Certificate of Origin issued by exporting country is required for FTA preferential tariffs. What is the specific verification method to identify the authorized issuing institution for each agreement and country? Released

Detailed Guide to Verifying Issuing Authorities for Certificates of Origin for FTA Preferential Tariff Application

The Certificate of Origin issued by the exporting country to apply for FTA preferential tariffs serves as the core basis for customs benefits. Since the issuance methods and authorized institutions for Certificates of Origin vary by FTA agreement and country, an accurate understanding and verification of these are essential. This is because a certificate issued by an incorrect institution or through an improper method may lead to the refusal of preferential tariff application and the imposition of additional duties and surcharges.

1. Understanding Certificate of Origin Issuance Methods: Third-party Issued vs. Self-certified

Before verifying the issuing authorities for Certificates of Origin, it is crucial to understand the two main methods of issuing FTA Certificates of Origin.

- Third-party issued Certificate of Origin: This is a method where an authorized institution in the exporting country, such as a Chamber of Commerce, Customs, or a specific government department, reviews the origin and issues the certificate. This certificate bears the official seal or signature of the issuing authority and is generally required in numerous FTAs, including Korea-US, Korea-China, Korea-ASEAN, and Korea-India FTAs. In this case, whether the institution is an issuing authority officially recognized by the agreement is highly important.

- Self-certified/Self-declared Origin Declaration: This method involves the exporter or producer directly confirming whether the origin determination criteria are met and declaring the origin by including a specific origin statement on commercial documents such as a commercial invoice. It has the advantage of simplifying administrative procedures as the exporter self-certifies the origin without a separate institutional review process. This method is applied in FTAs such as Korea-EU, Korea-UK, Korea-EFTA, Korea-Chile, and Korea-Peru. Especially for the Korea-EU FTA, for goods exceeding a certain value (currently €6,000), self-certification is only possible after acquiring 'Approved Exporter' status.

2. Specific Methods for Verifying Authorized Issuing Authorities

The most accurate and reliable methods for verifying authorized issuing authorities for each agreement and country are as follows:

- Verification through Domestic Regulations: In Korea, Article 8 (Issuing Authorities for Certificates of Origin) of the Enforcement Rule of the Act on Special Cases concerning the Customs Act for the Implementation of Free Trade Agreements clearly stipulates the issuing authorities for Certificates of Origin for each FTA partner country. As this is an official list of issuing authorities recognized by domestic law, it serves as the most fundamental source for verifying preferential tariff application. Particularly for third-party issued Certificates of Origin, only those issued by institutions specified in this regulation are validly recognized.

- Utilizing the Korea Customs Service FTA Portal: The most practically useful and accessible method is to utilize the Korea Customs Service FTA Portal (https://www.customs.go.kr/ftaportalkor/main.do). Within the portal, under the 'FTA General Status' menu, the 'FTA at a Glance' table allows you to conveniently check key information such as the issuing authorities for Certificates of Origin for each agreement, as well as origin determination criteria and preferential tariff rates. This portal is highly effective for quickly and accurately obtaining information as it is regularly updated with the latest data. Especially in the 'Resources' section, sample formats for Certificates of Origin and drafting guidelines for each agreement are provided, making it very convenient for practitioners.

- Verifying Original FTA Agreement Texts: In principle, the most definitive method is to check the information explicitly stated in the relevant FTA agreement text (especially in the 'Protocol on Rules of Origin and Origin Procedures' or the 'Chapter on Rules of Origin'). The agreement specifies details regarding the format of the Certificate of Origin, the issuing entity, validity period, and post-verification procedures. The original texts and annexes of each agreement can also be found on the Korea Customs Service FTA Portal.

- Inquiry with the Exporting Country's Customs Authority or Chamber of Commerce: If a Certificate of Origin needs to be issued within the exporting country, directly visiting or inquiring on the website of that country's customs authority (customs office) or Chamber of Commerce to confirm the latest information on issuance procedures and institutions is also an accurate method.

3. Practical Considerations and Additional Information

Beyond verifying the Certificate of Origin issuing authorities, the following additional considerations are necessary in practice for applying FTA preferential tariffs:

- Validity Period and Possibility of Retroactive Application: A Certificate of Origin generally specifies a validity period, and most agreements require submission to the importing country's customs within a certain period (e.g., 12 months) from the date of shipment. Some agreements include provisions allowing retroactive application if certain conditions are met, even if issuance is delayed. Therefore, to prevent disadvantages, it is necessary to check whether retroactive application is possible under the relevant agreement.

- Preparation for Origin Verification: Even if a Certificate of Origin has been issued, the importing country's customs authority may subsequently verify the authenticity of the origin. Exporters (or producers) must retain all documents capable of proving compliance with the origin determination criteria (e.g., production process records, Bill of Materials (BOM), purchase evidence, manufacturing flowcharts, etc.) for the period stipulated in the agreement (generally 3 to 5 years). Submission of an inaccurate or false Certificate of Origin can lead to customs duty imposition, as well as surcharges and fines.

- Utilizing the Approved Exporter Scheme: For agreements where self-certification is possible, Korea grants 'Approved Exporter' status to exporters, pre-screening and favoring their ability to prove the origin of exported goods. Obtaining this status can reduce the hassle of issuing certificates for each shipment in repetitive exports and allow for expedited customs clearance. Particularly in certain agreements like with the EU, it becomes a mandatory requirement for self-certification of amounts exceeding a specific value.

- Direct Consignment Principle: For FTA preferential tariff application, goods of origin must, in principle, be transported directly from the exporting country to the importing country. If transiting through a third country, a Non-manipulation Certificate or similar document must be submitted to prove that only minimal operations, such as unloading and reloading, occurred in the transit country.

Accurately verifying the Certificate of Origin issuing authority is the first step and the most fundamental procedure in utilizing FTAs. We recommend verifying accurate information through the methods presented above and, taking into comprehensive consideration the characteristics of individual agreements and the circumstances of export/import goods, seeking assistance from experts such as customs brokers to apply FTA preferential tariffs stably and lawfully.