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					Korea Customs and Tariff
2010




       Customs & Tariff Bureau
   Ministry of Strategy and Finance
                 KOREA
                                      Preface


         While the world’s trade environment is rapidly changing in line with the
current trends of regionalization and globalization, trade security and facilitation is
garnering more attention as a means to pursue sustainable growth and advanced
global trade. In addition, over the course of the global economic crisis, the
gravity of cooperation among countries is undoubtedly being recognized for
co-prosperity.


         Under such circumstance, cooperation among trading partners should be
further enhanced. The Customs administrations, which stand on the frontline of the
global trade, should also come up with the ways for closer cooperation.


        In such a dynamic platform of world trade, it is desirable for countries to
figure out rules and legislations concerning trade of others to contribute to the
seamless flow of exports and imports and boost trade among them.


         The Customs and Tariff Bureau of the Ministry of Strategy and Finance
is publishing “Korea Customs and Tariff 2010” since last year, aiming at offering
precise information on Korea’s advanced Customs administration to overseas
Customs operators, interested parties and stakeholders. This publication will give
an outline of the customs and tariff system of Korea.


         I hope that “Korea Customs and Tariff 2010” will serve as a reliable
guideline for overseas Customs operators and stakeholders to better understand
Korea’s customs administration. Thank you.




                                                                    Byun, Sang Goo
                                                                    Director General
                                          Table of Contents

Ⅰ. Introduction
    1. Customs Administration in Korea ····················································· 1
    2. Customs Act and Regulations ···························································· 3
    3. A Brief History of Korea Customs ·················································· 4


Ⅱ. Customs System
    1. Customs Procedures ························································································ 8
    2. Customs Valuation & Audit ········································································ 23
    3. Customs Duty Exemption and Abatement ················································· 29
    4. Customs Drawback ······················································································· 32
    5. Rules of Origin ····························································································· 37
    6. Bonded Area System ···················································································· 44
    7. Tariff System ································································································· 48
    8. Appeal System ······························································································· 59
    9. AEOs policy ·································································································· 62


Ⅲ. Improvements or Amendments in 2010
    1. Amendments of Customs Act ····································································· 69
    2. Amendments of Anti-Dumping provisions ················································· 99


Ⅳ. Implications of FTAs
    1. Outline of FTA Strategy ············································································ 106
    2. Korea's FTA status ····················································································· 106
    3. Major outcomes by FTAs ·········································································· 112


Ⅴ. Statistics and Others ···························································                              121
Tables and Charts

Table 1      Major Customs Act and regulations administered at the Customs &
             Tariff Bureau
Table 2      Types of Post Audit
Table 3      Rules of Origin in Korea’s FTAs
Table 4      Comparison of Free Trade Zone and Integrated Bonded Area in
             Korea
Table   5    Harmonized System of Korea (HSK) of 2010
Table   6    Structure of MFN Tariffs, 2010
Table   7    Adjustment Tariff, 2010
Table   8    Anti-Dumping Measures, as of January 2010
Table   9    Major detailed safety standards
Table   10   Korea's FTAs Status
Table   11   Trade Volume by FTAs
Table   12   Utilization by FTAs
Table   13   Korea-Chile FTA Tariff Concessions
Table   14   Comparison on Tariff concessions by FTAs
Table   15   Result of Korea-EFTA FTA talks
Table   16   Modality of Tariff Concession of Korea-ASEAN FTA
Table   17   Korea's Concession in Korea-US FTA
Table   18   US's Concession in Korea-US FTA
Table   19   Korea-EU FTA Tariff Concession rate
Table   20   Korea-India FTA Tariff Concession rate
Table   21   Korea's Trade Trend from 1980 to 2009
Table   22   Top 20 by Import Trade Volume
Table   23   Top 20 by Export Trade Volume
Table   24   Export by Products
Table   25   Import by Products
Table   26   Export Trade Volume by HS Chapter
Table   27   Import Trade Volume by HS Chapter
Chart   1    Organizational Structure of Customs Administration in Korea
Chart   2    Flow Chart of Import Clearance Procedures
Chart   3    The Legal Structure of Korea's Rules of Origin
Chart   4    Priority Order of Tariff Rate Application
Chart   5    Korea's FTA Organizational structure
                                              Korea Customs and Tariff 2010


Ⅰ. Introduction
 1. Customs Administration in Korea

 1.       Customs Administration in Korea is administered by two organizations.
 Customs and Tariff policy is managed by the Customs and Tariff Bureau in the
 Ministry of Strategy and Finance and Customs Enforcement and Control is
 performed by the Korea Customs Service under the Ministry of Strategy and
 Finance (MOSF).

Chart 1 Organizational Structure of Customs Administration in Korea


                         Customs Administration in Korea


                         Ministry of Strategy and Finance


                          Customs and Tariff Bureau



                                              Multilateral        Bilateral
     Customs           Industry &
                                               Customs            Customs
      Policy              Tariff
                                              Cooperation        Cooperation
     Division           Division
                                               Division           Division


                             Korea Customs Service



                                 6 Main Customs                   46 Customs
      HQ
                                    Houses                          offices

 2.         Customs and Tariff Bureau in the Ministry of Strategy and Finance
 has 4 divisions: Customs Policy Division, Industry & Tariff Division,
 Multilateral Customs Cooperation Division and Bilateral Customs Cooperation
 Division. Customs Policy Division takes charge of Customs Policy in all
 customs matters and administers the Customs Act and regulations. Industry &
 Tariff Division administers national tariff policy and manages HS code and



                                     - 1 -
                                                Korea Customs and Tariff 2010


nomenclature for the national tariff schedule. Multilateral Customs Cooperation
Division administers international cooperation within customs-related international
organizations, such as WTO, WCO, APEC, ASEM, ESCAP, UNCTAD, etc.
Bilateral Customs Cooperation Division takes charge of bilateral tariff
negotiations, such as Free Trade Agreement (FTA) and also implementation
issues related to FTAs by independent task force - FTA Implementation and
Planning Team.


 ※ Function of Division in Customs and Tariff Bureau

 1) Customs Policy Division
    - Establishing Customs Policy in all customs matters
    - Administrating Customs Act
    - Administrating customs broker system
    - Administrating customs system - bonded system, clearance, exemption,
      rules of origin
    - Administrating anti-dumping tariff

 2) Industry and Tariff Division
    - Administrating Tariff policy and national general tariff system
    - Managing HSK system, code and nomenclature
    - Administrating tariff quota system and safeguard

 3) Multilateral Customs Cooperation Division
    - Administrating Customs Affairs of international organizations, WTO,
      WCO, APEC, ASEM, ESCAP, UNCTAD, etc.
    - Administrating Tariff Negotiation in multilateral basis
    - Establishing International customs cooperation policy
    - Administrating Countervailing and Subsidy system
    - Administrating Customs valuation system

 4) Bilateral Customs Cooperation division
    - Administrating Tariff Negotiations in bilateral basis; FTA etc.
    - Administrating FTA Special Act and regulations
    - Administrating bilateral agreement, customs cooperation agreement
    - Administrating FTA Customs Implementation Act and related issues,
      including Origin verifications, Revision of FTAs, etc.




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                                               Korea Customs and Tariff 2010


3.          Under the Ministry of Strategy and Finance, there is the Korea
Customs    Service (KCS) as a separate organization. The KCS consists of HQ, 6
regional   main customshouses - Seoul, Busan, Incheon, Daegu, Gwangju and
Incheon    International Airport, and 46 regional customs offices as of January
2010.


2. Customs Act and Regulations

4.        The Customs Act is the basic law for the Customs Administration and
was first established in November 1949. It is supplemented by the Customs
Enforcement Decree (Presidential Decree) and the Customs Enforcement
Ordinance (Ministerial Ordinance).

5.       Customs and Tariff Bureau administers 6 laws, 10 presidential decrees
and 25 ministerial ordinances. (Table 1)

Table 1 Major Customs Act and regulations administered at the Customs &
        Tariff Bureau
 Type of Acts                       Title of Acts/Regulations
                  1. The Customs Act
                  2. The Customs Brokers Act
                  3. The Special Act on Drawback
                  4. The Temporary Import Value-added Act
      Law
                  5. The Special Act on Customs Act for the Implementation
                     of Free Trade Agreement
                  6. The Special Act on SOFA(for Status of US Army in
                     Korea).
                  1. The Customs Enforcement Decree
                  2. The Customs Brokers Enforcement Decree
                  3. The Enforcement Decree for the Special Act on Drawback
                  4. The Decree on the Application of the Adjustment duty
   Presidential   5. The Decree on the Application of the Autonomous Tariff
     Decree          Quota
                  6. The Decree on the Application of the International
                     Cooperation Tariff
                  7. The Decree on the Concessional Tariffs of the WTO, etc.
                  8. The Decree on the Preferential Tariff for LDCs'



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                                                Korea Customs and Tariff 2010



                 9. The Decree on the Implementation of the Customs
                    Convention on the International Transport of Goods
                 10. The Enforcement Decree of FTA Act

                 1. The Customs Enforcement Ordinance
                 2. The Customs Brokers Enforcement Ordinance
                 3. The Enforcement Ordinance for the Special Act on
                    Drawback
                 4. The Ordinance on Tariff Reduction Subject to Special Tax
                    Treatment Control Law
                 5. The Ordinance on Tariff Reduction on Factory Automation
                    machines
                 6. The Ordinance on Tariff Reduction on Goods for Industry
   Ministerial
                    Technology Research and Development
   Ordinance
                 7. The Ordinance on Tariff Reduction on Goods Used to
                    Prevent Environment Pollution
                 8. The Ordinance on the Imposition of Anti-Dumping Tariff
                    (15 Ordinances as of January 2010)
                 9. The Ordinance on the Imposition of Special Safeguard
                    Tariff
                 10. The Ordinance on the Increase of Market Minimum
                     Access (MMA)
                 11. The Enforcement Ordinance for FTA Act


3. A Brief History of Korea Customs

6.        In chronological order, Customs administration in Korea can be
divided into three parts: i) the early period of Korea Customs administration, ii)
pre and post Uruguay Round Agreement administerd by the WTO, and iii)
period of bilateral cooperation under the FTA environment.

Early Period of Customs Administration in Korea (1878 ~ 1970)

7.         The year 1878 marked the beginning of the history of Customs
administration in Korea. Dumojin Maritime Customs, the first modern customs
house, was established in September 28th, 1878, at an early stage of the
nation's modernization. The period was the infancy of Customs administration in



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                                               Korea Customs and Tariff 2010


Korea. During that period, however, customs houses were managed by foreigners
due to the lack of sovereignty of Korean government over customs affairs as,
which can be explained by historical backgrounds.

8.      However, Korea's development of Customs administration was impaired
by the military and political intervention of foreign powers between 1910 and
1948.

9.        With the launch of the independent government of the Republic of
Korea on August 15, 1948, the Customs Bureau was established under the
Ministry of Finance.

10.         Korea was able to attain sovereignty over customs affairs, which laid
the foundation of Korean Customs administration. Since the establishment of the
Korean government in 1948, Customs administration had been managed by the
Customs Bureau of the Ministry of Finance until 1970. The Customs Bureau
had five divisions: Surveillance Division, Export Division, Assessment Division,
Tariff Division and International Division. 11 customs houses were founded in
Seoul, Busan, Gimpo, Masan, Ulsan, Yeosu, Gunsan, Mokpo, Mukho and Jeju.
Those customs houses as well as the Customs Bureau had concentrated on
securing financial revenue required for economic development by collecting
customs tariffs, protecting domestic industries still in their infancy and
supporting local businesses in exportation. Another important development is the
inauguration of the Customs Act in 1949.

11.         Then in 1970, there were increasing demands in customs fields due
to growing trade volume, import and export declaration and passengers as well
as the necessity of customs control and surveillance. The Ministry of Finance
(MOF) established the Korea Customs Service (KCS) as an affiliated
organization to allocate the function of policy implementation to it, while the
MOF still administered customs policy making as a whole.

12.        At that time, under the Government Organization Act, Customs and
Tariff Bureau of the MOF has three divisions: Customs Policy Division,
Industry & Tariff Division, and International Customs Cooperation Division.

13.        Since then, Customs administration has been managed by the
Customs Bureau in the Ministry of Finance and the KCS. The Customs Bureau



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                                              Korea Customs and Tariff 2010


is in charge of the introduction of Customs policies, administration of Customs
Act, etc. The KCS is responsible for the implementation of Customs policy.

Pre and Post Uruguay Round (1971 ~ 2000)

14.         In the 1980s, Customs administration in Korea had been developed
to conform to the global customs standards as Korea pursued the open-door
policy more aggressively. International standards such as the HS and agreements
of GATT Uruguay Round were actively adopted, which established a foothold
for clearance management system.

15.         Another goal of Customs adminstration in Korea was to reduce
customs clearance costs. Therefore, plans and policies were made and
implemented to achieve the goal of the simplification of clearance systems and
procedures. As the WTO was launched in January 1, 1995, Korean Customs had
to adjust its Customs polices to be in line with multilateral trade system.
Customs in Korea focused on developing advanced and swift clearance
procedures to conform to the multilateral trade standard by reducing unnecessary
regulations of the government such as establishing paperless clearance system
and allowing traders to import/export after filing import/export declarations,
rather than after getting permission from Customs offices.

16.         On the other hand, Korean Customs set up the tariff rates meeting
the global standards by turning an average 13 % of the basic tariff rates
structure into uniform rate of 8% with an aim to embrace for the UR
negotiations in advance, which began in 1986 and the WTO launched in 1995
with the conclusion of UR negotiations.

17.         Entering 2000, Customs administration in Korea has been adjusted
itself to be best qualified in a globalized world. Korean Customs signed the
Revised Kyoto Protocol to prepare for the expansion of regionalism while the
multilateral trade system was being settled, launching various customs
cooperation programs with other regions. The adoption of international customs
rules and regulations resulted in positive changes in customs administration and
policies. To facilitate those changes, the MOFE completely revised the Customs
Act in 2001 to build more advanced Customs administration and systems to
keep up with globalization trend. All of these changes aimed to make Customs
administration and policies more customer-friendly.



                                    - 6 -
                                                Korea Customs and Tariff 2010




Era of Globalization and FTAs (2001 ~       )

18.         The global Customs environment began multilateral negotiations with
the launch of the WTO DDA talks in 2001. However, as much progress had
not been made with the delay of the negotiations, bilateral talks on tariff,
namely Free Trade Agreement (FTA) went mainstream since 2005 worldwide,
which contributed to reducing tariff barriers between contracting parties and
builded up regional trading blocs. Korea also has recently been focusing on
contracting various FTAs in a multi-track approach. To deal with increased
number of FTAs, Korean Customs has focused on the implementation issue of
each FTA such as procedures of the verification procedures of Certificate of
Origin, bilateral customs cooperation, exchange of customs data, etc.

19.        Korean Customs also strives to build an advanced customs system,
including Single Window Platform, IPR protection, introduction of Authorized
Economic Operators (AEOs) to facilitate trade and satisfy the global standards
required by the WTO and WCO.




                                    - 7 -
                                                 Korea Customs and Tariff 2010


Ⅱ. Customs System
1. Customs Procedures

 20.        Customs Clearance System is basically divided into three parts:
 export clearance, import clearance and customs clearance for return cargo
 according to Article 2 of the Customs Act. Korea implemented Import/Export
 Declaration System on July 1, 1996, replacing Import/Export Permit System.
 Also, EDI-based import clearance system has been in operation since July 1,
 1996, enhancing the effectiveness and efficiency in customs clearance procedures.

 21.         In addition, in an effort to further streamline the clearance procedure
 and reduce cost burden of declarants, Korea Customs Service (KCS) has been
 operating a web-based clearance system since October 2005. Korea confirms
 import-related requirements, accepts declaration and releases goods immediately
 when the import declaration is legitimate. Clearance procedures, therefore, are no
 longer considered as an obstacle to the logistics flow.

 22.          To lighten financial burden of businesses, the pre-clearance payment
 system changed into the post-clearance payment system, under which customs
 duties should be paid within 15 days after a customhouse accepts the
 declaration.

 23.        Korea sets up a Single Window environment for customs clearance,
 in which Customs checks whether import requirements have been satisfied
 through an electronic connection with other government agencies which issue
 required approval, certificate, etc. for importation. Importers do not have to be
 under the declaration processes of        Customs and other related government
 agencies.

 24.       Customs is not just a tax collecting agency. It verifies whether
 import requirements prescribed by relevant laws as well as the Customs Act
 have been fulfilled prior to the clearance..

Import Clearance Procedures

 25.         Any person who wants to import, export or return goods must lodge
 a declaration with a customhouse. Customs declaration for import/export can be


                                       - 8 -
                                                Korea Customs and Tariff 2010


submitted in the name of a cargo owner, a customs broker, and a juristic
person for customs clearance.

26.         Import declaration may be filed before a cargo carrier enters a port.
This is called prior-entry import declaration. Import cargo is stored at a bonded
area. Import declaration is possible before or after the bonded storage. Provided
that prior-entry import declaration be made within 5 days before the carrier
enters a Korean port and as for the aircraft, within 1 day before, import
declaration must be filed to a customhouse in charge of the district where the
goods are stored by EDI method with specifications of the goods under the
name of a cargo owner, a customs broker, and a customs brokerage firm.

27.         Declaration must be written on an import declaration form stating the
description of the goods as well as quantity, value and other particulars
required. The form is required to be attached with the supporting documents
below:

      - Import license (for goods which requires this to be imported),
      - Invoice
      - Price declaration
      - B/L (Bill of Lading)
      - Proofs that requirements have been satisfied under Article 226 of the
        Customs Act
      - Packing List
      - Certificate of Origin
      - Application for Duty exemption/abatement, preferential tariff rate, etc. (in
        case where they are available)

28.        When an import declaration is filed, the customhouse confirms
formal listings of the declaration forms and ensures whether required
documentation has been satisfied. If all requirements are satisfied, the
customhouse immediately accepts the declaration, and an importer can withdraw
goods with a certificate which proves that the declaration has been accepted.

29.        Import declaration is divided into two processing categories in
accordance with the Cargo Selectivity (C/S) system: Document Examination and
Inspection of Goods. Import declaration is subject to Document Examination
when it is required to prove that certain conditions for import clearance have



                                      - 9 -
                                                Korea Customs and Tariff 2010


been satisfied. Goods whose markings, uses, functions, ingredients, components,
etc. cannot be verified by submitted documents only need to undergo
observation, examination, or analysis process. In this case, the import declaration
is accepted upon a satisfactory Inspection. Declared goods suspected of
concealing contraband or of violating the Customs Act or other related
regulations are also subject to the Inspection.

30.        Customs checks whether there is any discrepancy between submitted
documents and the contents of declaration. It also determines whether to inspect
the goods. Cargo inspection is carried out when customs officers cannot confirm
the usage, marking, functions, etc. of the goods only with import declarations
and attached documentation or when it is deemed necessary to check for
concealed goods or to confirm that the cargo is identical.

31.        The C/S (Cargo Selectivity) System has information to screen
high-risk cargo, and it automatically selects cargo to be inspected. After
documentary inspection, a customs officer may decide whether to do physical
check-up. After the cargo inspection, Customs determines whether to accept
clearance declaration.

32.          After import clearance is accepted by an inspector, customs duties
must be paid along with internal taxes or security equivalent to the duty and
internal tax amount should be deposited at Customs before import declaration is
accepted. In case security is deposited, customs duties must be paid within 15
days after a customhouse accepts declaration. After this, the cargo covered by
the import acceptance can be released from the bonded area and enter into free
circulation.

33.        The Import/Export Declaration System has been implemented under
the premise that most imports and exports are legitimate and traders file fair
and accurate declarations. Customs tries to expedite the clearance of honestly
declared goods while effectively interdicting illegitimate goods. The Declaration
System speeds up import clearance by accepting importers' declaration at face
value. Verification of declaration such as import price and origin markings is
comprehensively conducted through the Post-Clearance Audit System for
companies and goods satisfying certain criteria. Currently, examination on
valuation accounts for most of the post-audit activities. When there is a deficit
in the duty payment due to error by the duty payer, a customhouse shall collect



                                     - 10 -
                                                 Korea Customs and Tariff 2010


the amount of deficit plus an additional charge equivalent to 20 % of the
deficit amount. (Chart 2)

34.       Goods falling under any of the following categories shall be assessed
by Customs:

      - hand-carried or accompanied goods of passengers or crews
      - postal matters (excluding commercial goods for which import license is
        required pursuant to the Foreign Trade Act)
      - goods deteriorated or damaged
      - goods to be sold by the Property Disposition Office at USFK
      - unaccompanied baggage to be used for personal use



Chart 2 Flow Chart of Import Clearance Procedures


                                  Pre-departure of a vessel /
              Pre-arrival of a vessel before placing goods in a bonded area /
                            After placing goods in a bonded area
                                             ↓
                                     Import declaration
                                             ↓

                                     Import acceptance

                                             ↓

                                     Release of goods

                                             ↓
                                Payment of customs duties


35.         In general, customs duties are levied on the basis of the declaration
and payment system. However, a customhouse shall impose and collect customs
duties directly in the above-mentioned cases. The customhouse gives a notice of
payment to the duty payer. Other procedures are basically the same as those of
the declaration and payment system.



                                    - 11 -
                                                  Korea Customs and Tariff 2010




36.        Customs Duty and Taxes imposed to the imported goods are as
follows;

     a. Customs Duty
     Korea Customs uses the Harmonized System (HS) of tariff nomenclature as
     a basis for the collection of Customs duties and trade statistics, which is
     adopted by almost all countries. In Korea, most goods are charged with
     8% of Customs duties. Dutiable value is the actual price paid to exporters
     plus freight and insurance (CIF price). For the applicable duty rate for the
     items of your interest, please refer to the Customs Tariff Database on the
     KCS's website. (http://www.customs.go.kr)

     b. Value Added Tax
     Value Added Tax (VAT) is charged on the imported goods. The current
     tax rate is 10 % of the dutiable value. Dutiable value is CIF value
     (Customs value) plus all the other duties and taxes. (Customs duties,
     Special Excise tax, Liquor tax, Transportation tax, Tobacco tax, Education
     tax and etc.)

     c. Individual Excise Tax
     Dutiable goods and the rates are as follows:

                                                                     Tax    Dutiable
                                 Goods
                                                                     rate    value
       Slot machines, pin-ball machines and other similar
                                                                     20%
       recreational machines, hunting guns or rifles
       Deer antlers, royal jellies; perfumes, colognes               7%
       Jewelry (excluding diamonds for an industrial use,
       unprocessed original stones), pearl, tortoise-shell, coral,          Customs
       amber, ivory, and their products; and precious metal                 value +
                                                                     20%    Customs
       products
       *The tax shall be levied on the amount exceeding                      duty
        two million won
       High-priced cameras and accessories; high-priced
       watches; high-priced fur skin and its products                20%
       (excluding rabbit skin and raw fur skin); expensive



                                       - 12 -
                                           Korea Customs and Tariff 2010



 carpets; and expensive furniture
 *The tax shall be levied on the amount exceeding
  two million won. (in case of high-priced furniture, 5
  million won)
 Automobiles with an engine displacement in excess of
                                                          10%
 2,000 cc and camping cars
 Automobiles with an engine displacement of 800 ∼
                                                          5%
 2,000 cc



d. Liquor Tax
Dutiable goods and the rates are as follows:

                                                          Tax    Dutiable
                         Goods
                                                          rate    value
 Beer (alcohol content 1% or more) *Temporarily in
                                                          72%
 2006, 80% of tax rate is applied.
 Fruit wine (alcohol content 1% or more)                  30%

 Whiskey (alcohol content 1% or more)                     72%

 Brandy (alcohol content 1% or more)                      72%

 General distilled spirits (alcohol content 1% or more)   72%

 Unrefined Liquors (alcohol content 1% or more)           5%
 Liquors made by a fermenting method other than
                                                          30%
 fermented liquors
 Liquors made by a fermenting method, mixed with
                                                          72%
 neutral spirits or distilled liquor


e. Transportation Tax
Transportation tax is charged on gasoline and similar substitute oils and
diesel oil and similar oil products:
For gasoline and similar substitute oils, KRW 630 per litter is charged,
and for diesel oil and similar oil products, KRW 404 per litter is charged.




                               - 13 -
                                                    Korea Customs and Tariff 2010


     f. Tobacco Consumption Tax
     In Korea, the tobacco consumption tax is a local tax (city and county tax)
     and the rates are;

                     Item                                   Tax Rate
                  Cigarettes                         KRW 641 per 20 pieces
                Pipe tobacco                           KRW 1,150 per 50g
                     Cigars                            KRW 3,270 per 50g
              Chewing tobacco                          KRW 1,310 per 50g
                     Snuff                             KRW 820 per 50g

     g. Education Tax
     Taxpayers of special excise tax, transportation tax, tobacco consumption tax
     and liquor tax are required to pay education tax and the rates are:


          Taxpayer                 Tax Base                        Rate

     Taxpayer of Special       Special Excise Tax
                                                                   30%
         Excise Tax                 Amount
         Taxpayer of           Transportation Tax
                                                                   15%
      Transportation Tax        Amount Payable
        Taxpayer of
                              Tobacco Tax Amount                   50%
        Tobacco Tax
     Taxpayer of Liquor                                10% (30% when liquor tax
                               Liquor Tax Amount
            Tax                                           rate is over 70/100)

     ※ The tax rates illustrated above can be adjusted within 30% of each rate for the
       purpose of supplying resources for the education investment fund. <Education
       Tax><Tobacco Consumption Tax ><Liquor Tax> <Special Excise Tax>

Establishment of the EDI-type/Web-based Clearance System

37.        In 1996, the EDI (Electronic Data Interchange) System was
introduced to establish a nationwide automated clearance network. Based on the
system, as of May 2002, 64 government agencies issuing import certificates,


                                       - 14 -
                                                 Korea Customs and Tariff 2010


such as the Ministry of Agriculture and Forestry, have been linked with the
KCS via an electronic network. The KCS now verifies whether import
requirements have been satisfied through the network, thereby greatly reducing
the time needed for clearance.

38.        In July 1999, the paperless import clearance system was launched,
enabling importers and exporters to clear their goods without having to visit
Customs. Thanks to the EDI import system, the average time required for
Customs clearance is less than 2.5 hours and more than 85% of the declarations
are cleared within 40 minutes. Also, in an effort to further streamline the
clearance procedure and reduce cost burden of declarants, the KCS has been
operating a web-based clearance system since October 2005.

39.         In parallel with the establishment of the EDI system, in June 1998,
the KCS introduced the On-Dock Immediate Clearance System in Busan and
Gwangyang port, that handle the largest amount of import and export cargo in
Korea. The system in line with the efforts to simplify clearance, enables the
immediate release of goods to the importer's or exporter's factories as they
arrive in the port. Under the On-Dock Immediate Clearance System, imported
goods can be cleared and released immediately upon the port entry. Cargo
release under the Import Declaration System enables trustworthy manufacturers
and foreign investment companies to clear raw materials and facility goods only
by filing brief cargo information and to file import declaration within 10 days
thereafter.

40.         For a faster clearance, an import declaration is possible even before
a vessel loaded with import cargo enters a port. After the port entry, the import
cargo can be immediately unloaded from the vessel and transported from the
pier to its destination. When a foreign trade vessel/aircraft enters an open port,
the captain of the vessel/aircraft shall, without delay, provides Customs with an
entry report (of the vessel/aircraft, etc.) along with the manifest, the list of
supplies carried on the vessel/aircraft, passengers, crew members, and personnel
effects of the crew.

41.          The Customs Act prohibits the importation of any of the following
goods:

         - Books, publications, circulars and pamphlets, films, phonographic
           records, sculptures and other items of similar nature which will either



                                      - 15 -
                                               Korea Customs and Tariff 2010


        disturb the national constitution order or harm public security or
        custom;
      - Goods which may reveal confidential information of the government or
        be used for intelligence activities; and
      - Coins, currencies, bank notes, bonds and/or any other negotiable
        instruments counterfeited, forged or imitated.

