What are the specific requirements under the agreement for issuing a back-to-back certificate of origin in Singapore when goods originating from Malaysia are imported to Korea via a bonded warehouse in Singapore? Released

You inquired about the possibility of issuing a Back-to-Back Certificate of Origin (CO) in Singapore and the specific requirements when goods originating from Malaysia are imported into Korea via a bonded warehouse in Singapore. Utilizing a Back-to-Back CO to apply preferential tariffs in such complex trade routes is a very important practical consideration.

First, to conclude, it is possible to issue a Back-to-Back CO in Singapore for Malaysian-origin goods imported into Korea via Singapore, within the scope allowed by a specific Free Trade Agreement (FTA). This is only if the regulations specified in each agreement, such as 'Article 7 (Requirements for Issuing Back-to-Back CO)', are met.

1. Concept and Necessity of Back-to-Back Certificate of Origin (CO)

A Back-to-Back Certificate of Origin is issued by the customs or an authorized body in a transit country to maintain the origin status when goods are not directly transported from the country of origin to the final importing country but are transported via a third country (transit country). This system allows for the issuance of a new certificate of origin in the transit country (Singapore) based on the original certificate of origin (e.g., issued in Malaysia) to be submitted to the final importing country (Korea) for preferential tariff benefits.

The need for such a system arises because FTAs generally require the 'Direct Consignment Rule'. Preferential tariffs apply only if goods are directly transported from the country of origin to the final importing country, and transiting through a third country may violate this principle. The Back-to-Back CO system is designed to recognize exceptions to the direct consignment rule, allowing for logistical convenience and efficiency while continuously receiving preferential tariff benefits.

2. Specific Agreement Requirements for Issuing Back-to-Back CO in Singapore

When Malaysian-origin goods are imported into Korea via a bonded warehouse in Singapore, the following requirements generally need to be met to issue a Back-to-Back CO in Singapore. The details may vary depending on the specific FTA agreement, but most agreements commonly require the following.

• Existence of a Valid Certificate of Origin: A valid original certificate of origin (Original CO) issued in Malaysia must be present. This original certificate serves as the basis for issuing the Back-to-Back CO.
• Non-Manipulation in the Transit Country (Singapore): The goods must not undergo any processing or alteration in the transit country (Singapore), except for simple unloading, repackaging, storage, and other necessary operations to preserve the original condition. Any work that changes the origin status of the goods is prohibited. This is also known as the 'Non-Manipulation Principle'. The fact that the goods are stored in a bonded warehouse in Singapore can be advantageous in meeting this requirement.
• Storage under Customs Control in the Transit Country (Singapore): The goods must be stored under the control of customs in the transit country (Singapore). If stored in a bonded warehouse, it serves as evidence that the goods were under customs control, which greatly helps in meeting this requirement. It is difficult to meet this requirement if stored in a general manner outside the bonded area.
• Consistency of Information: All information (exporter, importer, product name, HS code, origin criteria, etc.) stated in the Back-to-Back CO must match the information in the original certificate of origin. However, in the case of quantity, if only part of the goods is re-exported from the transit country, it may be less than the original, which is allowed. Additionally, the Back-to-Back CO must specify relevant information such as the issuance number and date of the original certificate of origin.
• Application Period: Generally, the Back-to-Back CO must be applied for and issued in the transit country within the validity period of the original certificate of origin. Detailed regulations may vary by agreement, so verification is necessary.
• Issuing Authority in the Transit Country: The authorized body in Singapore (e.g., Singapore Customs or Chamber of Commerce) must have the authority to issue the Back-to-Back CO according to the relevant FTA agreement.

3. Practical Considerations and Additional Information

In your case, the fact that the goods are stored in a 'bonded warehouse' in Singapore is a very positive factor. Since bonded warehouses are considered to be under customs control, it is easy to meet the 'storage under customs control' requirement mentioned above.

The following documents are generally required to issue a Back-to-Back CO.

• Copy of the original certificate of origin (Original CO)
• Transport documents such as Bill of Lading (B/L) or Air Waybill (AWB)
• Commercial Invoice and Packing List
• Documents proving entry and exit from the bonded warehouse in the transit country (e.g., storage certificate)
• Application for issuing a Back-to-Back CO

In FTAs where Malaysia, Singapore, and Korea are all member countries (e.g., Korea-ASEAN FTA (AKFTA), RCEP, etc.), there are regulations for issuing Back-to-Back COs, so it is important to closely review the relevant agreement. In particular, there may be detailed differences in the format, details, application, and issuance procedures of the Back-to-Back CO in each agreement.

Therefore, before proceeding with the actual issuance, it is the safest and most reliable method to inquire with the relevant authority in Singapore (Customs or Chamber of Commerce) to accurately verify the latest regulations and required documents.

As such, the Back-to-Back CO is an important tool to secure logistical flexibility in the era of complex global supply chains while not missing out on preferential tariff benefits. We hope you proceed with a successful trade transaction through accurate understanding of regulations and thorough document preparation.