When Chinese-origin goods are imported into Korea via Hong Kong, if container/seal number consistency is proven throughout all transport stages, does this fulfill the direct transport requirement for preferential tariffs, making them applicable? Released

When goods originating from China are imported into Korea via Hong Kong, if the consistency of container numbers and seal numbers is proven in documents at all transportation stages, it is highly likely to be deemed to satisfy the direct consignment requirement for the application of preferential tariffs under agreements such as the Korea-China FTA. This approach aligns with common trade practices and guidelines for operating preferential tariffs.

In Free Trade Agreements (FTAs), the 'Direct Consignment' requirement is one of the essential conditions for receiving preferential tariff benefits. This means that goods originating from the country of origin must be transported directly to the importing country, and no processing or manipulation should occur in a third country. However, for geographical or transportation reasons, goods may pass through or be temporarily stored in a third country. In such cases, it is crucial to prove that the nature of the goods has not been altered and no processing has taken place in that third country.

As mentioned in your question, the fact that container numbers and seal numbers match during the transportation process from China to Hong Kong (e.g., Cargo Manifest) and from Hong Kong to Korea (e.g., B/L) is strong evidence that the goods were transported in their original state without being opened or having their contents altered during transit. In other words, it serves as key documentary evidence supporting the fact that only simple transshipment or temporary storage occurred during the transit through Hong Kong, and no manipulation of the goods took place.

To meet these direct consignment requirements, the following documents serve as important evidence:

• Consistent Shipping Documents: The container number and seal number must match on the shipping documents between China and Hong Kong (e.g., Cargo Manifest, House B/L, etc.) and between Hong Kong and Korea (e.g., Master B/L, House B/L, etc.). If the numbers have changed, documents proving the reason (e.g., transshipment due to container damage) and the continuity before and after the change (e.g., Container Handover Receipt, Transshipment Report) are required.
• Through Bill of Lading: If a single shipping document is issued from China to Korea, this is the clearest evidence of direct consignment.
• Transit Country Customs Documents: Documents proving that the goods were temporarily stored or passed through Hong Kong customs (e.g., Transshipment Permit, Bonded Warehouse Storage Certificate, etc.) would provide even stronger evidence. These documents should specify that the goods were under customs control and underwent no processing other than repackaging.
• Valid Certificate of Origin: Of course, a validly issued Certificate of Origin must be submitted, separate from meeting the direct consignment requirement.

However, it is important to note that even if all these documents are in place, the final decision on whether preferential tariffs apply may vary depending on the results of the importing country's customs examination. Especially during post-import origin verification (post-audit), additional explanations or evidence may be requested regarding whether the goods meet the origin determination criteria and preferential tariff application requirements (e.g., direct consignment requirement). If the submitted documents are deemed insufficient, or if evidence of forgery or alteration is found during this process, the application of preferential tariffs may be excluded.

Therefore, if you are importing goods via the China-Hong Kong-Korea route, it is extremely important to maintain consistency in container and seal numbers throughout the entire transportation process and to meticulously retain all related shipping documents. Furthermore, thoroughly reviewing whether the origin determination criteria are precisely met from the Certificate of Origin issuance stage and pre-confirming that all FTA requirements are satisfied is the way to minimize risks. If there are any uncertainties, consulting with a professional customs broker is a wise approach.