I am curious whether the preferential tariff under the Korea-EFTA FTA can be applied with only the certificate of origin issued by the EFTA exporter to the importer (our company) in the non-party transit country. Released

If goods from EFTA are stored and repackaged in a non-party country's logistics warehouse before being imported into the country, it may be difficult to apply the Korea-EFTA FTA preferential tariff with only the certificate of origin issued by the EFTA exporter to the importer in the non-party country (even if it is the same entity as your company).

One of the core principles of applying FTA preferential tariffs is the 'Direct Consignment Principle'. According to this principle, goods exported from a contracting party must be directly transported to another contracting party. However, even if it is inevitable to transit through a non-party country due to transportation convenience or geographical conditions, it can be exceptionally recognized as direct consignment. The most important condition at this time is to prove that no processing or work has been done on the goods in the transiting non-party country.

Specifically, the allowable operations during transit through a non-party country are limited to unloading for transportation, transshipment, or minimal operations for the preservation of goods (e.g., ventilation, drying, removal of damaged parts during storage, etc., actions that do not change the nature of the goods). The 're-packaging' act mentioned in the question is highly likely to be interpreted as an operation beyond simple transportation convenience or preservation. In particular, the phrase 're-packaging according to the orders of each overseas branch' can be seen as a commercial preparation act of the goods, which may make it very difficult or impossible to prove that it does not change the nature of the goods. Therefore, if this 're-packaging' act is judged to violate the Non-Manipulation Rule stipulated in the FTA agreement, the direct consignment principle is compromised, making it impossible to apply the preferential tariff.

In addition, the subject and purpose of issuing the certificate of origin must also be considered importantly. The certificate of origin is a document proving that the goods are of origin to apply preferential tariffs between contracting parties. The certificate of origin issued by the EFTA exporter to the 'non-party country importer' (the entity owning or managing the logistics warehouse) is difficult to be recognized as a valid certificate of origin under the Korea-EFTA FTA agreement. In principle, the certificate of origin is generally issued directly by the exporter (or producer) to the importer of the importing contracting party (Korea) for the application of preferential tariffs in trade between FTA contracting parties. Documents issued to importers located in non-party countries can be interpreted as not having their main purpose in the application of the Korea-EFTA FTA, which becomes the basis for the judgment that validity recognition is difficult, as mentioned in the original answer.

In conclusion, if goods from EFTA are imported into the country after being repackaged through a non-party country, the 're-packaging' act in the non-party country is highly likely to violate the Non-Manipulation Rule of the direct consignment principle, and the fact that the certificate of origin is issued to the importer of the non-party country also makes it highly likely to not meet the requirements for applying FTA preferential tariffs. To apply FTA preferential tariffs, the transportation route must be changed directly from EFTA to Korea, or during transit through a non-party country, only minimal operations for preservation without any processing must be performed, and the certificate of origin must also be issued directly to the importer in Korea for the purpose of final export to Korea, fulfilling all requirements.