Export Clearance System

42.         Export Clearance is defined as 'a regulatory Customs procedure that
enforces an exporter to declare to Customs not only the nature of goods they
intend to export, but also their quantity, price and any other particulars'. It
consists of processes such as manufacturing of export goods, export declaration,
examination, inspection, acceptance of declaration and shipment of goods.

43.         In order to promote foreign trade by facilitating export, Korea
pursues a 'simplified and free Export Clearance', and introduced a simplified
Export Clearance procedure, wherein most declarations are handled by Paperless
(P/L) methods. However, Customs conducts documentary as well as physical
inspections at a certain ratio (based on risk selection criteria). By doing so,
Customs aims to prevent illegal and illicit trading and to enhance credibility of
Korea.

44.         The Export Clearance System has undergone constant changes and
now adopts a simplified Clearance for the purpose of providing maximum
benefits to export-related businesses.

45.         A rapid computerization in Customs administration was pursued in
the 1990s. An advanced export Clearance system via EDI was developed and
implemented in December 1994. Thanks to the computerization, a speedy Export
Clearance became possible and the fast Clearance was further facilitated by
making a client's visit to Customs unnecessary. Now 95% of Export Clearance
System is processed by P/L methods. Moreover, the KCS has been operating a
web-based clearance system since June 2005, in an effort to further streamline
the clearance procedure and reduce cost burden of declarants.

46.         An exporter is allowed to make an Export Declaration whenever the
exporter finds it convenient to make the declaration before a shipment occurs.


                                    - 16 -
                                                  Korea Customs and Tariff 2010


An export declaration must be made under the names of customs brokers,
Customs broker corporations, corporations dealing with clearance affairs, or
exporters. Export must be declared by EDI methods to a customs house. The
export declaration is made in accordance with where goods to be exported are
stored. However, a number of small-sized export firms are allowed to make an
Export Declaration through 'export declaration electronic facilities' equipped in
'export declaration support centers' such as the Korea International Trade Association.

47.         Export can be declared in a P/L form via EDI, with the exception
of certain goods - those selected and enforced to submit documents.

      - Goods subject to documentary submission: goods needed to prove their
        compliance of certain requirements prior to an Export Clearance
        acceptance, and re-exporting goods due to a breach of contracts. These
        account for 5 % of the total number of Export Declarations.

48.       An Export Clearance processing can be done in three different ways:
automated processing, immediate processing and post-inspection processing.

49.         An Export Declaration of Goods by automated processing, which
amounts to 95% of total export declarations, can be made electronically without
having a customs officials' inspection. Immediate processing applies to all the
goods required to submit documents with the exception of those needed to be
inspected. In this processing, which accounts for 4.6% of total Export
Declarations, customs officials examine actual contents of submitted documents.
Post-inspection processing is designed to conduct an examination on actual
goods by customs officials on the basis of submitted documents. This processing
takes up approximately 0.4% of total Export Declarations.

50.         In principle, goods to be exported are exempted from a physical
inspection. However, on particular occasions, such as when goods are selected
for an inspection and when an examination of actual goods is necessary after
checking declaration contents, a physical inspection can occur. In particular, a
physical inspection is applicable to those with high risk elements such as
infringing IPRs, forging goods, and disguising them as legitimate ones. Customs
decides an inspection ratio and inspection duration in a 'elastic' manner, by
considering the nature of goods and the degree of firms' trustworthiness and by
taking information of high risk elements such as illicit export and drawback into
account.



                                       - 17 -
                                                Korea Customs and Tariff 2010


51.        Shipment of goods for export on a foreign trade vessel or aircraft
must be made within 30 days after Export Declaration is accepted. If a
shipment cannot be made or delayed due to unforeseeable circumstances such as
changes in a shipment schedule, with exporters' application, an exporter is
permitted to postpone her/his shipment up to 1 year from the date of the first
Export Declaration acceptance.

52.          Under simplified export clearance procedures, an export clearance can
be made by the submission of a manifest, invoice, simplified clearance list or a
postal list, otherwise by an electronic transmission of equivalent information to
customhouses. Here are goods subject to simplified clearance procedures:

      - Unaccompanied non-commercial baggage valued less than FOB KRW 
        2.0 million
      - Newspapers, films for news broadcasting, recorded tapes, and other for
        mass-media purposes
      - Catalogues, documentary files, and so forh.

53.          Korea Customs Administration will continue to promote a simplified
and speedy export clearance, and at the same time, will tighten a documentary
and physical inspection as a part of Risk Management (R/M) in order to
prevent illicit trading including infringements on IPRs and counterfeits. Customs
aims to achieve the practicality of export inspection, by collecting and analyzing
information of trade-associated firms entailing high-risk elements, and by
reflecting this in the export inspection system.

Simplified Clearance system

54.        If goods are introduced for private use by a private person, they are
handled through Simplified Clearance Procedures and subject to a Simplified
duty rate.

      Personal effects or unaccompanied baggage: in case a traveler
      hand-carries personal belongings or gifts into the country: in case a
      traveler brings in personal belongings as unaccompanied baggage

      Post parcels: gifts sent by mail from friends or relatives abroad, goods
      purchased by domestic residents (if there is any import restriction on



                                     - 18 -
                                                Korea Customs and Tariff 2010


      them or if the value exceeds US$ 600, a formal import declaration is
      required.)

      Consignments and express consignments: gifts, samples, or repair parts
      sent from relatives or business partners from overseas, goods purchased
      over the Internet by domestic residents for personal use

55.         Simplified Clearance is applied for Postal Parcels and Express
Consignments. All inbound postal matters, excluding letters shall pass through a
Customs post office, which is designated by the Commissioner of Customs. The
joint Customs and Postal Service regulations prescribe that all post parcels have
a Customs Declaration Form securely attached, giving an accurate description
and the value of the content. This Declaration Form can be obtained at post
offices. Commercial shipments should be accompanied by a commercial invoice
enclosed in the parcel. The list of the postal parcels, received by a post office,
will be presented to Customs. All postal parcels are X-ray scanned and, if
necessary, inspected.

56.         Invoices or statements of value sheets should be enclosed with the
sealed article and marked on the address side of each post parcel as "invoice
enclosed." If the invoice or the statement of value cannot conveniently be
enclosed within the sealed article, it may be securely attached to the article.
Failure to comply with any of these requirements could delay Customs
clearance.

57.       Customs performs a detailed job of filling a postal inventory with
the commodity name, specification, quantity, dutiable value, HS code, tariff rate,
etc. Where taxation or a restriction does apply, Customs shall notify applicable
laws or other legal grounds to the Postal Service and it will then notify
Customs decision to the addresser or addressee.

58.        The consignee of the postal matters who receives the notification of
Customs duties payment is the one who has to pay the duties to Customs or
post office. The postal matters are not delivered to the addressee before
Customs duties are fully paid.

59.        Goods delivered by express couriers are subject to X-ray scanning
and other physical inspections, if necessary, to check the validity of declarations


                                     - 19 -
                                               Korea Customs and Tariff 2010


and to make sure they are compliant with all the relevant laws and regulations.
If a product is of less than US$100 in value, Customs performs selective
inspections, based on consignment lists forwarded by express courier operators.
The product is cleared duty-free, if found to be proper. For goods less than
US$2000 in value, Customs performs selective inspections, based on a
Simplified Declaration filed via the EDI. If the duty amounts are correct and
other conditions are met, they are cleared immediately. However, if they are
restricted and prohibited ones, then the goods have to be cleared in accordance
with the Formal Import Declaration procedures. For goods exceeding US$ 2000
in value, they have to be declared using the Formal Import Declaration
procedure via the EDI.

60.        Post parcels and express consignments would be cleared duty free
when the total dutiable value does not exceed KRW 150,000 and the quantity
is such that Customs shall recognize as for personal use. Although the quantity
is small enough to be recognized as for personal usage, if the total dutiable
value exceeds KRW 150,000, Customs duties and other taxes will be charged.
The goods have to satisfy importation requirements stipulated by relevant
domestic laws and regulations if it is to be duty-free cleared, even if they meet
the duty free allowance criteria.

61.         The following parcels are subjects to duty exemption. However, if
the quantity or value exceeds the duty free allowance, Customs duties are to be
paid:

      - Goods whose dutiable value is less than US$ 250 and Customs deems
        as commercial samples
      - Goods imported by a person participating in an exhibition or a trade
        show for the purpose of giving them out to visitors for free, of which
        Customs deems appropriate (the value of gift for a visitor should not
        exceed US$5)
      - Goods falling into Customs duty exemption categories by other related
        laws and regulations
      - Goods with a 0% Customs duty rate

62.        The following parcels are subject to Customs duties and other taxes,
according to the Korea Customs Act and other domestic laws:




                                    - 20 -
                                                Korea Customs and Tariff 2010


      - Goods other than for a private use, even though the total value is less
        than KRW 150,000
      - Goods whose total value exceeds KRW 150,000
      - Samples exceeding US$ 250 in dutiable value

Exemption of Import Declaration and Simplified Declaration

63.       For the goods listed below, import declaration is exempted and those
goods are exempted from customs duties or have 0% duty rate. A copy of B/L
could be filed as a substitute. However, if any of those items have any
commercial value, import declaration needs to be made:

      1) Diplomatic goods that are Customs-duty exempted
      2) Goods brought in by a visiting foreign President, his/her accompanied
         family member and staff
      3) Dead bodies or bones
      4) Goods used for media such as films and record tapes that contain
         newspaper articles or news
      5) Documents produced by overseas Korean consulates to the Ministry of
         Foreign Affairs and Trade
      6) Historic documents and paper

64.        For the following items, declarations are finalized simply by filing an
import declaration form without supporting documents.

      1) Goods subject to duty exemption addressed to domestic residents and
         whose total dutiable value is less than 150,000 Korean won (based on
         CIF price)
      2) Commercial samples subject to duty exemption and whose total
         dutiable value is less than 150,000 Korean won (based on CIF price)
      3) Import-permission exempted products in design
      4) Monetary instruments imported by a financial institution to manage its
         foreign exchange operation

65.      On goods subject to Simplified Import Declarations, dutiable value or
duty exemption status decisions are made based on the Customs declaration



                                     - 21 -
                                                 Korea Customs and Tariff 2010


form attached to the parcel, and the consignee is not required to make an
Import Declaration to Customs.

66.       Duty Free allowances are made on the basis of the price, quantity of
the goods and the reason for importing those goods. If a consignee views that
customs duties and other taxes are unjust, he/she can file complaints to the
customhouse that charged the amount. The complaints will be handled in
accordance with legitimate procedures and Customs will notify the measure
taken.

67.         For prohibited or restricted goods, however, necessary documents,
stipulated by relevant regulations, (i.e. certificates, recommendation, permission or
authorization ) need to be filed with import declarations. There are goods
subject to Customs Director's confirmation in line with Article 226 of the
Customs Act

      - Goods subject to import/export authorization in line with Article 27 of
        Enforcement Decree of Trade Law,
      - Goods subject to one or more of the following Acts:
        -- The Act on the Control of Narcotics;
        -- The Act on the Control of Firearms, Swords, Explosives; Natural
           Environment Conservation Act;
        -- The Act on Protection and Hunting of Birds and Animals;
        -- The Act on the Control of Trans-boundary Movement of Hazardous
           Wastes and Their Disposal;
        -- The Act on the Prevention of Livestock Epidemics; Plant Protection
           Act; and Pharmaceutical Affairs Act
      - Goods subject to Customs duty exemption (duty is exempted in
        accordance with the filed duty exemption application)
      - Goods on which a Customs drawback may be applied in line with the
        Special Act on Customs Drawback, including raw materials for export
        manufacturing
      - Goods of which Customs value exceeds US$ 600
      - Other goods that the importer wants to file an import declaration

68.        Intentional tax evasion or smuggling of prohibited goods may lead to
criminal investigation and punishment in accordance with the Korea Customs
Act.




                                      - 22 -
                                                Korea Customs and Tariff 2010


2. Customs Valuation & Audit

69.         The Customs Act and the Presidential Decree of the Customs Act
stipulate various rules on customs valuation which reflect relevant provisions of
the WTO Valuation Agreement. To be exact, the Customs Act provides and
defines how the customs value of imported goods is to be determined in
compliance with provisions of the WTO Valuation Agreement.

70.        The primary method for customs valuation (which is the transaction
value method based on the price actually paid or payable for the goods when
sold to Korea for export adjusted in accordance with the provisions of the Act
wherever the conditions prescribed therein are fulfilled) is stipulated in Article
30 of the Act as an implementation of Articles 1 and 8 of the WTO Valuation
Agreement.

71.         In addition, where the customs value cannot be determined under the
provisions of the Act, it is determined by sequential application of the valuation
method in descending order, which states that customs value can be determined
using the transaction value of identical goods, the transaction value of similar
goods, the deductive value method referred to in theory as the constructed value
method, and other valuation methods using reasonable means consistent with the
principles and general provisions of the WTO Valuation Agreement and Article
7 of the GATT 1994 and on the basis of the data available in Korea. However,
the deductive and the computed value method may be reversed at the request of
the importer.

72.         In this connection, worth noting is the fact that whereas Article 24
of the Presidential Decree of the Customs Act prescribes that in applying the
deductive value method for imported goods, profit and general expenses should
be taken as a whole and be calculated on the basis of an accounting report
prepared in a manner consistent with the generally accepted accounting
principles, no provisions expounding the specifics of the generally accepted
accounting principles are prescribed either in the Customs Act or in the
Presidential Decree thereof. In actuality, the KCS resorts to the Business
Accounting Standards, a body of regulations promulgated by the Securities
Management Commission of Korea, which are grounded on the recognized
consensus and substantial authoritative support within Korea.




                                     - 23 -
                                                Korea Customs and Tariff 2010


73.        The KCS publishes the "Standard Rate of Profit and General
Expenses" on an annual basis in May in cooperation with the National Tax
Service in preparation for the application of the deductive value method for
imported goods. With respect to the application of other valuation methods using
reasonable means consistent with the principles of the WTO Valuation
Agreement, the following methods have been preferentially implemented since
1994, so far as the conditions prescribed in the WTO Valuation Agreement
providing the valuation bases which cannot be used in determining the customs
value are met.

74.         The method is elastically interpreting and applying the requirement in
the determination of dutiable value on the basis of transaction value of identical
goods that "the identical goods shall have been produced in such a country as
determines the dutiable value and shall have been shipped at the shipping date
of the goods or in a period in which there is no change in the market
conditions or commercial practices to have any effect on the price before and
after the shipping date".

75.         The method is elastically interpreting and applying the requirement in
the determination of dutiable value on the basis of the domestic sale price
(deductive value method) that "the dutiable value shall be the unit price at
which the imported goods, identical goods or similar goods are sold
domestically, in the same condition as when imported",

76.        In relation to the determination of dutiable value using reasonable
means, a point to be noted is the fact that the Presidential Decree of the
Customs Act stipulates that Customs may regulate details governing the basic
data necessary for the determination of the customs value and its calculation
method for the following imported goods:

      - Goods deteriorated or damaged before import declaration
      - Accompanied goods of a passenger or a member of the crew, mailed
        articles, consigned items
      - Rented or leased goods
      - Used goods

77.        In case of Goods which, Customs thinks, may create confusion in
the determination of their customs value, in compliance with the aforementioned




                                     - 24 -
                                                Korea Customs and Tariff 2010


Article, the Government Executive Notice Concerning Customs Valuation
provides various methods for determination of the customs value using
reasonable means consistent with the principles of the WTO Valuation
Agreement with respect to the aforementioned imported goods.

78.        With respect to the valuation matters, the Korean government has
developed and implemented a system called "System of Post-Audit on Business"
since 1993 for a more effective post-clearance appraisement of imported goods,
the purpose of which is to examine particulars and documents of companies
necessary for an accurate appraisement of the goods imported and declared
thereby.

79.        The system of post-audit on businesses is basically designed to
achieve simplification of the customs procedures by promoting self-assessment
and strengthening the selectivity function of the customs office by focusing on
false and dishonest declarants.

80.        The main characteristics of the system are as follows. The KCS
designates a limited number of corporations which are subject to the post-audit
system in accordance with the classification of the corporations categorized as
honest importers, quasi-honest importers, importers under general surveillance and
importers under special surveillance.

81.         The KCS or customs houses may carry out the on-the-spot
examinations in the manner of either documentary examinations or summary
on-the-spot examinations according to the degree of the honesty of the corporate
as determined thereby.


82.         In this context, notable improvements include the enhancement of
expertise on the part of customs officials in charge of post-audit review and at
the same time, the collection of information concerned, and the establishment of
refined information management, particularly with respect to payment for
royalties and assists which cannot be overemphasized to ensure adequate and
accurate customs valuation.

Pre/Post-Audit




                                     - 25 -
                                                  Korea Customs and Tariff 2010


83.        Customs Audit - Customs performs audit on the validity of the
dutiable value and duty declaration voluntarily determined by taxpayers in
accordance with the Customs Act. The Customs audit can be performed before
goods are released (pre-audit) and after goods are released (post-audit).

84.        Meanwhile, audit on the Customs drawback in accordance with the
special regulation on the Customs drawback regarding the raw materials for
import/export can be performed before payments of the drawbacks (pre-audit)
and after payments (post-audit). The audit procedure is prescribed in the official
notice on the drawback procedures of raw materials for import/export.

85.         Pre-audit is the audit conducted at the point of declaration, on the
validity of the dutiable value and duty declaration voluntarily determined by
taxpayers. Matters to be checked in the pre-audit include tariff classification,
duty rate, dutiable value, internal taxes, drawback, etc. Pre-audit is classified into
immediate audit upon the individual declarations and generalized company audit.
Goods subject to pre-audit are prescribed in the Article 8 of the enforcement
decree of the Customs Act as follows;

      a. Goods exempted from duties or taxes in accordance with the Customs
         Act or international treaty
      b. Goods for installment payment in accordance with Article 107 of the
         Customs Act
      c. Goods declared by a delinquent taxpayer
      d. Goods declared by less compliant importer based on the criteria as
          provided by the Commissioner of the KCS based on the compliance
          rate
      e. Goods designated by the Commissioner of the KCS that the post-audit
         is not proper due to the fluctuating international price.

86.         Post-audit is the audit on the validity of the dutiable value and duty
declaration voluntarily determined by taxpayers after the import clearance.
Matters to be checked in the post-audit include tariff classification, duty rate,
dutiable value, internal taxes, drawback, etc.

87.         Post-audit is classified into immediate audit upon the individual
declarations and generalized company audit. Company audit is carried out by the
audit office of the main customhouses and the immediate audit upon clearance



                                       - 26 -
                                              Korea Customs and Tariff 2010


is performed by audit office of regional Customs. And post-audit is classified
into three types of audit as shown in the Table 2.

Table 2 Types of Post audit
        Type                                Description
                    Post-clearance audit is carried out immediately or within
                    1 to 2 days after the Customs clearance when it is
                    considered that taxation audit is necessary. The operator
  (1)Immediate
                    of the immediate audit upon clearance consists of a
     audit upon
                    selector and an audit officer. The selector singles the
     clearance
                    case out based on the review of the clearance documents
     (audit by
                    and the audit officer carries out the audit in accordance
     case)
                    with the instructions from the selector. The audit officer
                    reviews the case and enters the audit result into the
                    system.
                    The purpose of planned audit is to examine intensively
                    the transactions of particular goods such as high-risk
                    goods and agricultural-fishery products in order to
                    prevent tax evasion activities.

                    Through the continuous consultation with related
                    agencies, the KCS obtains trade related foreign exchange
                    transaction records as well as taxation record of
                    import/export companies from the Bank of Korea and
                    the National Tax service. For effective and efficient
  (2)Planned        information analysis, the KCS has established CDW
      audit         (Customs Data Warehouse) and OLAP (On Line
                    Analytical Processing) which enable integrated analysis
                    of Customs clearance data with external data.

                    When companies with high potential for tax evasion are
                    selected as targets of planned audit through information
                    analysis, audit officers visit the companies and closely
                    examine clearance records, trade-related documents and
                    account books, etc. If any serious irregularities are found
                    during the audit, the case is referred to the investigation
                    authority.



                                   - 27 -
                                             Korea Customs and Tariff 2010



                   The KCS performs comprehensive audit on the selected
                   large-scale trading companies considering their trade
                   volume and credibility and focusing on the clearance
                   documents and account books to verify the company’s
                   law compliance rates regarding Customs clearance
                   procedures and validity of the import declarations which
                   have been made within a certain period of time.

                   Under the previous immediate audit upon clearance (audit
                   by case) and planned audit system, the level of
                   compliance rate was low and related costs required by the
                   audit were huge and burdensome for the target companies.
                   Thus, the comprehensive audit system has been established
(3)Comprehensive
                   to lessen the burdens on companies as well as enhance
   audit
                   the efficiency of Customs control.

                   The selection of the companies targeted for comprehensive
                   audit is made through information analyses on the
                   credibility and risk factors of the companies. After closely
                   reviewing on the major areas of audit, Customs informs
                   the company of the actual audit schedule.

                   After completing the audit on the selected companies,
                   Customs takes relevant steps such as tax correction and
                   drawbacks depending on the result. According to the audit
                   result, the companies are classified into different groups
                   based on credibility and law compliance rate.




                                  - 28 -
                                                 Korea Customs and Tariff 2010


3. Customs Duty Exemption and Abatement

88.         The abatement (reduction) or exemption of customs duties means
partial or whole exemption of customs duties levied on import cargo for
international diplomatic relations, research and development promotion and
national polices when specific requirements are satisfied.

89.         Unconditional reduction or exemption from customs duties is allowed
according to status of importer, international practices and courtesies, etc.
Therefore there is no need for customs control of the goods exempted from
duties after importation. The following provisions pertain to this category:

      -   exemption   from customs duties for diplomats & quasi-diplomats
      -   exemption   on goods for use of government
      -   abatement   on deterioration or damage
      -   abatement   for Overseas Leased Processing Goods
      -   exemption   on goods re-imported

90.         Reduction or exemption from customs duties is allowed on the
condition that goods are for special use during a certain period. Customs
authority therefore may demand security or put restrictions on the usage at the
point of importation. The conditional abatement or exemption falls into the
following categories:

      - abatement or exemption on raw materials for manufacturing vessels, etc.
          navigating overseas and semi-conductor manufacturing machines
      - abatement or exemption for academic research
      - abatement or exemption for particular goods
      - abatement or exemption for environmental protection and factory
         automation
      - abatement or exemption for re-export
      - abatement or exemption on goods to be re-exported

91.         When goods imported are different from those designated by the
terms of contract, customs duties shall be refunded if the goods are re-exported
through bonded area within one year at the same quantity and shape of
importation.




                                       - 29 -
                                               Korea Customs and Tariff 2010


92.        For goods falling under following categories, the customhouse may
approve payment of customs duties on an installment basis for a period not
longer than 5 years as prescribed by the Commissioner:

      - Equipment, machinery, basic installment material for construction, and
        the structure thereof, designated by the Ministerial Notice of the
        Ministry of Strategy and Finance
      - Goods designated by the Ministerial Ordinance of the Ministry of
        Strategy and Finance and imported directly by the central or local
        government
      - Goods, subject to designation by the Ministerial Ordinance of the
        Ministry of Strategy and Finance, imported by any school or vocational
        training institute or by any non-profit making judicial person for public
        use
      - Goods, subject to designation by the Ministerial Notice of the Ministry
        of Strategy and Finance, imported by the institutions or facilities for
        social welfare such as an medical institution
      - Goods, subject to designation by the Ministerial Notice of the Ministry
        of Strategy and Finance, for technical research and development or
        experiment and practice, used by the institution designated by the
        Ministerial Ordinance of the Ministry of Strategy and Finance such as
        a research institute attached to a firm, an industrial technology
        research association and others
      - Goods imported for their own use by small and medium sized
        enterprises designated by the Ministerial Notice
      - Goods, subject to notice by Ministerial Ordinance of Strategy and
        Finance for education and experiment or practice at a vocational
        training institution attached to a firm, which cannot be properly
        manufactured domestically. (The vocational training institution must be
        designated by Ministerial Ordinance of MOSF)

93.         When the customhouse determines it necessary, the customhouse may,
at the time of importation, demand security equivalent to the amount of customs
duties abated or exempted, or installment payment with respect to the goods on
which such benefits have been granted. The KCS determines the type of
security as prescribed by the Presidential Decree.




                                    - 30 -
                                             Korea Customs and Tariff 2010


94.         A person who has been granted an approval of abatement, exemption
or installment payment of customs duties pursuant to Customs Act or any other
law shall submit to the customhouse the proofs of his ability to fulfill the
required conditions as prescribed by the Presidential Decree.




                                  - 31 -
                                                Korea Customs and Tariff 2010


4. Customs Drawback

95.         Customs Drawback is a system under which customs duties and
other taxes levied on imported raw materials can be refunded after they are
used to make export goods. The drawback system is one of several export
supporting measures to increase international competitiveness of exports. It
alleviates the burden of tariff levied on raw materials for the production of
export goods.

96.        Prior to July 1, 1975, raw materials were imported duty-free on the
condition that they would be used to produce export goods. However, the
system showed a major defect in operation with the increase in domestic
economic scale and increase of domestic transaction, and it also had difficulty in
post-management of duty-free goods after the clearance. To resolve this problem,
the drawback system has been adopted and has been in operation.

97.         Transactions eligible for drawback are limited to export transactions
in principle. However, exceptions are given to certain transactions that result in
the same effect as export transactions in practice. The Special Act for Drawback
defines the subjects for drawback as the following:

      1) Exports processed by Customs in accordance with the "Korea Customs
         Act"
      2) Special cases of transactions eligible for drawback
         - Supplies for vessels and aircraft plying between Korea and foreign
           nations, Supplies for pelagic-fishing vessels
      3) Domestic sales or construction supplies paid in foreign currency
         - Goods distribution to US forces in Korea paid in foreign currency
         - Construction supplies for US forces, foreign embassies, consulates or
           legations in Korea paid in foreign currency
      4) Goods or raw materials supplied to bonded areas including bonded
         factories, bonded sales shop including duty-free shop, and companies
         residing in Free Trade Zones

98.         Types of duties applicable for drawback are Customs duties and
internal taxes levied on raw materials at the time of importation. Such internal
taxes include special consumption tax, liquor tax, educational tax and special tax
for farming and fishing. Refund of Value Added Tax (VAT), of which the rate



                                     - 32 -
                                                 Korea Customs and Tariff 2010


is Zero for export goods, is separately administered by National Tax Service.

Type of Drawback system

99.         The drawback amount is, in principle, the sum of customs duties and
internal taxies levied on each imported raw material used to produce export
goods. It can be calculated in two ways: one is Individual Drawback and the
other is Simplified Fixed Drawback.

100.       Individual drawback is the sum of individual tariff levied on each
imported raw material used to manufacture export goods. The following
documents and conditions are required to be eligible for individual drawback:

       1) Description, size and quantity of raw materials used to manufacture
          export goods should be specified (Specification of Yield Ratio)
       2) A certificate of tax payment of each raw material described on the
          Specification of Yield Ratio(Import declaration certificate or certificate
          of tax payment of fundamental raw materials or certificate of import
          declaration partition)
       3) Documents proving export or their equivalents (Export declaration
          certificate or procurement confirmation)

101.         The yield amount is the quantity of raw materials used to
manufacture export goods, and it is composed of net quantity and wasted
quantity. Net quantity is the portion that composes the final product and wasted
quantity is the portion that is lost in the manufacturing process. The yield ratio
is the sum of net quantity and wasted quantity, and it becomes the basis for
drawback amount.

102.         There are two yield ratio systems used to calculate the drawback:
one is Self-management yield ratio and the other is Standard yield ratio. Since
Jan. 1, 2000 only Self-management yield ratio has been accepted for drawback.
Self-management yield ratio is calculated by the company applying for drawback
itself, using one of the methods accepted by the KCS. An applicant
calculates the yield ratio of each material for export goods and then,
calculates the drawback amount.

