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CUSTOMS REGULATIONS FOR THE RASON IN THE RASON ECONOMIC AND TRADE ZONE

Adopted by Decision No. 52 of the Cabinet on September 23, 2000

Chapter 1. General

Article 1. The purpose of these regulations is to establish a customs order and preferential tariff system which are suitable for the management of the Rason economic and trade zone, and to protect the interests of the State.
Article 2. The customs houses in the Rason economic and trade zone (hereinafter called the Zone) shall be established at such places as the customs clearance points on the border of the Zone, and the bonded area, bonded factories, bonded warehouses and bonded exhibition (hereinafter called the bonded district), airports and post offices. The Zone border covers the external border, internal border and the port border.
Article 3. The customs houses of the Zone (hereinafter called the customs) shall deal with the customs clearance and inspection of the baggage, means of transport, postal matters and personal effects carried by the institutions, enterprises and organizations of the DPRK (hereinafter called the institutions and enterprises), foreign-invested enterprises and foreign enterprises (hereinafter called the foreign investment-business enterprises), resident representative offices of foreign enterprises (hereinafter called the resident offices), citizens of the DPRK and foreigners (hereinafter called the individuals), and shall control the storage, use, and the state of disposal of the goods brought into the Zone.
The institutions and enterprises, foreign investment-business enterprises, resident offices and individuals shall provide necessary conditions for customs work.
Article 4. The customs shall exercise strict control and supervision of such illegal cases as taking out or bringing in, or smuggling prohibited goods such as arms, drugs and other articles which are harmful to national security, social and moral life of the people, human life and growth of animals and plants.
The customs may investigate or examine documents related to the bringing in or taking out of goods and to the payment of customs duty, and may search places, means of transport and bodies of individuals under suspicion of smuggling.
Article 5. Customs registration and clearance, customs inspection and control and customs duty and other fees in the Zone shall be subject to these regulations.
Matter related to customs work which are not provided for in these regulations shall be subject to the customs laws and regulations of the DPRK or the Zone.
Article 6. These regulations shall be applied to the institutions and enterprises, foreign investment-business enterprises, resident offices and the individuals that wish to take out or bring in cargoes, transportation means, postal matter and personal effects.

