KCS Eases Difficulties for Companies in Overseas Customs Clearance under FTAs... Launches 'Yes FTA'

[Asia Economy (Daejeon) Reporter Jeong Il-woong] # Company A recently escaped the risk of being retroactively fined 5.89 billion KRW by the Vietnamese customs authorities. The Vietnamese customs authorities attempted to retroactively collect customs duties for 2016-2017 by questioning Company A’s certificate of origin (issued by the Korea Chamber of Commerce and Industry), but the Korea Customs Service intervened and explained that the disputed certificate of origin was a new form following the revision of the "Korea-ASEAN Free Trade Agreement (hereinafter FTA) Certificate of Origin Operation Procedures," thereby avoiding the fine.

On the 23rd, the Korea Customs Service announced that it has established and is operating an ‘FTA Customs Clearance Difficulty Response Map (Map)’ to promptly resolve customs clearance difficulties arising during the application of FTA benefits for goods exported by Korean companies like Company A.

According to the Korea Customs Service, the number of overseas customs clearance difficulties experienced by Korean export companies while utilizing FTAs reaches an average of 130 cases annually, with the average customs duty loss amounting to 14.3 billion KRW.

In particular, FTA customs clearance difficulties frequently and repeatedly occur when foreign customs authorities exclude the application of FTA preferential tariffs due to minor errors in the certificate of origin (C/O) during the preferential origin verification process.

Accordingly, through the operation of the ‘Customs Clearance Difficulty Response Map,’ the Korea Customs Service plans to provide cases and related information of customs clearance difficulties occurring by agreement, enabling complainants to find similar cases and predict their own processing results based on the information.

Additionally, companies facing FTA customs clearance difficulties can request support from the Korea Customs Service or the Headquarters Customs Export-Import Company Support Center through the ‘FTA Customs Clearance Difficulty Response Map.’

Generally, FTA customs clearance difficulties are presumed to occur mainly because the customs authorities of the counterpart country lack understanding of the FTA agreement text or do not have clear domestic guidelines during the customs clearance inspection process of imported goods.

Moreover, due to the nature of customs clearance difficulties, problems with the customs authorities of the counterpart country can be resolved quickly only through the Korean customs authorities. However, many trading companies experiencing problems report to the Korea Customs Service late, often missing the optimal timing to resolve customs clearance difficulties.

Therefore, the Korea Customs Service urges not only trading companies but also other institutions and organizations supporting FTAs to widely utilize the ‘FTA Customs Clearance Difficulty Response Map.’

The ‘FTA Customs Clearance Difficulty Response Map’ can be accessed online by searching for ‘Korea Customs Service FTA Portal,’ then entering the Customs Clearance Difficulty corner in the Participation section (top right) of the site or by accessing the Customs Clearance Difficulty corner on the Korea Customs Service homepage.