RESTRICTEDWORLD TRADE
ORGANIZATIONG/C/W/134
22 December 1998
(98-5147)
Council for Trade in Goods Original: English
TRADE FACILITATION
Matters Related to the Facilitation of Cargo Movement in Korea
Communication from the Republic of Korea
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A. BONDED TRANSPORTATION
I. OUTLINE
In Korea foreign goods may be transported in bond if they are transported only between the
places listed below:
(1) Open ports;
(2) Bonded areas;
(3) Customs office premises;
(4) Non-bonded areas permitted by the customs collector;
(5) Customs clearance stations.
Any person who desires to engage himself/herself in transportation in bond shall make a
declaration to the customs collector and obtain a license.  This system enables businessman doing
business in the interior region to conduct customs procedures conveniently in his/her local customs
office.
II. DECLARATION OF BONDED TRANSPORTATION
The declaration of bonded transportation shall be made in the name of the owner of  the
goods, or the carrier or customs broker who is engaged in bonded transportation.
III. GOODS RESTRICTED FROM TRANSPORTATION IN BOND
(1) Goods prohibited from export and import;
(2) Dangerous goods;
(3) Scraps of base metals;
(4) Goods subject to quarantine, disinfection and special inspection;(5) Precious and valuable goods.G/C/W/134
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IV. INSPECTION FOR BONDED TRANSPORTATION
The goods for bonded transportation may be subject to inspection by customs if it is necessary
for surveillance and control.  Customs inspects th e goods according to the submitted declaration for
bonded transportation.
V. ROUTE OF BONDED TRANSPORTATION
The customs collector may specify the route of transportation as prescribed by the
Commissioner of the Korean Customs Service when it is deemed necessary for the surveillance and
control of the goods for bonded transportation.  Transportation in bond shall be completed within the
duration specified by the Commissioner.  However, the customs collector may extend the said
duration when he/she deems such extension to be necessary due to calamity or other inevitable
reasons.  When foreign goods transported in accordance with a license of transportation in bond havenot arrived at the destination within the specified duration, the customs duty thereon shall forthwith be
levied.
VI. SECURITY FOR BONDED TRANSPORTATION
The customs collector may request that a security deposit for the customs duty on goods
under transportation in bond be furnished when the license for transportation in bond is granted.
VII. SIMPLIFIED BONDED TRANSPORTATION
The customs collector may, taking into account the character of goods to be transported in
bond and the reliability of persons who are engaged in the bonded transportation, designate suchpersons who are eligible for simplified procedures of declaration, or for exemption of security on the
goods to be transported in bond.
B. SURVEILLANCE AND CONTROL OF CARGOES ENTERED
I. OUTLINE
The Customs Act provides for customs systems and procedures such as a bond areas system,
customs procedures for import and export of goods, and other related matters, in order to collect
customs duties on imported goods and to satisfy the requirements of various laws concerning the
control and restriction of the import and export of goods.  It is necessary, therefore, to confirm
whether goods are legitimately imported or exported under the above-mentioned customs systems and
procedures.  For this purpose, customs surveillance and control are maintained over the goods and
persons that pass through the customs territory.  In addition, corrective and punitive measures must betaken against those engaging in illegitimate import and export operations.  These tasks comprise the
work of the surveillance and control administration of the customs.
II. OBJECTS OF SURVEILLANCE AND CONTROL
The ultimate objects of surveillance and control enforced under the Customs Act are the
goods that move between Korea and other countries.  To exercise effective control over these goods,
however, ships, aircraft, vehicles (means of transport of goods), and persons considered objects of
control, are carefully monitored by the customs.  Fu rthermore, the Customs Act stipulates that foreign
trade vessels (including aircraft), in principle, cannot enter ports other than specified ports, that is,
open ports or customs airports.  The number of poi nts at which goods can leave or arrive in our
country are limited so that surveillance and control can be more effectively conducted.  At present,
there are 22 open ports and five customs airports in Korea.G/C/W/134
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III. MEASURES OF SURVEILLANCE AND CONTROL
As regards the control of smuggling, a major question is which area should receive more
emphasis:  prevention or exposure of customs offen ces.  In case of Korea, measures are being adopted
to cover both areas in the form of making inquiries upon the entrance of vessels, search of vessels and
inspection of baggage, etc.
In addition, investigations of customs offences will be carried out by criminal investigators.
C. POST-ENTRY INVESTIGATION OF GOODS IMPORTED
I. OUTLINE
With the introduction of the self-declaration system, the post-entry investigation of importers
has been conducted by the Korean Customs Service.  This investigation is carried out after thecompletion of the import clearance in order to check whether the import declaration made on the
importer's own initiative was true and correct.
A post-entry investigation is conducted to see whether the basis for assessment, the
disbursement of foreign exchange and other matters contained in the declaration of the importedgoods, were correctly established in accordance with the related laws and regulations.
The primary purpose of the self-declaration system is for an importer to pay customs duty on
the basis of the declaration which he/she considers to be correct, but voluntary declarations are not
always correct.  Therefore, each declaration must be carefully examined at the time of importclearance.  However, a careful examination of declarations might cause delay in the clearance.  To
avoid this delay, the post-entry investigation system has been developed so that both speedy clearance
and correct levying of customs duties can be achieved at the same time.
II. POST ENTRY INVESTIGATION
The authority to conduct an investigation of the importer and concerned parties is based on
the right of inquiry and examination prescribed in the Customs Act.  Under the pertinent provisions,
the customs authorities are authorized to inquire of any importer of imported goods and any other
party concerned, or to examine the said goods, or any books, records and documents pertinent thereto.
This authority is not to be construed as approved for investigation of an offence.
The post-entry investigation places an emphasis on confirming whether the declared value of
the imported goods was correct.  For this purpose, on-the-spot investigation into contracts, invoices,
account books, records, and any other books relating to the transaction, may be carried out at the
importer's office.  An inquiry is also made not only to the importer but also to the persons who entrust
import business to the importer or the other persons concerned.
By means of the above method, the customs office attempts carefully to establish whether the
declaration for the payment of the customs duty has been properly made.  In cases where errors have
been discovered as a result of such an investig ation, the customs office tries to ensure the correct
taxation by rectifying the basis for assessment and the amount of duty declared.
In addition, it would be worth noting that the Foreign Exchange Management Act, as
amended in 1997, gives the Commissioner of the Customs Service a right to investigate a matter
relating to an in-flow and out-flow of the fo reign exchange involved in the foreign trade.G/C/W/134
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The Korean Customs Service is, therefore, given the strengthened authority to investigate
illicit trading.
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