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Guide to Customs Administration

Imported cargo management

컨텐츠서비스메뉴

Mid- and Long-term Development Scheme regarding Export and Import Logistics Administration

Byung-ok AHN Director of Export and Import Logistics Division Korea Customs Service

  • Introduction

    Export and import logistics administration can be defined as affairs to manage routes, responsible parties and information on the entire export and import cargo process. The Korea Customs Service (hereinafter referred to as the "KCS") has continuously restructured export and import logistics process such as computerization and simplification of customs procedures in order to enhance national competitiveness. As a result, export and import traffic has increased by 50% over the recent 10 years, while cargo processing period (period consuming from entry to release) has significantly decreased from 9.6 days in 2003 to 2.3 days in 2012.
     

    the recent 10 years export and import traffic ,bonded area,cargo processing period

    However, the World Customs Organization has shifted a customs administration paradigm to focus on not only trade facilitation but also trade security since 2005. Accordingly, export and import logistics administration has made changes by establishing a special measure for trade security such as adopting Compliance Capacity Assessment System (2005) and Korea's advanced manifest system named Korea Manifest System (2011). In this context, the KCS set a Mid- and Long-term Development Scheme regarding Export and Import Logistics Administration and has pushed ahead with a phased-approach in order to manage export and import cargo effectively.
     

  • Mid- and Long-term Development Scheme regarding Export and Import Logistics Administration
    • Logistics Facilitation

      According to the World Bank's "Doing Business 2012," Korea took the 4th place up from 8th last year in terms of international rankings (for a total of 183 economies) for clearance administration named Trading Across Borders, and Korea firmly took the 1st place among advanced economies group, G20, consecutively from the previous year. Korea's status is internationally recognized as a leading country in Customs administration.

      Summary from Doing Business for Trading Across Borders
      <Summary from Doing Business for Trading Across Borders>
      Category Korea Average for the OECD
      Documents to export (number) 3 4
      Time to export (days) 7 11
      Cost to export (US$ per container) 680 1,032
      Documents to import (number) 3 5
      Time to import* (days) 7 11
      Cost to import (US$ per container) 695 1,085

      * Time to import: Period from entry to a contract to acquisition of goods by domestic owners

      The Korea Customs Service focuses on some projects in order to maintain its top status in customs administration as follows:

      First, the KCS intends to adopt the smart logistics management system to increase convenience for inside and outside customers by establishing mobile applications for drivers and mobile systems for employees in charge of bonded cargo for the purposes of real-time management for bonded transported cargo so that it becomes possible to make an arrival report of transported cargo in real-time even after customs working hours such as holidays.

      Second, necessity to comprehensively manage cargo transported between nations (N2N), governments (G2G) and private to government (B2G) increases as trade supply chain security and logistics visibility becomes more necessary to secure and customs borders are expanding from domestic areas to overseas areas. In response, the KCS plans to build a global integration system based on customs-private cooperation by establishing cargo management system based on Unique Consignment Reference (UCR) numbers which is international standards for cargo tracking, and by raising global visibility through providing information regarding places of loading and private logistics.

      Third, the KCS has conducted cargo management and risk management based on export and import logistics information provided for Customs by parties responsible for export and import logistics such as carriers, airliners, forwarders, etc. However, it is expected to have increased number of errors as foreign forwarders who are not familiar with Korean regulations shall prepare import manifests upon enforcement of Korea Manifest System in April 2012. Thus, the KCS intends to actively promote to enhance accuracy of export and import logistics information by establishing verification procedures regarding export and import cargo (e.g., establishing a system) and by aligning a system to fortify a real-time declaration for cargo entry and release.
       

    • Trade Security

      As export and import traffic has continuously increased while the number of customs officials are stagnant, the KCS will solve this issue through private-customs cooperation such as advancing risk management on export and import cargo and strengthening voluntary cargo control. In order to do so;

      First, the KCS plans to revise the Guideline for license validation in bonded areas considering operation purposes of such bonded areas and features of goods such as supplies for vessels and goods for private use, and to modify relevant regulations to include compliance capacity assessment and the entire assessment on bonded cargo management when deciding whether license will be renewed or not.

      Second, the KCS plans to systemize bonded transportation C/S by diversifying standards to select bonded transported cargo and other cargo to inspect, and to develop a next-generation e-seal affixing to box cars for monitoring various cargo in real time; at the same time, to strengthen safety management for hazardous cargo to the public health by reinforcing license requirement regarding bonded areas to store goods and by establishing a system to track relevant goods in real-time.

      Third, the KCS will wholly restructure a program for voluntarily managing bonded areas by reflecting current changes in international trade environment such as the AEO program and logistics security. In order to do so, the KCS will improve the program for voluntarily managing bonded areas to obtain effectiveness of the program by preparing assessment standards according to international standards in terms of requirements to designate and maintain a status for voluntarily managing bonded areas and by drastically increasing incentives including additional exemption from customs procedures for designated companies.
       

    • Business Promotion

      The bonded factory program has led national economic development as the representative export support measure in customs administration; however, companies using bonded factories are limited and it is difficult to employ the cutting-edge industry such as bio-technology because bonded factories operate focusing on physically combining manufacturing industry.
       


      In order to do so, the KCS plans to actively endeavor to reinvigorate general bonded areas by aggressively considering a measure to expand a scope of raw material acknowledged to be shipped into bonded factories and a scope of bonded processing such as processing on trust and by drawing out measures to improve programs to hold a global intermediate trader and international liquid cargo in custody.
       

  • Conclusion

    The Korea Customs Service strives to harmonize clearance procedures simplification and cargo management. Thus, the KCS dispatches 70% and more of human resources in charge of bonded cargo so that the KCS can reinforce physical goods management on the spot such as bonded area and cargo. In addition, the KCS also intends as a mid- and long-term plan to enhance a way to impose penalties concerning export and import cargo and to take pre-caution measures related with bonded areas and cargo by sharing export and import logistics information between the private and Customs.

    In the future, the KCS endeavors to strengthen the SCM based on risk management and cargo management, to support business activities responding to the FTA and other environmental changes, and to realize the global top export and import logistics administration by effectively operating human resources and organizations for the purposes of a tripod of logistics facilitation, trade security and business promotion.
     

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