103.         In case of residual products (by-products or residues with some



                                      - 33 -
                                                Korea Customs and Tariff 2010


economic value, other than the final export product, which are made throughout
the manufacturing process), the amount acquired by selling the residual products
has to be deducted from the total drawback amount acquired by selling the final
export product.

104.         Although Individual drawback has merit in accurate calculation, it
may become very difficult to use if many different types of raw materials are
used to produce export goods, or if local transactions are complex. To cope
with this problem and to simplify drawback procedure for small and
medium-sized companies, the Simplified Fixed Drawback System, where an
applicant can take advantage of predetermined and listed drawback amount of
certain products, has also been introduced.

105.         Simplified fixed drawback can only be used by small-sized
companies whose annual drawback amount in the previous two years is less
than 400 million won each. Under the System, the KCS determines and
announces the schedule of simplified fixed drawback rate on the basis of HS
10-digit heading to ascertain correspondence. Updated annually, the schedule of
the simplified fixed drawback rate is calculated based on the average drawback
amount of each export goods in the previous year. To apply for simplified fixed
drawback, the drawback application form and export declaration certificate have
to be submitted. For a small-sized company, the simplified fixed drawback
system takes precedence. An applicant can apply for Individual Drawback after
getting the approval from the KCS, but should be notified that once the
switching to Individual Drawback is completed, another switching will not be
allowed for two years. Simplified fixed drawback system is widely used for
small-sized companies for its convenience, although the refund may be less than
the amount calculated under individual drawback. As of january 2009, there are
a total of 3,867 items in the simplified fixed drawback table, and about 10,600
companies use this system.

106.         There are another drawback system for a domestic transaction of
imported raw materials. There are two main bodies that use imported goods to
manufacture export goods: one is importers and the other is domestic purchasers
of raw materials/semi-final products. In the latter case, a domestic transaction
occurs with the imported raw materials, and it is difficult for the final exporter
to name the importer of raw material or prove the tax paid at importation. In
order to resolve this problem, a Certificate of Tax Payment of Fundamental Raw



                                     - 34 -
                                               Korea Customs and Tariff 2010


Materials (CTPFRM) and a Certificate of Import Declaration Partition (CIP)
should be prepared.

107.        CTPFRM - for domestic trade of semi-final products, this certificate
issued by Customs verifies the amount of Customs duties levied on imported
raw materials contained in them. The transferable duty amount is calculated by
using the same method as the one applied to work out the drawback. In order
to obtain this certificate for drawback, the person who sold the
semi-manufactured product using imported raw materials needs to prepare the
following documents:

      - Local L/C (Letter of Credit) or Purchase Approval Document or
        Contract (For cases where Customs Director acknowledges that the
        transaction is for the production of export goods) which verifies internal
        transaction of goods.
      - Yield Ratio Specification which verifies description and amounts of raw
        materials used to manufacture goods traded,
      - Certificate of import declaration which verifies duties paid for raw
        materials at importation
      - Receipt with the date that verifies the transaction of semi-processed
        product

108.         CIP - Imported raw materials are often traded on the domestic
market in an original state without manufacturing or processing. This certificate
verifies how much of customs duties and other taxes levied at the time of
import has been splitted during the domestic trade. This certificate is issued
when the importer sells the raw materials for manufacturing export goods and
applies for it with documents above-mentioned (CTPFRM), excluding the Yield
Ratio Specification.

Drawback Application

109.          An exporter or manufacturer of export goods may apply for
drawback of duties. However, application for simplified fixed drawback is
restricted to only manufacturers of export goods. A drawback application should
be made within two years from the date when the export declaration is accepted




                                     - 35 -
                                                Korea Customs and Tariff 2010


110.          Computerization of Customs Drawback System was set up on July
1, 1997. All the necessary procedures for drawback including application and
actual refund payment are computerized. Those who want to get refund need to
send the required form through Customs EDI Drawback System (CEDID) from
their offices. CEDID automatically examines the refund requests and feeds back
the result [including whether or not there is any discrepancy between the
application and the stored data, and whether or not the application will be
processed as Paperless or supporting paper documents will be required to the
company. Customs officers check and screen the filed documents and then,
when the request is confirmed to be correct, he/she registers refund decision on
CEDID. After a refund decision is made, the refund amount is automatically
transferred to the bank account of the applicant, which he/she indicated on the
application form.    Since July 1, 1997, Simplified Fixed Drawback and the
issuance of the Certificate of internal transaction have been done electronically,
saving Customs clients expenses and time to visit customs houses. The KCS
plans to expand the paperless system to include all refund businesses.

111.          In principle, drawback amount is audited retrospectively (in the
post-audit manner). Exceptions apply to high-risk companies and goods where
yield ratio may be audited prior to the drawback payment. Drawback applicants
are required to store the records and documents concerned with drawback for
three years. However, records concerned with calculation of yield ratio have to
be maintained for five years. There are two post-audit methods the KCS uses
for drawback: one is document examination and the other is physical inspection.
When the post-audit reveals that the drawback is paid in excess, the client has
to pay back the excessive amount as well as penalty. In addition, if it is found
that the illegal measures were used to receive larger drawback, the violator may
be subject to punishment by the Special Act for Drawback.




                                     - 36 -
                                                Korea Customs and Tariff 2010


5. Rules of Origin

112.         Korea operates both preferential and non-preferential rules of origin.
Preferential rules of origin is regulated by the Customs Act, the specific
preferential trade agreement such as APTA, GSTP or each Free Trade
Agreement and Non-preferential rules of origin by trade law.(Table 4)

  Chart 3   The Legal Structure of Korea's Rules of Origin



                                 Special Act for                  Foreign
     Customs Act
                                      FTA                        Trade Law

      - Determination               - Preferential               - Labelling of
        of Origin                     Origin Criteria              Origin
      - Origin Criteria             - Determination              - Origin Criteria
      - Verification of               of Pref. Origin
        C/O                         - Verification of
      - Advance ruling                Pref. C/O
        on Origin                   - Advance ruling
                                      on Origin



113.         Korea applies non-preferential rules of origin equally to all other
imports. Origin is determined on request by the Ministry of Knowledge and
Economy. Korea's non-preferential rules of origin are based on the wholly
obtained goods and substantial transformation criterion. The tariff shift rule
(change in six-digit classification) is applied, except on cameras (value-added
rule) and textile articles (specified process rule); for certain live animals, the
rule of origin is determined by the territory where they were bred for over six
(bovine) or two (swine) months.

Preferential ROO

114.         Preferential rules apply to imports under preferential trading
arrangements; Korea has no common rules in this area. Korea considers that
rules should be transparent and promote trade and investment.




                                     - 37 -
                                                 Korea Customs and Tariff 2010


115.          For LDCs to receive duty-free access to eligible imports, goods
must be either "wholly produced or obtained" in the exporting country, or
manufactured from originating materials comprising at least 50% of the product's
f.o.b. price. Vessels catching fish must be registered in the exporting country
and have at least 60% domestic equity.

116.         Under the Asia-Pacific Trade Agreement, eligible imports are subject
to APTA preferential rules of origin (since the entry into force of the agreement
in September 2006). Products covered by APTA imported from a APTA
member in conditions with direct consignment shall be eligible for preferential
concessions: products wholly produced or obtained in the exporting APTA
member, or products worked on or processed as a result of which the total
value of the materials, parts or produce originating from non-APTA members or
of undetermined origin used does not exceed 55 percent of the f.o.b. value of
the products produced or obtained and the final process of manufacture is
performed within the territory of the exporting APTA member. The formula for
calculating the content of non-originating materials, and its requirement for
obtaining the originating status is as follows:

     Value of imported                  Value of undetermined
  non-originating materials,     +     origin materials, parts or
      parts or produce                         produce              × 100 ≤55%
                               f.o.b value



FTA's ROO

117.         Each of Korea's FTAs has separate and non-identical rules of
origin. For example, rules of origin under the Korea-Chile FTA are based on
the "goods wholly obtained" and the "substantial transformation" criterion.
Substantial transformation requires goods to be sufficiently processed in either
Korea or Chile to change in tariff classification (chapter, heading, or
subheading). Agricultural products require mainly a change in tariff chapter
(CC); a change in tariff heading (CTH) is required for certain foodstuffs, such
as cocoa paste and cocoa butter. Changes in tariff heading or subheading
(CTSH) are used for industrial products and often combined with a value-added
rule. CTSH are also used for textiles and clothing and often combined with a
specific-process rule.



                                     - 38 -
                                                  Korea Customs and Tariff 2010




118.          The value rule is also applied to selected agricultural and industrial
products. It usually stipulates a regional value content of not less than 45%
using the build-down method, and of 30% under the build-up method. Several
tariff items specify a higher value added of 80% using the build-down method.

119.         Under the build-up method, regional value added, expressed as a
percentage, is calculated by dividing the value of originating materials used in
production by the imported goods' f.o.b. value. The build-down method deducts
non-originating materials used in production from the import's value and
expresses this amount as a percentage of its value. This method implicitly
includes the product's non-material costs, such as labour, as originating materials.

120.            Accumulation of originating materials is allowed. De Minimis
provisions     allow goods not undergoing a tariff shift to be considered as
originating   if non-originating materials do not exceed 8% of their f.o.b. value. A
number of     clothing items are subject to only specific-process rules.

Table 3 Rules of Origin in Korea’s FTAs
       FTA            CTC(HS)     Local Content   SPR    Cumulation    De Minimis
 Korea-Chile          2,4,6         30%,45%         √    Bilateral    8%
 Korea-Singapore      2,4,6         45%,55%         √    Bilateral    8%, 10%
 Korea-EFTA           2,4,6          30%-70%        √    Diagonal     10%
 Korea-US         2,4,6          35%,45%       √   Bilateral      7%
      * CTC : Criteria of Tariff Changes, SPR : Specific Products Rules

121.          Since 2005, the KCS has intensified action against false origin
marking. Origin labelling requirements are applied equally to imported and
domestic goods. Origin labelling is mandatory for food and many other imports
(674 four-digit tariffs). Since November 2005, the KCS has operated an Origin
Mark Registration and Retrieval System, which records digital images of origin
marks on import goods and enables users to check the markings by trader or
item.    It    can    be    viewed     at  the   website   of   Korea     Customs
Service(http://english.customs.go.kr). The system protects consumers' interests by
matching origin marks of goods at the importation point and the post-clearance
stage; the KCS has cracked down on manipulation and destruction of markings.
At the end of 2007, 923,166 marks were registered in the system's database.


                                       - 39 -
                                                Korea Customs and Tariff 2010


Marking of Origin

122.        The marking of origin is to request producers or sellers to mark the
origin of the imported goods in order to ensure reasonable purchasing chances
to consumers with providing information on origin of the imported goods.
Marking system is to encourage fair trade in the domestic market by properly
showing reputation and image, quality, price, brand value, etc.

123.         The Foreign Trade Act of Korea requires each imported article
produced abroad to be marked in a conspicuous place as legibly, indelibly, and
permanently as the nature of the article permits, with the Korean, Chinese or
English name of the country of origin, to indicate to the ultimate purchaser in
Korea, the name of the country in which the article was manufactured or
produced in a form and manner which the ultimate purchaser can easily read
and understand. It is not feasible to state who will be the "end user or ultimate
purchaser" in every circumstance. Broadly stated, an "end user or ultimate
purchaser" may be defined as the last person in Korean market who will receive
the article in the form in which it was imported. Thus, a marking using such
method as die sinking, molding, etching, metal plate and special printing is
acceptable. However, goods not capable of being marked by those methods due
to their nature may be marked with adhesive stickers, labels or tags.

124.         When an article (or its container) is required to be marked to
indicate the country of origin, the marking will be sufficiently permanent if it
remains on the article (or its container) until it reaches the ultimate purchaser.

125.         When an article is of a kind which is usually combined with
another article subsequent to importation but before delivery to an ultimate
purchaser, and the name indicating the country of origin of the article appears
in a place on the article so that the name will be visible after such combining,
the marking shall include, in addition to the name of the country of origin,
words or symbols which clearly show that the origin indicated is that of the
imported article only and not that of any other article with which the imported
article may be combined after importation.

126.         If the name of any foreign country or locality in which the article
was manufactured or produced appears on an imported article or container, it
shall appear, legibly and permanently, in close proximity to such words, letters




                                     - 40 -
                                                 Korea Customs and Tariff 2010


or name of the country of origin preceded by "made in", "product of", or other
words of similar meaning.

127.        If marked articles are to be repacked in Korea after release from
Customs custody, importers must certify on entry that they will not obscure the
marking on properly marked articles when the article is repacked or that they
will mark the repacked container.

128.       If the importers do not repack, but resell to re-packers, the
importers must notify the re-packers of the marking requirements. Failure to
comply with the certification requirements may subject importers to penalties.

129.          In addition, if articles requiring a marking are repacked in Korea,
the new packages must be labeled to indicate the country of origin of the
articles contained therein. Importers must certify on entry that, if they repackage,
they will properly mark the repackaged containers; if they do not repackage, but
resell to re-packagers, notification of the marking requirements will be given to
such a re-packager. Failure to comply with the certification requirements may
subject importers to penalties.

130.           At present, goods subject to an origin marking in Korea amount
to the number of 650 articles based on four-digit HS classification. Those goods
can be imported without origin marking if they fall into the category of
Exceptions listed below. If goods are listed as "to be origin-marked at packing",
they can be imported with origin marked at packing, not at the goods
themselves.

131.        Articles which are otherwise specifically exempted from individual
marking are an exception to this rule. The exceptions are as follows:

      The following classes of articles are exempted from the country of origin
      marking requirements. The usual container in which one of these articles
      is imported will also be excepted from marking:

      1. An imported article which is to be put into the process of substantial
         transformation in Korea.
      2. Manufacturing equipment imported by the actual user (not for sale or
         rent)




                                      - 41 -
                                              Korea Customs and Tariff 2010


      3. Raw materials and equipment to be used for exports
      4. An article imported by a real user for research and development
      5. Disposable packing material imported by the person who actually uses it
      6. Goods to be used for warranty service of the imported goods
      7. Samples which are not for display and sale
      8. Unaccompanied or sent baggage(with no commercial value) or
         traveler's baggage
      9. An article which a foreign diplomat uses or consumes on a duty-free
         basis
      10. Goods donated, not for sale
      11. An article which simply passes Korea without entry by reason of
           bonded transportation and exportation, or transshipment, etc.
      12. An article granted a temporary admission and that is free of duty by
           reason of re-exportation
      13. Goods imported and re-exported from the bonded area without being
           released from it
      14. Goods exported from Korea and re-imported
      15. Goods manufactured more than 20 years before the importation
           For your reference, unless an article being shipped to Korea is
           clearly exempted from marking, it will be advisable for a foreign
           exporter to obtain advice from the Korea Customs Service before
           concluding that it is exempted from marking.

132.         Origin marking for importation is required at packing in following
cases where:

      1. Origin cannot be marked at the goods themselves
      2. Goods can be impaired by the origin marking
      3. Goods become substantially downgraded by origin marking
      4. Costs of origin marking is outrageous enough to impede importation of
         the goods
      5. The end-users customarily buy goods in packing; the packing is not
         customarily destroyed before the purchase (the packing is not required
         to be sealed.)
      6. The goods put in for substantial change is imported by the third party
         and supplied to the manufacturer
      7. Disposable item imported not by the actual user



                                    - 42 -
                                             Korea Customs and Tariff 2010


133.         If the article is not marked or falsely marked or marked in a
manner purposely leading to a confusion or misunderstanding, or if the marking
of the goods is purposely destroyed, obscured or altered at the time of
importation, the importer or owner of the goods shall be subject to
imprisonment not exceeding three years or a fine not exceeding 30 million won.
If the importer or owner of the goods violates Article 55 of the Foreign Trade
Act by gross negligence, he/she shall be subject to a fine of less than 20
million won.




                                   - 43 -
                                                 Korea Customs and Tariff 2010


6. Bonded Area System

134.         There are three types of bonded areas: designated bonded areas,
licensed bonded areas and integrated bonded areas. In addition, there are
customs free zones and free trade zones which are similar to bonded areas.
Bonded areas, customs free zones and free trade zones are similar in that
imported goods enter the zone in a bonded state. However, the Customs Free
Zone and Free Trade Zone are different from bonded areas in that customs
regulations do not apply in the zones.

135.         The designated bonded area is further categorized into the customs
inspection place and the designated storage place. The licensed bonded area is
categorized into the bonded warehouse, the bonded exhibition, the bonded
construction work site, the bonded factory and bonded store. And integrated
bonded area is a bonded area which has functions mentioned above.

136.         The customs inspection place is designated to perform customs
inspection on goods pending clearance. Entry hall and international postal
inspection site of post office are examples of such site.

137.         The designated storage place is used to temporarily store goods
pending clearance. Customs designates the site among facilities such as land and
buildings owned by the government or a self-governing body. The goods can be
stored at the designated storage for six months (one month for passenger
effects), and they should be retrieved from the storage within 15 days from the
day import declaration is processed

138.          The bonded warehouse is a place where goods pending clearance
are stored. The goods can be stored for one year, and the license for bonded
storage operation is valid for up to 10 years. The bonded warehouse can be
further classified into bonded warehouse for profit which operates to make profit
from storage fees, and bonded warehouse for self-use which manufacturing
companies operate to store raw materials temporarily for manufacturing.

139.         The bonded exhibition refers to an area where foreign goods can be
stored, displayed or used for the operation of exhibition, trade fairs and
expositions. Goods that are allowed into the bonded exhibition hall are products
of construction, administration, entertainment, display, sales and donation that are



                                      - 44 -
                                                Korea Customs and Tariff 2010


related to furnishing of the said exhibition hall. However, alcoholic beverage,
cigarette and fuel are excluded.

140.         The bonded construction work site refers to an area where
foreign-made machinery or construction materials, which are required for the
installation of industrial facilities such as a power plant or a petrochemical
plant, can be stored. Imported in an unassembled state, each machinery or
construction material doesn't need to be cleared until the construction of the said
large industrial complex is completed. As they are cleared after the construction,
the owner can enjoy simplified clearance procedure as well as reduced financial
burden.

141.        The bonded store refers to an area where foreign goods are sold on
the condition that a person who are eligible for duty exemption or who will
take the goods overseas uses the sold goods. The bonded store includes duty
free shops in downtown and departure halls. And there are specialized duty free
shops that exclusively serve diplomats, or carry only fur and jewelry products.

142.         The integrated bonded area refers to an area where all functions of
licensed bonded area can be comprehensively executed (i. e. those of the
bonded warehouse, the bonded factory, the bonded exhibition, the bonded
construction work site and the bonded store), with a single declaration of the
establishment of the area. Many companies can reside in one integrated bonded
area. This area was introduced to attract foreign investment and to promote
trade and logistics flow.

Free Trade Zone

143.        Free trade zone is designated by the Ministry of Knowledge and
Economy and guarantees liberal manufacturing, distributing and trade activities
with reduced regulations in line with relevant laws such as international trade
laws and the Korea Customs Act. Current free trade zones are in Masan, Iksan
and Gunsan.

Table 4 Comparison of Free Trade Zone and Integrated Bonded Area in Korea

                          Free Trade Zone              Integrated Bonded Area

 Legislation       Act on Designation and          Korea Customs Act



                                     - 45 -
                                                 Korea Customs and Tariff 2010


                   Management of Free Trade
                   Zone
                   Minister of Knowledge and       Commissioner of the Korea
Designated by
                   Economy                         Customs Service
                   Industrial complex near         Foreign Investment zone,
Applicable Areas
                   airports/seaports, etc.         Industrial complex, etc.
Major Industry
Supported in the Manufacturing                     Manufacturing
Zone/Area
Characteristics in Outside the Customs           Bonded area
line with the      jurisdiction (The Customs Act (Postponement of duty
Customs Act        is not applied)               imposition)

                                                   Raw materials for export
Boundary of        All goods(except for
                                                   (possible if special law is
Duty Exemption     consumer goods)
                                                   applied)
Indirect Taxes
on Supplies w/n    Imposed                         Imposed
the zone
                                                   Partial Declaration
                   Not required
Entry Report of                                    (Subject to drawback, raw
                   (Entry of raw materials for
Domestic Goods                                     materials for domestic
                   export confirmed)
                                                   processing, etc)

144.         Bonded Transportation refers to the transportation of foreign goods
in bond. Foreign goods may be transported, as they are, only between places
falling under each of the following: Provided, goods on which an import
declaration is accepted under Article 248 of the Customs Act may be
transported from a place where the relevant goods are stored to either of the
following places:

      - Open Port
      - Bonded Area
      - Area licensed to store goods other than bonded area (in line with
        Article 156 of the Customs Act)
      - Customs Authority



                                    - 46 -
                                               Korea Customs and Tariff 2010


     -   Customs Clearance Station
     -   Customs Clearance Point
     -   Customs Clearance Post Office
     -   Free Trade Zone

145.       All foreign goods in principle must be transported in bond.
However, exceptional cases listed below do not require bonded transportation
procedure:

      - Postal goods in line with postal laws
      - Goods subject to quarantine that are transported to the quarantine
        storage facility or inspection site by the quarantine office in line with
        the laws relevant to quarantine
      - Confiscated goods that are transported by government agencies




                                    - 47 -
                                                Korea Customs and Tariff 2010


7. Tariff System

HSK system

146.         Korea adopted the 2007 version of the Harmonized System of
Tariff Classification (HS) in January 1, 2007, which was adopted at the World
Customs Organization(WCO). As of 2010, the total number of Korea's tariff
lines is 11,881 at the HS 10-digit level without any change from 2009.
Requests to modify tariff rates are submitted by the relevant ministries and
interested parties to the Ministry of Strategy and Finance (MOSF) and the
Ministry presents the case to the public as an advance notice of legislation. If
accepted by the public or interested parties. any modification is submitted to the
State Council. After approval by the State Council, the modification is enacted
as part of the Customs Act, by the National Assembly, in the form of an
Annex to the Customs Act.

Table 5 Harmonized System of Korea(HSK) of 2010
                                                                               (lines)
       HSK                 4-digit              6-digit             10-digit
    Agriculture             196                  722                 1,794
  Non-Agriculture          1,025                4,330               10,087
      Total                1,221                5,052               11,881

WTO Bound tariff

147.        Korea's tariff rates vary according to the source of imports: the
MFN tariffs are levied on non-preferential sources; several preferential tariffs on
imports from signatories of the Asia Pacific Trade Agreement (APTA), least
developed countries (LDCs), Chile, Singapore and members of EFTA and
ASEAN; and the WTO concession (i.e. bound) rates.

148.        Korea bounds 90.8% of all tariff lines in the Uruguay Round under
the auspices of the WTO. Some 98.7% of agricultural tariff lines (excluding
mainly rice) and 89.5% of industrial tariff lines (WTO definitions) are bound.
On a tariff classification basis, 84.4% of agricultural tariff lines (HS Chapters
01-24) and 91.9% of industrial lines (HS Chapters 25-97) are bound. All the
Uruguay Round commitments are to be fully implemented by January 2009.



                                     - 48 -
                                                Korea Customs and Tariff 2010


149.        The simple average bound tariff rate fell slightly every year, and it
fell to 17.1% in 2009. The average bound tariff on industrial products will fall
only marginally to 9.3% (WTO definition). Following "tariffication" of non-tariff
measures, except those on rice, applies to many commodities, such as cereals
and dairy products. Korea's average bound rates on agricultural and industrial
products are 62.5% and 9.3% respectively in 2009.

150.          Over 99% of tariffs are ad valorem duties, which simplifies the
tariff structure and improves transparency. However, there are 124 different tariff
intervals (83 ad valorem, 41 alternate duties), mainly associated with agricultural
tariffs, of which about 44 have decimal duties, excluding tariff quotas and
alternate tariffs.

151.         Tariff rates range from free to 887.4%. Some 87% of rates are
10% or below. 60.1% of rates are between 5% and 10%; 9.8% of tariff lines
have the rate of 6.5%; the modal rate is 8%. Rates of over 30% apply to
2.9% of tariff items; "nuisance" applied MFN rates (2% or less) apply to 1.9%
of tariff lines, and 2.6% of lines have domestic tariff "peaks" (rates over
38.3%), and Alternate duties apply to 0.7% of total tariff lines (about 81 items).

152.         Non-ad valorem tariffs consist of alternate duties on several
manufacturing tariff items, mainly cinematographic film, diagnostic or laboratory
reagents, raw silk, and recorded video tapes. These generally apply the greater
of an ad valorem or a specific duty, whereby the alternate rate sets a floor on
the import duty rate. Alternate duties also apply to a number of agricultural
tariff items as out-of-quota duties, which also provide very high minimum ad
rates, generally of well over 100% (exceeding 500% on sesame seeds and oil,
jujube and pine nuts). Tariff quotas on agricultural tariff lines (1.5% of total
items) have out-of-quota rates expressed in form of alternate duties.

MFN rates

153.         As of 2010, simple average (unweighted) MFN tariff is 12.8%,
following WTO's practice of including out-of-quota duties for tariff quotas (i.e.
excluding the in-quota rate) and the ad valorem part of alternate-type duties for
the tariff analysis. Out-of-quota rates are much higher than in-quota rates, which
is likely to overstate tariff protection where no out-of-quota imports occur. On
the contrary, using the ad valorem rate of Korea's alternate tariffs, which apply



                                     - 49 -
                                                      Korea Customs and Tariff 2010


"whichever is the greater" rate, may understate tariff protection when the
alternate specific rate is operative.

154.          Tariff protection varies substantially across and within sectors,
averaging 47.8% for agricultural products and 6.5% for industrial goods in
2010(WTO definitions). WTO definition of industrial products covers all
non-agricultural products, i.e. products not covered by the WTO Agreement on
Agriculture. "WTO agricultural products" include all processed and unprocessed
agricultural commodities (HS Chapters 1 to 24, less fish and fish products, plus
some additional HS items).

155.         The highest average tariff rates goes to vegetable products (HS
Section 2), 101.6%. Among manufacturing products, the highest is for footwear
and headgear (HS Section 12), 10.1%, and the second highest is for textiles and
articles (HS Section 11), 9.8%.

Table 6 Structure of MFN tariffs, 2010
                                                                                   (%)
                                                                          2010
       Bound tariff
  1.   Bound tariff lines (% of all tariff lines)                           90.8
  2.   Simple average bound rate                                            17.1
       Agricultural products (HS01-24)                                      61.7
       Industrial products (HS25-97)                                         9.7
       WTO agricultural products                                            62.5
       WTO non-agricultural products                                         9.3
       Textiles and clothing                                                18.4
  3.   Duty-free tariff lines (% of lines)                                  15.5
  4.   Non-ad valorem tariffs (% of lines)                                   1.0
  5.   Non-ad valorem tariffs with no AVEs (% of lines)                      1.0
                                             b
  6.   Nuisance bound rates (% of lines)                                     2.0
       Applied tariff
  7.   Simple average applied rate                                          12.8
       Agricultural products (HS01-24)                                      47.8
       Industrial products (HS25-97)                                         6.5
       WTO agricultural products                                            53.5



                                             - 50 -
                                                             Korea Customs and Tariff 2010



       WTO non-agricultural products                                                6.5
       Textiles and clothing                                                        9.7
  8.   Tariff quotas (% of all lines)                                               1.7
                                                     c
  9.   Domestic tariff "peaks" (% of all lines)                                     2.6
                                                         d
 10.   International tariff "peaks" (% of all lines)                                8.9
 11.   Overall standard deviation of tariff rates                                  52.1
 12.   Coefficient of variation                                                     4.1
 13.   Duty-free tariff lines (% of all lines)                                     15.9
 14.   Non-ad valorem tariffs (% of all lines)                                      0.7
 15.   Non-ad valorem tariffs with no AVEs (% of all lines)                         0.7
                                                 b
 16. Nuisance applied rates (% of all lines)                                     1.9
  a 2010 tariff lines did not changed from 2009 tariff lines.
  b Nuisance rates are more than zero, but less than or equal to 2%.
  c Domestic tariff peaks are defined as those exceeding three times the overall simple
     average applied rate (indicator 7).
  d International tariff peaks are defined as those exceeding 15%.
  Source: Korea government calculations, WTO TPR 2008(Modified),


Flexible tariffs

156.         Korea applies higher temporary MFN duties (termed as flexible
tariffs) than those set at the national tariff schedule. The flexible tariffs
mechanism includes autonomous tariff quotas, adjustment duty, safeguard, special
safeguard, and seasonal duty.

