Version: 1.0.20.21 (2020-10-12 14:45)

EU-South Korea Free Trade Agreement

Since 2011, the EU and South Korea trade agreement has eliminated customs duties on nearly all products. It has also removed many other obstacles to exporting EU products, such as automobiles, pharmaceuticals, electronics and chemicals. Many services between the EU and South Korea have also been opened up for investors and for businesses to trade.

The agreement at a glance

Since 2011, the EU-South Korea trade agreement has eliminated customs duties on nearly all products (98.7%), including fisheries and agricultural products. It has also removed non-tariff barriers (NTB) to the exports of key EU products to South Korea, such as automobiles, pharmaceuticals, electronics and chemicals. Not the least, services markets in both the EU and South Korea have largely opened to businesses and investors from each other.

 

In the first five years of the agreement, EU exports to South Korea increased by 55%, European companies saved €2.8 billion in reduced customs duties, and trade in goods between the EU and South Korea reached a record level of over €90 billion.

The agreement

  • removes tariffs and other trade barriers and makes it easier for companies on both sides to export and import
  • simplifies paperwork and streamlines technical regulations, customs procedures, rules of origin and product testing requirements
  • boosts trade services in key sectors such as telecommunications, environmental services, shipping, and financial and legal services
  • improves the protection of intellectual property rights in South Korea and recognises a large variety of geographical indications for high-quality European food products on the Korean market
  • allows your company to bid for public procurement tenders in South Korea
  • offers better protection for your bilateral investments

 

Quick facts on EU-South Korea trade

  • South Korea is the EU's eighth-largest export destination for goods, and the EU is South Korea's third-largest export market
  • the most significant product exports from the EU to South Korea are machinery and appliances, transport equipment, and chemical products
  • the EU has a significant trade in services with South Korea
  • the EU is South Korea's biggest foreign direct investor

Who can export from the EU under the EU-South Korea free trade agreement?

If your company is registered in an EU Member State and you have acquired a valid customs declaration – and where necessary, an export licence – you can export under this agreement.

Tariffs

The EU-South Korea free trade agreement eliminates 98.7% of tariffs on trade in goods.

Here are some of the benefits for EU exporters

  • machinery and appliances enjoy the largest duty savings, with gains close to €450 million
  • the chemical sector is the second-largest beneficiary, with duty savings of €175 million
  • nearly all EU agricultural exports, such as pork, wine and whiskey, enjoy duty-free access to the South Korean market, and there are valuable duty-free quotas for products like cheese
  • in other industrial sectors
    • 93% of customs duties on textiles exports have disappeared
    • for glass 85% of customs duties have been eliminated
    • for leather and fur 84%
    • footwear 95%
    • iron and steel 93%
    • optical instruments 91%

 

Find the tariff rate applicable to your product in My Trade Assistant.

Rules of origin

This section introduces the main rules of origin and the origin procedures of the trade agreement.

Origin is the 'economic nationality' of traded goods. If you are new to the topic, you can find an introduction to the main concepts in the goods section.

Rules of origin

Your product needs to comply with certain rules that prove its origin in order to qualify for the preferential rate.

Where can I find the rules?

Rules of origin are set out in the Protocol concerning the definition of ‘originating products’ and method of administrative cooperation of the EU-South Korea free trade agreement (OJ L127, 14.5.2011, p. 1,344).

Does my product originate in the EU or South Korea?

For your product to qualify for the lower or zero preferential tariff under the EU-South Korea free trade agreement, it must originate in the EU or South Korea. A product is considered to originate in the EU or in South Korea if it is

See Annex I ‘Introductory notes’ to product-specific rules of origin.

See Annex IIa for alternative product-specific rules for certain products.

 

You can find the specific rules for your product in My Trade Assistant.

 

Examples of the main types of product specific rules in EU trade agreements

The product also needs to fulfil all other applicable requirements specified in the Chapter (for example insufficient working or processing, the direct transport rule). There are also some additional flexibilities that that will help you comply with product specific rules (for example tolerance or cumulation).

Tips to help you comply with the product specific rules

Additional flexibility is foreseen to help you comply with product specific rules, such as tolerance or cumulation.

