Who Should Issue the Certificate of Origin for the Korea-US FTA When Importing Goods with Different Producers and Exporters in the US, and What Are the Requirements for Issuance by the Exporter or Producer? Released

Regarding the issuance of certificates of origin when importing goods with different producers and exporters from the United States under the Korea-US Free Trade Agreement (FTA), you inquired about the issuing entities and related requirements. The Korea-US FTA provides significant flexibility in the issuance of certificates of origin compared to other FTAs, with the key point being that exporters, producers, or importers can all issue certificates of origin. This provision aims to enhance the convenience of origin certification, with clear requirements and responsibilities for each entity when issuing.

The Korea-US FTA certificate of origin adopts a self-certification format without a specific form, including only the minimum necessary information (exporter/producer/importer information, product item number and origin determination criteria, certification date, etc.). The important point here is that whoever prepares it must have the responsibility and ability to prove that the goods meet the Korea-US FTA origin determination criteria.

Explanation by Issuing Entity of Certificate of Origin

The roles and considerations of each issuing entity are as follows.

• Producer

  The entity directly involved in the production of goods and most accurately understands all the information necessary for determining origin. As they possess key materials necessary for origin determination, such as the source of raw materials, manufacturing processes, and production costs (e.g., BOM, manufacturing process diagrams, raw material purchase records, cost statements), they are considered the most ideal entity for issuing certificates of origin. If the producer issues it directly, the reliability of origin information is high, and there is the advantage of quickly and accurately providing necessary data during customs origin verification.

• Exporter

  If the exporter is different from the producer, the exporter usually receives origin-related information from the producer to issue the certificate of origin. In this case, the exporter is legally responsible for the content of the certificate of origin they issue, so it is very important to secure sufficient and reliable origin-related information (e.g., producer's origin confirmation, item-specific origin statement) from the producer. Even if the exporter does not directly produce origin-related materials, they must manage them so they can be submitted upon customs request. This means that the exporter has the duty to verify and manage the accuracy of the information beyond merely conveying the producer's origin information.

• Importer

  One of the most significant features of the Korea-US FTA is that the importer can directly issue the certificate of origin. This measure allows the importer to directly apply for FTA benefits if the producer or exporter within the supply chain is passive or unable to issue the certificate of origin. However, when the importer issues the certificate of origin, they must have sufficient knowledge and supporting materials to prove that the goods originate from the United States. For example, they must be able to analyze origin-related materials provided by the producer or exporter and verify their reliability themselves. If the materials submitted by the importer during Korean customs origin verification are deemed insufficient or erroneous, preferential tariffs may be denied, and disadvantages such as additional taxes may occur. Therefore, issuing directly as an importer involves considerable responsibility and risk and should be approached cautiously.

Key Requirements for Exporter/Producer Issuance

As mentioned in the original response, to qualify for issuing a certificate of origin, exporters or producers must meet the following three key requirements. These are essential conditions to ensure the reliability of origin certification and the efficiency of subsequent verification.

• Retention of Materials Related to the Certificate of Origin for the Goods

  All documents proving compliance with origin determination criteria must be retained. These include:

  • Product specifications and classification (HS code)
  • Description of the production process (manufacturing process diagrams, work instructions, etc.)
  • Records of raw material purchase and production (raw material specifications, purchase invoices, inventory records, etc.)
  • Proof of compliance with origin determination criteria (e.g., calculation materials for regional value-added ratio, proof of compliance with item change criteria, etc.)
  • Transaction details between producer/exporter and copies of delivery notes

  These materials must be retained for at least 5 years (from the date of import declaration clearance by the customs of the importing country), and electronic retention is also possible. This is the minimum retention period required by the Korea-US FTA agreement, and individual companies' internal regulations or other laws may require longer retention periods.

• Submission of Certificate of Origin Copy upon Request by US Customs

  Exporters or producers in the United States are obligated to submit a copy of the issued certificate of origin upon request by US Customs (CBP). This procedure demonstrates that the issuing entity is taking responsibility for their actions.

• Ability to Submit Origin Proof Materials for Korean Customs Origin Verification

  This is the most important requirement. Korean customs may request subsequent origin verification for goods that received FTA benefits, and in this case, the entity that issued the certificate of origin must be able to submit all proof materials demonstrating that the goods met the Korea-US FTA origin criteria directly or through a representative upon request by Korean customs. These materials consist of information across the production and supply chain of the goods and play a crucial role during origin verification. If submission is not possible or the submitted materials cannot prove origin, preferential tariffs will be denied, and additional tariffs and penalties may be imposed.

Conclusion and Recommendations

When importing goods with different producers and exporters from the United States, the Korea-US FTA certificate of origin can be issued by the producer, exporter, or importer. However, the key is that it is most desirable for the entity that can clearly prove compliance with the origin determination criteria and actively respond to subsequent customs verification requests to issue it.

Especially when the exporter or importer issues it instead of the producer, it is important to sufficiently secure origin-related information from the producer, verify the accuracy of that information, and establish a system to submit materials to customs with the producer's cooperation if necessary. We recommend minimizing the risk of applying FTA preferential tariffs and conducting stable trade through clear communication and responsibility sharing among all parties in the supply chain. Consulting with a customs expert to establish the best strategy for individual cases is also a