157.          Flexible tariffs are sometimes claimed to observe WTO bindings. In
certain cases, the flexible tariff rate regime shows a gap between bound and
applied rates in practice. The number of items covered by the broad "flexible
tariff" description has been cut in recent years from 203 (HS 10-digits) in 2004
to 109 in 2010, including anti-dumping duty, special safeguard, autonomous
tariff quota and adjustment duty. The Korean government intends to reduce or
remove gradually these tariffs in line with the reduction of tariff rates resulting
from the DDA and FTA negotiations.

 a. Autonomous tariff quotas

158.           Autonomous tariff quotas allows the authorities to increase or


                                           - 51 -
                                                Korea Customs and Tariff 2010


decrease certain tariffs at their discretion, with differentials of as much as 40%
above or below a general tariff rate. In this case, when it is deemed necessary,
the quantity may be limited. This provides considerable scope to encourage or
discourage imports of particular items, for inflation-control and industrial policy
purposes as follows:

      i) To facilitate the import of specific goods with the aim of ensuring the
         smooth supply and demand of goods or bolstering the industrial
         competitiveness;
      ii)   To stabilize the domestic prices of goods and other goods
            manufactured using the former, whose import prices sharply rise; and
      iii) To correct widely unbalanced tariff rates among similar goods.


159.          The application period was changed from semi-annual to annual
basis. But it can be set temporarily with reflecting urgent situations. During
2009, Korea set 3 times of autonomous tariff quota as reflecting the surge of
price of raw materials. As of January 1, 2010, it is applied to 46 items while
74 items last year.

b. Adjustment duties

160.        Adjustment duties protect domestic industries from import surges
and lighten the shock from trade liberalization. They are set annually by the
MOSF. Through an advance notice, if the MOSF's proposals approved by the
State Council, adjustment duties are implemented by Presidential decree.

161.         Korea has gradually reduced the number of goods subject to
adjustment duties to act up to the WTO's directions and diminish negative views
of various trade partners on it. At the end of 2009, we reduced the tariff rates
on 7 items: reduced to 31% from 34% on 3 fishery items on see bass, see
bream and croaker, and reduced 2~3% on vermicelli, mae joo, and oak
mushrooms.

162.         As of 2010, Korea applied to 15 items covering mainly certain fish,
rice preparations, sauces, and plywood. Last year, adjustment duties on electronic
parts was eliminated. Duties currently range from 10% on plywood to 50% on
croakers. Alternate duties where duties are the higher of an ad valorem or a



                                     - 52 -
                                                 Korea Customs and Tariff 2010


specific duty, are applied to six items of the six-digit tariff lines. Several
products subject to adjustment duties such as several fish and plywood items,
remained unbound.

Table 7 Adjustment tariff, 2010


                                                          General   Adjustment
    HS                       Description
                                                           (%)         (%)
ex 0301.92 Eels (excluding glass eel (for aquaculture))     10         27*
ex 0301.99 Sea-bream (excluding fry (for aquaculture))      10         31*
ex 0301.99 Sea bass (excluding fry (for aquaculture))       10         31
             Croakers (excluding redlip croaker and
ex 0301.99                                                  10         31
             yellow croaker)
ex 0303.79 Alaska pollack                                   10         30
ex 0303.79 Saury (excluding horn fish)                      10         31
             Croakers (excluding redlip croaker and
ex 0303.79                                                  10         50
             yellow croaker)
ex 0306.23 Shrimps and prawns, salted or in brine           20         42*
ex 0307.49 Squid (frozen, excluding fish meat)              10         22
ex 0709.59
           Oak mushrooms                                    30         40*
ex 0712.39
ex 1902.19 Chinese vermicelli                                8         32*
ex 1904.90 Rice, steamed or boiled                           8         50
           Sauces, preparations therefore and mixed
           seasonings of the following: 1.Capsicum
ex 2103.20 paste 2. Containing 20% or above of
                                                             8         45
ex 2103.90 Capsicum or garlic or onion or ginger, or
           containing 40% or above of any mixture
           of these
ex 2103.90 Mae Joo                                           8         14*
           Plywood, veneered panels and similar
ex 4412.31 laminated wood, of a whole thickness not
                                                             8         10
ex 4412.32 less than 6 mm, with each ply not
           exceeding 6 mm thickness



                                     - 53 -
                                                    Korea Customs and Tariff 2010



ex 4412.39
ex 4412.99
Note : the mark of "*" indicates the goods with alternate duties.


 c. Special safeguard and safeguard tariffs

163.         Korea reserved the right to take special safeguard action (SSG) on
crop and related products (e.g. grains, potatoes, ginseng, and soybean) under the
WTO Agreement on Agriculture, allowing for an additional duty of up to a
third of the level of the applied tariff on agricultural imports if their prices (or
quantities) fall below (or rise above) specified trigger levels. The decision to
implement such measures is made annually by the MOSF through a ministerial
ordinance, at the request of the MIFAFF. Special Safeguard Tariff Schedule is
issued annually. The products subject to SSG on agriculture are gradually
reduced to 29 items in 2009. The current 29 SSGs comprise 6 volume-based
(e.g. buckwheat and wheat groats), 18 price-based (e.g. wheat starch, raw
ginseng, red ginseng) and 5 both price- and volume-based (e.g. green and red
beans).

164.         Safeguard, including provisional, tariffs may also apply to imports
that have surged and caused or threaten to cause material injury to domestic
producers, where deemed necessary to protect domestic industries (by the
Customs Act). Safeguard tariffs apply for up to four years (200 days if
provisional), but can be extended by four years subject to a further review.
Since 2004, no safeguard tariffs have been applied.

 d. Seasonal duties

165.         Seasonal duties may be levied on goods with fluctuating seasonal
prices, to protect domestic industries against competing imports that threaten to
"disrupt" production. Seasonal duties were put in place in 2004 on grapes
imported from Chile under the KCFTA: preferential duties are applied only to
grapes imported during the Korean off-season. No other seasonal duties have
been applied so far.

Anti-Dumping duty

166.         The    Korea    Trade   Commission      (KTC)    administers   contingency



                                        - 54 -
                                                 Korea Customs and Tariff 2010


measures and investigates and determines whether imports are dumped or
subsidized and whether they cause or threaten to cause injury to the domestic
industry. KTC investigations under emergency safeguard provisions determine
whether imports have caused or threatened to cause "serious" injury to domestic
industry.

167.         The decision on the imposition of anti-dumping and countervailing
duties is taken by the MOSF. In early 2008, Korea amended the review process
of anti-dumping duties; the review process is conducted identically to the initial
investigation process. The amendment also stipulated that calculation method of
the dumping margin pursuant to paragraph 4, Article 9 of the WTO Agreement
on Anti-dumping.

168.         Korea initiated anti-dumping investigations into, for the most part,
chemicals, paper and paperboard, wood articles, and machinery mostly
originating from China, Japan, the EC, and the United States. In 2009, Korea
terminated anti-dumping measures on 3 items, PVC plate, Guide hole puncher
and polyvinyl alcohol.

169.         As of March 2010, Korea has 15 final measures consisting mostly
of definitive duties on imports from ten countries, and 2 items, particle board
and adipic acid, are under the investigation. Korea has taken no countervailing
measures so far.

Table 8 Anti-dumping measures, as of January 2010


                                                              Date of definitive
     Country                           Product
                                                                  measure
Definitive duties in force
Canada             Choline chloride                                20/10/04
                   Craft paper                                     10/27/08
China              Ferro-silico manganeses                         03/12/03
                   Uncoated woodfree papera                        07/11/03
                   Sodium dithionite                               23/06/04
                   Choline chloride                                20/10/04
                   Titanium dioxides                               02/03/05




                                        - 55 -
                                                   Korea Customs and Tariff 2010



                   Ceramic tile                                    30/12/05
                   Polyester filament draw textured yarn           20/10/06
                   Ethyl Acetate                                   08/25/08
                   PET Film                                        10/27/08
                   Craft paper                                     10/27/08
                   Polyester filament partially oriented yarn      01/21/09
India              Choline chloride                                20/10/04
                   Stainless steel bar                             30/07/04
                   PET Film                                        10/27/08
Indonesia          Uncoated woodfree papera                        07/11/03
                   Craft paper                                     10/27/08
Japan              Stainless steel bara                            30/07/04
                   Industrial robot with 6-axis vertical
                                                                   18/04/05
                   multi-articulation structure
                   Ethyl Acetate                                   08/25/08
Malaysia           Polyester filament draw textured yarn           20/10/06
Russia             Craft paper                                     10/27/08
Spain              Stainless steel bar                             30/07/04
Singapore          Ethyl Acetate                                   08/25/08
Chinese Taipei     Polyester filament draw textured yarn           20/10/06
                   Polyester filament partially oriented yarn      01/21/09
United States      Choline chloride                                20/10/04/
                   Craft paper                                     10/27/08
Definitive duties + Price undertakings in force
China              Uncoated woodfree paper                         01/06/07
                   Plate glass                                     10/29/07
                   Benzoyl peroxide                                08/25/08
Indonesia          Uncoated woodfree paperb                        01/06/07
Japan              Stainless steel barb                            30/07/04
                   PVC plateb                                      20/04/05




                                          - 56 -
                                                  Korea Customs and Tariff 2010


Priority Order of Tariff Rate Application

170.         Korea has 15 different tariff rates levied on imported goods in the
tariff system. General tariff and Provisional tariff shall be governed by the
schedules of tariff rates in the Customs Act. Other tariff rates are prescribed by
the Presidential Decree or the Ordinance of the Ministry of Strategy and
Finance in accordance with the provisions of Articles 51 through 77 of the
Customs Act. Tariff rates are as follows:

       1. General tariff (§49)
       2. Provisional tariff (§49)
       3. General Preferential tariff(§76)
       4. Adjustment duty(§69)
       5. Autonomous Tariff quota(§71)
       6. Seasonal duty(§72)
       7. International Cooperation tariff(§73)
       8. Beneficial tariff(§74)
       9. Anti-dumping duty(§51)
       10. Countervailing duty(§57)
       11. Retaliatory duty(§63)
       12. Emergency tariff(§65)
       13. Emergency Tariff on Goods from Particular Country(§67-2)
       14. Special Safeguard(§68)
       15. Concessional tariff on forest and livestock products(WTO regime)

171.            Basically, lower tariff rate is applied preferentially. Based on the
article 50    in the Customs Act, however, there is priority order of tariff rate
application    shown in the Chart 4 below. Tariff rates are applied in a orderly
basis from    priority 1 to priority 5.

172.           Priority 1 is applied with any condition regardless of more or less
of tariff rates. Priority 2 is applied only if it is lower than priority 3,4,5, and 6.
But, concessional tariff on agriculture, forest and livestock product under the
WTO Schedule shall apply though it is higher than priority 5 and 6.
Autonomous quota tariff in priority 3 group is applied only if it is lower than
priority 4. General Preferential tariff is applied where it is lower that
priority 5 and 6. Provisional tariff is applied preferentially than general
tariff.



                                       - 57 -
                                                 Korea Customs and Tariff 2010


Chart 4 Priority Order of Tariff Rate Application


                                                                Regardless of
                 9. Anti-dumping duty(§51)                      the tariff rate,
 Priority 1
                 10. Countervailing duty(§57)                   priority 1
                 11. Retaliatory duty(§63)                      prevails
                 12. Emergency tariff(§65)
                 13. Emergency Tariff on Goods from
                      Particular Country(§67-2)
                 14. Special Safeguard(§68)




                                                                Applied only
                 7. International Cooperation tariff(§73)       if it is lower
Priority 2       8. Beneficial tariff(§74)                      than priority
                                                                3,4,5,6.
                                                                Applied if it is
                 15. Concessional tariff on forest and          higher than
                      livestock products(WTO regime)            priority 5,6.




                                                                Tariff quota is
                 4. Adjustment duty(§69)                        applied only if
 Priority 3      5. Autonomous quota tariff(§71)                it is lower
                 6. Seasonal duty(§72)                          than priority 4.




 Priority 4      3. General Preferential tariff(§76)



 Priority 5      2. Provisional tariff (§49)



 Priority 6      1. General tariff (§49)



                                      - 58 -
                                                Korea Customs and Tariff 2010


8. Appeal System

173.        Customs matters must be treated in a fair and transparent manner.
The Korea Customs Administration has set up a general principle that all
persons who deal with Customs must be afforded an opportunity to lodge an
appeal on any matter. In everyday practice, situations may arise in which a
decision or omission of Customs is not acceptable to the person directly affected
by it.

174.         Therefore, Customs tries to provide the person concerned, upon
request, with an explanation of the reasons for the decision or the omission and
a right of appeal to a competent authority. The competent authority may be
Customs itself, Customs headquarters, a tax tribunal and, in the final instance, a
judicial court.

175.         This right of appeal ensures a protection of individuals against
decisions of Customs that may not be in compliance with the laws and
regulations. It also ensures a protection against omissions by Customs in any
matter. At the same time, the review of the challenged decisions or omissions
by a competent authority and the verdicts on these reviews can be a suitable
means of ensuring uniform application of the laws and regulations.

176.          Korea provides a transparent and multi-stage appeal process. It is
intended to prevent any disadvantage by Customs' decisions. Furthermore, the
availability of an independent judicial review as a final avenue of appeal should
instill confidence in the government institutions and in particular in the Customs
administration into the public.

177.          The principle is consistent with Article 11 of the WTO GATT
Valuation Agreement. Appeals cover all matters relating to the laws and
regulations in which Customs are responsible for administering and enforcing
tariff classification, origin and Customs valuation, as well as appeals against
provisions of a general character. They do not, however, embrace appeals in
penal matters or appeals against opinions expressed by Customs which are not
binding in effect.

178.         An initial appeal to Customs may result in a more expeditious
resolution of the matter at a less cost and time to both the affected person and



                                     - 59 -
                                                Korea Customs and Tariff 2010


the Customs administration. Before resorting to the final judicial court review,
appellants must take one of the following administrative procedure:

      < Right of Appeal to Customs>

      1. Right of appeal to Customs
      2. Pre-appeal procedures
      3. Pre-taxation deliberation
      4. Post-appeal procedures
      5. Relief by appeal
      6. Relief by authority
      7. Administrative review
      8. Judicial review
      9. Appeal to Director of Customs
      10. Appeal to Commissioner of Customs
      11. Appeal to tax tribunal
      12. Appeal to Board of Audit and Inspection
      13. Administrative litigation
      14. Civil suit

179.          Appellants should lodge appeals in writing and state with
particularity the grounds on which the appeal is being made. This allows the
consideration of the matter to be based on clear facts and not to be subject to
non-objective interpretations. Customs renders its decision on an appeal as soon
as possible and notifies the appellant in writing as soon as possible of the
decision taken on the appeal.

180.         To protect taxpayers' rights, Korea adopted Pre-Taxation Deliberation
System in which Customs notifies importers of additional tax bills before the
actual taxation. The KCS notifies importers when importers are found to have
paid less than what is due tax amount. If the importers do not agree with
Customs' decision on the additional payment, they can appeal to the KCS within
20 days from the receipt of the notice.

181.        Any person affected by a decision or an omission of Customs can
appeal to the head of any Customhouse at the administrative level without
having to resort to an independent judicial authority. The person can make
appeals within 90 days from the receipt of decisions and Customs will review
the matter within 30 days.



                                     - 60 -
                                               Korea Customs and Tariff 2010




182.        Any person affected by a decision or an omission of Customs can
appeal to the Commissioner of Customs at the administrative level without
having to resort to an independent judicial authority. The person can make
appeals within 90 days from the receipt of decisions and the Commissioner will
review the matter within 60 days.

183.        Any person affected by a decision or an omission of Customs can
appeal to the Tax Tribunal as an independent administrative body. The person
can make appeals within 90 days from the receipt of decisions and Customs
will review the matter within 90 days.

184.         An appeal to a judicial review may be made to any Customs office
responsible for the decision or the omission. An appellant has the legal right to
ultimately appeal to an independent judicial authority.




                                    - 61 -
                                              Korea Customs and Tariff 2010


9. AEOs policy


185.          WCO has designed standards to secure and to facilitate the
ever-growing flow of goods in international commerce and adopted the standard
- AEO system by the WCO council at its 2005 sessions. Most of countries
have tried to adopt AEO system to get along with international standard and to
facilitate customs clearance procedures. For instance, EU has also introduced
AEO system through the amendment of Customs Code and provided beneficial
customs clearance procedures within its region in December 2006.

      ※ WCO defines AEO(Authorized Economic Operator) as "a party
          involved in the international movement of goods in whatever function
          that has been approved by or on behalf of a national Customs
          Administration as complying with WCO or equivalent supply chain
          security standards.

186.         Korea established legal basis of AEO system in accordance with
WCO framework through the introduction of new article of 255-2 of Customs
Act in January 2008. But detailed operational standards were not established
during 2008. Korea Customs Service consulted with relevant organizations and
companies eligible for AEO certification to set detailed operational standards.
Based on the consultations, detailed operational standard was enacted and
implemented as a Notification of Customs Service. And detailed standards was
set up at article of 259-2 of the presidential decree of Customs Act on February
4, 2009.

Legal basis of AEO

187.         Any Person or companies relating to trade such as manufacturing,
delivering, storing and customs clearance of goods exported and imported who
satisfy the safety standards on facilities, document management and employee
training. Customs provides benefits in customs clearance procedures for AEOs.

188.     Article 255-2 set up legal basis for designation and operation of
AEO among importers and exporters as follows:

      i) Eligibility: applicants satisfying safety standards prescribed in the
         Presidential decree



                                    - 62 -
                                               Korea Customs and Tariff 2010


        - Considering Mutual recognition with foreign Customs Administration

      ii) Benefits in customs clearance procedures are provided.


     Article 255-2(Designation of AEO)

     1. The Customs commissioner may certify companies relating to trade
        such as manufacturing, delivering, storing and customs clearance of
        goods exported and imported as AEO if they satisfy the safety
        standards stipulated in the Presidential decree on facilities, document
        management and employee training, etc.

     2. Any person who intends to be certified as AEO shall apply to the
        Customs commissioner with the qualification of safety standard stated
        in paragraph 1. In this case, the Customs commissioner may
        designate an independent certificate authority to examine whether the
        applicants meet safety standards.

     3. Benefits in customs clearance procedures may be provided to AEO
        certified by the provisions of paragraph 1 under the conditions as
        prescribed by the Commissioner of the Korea Customs Service.

     4. The Commissioner of Korea Customs Service may provide benefits in
        customs clearance procedures stipulated in the paragraph 3 to AEO
        certified in foreign countries according to mutual recognition terms
        and conditions

     5. Necessary matters, such as application for AEO designation, certificate
        authority, mutual recognition, etc. under the provisions of paragraph 1
        through 4, shall be prescribed by the Presidential decree.



Operational standards of AEO

189.          Guidance for the introduction of AEO system aiming at quick
customs clearance and trade security is established as such - Standards for AEO
certification and benefits for AEOs, Mutual recognition of AEO status among
countries.

190.         All      Supply     Chain      entities including    manufacturers,
importers/exporters, forwarders, customs brokers, warehouseman, shipping agents
and airlines are eligible for AEO certification.



                                     - 63 -
                                                  Korea Customs and Tariff 2010




191.        Standards for AEO certification breaks down to facility security,
employee security, transportation, employee training and document management
system to set detail safety standards.

      i) Certifying Supply Chain entities satisfying the safety standard set by
          Customs as AEOs and providing them with benefits such as reduction
          of inspection of goods
      ii) Effective border control through granting benefits like quick customs
            clearance to qualified entities and concentrated crackdown on
            unqualified entities.

192.      The KCS established eight detailed standards in accordance with the
WCO’s security standards for the AEO.

        ①    Demonstrated compliance   with Customs requirements,
        ②    Financial viability,
        ③    Security management for   operation system in export/import,
        ④    Security management for   trading partners,
        ⑤    Security management for   transportation means,
        ⑥    Security management for   imported/exported goods,
        ⑦    Security management for   personnel,
        ⑧    Security management for   other issues

193.          The KCS also established procedures to give an AEO certificate as
follows;
        -   Receiving requests for inspection from applicants →Conducting
            paper-based and field inspections →Issuing a certificate if all
            conditions are met

Table 9     Major detailed safety standards


    Classification                               Details
                     Fence, locking system, lightings, establishment of internal
   facility security control system, operational map, inventory management
                     system and etc
      employee        Reference check, criminal record check, career check and
       security       etc



                                       - 64 -
                                              Korea Customs and Tariff 2010



                  - establishment of record management system
                  Implementing a procedure to prevent goods excluding
                  transportation freight from being involved in supply chain
 Transportation   - monitoring take in and out of freight
    security      - indicating freight equipment, containers and etc
                  - Seal-checking procedures on transportation equipment
                  - check and report system for excess or deficiency

                  - internal document management system to prevent
   Document         fabrication of documents
    security      - carrying out duties of document keeping and accessibility
                    to customs' documents

                  - setting standards for employee training about logistics
     Other
                    security

<The current accreditation procedures for an AEO applicant>

1. Application
An AEO applicant should send an application to the Commissioner of the
Korea Customs Service with required documents. (such as self-assessment
table, best practices, and explanation about import and export status of the
applicant)

2. Assessment (which takes four to five months)
Within two months from the day when an application is submitted, the
Customs assesses an AEO applicant’s compliance with authorized standards.

If the applicant meets the standards, the Customs visit the applicant’s
facilities(if necessary, also those of firms which transact with the applicant)
and conduct field investigation within two months from the date when the
assessment completes. The Customs should inform the applicant of the plan
to conduct field investigation one month before the investigation.

3. Approval
Based on the result of field investigation, the applicant is approved as an
AEO after the deliberation of the AEO assessment committee (headed by the
Vice Commissioner of the Korea Customs Service). AEO status for an
applicant is effective for three years.




                                   - 65 -
                                               Korea Customs and Tariff 2010


   4. Follow-up management
   An AEO should submit the result of self-assessment on its import and export
   status based on the authorized standards once a year.

   The Customs conduct a thorough investigation whether an AEO meets its
   compliance with the authorized standards until six months before the approval
   expires. Based on the result, the status of an AEO can be revoked or
   leveled down or up.


194.          According to standards for AEO certification, The KCS operates 4
kinds of criteria to certificate operators - Compliance, Internal control system,
Financial Stability, Safety Control. Based on those criteria. the KCS classifies
AEOs by 3 classes - A, AA and AAA. Basically, three criteria - Internal
control system, Financial Stability and Safety control should be over 80 points
and compliance points should be over 85 based on Customs's assessment. A
class is given to operators who have compliance point of over 85, AA class
over 90 and AAA class over 95 as operators under previously AA class. The
certificate will be effect for 3 years.

195.         The KCS grants tangible benefits in customs clearance procedures to
certified operators - Simplifying import/export declaration and customs tariffs
payment procedures, conducting little or no inspection on goods
imported/exported. Benefits on Credit Security and Monthly payment are as
follows; 'A' class with 30 days Credit Security, 'AA' class with 40 days Credit
Security and 'AAA' class with 365 days Credit Security. All AEOs are permitted
monthly payment.

Future plan

196.          The KCS will designate companies to conduct Pilot test such as
consulting and examination. Exemplary companies will be designated centering
on US’s C-TPAT C-TPAT (Customs-Trade Partnership Against Terrorism
certificates - Samsung corp., Merchant Marine and etc) and top 50 exporters.

197.        Mutual recognition system of AEO among countries will be pursued
- As of 2010, the Mutual Recognition Agreement was contracted with Canada,
Singapore and US.




                                    - 66 -
                                             Korea Customs and Tariff 2010


<Assessment standards and authorization rating>

1. Assessment standards

   a. Fiscal soundness: assessing the size, existence of a default, debt ratio,
      and credit rating of an applicant
   b. Security management: assessing eight requirements* to grasp an
      applicant’s security management

      * business partner requirement, container and trailer security and seals,
        physical access controls, personnel security, procedural security,
        physical security, information technology security, and security
        training and threat awareness (all of these are directly employed
        from C-TPAT as a means to prepare for MRA)

   c. Internal control system: quantitatively assessing accounting and
      computer information system, fraudulent act prevention program, and
      risk management program
   d. Regulation compliance: quantitatively assessing whether the applicant
      abides by laws and regulations concerning importation and exportation
      as well as customs administration

2. Authorization rating

   Minimum authorization standards: an applicant should meet fiscal
   soundness and security management requirements and score 80 or more in
   the ‘internal control system’ standard
   - Rating A: scoring 85 or more in the ‘regulation compliance’ standard
   - Rating AA: scoring 90 or more in the ‘regulation compliance’ standard
   - Rating AAA: scoring 95 or more in the ‘regulation compliance’ standard
     and showing a good practice designated by the Commissioner of the
     KCS



<Particulars of the AEO proposed by the WCO>

 The AEO program offers various benefits such as simplified cargo
 inspection procedure to parties in WCO or equivalent supply chain when



                                  - 67 -
                                            Korea Customs and Tariff 2010




they meet security standards in terms of trade and are approved as AEOs.

     - Economic operators in question: all parties in the international trade
       supply chain such as exporters/importers, customs brokers, carriers,
       consolidators, intermediaries, ports, airports, terminal operators,
       integrated operators, warehouse and distributors
     - Security standards in question: detailed security standards including
       premises security, personnel security, conveyance security, education
       training and awareness, management of commercial records
     - Granted benefits in question: Tangible benefits such as simplified
       cargo inspection procedures and documentation and implicit benefits
       of securing the status of an AEO partner which works as a critical
       factor for importers/exporters when they choose their trading
       partners

Validation process

     - Application of validation (after self-assessment) by a potential AEO
       →Validating adherence to the security practices in accordance with
       the AEO program by the local Customs or an authorized third
       party →Physical inspection of premises by the inspector→
       Authorization is granted and the authorization will be subject to
       periodic review




                                 - 68 -
                                                    Korea Customs and Tariff 2010


Ⅲ. Improvements or Amendments in 2010
1. Amendments of Customs Act

 198.          In principle, no security is required for importers except for several
 cases. (Article 248 of the Customs Act)


                    Original                                  Revised
     In principle, security is required
     when dutiable goods are imported.

     Security is exempted on importers
     falling under any of the following
                                                In principle, no security is required
     subparagraph:
                                                when dutiable goods are imported
     1.     when the importer is the
                                                unless any specific regulation in the
     government, a local government, or
                                                Act enumerates such cases.
     a public enterprise and
     2.     when the importer has gained
     enough credibility and has no
     record of violating the Customs Act
     within two years.


   <The reason for the amendment>
   198.1 To reduce burdens on businesses:
   Among the imports subject to customs duties in 2008 (worth KRW 62.6
   trillion), KRW 47.2 trillion worth of them (75.7% of the total) was cleared
   without presenting security.

   198.2 According to the Revised Kyoto Convention, "the Customs shall not
   require security when they are satisfied that an obligation to the Customs will
   be fulfilled. (Article 5.4)" All of these mean that the Customs Act which
   requires security as a prerequisite when goods are cleared does not reflect the
   current situation.

   198.3 Korea revised the Customs Act to reflect this situation and no security
   is required when dutiable goods are imported unless any specific regulation in




                                       - 69 -
                                            Korea Customs and Tariff 2010


the Act enumerates such cases. Of course, there are several cases where
security is still required in order to secure stable duty claims. In addition,
such cases are enumerated in the Enforcement Decree of the Customs Act.
(e.g. violators of the Customs Act or the Act on Special Cases concerning the
Refundment of Customs Duties, etc. Levied on Raw Materials for Export,
delinquent duty payers, and new importers.) This revised provision enters into
effect from June 1, 2010.

198.4 After the Customs Act concerning the provision of security has been
amended and the provision of the Enforcement Decree concerning this Article
“in principle, no security is required for importers except for several cases”
has also been revised.

