Legal basis:
– Act on Designation And Management of Free Trade Zones;
– Customs Act.
The term “free trade zone” means a zone designated in which free activities of manufacturing, logistics, distribution and trade are guaranteed with exemptions. However, in the following cases, the goods cannot be delivered into or out of Free Trade Zones in Korea.
- Prohibition from shipping goods into or out of Free Trade Zones
No one shall ship goods into or out of any free trade zone which are:
– Books, publications, drawings, films, records, videos, sculptures and other similar goods which disrupt constitutional order, disturb the public safety and order or corrupt public morals;
– Goods which reveal confidential information of the Government or are used to carry out intelligence missions;
– Currencies, bonds and securities which are counterfeited, forged or copied.
The head of a customs office may restrict the shipment of goods that cause harm to national health or preservation of the environment or other goods into or out of any free trade zone.
- Suspension of shipments into Free Trade Zones
In any of the following cases, the head of a customs office may suspend shipments of goods by a relevant occupant enterprise into any free trade zone within six months.
– Where an occupant enterprise ships foreign goods into a free trade zone to use and consume them without filing an import declaration and paying customs;
– Where an occupant enterprise ships foreign goods out of a free trade zone and into the customs territory without filing an import declaration or paying customs;
– Where an occupant enterprise ships raw materials or goods manufactured or processed using raw materials out of the free trade zone and into the customs territory on condition that the whole amount of such raw materials or goods are shipped out of Korea;
– Where an occupant enterprise uses or consumes goods without filing a report on the use or consumption of such goods;
– Where, in filing a report on shipment out of Korea an occupant enterprise fails to fulfill conditions for overseas shipment as prescribed in relevant statutes, including permission, approval, recommendation, or certification; or where an occupant enterprise fulfills such conditions by improper means;
– Where an occupant enterprise violates its duty to report shipment of goods processed outside a free trade zone or to pay customs;
– Where an occupant enterprise violates its duty to keep inventory records;
– Where an occupant enterprise refuses, obstructs, or evades without good cause or refuses to submit materials;
– Other cases according to the Korean law.
In addition, where the head of a customs office deems that the suspension of shipments of goods into free trade zones is likely to cause serious inconvenience to the user or to undermine the common good, he or she may impose a penalty surcharge on a relevant occupant enterprise not exceeding the amount equivalent to 3/100 of the amount of sales accruing from the operation of the relevant occupant enterprise, in lieu of the suspension. In such cases, a person liable to pay a penalty surcharge fails to make such payment by the payment deadline, such surcharge shall be collected in the same manner as delinquent national taxes.