Chapter 2. Custom Registration and Clearance

Article 7. Institutions and enterprises, foreign investment-business enterprises and resident offices in the Zone shall register themselves with the customs, appoint their respective customs declarer, and render cooperation to customs work.
Where the business of taking out or bringing in goods is not a routine duty, customs registration is unnecessary.
Article 8. Customs registration shall require submission of application for registration to customs.
Application for customs registration shall be accompanied by a copy of the certificate of business registration, an application for customs declarer and other documents as may be required.
Article 9. The customs shall, within 15 days of receipt of application for customs registration, conduct customs registration and the registration of customs declarer, before issuing a certificate of customs registration and a certificate of customs declarer. Any registered customs declarer shall be replaced only under previous agreement with the customs.
Article 10. A customs declarer shall prepare documents of customs declaration of the goods to be taken out or brought in, and shall be personally responsible for customs clearance.
The customs declaration shall be accompanied by such documents as the export/import licence or the letter of approval for goods to be taken out or brought in, the documents issued by the city people’s committee in the Zone (hereinafter called the Zone Administration), and invoice.
The legal responsibility for any declaration by a customs declarer shall be borne by the relevant institution and enterprise, foreign investment-business enterprise, or resident office.
Article 11. Approval for bonded materials to be brought into the bonded district, transit cargoes, and the consumer goods to be taken out or brought in by resident individuals in the Zone shall be given by the customs.
In case of bringing in bonded materials, the declaration of bonded materials, and In case of transit cargoes, the declaration of transit cargoes and a copy of contract shall be submitted to the customs.
Article 12. Customs clearance for the goods to be brought in to or taken out of the Zone by a foreign investment-business enterprise in the Zone, shall be done only within the category of business approved by the central trade guidance organ, and no customs clearance for the goods to be taken out or brought in by other enterprises shall be allowed.
Article 13. A resident office shall not go through customs formalities for the goods to be taken out or brought in solely for the purpose of gaining profit. In case of a resident office wishing to take out or bring in goods as instructed by its parent company, it shall get an approval of the Zone Administration, before submitting documents of customs declaration.
Article 14. Documents of customs clearance of the goods to be taken out or brought in shall be submitted prior to the arrival of the goods in question at a customs clearance point.
Where it is impossible to submit the documents of customs clearance in advance, they shall be submitted as soon as the goods have arrived at the customs clearance point.
Article 15. In case of the institution and enterprise in the areas outside the Zone wishing to bring into the Zone export goods as arranged by plan or to take out import goods through the Zone to the areas of the DPRK outside the Zone, they shall go through customs clearance only after they have got approval of the central trade guidance organ.
Article 16. In case of bringing the goods into the zone or taking them out to the areas of the DPRK outside the Zone according to State plan for materials supply or to contract, such documents as may be required by the customs shall be submitted prior to going through customs clearance.
Article 17. Customs declaration of a ship coming in and going out of a trade port and of the cargo aboard it shall be made by its captain.
Article 18. Customs declaration of a train passing through a customs clearance point shall be made by the relevant railway station.
The relevant railway station or the cargo owner shall submit documents required by the customs as soon as the train arrives at the station.
Article 19. Customs declaration of the air cargo shall be made by the relevant airport or chief pilot of the aircraft concerned.
The relevant airport or the chief pilot shall submit documents required by the customs before take-off and after landing.
Article 20. Customs declaration of transit cargo shall be made by either the cargo owner or his agent.
Article 21. In case an aircraft or a ship has landed or come to anchor at a place where no customs house is located, due to unavoidable circumstances, or in case an aircraft or a ship has jettisoned or unloaded its cargo for the sake of its safety, the relevant operation institution or the chief of the relevant means of transport shall immediately notify the customs of it.
Article 22. Customs declaration of postal matter shall be made by the relevant post office or the owner. In case of the postal matter received, the post office shall make a declaration to the customs, and In case of the postal matter to be dispatched, the owner shall declare it.
Article 23. In case of an institution wishing to take bonded materials out of the bonded district, it shall declare to the relevant customs house 24 hours before packing or dispatching such materials.
Article 24. Where the bonded materials in the bonded district are to be turned into import goods, the relevant institution shall get the approval of the Zone administration before proceeding to necessary customs formalities.
Article 25. Bonded materials or goods may be taken out of the bonded district temporarily for a period of 6 months for the purposes of repair, processing, assembling, experiment, packing and so on, and customs clearance shall be made for them, when they are to be brought back into the bonded district.
If bonded materials or goods taken temporarily out of the bonded district are not able to be brought back within a specified period of time, due to unavoidable circumstances, application may be submitted to the customs for extension of this period to no longer than 3 months.
Article 26. Where work is to be done with cargo under the supervision of the customs, the cargo owner or the relevant institution to do the job shall obtain approval of the customs.
Article 27. Individuals, including the crew aboard a transportation means, who pass through a customs clearance point, shall make declaration of their personal effects.
Declaration of personal effects may be made in writing or orally as required by the customs.
Article 28. Documents of customs clearance related to the goods taken out or brought in shall be preserved for 5 years.
The documents of customs clearance for goods imported by the enterprises engaged in tourist business, hotel service, commercial business and restaurant business shall be preserved for 10 years.

