RESTRICTED
WORLD TRADE S/NGMTS/W/2/Add.7
1February 1995
ORGANIZATION
(95-0189)
Negotiating Group onMaritime Transport Services Original: English
COMMUNICATION FROM THE REPUBLIC OFKOREA
Response toQuestionnaire onMaritime Transport Services
Thefollowing communication iscirculated attherequest oftheRepublic ofKorea toMembers
oftheNegotiating Group onMaritime Transport Services.
_______________S/NGMTS/W/2/Add.7
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I. Market Structure
Vessels
1. (AsofDecember 1994)
STRUCTURE OFNATIONALLY-OWNED OROPERATED FLEET
Types ofVessels Number ofVessels Deadweight Tonnage
National Flag Foreign Flag National Flag Foreign Flag
OilTankers 41 8 928,564 988,081
Liquified GasCarriers 11 10 60,854 99,952
Chemical Tankers 31 7 149,534 109,883
Combination Carriers
Ore/Bulk Carriers 96 23 6,077,324 3,155,294
General Cargo 48 11 273,364 71,623
Combination Ships 65 23 1,440,747 875,409
Refrigerated Carriers 4 21,306
Specialized Cargo122 8 319,321 82,520
Ro-Ro 7 11 131,862 127,951
Ferries and
Passengers1 1 2,500 2,432
Other 128 6 544,406 303,695
AllVessels 454 108 9,949,781 5,816,840
- Thestatistics arebased onvessels ofover1,000grt;
- Inaccordance withtheKorean regulation, BareBoatCharter withHirePurchase option (BBC/HP) isincluded inthenational
flagships, andthushasequal rights andobligations tonational flagvessels;
- Foreign flagvessels arebased onBareBoatCharter (BBC) ofnational carriers foraperiod exceeding sixmonths.
Trade
2. Total : 316,872,000 tons(99.7%)
Exports : 71,245,000 tons(99.3%)
Imports : 245,629,000 tons(99.8%)
*Based on1993 statistics.
3. Seeanswer toquestion No.2.
4. Total : 92,210,000 tons(29.1%)
Exports : 16,956,000 tons(23.8%)
Imports : 76,144,000 tons(31.0%)
130specialized cargo vessels arecarcarriers.S/NGMTS/W/2/Add.7
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*Based on1993 statistics.
5. 24.9% (1993, interms ofquantity)
Organization ofCargo
6. linershipping : 47,398 thousand tons
drybulkshipping : 185,276 thousand tons
liquid bulkshipping : 122,435 thousand tons(LPG, LNG included)
7. (Unit: thousand TEU)
1993
(January-December)1994
(January-October)
Total 2,635 2,633
Shipping byConsortia
(Share, %)527
(19.9)360
(13.7)
8. None.
9. None.
10. 100%.
11. Dataonquantity and/or value notavailable.
Ports andAuxiliary Services
12. (Unit: thousand tons)
Total Volume Container Cargo Container Share (%)
Total 316,872 23,820 7.5
Pusan Port 57,526 22,837 39.7
Inchon Port 40,621 794 2.0
Ulsan Port 72,252 185 0.3
Other Ports 146,473 4 -
*Based on1993 statistics
13. Container station anddepot services : YES(2)
Maritime Agency Services : YES(10)
Maritime Freight Forwarding Services : YES(15)
Maritime Cargo Handling Services : NO
Storage andWarehousing Services : YES(6)
Customs Clearance Services : NO
Maintenance andrepair ofvessels : NO
14. None.
II. Regulatory StructureS/NGMTS/W/2/Add.7
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General
1. Korea Maritime andPortAdministration (KMPA) isthemain authority which isincharge
oftheinternational maritime transport sector. Currently, Shipping Law, Shipping Industry
Promotion Law, Seamen ’sLaw, Vessel ’sLawandother related regulations apply tothe
maritime-related matters.
2. Inprinciple, thefollowing designated cargoes mustbetransported byKorean FlagVessels.
- Crude oil,ironore,rawmaterial forfertilizer, grain, coal, petrochemicals, LNG.
- However, inthefollowing cases, foreign flagvessels canalsotransport these cargoes
afterobtaining awaiver.
- When thebidding rateofthenational flagvessel exceeds thelowest bidding rateof
theforeign flagvessel bymore than10%.
- When Korean vessels cannot transport thecargo duetotheirlackoftransport capacity.
- When itisimpossible orverydifficult tohavethecargo transported byKorean vessels
duetospecial circumstances atcertain places.
- When thetransportation bytheKorean vessels isrestricted because ofthelegislation
ofthetrading country concerned, etc.
