Can a producer who is a non-approved exporter use an approved exporter's authorization number to fill out a declaration of origin on the Packing List for the application of the Korea-EU FTA, and will this declaration be considered valid? Released

The origin declaration written on the Packing List by a producer who is a non-certified exporter using the certified exporter's certification number for the application of the Korea-EU FTA cannot be validly recognized. This is a clear violation of the Korea-EU FTA origin regulations.

Core Requirement of the Korea-EU FTA Origin Declaration: 'Certified Exporter' Status

The Korea-EU FTA agreement stipulates that when the export goods exceed a certain amount (6,000 euros), only those with 'certified exporter' status can write the origin declaration. As mentioned in the original answer, the following requirements must be met to have the authority to write the origin declaration.

• A person who can determine and prove the origin of the goods and respond to post-verification requests (exporter or producer)
• A person who has all the documents necessary to prove the origin of the goods to the customs authorities where the exporter is located
• A person who has been granted certified exporter status by the customs authorities where the exporter is located

The most important part here is the third requirement, 'certified exporter status'. The certified exporter system means that the exporter has been officially recognized by the customs authorities as having the capability and system to independently verify and prove the origin. This status is a unique authority granted to a specific corporation or business, and the certification number is also valid only for the person to whom it is granted.

Issues and Validity Judgment of 'Borrowing' Certification Numbers

As in the case of the questioner, when a producer who is a non-certified exporter 'borrows' the certification number of a certified exporter to write an origin declaration, it is equivalent to falsely impersonating the qualification of a certified exporter by someone without the authority to write the origin declaration. This is invalidated for the following reasons.

• Infringement of Unique Authority: The certified exporter number is a unique identifier granted to the certified exporter after review by the customs authorities. Its use by others undermines the legitimacy of the certification.
• Difficulty in Origin Verification: If the origin declaration is selected for post-verification in the importing country, confusion arises because the actual entity who wrote the declaration (non-certified producer) and the entity listed with the certification number (certified exporter) are different. The non-certified producer may lack the documents and ability to respond necessary for post-verification, and the certified exporter may find it difficult to take responsibility for a declaration they did not write themselves.
• Risk of False Declaration: The act of a non-certified producer writing a declaration using the certified exporter's number may effectively constitute a false origin declaration. This can be considered a serious violation that undermines the sound operation of the FTA agreement.

Impact and Risks of Incorrect Origin Declaration

If an origin declaration written in this manner is deemed invalid by the customs authorities of the importing country, the following serious problems may arise.

• Exclusion from Tariff Preferences: The importer may not receive the preferential tariff rate under the Korea-EU FTA and will have to pay additional duties and surcharges under the general MFN (Most Favored Nation) rate. This leads to increased costs for the importer, which can adversely affect the trade relationship in the long term.
• Risk of Sanctions for Importers and Exporters: The customs authorities of the importing country may impose administrative sanctions, such as fines, on the importer for false or inappropriate origin declarations. Additionally, legal sanctions (fines, penalties, revocation of certified exporter status, etc.) under customs or foreign trade laws may be imposed domestically and internationally on the exporter who wrote the origin declaration (actually the producer) and the certified exporter who lent their name.
• Decline in Credibility: Such cases can lead to a decline in the international credibility of exporters and producers and may result in increased scrutiny by customs authorities on future FTA utilization.

Correct Procedures and Alternatives

To accurately and safely utilize FTA benefits for proving the origin of export goods, it is important to follow the following procedures.

• If the exporter is a certified exporter: The producer should provide accurate origin information to the exporter, and the exporter should use their certified exporter number to write the origin declaration. In this case, the producer must provide sufficient materials, such as an origin confirmation and statement, necessary for the exporter to write the origin declaration.
• If the producer exports directly (non-certified exporter):
  • Small goods (6,000 euros or less): In the case of the Korea-EU FTA, if the export amount is 6,000 euros (or the equivalent amount in local currency) or less, a non-certified exporter can also write the origin declaration. However, even in this case, the producer must be fully equipped with documents (production process records, BOM, etc.) that can prove that the goods meet the FTA origin criteria.
  • High-value goods (exceeding 6,000 euros): In this case, the producer must obtain 'certified exporter' status directly. By applying for certified exporter status with the customs office and passing the review, they can be granted a unique certification number and write the origin declaration themselves. This is the most fundamental solution for stable FTA utilization.

In conclusion, writing an origin declaration to apply FTA preferential tariffs follows strict regulations, and unauthorized use of the certified exporter number is a serious violation. It is always recommended to adhere to accurate and legal procedures to avoid unnecessary risks and continue stable trade activities.