Chapter 3. Customs Inspection and Control

Article 29. Cargoes, postal matter, transportation means or individuals that enter or leave the Zone shall pass only through customs clearance points and shall be subject to customs inspection.
If, for some unavoidable reasons, cargoes, postal matter or transportation means are to be brought in or taken out through a place where a customs house is not located, approval shall be obtained from the relevant institution and an application for on-site inspection shall be submitted to the customs house nearest to the place to undergo the inspection on the spot.
Article 30. Customs inspection of the goods to be brought in or taken out shall be made at the customs control district or bonded district on a customs clearance point, or at a designated place of arrival or dispatch.
Where it is impossible to make customs inspection of the goods to be brought in or taken out at a customs control district on a customs clearance point, the goods shall be transported under supervision from a customs house to another in the Zone.
The customs shall, if need be, organize escort for the transportation of the goods to be brought in or taken out.
Article 31. Goods to be brought in or taken out through the areas of the DPRK outside the Zone shall not be inspected by the customs houses in the areas outside the Zone, and the said goods shall be put under supervision while being transported from the customs in the Zone to the customs in the areas outside the Zone.
Bulk cargoes shall be inspected by the customs in the areas outside the Zone.
Article 32. During the transportation of cargoes under the supervision of customs, it is forbidden to change the destination, discharge the cargoes or load any other cargo in addition to the said cargoes.
Article 33. Where the goods to be brought in to or taken out of the Zone are to be carried by lorries, they shall be carried by such type of lorries as are equipped with facilities and conditions which are convenient enough for the customs to supervise the transportation of cargoes.
Bulk cargoes may be carried by several-purpose lorries.
Article 34. The customs inspection of the goods to be brought in or taken out of a trade port shall be made at the trade port concerned.
Article 35. Transportation means entering or leaving the Zone shall be inspected at a customs control district on a customs clearance point.
The transportation means that has arrived at a customs control district shall be prohibited from leaving without permission of the customs.
The institution operating transportation means or its agent shall give prior notice to the customs of expected time of arrival or departure of the transportation means so as to facilitate customs inspection.
Article 36. A post office shall neither deliver to the owner nor dispatch out of the Zone any postal matter that has not been inspected by the customs.
Letters, printed matter, currencies, securities, etc., shall not be put in a parcel.
Article 37. Individuals who enter or leave the Zone and trade ports shall be subjected to customs inspection on their personal effects, including the luggage.
Article 38. Individuals may bring with them or send or receive by mail the commodities within the limit of an amount required for their life in and out of work.
Household goods to be moved or property inherited may be brought in or taken out without limitation upon presentation of a certificate issued by the relevant institution.
Article 39. Korean won shall not be taken out to or brought in from a foreign country.
Korean won may be carried within the limit of an amount set by a relevant central banking institution, through the customs clearance point on the internal border.
Article 40. Movement of foreign currency in cash, foreign exchange securities, precious metals and jewellery that are personally carried by individuals shall be subject to the following rules:
1. Foreign currency in cash and foreign exchange securities that are brought in from or taken out to a foreign country shall be allowed without the bearer having to make a customs declaration,
2. Precious metals and jewellery that are brought in from a foreign country shall be allowed as the bearer makes a customs declaration,
3. Foreign currency in cash, foreign exchange securities, precious metals and jewellery that are brought into the Zone through the areas of the DPRK outside the Zone shall be allowed upon presentation of a certificate issued by a relevant banking institution or a document confirmed by the customs at the time of their entry into the territory of the DPRK,
4. Precious metals and jewellery that are to be taken out to a foreign country shall be allowed upon presentation of a certificate issued by a relevant banking institution or a document confirmed by the customs at the time of their entry into the Zone, and
5. Foreign currency in cash, foreign exchange securities, precious metals and jewellery to be taken out of the Zone to other areas of the DPRK outside the Zone shall be allowed as the bearer makes a declaration.
Article 41. Transit cargoes to be brought in or taken out shall only be supervised, without being subject to customs inspection.
Customs inspection on transit cargoes may be conducted when it is required by any foreign cargo owner or when it is deemed necessary by the customs.
Article 42. Materials whose entry into the DPRK is limited shall be brought in or taken out only through customs clearance points on the border and port border within the Zone, and their storage and transportation shall be undertaken under the supervision of the customs.
Article 43. The customs shall supervise the disposal of duty-free materials and the products made of duty-free materials in the Zone so that they are not disposed of illegally.
Article 44. Where the work of loading and unloading cargoes, or carrying, storing, sorting, mingling or packing cargoes takes place at trade port, and where the work is to be done in the Zone to handle the cargoes that are placed under the supervision of the customs, on-site supervision shall be conducted by the customs.
Article 45. Where a product is processed or assembled in a bonded factory by using both the bonded raw and other materials and semi-products and the local raw and other materials and semi-products, the factory concerned shall report to the customs in writing about the mixing proportion and the production quantity.
Article 46. A bonded factory shall present a quarterly report in writing to the customs within the 10th day of the first month of the next quarter, describing the receipt, consumption and current stock of raw and other materials and semi-products, as well as production, export and current stock of finished products, and shall have the report cross-checked by the customs.
Article 47. No ordinary export or import goods other than bonded goods shall be stored in a bonded warehouse.
The management institution of a bonded warehouse shall store or deliver only such goods as have been approved by the customs, and shall, within the 5th day of each month, report in writing to the customs on the receipt, delivery and stock of bonded materials during the previous month and have the report cross-checked by the customs.
Article 48. Any processing or assembling of bonded materials is forbidden in a bonded warehouse.
Any movement of cargoes, re-packing, change of markings on the packing or sorting of cargoes shall be undertaken under the supervision of the customs.
Article 49. If, during storage of bonded materials, it is found that the actual quantity of materials is short of the recorded one or that any of the materials have been destroyed, degenerated or damaged, the management institution of the relevant bonded warehouse shall report in writing to the customs thereof, and shall have the report certified by the customs.
The management institution of the bonded warehouse shall be responsible for any shortage of quantity or damage to bonded materials (except for such loss or damage as has been caused by an unavoidable circumstance).
Article 50. Cargoes for resale or transit trade shall be taken out to other countries within 3 months from the date of their arrival at the Zone.
In case they cannot be disposed of within the fixed period, the period may be extended for no longer than 1 month with the approval of the customs.
Article 51. The customs shall strengthen relations with quarantine offices on customs clearance points.