<Enumeration of the cases where security is required. (Article 252 of
Enforcement Decree oft Customs Act)>


                Original                               Revised
Goods subject to the omission of       Importers subject to the provision of
security offer:                        security:

1.    Goods imported by the State,     Importers whom the head of a
local       governments,         and   customhouse deems in trouble with
government-invested institutions       securing duty claims after taking
                                       into account importation records,
2.     Goods imported by any           customs duties on imported goods,
importer or any exporter who has       and etc.
not violated the Customs Act for
the preceding two years.               1.       Importers who have no
                                       importation records for the last two
                                       years;
                                       2.       Importers who are under
                                       bankruptcy procedures, liquidation
                                       procedures, and debtor rehabilitation
                                       procedures; and
                                       3.       Importers on whom the head
                                       of a customhouse thinks it is
                                       difficult to secure duty claims




                                  - 70 -
                                                 Korea Customs and Tariff 2010


                                           imposed       after      taking     into
                                           consideration      their     importation
                                           records,    assets,    and     operating
                                           income and customs duty rate on
                                           imported goods.


  <The reason for the amendment>
  198.5 . After this amendment, the Enforcement Decree enumerates the cases
  where security is required; if the head of a customhouse thinks that it is
  difficult for the head of a customhouse to secure duty claims imposed on an
  importer after taking into account the importer’s importation records and
  customs duty rate and etc., the head of a customhouse can require the
  importer to provide security.

199.         Six out of eight cases where security shall be offered other than
import declaration are removed from the Act. (Article 158, 181, 187, 195, 202,
and 205 of the Customs Act)


                   Original                                 Revised
                                             Security for such acts is no more
    The head of any customhouse can          required; as records of presenting
    require actors (businesses) to offer     security by businesses are virtually
    security for their acts other than       nonexistent.
    import declaration.                      * As of 2008, only eight cases
                                             worth KRW 90 million exist.

  <The reason for the amendment>
  199.1 To remove provisions in the Act which unnecessarily require security:
  Although the Act provides eight cases where security is required other than
  import declaration, security is virtually no more required in six out of eight
  cases and consequently relevant provisions in the Act become meaningless.
  Therefore, these six cases are removed from the Act to reduce unnecessary
  burdens on businesses.

  199.2 Here are the six cases where security is no more required other than
  import declaration:
     a. Carrying out a maintenance and supplementary work in a designated




                                    - 71 -
                                                  Korea Customs and Tariff 2010


         place outside a bonded area (Article 158);
     b. Permitting works to be done outside a bonded factory (Article 187);
     d. Permitting works to be done outside a bonded construction work site
         (Article 195);
     d. Carrying out works outside a general bonded area (Article 202);
     e. Storing goods in a licensed bonded area by the operator of such area
        (Article 181); and
     f. Storing goods in a general bonded area by the operator of such area
        (Article 205)

  199.3 The rest of the two cases where security is still required are:
     a. Permitting storage of goods outside a bonded area and
     b. Carrying out bonded transportation

  199.4 This revised provision enters into effect from June 1, 2010.

200.         Additional duties for re-exported goods are no more included when
calculating the security for such goods. (Article 108 of the Customs Act)


                   Original                                   Revised

    Goods       imported     and      then
    re-exported        under      certain
    procedures     are    exempt     from
    customs duties but firms shall
                                               Security for additional duties is no
    present security for such goods.
                                               more required.
    The security amounts to the
    combination of not only exempted
    customs duties and taxes but also
    additional duties for the goods.


  <The reason for the amendment>
  200.1 To reduce burdens on businesses as well as to conform to the Revised
  Kyoto Convention:
  Goods imported and then re-exported under procedures defined in international
  agreements (e.g. goods to display or use at exhibitions or fairs or under
  Carnet) are exempt from customs duties.
  200.2 Businesses who deal with such goods were required to present security



                                      - 72 -
                                                  Korea Customs and Tariff 2010


 for such goods to the Customs and the security was a combination of not
 only exempted customs duties and taxes but also additional duties for the
 goods. The problem was, even though most businesses satisfied the conditions
 attached to the goods (i.e. re-exporting them after importation), additional
 duties in the security came as unnecessary burdens on them. Therefore, the
 Customs decided to exclude additional duties from the security. This revised
 provision enters into effect from June 1, 2010.

201.        The amount of customs duties in arrears subject to increased
surcharge doubled. (Paragraph 3, Article 41 of the Customs Act)


                  Original                                   Revised

  If    customs    duties   in    arrears
  (including any internal tax collected       The threshold of customs duties in
  by the head of a customhouse) are           arrears (including any internal tax
  not fully paid by a fixed time limit        collected by the head of a
  and the amount of the customs               customhouse) over which increased
  duties in arrears is KRW 500                surcharge is levied doubled to KRW
  thousand     or     more,    increased      1 million or more.
  surcharge is levied.



 <The reason for the amendment>
 201.1 To reflect consumer price increase and to improve the collection of
 small amount of customs duties in arrears:
 Consumer price has increased by 2.8 times from 1984 (when the provision of
 increased surcharge was first introduced) to 2008 (consumer price index: 38.8
 in 1984, 34.9 in 2000, 100.0 in 2005 and 109.7 in 2008.)

 201.2 In addition, Article 22 of the National Tax Collection Act stipulates
 that the threshold of customs duties in arrears over which increased surcharge
 is levied is KRW 1 million or more, a 100% increase from KRW 500
 thousand since January 1, 2008. Under these circumstances, the Customs also
 doubled the increased surcharge threshold to KRW 1 million or more.

 * Increased surcharge is an extra surcharge levied when businesses fail to
   pay customs duties already in arrears after a surcharge equivalent to 3/100



                                     - 73 -
                                                    Korea Customs and Tariff 2010


    of customs duties is imposed as they fail to pay customs duties by a fixed
    time limit. The increased surcharge is equivalent to 12/1,000 of customs
    duties in arrears and shall be collected every time when one month elapses
    from the day on which the payment time limit expires. The period for
    which the increased surcharge is additionally collected shall not exceed 60
    months.

    <Comparison between the increased surcharge threshold              between    the
    National Tax Service and the Korea Customs Service>


                            Before 1983           1983 ~ 2007      Since 2008
       The National                               KRW 500          KRW 500
                            None
       Tax Service                                thousand         thousand
       The Korea
                            KRW 300               KRW 500
       Customs                                                     KRW 1million
                            thousand              thousand
       Service


  * The total amount of customs duties in arrears is a combination of
    tariff duties in arrears and any internal tax in arrears collectable by
    the head of a customhouse. Furthermore, the total amount of internal
    taxes in arrears is calculated on the basis of tax items since 2008.

202.       Interest on returned duties imposed during the revision period is
exempt when there is a justifiable ground for a duty payer. (Article 38-2 of the
Customs Act)


                 Original                                    Revised

                                                1.     …
  Goods exempt from interest on
                                                2.     …
  returned duties imposed during the
                                                3.     If there is a justifiable
  revision period:
                                                ground for a duty payer, the duty
  1.     Imported     goods   by   the
                                                payer will be exempt from interest
  central or local governments and
                                                on returned duties imposed during
  2.     Postal items
                                                the revision period. <Newly Added>




                                       - 74 -
                                              Korea Customs and Tariff 2010


<The reason for the amendment>

202.1 If a revision is completed within six months, the given revision period,
it is unreasonable for a duty payer to assume the liability for the revision.
Therefore, the provision of "exemption from interest on returned duties
imposed during the revision period" is required to protect duty payers in good
faith. In the case of additional duties, they are eliminated under several
conditions defined in the Enforcement Decree of the Customs Act and part of
additional duties, if justifiable, can be removed based on the rulings by Tax
Tribunal under several conditions although it is not defined in the
Enforcement Decree.

202.2 An example of justifiable grounds ruling by Tax Tribunal: "In the case
of multichip integrated circuits, given that the requesting legal body is facing
difficulty in making a precise decision on the classification of the item at
issue… there seem to be justifiable grounds for the requesting legal body not
to be blamed for neglecting its responsibility for declaring the item at issue
for classification… it is unreasonable to impose additional duties on the
requesting legal body…"


202.3 In addition, the Framework Act on National Taxes also has provisions
which grant exemption of additional duties. As a result, provisions with
exemption grant of additional duties shall apply mutatis mutandis and
therefore, it is reasonable for interest on returned duties imposed during the
revision period to be removed under a justifiable ground for a duty payer.


202.4 This revised provision will enter into effect when interest on returned
duties imposed during the revision period is levied for the first time after this
amendment.




                                   - 75 -
                                                      Korea Customs and Tariff 2010


  <Revision of Interest on returned duties imposed during the revision period,
  and additional duties>

      Declaration                 Payment



      Within 15 days              Within six months    After the revision period expires

                              Subject to interest on
                              returned duties imposed      Shall pay additional duties
     General         None
                              during    the    revision    [10%(40%) + interests]
     case
                              period
                              [Shall pay interest on
     Justifiable                                           [Partly     exemption     of
                              returned duties imposed
     grounds                                               additional duties (including
                              during    the    revision
     exist                                                 interests)]
                              period]
                              ↓                            ↓
                              [Exempt from interest on
     Justifiable
                              returned duties imposed      [Exemption of additional
     grounds
                              during    the    revision    duties (including interests)]
     exist
                              period]

    * Interest on returned duties imposed during the six-month revision period
      and interest of additional duties are reckoned from one day after the due
      date of the duties.

Reductions

203.       Reduction of duties on goods used to prevent any industrial disaster
or any occupational disease is eliminated. (Article 95 (1) 3 of the Customs Act)


                   Original                                    Revised


Duties on goods used to prevent any
industrial disaster or any occupational        <Deleted>
disease are reduced by half.




                                          - 76 -
                                                      Korea Customs and Tariff 2010


<The reason for the amendment>
This provision is to reduce tariffs by 50% on goods related to preventing
industrial disasters and occupational diseases and the number of items subject to
the reduction is 59, including gas leakage sensors, height and weight scales,
and particles detectors. For the last three years, however, only one item (a gas
leakage detector) imported by one company, Korea Gas Corporation, has been
subject to the reduction benefit. As a result, this reduction scheme becomes
meaningless and therefore is scrapped.

                               <Reduction records>
                              (Unit: KRW 1 million)
        Year                  ’05               ’06           ’07          ’08
The total amount of
                               0                3              4            9
reduction benefit

  203.1 This revised provision will enter into effect right after the proclamation
  of the amendment.

  203.2 Goods subject to this reduction are categorized into two groups:

  1.    Goods imported by users or constructors (including contractors and
        subcontractors) falling under any of the three subparagraphs prescribed
        below by the ordinance of the Ministry of Strategy and Finance;

       a. Facilities, machinery and appliances used to prevent any industrial
           disastesr for safety purposes
       b. Facilities, machinery and appliances used to prevent any occupational
           diseases for sanitary purposes and
       c. Personal protective equipment for safety or sanitary purposes

  2.     Goods subject to the reduction used to prevent any industrial disasters or
         any occupational diseases;
        - 59 goods including gas leakage sensors and sampling equipment
           prescribed by public notification 93-16 of the Ministry of Finance

  203.3 The Minister of Labor shall submit to the Ministry of Strategy and
  Finance an application form for the reduction of duties by April each year.
  The application shall include an applicant’s domicile, name, firm name,



                                       - 77 -
                                              Korea Customs and Tariff 2010


 business field, HS code, item, standard, quantity, price, usage, and the
 structure of the good subject to the reduction.

204.        The scope of re-imported goods subject to exemption of customs
duties has changed. (Article 99 of the Customs Act)


              Original                                  Revised

Article 99 (Exemption from Customs
Duties for Re-import). If goods
falling under any of the following
subparagraphs are imported, customs
duties thereon may be exempted
under the conditions as prescribed by
the Presidential Decree:
1.     Goods exported from Korea        1.      Goods exported from Korea
(including bonded processing exports)   (including bonded processing exports)
which are re-imported within two        which      are    not      manufactured,
years from the day on which an          processed, repaired, or used overseas
export declaration was approved:        (which are usable for a long period
Provided, the same shall not apply to   of time and are exported to be
cases falling under any of the          temporarily used overseas under a
following items                         lease contract or in connection with
                                        the effectuation of a work contract,
                                        but excluding those which are
                                        prescribed by the Ordinance of the
                                        Ministry of Strategy and Finance and
                                        are imported to be displayed or used
                                        in     any     exposition,   exhibition,
                                        competitive show or other similar
                                        events) and are re-imported within
                                        two years from the day on which an
                                        export declaration was approved:
                                        Provided, the same shall not apply to
                                        cases falling under any of the
                                        following items.




                                   - 78 -
                                                   Korea Customs and Tariff 2010


  <The reason for the amendment>

  204.1 The purpose of exemption of duties for re-exports is to grant
  exemption to exported goods which are returned because of their deficiencies
  or which are expected to be used temporarily (e.g. used under a lease
  contract). The current relevant provisions in the Customs Act, however, grants
  the exemption regardless of whether exported goods are used or not or such
  goods are imported for free or not. As a result of the amendment, exemption
  of duties for re-exports are granted to re-imported exports which are not
  manufactured, processed, repaired, or used overseas, exports temporarily used
  overseas under a lease contract or in connection with the effectuation of a
  work contract, and exports used in any exposition, exhibition, competitive
  show or other similar events.

  204.2 This revised provision enters into effect from April 1, 2010.

205.         The Article which provides reduction or exemption of customs
duties for goods used for scientific research is reorganized. (Article 90 (1) 1~4)



                 Original                                     Revised
  Article 90 (Reduction or Exemption          Article 90 (Reduction or Exemption
  of Customs Duties for Goods Used            of Customs Duties for Goods Used
  for Scientific Research)                    for Scientific Research)
  (1)      Customs duties may be              (1)     Customs duties may be
  reduced or exempted on imported             reduced or exempted on imported
  goods      falling under any of the         goods      falling under any of the
  following subparagraphs:                    following subparagraphs:
  1.       …                                  1.      …
  2.       Samples, reference materials,      2.      Goods, which are prescribed
  books, records, recorded tapes,             by the Ordinance of the Ministry of
  recorded slides, exposed films,             Strategy and Economy, from among
  reagents and other goods and                goods      used     for    purposes    of
  materials similar to them used by           scientific      research,      education,
  schools, public medical institutions,       training, experiments and practices,
  public         vocational    training       and scientific and technological
  institutions, museums and other             research and used by schools, public
  institutions corresponding to them,         medical         institutions,      public



                                     - 79 -
                                                Korea Customs and Tariff 2010


  which are prescribed by the               vocational    training   institutions,
  Ordinance of the Ministry of              museums and other institutions
  Strategy and Finance                      corresponding thereto which are
                                            prescribed by the Ordinance of the
                                            Ministry of Strategy and Finance
  3.     Goods which are prescribed         3.     <Deleted>
  by the Ordinance of the Ministry of
  Strategy and Finance, from among
  goods used by the institutions
  described in subparagraph 2 for
  purposes of scientific research,
  education, training, experiments and
  practices,    and    scientific  and
  technological research




206.       The Enforcement Rule of the Customs Act is revised as
follows:


                Original                                   Revised
  Article 37 (Goods Used for                Article 37 (Goods Used for
  Scientific  Research     Subject  to      Scientific   Research     Subject to
  Reduction of Customs Duties)              Exemption of Customs Duties)
  (1)    Pursuant to Article 90 (1) 1       (1)    Pursuant to Article 90 (1) 1
  or 3 of the Customs Act, customs          or 3 of the Customs Act, customs
  duties may be reduced on imported         duties may be reduced on imported
  goods falling under any of the            goods falling under any of the
  following subparagraphs:                  following subparagraphs:
  1.     Goods subject to reduction of      1.     Samples, reference materials,
  customs duties under Article 90 (1)       books, records, recorded tapes,
  1 or 3 of the Customs Act                 recorded slides, exposed films,
                                            reagents, and other goods and
                                            materials similar thereto




                                   - 80 -
                                                 Korea Customs and Tariff 2010


 <The reason for the amendment>
 206.1 Goods used by the central and local governments and by schools and
 other institutions corresponding thereto for the purpose of scientific research
 are subject to reduction of customs duties. The problem was, however, a
 detailed list of such goods used by schools and other institutions was
 prescribed in the Customs Act, whereas the list of those by the central and
 local governments was prescribed in the Enforcement Rule of the Customs
 Act. Therefore, the Customs revised the Customs Act to arrange all the list of
 such goods to be prescribed in the Enforcement Rule.

 206.2 This revised provision enters into effect from April 1, 2010.



207.        Reduction rate for the specific goods subject to reduction of
customs duties returns to 100%. (Article 93 of the Customs Act)


                Original                                  Revised
 Article 93 (Specific Goods Subject       Article 93 (Specific Goods Subject
 to Exemption of Customs Duties)          to Exemption of Customs Duties)

 Among the goods subject to the           Among the goods subject to the
 exemption, reduction rate for those      exemption, reduction rate for those
 falling under the following categories   falling under the following categories
 is 80%.                                  is 100%.
 -Goods which are to be used as raw
 materials for a pilot production
 designed    to    determine    whether
 machinery         and       appliances      <The same as the left>
 manufactured by any domestic small
 and medium enterprises, upon an
 order from a foreign buyer, are in
 conformity with specifications and
 functions required by such a foreign
 buyer.
 -Materials needed to construct,
 maintain and ornament national
 cemeteries and funeral goods
 -Personal     belongings    of     any



                                    - 81 -
                                               Korea Customs and Tariff 2010



 predecessors that are inherited to any
 persons residing in Korea following
 the death of such predecessors



 <The reason for the amendment>

 207.1 Article 93 of the Customs Act specifies goods exempt from customs
 duties and, among them, goods categorized into three paragraphs (paragraph 9,
 17 and 18) were subject to special tax for rural areas. That means such goods
 should pay 20% of the customs duties exempted as special tax for rural areas.
 When the government decided to scrap the special tax, customs duties
 reduction rate for such goods was lowered from 100% to 80% to reflect the
 elimination scheduled on January 1, 2010. However, the planned repeal is
 delayed and therefore the Customs decided to restore the reduction rate to
 100%.


208.         According to the amendment of Article 255-2(2) of the Customs
Act in December 2007, the Customs Act establishes provisions which entrust
organizations designated by the Enforcement Decree of the Customs Act with
validating an AEO applicant. Thus the Enforcement Decree of the Customs Act
designates entrustment organization as follows:

 208.1 Designating entrustment organizations which validate the compliance of
 an AEO applicant (Article 289-2(3) and (4) of Enforcement Decree)


                Original                                Revised

                                          Requirements to be designated as a
 < None >                                 third party validator to perform the
                                          assessment of an AEO applicant’s
                                          compliance with standards

                                          An organization or institution which
                                          possesses professional personnel and
                                          computerized facilities to perform
                                          validation processes and which is



                                    - 82 -
                                                Korea Customs and Tariff 2010



                                          designated by the Commissioner of
                                          the Korea Customs Service

                                          The Commissioner of the Korea
                                          Customs Service has the authority to
                                          supervise such third party validators.


 <The reason for the amendment>

 208.2 Although demand for the authorization for an AEO is increasing, the
 Korea Customs Service does not have enough personnel to conduct
 authorization procedures, which discourages efficiency in the authorization
 process. For example, 242 firms have expressed their intention to apply for
 the AEO status (which is scheduled to complete by the end of this year), and
 the KCS has only 9 personnel to conduct the authorization process and it
 takes four to five months to complete the process for an applicant. As a
 result, the KCS decided to designate entrusted private organizations to validate
 AEO applicants, as a means to deal with increasing demand more efficiently.

 208.3 This revised provision enters into effect in June 1 2010.

209.         The level of punishment for 18 cases is lowered from a fine to a
fine for negligence. (Article 276 and 277 of the Customs Act)


                  Original                                 Revised
    Any person falling under any of the      Any person falling under any of the
    following subparagraphs (considered      following subparagraphs shall be
    as committing minor offenses) shall      punished by a fine for negligence
    be punished by a fine no more than       no more than KRW 1 million.
    KRW 1 million or 2 million.

                                              <same as the left>


 ※ 18 minor offenses against the Customs Act

 <Two cases in which fine is no more than KRW 2 million>



                                    - 83 -
                                             Korea Customs and Tariff 2010


-   Using foreign goods entered into a bonded construction site before an
    import declaration for such goods is filed. (Article 192 and 205) and
-   Using or consuming goods entered into an integrated bonded area before
    they are imported through customs clearance. (Article 200 (1))

<16 cases in which fine is no more than KRW 1 million>
[Three cases related to means of transportation / transportation system]
-   The captain of any domestic vessel or any domestic aircraft enters into
    any foreign open port and returns to Korea thereafter on the grounds of a
    calamity or force majeure without reporting to the head of any
    customhouse, (Article 139)
-   The captain of any foreign trade vessel or any foreign trade aircraft loads
    goods onto, unloads them from, or transships them into such vessel or
    such aircraft without obtaining permission from the head of any
    customhouse, (Article 143 (1)) and
-   The driver of an on-road vehicle crosses a national border without a
    document certifying that the on-road vehicle is authorized or permitted to
    cross such national border, from the head of the competent customhouse.
    (Article 152 (1))

[Thirteen cases related to means of bonded system]
-    Storing foreign goods in a place other than a bonded area (Article 155
     (1))
-    Storing goods which are difficult or inappropriate to be stored in a
     bonded area in a place other than a bonded area without obtaining
     permission from the head of any customhouse (Article 156 (1))
-    Altering or dismantling goods stored in any bonded area without obtaining
     permission from the head of any customhouse (Article 159 (2))
-    Disposing of goods stored in a bonded area due to decomposition,
     damage and other reasons without obtaining approval from the head of
     any customhouse (Article 160 (1))
-    Shipping goods, in whole or in part, out of a bonded area to use them
     as samples without obtaining permission from the head of any
     customhouse (Article 161 (1))
-    Using goods shipped into a bonded factory without filing a use report to
     the head of any customhouse (Article 186 (1) and 205)
-    Managing goods shipped into an integrated bonded area without
     classifying such goods according to integrated bonded functions (Article
     201 (1))



                                  - 84 -
                                                Korea Customs and Tariff 2010


 -    Relocating, using or disposing of goods shipped into an integrated bonded
      area (Article 201 (3))
 -    Transporting foreign goods unloaded from a vessel or an aircraft due to a
      calamity or unavoidable grounds without obtaining approval (Article 219
      (2))
 -    Running a permanent business establishment and selling foreign goods
      without compiling data attesting to tax invoices (Article 266 (2))
 -    Doing the bonded work outside a bonded factory without obtaining
      permission (Article 187 (1) and 89 (4))
 -    Doing the bonded work outside a bonded construction work site without
      obtaining permission, (Article 195 (1)) and
 -    Doing the bonded work outside an integrated bonded area without
      obtaining permission (Article 202 (1))


 <The reason for the amendment>
 209.1 Among the offenses prescribed in the Customs Act, eighteen cases
 listed above are minor but punishable by criminal records to the violators,
 which is a big disadvantage to them. Therefore, the amendment lowered the
 level of punishment for 18 cases from a fine to a fine for negligence, which
 means the violation would not lead to criminal records as they are erased
 after a certain period of time.

 209.2 This revised provision will enter into effect after this amendment is
 promulgated. (If a punishment is not finalized when this amendment is
 promulgated, the provision will be applied retrospectively.)


210.        Fines imposed on criminal minors, mentally weak/retarded persons,
and accessories are exempt or reduced. (Article 278 of the Customs Act)


               Original                                   Revised
General provisions of the Criminal          Provisions on the Criminal Law
Act are not applied to the punishment       such as insanity defense, mistake of
of offenders of the Customs Act when        law, and mitigation of punishment
they are punishable by a fine.              for accessories are applied to the
                                            punishment of offenders of the
                                            Customs Act. Yet, aggravation for



                                   - 85 -
                                                 Korea Customs and Tariff 2010


                                             concurrent crimes is still excluded
                                             from general provisions of the
                                             Criminal Act.

-Fines imposed on criminal minors            -Fines imposed on criminal minors
(less than 14 years of age) are the          (less than 14 years of age) are
same as those imposed on ordinary            exempt.
criminals.
-Mitigation of fines is not allowed for      -Mitigation of fines is allowed for
deaf-mutes.                                  deaf-mutes.

-Mitigation of fines is not allowed for      -Mitigation of fines is allowed for
mentally weak/retarded persons.              mentally weak/retarded persons.
-Mitigation of fines is not allowed for      -Mitigation of fines is allowed for
accessories.                                 accessories.
-Mitigation of fines in extenuation of       -Mitigation of fines in extenuation
circumstances is not allowed.                of circumstances is allowed.
-Mistake of law on a justifiable             -Mistake of law on a justifiable
ground is not considered as a factor         ground is considered as a factor to
to allow mitigation or exemption of          allow mitigation or exemption of
fines.                                       fines.

* Multiple offenses (punishable by           * Multiple offenses (punishable by
fines)are summed up and aggravatingly        fines)   are    summed    up   and
punished.                                    aggravatingly punished.



 <The reason for the amendment>

 210.1 To prevent excessive punishment:
 Exempting or mitigating fines imposed on those who have no or limited
 criminal responsibility like minors or mentally weak/retarded persons and those
 who make a mistake of law on a justifiable ground. (For your reference,
 imprisonment imposed on minors is exempt or mitigated under the Criminal
 Act.)

    l Exemption of fines on minors and mitigation of fines on mentally
      weak/retarded persons: for the protection of human rights by mitigating



                                    - 86 -
                                               Korea Customs and Tariff 2010


      or exempting fines on those who have no or limited criminal
      responsibility.
    l Exemption of fines on those who make a mistake of law on a
      justifiable ground: as imposing fines on those who have make a
      mistake of law on a justifiable ground is against the principle of
      liability, a mistake of law on a justifiable ground is liable for
      exemption of fines.
    l Mitigation of fines on accessories: as levying the same fine on
      accessories as on principal offenders is feared to be against the
      principle of the prohibition of excessive restriction.
    l Mitigation of punishment in extenuation of circumstances: as not
      allowing mitigation of fines even though there are extenuating
      circumstances is feared to exercise the right of punishment excessively,
      mitigation of fines is allowed under extenuating circumstances.

 210.2 Aggravating punishment for multiple offenses (smuggling or evading
 customs duties punishable by fines), however, remains unchanged as, if this
 amendment applies to multiple offenders, fines imposed on them will be
 mitigated too much and therefore, will not be effective for the prevention of
 offenses.

 210.3 This revised provision will enter into effect after this amendment is
 promulgated. (If a punishment is not finalized when this amendment is
 promulgated, the provision will be applied retrospectively.)

211.         Mitigation of punishment imposed on any person who prepares
himself/herself to commit any offense under Articles 268-2, 269 and 270
(Article 271 of the Customs Act)


               Original                                 Revised

Any       person     who     prepares    Punishment inflicted on any person
himself/herself to commit any offense    who     prepares     himself/herself to
under Articles 268-2, 269 and 270        commit any offense under Articles
shall be punished as committing any      268- 2, 269 and 270 shall be the
principal offense.                       half of the punishment inflicted on
                                         principal offenders.
-Article 268-2: Counterfeit or forgery   -Article 268-2: Counterfeit or forgery



                                    - 87 -
                                               Korea Customs and Tariff 2010


 of e-documents (imprisonment for         of e-documents (imprisonment for
 between not less than one year to        between not less than one year to
 not more than 10 years or a fine         not more than 5 years or a fine not
 not exceeding KRW 100 million)           exceeding KRW 50 million)
-Article       269:        Smuggling     -Article        269:       Smuggling
 (imprisonment for between not less       (imprisonment for between not less
 than one year to not more than 10        than one year to not more than 5
 years or a fine not exceeding KRW        years or a fine not exceeding KRW
 20 million)                              10 million)
-Article 270: Evasion of customs         -Article 270: Evasion of customs
 duties (imprisonment of not more         duties (imprisonment of not more
 than three years or a fine less than     than three years or a fine less than
 whichever is the greater between         whichever is the greater between
 five times the amount of evaded          three times the amount of evaded
 customs duties and the cost of the       customs duties and the half the cost
 relevant goods whose customs duties      of the relevant goods whose customs
 are evaded)                              duties are evaded)


  <The reason for the amendment>
  211.1 It is reasonable to punish any person who ‘prepares himself/herself to
  commit’ any offense under Articles 268-2, 269 and 270, even though such
  offense is not actually committed, as such tariff-related offense is considered
  difficult to be committed by an individual and requires organized activity as
  well as expertise for the purpose of profit making. (For your reference, Japan
  also punishes any person who prepares himself/herself to import prohibited
  goods or evade customs duties.) Imposing the same punishment on any person
  who prepares himself/herself to commit, however, is considered harsh and
  therefore, the Customs decided to mitigate punishment for any person who
  prepares himself/herself to commit by half in accordance with the Criminal
  Law.

