For how many years must an importer applying for preferential tariff rates retain a copy, not the original, of the Certificate of Origin, and when does the retention period begin? Released

Importers who apply for preferential tariff rates should, as a rule, keep a copy of the certificate of origin, not the original, and this copy must be retained for five years from the day following the date of application for preferential tariff rates. This is a regulation stipulated in Article 13 (Storage of Certificates of Origin, etc.) of the Act on Special Cases concerning the Customs Act for the Implementation of Free Trade Agreements (hereinafter referred to as the FTA Special Act) and Article 10-2 (Retention Period for Certificates of Origin, etc.) of the Enforcement Decree of the same Act.

The provision allowing importers to keep a copy of the certificate of origin instead of the original is a measure that considers changes in the modern trade environment and practical efficiency. Considering the widespread adoption of digital document management and the vast volume of trade, physically storing all original certificates of origin imposes an immense burden on businesses. Therefore, customs authorities recognize the storage of documents in electronic file formats such as scanned copies, fax copies, or PDFs. What is crucial is that the stored copy must clearly identify the contents of the original and be in an intact form, free from alteration or forgery.

The reason the retention period for the certificate of origin begins 'from the day following the date of application for preferential tariff rates' is to secure a sufficient period for post-clearance audits and verifications, linked to the statute of limitations for customs claims (5 years). By starting the calculation from the day after the application date for preferential tariff rates, rather than the import declaration acceptance date, customs authorities secure the legal basis and time to subsequently verify the appropriateness of FTA preferential tariff rate application. Should a request for origin verification be made by customs authorities during this period, the importer must submit the retained copy of the certificate of origin and other relevant documents to prove the validity of the preferential tariff rate application.

Beyond the certificate of origin, it is crucial to retain various other documents necessary to prove the appropriateness of preferential tariff rate application. These include import declaration certificates, commercial invoices, bills of lading (B/L), purchase agreements, payment proofs, manufacturer's origin confirmation statements, and production process-related materials. Such documents complement the contents of the certificate of origin and are essential for clearly proving that the imported goods are indeed subject to the FTA agreement. In particular, if the information stated on the certificate of origin is insufficient or if additional clarification is required during the verification process, the retained supporting documents can play a decisive role.

If an importer fails to retain the certificate of origin and other relevant documents for the prescribed period, or cannot respond to a submission request from customs authorities, severe disadvantages may be incurred. The difference between the preferential tariff rate already applied and the general tariff rate may be collected, and additional surcharges may also be imposed. This can lead not only to financial losses for the company but also negatively impact the maintenance of certifications such as Authorized Economic Operator (AEO); therefore, it is essential for companies that have applied FTA preferential tariff rates to establish a system for thoroughly retaining and managing all relevant documents, including certificates of origin.

Therefore, importers who have applied for FTA preferential tariff rates must thoroughly retain copies of certificates of origin for five years from the day following the date of application for preferential tariff rates, and this implies the need for active and systematic management in preparation for post-clearance verification, beyond mere document preservation.