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Customs agency to strengthen ‘bonded processing’ system for exporters
Korea Customs Service (KCS) Commissioner Lee Myeong-ku speaks during an event at the agency's Seoul office, Thursday. Courtesy of KCS
By Lee Kyung-min
The Korea Customs Service (KCS) said Thursday it plans to strengthen the "bonded processing" export system to help high-potential growth industries boost their global competitiveness amid a rapidly changing trade environment.
The system allows companies to import foreign raw materials without paying duties or taxes right away, instead allowing them to process or manufacture them domestically. This enables them to export the finished products tax-free or at a significantly lower cost.
The measure not only lowers costs and tax burdens for manufacturers but also streamlines production, boosting efficiency and enabling faster, more autonomous operations.
This is part of the growth strategy announced by the agency at its Seoul office, attended by officials from seven major companies, including Samsung Electronics, SK hynix and Celltrion.
The primary goal is to help companies better navigate growing external uncertainties, notably U.S. tariffs under the Trump administration and intensifying competition over advanced technologies among major economies.
The move comes as Korea’s exports topped $700 billion last year for the first time, driven by record-high sales in the semiconductor sector.
“These outstanding results were supported in part by close coordination between the government and exporters, particularly through assistance focusing on the ‘bonded processing’ favored by key industries such as semiconductors, shipbuilding and biotechnology,” KCS Commissioner Lee Myeong-ku said during the announcement.
As part of the initiative, the KCS has launched a nationwide support task force of customs officials and industry experts.
It will operate three teams focused on advanced industries, including semiconductors, biotech and aircraft maintenance.
The customs agency said it plans to revise and implement relevant regulations by the end of the first quarter to swiftly execute the strategy.
“The strategy is the starting point of regulatory innovation and public-private cooperation. More Korean manufacturers are expected to secure export competitiveness in global markets,” he added.
TThe agency aims to reduce production costs by streamlining customs oversight, simplifying approvals and extending the declaration period, giving companies flexibility in how imported materials are taxed.
The initiative will also facilitate the use of vehicles transporting goods under the bonded export system, easing logistics for manufacturers.