Import Tariffs: With the U.S.-Korea FTA, 95% of tariffs on U.S. imports were eliminated by March 15, 2017. Korea maintains a tariff quota system designed to stabilize domestic commodity markets. The U.S. Department of Commerce can help U.S. exporters identify the harmonized system number for their products and the associated tariff rates over the next ten years. Exporters can also contact the U.S. Agricultural Trade Office, affiliated with the U.S. Embassy in Seoul, for specific information on agricultural tariff rates. Tariffs and taxes must be paid in Korean Won within 15 days after goods have cleared Customs.
Import Duty: Duties are assessed on a Cost-Insurance-Freight (CIF) basis. The main mode of customs evaluation is the transaction value method. Other methods under the WTO appraisement hierarchy may be used if there are doubts about Korean Customs valuation methods on the stated value. Customs duties can be adjusted every six months, within the limit of the basic rate, plus or minus 40 percent. Korea has a flat 10 percent Value Added Tax (VAT) on all imports and domestically manufactured goods. A special excise tax of 10-20 percent is also levied on the importation of certain luxury items and durable consumer goods.
Import Requirements and Documentation: Companies exporting to the Republic of Korea must provide a commercial invoice and a certificate of origin to clear customs. The commercial invoice is an original invoice, and two copies must be presented with the shipping documents and must include total value, unit value, quantity, marks, product description and shipping from/to information. The certificate of origin was required for some products prior to implementation of the KORUS FTA. Exporters are encouraged to discuss shipping document requirements with their respective importer. An importer may claim preferential treatment under the KORUS FTA in order to receive the lower tariff. The importer can do this by providing written or electronic certification to Korean Customs from the manufacturer, the exporter, or the importer. The manufacturer, exporter or importer is required to retain all documents (i.e., bill of materials, manufacturing process documentation, etc.) demonstrating that the good qualifies as a U.S.-origin good, for five years.
Customs Regulations: Korea maintains an import declaration system that allows for the immediate release of goods upon acceptance of an import declaration filed without defect. With the exception of high-risk items related to public health and sanitation, national security, and the environment, which often require additional documentation and technical tests, goods imported by companies with no record of trade law violations are released upon the acceptance of the import declaration without Customs inspection. The Korean Customs Service’s Electronic Data Interchange (EDI) system for paperless import clearance allows importers to make an import declaration by computer without visiting the Customs House. Import declarations may be filed at the Customs House before a vessel enters a port or before the goods are unloaded into bonded areas. In both cases, goods are released directly from the port without being stored in a bonded area, if the import declaration is accepted.
U.S. Export Controls: The U.S. Department of Commerce, Bureau of Industry and Security (BIS), develops, implements, and interprets U.S. export control policy for dual-use commodities, software, and technology. Dual-use items subject to BIS regulatory jurisdiction have predominantly commercial uses, but may also have military applications.
Source: The International Trade Administration (ITA), U.S. Department of Commerce www.export.gov