Tolerance

The tolerance rule allows producers to use non-originating materials worth up to 10% of the ex-works price that are normally prohibited by the product-specific rule

Cumulation

The agreement also allows for bilateral cumulation. Materials originating in South Korea can be counted as originating in the EU when used in the manufacture of a product in the EU and vice versa.

Other requirements

Your product must also meet all other applicable requirements of the Protocol (such as insufficient working or processing, or the direct transport rule).

Direct transport rule

Originating products must be transported from the EU to South Korea (and vice-versa) without being further processed in a third country.

Trans-shipment or temporary warehousing in a third country is allowed, if the products remain under customs surveillance and do not undergo operations other than

  • unloading
  • reloading
  • any other operation designed to preserve products in good condition

Evidence of the direct transport must be brought to the customs authorities of the importing country.

Duty drawback

Under the EU-Korea free trade agreement, it is possible to get a refund on duties previously paid on non-originating materials used to produce a product that is exported under a preferential tariff.

A special mechanism is included to address potential increase in foreign sourcing by Korean manufacturers.

Origin procedures

Exporters and importers have to follow the origin procedures. The procedures are set out in Section B of the Protocol on Rules of Origin of the agreement. They clarify, for example, how

  • to declare the origin of a product
  • to claim preferences
  • the customs authorities can verify the origin of a product

How to claim a preferential tariff

Section B of the Protocol on rules of origin of the agreement sets out the origin procedures related to a claim for preferential tariff and the verification by customs authorities.

Importers can claim preferential tariff treatment based on an origin declaration provided by the exporter.

Origin declaration

No proof of origin is required when the total value of the products does not exceed

  • for import to the EU €500 in case of small packages or €1,200 for personal luggage
  • for import to Korea $1,000 in case of small packages or $1,000 for personal luggage
Self-declaration by the exporter

Exporters can self-declare that their product originates in the EU or South Korea by filling an origin declaration. The declaration can be filled out

The origin declaration cannot be issued by an authorised body and a EUR.1 form will not be accepted as a proof of origin.

Approved exporters

The customs authorities of the exporting country may authorise any exporter who exports products under the trade agreement to make origin declarations for products regardless of their value. The exporter must provide sufficient guarantees to the customs authorities that the originating status of the products and the fulfillment of all the other requirements of the agreement (Protocol) can be verified. The customs authorities can withdraw the approved exporter status in the event of any abuse.

What should the origin declaration contain?
  • to make an origin declaration you should type, stamp or print the following declaration on the invoice, the delivery note or another commercial document: “The exporter of the products covered by this document (customs authorisation No ...) declares that, except where otherwise clearly indicated, these products are of ... preferential origin”
  • the origin declaration can be made in any of the official languages of the EU or in Korean and can be found in Annex III)
  • you must sign your origin declaration by hand. If you are an approved exporter, you are exempted from this requirement provided you give your customs authorities a written undertaking that you accept full responsibility for any declaration identifying you
Submission and validity
  • an origin declaration may be made by the exporter when the products to which it relates are exported, or after export on condition that it is presented in the importing Party no longer than two years or the period specified in the legislation of the importing Party after the products to which it relates have been imported
  • you should be prepared to submit documents proving the originating status of your products together with your origin declaration
  • the origin declaration remains valid for 12 months from the date of issue

Verification of origin

The customs authorities may verify whether a product imported is indeed originating or fulfils other origin requirements. The EU-South Korea Free Trade Agreement is based on the following principles

  • verification is based on administrative cooperation between customs authorities of the importing and the exporting Party
  • checks on the origin of the products are done by local customs. Visits of the importing Party to the exporter are not allowed, except as provided in Article 27 paragraph 8 of the Protocol.
  • the authorities of the exporting Party make the final determination of origin and inform of the results the authorities of the importing Party

Product requirements

The EU and South Korea now cooperate on technical regulations, setting standards and conformity assessments to make it easier for you to trade internationally. This will ensure that you do not waste money and/or time on duplicate or multiple procedures.

You will need to follow these rules so that your products can be evaluated for conformity with the necessary technical standards.