*Share ofdesignated cargoes transported byKorean flagvessels: 33.3% (’93).
3. Anyperson (including aforeigner) whodesires toprovide international linerservices between
domestic ports andforeign ports should filewiththeAdministrator ofKMPA atleast10days
inadvance. Theactofreceiving anamount lower thanthefreight ratesfiled, ortheactof
rebating partofthefreight ratesalready received inanattempt toreceive anamount lower
thantheratesreported isprohibited.
4. Foreigncarriers’commercialpresenceofinlandtruckingandfreightforwardingforrailtransport
forthepurpose oftransporting export/import container cargo isallowed under certain conditions
ifthebusinesses meetthelicense requirements according torelated lawsandregulations.
- Commercialpresenceforinlandtruckingbusinessispermittedforbusinessesofcountries
thatdonotdiscriminate against Korean-flag vessels according totheprinciple of
reciprocity.
- Commercial presence forfreight forwarding forrailtransport maybelimited (to
foreigners andKoreans alike) according toeconomic demand.
- Commercial presence forotherauxiliary services related tomulti- modal transportation
isunrestricted.
5. Ingeneral, thegovernment issolely responsible forportconstruction andmanagement but
incertain container ports (Pusan andKwangyang), aseparate corporation isestablished for
management andoperations.S/NGMTS/W/2/Add.7
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Ifapierorother portfacility isconstructed through private investment, theinvestor shallbe
granted exclusive usage rights foracertain period oftimeandtheamount invested willbe
offset byportusage charges.
Ofportauxiliary services available anchorage andberthing services (excluding certain ports)
andnavigation auxiliary services areexclusively provided bythegovernment while other
auxiliary services areprovided byprivate firms. Commercial presence inportauxiliary services
isallowed except fortowing andtugassistance, sampan, fuelling andwatering.
6. Transportation ofpassengers orcargoes byvessels between adomestic portandaforeign port
orbetween foreign ports.
7. Person orentity thathasacquired aseatransport business license issued bytheAdministrator
ofKMPA, inaccordance withtheShipping Law.
Market Access
8. (a)-(c)Nolimitation
(d) Refer tothecommitments made inAllSectors andMaritime Transport Services Sector
oftheKorean Schedule withrespect tothemode 4).
9. Yes.
(a)(1) Shipping services (International shipping)
Inthecaseofcommercial presence forthepurpose ofoperating afleetunder thenational
flagofKorea, itisallowed foracompany engaging intransportation ofLPGandLNG,
cross-tradingandtransportationofcontainercargobycarferry.Forothertransportation,
thefollowing conditions must besatisfied.
- Joint-venture withaKorean flagcarrier
- TheAdministrator ofKMPA recognizes theneedforcommercial presence
toenhance international cooperation ortoestablish international routes, in
accordance withtheShipping Industry Promotion Law.
Other forms ofcommercial presence isgenerally allowed.
(2) Shipping auxiliary services
Ajoint-venture or100% foreign ownership rendering maritime agency services,
maritimefreightforwardingservices,shippingbrokerageservicesorvesselmaintenance
andrepair services mustbeincorporated asaChusik Hoesa (ajointstock company).
(3) Portauxiliary services
There isnolimitation oncommercial presence withtheexception oftowing andtug
assistance, sampan, fuelling andwatering.
(b) See(1)and(2)under part(a)above.S/NGMTS/W/2/Add.7
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10. None.
11. Thefollowing vessels canflythenational flag:
(1) Government orpublic owned vessels
(2) Vessels owned byKorean nationals
(3) Vessels owned bytrading entities established inaccordance withKorean lawunder
thefollowing conditions:
First, more thanhalfthecapitals putupbytheentities concerned should beinvested
byKorean.
Second, morethanthreefifthsofthevoting rights oftheboard ofdirectors intheentities
must belong toKoreans.
Third, therepresentative directors oftheentities must beKorean nationals.
(4) Vessels owned byentities other thanthose mentioned inNo.3above which are
headquartered inKorea andrepresented byKoreans.
(Incasethecompanies areco-represented, allrepresentatives must beKoreans).
National Treatment
12. (a) None.
(b) None.
Access toandUseofPortFacilities
13. Theuserattheportcanuseallservices listed inthequestion.
14. Theuseofpilotage andtowing andtugassistance aremandatory.
15. Allservices listed inthequestion areavailable onanon-discriminatory basis.
16. None.
17. None.
18. None.
19. None.
Most-favoured-nation Treatment
20. Inthelinercargo sector, there isameasure thatregulates cargo-sharingS/NGMTS/W/2/Add.7
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- After acceding totheConvention ofUNLiner Code in1979, theKorean government
accepted the4:4:2 basis forcargo-sharing bystipulating itintheShipping Industry
Promotion Law. Korea alsoconcluded theMaritime Transport Agreement withthree
countries (Pakistan, Malaysia andNigeria) onthebasis of4:4:2 cargo-sharing.
