Re-export Duty Exemption Guide: Eligible Items and Variations in Re-export Periods (Customs Act Art. 97) Released

The Re-export Duty Exemption system, under Article 97 of the Customs Act, is a vital mechanism that exempts customs duties and taxes on goods temporarily imported and intended for re-export within a specific timeframe. This system is designed to support international business activities and alleviate unnecessary tax burdens. To utilize this system effectively, a precise understanding of the scope of eligible goods and re-export deadlines is essential.

1. Specific Scope of Goods Eligible for Re-export Duty Exemption

Goods eligible for duty exemption under Article 97 are detailed in Article 50, Paragraph 1 of the Enforcement Rule of the Customs Act. In addition to the packing materials and exhibition goods you mentioned, various other items are included. The primary categories are as follows:

• Packing Materials: Applicable to packing materials for imported or exported goods. This includes containers used for cargo transportation in international commerce that can be identified upon re-export. However, packing materials imported in bulk (such as straw, paper, glass fiber, wood shavings) or materials not used repeatedly in international commerce are excluded. This implies that reusable transport containers are the main target for exemption rather than disposable consumables.

• Personal Effects and Professional Equipment of Temporary Visitors: Includes personal effects worn or carried by a person temporarily entering Korea for personal use and subsequent re-export, or goods imported separately for the same purpose. Professional equipment or video tapes for media coverage are also eligible. This measure facilitates the convenience of tourists and foreign nationals entering for business purposes.

• Goods for Fairs and Exhibitions: Goods imported for display or use at fairs, exhibitions, competitive shows, evaluation sessions, or similar events. Eligibility is subject to the Head of the Customs House deeming the goods appropriate considering the nature and scale of the event. Goods used at international conferences or meetings are also eligible.

• Academic Research and Educational Training Goods: Scientific equipment and research materials imported by specific institutions (e.g., the Agency for Defense Development) for academic research or educational training purposes.

• Samples for Order Collection, Testing, and Manufacturing:

  • Order Collection Samples: Samples of specific products already in production, used to gauge market demand.
  • Testing Goods: Goods subject to performance testing. This is limited to tests where the nature or shape of the goods remains substantially unchanged (including sample production). It excludes goods used for manufacturing or processing commercial products.
  • Manufacturing Samples: Prototypes/samples for product fabrication. This excludes items that become the means of production themselves, such as molds, wooden patterns, or machine tools. Eligibility is judged based on documents like sales contracts and purchase orders, as well as the nature/shape of the goods.

• Goods for Repair: Goods imported for repair that will be re-exported. It requires that the 10-digit HS CODE of the item remains consistent before and after repair.

• Other Special Goods: Various other items may qualify based on criteria set by the Commissioner of the Korea Customs Service. Examples include machinery/tools for inspection or testing of import/export goods, personal vehicles (cars, motorcycles, campers) brought by temporary visitors, aircraft and vessels, parts for container repair, films for export printing, master tapes for optical memory media, machinery for aircraft repair/testing, pallets for air/sea cargo, and molds (and parts) for manufacturing proprietary products by foreign-invested companies.

2. Special Cases for Re-export Periods by Item Type

The general re-export period for exempted goods is within one year from the date the import declaration is accepted. While this can be extended within a one-year range for unavoidable reasons, Article 115 of the Enforcement Decree of the Customs Act specifies special periods that may be shorter or longer than the standard one-year rule for certain items:

• Personal Effects and Media Equipment of Temporary Visitors: For personal effects, media equipment, and similar items brought by temporary visitors, the re-export period is set as the duration until the person's first departure from Korea. This is flexibly applied to match their length of stay.

• Goods for Fairs and Exhibitions: For goods imported for exhibitions or fairs, the re-export period is the duration of the event plus the time deemed necessary for the re-export process.

• Goods and Materials for Processing or Repair: The exemption applies for the period recognized as necessary to complete the processing or repair work. This reflects the practical time required for the specific operations.

• Other Goods: For items not falling under the specific cases above, the re-export period is determined by the duration confirmed in the documents related to the import contract. If verification through contracts is difficult, the Head of the Customs House will determine the period by comprehensively considering the nature, usage, importer, and useful life of the goods.

When utilizing the Re-export Duty Exemption, it is crucial to verify both the eligibility of the goods and the precise re-export deadline. If the goods are not re-exported within the deadline or are used for purposes other than intended, the exempted duties and potential penalties (surcharges) may be collected. Therefore, it is advisable to carefully review relevant regulations and consult with a customs specialist.