The EU-South Korea trade agreement includes four sector-specific rules on

  • electrical and electronic equipment
  • pharmaceutical products/medical devices
  • motor vehicles and parts
  • chemicals

Electrical and electronic equipment

You can now benefit from better recognition of international standards and approval procedures for products in the electronics industry. This will help you enter global supply chains and grow your business.

Before the agreement, EU exporters of consumer electronics and household appliances to South Korea were required to carry out duplicative and expensive testing and certification procedures in South Korea to sell their products. Now, however, you are able to enjoy an improved regulatory environment for your products.

The EU-South Korea trade agreement reduces differences between requirements for European and South Korean products by adopting the same international standards. The relevant international standards bodies for this sector include

It eliminates the need for certification by an independent organisation.

  • in most cases, you only need a ‘supplier‘s declaration of conformity’ to prove compliance with South Korean requirements regarding electromagnetic compatibility (EMC) and safety
  • this reduces business costs, complexity and the administrative burden. It allows your products to enjoy the same treatment in South Korea that South Korean products get when they come into the EU
  • if the supplier’s declaration of conformity has to be accompanied by test reports, these can be issued by an EU testing laboratory

On electrical safety, South Korea has the option to continue requesting third-party certification for a limited list of 53 items, if it can justify that they pose a risk to human health and safety. These are set out in the trade agreement under Annex 2-B, Appendix 2-B-3.

You can find more information on exporting electrical and electronics equipment here.

 

The specific electrical and electronics products covered by the agreement and their related provisions can be found in Annex 2-B Electronics and its Appendixes.

Pharmaceutical products and medical devices

Under the EU-South Korea free trade agreement, all rules relating to pharmaceutical products and medical devices must be published at an early stage, to give businesses enough time to understand them.

South Korea now recognises international standards and practices more widely. There is now a common definition of pharmaceutical products and medical devices in the EU and South Korea.

 

You can read about the pharmaceutical products and medical devices covered by the agreement here: Annex 2-D Pharmaceutical Products and Medical Devices.

The EU and South Korea have agreed to

  • make rules available in advance
  • provide reasonable opportunities for comments
  • address in writing important issues raised in the comments
  • allow a reasonable interval between the publication of rules and their entry into force

For pricing and reimbursement, both sides have agreed to ensure that

  • procedures, rules, criteria and implementing guidelines are fair, transparent and reasonable, and do not discriminate against EU companies
  • criteria for decision-making are objective and clear for EU manufacturers
  • all rules are made publicly available

Motor vehicles

 

EU manufacturers no longer have to produce cars specifically for the South Korean market or conduct expensive tests to demonstrate compliance with safety standards.

South Korea now accepts UNECE international standards or EU standards as equivalent to all major South Korean technical regulations. If your vehicles comply with these standards, your product does not need to meet any additional requirements to export under the EU-South Korea trade agreement.

Tests conducted in the EU are now recognised by South Korea. South Korea will also recognise EU On-Board Diagnostic Devices that conform to the Euro 6 norm as equivalent to South Korean standards.

You can read more about emission standards here.

 

Detailed provisions on motor vehicles and parts covered by the agreement can be found under Annex 2-C Motor Vehicles and Parts and its Appendixes.

Chemicals

The trade agreement preserves EU rules and regulations in the chemical sector and introduces cooperation on regulatory transparency in areas such as

  • Good Laboratory Practice
  • a quality system of management controls for research laboratories and organisations regarding chemical (including pharmaceuticals) non-clinical safety tests
  • Test Guidelines to seek a more harmonised approach to chemical assessment and management

 

You can read about the chemicals covered by the agreement here: Annex 2-E Chemicals .

Contacts for technical rules and standards in South Korea

The Korean Agency for Technology and Standards (KATS) sets and maintains South Korean standards

  • related to established certifications, such as the Korean Certification (KC) mark
  • measurement and reference standards
  • technical regulations.

The Korean Register of Shipping and the Ministry of Oceans and Fisheries set marine equipment standards.

Human, animal and plant health - SPS requirements

EU and South Korea cooperate on recognising disease-free areas to increase predictability for you as an exporter.

The Ministry of Agriculture, Food and Rural Affairs (MAFRA) is responsible for veterinary controls of

  • live animals
  • animal products

The Animal and Plant Quarantine Agency is the relevant authority for pest risk analysis for designated plants.

