S. Korea to tighten regulations on direct online buying of foreign products

By Park Sae-jin Posted : October 19, 2020, 11:24 Updated : October 19, 2020, 11:24

[Gettyimages Bank]

SEOUL -- South Korean online shoppers who buy various products including electronics and everyday necessities from foreign countries at cheap prices may face strict government regulations aimed at boosting the growth of domestic consumption and stemming profit-making through resale that has disrupted a sound commercial order.

South Korea exempts consumers from tariffs and value-added taxes when they directly buy foreign goods valued below $150 for personal consumption and $200 for products purchased from the United States. "Jikgoo" (direct buying) consumers mainly pick products from Amazon and other online shopping malls operated by Chinese online commerce giant Alibaba.

Originally, the Jikgoo tax exemption was introduced for ordinary consumers who occasionally wish to use foreign online shopping channels. However, some people habitually buy foreign products or make a profit by selling directly purchased products through online secondhand markets.

The Ministry of Economy and Finance said in a statement on October 18 that the government would review the Korea Customs Service's proposal to set a duty-free limit on Jikgoo buyers. "It is logical to impose a duty-free limit on Jikgoo in order to promote domestic consumption and counteract against reverse discrimination against domestic products," a ministry official was quoted as saying.

The customs service has adopted a Personal Customs Clearance Code (PCCC) system in 2011. All private buyers who purchase products from foreign countries can submit personal codes instead of their resident registration numbers. The system will be made compulsory for all direct buyers in December this year and it will be used for collecting and monitoring Jikgoo data. Some 79.2 percent of 11,342 Jikgoo products in the first eight months of 2020 were duty-free.
 
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