The government will streamline import procedures for raw materials such as paint and for energy. As the Middle East war drags on and disrupts supplies of raw materials, corporations have sought alternative suppliers, but the time required for import registration and customs clearance has held them back.
On the 3rd, at a joint meeting of the Emergency Economic Headquarters and ministers related to the economy, the government announced a plan for temporary special regulatory exemptions related to imports and logistics. The measure follows disruptions in naphtha supplies after imports of Middle Eastern crude oil were blocked by the closure of the Strait of Hormuz.
Because naphtha is used as a raw material for a range of chemical products, including synthetic resins, fibers and rubber, after passing through basic feedstocks such as ethylene and propylene, concerns have grown that supply disruptions could spread to items closely tied to daily life, such as packaging materials.
There are four key measures. First, when importing chemicals facing supply disruptions—such as paint raw materials or polyethylene (PE) resins—the existing hazard testing data requirement, which took more than three months, will be allowed to be replaced with a test plan, sharply shortening the registration period.
Customs procedures will also be overhauled. For key items such as energy and raw materials, the government will immediately establish a system for prior information sharing among relevant ministries so customs clearance can be completed before arrival and unloading, allowing immediate entry into the country upon arrival.
It will also address the tariff burden stemming from surging freight rates. Due to the closure of the Strait of Hormuz, the Middle East–China tanker Worldscale (WS) index jumped 608%, from 60.3 in Mar. last year to 426.89 last month. The government will exclude the increase in freight costs from the customs dutiable value calculation, but only for corporations that use alternative routes or transport modes.
Special exceptions will also apply to so-called "U-turn cargo," which was exported to the Middle East but returned due to the war situation. If the deadline (60 days) for correcting the customs clearance category is exceeded, the imposition of fines will be minimized, and even if there are corrections or withdrawals after an export declaration, penalty points will be temporarily waived.
The government determined that, compared with measures such as fiscal injections or supply–demand controls that can have significant side effects, a regulatory deferral approach targeting bottlenecks in the supply chain directly is better in terms of speed and efficiency. However, once the emergency ends, the regulatory deferrals will also end immediately, and the government will assess the effects and side effects to reexamine from scratch whether the regulations are needed at all.