Korea Certified Customs Attorney SJ

  In transactions between related parties, post-adjustment is commonly made based on the difference between the target margin and the actual margin calculated after the sale of imported goods. Since ‘the value of any part of the proceeds of any subsequent resale, disposal or use of the imported goods that accrues directly or indirectly to the seller’ is an additional element of customs valuation under the transaction value method, it is natural for Customs authorities to focus on the periodic payments made between the related parties. It used to be a common practice for importers to correct the customs value of imported goods when paying the difference, considering it as part of the proceeds from the imported goods, and not to correct the customs value of imported goods when receiving the difference, treating it as an adjustment of profit. It was absurd to apply a double standard when the reason for the post-adjustment remained the same. Importers appealed Customs’ decision, filed ...

  Under Article 36 (1) of the ACT ON SPECIAL CASES OF THE CUSTOMS ACT FOR THE IMPLEMENTATION OF FREE TRADE AGREEMENTS (hereinafter referred to as ‘FTA Customs Act’), when the application of the FTA tariff rate is denied, and deficient duties (calculated as customs value x (MFN tariff rate - FTA tariff rate)) are collected, the following amounts are also collected as additional duties: 1. 10% of the deficient duties (40% if the relevant shortfall results from an importer’s request for the application of conventional tariffs through unjust means, such as forgery and alteration of a certificate of origin) 2. The amount computed by multiplying the underpaid duties or deficient duties by the number of days specified in item (a) and the interest rate prescribed in item (b): (a) The number of days from the day following the statutory time limit for payment (in the case of the ex post facto application of conventional tariffs, referring to the day when the customs duties are refunded...

  Pursuant to Article 25 (2) of the FOREIGN EXCHANGE TRANSACTIONS ACT ( 외국환거래법 ), the Minister of Economy and Finance is authorized to designate one or more legal entities or organizations that are related to or specialize in foreign exchange affairs as an institution to relay, concentrate, exchange, or analyze data on foreign exchange transactions, payments, or receipts. Such an institution is referred to as the Foreign Exchange Information Center (FEIC). Currently, the Bank of Korea (BOK) plays the role of FEIC to facilitate the efficient and transparent foreign exchange transactions. Under the regulation of the BOK,   Foreign Exchange Information Center (FEIC) Operation Procedures ( 외환정보집중기관 운영절차 ), foreign exchange banks are required to report foreign exchange payments/receipts exceeding USD 1,000 to the BOK, and Customs may request the BOK for the reported data. By comparing the reported data with the declared import data, Customs officials can detect numerous custom...

  Among the duty exemption/reduction programs, the one prescribed in Article 95(1) 3 of the CUSTOMS ACT is designed to assist small and medium-sized manufacturers and medium-standing enterprises engaged in manufacturing products for factory automation. CUSTOMS ACT Article 95 (Reduction or Exemption of Customs Duties for Goods Used to Prevent Environmental Pollution, etc.)     (1) Customs duties may be reduced or exempted on any of the following imported goods, which are difficult to be manufactured in Korea: 1.       Machinery, appliances, facilities and equipment prescribed by Ordinance of the Ministry of Economy and Finance as goods used to prevent emissions of pollutants (including noise and vibration) or treat pollutants; 2.       Machinery and appliances prescribed by Ordinance of the Ministry of Economy and Finance as goods used to treat wastes (including recycling)...

  There is a crucial rule in tax administration that applies consistently, known as the actual taxation rule. From the perspective of customs duties, this means that the person who actually owns the imported goods at the time of filing their import declaration shall be the person liable to pay customs duties and be so declared. This rule is stipulated in Article 14 of the FRAMEWORK ACT ON NATIONAL TAXES ( 국세기본법 ), a statute prescribing fundamental and common matters concerning national taxes. FRAMEWORK ACT ON NATIONAL TAXES   Article 14 (Actual Taxation) (1)      If any ownership of an income, profit, property, act or transaction which is subject to taxation, is just nominal, and there is other person to whom such income, etc., belongs, the other person shall be liable to pay taxes and tax-related statutes shall apply, accordingly. (2)      The provisions pertaining to the computation of tax base in t...

Usually, the tariff rate applicable to a HS Code doesn’t change throughout a year. However, when it comes to agricultural products, depending on when they are imported, the applicable tariff rate can be different drastically. For example, fresh or chilled potatoes that are not for seed are classified in 0701.90-0000 in Korea. For 0701.90-0000, the applicable tariff rates in 2023 are as follows: Tariff Rate Code Tariff Rate Description Tariff Rate (%) W1 WTO tariff rate for the goods recommended by Korea Agro-Fisheries & Food Trade Corporation (Recommendable total weight: 18,810 tons) 30% W2 WTO tariff rate for the goods not recommended by Korea Agro-Fisheries & Food Trade Corporation 304% P1 Quota tariff rate applicable for May 1, 2023 to November 30, 2023 only to the goods for making potato chips recommended by Korea Food Industry Association (Recommend...