Trade in Goods Guide to using ASEAN-KOREA FTA / KOREA-SINGAPORE FTA to export to Korea Korea in this text refers to South Korea only. Step1 : Knowing your HS Code Check for the Korean HS (Harmonised System) Code of your product. Korean HS code will be required to find out your product’s import duty1 or tariff concession rate2 when importing to Korea. You may check with either the Korean Customs Authority or your importer in Korea to find out your product’s HS Code in Korea. To find Singapore’s HS code of your product, please refer to Singapore Customs. http://www.customs.gov.sg/leftNav/trad/per/Classification+of+Goods.htm Step 2 : Getting the MFN and Tariff Concession Rates With the HS code, check for 1) Korean import duty or MFN rate for your product. 2) Tariff concession rates given to your product You can check with the Korean Customs Authority or Korean importing party for the latest MFN rates. Note: If the product has 0% import duty, FTA may not be beneficial to you in terms of tariff savings. For a quick check on both MFN rates and Tariff Concession rates, Please refer to the following: Singapore FTA website (Korea’s Preferential Tariff Rate and Rules of Origin): http://www.fta.gov.sg/tariff_calculator.asp Korea Customs website (Korea’s Import Duty): http://english.customs.go.kr/kcsweb/user.tdf?a=user.customtariff.CustomTariffApp&c=1 001&mc=ENGLISH_INFORMATION_KOREA ASEAN-Korea FTA Integrated information Services: http://www.akfta.net/ The Legal Text for ASEAN-Korea FTA Tariff Reduction and Elimination can be found in the link below. http://www.fta.gov.sg/akfta/article3.pdf 1 Import Duty refers to the tax payable for the purpose of importing a product into a country. Tariff Concession Rate refers to the import duty which would be applicable to a product which is imported under a specific FTA. 2 All information is provided by IE Singapore to you in good faith, without any representation or warranty, and does not constitute professional advice. IE Singapore or its employees shall not be held responsible for any consequence arising from your reliance on any information provided by us. You are advised to consult your own professional advisors. The Legal Text for Korea-Singapore FTA Tariff Elimination Schedule can be found in the link below. http://www.fta.gov.sg/ksfta/annex%203a%20-%20tariff%20elimination%20schedule.pdf Step 3 : Compare MFN and Tariff Concession Rates. Compare MFN and Tariff Concessions Rates to find out if you will be able enjoy a lower Tariff rate by using any of the FTAs. Step 4: Check the Rules of Origin for the FTA which is beneficial to you To qualify for the Tariff Concessions Rates, check that the product satisfies the Rules of Origin (ROO). For ASEAN-Korea Free Trade Agreement (AKFTA): To be considered as Originating Goods under AKFTA, 1. Your product will be considered originating if it is Wholly Obtained or Produced in Singapore according to Rule 3 under AKFTA Rules of Origin Legal Text. Please refer to Rule 3 of http://www.fta.gov.sg/akfta/annex3rulesoforigin.pdf. 2. If your product is not Wholly Obtained, a. Check if your product falls under Product Specific Rules under “Letter of Understanding for the Amendment of Product Specific Rules” http://www.fta.gov.sg/akfta/lou_akfta_amendment_psr.pdf. Your product will have to follow the specific Rules of Origin defined if it falls under this agreement. b. If your product does not fall under Product Specific rules, your product will have to either meet the Regional Value Content of 40% FOB price or Change in Tariff Headings (first 4 digit of HS Code). Please refer to Rule 4 of http://www.fta.gov.sg/akfta/annex3-rulesoforigin.pdf. Please take note that Operations and Processes as specified according to: 1. Rule 8 under AKFTA Rules of Origin Legal Text http://www.fta.gov.sg/akfta/annex3-rulesoforigin.pdf and, 2. Non-qualifying operations for Textile & garment under explanatory Notes to Annex 3 http://www.fta.gov.sg/akfta/annex_3_appendix_3.pdf All information is provided by IE Singapore to you in good faith, without any representation or warranty, and does not constitute professional advice. IE Singapore or its employees shall not be held responsible for any consequence arising from your reliance on any information provided by us. You are advised to consult your own professional advisors. 3. Singapore Customs Minimal Operation http://www.customs.gov.sg/NR/rdonlyres/01FDFC8A-F652-4BDD-A8A361D7A5AAA07B/12922/MinimalOP.doc will not be taken into account when determining the Rules of Origin. For Korea-Singapore Free Trade Agreement (KSFTA): To be considered as Originating Goods under KSFTA, 1. Your product will be considered originating if it is Wholly Obtained or Produced in Singapore according to Article 4.1 under Rules of Origin Legal Text. http://www.fta.gov.sg/ksfta/koreasingapore%20free%20trade%20agreement%20(ksfta)_chap4.pdf 2. If your product is not Wholly Obtained, it will be subjected to the Product Specific Rules as stated in Annex 4A: Specific Rules of Origin. Please refer to http://www.fta.gov.sg/ksfta/annex%204a%20%20specific%20rules%20of%20origin.pdf Please take note that Operations and Processes as specific according to Article 4.16 under Rules of Origin Legal Text will not be taken into account when determining the Rules of Origin. http://www.fta.gov.sg/ksfta/koreasingapore%20free%20trade%20agreement%20(ksfta)_chap4.pdf Step 5: Comply with the documentation procedures If your product is able to benefit from the Preferential Concessions and meet the Rules of Origin, you may start the documentation procedures to apply for relevant Preferential Certificate of Origin. 