Country of Origin (COO) Marking Requirements in South Korea

n  COO Marking Regulations

All imported goods shall comply with the CUSTOMS ACT (관세법)  and the FOREIGN TRADE ACT (대외무역법) . In accordance with Article 33 of the FOREIGN TRADE ACT, COO shall be marked on an imported item that is stipulated as one of the goods subject to COO marking. Under Article 33-2 of the FOREIGN TRADE ACT, a penalty surcharge as well as a corrective order may be imposed for a person who violates COO marking, and under Article 230 of the CUSTOMS ACT, customs officials shall not permit customs clearance of goods whose COO marking is inappropriate.

Subordinate statutes of the FOREIGN TRADE ACT - FOREIGN TRADE MANAGEMENT REGULATION (대외무역관리규정, “FTMR”)  and NOTIFICATION ON THE OPERATION OF THE COUNTRY OF ORIGIN LABELING SYSTEM (원산지표시제도운영에관한고시, “COO Notification”)  prescribe details of COO marking. However, as COO marking is related to various forms of goods and packaging, regulations cannot cover all cases and there exist some grey areas.

 

n  Goods subject to COO Marking

Goods subject to COO marking are listed in Table 8 attached to the FTMR on the basis of HS Code (Heading), which covers most of Headings.

 

n  COO Marking Principles

    Language

Under Article 76 (1) of the FTMR, Korean, Chinese characters and English can be used as COO marking language.

Unless Korean labeling is required under the statutes enacted to regulate certain goods, English is widely used in COO marking.

    Wording

Under Article 76 (1) of the FTMR and Article 8 of the COO Notification, following wording is allowed as COO marking:

-      “원산지: Country name” or “Country name 산(産)”

-      “Made in Country name” or “Product of Country name”

-      “Made by Manufacturer’s name, address, country name”

-      “Country of Origin: Country name”

-      “Manufactured by Manufacturer’s name, address, country name”

-      “Manufactured in Country name”

-      “Produced in Country name”

-      “Country name Made”

-      “Assembled in Country name”

-      “Brewed in Country name”

-      “Distilled in Country name”

It shall be noted that, if some words are added to the wording like “HAND MADE IN……”, it is regarded as COO misleading indication. If some expressions like “DESIGNED IN……” are positioned around COO wording and the country indicated after these expressions is not the same as COO, it is also regarded as misleading.

    Method

Under Article 76 (5) of the FTMR, COO shall be marked, in principle, in the stage of manufacture through  printing, stenciling, branding, molding, etching, stitching or any other similar ways that are not easily removable. Proviso of Article 76 (5) of the FTMR stipulates that stamping, label, sticker and tag can be exceptionally used for the goods COO marking on which in principle ways is inappropriate or impossible and for the cases where COO marking in principle ways may damage the goods.

Customs applies the proviso very strictly and permit the exceptional method of COO marking for the cases like the examples listed in Table 1 attached to the COO Notification. 

    Place

Under Article 75 (1) and Article 76 (3) of the FTMR, COO shall be marked on a product itself in a place easily found by customers. Pursuant to Article 5 (4) of the COO Notification, if the product is sold as packaged, COO shall be marked on the packaging itself except for the cases where the packaging is transparent, and customers can confirm the COO without tearing the packaging.

Under Article 81 of the FTMR, the Commissioner of Korea Customs Service (KCS) may determine detailed method of COO marking per product, and the methods are listed in Table 2 attached to the COO Notification for some goods on the basis of Heading. But it doesn’t cover all Headings.

 

n  Exemption from COO Marking

Article 82 of the FTMR and Article 9 of the COO Notification stipulate the cases that can be exempt from COO marking.

Thanks to “Parts, accessories, or tools packaged with main machinery as a set and imported”, COO marking can be done only on the main component of a set-packaged product.

Thanks to “Goods imported by an end-user and not provided for sale or rental purposes”, packaging materials that are not for sale can be exempt from COO marking. However, when the goods are selected to be examined by Customs, importers shall submit documentary evidence like a letter of explanation to prove that the condition of exemption from COO marking is met.

