The Korea-US Free Trade Agreement, also known as KORUS FTA, was signed in 2007 and took effect in March 2012. The agreement has since created a free trade zone between the two countries, promoting economic growth and creating countless business opportunities.
One essential document required for companies trading under the KORUS FTA is the Certificate of Origin. A Certificate of Origin is a document that indicates the origin of goods being exported, and it serves as evidence that the goods meet the requirements of the FTA. Essentially, it confirms that the goods were produced in South Korea or the United States and qualify for preferential treatment under the KORUS FTA.
Why is a Certificate of Origin crucial under the KORUS FTA?
A Certificate of Origin is essential to ensure that the goods being imported and exported between the two countries benefit from the agreement`s benefits. It also helps in avoiding hefty tariffs and increased customs regulations. Without a Certificate of Origin, the goods may not qualify for preferential treatment, leading to more time and money spent on customs duties and compliance.
How to obtain a Certificate of Origin
To obtain a Certificate of Origin, the exporter must provide documentation to prove that the goods meet the origin criteria. This may include a statement from the manufacturer, an invoice or packing list, and a bill of lading.
To qualify for preferential treatment under the KORUS FTA, goods must meet the origin criterion. Generally, goods that are wholly obtained or produced in either South Korea or the United States qualify for preferential treatment. Alternatively, goods that have been substantially transformed in either country also qualify.
In conclusion, the Certificate of Origin is a crucial document for companies who trade under the KORUS FTA. It confirms that the goods being exported meet the criteria set under the agreement, qualifying them for preferential treatment. This document can help companies save time and money on customs duties and compliance, making it essential in international trade.