Guidelines on Customs Jurisdiction and Change Procedures for Duty Drawbacks under the Special Act Released

The jurisdiction for the refund of customs duties on raw materials used for export (hereinafter referred to as 'Duty Drawback under the Special Act') is governed by the 「Notification on the Processing of Refund Affairs for Raw Materials for Export」 (the 'Refund Notification'). Below is a detailed explanation regarding your inquiries.

General Principle: Jurisdiction Based on Manufacturing Site

The jurisdictional customs office for duty drawbacks is not determined solely by the manufacturing site, but it is the primary standard. In principle, the customs office (including support centers) that has jurisdiction over the location of the manufacturing plant where the goods subject to refund are produced serves as the jurisdictional office. This principle is established to ensure the efficiency of substantive management and supervision throughout the entire process—from the import of raw materials to manufacturing/processing in bonded factories and final exportation. This allows the customs office most familiar with the production site to facilitate document reviews and on-site inspections effectively.

Exception: Jurisdiction of the Head Office (Principal Office)

While the manufacturing site is the standard, not all companies must follow this rule. Companies that operate multiple manufacturing plants and centralize their refund-related administrative tasks at their headquarters may, for the sake of operational efficiency, designate the customs office governing their principal office (headquarters) as their jurisdictional customs office.

This exception is granted provided that the principal office systematically handles and manages refund affairs for all manufacturing sites. This is common for large or mid-sized enterprises where production facilities are geographically dispersed, but accounting and trade operations are integrated at the headquarters.

Excluded Customs Offices

Certain customs offices are excluded from acting as jurisdictional offices for Duty Drawbacks under the Special Act. According to the Refund Notification, the following offices are ineligible:

• Gimpo Airport Customs
• Gimhae Airport Customs
• Dorasan Support Center
• Busan International Mail Support Center
• Goseong Support Center

These offices are specialized in specific types of clearance (e.g., air cargo, international mail, or specific border area clearance) and are not equipped to handle the comprehensive scope of general corporate refund processing.

Procedures and Documentation for Changing Jurisdiction

If a company needs to change its designated jurisdictional customs office due to relocation, restructuring, or efforts to improve administrative efficiency, it must follow formal procedures. The required steps are as follows:

• Submit the 'Application for Change of Refund Application Authority': This is Form No. 2 under the Refund Notification.
• Submission Point: The application can be submitted to either the current jurisdictional customs office or the prospective new customs office.
• Approval Process: The change is finalized only after receiving approval from the head of the customs office.

Upon receipt of the application, the customs office will evaluate factors such as the company's operational structure, the continuity of refund tasks, and the administrative capacity of the new office before granting approval.

Summary

In conclusion, while the jurisdiction for duty drawbacks is primarily based on the manufacturing site, head office jurisdiction is permissible for consolidated management. However, specific airport and mail-related customs offices are excluded. Any change in jurisdiction requires the submission of official documentation and subsequent approval by the customs authorities. Understanding these regulations is essential for the seamless processing of duty refunds.