KCS "Allow Duty-Free Goods Sales on Open Markets... Support for Duty-Free Industry Revitalization"

A downtown duty-free shop in Seoul is holding an event for customers to celebrate Halloween. Photo is unrelated to the article content. Photo by Asia Economy DB

[Asia Economy (Daejeon) Reporter Jeong Il-woong] Duty-free product sales channels will be expanded. Online sales of duty-free products, which were previously only possible through duty-free shop internet malls, will now be available through all online shopping platforms, including domestic and international portal sites and the metaverse. This is being promoted as part of the government's measures to revitalize the duty-free industry.

The Korea Customs Service announced on the 1st that it will implement the revised "Notice on the Operation of Bonded Sales Stores," which includes these changes.

The revision took effect on the 31st of last month. The main points of the revision include expanding duty-free product sales channels to open markets and the metaverse, allowing duty-free purchases at downtown duty-free shops without a passport, extending the payment deadline for license fees and permitting installment payments, and strengthening the logistics competitiveness of the duty-free industry through regulatory innovation.

First, duty-free shops will be able to expand their sales channels, which had been limited to their own internet malls, to include sales through all online shopping platform storefronts.

In particular, small and medium-sized duty-free shops will now be able to jointly establish internet duty-free shops with multiple duty-free operators. This measure is intended to support the expansion of duty-free product sales by compensating for the limitations of small and medium-sized duty-free shops in terms of product variety and financial resources.

Allowing duty-free purchases without a passport will be limited to downtown duty-free shops. Until now, presenting a passport was mandatory to purchase duty-free products at downtown duty-free shops.

However, according to the Customs Service, under the revision, as long as identity verification (authentication) is done via smartphone, duty-free purchases will be possible without presenting a passport.

However, this method of purchasing duty-free products is expected to be available from April after duty-free operators complete the development of the related systems.

The Customs Service will extend the license fee payment deadline, originally scheduled for March 31, to December 31. The extension of the license fee payment deadline has been in effect since 2020, considering the operational difficulties faced by the duty-free industry due to COVID-19 and other factors.

Additionally, installment payments will be allowed to support the cash flow of the duty-free industry. Installment payments are generally made in four installments, but small and medium-sized enterprises can pay in up to six installments.

Furthermore, the Customs Service plans to allow duty-free shops to bring in duty-free goods from the facility construction stage under the preliminary license system, enabling them to start operations immediately upon license issuance. It will also permit duty-free shops to pre-sell and then import popular products sold by reservation, such as K-pop albums and limited-edition domestic idol merchandise, adding liquidity to logistics flows.

Kim Won-sik, Director of the Bonded Industry Support Division at the Customs Service, said, "The revision of the notice on the operation of bonded sales stores is being implemented as part of the 'Duty-Free Industry Revitalization Measures' announced on September 14 last year. Through this, the Customs Service hopes to enhance the convenience of duty-free shopping for the public and provide a foundation to support the revival of the duty-free industry, which has been facing a crisis due to COVID-19 and other challenges."