I understand that imported goods with Country of Origin marking requirements can be exempted under specific purposes (e.g., research, personal use) or situations (e.g., re-export). Please specify the conditions for exemption. Released

Origin marking is an important system to guarantee consumers' right to know and establish a fair trade order. The obligation to mark the origin of imported goods generally applies to all subject items, but in certain purposes or situations, this obligation may be exceptionally exempted. These exemption provisions apply when they enhance administrative efficiency, align with the original purpose of the goods, and pose little risk of disturbing the domestic market. From the perspective of a customs broker, I will explain these exemption conditions in detail.

The goods exempted from origin marking obligations according to the Enforcement Decree of the Foreign Trade Act, etc., are as follows:

1. Goods imported as raw materials and facility equipment for earning foreign currency under Article 2, Paragraphs 6 and 7 of the Enforcement Decree of the Foreign Trade Act
This item refers to raw materials or production facilities for goods that are processed or manufactured domestically and then exported. In other words, even if imported into the country, they eventually become part of products re-exported overseas, or are used to produce such products. Since these goods are not directly sold to domestic consumers, there is less need to protect consumers' right to know through origin marking. Rather, imposing an origin marking obligation could hinder export competitiveness, thus they are exempted.

2. Consigned goods, unaccompanied baggage, or traveler's personal effects sent free of charge to individuals
This refers to goods intended for personal use, not commercial purposes. Examples include gifts received from relatives abroad, household goods for relocation, or personal items travelers carry in themselves. Since these goods are not for sale and their quantity or value has a negligible impact on the domestic market, the origin marking obligation is exempted for administrative convenience.

3. Parts and raw materials imported directly by the actual end-user (including cases where import is carried out on behalf of the actual end-user) for use in a manufacturing process that results in substantial transformation after import
This exemption provision is very important. 'Substantial transformation' refers to the process where imported parts or raw materials are processed domestically to become products with new names, characteristics, or uses. For example, if fabric imported from China is manufactured into clothing in Korea, the origin marking on the fabric itself loses its meaning. This is because the origin of the final product becomes the country where the substantial transformation occurred (in this case, Korea). This provision applies only when the actual end-user directly imports or has the import carried out on their behalf, and it does not apply when distributors import finished products for sale.

4. Goods not provided for sale or lease purposes, imported directly by the actual end-user. However, among such goods, manufacturing facilities and equipment (including parts and spare parts) can also be recognized even when import is carried out on behalf of the actual end-user.
This item applies when the commercial distribution of goods is not presupposed. That is, when the importer intends to use the goods directly for their own business or activities and not for sale or lease. Particularly for manufacturing facilities and equipment, which are essential for a company's production setup, their nature has little impact on the domestic distribution market, and exemption is permitted to promote corporate investment. Imports carried out on behalf of the user are also recognized to provide convenience in corporate import procedures.

5. Goods for research and development, imported by the actual end-user (including cases where import is carried out on behalf of the actual end-user)
These are goods used in research and development activities for new technology development, product improvement, etc. These items are imported in small quantities for special purposes and are not sold to general consumers. The origin marking obligation is exempted to encourage research activities and reduce unnecessary administrative burden. Both direct import by the actual end-user and import carried out on their behalf are recognized.

6. Samples (limited to those not for display or sale) and goods for repair of defects in imported goods (limited to cases where they are directly imported to repair defects due to the inherent flaws of the imported goods)
Samples are literally items imported as product samples or for exhibition purposes, and must not be for sale. Since consumers cannot purchase these items, the meaning of origin marking fades. Goods for repair of defects are parts imported to repair or replace defects in products that have already been imported and sold. This is not a new commercial transaction, and its purpose is to restore the function of the existing product, so exemption is allowed. However, the defect must be due to the inherent flaw of the imported goods themselves.

7. Transit goods that merely pass through Korea by bonded transport, transshipment, etc.
These goods only pass through the territory of Korea and are not brought into the domestic market for consumption. 'Transit' or 'Transshipment' means that the final destination of the goods is not Korea, so there is no need to apply domestic origin marking regulations.

8. Temporarily imported goods, such as duty-exempt items conditional on re-export
These are goods temporarily imported for specific purposes such as exhibition, test research, or re-export after processing, and are scheduled to be re-exported within a certain period. Since these goods are also not intended for domestic consumption, the origin marking obligation is exempted. This operates in conjunction with the re-export condition duty exemption system under the Customs Act.

9. Goods re-imported after being exported from Korea
This refers to cases where goods produced domestically and exported are re-imported into the country. For example, goods returned after repair overseas, or items exhibited at overseas exhibitions that come back, fall into this category. Since they were already produced domestically and their origin is clear, there is no need to mark the origin again upon re-import, or it can be considered that the original origin information is maintained as is.

10. Diplomatic duty-exempt goods
These are goods imported by diplomats and their families for personal use, which are exempt from customs duties and other taxes according to international customs and agreements. Goods with such special status are also exempt from the origin marking obligation.

11. Goods imported by individuals for self-consumption that the customs head recognizes as appropriate
This provision offers flexibility for small quantities of goods for personal consumption. If recognized as purely for personal consumption and not for commercial purposes, the customs head may permit an exemption from origin marking, considering the nature and quantity of the goods. This is to promote convenience for individual importers and avoid excessive regulation for small quantity goods.

12. Other goods recognized as appropriate by the Commissioner of Korea Customs Service in consultation with the Minister of Trade, Industry and Energy
This is a comprehensive exemption clause, applicable when there is a need to exempt the origin marking obligation in newly arising or special situations beyond the specific cases listed above. It is a provision to flexibly respond to rapidly changing trade environments or industrial conditions.

As such, while the origin marking obligation is applied broadly, various exemption provisions have been established, comprehensively considering the characteristics and use of the goods, as well as their impact on the domestic market. These exemption clauses aim to strike a balance by reducing unnecessary administrative burdens without undermining the original purpose of the origin marking system.

Determining whether an item is subject to origin marking exemption requires a precise understanding of the specific import purpose, use, quantity of the item, and relevant laws and regulations. If there are any unclear matters, it is important to consult with an expert, such as a customs broker, to receive accurate judgment and guidance on appropriate procedures.