Retroactive Application of Korea-ASEAN FTA and Customs Refund Following Erroneous Korea-Vietnam FTA Declaration Released

Post-Importation Application of Korea-ASEAN FTA and Tax Refund Procedures

If you have legally obtained a Korea-ASEAN FTA Certificate of Origin (C/O) but mistakenly applied the Korea-Vietnam FTA preferential rate during the import declaration process, you are entitled to apply for the Korea-ASEAN FTA rate retroactively to claim a refund for the difference in customs duties. This is a right granted to importers under the Special Act on the Implementation of Free Trade Agreements and the Customs Act of South Korea.

Application Deadline and Rectification Process

Importers can submit a request for retroactive application to the Korea Customs Service or the head of the relevant customs office within one year from the date the import declaration was accepted. This process involves canceling the initial Korea-Vietnam FTA application and amending the tax amount to reflect the more favorable Korea-ASEAN FTA preferential rate.

Procedural Steps for Claiming a Refund

To initiate the refund, the following procedural steps must be taken:

• Submission of Correction Request: The importer must file a "Request for Rectification" (Correction) to adjust the previous import record.
• Documentation: Submit the original (or a valid copy) of the Korea-ASEAN FTA Certificate of Origin (Form AK).
• Verification of Origin: Provide evidence that the goods meet the specific Rules of Origin (ROO) stipulated under the Korea-ASEAN FTA.
• Review and Refund: Customs will review the documentation and, upon approval, recalculate the tax and refund the surplus amount already paid.

Navigating Overlapping FTAs (AK FTA vs. KV FTA)

This retroactive system is designed to provide relief for importers who failed to apply the most advantageous rate due to administrative errors, system glitches, or insufficient duty rate comparisons. Since South Korea has two separate FTAs with Vietnam (Korea-ASEAN FTA and Korea-Vietnam FTA), duty rates for the same item may vary. Selecting the most favorable agreement is critical for maximizing customs duty savings. If an error occurs, applying the correct agreement retroactively allows the importer to recover unnecessary costs.

Key Considerations for Successful Application

When applying for retroactive benefits, thorough verification of the following is essential:

• Validity of the C/O: Ensure the certificate is issued correctly, is within its validity period, and includes the correct HS Code and Origin Criterion.
• Compliance with General Rules: Verify adherence to the Direct Transport Principle and other administrative requirements for the specific FTA.
• Expert Consultation: For complex cases or high-value claims, consulting a Licensed Customs Broker is highly recommended to ensure a swift and accurate refund process.