On August 31, the South Korean government held a conference at the Incheon Business Information TechnoPark (IBITP) located in Yeonsu-gu, Incheon City. It announced a plan to overhaul bonded factory-related rules and systems at the meeting presided over by Prime Minister Hwang Kyo-ahn. Such an overhaul of those regarding bonded factories is for the first time in four decades. Export via this type of factories accounts for approximately 30% of the total exports from South Korea.
According to the government’s plan, certain elements in sectors such as IT, biotech and those dubbed new export industries by the government are to be regarded as raw materials using bonded factories so that those elements can benefit from relevant laws. Those sectors have not been deemed as using bonded factories so far.
In addition, the maximum length of the period of temporary storage out of bonded factories allowed for heavy industries companies in the offshore plant and shipbuilding industries and the like is to be extended to three years from two years. Furthermore, only one approval is to be required for two or more outsourcing operations.
At the same time, the government is planning to expand the scope of articles that can be brought into bonded factories so that the facilities’ logistics and R&D functions can be enhanced while automatic acceptance is to be applied to exemplary firms with regard to their reports on the use of raw materials. The customs houses’ confirmation of the satisfaction of requirements by imported raw materials and related analysis and inspection procedures are to be simplified, too. The government is predicting that this plan will result in an economic effect of 1.0666 trillion won.