The national Biosafety Clearing House in South Korea provides information and expertise on genetically modified organisms and serves as a place to exchange such information.

The Ministry of Foreign Affairs is the Official Contact Point for inquiries regarding

  • nature protection
  • prohibitions or restrictions on toxic chemicals


Find the specific rules and requirements for your product in My Trade Assistant.

Contacts for Sanitary/Phytosanitary Requirements (SPS)

Technical barriers to trade

Although technical rules are important, at times they can act as a barrier to international trade and can thus be a considerable burden for you as an exporter.

  • if you think you are facing a trade barrier that slows your business down or prevents you from exporting, you can tell us
  • report what is stopping your exports to the South Korea using the online form and the EU will analyse your situation and take appropriate action

Report a trade barrier 

Customs clearance documents and procedures

The agreement ensures more transparent and simplified customs procedures to facilitate trade and reduce costs for businesses.

Documents

The step-by-step guides describe the different types of documents you should prepare for the customs clearance of your products.

Depending on your product, the customs authorities may require all or some of the elements below

  • entry declaration
  • customs import declaration
  • declaration of customs value
  • commercial invoice (find the specific requirements regarding its form and content in My Trade Assistant)
  • packing list
  • import licences for certain goods
  • certificates showing your product complies with mandatory product regulations, such as health and safety requirements, labelling and packaging
  • proof of origin - origin declaration
  • air waybill
  • bill of lading

For more certainty, you may also wish to apply for Binding Tariff Information , and/or Binding Origin Information in advance.

 

For detailed information about the documents you need to present for customs clearance for your product, go to My Trade Assistant .

Procedures for proving and verification of origin

For a description of how to prove the origin of your products to claim a preferential tariff and of the rules relating to the verification of origin by customs authorities, please refer to the section on rules of origin above.

For information on customs procedure for import and export in general, visit DG Taxation and Customs Union.

Trade facilitation

The EU and South Korea have agreed to

  • simplify and streamline border procedures
  • harmonise documentation and data requirements
  • improve the security of shipping containers and other shipments when
    • imported into
    • trans-shipped through
    • transiting South Korea or EU countries

The agreement sets up a Customs Committee that can discuss and resolve any differences on customs and trade facilitation matters, including

  • tariff classification
  • origin of goods
  • mutual administrative assistance in customs matters

 

Find the specific customs clearance procedures and documents for your product in My Trade Assistant.

Intellectual Property and Geographical Indications

The EU-South Korea free trade agreement promotes strong enforcement of intellectual property rights by customs authorities and complements the minimum standards in the WTO`s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

You can read more about the benefits of IP rights here.

  • the agreement protects an author’s work for 70 years after the death of the author
  • performers and producers of phonograms have an additional right to a single equitable remuneration
  • companies can extend patent protection for pharmaceuticals by using Supplementary Protection Certificates
  • there is a particular focus on counterfeit goods

You can read more about how the EU-South Korea free trade agreement protects your intellectual property rights here.

The European IPR Helpdesk offers a Helpline service for direct support on intellectual property.

Trademarks

The trade agreement provides clear rules for registering trademarks in the EU and South Korea. This gives you the opportunity to oppose the registration of a trademark.

A public electronic database of applications and registrations is available for you to check trademarks. The database also details the rights given to registered and unregistered designs.

Infringements

What to do if intellectual property is used without permission?

The trade agreement details enforcement measures in case of IPR infringements such as

  • civil and administrative proceedings
  • criminal procedures
  • penalties

It includes some stronger protections on copyright and designs and enforces IP rights based on EU rules (complementing the WTO TRIPS Agreement)

Customs officials can intervene at the border if they suspect that goods infringing an intellectual property right are being imported or exported.

Geographical Indications 

The EU-South Korea trade agreement protects European Geographical Indications (GIs) for

  • wines and spirits
  • agricultural products and foodstuffs

The EU has protected about 160 GIs that it sees as the most commercially important.

The agreement lists the GIs that are covered in two attachments.

Wines and spirits are covered in Annex 10-B of the agreement, and include for example:

Champagne, Grappa, Ribera del Duero, Ouzo and Scotch or Irish Whiskey.

