The procedures will be simplified so that advanced corporations, like semiconductor companies, can more quickly import and export prototype products from bonded factories. Previously, only corporations designated as self-managed bonded factories could substitute the pre-approval process for external processes with self-recording and management when exporting to corporate research institutes, but now the same benefits will apply when exporting to dedicated research and development departments. This measure aims to support the swift manufacturing and processing of exporting corporations to respond to changes in the trade environment, such as the tariff war.
Additionally, the government plans to provide the same benefits as single bonded factories if multiple bonded factories owned by the same corporation are within 30 kilometers of each other. Once recognized as a single bonded factory, corporations can achieve free and swift logistics movement without going through bonded transport or import-export reporting at multiple bonded factories.
The government announced the 'Regulatory Innovation Plan for Supporting Exports of Advanced and Key Industries' containing this information during the Ministerial Meeting on National Agenda, Economic Relations, and Strengthening Industrial Competitiveness held on the 19th.
According to the Korea Customs Service, the share of exports utilizing the bonded processing system in advanced and key industries, such as semiconductors, shipbuilding, displays, and bio, accounts for 90% of the total export value. The bonded processing system refers to a system that exempts import tariffs when raw materials brought in from abroad are processed and then exported again. This allows corporations to reduce production costs and increase export competitiveness.
A bonded factory is a special bonded area that applies duty-free treatment when using and exporting imported foreign materials under a tax suspension status. Excellent corporations designated as 'self-managed bonded factories' can replace pre-approval procedures for external processes, such as research and testing materials, with self-recording and management. This simplified procedure applies when exporting to corporate research institutes.
According to the plan, the government will expand the application of the prototype export-import simplification to dedicated research and development departments. A Korea Customs Service official noted, 'This will enhance the efficiency of testing, research, and new product development prior to entering the manufacturing process, and enable quick identification of causes for defective products.'
The government also decided to abolish the storage period for shipbuilding, aviation, plant equipment, and raw materials at docks within free trade zones (FTZ). FTZ refers to areas designated by the government to support the attraction of manufacturing and logistics companies in industrial complexes, airports, ports, and distribution complexes.
While foreign goods could previously be stored without restrictions in FTZ, some FTZs, such as Busan Port, Incheon Port, and Incheon International Airport, allowed storage of goods for only up to three months for rapid logistics processing. With the elimination of the storage deadline, it is expected to support shipbuilding and aircraft repairs that require long-term storage of large or heavy items, according to the Korea Customs Service.
The government has decided to relax distance restrictions for the 'single bonded factory' to allow the unified management of two or more bonded factories owned by the same corporation. If multiple bonded factories are regarded as a single bonded factory, free and rapid logistics movement will be possible without bonded transport or import-export reporting. The current system recognizes bonded factories within 15 kilometers in a straight line as one factory. The government has decided to expand this to 30 kilometers.
The government will also allow for exports and imports to be reported for goods produced and surplus items from outside processing locations while they are installed at outside processing facilities. Until now, unnecessary processes were required where inspected items had to be imported into the primary bonded factory and then returned to the outside processing facility if selected for inspection.
The requirements for designation as a self-managed bonded factory will also be relaxed. Previously, export-import safety management excellent companies (AEO) had to hire a customs broker and provide access rights to their operational system to be designated. This led to defense industry companies unable to be designated as self-managed bonded factories due to security issues preventing them from granting access rights.
In the future, defense industry companies that find it difficult to provide access rights due to security issues will be able to submit a guarantee of access, and if recognized by the customs director, they will be able to receive designation as a self-managed bonded factory.
Furthermore, the government will simplify the management and tariff methods for leftover materials such as packaging materials, containers, and residual raw materials that are discarded after bonded processing. While leftover materials with substantial value had to be managed by distinguishing between domestic and foreign items, in the future, integrated management without distinction will be possible. It plans to allow inventory management by design hand volume.