Chapter 4. Customs Duty and Customs Fee

Article 52. The customs shall apply preferential tariff rates to materials or goods that are imported into the Zone.
Article 53. No customs duty shall be imposed on the following materials or goods:
1. Materials in the form of investment into the Zone,
2. Materials for production and management,
3. Materials to be processed in the Zone for re-export,
4. Reasonable quantity of office articles, office instruments, equipment, furniture or transportation means and consumer goods brought in by an enterprise for its own consumption,
5. Goods produced in the Zone for export to a foreign country,
6. Goods for resale and transit trade, and
7. Materials or goods listed otherwise by the State.
Article 54. Customs duty shall be imposed on the following:
1. Materials or goods to be sold in the Zone,
2. Materials or goods which have been produced in the Zone or those imported to the Zone and which are to be sold either in the Zone or in any other areas of the DPRK outside the Zone,
3. Materials that have been brought into the Zone for the purposes of processing for hire, resale or transit trade and are to be sold either in the Zone or in any other areas of the DPRK outside the Zone with the approval of the State,
4. Office articles, office instruments, transportation means and consumer goods brought into the Zone in excess of actual needs, and
5. Personal belongings and postal matter brought into the Zone in excess of duty exemption limits.
Article 55. Tonnage dues shall not be imposed on foreign ships entering or leaving trade ports.
In case of the dissolution or withdrawal of the business within 10years after the start of its operation, the customs duty reductions t has been favoured with shall be returned to the customs.
Article 56. Duties shall be imposed on the commodities brought in for tourist business, hotel service, commercial business and restaurant business in the Zone.
Article 57. The products made of raw and other materials, accessories and components that have been brought in without payment of customs duty shall be exported on all accounts.
Where any of the export products are to be sold in the Zone or to any other part of the DPRK outside the Zone with the approval of the State, customs declaration shall be made thereof to the customs and the customs duty shall be payable for such imported raw and other materials, accessories and components as have been used to manufacture such products.
If the exact quantities and prices of the imported raw and other materials, accessories and components that have been consumed to manufacture the products, have not been declared, the customs shall impose customs duty, taking into account the quantities and import prices of the relevant materials brought in.
Article 58. Where a foreign investment-business enterprise wishes to purchase goods or materials in the areas of the DPRK outside the Zone or to sell the products of the Zone to other parts of the DPRK outside the Zone, the enterprise concerned shall pursue the purpose through a relevant trade institution of the DPRK, and In case of purchase or sale of materials or goods, both the enterprise and the relevant trade institution of the DPRK shall pay customs duty.
Article 59. In case of purchasing materials in the Zone or in the areas of the DPRK outside the Zone to export them without processing, export duty shall be payable.
In case goods or commodities with an added value of more than 20 per cent are produced for export by making use of the said materials, such goods or commodities shall be deemed to have been produced in the Zone and, accordingly, no export duty shall be imposed on them.
Article 60. Office articles, office instruments, equipment, furniture, consumer goods and transportation means that have been brought in from a foreign country for personal consumption shall not be sold either in the Zone or to other parts of the DPRK outside the Zone.
In case they are to be sold due to unavoidable reasons, declaration shall be made thereof to the customs, and the customs duty required of them shall be payable.
Article 61. No customs duty shall be imposed during the bond period.
The bond period shall be 2 years for a bonded factory or a bonded warehouse, and shall be as set by the customs for a bonded exhibition.
Where the bond period is to be extended for an unavoidable reason, an application for the purpose shall be submitted to the customs 10 days before the expiry of the bond period, and the customs, after examining the application, shall reject it or extend the period for no longer than 6 months.
Article 62. In case of carrying bonded materials or goods out of the Zone temporarily for the purposes of repair, processing, assembling, experiment or packing, any security in cash or in kind equivalent in value to the amount of customs duty, shall be placed in the custody of the customs.
If the said materials or goods have been carried back into the Zone within a specified period of time, the security in cash or in kind shall be returned, and if not, the security may be disposed of in lieu of the customs duty.
Article 63. In case the materials or goods to be brought into the Zone are found in the course of customs inspection, to have been decomposed, degenerated, damaged or missing, they, according to their current state, may be partly or totally exempted from the customs duty.
Article 64. The standard price on the basis of which import duty is imposed shall be the price of arrival at border, whereas that on the basis of which export duty is imposed shall be the price of delivery at border.
The standard price on the basis of which customs duty is imposed on personal belongings and postal matter shall be the corresponding retail price of the article in question prevailing in the Zone.
Article 65. Amount of customs duty shall be calculated in Korean won, pursuant to the tariff rates prevailing at the time when the materials or goods in question are brought in or taken out, and the customs duty shall be imposed in Korean won or foreign currency.
The exchange rate of Korean won against any foreign currency shall be such as is made public by the trade banking institution in the Zone for the given time.
Article 66. Customs duty shall be paid according to the notice of payment of customs duty issued by the customs. No materials or goods shall be brought in or taken out of the Zone without payment of customs duty.
Article 67. In case the prices of the materials or goods to be brought in or taken out are declared lower than their original prices, for the purpose of tax evasion, the customs may have the prices of such goods re-evaluated through a relevant institution and impose such customs duty as is required.
Article 68. The customs shall collect customs fee for customs registration and for customs clearance, supervision and on-site customs inspection with regard to transit cargoes.
Customs fee shall be paid to the customs according to the notice of payment of customs fee given by the customs.
The standard of customs fee shall be such as is determined by the relevant State pricing institution.
Article 69. Where the customs duty and customs fee have been overpaid, a request may, within 1 year from the time of payment, be made of the customs concerned to refund any surplus amount paid.
Article 70. Where the customs has failed to collect full amount of customs duty and customs fee with regard to any goods or materials brought in or taken out, it may collect the appropriate amount of such customs duty and customs fee within 3 years from the date of customs clearance for the goods or materials in question.
Article 71. Where a foreign-invested enterprise wishes to dissolves its business, the enterprise concerned shall notify the customs of its dissolution within 5 days from the date of approval by the screening institution of the incorporation of enterprises.
The customs, upon receipt of notice of dissolution of the enterprise concerned, shall send to the liquidation committee a document claiming for the customs duty and customs fee overdue, and the liquidation committee shall satisfy the claim of the customs for payment on a priority basis.