Agricultural products and foodstuffs are covered in Annex 10-A of the agreement, and include:

Parmigiano Reggiano, Prosciutto di Parma, Roquefort, Guijuelo, Turrón de Alicante and Bayerisches Bier.

 

The Geographical Indications are protected against

  • describing or presenting a product to suggest that it originates in a geographical area other than the true place of origin, in a misleading way
  • using a geographical indication for a similar product not originating there, even if the true origin of the goods is indicated or accompanied by expressions such as ’kind’, ‘style’ or ‘imitation’

Trade in Services

You can benefit from a more open South Korean services market under the trade agreement.

The rules cover

  • cross-border provision of services
  • establishment

This means that you can either provide your services from an EU country or establish an office, branch or subsidiary in South Korea if you prefer.

These benefits apply to EU companies in more than 100 services sectors, including

Telecommunications

  • EU satellite operators (telephone and TV) can operate directly cross-border into South Korea, without having to liaise with or go through a South Korean operator

Environmental services

  • treatment of non-industrial wastewater (sewage services).

Transport

  • EU shipping companies are able to provide international shipping services in South Korea and are treated the same as South Korean companies when using port services and infrastructure
  • European companies can also provide a wider range of auxiliary maritime services
  • there are more opportunities for auxiliary air transport services such as ground handling

Construction

  • EU companies are no longer subject to obligatory subcontracting requirements

Financial

  • EU financial companies can provide more services to South Korea’s financial markets
  • EU financial companies can transfer data freely from branches and affiliates in South Korea to their EU headquarters

Postal and express delivery

  • EU companies can provide international express delivery services in South Korea

Business and professional services such as legal, accounting, engineering and architectural services

  • EU law firms can open offices in South Korea to advise foreign or South Korean clients on non-South Korean law
  • EU law firms can form partnerships with South Korean firms and recruit South Korean lawyers to provide ‘multijurisdictional’ services
  • EU lawyers can use the job titles they use in the EU

Services not covered by the agreement

  • audio-visual services
  • domestic maritime transport
  • most air transport
  • services supplied in the exercise of governmental authority

List of South Korea’s specific commitments to open up its services market to EU companies.

Public procurement

Interested in tendering for government contracts for supplies, services or construction works in South Korea?

The EU-South Korea trade agreement provides you with better opportunities to bid for South Korean government procurement contracts.

South Korea and the EU had already agreed to open up bidding for public procurement contracts to foreign companies under the WTO Government Procurement Agreement (GPA).

The EU-South Korea trade agreement expands the contracts for which you can compete. In South Korea, EU firms can now bid for ‘build-operate-transfer’ (BOT) contracts (concession services). If your business is an EU construction and service supplier, you can compete for big infrastructure projects in South Korea, such as building and operating highways.

Contacts for public procurement

Investment

The agreement covers investment in both services and other economic activities, including

  • agriculture
  • forestry
  • mining
  • manufacturing
  • energy

Competition laws

The EU and South Korea have agreed to enforce strong competition laws.

The agreement deals with unfair and anti-competitive business practices effectively, including

  • cartels
  • abusive behaviour by companies with a dominant market position
  • anti-competitive mergers and acquisitions

The agreement ensures that competition rules also apply to state-controlled companies or enterprises and forbids certain types of subsidies seen as particularly harmful to competition

  • subsidies covering debts of an enterprise without any limitation or duration
  • subsidies to failing enterprises, without a credible restructuring plan to return them to long-term viability without further reliance on state support

Additionally, the trade agreement requires subsidies to be transparent. If either the EU or South Korea use any subsidies, they have to report the total amount, type and supply of the subsidies every year.

These subsidy rules apply to all products, except agriculture and fisheries.

Trade and Sustainable Development

The EU and South Korea have agreed on high labour and environmental standards that protect workers and the environment. The agreement sets up mechanisms to make sure these commitments are met, including through involving civil society.

Labour

Environment

The EU and South Korea agreed to strong monitoring mechanisms that include public scrutiny. This means you have more information and there are places to raise concerns on labour and environmental issues that affect your business in South Korea.

