By Lee Hyo-sik
Staff Reporter
The nation's customs agency is playing a key role in facilitating exports through its state-of-the-art export logistics and business-friendly customs clearance system, the top customs officer here says.
In an interview with The Korea Times, Korea Customs Services (KCS) Commissioner Hur Yong-suk said the office is helping exporters ship more goods overseas by informing them of changes in tariffs and customs procedures with trading partners that have signed a free trade agreement (FTA) with Korea.
The KCS is making every effort to boost cooperation with its counterparts abroad to better resolve customs-related difficulties facing domestic firms in host countries, while helping developing economies establish a more customer-friendly and cost-effective customs clearance system, upgrading Korea's image overseas.
``The nation has an export-oriented economic structure and increasing outbound shipments is the key to overcoming the current economic difficulties, with exports accounting for more than 46 percent of gross domestic product (GDP). I think the ongoing global economic downturn is a good opportunity to boost our presence overseas by taking away market shares from China, Japan and other outward-oriented economies,'' Hur said.
The commissioner then said the KCS is playing an important role in the nation's endeavors to achieve a $20-billion current account surplus this year by helping exporters send products abroad in a time and cost-effective manner.
``We established a taskforce headed by the vice commissioner to help businesses deal with customs-related issues. We have improved export logistics and clearance systems so that companies can ship their products out of the country more quickly and less costly. Customs officers are also regularly visiting exporters in an attempt to resolve any hardships they face when dealing with customs,'' he said.
To expedite outbound shipments, the KCS designated 106 companies in petrochemical, industrial fiber, auto parts and biotechnology sectors as bonded factories with a self-regulated customs zone. It allows companies to send goods overseas without undergoing additional customs clearance at the nation's airports or seaports, shortening the delivery time, Hur said.
He also said the agency is using X-ray and other high-tech equipment to minimize cargo inspections at loading sites, while allowing cash-strapped exporters to defer payments of customs duties and reduce tax audits to help them cope with an unfavorable business environment overseas.
To help businesses take full advantage of the FTAs the nation has signed, the commissioner said the agency is doing its best to help them increase their outbound shipments by providing information on changes in the customs environment in the relevant countries.
``With the free trade pact in place, tariff rates will go down and the customs procedure will be simplified. But the extent and content of these changes are different from country to country. We are informing local exporters of such changes in each nation, helping them make the best use of the FTAs for their business,'' he said.
The KCS also created business models for automakers and 48 other exporters, telling them about which markets offer low tariff rates and the simple customs clearance available for specific products. ``We provide tailored consulting services to businesses in these 49 sectors. We have also simplified the procedure in which businesses receive a certificate from us, regarding the country of origin (C/O) of their export items that are shipped to FTA-signed economies,'' the customs chief said.
To more effectively resolve customs-related troubles facing local exporters overseas, the agency dispatched an officer to Indonesia in February and plans to send more to the United States, European Union and other economies where FTAs are under negotiation.
The commissioner said that boosting international cooperation in both a bilateral and multilateral manner is crucial to establishing an efficient and cost-effective customs system here, as well as improving Korea's standing on the global stage.
``Among 174 countries, Korea ranked 12th in the advancement of its customs system this year, much higher than the nation's overall competitiveness ranking of 23rd, according to the World Bank. We are now trying to push it up to seventh in 2010,'' he said.
Korea currently holds the chairmanship of the Asia-Pacific region at the World Customs Organization (WCO), with the KCS at the center of promoting collaboration among Asian economies.
``I have been attending bilateral meetings with overseas counterparts as many times as possible to make things easier for local exporters to do business in foreign countries. Above all, maintaining a close relationship and sharing information with Japan and China is crucial to our customs because the trade volume with our two neighbors is huge. In this regard, customs chiefs from the three countries hold a meeting annually,'' Hur said.
The KCS is also seeking to expand cooperation with Southeast Asia and other developing economies by helping them set up an effective customs clearance system. ``In the process, they will know more about us and will become friendlier to us, which will improve our international image and credibility,'' the commissioner noted.
Hur then said the KCS will extend up efforts to clamp down on the smuggling of bogus luxury bags and other faked items by introducing a high-tech automated cargo inspection system and boosting cooperation with customs agencies in China and with other trading partners.
``Korea has become a victim of intellectual property right violations across the globe. Our auto parts and information technology products are illegally copied and the fakes are sold as real, damaging the business and reputation of Korean companies abroad. Last year, local companies incurred a sales loss estimated at $25.3 billion, equivalent to about 6 percent of the country's outbound shipments,'' Hur said.
With the illegal manufacturing of forged goods overseas, more are being smuggled into the country. The KCS seized a range of forged products worth 934 billion won in the value of real goods, up 37 percent from a year earlier.
``The smuggling and distribution of faked goods here shakes the fundamentals of the Korean economy. The sales of such goods here in violation of intellectual property rights will also severely damage Korea's reputation overseas. We will make every effort to keep these illegal items away in the first place by strengthening customs inspections,'' the commissioner stressed.
Korea has been cracking down on the manufacturing and sales of faked goods here over the years and its efforts bore fruit in 2006. The WCO named Asia's fourth-largest economy as one of the best countries at protecting intellectual property rights.
Additionally, the United States removed Korea from its watch list of intellectual priority rights violators earlier this month. It was the first time that the nation did not appear on the list, which has been issued for decades by the Office of the U.S. Trade Representative.
``The removal signifies our decade-long effort to protect intellectual priority rights and practice international standards. It will further boost the nation's international standing and attract more investment from outside. However, we will not remain complacent but continue to make efforts to turn the nation into a more business-friendly and law-abiding place,'' Hur stressed.
To further prevent the smuggling of bogus items into the country, the KCS will continue to educate customs officers about the protection of intellectual property rights and introduce more advanced and accurate cargo sample techniques.
`We have established an advanced inspection system in which customs officers take photos of suspected faked goods on the spot and send them to the original manufacturers for verification, which has been proven very time- and cost-effective. We will also share more information with other customs authorities and carry out an awareness campaign warning against bringing counterfeits into the country,'' he said, adding that the KCS will offer those who report the smuggling of forged goods financial rewards.
To further increase the public awareness of fake goods, the agency will hold an exhibition showcasing a wide array of the booty on May 26 at the COEX in southern Seoul. ``We have been organizing the event since 2002, attracting over 20,000 visitors last year. It will be a good occasion to publicize the importance of intellectual property rights protection and the ill effects of counterfeits,'' the customs chief said.