  211.2 This revised provision will enter into effect after this amendment is
  promulgated. (If a punishment is not finalized when this amendment is
  promulgated, the provision is applied retrospectively.)



212.        Any fraudulent act to evade customs duties shall be punished.



                                    - 88 -
                                               Korea Customs and Tariff 2010


(Article 275-2 of the Customs Act)


               Original                                 Revised
                                         Any fraudulent act, such as hiding
                                         asset, to evade customs duties shall
                                         be punished by imprisonment for not
<None>
                                         more than 3 years or by a fine not
                                         exceeding KRW 30 million. <Newly
                                         Added>


  <The reason for the amendment>
  212.1 To establish provisions to punish customs duty delinquents who
  deliberately hide their assets in order to evade customs duties:
  There had not been effective methods to punish such delinquents while they
  devised ingenious methods to evade customs duties such as hiding assets and
  conducting fraudulent activities. The Customs can file a civil lawsuit against a
  delinquent who committed a fraudulent act to evade customs duties over the
  revocation of such fraudulent act.

  212.2 Civil court rulings, however, are not legally binding enough to force
  the defendant to pay customs duties in arrears. As a result, the Customs
  revised the Customs Act by adding a provision which imposes criminal
  punishment on a fraudulent act to evade customs duties.

  212.3 The amount of fines levied on duty delinquents is the same as the
  amount imposed on a delinquent who committed a fraudulent act to evade
  taxes prescribed in the Punishment of Tax Evaders Act.


213.        Lending name to a third person who avoids customs duties shall be
punished. (Article 275-3 of the Customs Act)


                Original                                 Revised

                                          Any person who lends his/her name
  <None>                                  to a third person who avoids
                                          customs duties or evade compulsory



                                     - 89 -
                                                Korea Customs and Tariff 2010




                                          execution shall be punished by a fine
                                          not exceeding KRW 1 million.



  <The reason for the amendment>

  213.1 To punish any person who lends his/her name to another person who
  avoids customs duties or evade compulsory execution:
  There have been lots of cases where importers who evaded or defaulted on
  customs duties still can avoid customs duties or evade compulsory execution
  by borrowing another person’s name.

  213.2 The person who borrowed another’s name to avoid customs duties can
  be punished by a duty evasion offense. The person who lent his/her name
  was punishable as ‘an accomplice of a tax evader’ only when the person was
  directly involved in the evasion. Except for that case, however, no provision
  under the Customs Act could punish the person and that was why lending a
  person’s name to another had been frequently committed. As a result, the
  Customs established a provision which punishes any person who lends his/her
  name to another person who tries to avoid customs duties. The amount of
  fines levied on the lender is the same as the amount imposed on a person
  who lent his/her name to another person who evades taxes prescribed in the
  Punishment of Tax Evaders Act.


214.        A case subject to ‘notice disposition’ by the head of any
customhouse is considered as a case where statute of limitation shall be
suspended. (Article 311 of the Customs Act)


               Original                                   Revised
When the head of any customhouse          When the head of any customhouse
notifies a customs offender of the        notifies a customs offender of the
payment of those prescribed in            payment of those prescribed in Article
Article 311 (1) (‘notice disposition’),   311 (1) (‘notice disposition’), statute
statute of limitation for this case       of limitation for this case shall be




                                     - 90 -
                                                     Korea Customs and Tariff 2010


shall be interrupted.                          suspended.

* Interruption of statute of limitation:       * Suspension of statute of limitation:
If a certain case where statute of             If a certain case where statute of
limitation     shall   be    interrupted       limitation shall be suspended happens,
happens,      statute   of     limitation      statute of limitation is completed after
completes after the total limitation           the limitation period excluding the
period expires from the point when             period which elapsed before the
statute of limitation was interrupted.         suspension expires from the point
                                               when statute of limitation was
                                               suspended.




  <The reason for the amendment>

  214.1 To strengthen protection of rights of suspects:
  The Criminal Procedure Act considers indictment by a public prosecutor as
  one of the cases where prescription of prosecution suspends. Notifying a
  customs offender of the payment of those prescribed in Article 311 (1),
  however, was considered as one of the cases where prescription of prosecution
  interrupts under the Customs Act, which means customs offenders were
  unfairly treated compared to other offenders of crimes (or those who are
  indicted). To equally treat customs offenders as other offenders, the Customs
  revised the provision of ‘notice disposition’ by changing ‘interruption’ into
  ‘suspension.’

215.         Replacing hard-to-understand terms with easy-to-understand ones
(Article 291, 292, 294, 300, 302, 307, 308, and 309 of the Customs Act)


                 Original                                      Revised
Interrogation   of      a   suspect   (§291,   Investigation of a suspect (§291, §292)
§292)
                                               Giving a request for attendance to a
Summoning a suspect or a person of             suspect or a person of reference




                                         - 91 -
                                                    Korea Customs and Tariff 2010


reference (§294)                             (§294)
                                             Inspecting a vessel, vehicle or aircraft
Rummaging a         vessel,   vehicle   or   (§300)
aircraft (§300)

 <The reason for the amendment>

 215.1 To give a better understanding of the Customs Act to the public:
 Difficult-to-understand terms in the Customs Act are substituted                      by
 easier-to-understand terms.

216.        Establishing the legal basis for entrustment of competence for
IPR-related works to the private sector (Article 329 of the Customs Act)


                  Original                                     Revised

                                             Devolution       and      entrustment     of
                                             competence
                                             - Legal basis for entrustment of
                                               competence for IPR-related works to
                                               the private sector (i.e. receiving
                                               rightsholders’        application      for
                                               trademark      and      copyright     and
                                               requesting rightsholders to supplement
                                               their application) is now prescribed in
                                               the Customs Act. (Before this
                                               amendment, the basis was laid in
                                               ‘the Regulations on Devolution and
                                               Entrustment        of       Administrative
                                               Competence.’)


 <The reason for the amendment>

 216.1 To introduce the legal basis for devolution or entrustment of
 competence for IPR-related works to the private sector in the Customs Act:
 If there is no applicable provision which provides the legal basis for
 devolution or entrustment of competence in a law or act, ‘the Regulations on



                                        - 92 -
                                                  Korea Customs and Tariff 2010


  Devolution and Entrustment of Administrative Competence’ renders applicable
  provisions for the law or act.

  216.2 The Ministry of Public Administration and Security, however, demands
  that, if there is a law or act without any provision that provides the legal
  basis for devolution or entrustment of competence in itself and therefore, has
  resorted to ‘the Regulations on Devolution and Entrustment of Administrative
  Competence,’ any government agency related to the act or law should amend
  it to have applicable provisions with legal basis for devolution or entrustment
  of competence and relevant competence should be entrusted to or devolved on
  by the Enforcement Decrees of the amended law. As a result, the Customs
  revised the Customs Act to follow the guidance of the Ministry of Public
  Administration and Security.

217.        Exemption of customs duties for goods specially made or
manufactured for use by the patients with rare and incurable diseases. (Article
91 of the Customs Act)


                  Original                                 Revised


   The imported goods falling under
   any of the following subparagraphs
   shall be exempt from customs
   duties:
   -Goods prescribed by the Ordinance
    of the Ministry of Strategy and
    Finance    from     among       goods
    specially made or manufactured for
    use by the disabled patients or
                                              -Patients with rare and incurable
    those with chronic renal failure.
                                               diseases are added to the list of
                                               beneficiaries.


  <The reason for the amendment>

  217.1 To clearly state in the Customs Act that custom duties are exempt for
  goods used for patients with rare and incurable diseases:



                                     - 93 -
                                                 Korea Customs and Tariff 2010


  In fact, the Enforcement Decree and Enforcement Rule of the Customs Act
  already granted exemption of customs duties for treatments for rare and
  incurable diseases. This amendment is to specify legal basis for customs duty
  exemption applied to such diseases. For your reference, subparagraph 4, item
  b of the Enforcement Rule of the Customs Act prescribes that 10 treatments
  under 9 categories are exempt from customs duties as treatments for rare and
  incurable diseases.


218.         Inspection of consignments shall be conducted by customs officers.
(Article 254-2 of the Customs Act)


                 Original                                   Revised

                                             Consignments shall be inspected by
                                             customs officers.

                                             ※Currently, express couriers who
                                              signed MOUs with the Customs
                                              conduct X-ray scanning at their
                                              own facilities by their own
   <None>
                                              employees. What customs officers
                                              do during the whole inspection
                                              process      is  attending     and
                                              supervising,    not     inspecting.
                                              Among the registered 35 express
                                              couriers, 15 signed MOUs with
                                              the Customs.



  <The reason for the amendment>
  218.1 To strengthen inspection of consignments for the prevention of illegal
  drugs:
  Before the inspection of state administration in 2008, employees of express
  couriers who signed MOUs with the Customs inspected consignments and
  customs officers only attended and supervised the whole inspection process
  and did not inspect consignments. After this amendment, the Customs will
  dispatch customs officers to the facilities of the express couriers who signed



                                    - 94 -
                                                Korea Customs and Tariff 2010


 MOUs and they will conduct inspection with employees of the express
 couriers.


219.        Basic customs duty rate for sugar end-products is lowered to 35%.
(Attached table of the Customs Act)

                 Original                               Revised
   Basic customs duty rate for sugar
                                            Lowered to 35%
   end-products: 40%


 <The reason for the amendment>

 219.1 To strengthen competitiveness of domestic sugar producers, contribute
 to the stabilization of consumer price, and protect consumer rights:
 Lawmaker Hong initially suggested that basic customs duty rate of sugar
 end-products should be 10%, a 30% point decrease. But the suggested rate
 rose to 35% after a meeting of Tax Subcommittee of the National Assembly
 as it was feared that extensive cut of basic customs duty rate would lead to
 massive importation of dumped sugar end-products from foreign markets,
 which would trigger a market distortion, damage to the local sugar industry
 and instability of the local sugar suppliers.

 219.2 It is difficult to set an appropriate level of basic customs duty rate of
 sugar end-products as conditions, which should be considered, such as price of
 sugar and raw sugar and foreign exchange rate constantly change. The
 conclusion is that basic customs duty rate of sugar end-product should be
 lowered gradually as sugar is one of the most important food ingredients and
 domestic source of sugar production should be secured as a cushion to deal
 with price fluctuation of sugar produced overseas.

220.        The legal basis was established for entrustment of competence for
IPR-related works to the private sector (Article 288(8)).

Article 329(4) of the Customs Act was amended as follows;
The Customs Act establishes provisions which provides for the legal basis for
entrustment of competence for IPR-related works to the private sector.



                                   - 95 -
                                               Korea Customs and Tariff 2010




                Original                                 Revised
                                          IPR-related declaration works (i.e.
                                          receiving             rightsholders’
                                          application for trademark and
                                          copyright       and       requesting
                                          rightsholders to supplement their
               < None >                   application) are entrusted to
                                          incorporated associations which
                                          have professional expertise and
                                          are      designated      by      the
                                          Commissioner of the Korea
                                          Customs Service.

 <The reason for the amendment>
 220.1 “The Regulations on Devolution and Entrustment of Administrative
 Competence” prescribes the entrustment of IPR-related declaration works. As
 the Customs Act – the parent law of this Enforcement Decree – has been
 amended to have applicable provisions which provide the legal basis for
 devolution or entrustment of competence, the Enforcement Decree of the same
 Act has also changed to prescribe the entrustment of competence.

 220.2 The purpose of the entrustment of competence to incorporated
 associations is to provide more opportunity for the private sector to participate
 in administrative works and to promote efficiency in the protection of IPR.


221.      Payment limit of customs duties payable by a credit card up to
KRW 5 million is increased. (Article 32.5 of Enforcement Decree)

                Original                                Revised
  The payment limit of customs
  duties payable by a credit card:        Increased to KRW 5 million
  no more than KRW 2 million




                                    - 96 -
                                             Korea Customs and Tariff 2010


<The reason for the amendment>
221.1 The Enforcement Decree of the Framework Act on National Taxes has
increased the payment limit of domestic taxes payable by a credit card from
KRW 2 million to 5 million. (Article 26-2) This measure is to help taxpayers
pay taxes when they are suffering a temporary liquidity crunch. Tax items and
taxpayers subject to this measure as well as the payment limit have also
expanded.

221.2 In accordance with the revision of the Enforcement Decree of the
Framework Act on National Taxes, the Customs also increased the payment
limit of customs duties payable by a credit card from KRW 2 million to 5
million. Before this amendment (2009), 77.8% of the customs duty payers
(based on each taxable case) were able to pay their customs duties through
credit cards. After the amendment, this figure is estimated to go up to 91.2%.
Based on the amount of customs duties, 18.3% of customs duty payers were
able to pay customs duties through credit cards before the amendment and
42.5% is expected after the amendment. For your reference, 0.2% of the total
customs duty cases (1,208 out of 597,735) were paid through credit cards and
that accounted for only 0.21% of the total customs duty revenue. (KRW 529
million out of 245.239 billion)

221.3 This revised provision will apply to the case whose import declaration
is made from January 1, 2010.

<Collection of customs duties through credit cards>

General information

   1. Subjects of this provision: individuals or businesses owned by a private
      person (in accordance with the Enforcement Decree of the Framework
      Act on National Taxes which allows only individuals or businesses
      owned by a private person to pay national taxes by credit cards)
   2. Payment methods: through online (www.cardrotax.or.kr) or terminals (39
      terminals are located in arrival halls at the Incheon International
      Airport); Available between 9:00 to 22:00 and not available during
      holidays
   3. Payment limit: KRW 2 million or less per each customs duty payment
      notice. A customs duty payer has no limitation in the number of times
      to pay customs duties through credit cards.



                                  - 97 -
                                                   Korea Customs and Tariff 2010


   4. Fees for customs duty payment agencies: 1.2% of customs duty paid
      (effective from January 1, 2010; 1.5% before then)
   5. Others: No cancellation is allowed once customs duties are paid through
      credit cards; No separate payment is allowed, (e.g. out of KRW 3
      million customs duty, paying 2 million by credit cards and 1 million by
      cash.)

Service Provider: The Korea Financial Telecommunications and Clearings
                  Institute

<Records of customs duty payment by credit cards (‘08.10~‘09.10)>
                                                               (case,   million KRW)
    Year                `07                        `08                  `09.1~10
                Cases         amount     Cases           amount     Cases        amount
  Payment         -             -            150          70        1,208         529



<Comparison between domestic tax payment and customs duty payment
through credit cards>


                    Tax items
                  subject to this              Basis                     Limit
                 payment system
               income tax, value
                added tax, gross
                                                                   KRW 2 million or
                 real estate tax,
                                       Per each taxable           less (excess amount
Domestic Tax        individual
                                             item                    can be paid by
                consumption tax,
                                                                          cash)
               liquor tax, and (+
                      surtax)
                                                      If customs duty on
              customs duty, value Per each customs
                                                         a customs duty
                   added tax,     duty payment notice
                                                         payment notice
C u s t o m s       individual       (which means
                                                        exceeds KRW 2
Duty            consumption tax,    multiple taxable
                                                      million, credit card
               liquor tax, and (+     items can be
                                                         payment is not
                      surtax)            allowed)
                                                             allowed



                                    - 98 -
                                               Korea Customs and Tariff 2010


2. Amendments of Anti-Dumping provisions of the Enforcement
   Decree of Customs Act

 222.         Publishing negative decision of a preliminary investigation in an
 official Gazette (Article 61(4) of Enforcement Decree)


                 Original                                Revised
  Notifying     and   announcing    the   Notifying     and   announcing    the
  decision      of    a     preliminary   decision      of    a     preliminary
  investigation                           investigation

  1.      (Affirmative        decision)   1.      (Affirmative        decision)
  notifying interested persons of the     notifying interested persons of the
  decision and publishing it in an        decision and publishing it in an
  official Gazette                        official Gazette

  2. (Negative decision) notifying        2.      (Negative decision) notifying
  interested persons of the decision      interested persons of the decision
                                          and publishing it in an official
                                          Gazette


   <The reason for the amendment>

   222.1 Under the WTO Anti-Dumping Agreement (Article 12.2), “public
   notice should be given of any preliminary or final determination, whether
   affirmative or negative, of any decision.” Under the Enforcement Decree of
   the Customs Act, however, a negative decision is not required to be published
   in an official Gazette, which conflicts the WTO Anti-Dumping Agreement.
   (Article 71(2) of the Enforcement Decree of the same Act) For your
   reference, any affirmative result should be notified to interested persons and
   be published in an official Gazette. (Article 71(1) 1 of the Enforcement
   Decree of the same Act) Therefore, the Enforcement Decree of the Customs
   Act was amended and when the decision of a full-scale investigation is
   negative, such a negative decision is also required to be published in an
   official Gazette by the Minister of the Strategy and Finance.




                                     - 99 -
                                             Korea Customs and Tariff 2010


 222.2 This revised provision will enter into effect from the case into which a
 preliminary investigation is completed after this amendment is promulgated.


223.        The period is extended during which the decision whether to levy
anti-dumping duties is made to within one month and 20 days. (Article 61(7)
and 70(6) of Enforcement Decree)

                Original                               Revised
  The period during which the           The period during which the
  decision    whether      to levy      decision     whether     to levy
  anti-dumping duties is made           anti-dumping duties is made

  Within one month (can be extended     Within one month and 20 days
  within the limit of 20 days, if
  necessary)

 <The reason for the amendment>
 223.1 The Minister of Strategy and Finance shall decide whether to levy
 anti-dumping duties within one month from the date on which the results of a
 full-scale investigation are received from the Korea Trade Commission and
 take a measure to levy such anti-dumping duties in accordance with Article
 51 of the Act: Provided, the period of one month may, when it is deemed
 necessary, be extended within the limit of 20 days.

 223.2 Anti-dumping duties are imposed in the form of an ordinance of the
 Ministry of Strategy and Finance and the government has one-month period to
 publish and announce an ordinance of a Ministry. But required procedures* to
 publish and announce an ordinance normally take more than one month and it
 is virtually impossible for the government to complete the whole process.

 * Discussions among related government agencies and prior announcement of
   legislation (which take over 20 days), examination by the Ministry of
   Government Legislation, and publishing in an official Gazette – only one
   month is given to complete these whole procedures.

 223.3 As a result, 20-day extension period is added to the original
 one-month period to ensure procedural stability in publishing and announcing



                                  - 100 -
                                              Korea Customs and Tariff 2010


  an ordinance of a Ministry.

  223.4 In the case of the initial decision on dumping investigation (Article 61
  (7)), this revised provision will apply to the first decision upon the
  investigation after this amendment is promulgated. In the case of the review
  of anti-dumping duties (Article 70 (6)), this revised provision will apply to
  the first decision upon the review after this amendment is promulgated.

224.          Lesser duty principle is introduced when anti-dumping duties are
levied. (Article 65 (8) of Enforcement Decree)

                 Original                               Revised
  Imposition standard of anti-dumping     Imposition standard of anti-dumping
  duties                                  duties

   Within the limit of dumping rates      Within the limit of dumping rates
                                          and to the least possible required to
                                          remove the injury to the domestic
                                          industries

                                          *Anti-dumping duty rate: the lesser
                                          between the dumping rate and the
                                          rate which can remove the injury to
                                          the domestic industries

  <The reason for the amendment>

  224.1 A positive side of anti-dumping duties is the protection of domestic
  industries against unfair trade. But its negative aspect is the burden of cost
  increase on importers and domestic consumers caused by import price rise.
  Anti-dumping duties should be levied as little as possible while maintaining a
  delicate balance between fulfilling the purpose of anti-dumping duties and
  preventing possible damages on domestic industries while considering profits
  of importers.

  224.2 Lesser duty principle is a recommendation of the WTO Anti-Dumping
  Agreement (Article 9.1) and Korea has also applied this principle from the
  case of a certain electric razor in 1996. (Established rules of the Trade



                                   - 101 -
                                                                                       Korea Customs and Tariff 2010


       Committee prove Korea’s application.) Korea has insisted the global
       community should adopt lesser duty principle in the FTA, DDA and other
       international trade negotiations. This principle is a mandatory provision in
       Korea - Singapore FTA, Korea - EFTA, Korea - India FTA, and Korea - EU
       FTA and therefore, should be incorporated into domestic laws and regulations.
       That is why the Customs amended this provision.

       224.3 For your reference, the Anti-Dumping Friends Group1) demands that
       lesser duty principle should be a mandatory provision in the DDA negotiations
       and the EU and Australia incorporated this principle into their domestic laws
       and regulations.


     225.        It prescribes the notification period of initiating an anti-dumping
     review in the Enforcement Decree of the Customs Act. (Article 70(2))

                                  Original                                                               Revised
        Notification                  of            anti-dumping               Notification                  of            anti-dumping
        investigation                                                          investigation

        In the case of the initial decision on                                 <same as the left>
        dumping investigation: notification
        shall be made within 10 days from
        the date when the decision to
        initiate dumping investigation is
        made

        In the case of the review                                     of       In the case of the review of
        anti-dumping duties: none                                              anti-dumping duties: notification shall
                                                                               be made within 10 days from the
                                                                               date when the decision to initiate the
                                                                               review is made




1)     It c o n s is ts o f 1 3 c o u n trie s in c lu d in g K o re a , Ja p a n , a n d B ra z il a n d a rg u e s th a t th e re s h o u ld b e a
     c o n s id e ra b le c h a n g e in D D A a n ti- d u m p in g n e g o tia tio n s to p re v e n t th e m is u s e o f a n ti- d u m p in g
     m e a s u re s .




                                                                   - 102 -
                                                        Korea Customs and Tariff 2010


   <The reason for the amendment>

   225.1 The Enforcement Decree of the Customs Act has no provision which
   prescribes “period of notification” of the initiation of investigation, which
   causes difficulty in conducting customs affairs. In the case of the initial
   decision on dumping investigation, notification shall be made within 10 days
   from the date when the decision to initiate dumping investigation is made. In
   the case of the review of anti-dumping duties, the Enforcement Decree of the
   same act provides that ‘the Minister of Strategy and Finance shall decide
   whether the review is required to be reexamined within two months from the
   day on which a request is filed for such review’ and then ‘serve a notice
   thereon in writing on any interested person. (Article 70 (2) and 71 (1)-3)’


   <The current time limit within which anti-dumping investigation shall be made
    and anti-dumping measure shall be taken>

                           Publishing
                          initiation of                                Time limit
            Deliberating                Investigation into dumping                     In total
                          investigation                               within which
            initiation of                   rates and injury to                           (if
                               in an                                  measures shall
            investigation                   domestic industries                       extended)
                              official                                  be taken
                             Gazette
               (By the                  (By the Trade Committee)         (By the
                             (By the
                Trade                                     Full-scale   Ministry of    7 months
                               Trade     Preliminary
   Initial   Committee)                                 investigation Strategy and     and 10
                           Committee) investigation
investigati Reception of                                 (3 months)     Finance)         days
                           Decision – (3 months) +
     on      a request –                                   + two      One month +        (12
                            within 10    two months
              within 2                                     months        20 days       months)
                                days      extension
               months                                     extension     extension
               (By the
                                                                         (By the
             Ministry of
                                                                       Ministry of
            Strategy and                                                              7 months
                                        (By the Trade Committee) Strategy and
              Finance)                                                               (11 months
  Review                        ――         6 months + 4 months          Finance)
            Reception of                                                               and 20
                                                 extension            One month +
             a request –                                                                days)
                                                                         20 days
              within 2
                                                                        extension
               months

   225.2 The period of notification of the review, however, is not prescribed in
   the Enforcement Decree of the same act and this causes an interpretation
   dispute: within two months after a request for a review is made, does the




                                           - 103 -
                                              Korea Customs and Tariff 2010


  government only have to decide whether to allow the initiation of the review
  or also have to publish the notification of initiation in an official Gazette?

  225.3 To resolve this dispute, the Customs revised this provision and such
  notification shall be made and published in an official Gazette within 10 days
  from the date when the decision to initiate the review is made. As a result,
  as prescribed in the WTO Anti-Dumping Agreement, any such review as well
  as the initial dumping investigation can be completed within 12 months from
  the initiation date. For your reference, under the current customs acts and
  regulations, the initial dumping investigation shall be completed within 12
  months of the date of initiation and a review shall be completed within 11
  months and 20 days. Therefore, adding 10 days of notification period means
  such review shall be completed within the same amount of time as the initial
  dumping investigation of 12 months.

226.        Application of procedures during anti-dumping investigations mutatis
mutandis to anti-dumping reviews (Article 70(12))

                 Original                                Revised
                                          Certain      procedures       during
  <None>                                  anti-dumping   investigations  apply
                                          mutatis mutandis to anti-dumping
                                          reviews.

  <The reason for the amendment>

  226.1 Article 64 of the Enforcement Decree of the Customs Act prescribes
  that there are certain procedures* to follow during the anti-dumping
  investigations.

      1. Any requested party shall respond to the inquiries by the Customs not
         more than 40 days from the date when they are delivered.
      2. The Customs shall treat data presented by the requested party as
         confidential.
      3. The Customs shall permit any interested party to use such data unless
         specific cases exist.
      4. The Customs shall allow any interested party to hold a public hearing
         to express his opinion.



                                   - 104 -
                                            Korea Customs and Tariff 2010


226.2 These provisions in Article 64 comply with Article 6 of the WTO
Anti-Dumping Agreement. Article 11.4 of the WTO Anti-Dumping Agreement
says that ‘the provisions of Article 6 (Evidence) regarding evidence and
procedure shall apply to any review carried out under this Article.’This means
a review as well as an investigation of anti-dumping duties also should follow
the same procedures defined in the Agreement. The problem is that the
Enforcement Decree of the Customs Act does not have provisions which can
apply to anti-dumping reviews. Therefore, the Customs amended relevant
provisions to comply with the Anti-Dumping Agreement.




                                 - 105 -
                                                Korea Customs and Tariff 2010


Ⅳ. Implications of FTAs

1. Outline of FTA Strategy

227.          In response to the rapid proliferation of regionalism throughout the
world, Korea has been actively pursuing FTAs with major trading partners.
While remaining as a strong supporter of the multilateral trading system, Korea
aims to pursue FTAs that are complementary to and go beyond WTO
liberalization.

228.          In this regard, Korea's FTA policy can be summarized as follows:

       First, Korea aims to pursue FTAs with large advanced economies or
       economic blocs and promising emerging markets.

       Second, Korea aims to pursue FTAs that are high-level in terms of degree
       of liberalization and comprehensive in terms of coverage and scope.

       Third, Korea adopts a multi-track approach when negotiating FTAs, meaning
       that the negotiations can be carried out simultaneously with more than one
       country when necessary.

229.         Additionally, in order to achieve national consensus as part of the
negotiation process, Korea aims to pursue a wide range of outreach efforts with
the public and private sectors.

2. Korea's FTA status

230.         During the past about 5 years, Korea has pushed multi-track
approach for free trade agreement in order to ensure export markets and
strengthen national competitiveness of its export-oriented economy in the global
economy. As a result, Korea has currently contracted FTAs with Chile,
Singapore, the European Free Trade Association (EFTA), the Association of
Southeast Asian Nations (ASEAN) and India. Korea has concluded FTA talks
with US and signed FTA on June 30 2007 and concluded negotiation with EU.
Korea is still waiting for the parliament's ratification for Korea-US FTA and the
singing within year 2010 for Korea-EU FTA.




