1/ What is the procedure to become an Approved Exporter?
All you need to do is fill out a “prior Origin Declaration” (Déclaration Préalable d’Origine – DPO) one single time, for all of the goods and importing countries that you wish to include under AE status. Customs will examine your DPO to make sure that you fully understand the applicable rules of origin and the availability of information required to determine the preferential origin of goods.
In South Korea, according to the number of goods produced, the Korean exporter can choose between two types of Approved Exporter status:

Company Specific Approved Exporter Status: recommended when the exporter produces multi goods. In this case, product specific authorization for each product can be cumbersome.

Product Specific Approved Exporter Status: recommended when the exporter produces one or two different kinds of goods. In this case, company specific authorization can be costly because it requires strict requirement such as origin electronic management system.

2/ My Korean client informs me that I have to issue an Origin Declaration. What are the conditions?

• For shipments of a value less than or equal to EUR 6,000, if the goods are of a European Union (EU) preferential origin, any exporter is able to issue an origin declaration on the invoice or any other commercial document.

• For shipments with a value exceeding EUR 6,000, the exporter should have the Approved Exporter status. He has to register a “prior Origin Declaration” to the customs authority locally competent.

3/ Is it possible to issue the origin declaration retrospectively?

• At import in the EU, if the operator is not able to present it at the time of customs clearance, it can be presented within 2 years after the release for free circulation of the goods.

• At import in South Korea, the origin declaration must be presented within one year. It is recommended to the EU exporters to apply quickly for the approved exporter status so that their clients can benefit from the preference.

On presenting the origin declaration after the import in the EU, the operator shall benefit from the refund of duty paid. In case of importations in South Korea, it is necessary to refer to Korea Customs Service (KCS).

4/ What are the different terms existing in this agreement?

An Origin Declaration has a 12-month validity and can only be issued after the entry into force of the FTA. When goods are cleared through customs, if there is no origin declaration on invoice or any other commercial document as a justification of the preferential origin, the exporter has:

• 1 year to present a valid origin declaration (issued in the last 12 months) for the import to South Korea
• 2 years to present a valid proof (issued in the last 12 months) for the import to EU
• Until June, 30th, 2012 to present a valid proof (issued in the last 12 months) if the goods have been put in storage before July 1st, 2011 and cleared through customs after this date.

5/ How to respect the direct transport rule when only a few direct maritime shipping lines exist?

The free trade agreement states that the goods must be shipped in one single consignment. If transhipping, the goods should remain under the surveillance of the customs authorities during the transhipment. Evidence may be asked to ensure that the rule of direct transport is respected and in particular, a certificate of the other country’s customs authority.

6/ To optimize the logistics costs of European components exported to Korea, a company chooses to consolidate these shipments coming from different European countries in a single location in the EU, in order to ship complete containers. Is the rule of direct transport respected?

UE = 1 single custom territory. Even if the goods come from different Member States of the EU, the rule of direct transport is respected. The free trade agreement is signed between South Korea and the EU without distinction of the different Member States.

7/ What is the impact of a triangular trade? Is it possible to ask for the preference whereas the documents flow (invoice sent from a third country) differs from the goods flow?

Only physical flows matter regarding customs clearance. The origin declaration must be issued by the European exporter; the invoice can be issued by another operator even located in a third country. The free trade agreement origin protocol states that the origin declaration can be issued on a delivery note or any other commercial document by the European exporter.

8/ My product is not made entirely in the EU, but also in a different country (e.g.: Turkey, Morocco...). What are the consequences?

The principle of territoriality requires that all of the operations be carried out in the EU or in South Korea. If, at any moment, an operation is done in a third country, outside the agreement (outside the EU or South Korea), the preferential origin is lost. Consequently, even if the operator carries out minor alterations on the product outside the EU or South Korea, he will not benefit from the tariff preference.

9/ Will the EU-South Korea FTA modify the rules concerning the translation of the instructions manuals and labelling?

The FTA does not modify the existing rules, but the government can modify the regulations, beyond the EU-South Korea FTA.

Source : French Customs (www.douane.gouv.fr), courtesy translation by FTV Interpretation

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