Is the Korea-Canada FTA applicable to goods from Canada that are stored in a third country's Regional Distribution Center and then shipped to Korea once a buyer is confirmed? Released

 In order to apply the FTA agreement tariff, the basic 'direct transportation principle' must be satisfied.

 Accordingly, it is important whether the goods are transported directly from the exporting party country to the importing party country without passing through another country.

 However, the Korea-Canada FTA agreement stipulates only the transit requirement without the direct transportation requirement, stating that if passing through a non-party country, the goods must not be traded or consumed in the territory of the non-party country.

 Therefore, in cases where a transaction occurs while the goods are located in a Regional Distribution in a third country, it does not meet the transportation requirements of the Korea-Canada FTA, making it difficult to apply the Korea-Canada FTA.

 Regarding FTA transportation requirements, most of the agreements listed below stipulate both the direct transportation principle and the transit requirement, and if only specific actions such as transshipment occur in the territory of a non-party country during transportation and no other work is done, transit through a non-party country is recognized as an exception.

Korea-Singapore, Korea-EFTA, Korea-ASEAN, Korea-India, Korea-EU, Korea-Peru, Korea-Turkey, Korea-Australia, Korea-New Zealand, Korea-Vietnam, Korea-China FTA agreements

 Meanwhile, the FTA agreements listed below stipulate only the transit requirement, and the Korea-Chile and Korea-US FTAs recognize transit through a non-party country if it is proven that there was no processing other than work to maintain the goods in good condition under customs control, regardless of whether there was a transaction/consumption act. This is almost the same condition as most of the agreements above.

Korea-Chile, Korea-US, Korea-Canada FTA agreements

Accordingly, it can be evaluated that only the Korea-Canada FTA imposes restrictions on transactions/consumption acts in a third country.