Customs Service Expands Tariff Reduction Items for Air Transport of Raw Materials and Components

[Asia Economy (Daejeon) Reporter Jeong Il-woong] The Korea Customs Service is expanding the scope of special provisions for air freight charges. The purpose is to support the domestic manufacturing industry facing difficulties in procuring raw materials and parts due to the novel coronavirus infection (COVID-19).

According to the Korea Customs Service on the 29th, the special provision for air transportation applies to goods for which air transportation has become inevitable due to changes in transportation methods from sea to air or changes in overseas trading partners caused by the impact of COVID-19, etc. Under this provision, customs duties are imposed based on sea freight costs even when air transportation is used.

Considering that air transportation costs are at least 15 times higher than sea transportation costs, this measure aims to reduce the customs burden on companies caused by COVID-19.

In this regard, the Korea Customs Service previously announced last month that the special provision would be temporarily applied to core automobile parts such as wiring harnesses (HSK 8544.30-0000).

Additionally, two more items, other plastic insulated wires (HSK 8544.42-2090) and direct current motors (8501.10-1000), will be included in the scope of the special provision for air freight charges. The special provision for these items will be retroactively applied from import declarations dated from the 5th of last month.

The Korea Customs Service explained that, based on field difficulties reported to the Export-Import Enterprise Support Centers at regional customs offices nationwide and the Ministry of Trade, Industry and Energy’s Material and Parts Supply Response Support Center, it confirmed that urgent changes in transportation methods (ship → air) due to COVID-19 commonly occurred among two or more companies importing the same goods, leading to the selection of these two additional items.

A Korea Customs Service official said, “If companies suffer serious damage such as suspension of operations due to the spread of COVID-19 and must inevitably import goods by air, we ask them to report the damage to the Export-Import Enterprise Support Center at the regional customs office.”