Chapter 5. Sanctions and Petition

Article 72. The central customs guidance institution shall undertake tight control and supervision of the customs to prevent occurrence of any deviation.
Article 73. Where bonded materials or goods have not been disposed of within a fixed period of time, the materials or goods in question shall be delivered to a relevant institution for disposal by means of sale, and from the money earned by the sale, an appropriate amount shall be disposed of as customs duty and the rest shall be delivered to the management institution of the bonded warehouse for disposal.
In case the bonded materials or goods cannot be disposed of by means of sale, an appropriate amount of the materials or goods concerned, equivalent to customs duty, shall be delivered for disposal as customs duty.
Article 74. In case of breach of these regulations, such administrative punishment as confiscation of the certificate of customs declarer, suspension of customs clearance for goods to be brought in or taken out, cancellation of customs registration, detaining of the transportation means and the goods to be brought in or taken out, or fining, shall be imposed depending on the severity of offence, and, if the violation proves to be severe, criminal punishment shall be imposed.
Article 75. Contraband goods shall be seized immediately on the spot and, depending upon the severity, vehicles and other means used for smuggling them shall be seized.
Where it is impossible to seize the smuggled goods, the amount of money corresponding to the value of the goods in question shall be paid by the institutions and enterprises, foreign investment-business enterprises or individuals that have committed smuggling or cooperated in smuggling.
Article 76. Prohibited goods such as arms, drugs and other articles which are harmful to national security, social and moral life of the people, human life and growth of animals and plants, and Korean won to be taken out to or brought in from a foreign country shall be seized.
Article 77. The seized goods shall be disposed of as required by the laws and regulations on the disposal of confiscated property.
Article 78. Petition may be filed with regard to any complaint about customs clearance, inspection, or payment of customs duty and customs fee.
The petition shall be settled within 30 days of its receipt.


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