                                     - 106 -
                                                   Korea Customs and Tariff 2010


231.        Korea is seeking to sign FTAs with as many countries as possible.
Now Korea is in process of FTA negotiations with GCC, Peru, Australia, New
Zealand and Colombia, and joint study for possible FTAs with MERCOSUR,
China, Russia, SACU, Israel, Turkey, and Korea-Japan-China FTA. FTA talks
with Japan, Canada and Mexico are temporally suspended due to various reasons
in each FTA but Korea is in a effort of resuming sooner or later.


Table 10 Korea's FTAs Status

  Category     Partner    Proceedings                       Summary
                                               Concession: 99.8%(In:100%,
              Chile       April 2004
                                               Ag:98.5%)
                                               Concession: 91.6%(In:97.4%,
              Singapore   March 2006
                                               Ag:66.6%)
 In effect    EFTA2)                           Concession: 98.5%(In:99.7%,
                          Sept. 2006
 (5)          (4)                              Ag:34%(Sw), 46%(Nor), 58%(Ice)
              ASEAN3)                          Concession: 99.1%(In:100%,
                          June 2007
              (10)                             Ag:93.2%)
              India       Jan 2010             Concession: 93.1% - India 85%
 Signed                                        Waiting for the parliament's
              U.S.        June 2007
 (1)                                           ratification
 Concluded    EU                               Waiting for signing by the end of
                          July 2009
 (1)          (27)                             2010
              GCC4)       3rd meeting
                                               Negotiating on Tariff Concession
              (6)         (July 2009)
                                               Text-review on the Agreement,
                          1st meeting
              Australia                        Exchange of basic position on
                          (May 2009)
                                               Negotiation
 In Process                                    Text-review on the Agreement,
              New         1st meeting
 (5)                                           Exchange of basic position on
              Zealand     (June 2009)
                                               Negotiation
                          4th meeting
              Peru                             Waiting for 5th talk
                          (Oct. 2009)
                          2nd meeting
              Colombia                         Waiting for 3rd talk(abt. July 2010)
                          (Feb. 2010)



                                     - 107 -
                                                            Korea Customs and Tariff 2010



                  Mercosur5)       4th meeting          Not determined the start-up of FTA
                  (5)              (Oct. 2006)          talks
                                   5th meeting
                  China                                 Waiting for 6th meeting
                                   (June 2008)
                                   2nd meeting
                  Russia                                Waiting for 3rd meeting
                                   (July 2008)
  Joint                            Agreed               Waiting for Joint Study by Private
                  SACU6)
  Study                            (Dec. 2008)          sector
  (7)                              Agreed
                  Israel                                Waiting for 3rd Joint study
                                   (May 2009)
                                   Working
                  Turkey           group                Waiting for 1st talk(in 2010)
                                   (Jan 2010)
                  Korea-           Working
                  Japan-           group                Waiting for Joint study(in 2010)
                  China            (Jan 2010)
                                   6th meeting
                  Japan                                 4th working group(Dec. 2009)
                                   (Nov. 2004)
  Suspended                        13th meeting
                  Canada                                Suspended due to 'Beef' negotiation
  (3)                              (March 2008)
                                   2nd talks            Suspended due to internal issues in
                  Mexico
                                   (June 2008)          Mexico


  232.         Resulting from FTA contracts, Korea's import and export volume
  have been continuously increased. With Chile, export value increased almost
  double from US$ 1,566 million in 2006 to US$ 3,032 million in 2008. With
  Singapore, export increased from US$ 9,489 million to 16,293 million and
  import from US$ 5,887 million to US$ 8,362 million. With the EFTA and
  ASEAN countries, export and import increased significantly also. Korea's total
  export and imports with all FTA countries account for 11.6%, 10.3%
  respectively compared to the trade value to the whole world.



2)EFTA: Switzerland, Norway, Iceland, Lichtenstein
3) ASEAN: Brunei, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines,   Singapore, Viet Nam,
   Thailand
4) GCC: Saudi Arabia, UAE, Kuwait, Oman, Qatar, Brain
5) MERCOSUR: Argentina, Brazil, Paraguay, Uruguay, Venezuela
6) SACU : South Africa, Botswana, Namibia, Lesotho, Swaziland



                                              - 108 -
                                                                 Korea Customs and Tariff 2010


Table 11 Trade Volume by FTAs
                                                                              (Unit : million US$, %)
                                     Export Value                                Import Value
        FTA
                           2007         2008           2009           2007         2008            2009

        Chile            3,115(99)   3,032(△3)      2,229(△27)     4,184(10)     4,127(△1) 3,103(△25)

 Singapore(‘06.3.2)     11,949(26)   16,293(36)     13,617(△16)    6,860(17)     8,362(22)      7,872(△6)

             Swiss      484(△42)     399(△18)        341(△14)      1,992(51)     1,908(△4) 1,663(△13)

            Norway      596(△30)     2,080(249)     1,606(△23)     1,536(79)     2,202(43)      2,869(30)
EFTA
            Iceland       38(6)        39(1)          6(△85)         21(62)        22(4)        11(△51)

         Lichtenstein      4(0)         4(0)          2(△32)        5(△17)         5(0)            5(2)

           Sub-Total    1,122(△35) 2,522(125)       1,955(△23)     3,554(62)     4,137(16)      4,548(10)

           Indonesia     5,771(18)   7,934(38)      6,000(△24)      9,114(3)     11,320(24) 9,264(△18)

            Malaysia     5,704(9)     5,794(2)      4,325(△25)     8,442(17)     9,909(17)    7,574(△24)

          Viet Nam       5,760(47)   7,805(36)       7,149(△8)     1,392(50)     2,037(46)      2,370(16)

         Philippines     4,420(13)   5,016(14)       4,567(△9)     2,438(12)     3,099(27)    2,652(△14)

           Myanmar       292(141)    244(△17)         406(66)       81(△16)       116(44)       78(△33)
ASEAN
             Brunei       27(19)      70(164)        57(△18)       935(△23)      1,724(85)      969(△44)

          Cambodia       281(37)       294(5)        273(△7)         9(63)        14(62)          18(27)

            Thailand     4,488(6)    5,779(29)      4,528(△22)     3,769(13)     4,282(14)    3,239(△24)

           Lao PDR       56(139)      53(△4)           56(5)        70(296)      53(△25)        18(△67)

           Sub-Total    26,799(19)   32,989(23)     27,361(△17)    26,250(10)    32,554(24)   26,182(△20)

India(`10.1.1)           6,600(19)    8,977(36)     8,013(△11)      4,624(27)    6,581(42)      4,142(△37)

Total (A)               49,585(21)   63,813(29)     53,175(△17)    45,472(15)    55,761(23)   45,847(△18)

World(B)                371,489(14) 422,007(14) 363,534(△14) 356,846(15) 435,274(22) 323,085(△26)

FTA ratio(A/B)          13.35%        15.12%        14.63%          12.74%       12.81%         14.19%




                                                  - 109 -
                                                Korea Customs and Tariff 2010


233.        The Korea-Chile FTA is regarded as the most successful FTA talks
in the view of utilization ratio among the 5 FTAs in effect. Utilization ratio for
the Korea-Chile FTA reaches 72% by case and 48% by import amount followed
by the EFTA with 40% by case and the ASEAN with 35% by amount.


Table 12 Utilization by FTAs
                                                               (Unit : million US$)
                               Import(A)       Concession(B)         Ratio(B/A)
  FTA          Period
                            case    Amount     case     amount      case    amount
            April 2004~
  Chile                    52,870    18,686   38,075    8,988      72.0%    48.1%
              Dec. 2009
            March 2006 ~
Singapore                 435,164    27,477    9,277     868       2.1%     3.2%
               Dec. 2009
              Sept. 2006-
 EFTA                     173,842    12,980   70,203    3,842      40.4%    29.6%
              Dec. 2009
             June 2007~
ASEAN                     992,000    73,497   164,861   25,690     16.6%    35.0%
              Dec. 2009
             Jan. 2010~
 INDIA                     8,098      991       82        6        1.0%     0.7%
               Feb. 2010

234.         In order for pursuing successful FTA negotiations, Korean
government     has established and been operating FTA policy and promotion
organization. The Structure of FTA organization is as shown below:




                                    - 110 -
                                                      Korea Customs and Tariff 2010


Chart 5 Korea's FTA Organizational structure


           International Economic
                                                    FTA Policy Adjustment Committee
             Ministers' Meeting
 ․Chair : Minister of MOSF                         ․Chair : Minister of MOSF &
 ․Member :                                                   Co-Chair from public
  - Minister of Trade of MOFAT,                              sector
  - Minister of MOKE, MIFAFF, etc.                 ․Member: About 30 members
                                                    - Minsters of government agencies
 ․Function :
   - Setting up basic position of FTA,             ․Function:
   - Decision on Negotiation Strategy                - Providing information for FTA
   - Approval on FTA Negotiation                        contract or ratification
                                                     - Supporting domestic
                                                        implementation

                                                   ․Subsidiary
                                                     - FTA Policy Bureau(MOSF)


                                                   Relevant Ministries;
        FTA Promoting Committee

 ․Chair : Minister of Trade                        MOSF: Ministry of Strategy and
 ․Member                                                   Finance
   - Deputy ministers of International             MOFAT: Ministry of Foreign
      affairs in relevant ministries                       Affairs and Trade
 ․Function                                         MOKE: Ministry of Knowledge
   - Deliberate FTA contract                                and Economy
                                                   MIFAFF: Ministry of Food,
                                                           Agriculture, Forestry and
          Negotiating Delegation                           Fisheries

 ․Delegate : Head of FTA Negotiation
                Bureau of MOFAT
 ․Negotiating Group
  - Trade in goods,
     Services/Investment
     Dispute Settlement




                                         - 111 -
                                                              Korea Customs and Tariff 2010


3. Major outcomes by FTAs


(1) Korea-Chile FTA
235.        Korea concluded FTA talks with Chile on October 24, 2002, after
three years of negotiations initiated at the late 1999. The two signatories agreed
to eliminate import tariffs on 94.5% (Korea) and 96.5% (Chile) of tariff lines
within ten years.

Table 13          Korea-Chile FTA Tariff Concessions
                                                                            (TL: HSK 10-digit, %)
                              Industrial   Agricultu-
 Concession           TL                                Woods     Fishery         Major items(Ag)
                                goods      ral goods
 Immediate           9,740     9,101          224        138        277
                                                                              feeding, wool, coffee
 Elimination         (87.2)    (99.9)        (15.6)     (58.2)     (69.5)
                       701                    545         70         86       bracken, rose, bean curd,
 For 5 years                      -
                      (6.3)                  (38.1)     (29.5)     (21.5)     wine, almond
                                                                              Fruit juice, Fruit
                      41         1            40
 For 7 years                                              -          -        preparations,
                     (0.4)     (0.01)        (2.8)
                                                                              Poultry, Soup, Potato
                       1                       1
 For 9 years                      -                       -          -        Other fruit juice
                     (0.01)                  (0.07)
                      262                     197         29        36        Tomato, Pork, Peach,
 For 10 years                     -
                     (2.3)                   (13.8)     (12.3)     (9.0)      Kiwi fruit
Seasonal tariff         1                       1
                                  -                       -          -        grape
  (10 year)          (0.01)                  (0.07)
                       12                      12
 For 16 years                     -                       -          -        dry milk, mixed juice
                      (0.1)                   (0.8)
   After               18                      18
                                  -                       -          -        beef, chicken, plum,
 TRQ+DDA             (0.15)                  (1.26)
    After             373                     373                             garlic, onion, pepper,
                                  -                       -          -
    DDA              (3.3)                   (26.0)                           dairy products
                      21                      21
  Exemption                       -                       -          -        rice, apple, pear
                     (0.2)                   (1.5)

    Total            11,170    9,102         1,432       237        399




                                              - 112 -
                                                      Korea Customs and Tariff 2010


 236.          The Korea-Chile FTA was Korea’s first FTA with a major trading
 partner in the global market. Since its entering into force on April 1, 2004, the
 agreement has established the infrastructure for Korean businesses required to
 help them to expand the scope of activities and diversify export market.
 237.          Korea agreed to eliminate tariffs immediately on 87.2% of the total
 tariff lines, except for 21 agricultural products including rice, apple and pear.
 Chile’s agreement was 41.8%.


 (2) Korea-Singapore FTA
 238.        Korea and Singapore had 7 rounds of negotiations since the
 beginning of the talks at the early 2004 and concluded the Korea-Singapore
 FTA talks on the occasion of the summit meeting of ASEAN+3 held on
 November 2004. The two signatories signed the final agreement on August 4,
 2005 and the Korea-Singapore FTA entered into force on March 2, 2006.

Table 14 Comparison on Tariff concessions by FTAs

      Category           Korea-Chile             Korea-Singapore        Korea-EFTA

 Tariff Concession         99.8%                     91.6%                 98.5%

 Rule of Origin
                     ․Whole production,        ․Whole production,    ․Whole production,
                      Substantial               Substantial           Substantial
  -Criteria           transform                 transform             transform
                                               ․By products, over    ․By Products, over
                     ․Value: over 45%           45~55%                40~70%
  -Concession on                               ․Accepted as          ․Acknowledged as
                     ․Not Accepted
   Gaesung Complex                              Korean Origin         Korean Origin
                     ․Self-Certification       ․Certification by     ․Self-Certification
  -Certification
                      by Exporter               Authority             by Exporter
                                                                     ․Request for
                     ․Verification Visit       ․Verification Visit
  -Verification                                                       Verification
                     (Direct)                  (Direct)
                                                                      (Indirect)


 239.       Korea agreed to eliminate import tariffs on 91.6% of tariff lines
 (97.4% for industrial goods and 66.6% for agricultural goods from Singapore)



                                           - 113 -
                                                Korea Customs and Tariff 2010


within ten years. Singapore also agreed to immediately eliminate all tariffs on
imports from Korea.


240.         In particular, the Korea-Singapore FTA extends tariff concessions
for products manufactured in the Gaesung Industrial Complex and other special
economic zones in North Korea and the concession was the same as those
granted to products made in Korea. Therefore, the Korea-Singapore FTA set a
precedent for securing an export market for goods manufactured in the Gaesung
Industrial Complex and other special economic zones in North Korea.


(3) Korea-EFTA FTA
241.        Korea and the EFTA initiated FTA negotiations at the early 2005
and concluded the talks at the fourth round negotiations (held from July 4 to 8,
2005). The conclusion of the agreement was announced on July 12, 2005. The
agreement was signed on December 15, 2005 and entered into force on
September 1, 2009.

242.        The industrial structure of the EFTA region is supplementary to that
of Korea and therefore the Korea-EFTA FTA was not expected to cause much
damage to Korean industries. And this FTA was deemed to increase Korea’s
export to the European market among major export items such as vehicles and
vessels.

243.         In the case of agricultural products, taking into consideration of the
sensitiveness of agricultural products, both signatories agreed only on processed
agricultural products. For basic agricultural products, the two sides agreed to
sign separate bilateral agreements between each EFTA member country and
Korea.

 (4) Korea-ASEAN FTA
244.       Korea and ASEAN began FTA talks in early 2005 and
concluded the talks at the 13th round of negotiations held from July 3 to
7, 2006. The Korea-ASEAN FTA (or the Agreement on Trade in Goods
under the Korea-ASEAN FTA) was officially signed on August 24, 2006
and entered into force on June 1, 2007.




                                     - 114 -
                                                 Korea Customs and Tariff 2010


Table 15 The Result of Korea-EFTA FTA talks

   Sector              Korea's Concession                 EFTA's Concession

                       99.7% Concession
               - Exemption on 29 items such as
 Industrial                                                     100%
                 crude oil, petroleum products and
   goods                                                 Immediate Elimination
                 Review again 3 years later
               - 91.1% of Immediate Elimination

                        80.5% Concession
               - Exemption on 47 items such as
                 marin plant                                    100%
  Fishery
               - Exemption on 32 items such as           Immediate Elimination
                 Live fish and Review later
               - Quota on Mackerel
               - Concession rate of 34% for
                                                           <Processed> 100%
                 Switzerland, 46% for Norway,
                                                             <Raw material>
Agricultural     58% for Iceland
                                                          -Switzerland : 42.2%
  goods        - Exemption on some agricultural
                                                            -Norway : 52.7%
                 goods such as apple, pear, beef,
                                                            -Iceland : 53.8%
                 garlic, milk, etc.


 Table 16 Modality of Tariff Concession of Korea-ASEAN FTA

     Items            Korea         ASEAN6            Viet Nam         CLM*

                  By 2008:85%     By 2010:85%        By 2016:85%   By 2018:85%
Normal Track
                  By 2010:90%     By 2012:90%        By 2018:90%   By 2020:90%
                  By items:10%                      By items:10%
Sensitive Track                                                   By items:10%
                  By Import Value:10%               By Import:25%
                 By items: 200 lines based on
                                              By items : 200 lines based on
                 CTSH(6dg) or 3% of national
                                              CTSH(6dg) or 3% of national
Highly Sensitive level
                                              level
   List
                 By imports : 3%
                                              By imports : 3%
                 Exemption : 40 lines
       * CLM: Cambodia, Lao PDR, Myanmar


                                     - 115 -
                                              Korea Customs and Tariff 2010


245.        The Korea-ASEAN FTA offers preferential treatment to Korean
products exported to ASEAN and therefore, was expected to grant benefits to
Korean industries to boost competitiveness of Korean products.

246.        Coming into force on June 1, 2007, the Agreement on Trade in
Goods under the Korea-ASEAN FTA is adopted by 9 out of 10 ASEAN
member countries: Singapore, Indonesia, Malaysia, Vietnam and Myanmar (in
June 2007); the Philippines (in January 2008); Brunei (in July 2008), Laos (in
October 2008) and Cambodia (in November 2008).

247.        Thailand concluded the talks in December 2007 but was unable to
sign the Agreement due to domestic political reasons. Thailand completed her
domestic procedures for adopting the Agreement in January 2009 and signed the
Protocol on the Accession to the Korea-ASEAN FTA on the occasion of the
Korea-ASEAN Summit Meeting in February 2009.


(5) Korea-US FTA

248.         Korea and the US announced the launch of the Korea-US FTA
(KORUS FTA) negotiations on February 3, 2006 and held 12 rounds of
negotiations from June 2006 to April 2007, including high-ranking officials
meetings. The treaty was signed on June 2007 and submitted to the National
Assembly for parliamentary ratification on September 2007. However, ratification
process is still on going.

249.         The KORUS FTA is a comprehensive FTA which covers goods,
trade remedy, investment, service, competition, government procurement, IPR,
labor, environment and other trade-related issues. Korea expects the KORUS
FTA can greatly increase the real trade volume, especially in vehicle, LCD
monitor, TV camera, color TV and epoxy resin, etc.

250.        Thanks to the KORUS FTA, Korea is expecting to get an
equivalent competitive basis to Canada, Mexico who have already signed the
FTA contract with the US and obtained favorable position compared to Japan and
China who are the major competitors, but have yet to sign the FTAs with the US.

251.        However, united automobile workers(UAE) and fabric and clothes
sector have shown strong opposition on KORUS FTA, Both countries still are



                                   - 116 -
                                                  Korea Customs and Tariff 2010


waiting for parliament's approval.

Table 17 Korea's Concession in KORUS FTA
                                                                 (Unit: Billion US$)
 Concession           TL        Import Value             Major items(tariff)
                                                 Vehicle(8),    Digital    Projector
Immediate                                        TV(8),
                9,061(80.5%)     21.8(77.8%)
Elimination                                      Air bag(8), Airplane Engine(3)
                                                 Electronic measuring instrument(8)
For 3 years       765(6.8%)      3.7(12.0%)      Perfume(8), Polyurethane(6.5)
                                                 Aluminum plate (8),
For 5 years       509(4.5%)          0.8(2.7%)   Lobster(20), high-frequency
                                                 amplifier(8)
                                                 Beef(40), Pork(22.5), Chicken(20),
                                                 Orange(50), Sugar(50),
Over 5 years      910(8.1%)          2.1(7.4%)
                                                 Croaker(63), Plywood(12),
                                                 Cosmetics(8)

Exemption          16(0.1%)      0.03(0.1%)      Rice(MMA,5)
Total           11,261(100%)     28.4(100%)


Table 18    US's Concession in KORUS FTA
                                                                 (Unit: Billion US$)
 Concession          TL         Import Value             Major items(tariff)
                                                 Vehicle under 3000CC(2.5),
Immediate
                8,628(82.1%)     34.9(85.4%)     Poly Styrene(6.5), color TV(5),
Elimination
                                                 Man's Shirt(28), Sweater(32)
                                                 Vehicle over 3000CC(2.5),
For 3 years      370(3.5%)           2.8(6.9%)
                                                 DTV(5), Golf goods(4.9)
For 5 years      746(7.1%)           1.4(3.4%)   Tyre(4), Leather clothing(6)
                                                 Cargo truck(25), bearing(9),
Over 5 years     761(7.2%)           1.8(4.3%)   Poly Esther resin(6.5),
                                                 Steel(4.3~6.2), Accessory(11)
Exemption       10,505(100%)     40.9(100%)



                                       - 117 -
                                               Korea Customs and Tariff 2010


(6) Korea-EU FTA


252.         In May 2007, Korea and the European Union started FTA
negotiations with the aim of completing the talks by the end of 2008. The talks
progressed quickly, after initial tussles over automobile market access. The main
concern between the two sides was the agricultural sector - especially pork
products, automobile and electronic products. Rules of Origin was also a big
flash point between Korean and the EU.

253.         Korea has held 8 rounds of negotiations with the EU in a bid to
gain greater footing in the 27-nation economic bloc. Korea and the EU made an
agreement on most of the concerns at the Trade Ministers' Meeting on January
2009, except for customs drawback system. The EU requested to remove
drawback system on exporting goods, However, Korea sticked to maintain it. It
was settled down as the EU accepted drawback system with a review clause
which can raise an issue to limit the drawback 5 years after the effectuation of
the FTA. Korea and the EU finally agreed to conclude the talks on October 15,
2009.

Table 19 Korea-EU FTA Tariff Concession rate

         Category                    Korea                       EU

Immediate Elimination                81.7%                      94.0%
For 5 years                          93.6%                      99.6%
For 10 years                         99.6%                         -
Exemption                             0.4%                       0.4%
Total                                100.0%                    100.0%


 (6) Korea-India FTA

254.         Korea-India FTA was launched on March 2006 and was concluded
at the 12th talks held in Seoul and A was officially signed on August 2009. It
entered into force on January 1, 2010.




                                    - 118 -
                                              Korea Customs and Tariff 2010


Table 20 Korea-India FTA Tariff Concession rate


         Category                    Korea                      India

 Immediate Elimination               60.6%                      3.9%

 For 5 years                         20.5%                      3.4%

 For 8 years                         7.5%                      64.2%

 Sub-Total                           88.6%                     71.5%
 Reduced to 1% to 5%
                                     0.3%                       8.8%
 for 8 year
 Reduced by 50%
                                     4.2%                       5.0%
 for 8 year
 Exemption                           6.8%                      14.7%

 Total                              100.0%                     100.0%



(7) Other FTAs


255.          The Korea-GCC FTA was launched in the view of securing energy
resources - especially crude oil in July 2008. By now, the 3rd meeting was
held in July 2009 in Seoul. Draft tariff concessions were exchanged at the first
meeting and both sides have difficulty in accepting priority products in the
request list of each other.

256.         The Korea-Peru FTA was launched on March 2009 and has had 4th
meeting so far. Both countries agreed to conclude negotiations as soon as
possible at the Korea-Peru Summit Meeting in November 2009. Both countries
are expecting the conclusion by the end of 2010.

257.        The Korea-Australia FTA and Korea-New Zealand FTA was
launched in May and June 2008 respectively. The FTA between Korea and
Australia has had 4th round of negotiations. The two nations are trying to
conclude the FTA negotiations within 2010. The Korea-New Zealand FTA has



                                   - 119 -
                                               Korea Customs and Tariff 2010


had 3rd round of talks. Korea and New Zealand still have a big gap on
concession of the agricultural products - especially on diary products.

258.        The Korea-Colombia FTA started common study in March 2009,
and then has had 2nd meeting after beginning of the talks in November 2009.
Both countries are exchanging basic positions on interested items of each other.

259.          Korea started a joint study with China in March 2007 and has had
5 rounds of meeting for the launch of the Korea-China FTA. However, both
countries have not finalized the final report of the joint study as of May 2009.
The two sides are expecting the FTA to be launched sooner or later after
reporting the outcomes of joint study within 2010.

260.         The tri-lateral FTA negotiations among Korea, Japan and China are
expecting a possible launch sooner or later. Trade ministers of the three
countries agreed to start a joint study in the first half of 2010. They also
agreed to establish a working group, namely the Joint Study Committee, i.e.
JSC to deal with this study. In principle, the three countries agreed to conclude
the joint study by the end of 2012. The first JSC will be expected to begin
sooner or later.

261.        Korea and Japan started FTA talks in December 2003, but it was
stuck due to difficulties in concession on the agricultural goods in the Japanese
side. Both countries held an expert-level meeting to consult the possible
reopening of the FTA talks in June and December 2008, however, the gaps
between the two sides have not been narrowed yet.

262.          The Korea-Canada FTA was launched in July 2005 and has had
13th meeting so far. Most of the concerns in tariff concessions were agreed
except for sensitive items such as vehicles, beef and pork. Regarding Rules of
Origin, Canada defers the decision to admit the products manufactured in the
Gaesung industrial Complex as the Korean origin. Now, negotiations are
suspended due to Korea's ban on the Canadian beef.

263.        The Korea-Mexico FTA talks were resumed in December 2007 as
the level of an FTA other than economic cooperation agreement. However,
Mexico failed to prepare an offer list at the second meeting held in June 2008
in Seoul. Now, Mexico is facing difficulty in continuing the FTA negotiations
due to its political situation and the severe opposition from businesses.



