**Having imported goods under FTA preferential tariffs, in preparation for future customs audits, is it mandatory to retain the original Certificate of Origin, or does a copy alone fulfill the legal retention obligation?** Released

If you have imported goods under the FTA preferential tariff, storing a copy of the Certificate of Origin instead of the original sufficiently fulfills the legal obligation regarding its retention, and this is clearly stipulated in relevant laws and regulations. In other words, it is not mandatory to always keep the original Certificate of Origin in preparation for customs audits, etc.

Legal Basis and Significance of Storing Copies of Certificates of Origin

In accordance with the Act on Special Cases Concerning the Enforcement of the Customs Act under Free Trade Agreements (hereinafter referred to as the 'FTA Special Cases Act') and the provisions of individual FTA agreements, importers who have applied preferential tariffs are required to retain relevant documents, including copies of Certificates of Origin, for 5 years from the date of import declaration acceptance. Here, 'copy' includes electronic document forms copied (scanned) from the original, as well as printed paper copies. This measure reflects the changes of the digital age and efficient document management, and it is a global trend for many countries to allow the storage of copies or electronic documents instead of originals.

Why Are Copies Sufficient?

• Increased Efficiency: The process of individually sending and storing original Certificates of Origin in international trade is time-consuming and costly. Storing copies or electronic documents resolves these inefficiencies.
• Efforts to Prevent Forgery and Alteration: Recently, various verification methods have been introduced to check for forgery or alteration of Certificates of Origin, such as utilizing electronic systems (e.g., E-CERT system) or verifying authenticity on the issuing authority's website. The truthfulness and validity of the content are more important than whether a copy itself is stored.
• Legal Validity: Since the law explicitly permits the storage of copies, the importer's obligation is sufficiently fulfilled by simply storing copies.

Preparations for Customs Audits

Although storing copies is permitted, it is important to thoroughly prepare the following in anticipation of future customs audits.

• Accurate and Clear Copies: All contents of the Certificate of Origin (issue number, validity period, tariff classification, origin criterion, signature, etc.) must be clearly identifiable. Copies should be scanned or copied in high resolution and stored. Damaged or illegible copies may have insufficient validity as submitted documents.
• Storage in Conjunction with Related Documents: As the Certificate of Origin is part of the respective import transaction, it is essential to store it together with all related documents, such as the import declaration acceptance certificate, commercial invoice, packing list, bill of lading and other transport documents, payment proofs, and if necessary, internal production and cost data that can prove compliance with the origin criterion. These documents supplement the contents of the Certificate of Origin and serve as important evidence that the actual transaction took place.
• Systematic Storage System: When storing in digital file format, clear file naming conventions and folder structures should be used to quickly locate documents for a specific case. Additionally, periodic backups and security management are crucial to prevent data loss.
• Compliance with Retention Period: The obligation to retain documents for 5 years from the date of import declaration acceptance must be strictly observed.

Potential Issues Arising from Non-compliance

If, during a customs audit, the Certificate of Origin or other related documents cannot be submitted, or if the content of the submitted documents is found to be insufficient or inconsistent with the facts, the preferential tariff applied to the goods may be denied. In such a case, the difference from the customs duties already paid will be collected, and additional surcharges may be imposed, thus requiring special attention.

In conclusion, while storing copies of Certificates of Origin is sufficient for applying FTA preferential tariffs, please always bear in mind that such copies must be clear and systematically managed together with related supporting documents. Thorough document management is the most fundamental way to minimize all potential customs administration risks in the future.