Duty-Free Shops Must Be Saved... Bill Proposed to Reduce Patent Fees in Disaster Situations

Adverse Effects of COVID-19 Situation
10 Proposals by Democratic Party Lawmaker Go Eum-jin and Others

A bill has been proposed to reduce the patent fees paid by the duty-free industry to the Korea Customs Service during disasters in order to save the duty-free industry, which is on the brink of collapse due to the global crisis caused by the novel coronavirus infection (COVID-19). The photo shows the empty duty-free store at Incheon International Airport Terminal 1.

[Asia Economy Reporter Cha Min-young] A bill has been proposed to reduce the patent fees paid by the duty-free industry to the Korea Customs Service during disaster situations in order to save the duty-free industry, which is on the brink of collapse due to the global crisis caused by the novel coronavirus infection (COVID-19).

According to the National Assembly Legislative Information System on the 30th, the 'Partial Amendment to the Customs Act' proposed on the 29th by 10 members including Go Yong-jin of the Democratic Party of Korea contains such provisions.

The main point of this bill is to establish a legal basis allowing those who have been granted a license for bonded sales stores to reduce patent fees if the bonded sales store suffers significant damage to its business due to various disasters corresponding to Article 3, Paragraph 1 of the 'Framework Act on the Management of Disasters and Safety.' The purpose is to reduce damage to the duty-free industry and resolve employment instability.

In fact, this year, the domestic duty-free industry suffered enormous damage due to restrictions on entry and exit of foreigners and nationals caused by the spread of COVID-19. According to the Korea Duty Free Shop Association, domestic duty-free store sales in September were about 1.48 trillion KRW, showing a recovery trend since February this year but still lagging behind the same period last year (about 2.24 trillion KRW). Even this level would have been impossible without the temporary third-country return approval measures permitted by the Korea Customs Service, which allowed sales by Chinese corporate-type daigou traders to continue.

The Korea Customs Service currently calculates patent fees based on the sales amount of the relevant year according to the current law. If the sales amount for the year is ▲ 200 billion KRW or less, the fee is 1/1000 of the sales amount ▲ over 200 billion KRW up to 1 trillion KRW, 200 million KRW plus 5/1000 of the amount exceeding 200 billion KRW ▲ over 1 trillion KRW, 200 million KRW plus 1/100 of the amount exceeding 1 trillion KRW.

The recovery of air routes remains distant. In September, the number of international passengers using Incheon International Airport decreased by 96.4% compared to the same month last year, totaling 197,000. International passengers recorded a low point in May (138,000) but rebounded for three months, increasing to about 230,000 in August, before the upward trend stalled last month. Concerns are growing for October as COVID-19 shows signs of resurgence, especially in Europe and North America.