Determination of Customs Jurisdiction for Duty Drawback: Factory Location, Headquarters, and Change Procedures Released

Jurisdiction for the refund of customs duties on raw materials for export (under the Special Act on Customs Drawback) is governed by the Notice on the Handling of Customs Drawback for Raw Materials for Export. The following provides a detailed explanation regarding the determination and change of jurisdiction.

Principle of Jurisdiction Based on Manufacturing Site

As a general rule, the customs office (including support centers) having jurisdiction over the location of the manufacturing site where the goods subject to drawback are produced is designated as the competent customs office. This principle is established to ensure efficient supervision of the entire process—from the import of raw materials to manufacturing in bonded factories and final exportation. Local customs offices are best positioned to verify actual production conditions and facilitate necessary documentary or physical inspections.

Exception for Integrated Management via Headquarters

While the manufacturing site is the standard, it is not the only option. Companies that operate multiple manufacturing sites and process drawback-related tasks centrally at their head office may designate the customs office having jurisdiction over their principal office (Headquarters) as their competent jurisdiction. This exception is granted for administrative efficiency, provided that the principal office systematically manages the drawback operations for all manufacturing facilities. This is common among large-scale or mid-sized enterprises where production is geographically dispersed but accounting and trade operations are integrated at the headquarters.

Customs Offices Excluded from Drawback Jurisdiction

Certain customs offices are excluded from acting as competent authorities for duty drawback under the relevant Notice. These include:

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

These locations specialize in specific clearance types (such as air cargo, international mail, or specific border regional clearance) and are not equipped or intended to handle comprehensive corporate drawback administrative functions.

Procedure and Documentation for Changing Jurisdiction

If a company needs to change its designated customs office due to relocation, restructuring, or operational efficiency, it must follow formal procedures:

• Submit the "Application for Change of Drawback Application Authority" (Form No. 2 of the Drawback Notice).
• The application can be submitted to either the current competent customs office or the newly desired customs office.
• The change becomes final only after approval by the Head of the Customs Office.

The Customs Service will review the application by evaluating the company’s business model, the continuity of drawback operations, and the administrative capacity of the new jurisdiction before granting approval.

Summary

In summary, while the manufacturing site's location is the primary standard for duty drawback jurisdiction, the headquarters' location may be used for integrated management. Specific airport and postal-related customs offices are strictly excluded. Any change in jurisdiction requires the submission of official forms and subsequent approval by Customs to ensure smooth and compliant trade operations.