Self-Classification of Strategic Items

Korea is a member of the seven international export control systems as follows:

1. Wassenaar Arrangement (WA)
2. Nuclear Suppliers Group (NSG)
3. Missile Technology Control Regime (MTCR)
4. Australia Group (AG)
5. Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on Their Destruction (CWC)
6. Prohibition of the Development Production and Stockpiling of Bacteriological (Biological) and Toxin Weapons and on Their Destruction (BWC)
7. Arms Trade Treaty (ATT)

 

Goods and technologies controlled under the systems are publicly notified in tables attached to the PUBLIC NOTICE ON TRADE OF STRATEGIC ITEMS (전략물자 수출입고시). Except for some special cases like returning an imported strategic item to its manufacturer or original exporter, export license is required to export such goods and technologies, and export license number shall be input in the export declaration.

 

It is true that HS Code and classification of strategic items cannot be closely correlated. Notwithstanding, the list of HS Codes where strategic items can be classified is shared by customs authority and customs officials request the classification form of strategic item when the exporting goods are selected to be examined by Customs during their export customs clearance. So, exporters shall be able to prepare the classification form even if they do not deal with strategic items.

 

There are two ways to prepare the classification of strategic item. One is to apply for professional classification to competent authorities as follows:

-       Korean Security Agency of Trade and Industry (KOSTI): For the items of Categories 1 to 9 of the Table 2 [Dual-use Control Lists] and items of the Table 2-2 [Catch-all Lists]

-       Korea Institute of Nuclear Nonproliferation and Control (KINAC): For the items of Category 10 of the Table 2 [Dual-use Control Lists]

-       Defense Acquisition Program Administration (DAPA): For the items of the Table 3 [Munitions List] and the Table 2 [Dual-use Control Lists] which are to be used for military purposes by the government of the importing country, military-related organizations and defense industry entities

 

If an exporter deals with high-technology goods but cannot be sure of their classification, it is highly recommended to apply for professional classification for the representative model. In responding to the competent authority’s questions, the exporter can be certain about what characteristics of the goods become the deciding factors.

 

Once the statement of professional classification is issued, it can be available to other exporters if the applicant issues the Form 4-2 [Statement of Agreement to Use Professional Classification Result] attached to the PUBLIC NOTICE ON TRADE OF STRATEGIC ITEMS to the exporters.

 

If an exporter is certain that the exporting goods (excluding technologies) are not strategic items, professional classification is not necessary just to meet the customs official’s request. In this case, self-classification form can be submitted to Customs.

 

Since June 18, 2020, self-classification form shall be issued through the Strategic Goods Management System, YESTRADE (www.yestrade.go.kr). Registration of user and digital identity certificate is required to use the system.

For the first issuance, YESTRADE requires to watch a short educational video (about 25 minutes) according to Article 20 (3) of the FOREIGN TRADE ACT (대외무역법), which includes how to use self-classification through YESTRADE.

 

There are four categories to start self-classification – product name, control number, HS Code, and CAS number. In case of knowing control number and preparing self-classification to attach to the application for export license, it would be more efficient to use control number category. In case of preparing self-classification of non-strategic item in order to submit the self-classification form to Customs, HS Code category can be chosen.

 

In the case of router classified in 8517.62-3010, it can go like below.

    Enter HS Code

     Click the relevant category of control number. If it is not certain, more than one category can be chosen.

    Answer the yes or no questions.

 

    Register the classification result.

 

    In registering, enter the same HS Code, product name, model number and description as in the export declaration. Manual, catalog, or specification sheet shall be attached to show technical performance and use of the relevant item.

 

    Print self-classification form in the Online Self-Classification Status menu.

Depending on the features of encryption, router can be the strategic item control number of which is 5A002.A. However, self-classification through YESTRADE may not be related to the actual control number.

It shall be noted that it is risky to determine whether the item in question belongs to strategic goods or not solely based on the self-classification through YESTRADE. Exporters shall be aware of the relevant deciding factors of strategic items for the goods they handle and check the relevant features separately.