- However, Korea doesnotactually apply thisprovision because there arenomeasures
inKorean lawsthatallow ittobeimplemented.
21. Seeanswer toquestion 20.
22. Seeanswer toquestion 20.
23. Partofalltaxes areexempted forincome derived frominternational traffic byindividuals or
companies ofcountries thathaveconcluded the‘Convention fortheAvoidance ofDouble
Taxation withrespect toTaxes onIncome andCapital ’or‘Understanding concerning the
Reciprocal Exemption ofTaxes onIncome derived fromtheOperation ofShips andAircraft
inInternational Traffic ’withtheRepublic ofKorea.
- Countries which concluded theConvention fortheAvoidance ofDouble Taxation with
respect toTaxes onIncome andCapital withtheRepublic ofKorea
Japan,Thailand,Germany,theUnitedKingdom,Denmark,Belgium,theUnitedStates,
theNetherlands, France, Singapore, Canada, Switzerland, Finland, Sweden, Malaysia,
New Zealand, Australia, Norway, Bangladesh, Turkey, SriLanka, India, the
Philippines, Luxembourg, Mongolia, Brazil, Pakistan, Austria, Indonesia, Tunisia,
Hungary, Ireland, Poland, Italy, Egypt, Vietnam, thePeople ’sRepublic ofChina,
Rumania, Spain.
- Countries which exchanged theUnderstanding concerning theReciprocal Exemption
ofTaxes onIncome derived fromtheOperation ofShips andAircraft inInternational
Traffic withtheRepublic ofKorea
Taiwan, Kuwait, Thailand, Saudi Arabia.
- Beneficiaries oftaxexemption forincome derived frominternational traffic, according
toprinciple ofreciprocity
Chile, Mexico, Egypt, Panama.
24. None.
25. IfKorean carriers areunfairly treated byforeign governments, foreign vessel operators ’groups
orforeign vessel operators whoaremembers ofthegroup, theKorean government maytake
thefollowing measures:
- Inthecaseofunfair treatment byaforeign government, necessary counter-measures
willbetaken against itsvessels,
- Inthecaseofunfair treatment byforeign vessel operators ’groups orforeign vessel
operators, necessary counter-measures willbetaken against thegroups oroperators.S/NGMTS/W/2/Add.7
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More specifically, ifacertain country discriminates against Korean carriers withregard to
theestablishmentofbranchoffices,activitiesrelatedtocargosolicitationanduseofportfacilities
against theprinciple ofequality andmutual benefit, theKorean government maytakecounter-
measures against thatcountry.
26. IftheKorean government recognizes thatacertain foreign vessel operator ishindering the
development ofKorea ’sshipping orisdisrupting theorder oftraderoutes, itcantakemeasures
torestrict theentry oftheoperator ’svessels intoKorean ports.
Government Procurement
27. None.
28. None.
Competition Law
29. Inthecasethatocean-going cargo carriers (including foreign cargo carriers) carry outjoint-
activities orsigncontracts withregard tofreight rates, allocation ofvessels, cargo-sharing
andother transportation conditions, theywillbeexempted from antitrust laws. However,
limitations toparticipation inorwithdrawal from thecontract must notbeincluded.
(a) Block exemption;
(b) Inthecaseofmulti modal transport services antitrust lawisapplied;
(c) Norelated regulations;
(d) Norelated regulations.
Shipping Conferences
30. None.
31. Ifaconference agreement isconcluded, itscontents must benotified inadvance tothe
AdministratorofKMPA.Ifthecontentimposesanyunfairlimitationsrelatingtotheparticipation
inorwithdrawal fromtheagreement, orifitisconsidered tohinder thedevelopment ofKorea ’s
shipping, theKorean government maytakemeasures tosuspend theagreement orrevise/adjust
thecontents oftheagreement.
32. Seeanswer toquestion 31.
33. Norelated regulations.
34. (a) None.
(b) None.
(c) None.
Shipper/Carrier RelationsS/NGMTS/W/2/Add.7
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35. According totherelated law,carriers andshippers canorganize andadminister acarrier/shipper
consultative committee toensure thesmooth anduninterrupted transportation ofcargo andthe
mutual exchange ofinformation. However, thisentity doesnothaveresponsibility for
discussing matters suchasratesettlement inadvance.
36. Norelated regulations.