Duty free shops not allowed to open in airport arrival terminals

Deputy Prime Minister and Strategy and Finance Minister Hyun Oh-seok said Wednesday the government has decided not to allow duty-free shops in arrival terminals of international airports. At the 15th meeting with senior economic officials meeting at the government complex in Seoul, Hyun said, "At present, it is not desirable to open duty-free shops in arrival terminals."

The finance minister said, “Though the introduction would reduce inconvenience of users and prevent outflow of foreign currency, we deemed adverse effects would outnumber positive effects, such as undermining customs inspection and damaging duty-free shop businesses in downtown Seoul.” "We held talks among related ministries, and came to this agreement," he added.

Proposals to introduce duty-free shops in arrival terminals were first made along with the opening of the Incheon International Airport in 2001. In July that year, the principle to introduce duty-free shops in arrival terminals were announced at the tourism promotion meeting presided by then President Kim Dae-jung. However, the plan foundered due to opposition by Strategy and Finance Ministry.

Korea Customs Service and Finance Ministry oppose to the revision of customs law citing national security reasons. They are worried about potential mal-inspection of terror goods, drugs and guns if duty-free shops are opened in arrival terminals. To manage them properly, the customs inspection should have to be strengthened, which could increase inconvenience of travelers, they say.

The World Customs Organization recommends sales of duty-free goods only to exiting passengers due to difficulty in supervising arrival terminals. Currently, 117 airports in 63 countries including Hong Kong, Singapore and Taiwan have duty free shops in arrival terminals. The U.S., Japan and European Union don`t have arrival shops as recommended by the organization.

A finance ministry official said, "Introducing duty-free shops at arrival terminals goes against the principle of destination-based taxation," adding, "We came to an agreement to ease confusion among related ministries."