WORLD TRADE G/LIC/N/3/KOR/1
21November 1996
ORGANIZATION(96-4959)
Original: English Committee onImport Licensing
REPLIES TOQUESTIONNAIRE ONIMPORT LICENSING PROCEDURES
Notification under Article 7.3ofthe
Agreement onImport Licensing Procedures
KOREA
Thefollowingnotification,dated24October1996,hasbeenreceivedfromthePermanentMission
ofKorea.
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Outline ofSystems
1. Korea embraces theprinciple offreetrade initstrade policy. Anytrade restrictions which
doexistarelimited tothenecessary minimum.
Importers ofgoods must obtain animport licence under theForeign Trade Act. However,
import licences aregranted automatically foralmost allgoods with theexception ofafew
import-restricted items.
Some items aresubject toimport-related requirements under separate domestic laws, in
compliance withinternational rulesoragreements. Suchimport licences areissued automatically upon
thesubmission ofcertification, typeapproval, etc.,obtained fromcompetent authorities orassociations.
Most items subject toimport restrictions areagricultural andfishery products. Importers of
relevant items must obtain animport recommendation prior tothesubmission ofanimport licence
application under theExport-Import Notice based ontheForeign Trade Act.
Purpose andCoverage ofLicensing
2. Inprinciple, import licensing applies toallimported goods. However, almost allgoods can
befreely traded byobtaining anautomatic import licence from theforeign exchange banks.
Import recommendation requirements apply toonly95import-restricted items onthebasis
ofHSK 10-digit asofJuly1996.
3. Thesystem applies togoods originating inandcoming from allcountries.
4. Thepurpose ofimport licensing isnottorestrict thequantity orvalue ofimports buttomonitor
foreign trade trends andmaintain foreign trade statistics.G/LIC/N/3/KOR/1
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Import-related requirements arenotintended torestrict imports, buttoensure theprotection
ofpublic health andsanitation, national security, safety andtheenvironment. Suchrequirements are
implemented infullaccordance withKorea 'sresponsibilities andobligations pursuant totheGATT 1994
Articles XX,XXI, theWTO Agreements onTBT, SPSandother international rules oragreements,
suchastheBasel Convention.
ThepurposeofKorea'ssystemofimportrecommendationrequirementsistorestrictthequantity
ofimports ofafewselect goods. Such restrictions areallowed byGATT/WTO. Among the95
import-restricted goods, 81items arerestricted under GATT Article XVIII Section B(seeWTO
document L/7449, 29April 1995). These items werereviewed attheregular consultations withthe
GATT/BOP Committee in1991 and1994. Fourteen rice-related items arerestricted inaccordance
withtheconcession schedule oftheUruguay Round (seeUruguay Round Schedule LX-Republic of
Korea, March 1994) andtheWTO Agreement onAgriculture.
Under itsimport liberalization programme, theKorean Government hassteadily reduced the
number ofimport-restricted items. Allgoods except forrice-related items willbeliberalized bythe
year2001.
5. Korea 'simport licensing system isenforced under theForeign Trade Act,theEnforcement
Decree oftheForeign Trade Act,theForeign Trade Management Regulation, andtheExport-Import
Notice. Theimport-related requirements aresetforth in49domestic Acts.
Under Korean legislation, thedesignation ofproducts tobesubject tolicensing isamatter
ofadministrative discretion.
Itisnotpossible fortheKorean Government toabolish thislicensing system without legislative
approval.
Procedures
6. There arenorestrictions onthequantity orprice ofindividual imported items, except on81
items allowable under theGATT/BOP Committee and14rice-related items inaccordance withUruguay
Round concessions. Inorder toimport anyimport-restricted agricultural products inexcess ofthe
market access amount, therelevant organizations must issue animport recommendation. Such
recommendations arebased onthedetermination ofappropriate levels ofimports based onpricestability
anddomestic supply anddemand considerations.
TheprocedureforimportingproductsunderquantityrestrictionisstipulatedintheExport-Import
Notice based ontheForeign Trade Act.
7. (a) There isnorestriction regarding thetimeofthelicence application.
(b) Alicence isgranted immediately upon request.
(c) There isnolimitation astotheperiod oftheyearduring which application forlicence
maybemade.
(d) Consideration oflicence applications ofautomatic-approval items iseffected solely
bytheforeign exchange banks.
8. Anapplication foralicence cannot berefused ifitsatisfies theestablished criteria.G/LIC/N/3/KOR/1
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Eligibility ofImporters toApply forLicence
9. Anyperson orfirmintending toengage inforeign tradeshould register withtheKorea Foreign
Trade Association (KFTA).
Thecriteria andprocedures forregistration areprescribed bythePresidential Decree ofthe
Foreign Trade Act.
Those eligible toapply foranimport licence are:
- ajuridical person whose paid-in capital ortotalinvestment exceeds 10million won.
- anindividual whose daily deposit balance forthelastonemonth exceeds 10million
won.
Theapplicant should payaregistration taxandaKFTA membership fee.TheMinister of
Trade, Industry andEnergy announces thelistofauthorized importers.
Documentational andOther Requirements forApplication forLicence
10. Toapply foralicence, anoffer sheet orthecopy ofthecontract, acopy ofimport
recommendations (only inthecaseofimport-restricted items) andother necessary documents are
required.
11. Theimport declaration, import licence, commercial invoice, billoflading andother necessary
documents arerequired onactual importation.
12. There areneither licensing feesnoradministrative charges.
13. There isnodeposit oradvance payment requirement associated withtheissue oflicences.
Conditions ofLicensing
14. Theperiod ofvalidity oftheimport licence is12months andcanbeextended upon request
orexofficio (only inthecasewhere theimporter failstoapply forapproval forextension ofthevalidity
termbefore itsexpiration).
15. There isnopenalty forthenon-utilization ofalicence.
16. Licences arenottransferable between importers.
17. There arenoother conditions attached totheissue ofalicence.
Other Procedural Requirements
18. There arenoother administrative procedures required forimportation apart from theimport
licensing system described above.
19. Foreign exchange isprovided automatically forgoods tobeimported bythestandard settlement
method.However,inthecaseofnon-standardsettlementmethods,suchasdeferredpayments,instalment
payments, orimports onasimple remittance basis, etc.,where thesettlement exceeds adefinite period
oftimeordesignated amount ofmoney stipulated intheForeign Exchange Management Act,permission
from theBank ofKorea ortheMinistry ofFinance andEconomy must beobtained.