 

n  Penalty for Violating COO Marking

The FOREIGN TRADE ACT stipulates imprisonment with labor for not more than five years or a fine not exceeding 100 million won for the following acts:

-        Marking a false origin or labeling any misleading mark of origin

-        Damaging or modifying a mark of origin

-        Omitting to indicate the origin of the goods which shall bear an indication of origin

-        Violating an order to take a corrective measure including suspension of sale, recovery to the original state, and marking of origin

In practice, COO marking is regulated with a penalty surcharge pursuant to Article 33-2 (2) of the FOREIGN TRACT ACT. The amount of penalty surcharges is as below. Depending on the scale of exportation/ importation and the severity and frequency of violations, the amount may be aggravated or abated. Notwithstanding, the total amount of penalty surcharges shall not exceed 300 million won, even when it is aggravated. 

Act	Penalty Surcharge
A person who damages or modifies the marks of origin of goods through simple processing doesn’t mark the initial origin or marks a different origin on such goods produced after simple processing.	Lesser between the amount equivalent to 10% of import/export declaration amount of relevant goods (for distributor, the sum of sold goods’ sales price and unsold goods’ purchase price) and KRW 100 million
A person doesn’t follow the methods of marking origin.	Lesser between the amount equivalent to 10% of import/export declaration amount of relevant goods and KRW 200 million
A trader or distributor marks a false origin or labels any misleading mark of origin.	Lesser between the amount equivalent to 10% of import/export declaration amount of relevant goods (for distributor, the sum of sold goods’ sales price and unsold goods’ purchase price) and KRW 300 million
A trader or distributor damages or modifies a mark of origin.	Lesser between the amount equivalent to 10% of import/export declaration amount of relevant goods (for distributor, the sum of sold goods’ sales price and unsold goods’ purchase price) and KRW 300 million
A trader or distributor omits to indicate the origin of the goods which shall bear an indication of origin.	Lesser between the amount equivalent to 10% of import/export declaration amount of relevant goods and KRW 200 million

According to KCS’s internal instruction, the first violation is subject to corrective order, the second violation is subject to both corrective order and penalty surcharge, and the third violation is subject to both corrective order and aggravated penalty surcharge. Violations are numbered when the same type of violation is committed in the past two years.

n  Advance Ruling on COO Marking

Customs authority applies the provisions of exceptional methods of COO marking strictly. Besides, as the determination of appropriate COO marking is at the discretion of a customs official who actually inspects the import shipment, the method of COO marking which has been accepted by a customs official can be denied by other customs officials.

Importers can actively remove such uncertainty by applying for advance ruling on COO marking with the Commissioner of KCS in accordance with Article 21 of the COO Notification. Customs officials shall accept the COO marking done in a way described in the ruling. From time to time, KCS publicly notifies the ruling result so that other importers can refer to.

One good example is a reversible hat. According to Table 2 attached to the COO Notification, the fabric label of COO shall be sewn to a hat. Usually, the label is sewn to the inside of hat. However, in the case of a reversible hat, inside doesn’t exist. So, an importer filed the advance ruling on COO marking, arguing that a paper tag shall be accepted as an appropriate way of marking COO for a reversible hat, and KCS accepted it.

 

n  Labeling under Other Statutes

There are numerous statutes enacted to regulate certain products. Usually, such statutes also stipulate labeling requirements of relevant products and COO is one of the information which shall be included in the labeling. As the labeling is to provide Korean customers with useful information, it is required to be written in Korean. Although English can be allowed for the indication of manufacturer’s name, we can generally refer to the labeling as Korean labeling.

 Under Article 76 of the FTMR and Article 6 of the COO Notification, if COO under the statutes is the same as the COO under the FOREIGN TRADE ACT and the labeling cannot be easily removed, labeling under the statutes is deemed as an appropriate COO marking under the FOREIGN TRADE ACT except for some special cases like OEM imported food.