Introduction of the EU-Korea Free Trade Agreement

The Free Trade Agreement (‘FTA’) between the European Union and the Republic of Korea came into force on 1 July 2011.

Under the FTA, importers can claim preferential origin on qualifying goods on import into the EU or the Republic of Korea. The qualifying criteria are set out in the legislation. Proof of origin is by way of an origin declaration by the exporter (who has to be authorised in advance) on a commercial invoice (or other commercial documentation) instead of an EUR1 certificate.

The FTA is of significant importance to traders importing goods of Korean origin into the EU, as the customs duty on a large number of goods has been reduced to zero. This also represents an opportunity for manufacturers in the EU to become more competitive in Korea if their products are now entitled to a reduced or zero rate of customs duty on import into Korea.

Traders should carry out a review of their imports and exports to assess whether they can benefit from this duty saving opportunity.