Links, contacts and documents

Customs agencies, government representatives, chambers of commerce and business associations

Contacts for Sanitary/Phytosanitary Requirements (SPS)

Contacts for public procurement

Customs agencies, government representatives, chambers of commerce and business associations

Korea Customs Service

Korea Customs Service Building 1, Government Complex-Daejeon, 189 Cheongsa-ro, Seo-gu, Daejeon, 35208, KOREA

Web: https://www.customs.go.kr/kcs/main.do

World Customs Organisation

Web: http://www.wcoomd.org/en/about-us/what-is-the-wco.aspx

Delegation of the European Union to the Republic of Korea

Delegation of the European Union to the Republic of Korea 11th Floor, Seoul Square, 416 Hangang-daero, Jung-gu Seoul, 04637, KOREA

Tel.: +82 23704 1700

E-mail: Delegation-rep-of-Korea@eeas.europa.eu

Embassy of the Republic of Korea to the Kingdom of Belgium and the European Union

Embassy of the Republic of Korea to the Kingdom of Belgium and the European Union Chaussee de la Hulpe 173-175, 1170 Brussels (Watermael-Boitsfort), BELGIUM

Tel.: + 32 2675 5777

Fax: + 32 2675 5221 / +32 2662 2305

E-mail: eukorea@mofa.go.kr

Korea International Trade Association (KITA)

KITA 511, Yeongdongdae-ro, Gangnam-gu, Seoul, KOREA

Tel.: +82 1566 5114

Korea Trade-Investment Promotion Agency (KOTRA)

KOTRA (06792) 13, Heolleung-ro, Seocho-gu, Seoul, KOREA

Tel.: +82 1600 7119

BuyKOREA

Tel.: +82 23460 7432

Fax: +82 23460 7958

E-mail: buykorea@kotra.or.kr

EU4Business

EU4Business Secretariat De Kleetlaan 2, B-1831 Diegem BELGIUM Tel: +32 2749 1851 Email: secretariat@eu4business.eu

Bank of Korea

67, Sejong-daero Jung-gu, Seoul, 04514, KOREA

Tel.: +82 2759 4114

Web: https://www.bok.or.kr/eng/main/contents.do?menuNo=400239

Contacts for Sanitary/Phytosanitary Requirements (SPS)

Ministry of Agriculture, Food and Rural Affairs (MAFRA)

Ministry of Agriculture, Food and Rural Affairs (MAFRA) Government Complex Sejong 94, Dasom 2-ro KR-339012 Sejong City, KOREA

Tel.: +82 2 61969110

Fax: +82 44 8680846

Animal and Plant Quarantine Agency (QIA)

Animal and Plant Quarantine Agency (QIA) 177, Hyeoksin 8-ro Gyeongsangbuk-do KR-39660 Gimcheon-si, KOREA

Tel.: +82 54 9121000, +82 54 9120605, +82 54 9120627

Fax: +82 54 9120635

Ministry for Food and Drug Safety (MFDS)

Ministry for Food and Drug Safety 187, Osongsaengmyeong 2-ro Osong-eup Heungdeok-gu Cheongju-si Chungcheongbuk-do, KOREA [28159]

Tel.: +82-43-719-1564

Korea Research Institute of Bioscience and Biotechnology (KRIBB)

Korea Research Institute of Bioscience and Biotechnology (KRIBB) 125 Gwahangno Yuseong-gu KR-34141 Daejeon, KOREA

Tel: +82 42 8798300

Fax: +82 42 8798309

Official Contact Point (OCP) for toxic chemicals

Ministry of Foreign Affairs 60, Sajik-ro 8-gil Jongno-gu KR-03172 Seoul, KOREA

Tel: +82 2 21002114, +82 2 21007794

Fax: +82 2 21007999, +82 2 21008470

Contacts for public procurement

Public Procurement Service (PPS)

PPS Headquarters; Government Complex Daejeon Building 3, 189, Cheongsa-ro Seo-gu, Daejeon, KOREA

Tel: +82 7005 67470 Fax: +82 505 480 1211

E-mail: ppskorea@korea.kr

Korea Online E-Procurement System (KONEPS)

Web: https://www.pps.go.kr/eng/index.do

Further links

Quick links