1) 2) 3) Register your factory with Singapore Customs. Submit Manufacturing Cost Statement for approval. Apply for Preferential Certificate of Origin for each shipment. For information on the above 3 documentation procedures, please refer to http://www.customs.gov.sg/leftNav/trad/Certificates+of+Origin.htm Step 6: Sent product and Preferential Certificate of Origin to Importer Once you have completed the above 5 steps, your product would be ready to enjoy the preferential concessions. Send your product and Preferential Certificate of Origin for that shipment to your importer. All information is provided by IE Singapore to you in good faith, without any representation or warranty, and does not constitute professional advice. IE Singapore or its employees shall not be held responsible for any consequence arising from your reliance on any information provided by us. You are advised to consult your own professional advisors. Your importer will be able to enjoy the preferential concessions upon showing Korean Customs the Preferential Certificate of Origin when clearing the product. Please keep all your documents for any post verification according to the period stated below: For AKFTA = 3 Years For KSFTA = 5 Years Legal Texts Legal Texts for both FTAs are available for detailed information. AKFTA Legal Texts can be found at the link below. http://www.fta.gov.sg/fta_akfta.asp?hl=3 KSFTA Legal Texts can be found at the link below. http://www.fta.gov.sg/fta_ksfta.asp?hl=22 All information is provided by IE Singapore to you in good faith, without any representation or warranty, and does not constitute professional advice. IE Singapore or its employees shall not be held responsible for any consequence arising from your reliance on any information provided by us. You are advised to consult your own professional advisors. General Steps in use Singapore’s FTA with Korea for Exports (Flowchart) Steps to using Singapore’s FTA with Korea Step 1: Know your product’s HS Code Step 2: Find out normal import duty rate (MFN Rates) and your product’s concession rate for intended FTA * No Step 3: Compare if there is monetary benefit in using FTA No monetary Benefit Yes Step 4: Check and meet the Rules of Origin for your product ** No Cannot Use Yes Step 5: Comply with documentation procedures Step 6: Sent product and Preferential Certification of Origin to Importer * For a quick check, you can make use of the following: Singapore FTA website (Korea’s Preferential Tariff Rate and Rules of Origin): http://www.fta.gov.sg/tariff_calculator.asp Korea Customs website (Korea’s Import Duty): http://english.customs.go.kr/kcsweb/user.tdf?a=user.customtariff.CustomTariffApp&c=1001&mc=ENGLISH_IN FORMATION_KOREA ** For Rules of Origin on Korea-Singapore Free Trade Agreement or ASEAN-Korea Free Trade Agreement, Please refer to respective flow chart. All information is provided by IE Singapore to you in good faith, without any representation or warranty, and does not constitute professional advice. IE Singapore or its employees shall not be held responsible for any consequence arising from your reliance on any information provided by us. You are advised to consult your own professional advisors. ASEAN Korea Free Trade Agreement Rules Of Origin for Exports (Flowchart) AKFTA Rules of Origin (ROO) Is your product Wholly Obtained or manufactured within Singapore? Yes May Qualify No Yes Does your product falls under Product Specific Rules? * Your product has to meet the Rules as stated * No Does your product meet Regional Value Content of 40% FOB price? ** Yes May Qualify No Does the first 4-digit of your product’s non-originating materials HS Code defers from the first 4-digit of your product HS Code? *** Yes May Qualify No Does not qualify * Please refer to http://www.fta.gov.sg/akfta/lou_akfta_amendment_psr.pdf for the list of products and their criteria under Product Specific Rules. ** Regional Value Content = x 100% *** Non-originating materials are materials which do not qualify under the specific FTA which your product would be exported under. All information is provided by IE Singapore to you in good faith, without any representation or warranty, and does not constitute professional advice. IE Singapore or its employees shall not be held responsible for any consequence arising from your reliance on any information provided by us. You are advised to consult your own professional advisors. Korea Singapore Free Trade Agreement Rules Of Origin for Exports (Flowchart) KSFTA Rules of Origin (ROO) Is your product Wholly Obtained or manufactured within Singapore? Yes May Qualify No Does your product falls under Product Specific Rules? * Yes Your product is to meet the Rules as stated * No Does not qualify * Please refer to http://www.fta.gov.sg/ksfta/annex%204a%20-%20specific%20rules%20of%20origin.pdf for the list of products and their criteria under Product Specific Rules. All information is provided by IE Singapore to you in good faith, without any representation or warranty, and does not constitute professional advice. IE Singapore or its employees shall not be held responsible for any consequence arising from your reliance on any information provided by us. You are advised to consult your own professional advisors.