                                    - 120 -
                                                    Korea Customs and Tariff 2010


Ⅴ. Statistics and Others
Table 21   Korea's Trade Trend from 1980 to 2009
                                                                        (million US$)
    Year         Export       ratio              Import      ratio          Balance
    1980            17,505            16.3         22,292             9.6     - 4,787
    1981            21,254            21.4         26,131            17.2     - 4,878
    1982            21,853             2.8         24,251        -7.2         - 2,397
    1983            24,445            11.9         26,192             8.0     - 1,747
    1984            29,245            19.6         30,631            16.9     - 1,387
    1985            30,283             3.6         31,136             1.6       - 853
    1986            34,714            14.6         31,584             1.4       3,131
    1987            47,281            36.2         41,020            29.9       6,261
    1988            60,696            28.4         51,811            26.3       8,886
    1989            62,377             2.8         61,465            18.6         912
    1990            65,016             4.2         69,844            13.6     - 4,828
    1991            71,870            10.5         81,525            16.7     - 9,655
    1992            76,632             6.6         81,775             0.3     - 5,144
    1993            82,236             7.3         83,800             2.5     - 1,564
    1994            96,013            16.8        102,348            22.1     - 6,335
    1995          125,058             30.3        135,119            32.0    - 10,061
    1996          129,715              3.7        150,339            11.3    - 20,624
    1997          136,164              5.0        144,616        -3.8         - 8,452
    1998          132,313         -2.8             93,282       -35.5          39,031
    1999          143,685              8.6        119,752            28.4      23,933
    2000          172,268             19.9        160,481            34.0      11,786
    2001          150,439        -12.7            141,098       -12.1           9,341
    2002          162,471              8.0        152,126             7.8      10,344
    2003          193,817             19.3        178,827            17.6      14,991
    2004          253,845             31.0        224,463            25.5      29,382
    2005          284,419             12.0        261,238            16.4      23,180
    2006          325,465             14.4        309,383            18.4      16,082
    2007          371,489             14.1        356,846            15.3      14,643
    2008          422,007             13.6        435,275            22.0    - 13,267
    2009          363,533        -13.9            323,084       -25.8          40.449




                                       - 121 -
                                                  Korea Customs and Tariff 2010



 500                                                                         export
                                                                             import
 400                                                                         Balance

 300

 200

 100

     0
         1994199519961997199819992000200120022003200420052006200720082009
-100




Table 22 Top 20 by Import Trade Volume
                                                                   (million US$, %)
                                       2008                        2009
 Rank          Country
                               Amount       Ratio          Amount           Ratio
           Total                435,275      22             323,085         -25.8
1          China                 76,930     22.1             54,246         -29.5
2          Japan                 60,956      8.4             49,428         -18.9
3          U.S.                  38,365      3.1             29,039         -24.3
4          Saudi Arabia          33,781     59.6             19,737         -41.6
5          Australia             18,000      36              14,756          -18
6          German                14,769      9.1             12,298         -16.7
7          Taiwan                10,643      6.8              9,851          -7.4
8          Arab Emirates         19,248     52.1              9,310         -51.6
9          Indonesia             11,320     24.2              9,264         -18.2
10         Qatar                 14,375      70               8,386         -41.7
11         Kuwait                12,129     38.7              7,992         -34.1
12         Singapore              8,362     21.9              7,872          -5.9
13         Malaysia               9,909     17.4              7,574         -23.6
14         Russia                 8,340     19.5              5,789         -30.6
15         Iran                   8,223     26.9              5,746         -30.1
16         India                  6,581     42.3              4,142         -37.1
17         Oman                   5,695     49.3              4,124         -27.6
18         France                 4,877     20.6              4,006         -17.9
19         Iraq                   4,228     37.3              3,812          -9.8
20         Brazil                 4,380     56.8              3,744         -14.5



                                       - 122 -
                                              Korea Customs and Tariff 2010


Table 23 Top 20 by Export Trade Volume
                                                            (million US$, %)
                                  2008                      2009
  Rank       Country
                           Amount          Ratio     Amount        Ratio
         Total              422,007         13.6      363,534      -13.9
 1       China               91,389         11.5       86,703       -5.1
 2       U.S.                46,377          1.3       37,650      -18.8
 3       Japan               28,252          7.1       21,771      -22.9
 4       Hong Kong           19,772           6        19,661       -0.6
 5       Singapore           16,293         36.3       13,617      -16.4
 6       Martial Islands      4,759        108.8        9,672      103.2
 7       Taiwan              11,462         -12         9,501      -17.1
 8       German              10,523         -8.8        8,821      -16.2
 9       India                8,977          36         8,013      -10.7
 10      Viet Nam             7,805         35.5        7,149       -8.4
 11      Mexico               9,090         21.5        7,133      -21.5
 12      Indonesia            7,934         37.5        6,000      -24.4
 13      Brazil               5,926         69.9        5,311      -10.4
 14      Australia            5,171         10.2        5,243        1.4
 15      Arab Emirates        5,749         55.2        4,978      -13.4
 16      Liberia              2,802         11.6        4,885       74.4
 17      Philippines          5,016         13.5        4,567        -9
 18      Thailand             5,779         28.8        4,528      -21.6
 19      Netherlands          6,406         42.7        4,528      -29.3
 20      Panama               6,464        105.5        4,477      -30.7




                                 - 123 -
                                                      Korea Customs and Tariff 2010


Table 24 Export by Products
                                                                     (Million US$, %)
                                '07                    '08                 '09
            Type                       Ratio                Ratio               Ratio
                       Amount                   Amount              Amount
                                      Percent              Percent             Percent

Total                   371,489
                                           14.1
                                                 422,007
                                                               13.6
                                                                     363,534
                                                                               △  13.9
                                            100                 100              100.0

Heavy Industry          311,045
                                          15.0
                                                   341,880
                                                               9.9
                                                                     303,861
                                                                               △ 11.8
                                          83.7                81.0                 83.6

 ․IT products            50,656
                                          10.1
                                                    52,604
                                                               3.8
                                                                      39,421
                                                                                △17.7
                                          13.6                12.5                 10.8

 ․Semi-conductor         39,046
                                           4.5
                                                    32,788
                                                             △16.0
                                                                      31,918
                                                                                 △2.7
                                          10.5                 7.8                  8.8

 ․Electronics             5,600
                                         △8.8
                                                     5,185
                                                             △7.4
                                                                      10,436
                                                                                △12.0
                                           1.5                 1.2                  2.9

 ․Vehicles               34,483
                                          13.1
                                                    31,072
                                                             △9.9
                                                                      22,399
                                                                                △28.4
                                           9.3                 7.4                  6.2
                                          24.0                46.4                  3.7
 ․Vessel                 26,855                     39,312            42,825
                                           7.2                 9.3                 11.8

 ․Still & Metal          31,594
                                          16.3
                                                    37,933
                                                              20.1
                                                                      29,876
                                                                                △21.6
                                           8.5                 9.0                  8.2

 ․Machinery, etc         36,164
                                          24.8
                                                    43,425
                                                              20.1
                                                                      32,772
                                                                                △23.7
                                           9.7                10.3                  9.0

Light Industry           27,470
                                           2.3
                                                    29,322
                                                               6.7
                                                                      27,498
                                                                                 △ 6.5
                                           7.4                 6.9                  7.6

 ․Fabric                  5,195
                                         △1.5
                                                     5,239
                                                               0.8
                                                                       4,522
                                                                                △14.1
                                           1.4                 1.2                  1.2

 ․Clothes                 1,909
                                        △12.1
                                                     1,733
                                                             △9.2
                                                                       1,393
                                                                                △19.8
                                           0.5                 0.4                  0.4

Materials, Fuel          29,443
                                          17.4
                                                    43,923
                                                              49.2
                                                                      27,892
                                                                               △ 36.8
                                           7.9                10.4                  7.7

 ․Petroleum              24,212
                                          17.5
                                                    37,657
                                                              55.5
                                                                      23,192
                                                                                △38.7
                                           6.5                 8.9                  6.4
                                          11.5                12.1                  5.2
Food, Consumer goods      3,531                      3,958             4,283
                                           1.0                 0.9                  1.2




                                         - 124 -
                                                      Korea Customs and Tariff 2010


Table 25 Import by Products
                                                                       (Million US$, %)
                             '07                       '08                   '09
          Type                      Ratio                     Ratio                 Ratio
                    Amount                   Amount                    Amount
                                   Percent                   Percent               Percent

Total                356,846
                                    15.3
                                                  435,275
                                                              22.0
                                                                        199,670
                                                                                   △  54.1
                                   100.0                      100.0                 100.0

Raw materials        201,740
                                    16.0
                                                  268,991
                                                              33.3
                                                                        112,598
                                                                                   △  58.1
                                    56.5                      61.8                    56.4

 ․Crude Oil           60,324
                                     8.0
                                                   85,855
                                                              42.3
                                                                         30,187
                                                                                   △  64.8
                                    16.9                      19.7                    15.1

 ․Iron ore             2,856
                                    20.2
                                                    4,846
                                                              69.7
                                                                          3,538
                                                                                   △  27.0
                                     0.8                       1.1                     1.8

 ․Base Metals         14,306
                                    16.0
                                                   13,359
                                                             △ 6.6
                                                                          9,111
                                                                                   △  31.8
                                     4.0                       3.1                     4.6

 ․Steel               24,076
                                    36.0
                                                   37,071
                                                              54.0
                                                                         21,561
                                                                                   △  41.8
                                     6.7                       8.5                    10.8

 ․Wood                 2,501
                                    16.4
                                                    2,490
                                                             △ 0.4
                                                                          1,927
                                                                                   △  22.6
                                     0.7                       0.6                     1.0

Capital Goods        118,129
                                    13.0
                                                  126,678
                                                               7.2
                                                                         65,656
                                                                                   △  48.2
                                    33.1                      29.1                    32.9

 ․Semi-conductor      39,293
                                    11.2
                                                   40,780
                                                               3.8
                                                                         20,697
                                                                                   △  49.2
                                    11.0                       9.4                    10.4

 ․IT products         30,823
                                     9.9
                                                   32,018
                                                               3.9
                                                                         17,633
                                                                                   △  44.9
                                     8.6                       7.4                     8.8

 ․Machinery, etc.     16,012
                                    12.1
                                                   16,822
                                                               5.1
                                                                          8,361
                                                                                   △  50.3
                                     4.5                       3.9                     4.2

 ․Transportation       9,982
                                    25.1
                                                   11,650
                                                              16.7
                                                                          9,545
                                                                                   △  18.1
                                     2.8                       2.7                     4.8

Consumer's goods      36,976
                                    19.4
                                                   42,145
                                                              14.0
                                                                         21,417
                                                                                   △  49.2
                                    10.4                       9.7                    10.7

 ․Grain                4,750
                                    36.8
                                                    7,422
                                                              56.3
                                                                          3,459
                                                                                   △  53.4
                                     1.3                       1.7                     1.7

 ․Beef                  939
                                    18.6
                                                     960
                                                               2.2
                                                                           797
                                                                                   △  17.0
                                     0.3                       0.2                     0.4

 ․Vehicles             2,456
                                    33.2
                                                    2,478
                                                               0.9
                                                                          1,056
                                                                                   △  57.4
                                     0.7                       0.6                     0.5
 ․Precious Stone
                       1,664
                                    43.9
                                                    1,723
                                                               3.5
                                                                          1,432
                                                                                   △  16.9
 and Jewelry                         0.5                       0.4                     0.7




                                        - 125 -
                                                      Korea Customs and Tariff 2010


Table 26     Export Trade Volume by HS Chapter
                                                                         (million US$, %)
                                                          2008          2009
No. Ch.                  Description
                                                      Amount Ratio Amount Ratio
          Total                                        422,007 13.6 363,534 -13.9
1    85   Electrical machinery and equipment            98,318  0.9  88,787  -9.7
2    89   Ships, boats and floating structures          40,968 53.8  42,483   3.7
3    84   machinery and mechanical appliances           45,501  4.8  38,206   -16
4    87   Vehicles other than railway                   48,334 -1.7  36,531 -24.4
          Optical, medical or surgical instruments
5    90                                                  28,557   18.3      29,252     2.4
          and apparatus;
 6   27   Mineral fuels, mineral oils and products       38,455   56.1      23,786   -38.1
 7   39   Plastics and articles thereof                  20,216     14      18,356    -9.2
 8   72   Iron and steel                                 21,334   29.7      15,464   -27.5
 9   29   Organic chemicals                              15,786    4.1      13,096     -17
10   73   Articles of iron or steel                       9,063   29.1       8,022   -11.5
11   40   Rubber and articles thereof                     5,551   20.1       4,766   -14.1
12   71   Natural or cultured pearls, precious            2,669   42.4       4,091    53.3
13   60   Knitted or crocheted fabrics                    3,263    3.2       3,158    -3.2
14   74   Copper and articles thereof                     4,149   -2.4       3,048   -26.5
          Man-made filaments; strip and the like of
15   54                                                   2,931    1.8       2,499   -14.7
          man-made textile materials
16   48   Paper and paperboard;                           2,621   10.8       2,298   -12.3
17   28   Inorganic chemicals;                            2,265   82.5       2,028   -10.4
18   38   Miscellaneous chemical products                 2,162   16.6       1,936   -10.5
19   76   Aluminium and articles thereof                  2,436     10       1,827     -25
          Tools, implements, cutlery, spoons and
20   82                                                   1,368    0.4       1,175   -14.1
          forks, of base metal;
21   03   Fish                                            1,118   18.6       1,172     4.8
          Tanning or dyeing extracts; paints and
22   32                                                   1,294    8.6       1,169    -9.7
          varnishes;
23   55   Man-made staple fibres                          1,399   -5.2       1,147    -18
          Impregnated, coated, covered or laminated
24   59                                                   1,272    4.4       1,020   -19.9
          textile fabrics;
25   30   Pharmaceutical products                          777    28.7         919   18.4
26   88   Aircraft, spacecraft, and parts thereof          709    12.9         811   14.4
          Furniture; bedding, etc. not elsewhere
27   94                                                    775     0.8         768    -0.9
          specified or included;
28   61   Articles of apparel and clothing                 907    -9.6         687   -24.2



                                         - 126 -
                                                       Korea Customs and Tariff 2010



          accessories, knitted or crocheted
29   41   Raw hides and skins and leather                   851    -0.5    686   -19.5
30   83   Miscellaneous articles of base metal              748    24.7    683    -8.7
31   79   Zinc and articles thereof                         851   -30.9    666   -21.8
          Other made up textile articles; sets; worn
32   63                                                     649    13.7    628    -3.1
          clothing and worn textile articls; rags
33   70   Glass and glassware                               761   -10.6    628   -17.5
          Articles of apparel and clothing
34   62                                                     657    -9.7    571   -13.1
          accessories, not knitted or crocheted
          Wadding, felt and nonwovens; special
35   56                                                     661      -2    549    -17
          yarns;
36   21   Miscellaneous edible preparations                 520    18.9    527     1.3
          Tobacco and manufactured tobacco
37   24                                                     513     9.7    523      2
          substitutes
38   52   Cotton                                            597   -12.5    497   -16.8
39   33   Essential oils and resinoids;                     412    20.9    464    12.6
          Special woven fabrics; tufted textile
40   58                                                     528    -8.8    458   -13.2
          fabrics;
          Soap, organic surface-active agents,
41   34                                                     461    22.2    452      -2
          washing preparations, etc
          Preparations of cereals, flour, starch or
42   19                                                     433    11.8    447     3.2
          milk; pastrycooks' products
43   96   Miscellanous manufactured articles                506    -1.1    440   -13.1
44   95   Toys, games and sports requisites;                373      -4    439    17.7
          Footwear, gaiters and the like; parts of
45   64                                                     483     4.4    375   -22.3
          such articles
46   31   Fertilisers                                       783   135.3    362   -53.8
47   22   Beverages, spirits and vinegar                    333    22.7    358     7.6
          Articles of stone, plaster, cement,
48   68                                                     461     7.4    351   -23.9
          asbestos, mica or similar materials
          Railway or tramway locomotives,
49   86                                                     521    69.7    336   -35.5
          rolling-stock and parts thereof;
          Works of art, collectors' pieces and
50   97                                                     786   381.5    290    -63
          antiques
51   17   Sugars and sugar confectionery                    252     5.7    257       2
52   37   Photographic or cinematographic goods             260     2.2    253    -2.7
53   49   Printed books, newspapers, pictures               261    22.3    251    -3.8
          Albuminoidal substances; modified
54   35                                                     226     8.6    232     2.9
          starches; glues; enzymes




                                          - 127 -
                                                        Korea Customs and Tariff 2010



          Salt; sulphur; earths and stone; plastering
55   25                                                      361   27.3     230   -36.3
          materials, lime and cement
56   78   Lead and articles thereof                          155   40.6     229   48.4
          Arms and ammunition; parts and
57   93                                                      233     44     215    -7.5
          accessories thereof
58   75   Nickel and articles thereof                        358   13.8     194   -45.9
          Other base metals; cermets; articles
59   81                                                      338    -2.9    187   -44.8
          thereof
          Oil seeds and oleaginous fruits; seeds and
60   12                                                      178     14     170    -4.3
          fruit; industrial or medicinal plants;
61   16   Preparations of meat, of fish                      149   17.5     165   11.2
          Preparations of vegatables, fruit, nuts or
62   20                                                      168     12     161    -3.6
          other parts of plants
63   08   Edible fruit and nuts;                             107    6.8     143    33.9
64   92   Musical instruments;                               186    0.8     124   -33.5
65   07   Edible vegetables                                  106   19.1     123    15.7
          Residues and waste from the food
66   23                                                       88   66.1     113   27.5
          industries; prepared animal fodder
67   69   Ceramic products                                   123     5.3    106   -14.1
68   65   Headgear and parts thereof                         139    -0.5    101     -27
69   42   Leather; saddlery and harness;                     103    -6.3     98    -4.8
70   50   Silk                                               117     8.8     88   -24.9
71   26   Ores, slag and ash                                 227    36.7     86     -62
72   47   Pulp of wood                                        58   -15.1     82    41.2
73   06   Live trees and other plants; etc.                   78    31.2     79     0.5
74   51   Wool, fine or coarse animal hair;                   95    -9.1     76   -20.2
75   91   Clocks and watches and parts thereof                93    -1.3     70   -24.6
76   44   Wood and articles of wood;                          59     2.9     57    -2.7
          Lac; gums, resins and other vegetable
77   13                                                       59    6.8     56     -5.8
          saps and extracts
          Prepared feathers; artificial flowers;
78   67                                                       42   18.5     44      3.4
          articles of human hair
79   11   Products of the milling industry;                   32    -5.3    43    33.9
80   80   Tin and articles thereof                            45      -2    33     -26
81   18   Cocoa and cocoa preparations                        28    -9.8    32    12.9
          Animal or vegetable fats and oils and
82   15                                                       51   61.4     31    -38.3
          their cleavage products;
83   02   Meat and edible meat offal                          25   -16.8    30    22.6
84   57   Carpets and textile floor coverings                 32    -6.4    29    -8.4




                                          - 128 -
                                                     Korea Customs and Tariff 2010



85   05 Products of animal origin                          26   -29.1    25      -5
86   04 Dairy produce                                      12     7.3    24    94.2
87   09 Coffee, tea, maté                                  14     3.8    18    29.6
        Other vegetable textile fibres; paper yarn
88   53                                                    13   -60.6    10   -20.3
        and woven fabrics of paper yarn
89   36 Explosives; matches;                                6    12.5     9      42
90   10 Cereals                                             1   -24.9     8   565.9
        Furskins and artificial fur; manufactures
91   43                                                    12   -12.6     7   -39.5
        thereof
92   01 Live animals                                        2   80.4      3    27.5
        Umbrellas, sun umbrellas, walking-sticks,
93   66                                                     3   35.7      3    -2.1
        and parts thereof
94   46 Manufactures of straw,                              1     -27     1   -13.6
95   45 Cork and articles of cork                           -   -14.7     -   -17.2
96   14 Vegetable plaiting materials;                       -   -15.2     -   -56.1




                                        - 129 -
                                                     Korea Customs and Tariff 2010


Table 27      Import Trade Volume by HS Chapter
                                                                   (million US$, %)
                                                          2008           2009
No. CH.                   Description
                                                      Amount Ratio Amount Ratio
          Total                                        435,275   22 323,085   -25.8
1    27   Mineral fuels, mineral oils and products     142,516 47.7  91,670   -35.7
2    85   Electrical machinery and equipment            62,848  6.9  53,542   -14.8
3    84   machinery and mechanical appliances           40,591  4.2  34,407   -15.2
4    72   Iron and steel                                35,785 54.7  18,443   -48.5
          Optical, medical or surgical instruments
5    90                                                 12,583    5.2   10,486   -16.7
          and apparatus;
 6   29   Organic chemicals                             11,032   11.8    9,016   -18.3
 7   26   Ores, slag and ash                            11,164   20.1    8,815     -21
 8   39   Plastics and articles thereof                  7,469    7.7    7,159    -4.2
 9   73   Articles of iron or steel                      6,325   29.8    6,110    -3.4
10   87   Vehicles other than railway                    7,181    7.8    5,516   -23.2
11   38   Miscellaneous chemical products                6,291    4.3    5,339   -15.1
12   74   Copper and articles thereof                    6,289   -5.6    4,466     -29
13   28   Inorganic chemicals;                           5,178   39.2    3,743   -27.7
14   76   Aluminium and articles thereof                 5,443    2.8    3,440   -36.8
15   30   Pharmaceutical products                        2,994    8.6    3,036     1.4
16   10   Cereals                                        4,330   53.2    2,871   -33.7
17   89   Ships, boats and floating structures           3,360   78.1    2,823     -16
18   71   Natural or cultured pearls, precious           3,532    0.6    2,685     -24
19   70   Glass and glassware                            2,560    3.7    2,455    -4.1
20   03   Fish                                           2,531   -3.7    2,335    -7.7
          Articles of apparel and clothing
21   62                                                  2,720   -3.5    2,139   -21.3
          accessories, not knitted or crocheted
22   44   Wood and articles of wood;                     2,573   -0.6    1,997   -22.4
23   40   Rubber and articles thereof                    2,502   20.5    1,749   -30.1
          Tanning or dyeing extracts; paints and
24   32                                                  1,857    5.4    1,683    -9.4
          varnishes;
25   02   Meat and edible meat offal                     2,031    0.8    1,678   -17.4
          Residues and waste from the food
26   23                                                  1,887   61.9    1,511   -19.9
          industries; prepared animal fodder
27   88   Aircraft, spacecraft, and parts thereof        1,881    -27    1,475   -21.6
28   47   Pulp of wood                                   2,145   13.4    1,458   -32.1
29   94 Furniture; bedding, etc. not elsewhere           1,785   -3.5    1,366   -23.5



                                          - 130 -
                                                          Korea Customs and Tariff 2010



          specified or included;
30   48   Paper and paperboard;                               1,461     6.8   1,232   -15.7
31   52   Cotton                                              1,299     6.8   1,211    -6.7
          Articles of stone, plaster, cement, asbestos,
32   68                                                       1,373   10.6    1,195    -13
          mica or similar materials
          Oil seeds and oleaginous fruits; seeds and
33   12                                                       1,433     50    1,182   -17.5
          fruit; industrial or medicinal plants;
34   95   Toys, games and sports requisites;                  1,259     6.2   1,097   -12.8
35   33   Essential oils and resinoids;                       1,081     9.1   1,052    -2.7
          Articles of apparel and clothing
36   61                                                       1,273     0.6   1,022   -19.7
          accessories, knitted or crocheted
37   42   Leather; saddlery and harness;                       984    19.4     937     -4.8
          Footwear, gaiters and the like; parts of
38   64                                                       1,024     6.8    923     -9.8
          such articles
39   75   Nickel and articles thereof                         1,389    -38     913    -34.3
          Animal or vegetable fats and oils and
40   15                                                       1,150   45.4     898    -21.9
          their cleavage products;
41   37   Photographic or cinematographic goods               1,030    7.5     895    -13.1
42   17   Sugars and sugar confectionery                        813   21.7     882      8.5
43   69   Ceramic products                                    1,026    5.6     856    -16.6
44   81   Other base metals; cermets; articles thereof        1,250   30.4     784    -37.3
45   55   Man-made staple fibres                                837   -2.9     781     -6.7
          Salt; sulphur; earths and stone; plastering
46   25                                                       1,103   41.2     710    -35.7
          materials, lime and cement
47   21   Miscellaneous edible preparations                    704       15    688     -2.2
48   08   Edible fruit and nuts;                               662     -1.7    601     -9.3
49   41   Raw hides and skins and leather                      776    -14.1    584    -24.7
          Soap, organic surface-active agents,
50   34                                                        644    11.6     577    -10.4
          washing preparations, etc
          Man-made filaments; strip and the like of
51   54                                                        789     -2.1    557    -29.4
          man-made textile materials
52   22   Beverages, spirits and vinegar                       708       8     540    -23.7
          Preparations of vegatables, fruit, nuts or
53   20                                                        634      2.4    534    -15.8
          other parts of plants
          Tools, implements, cutlery, spoons and
54   82                                                        652      1.3    523    -19.7
          forks, of base metal;
55   31   Fertilisers                                          749    76.4     467    -37.7
          Albuminoidal substances; modified starches;
56   35                                                        503      9.7    449    -10.7
          glues; enzymes




                                           - 131 -
                                                       Korea Customs and Tariff 2010



57   07   Edible vegetables                                 535    43.5   395   -26.2
58   83   Miscellaneous articles of base metal              467     8.9   383   -18.1
59   16   Preparations of meat, of fish                     429    -0.8   356     -17
60   78   Lead and articles thereof                         256   -17.4   351    37.1
61   49   Printed books, newspapers, pictures               369       4   348    -5.5
          Tobacco and manufactured tobacco
62   24                                                     314   41.1    347    10.6
          substitutes
63   04   Dairy produce                                     410   10.6    335   -18.4
          Wadding, felt and nonwovens; special
64   56                                                     341     9.8   326    -4.3
          yarns;
          Other made up textile articles; sets; worn
65   63                                                     356     7.1   324      -9
          clothing and worn textile articls; rags
66   09   Coffee, tea, maté                                 339   33.9    321    -5.4
67   96   Miscellanous manufactured articles                352      9    305   -13.3
          Impregnated, coated, covered or laminated
68   59                                                     320   10.6    303    -5.3
          textile fabrics;
          Preparations of cereals, flour, starch or
69   19                                                     370   13.7    300   -19.1
          milk; pastrycooks' products
70   91   Clocks and watches and parts thereof              296    13.3   291    -1.8
71   51   Wool, fine or coarse animal hair;                 348   -19.5   255   -26.6
          Arms and ammunition; parts and
72   93                                                     491   24.9    242   -50.7
          accessories thereof
73   80   Tin and articles thereof                          346   28.8    236   -31.9
          Works of art, collectors' pieces and
74   97                                                     723    -6.6   214   -70.4
          antiques
          Railway or tramway locomotives,
75   86                                                     221   39.1    208    -5.7
          rolling-stock and parts thereof;
76   11   Products of the milling industry;                 231   30.3    208    -9.9
77   18   Cocoa and cocoa preparations                      193   -9.3    196     1.5
          Furskins and artificial fur; manufactures
78   43                                                     153   -27.8   170    11.1
          thereof
79   92   Musical instruments;                              188    -0.3   146   -22.4

80   79 Zinc and articles thereof                                 -28.9   125   -16.5
                                                            150
        Lac; gums, resins and other vegetable saps
81   13                                                     107     4.5   109     1.9
        and extracts
82   05 Products of animal origin                           140    -1.6   106   -24.2
83   50 Silk                                                144    -9.6   101   -29.9
84   60 Knitted or crocheted fabrics                         98     4.6    80   -18.3




                                          - 132 -
                                                          Korea Customs and Tariff 2010



85   57 Carpets and textile floor coverings                     95     2.6    68   -28.6
        Other vegetable textile fibres; paper yarn
86   53                                                         55   -18.9    58      6
        and woven fabrics of paper yarn
        Special woven fabrics; tufted textile
87   58                                                         71   -14.4    56   -20.1
        fabrics;
88   06 Live trees and other plants; etc.                       65   -3.8     53   -18.5
89   65 Headgear and parts thereof                              59   10.6     53    -9.2
        Umbrellas, sun umbrellas, walking-sticks,
90   66                                                         68    -2.8    52   -22.8
        and parts thereof
        Prepared feathers; artificial flowers; articles
91   67                                                         49     3.9    44   -10.7
        of human hair
92   01 Live animals                                            45   -13.1    39   -14.3
93   36 Explosives; matches;                                    28   -16.6    28    -1.6
94   46 Manufactures of straw,                                  35     1.6    27   -21.8
95   14 Vegetable plaiting materials;                           22    22.9    18   -14.9
96   45 Cork and articles of cork                                3    16.3     2   -18.4




                                           - 133 -
                                           Korea Customs and Tariff 2010




Contact List

For more information on Korea Customs and Tariff 2010

◈ Ministry of Strategy and Finance

     Mr. Byun, Sang- Goo
     Director General
     Customs & Tariff Bureau
     Tel : 82-2-2150-4400
     Fax : 82-2-2150-9239

     Multi-lateral Customs Cooperation Division
     Tel : 82-2-2150-4450
     Fax : 82-2-2150-9239
     Email: ccd@mosf.go.kr




                                  . . .




                                 - 134 -
                                            Korea Customs and Tariff 2010




           Korea Customs and Tariff 2010


Publication date : July 2010
Publication authority : Multilateral Customs Cooperation Division

 This book is published to present a brief overview of the Korean
 Customs System. If any discrepancies are found between its contents
 and the current Korean Customs Act and Regulations, the latter shall
 prevail.


 If you have any questions about the contents of this book, please
 contact Multilateral Customs Cooperation division of the Ministry of
 Strategy and Finance of Korea by phone, by fax or by email:



            Jeong, Jeong-Hoon<jhjeong@mosf.go.kr>, Director
            Jaeho Jung<jaeho77@mosf.go.kr>, Deputy Director




                                  . . .

				
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