U.S.-Korea Free Trade Agreement
Rules of Origin
Step 1: Determine your product’s classification
Determining your product’s classification can be a multi-step process in itself. The simplest, most definitive way is to request an advance ruling from the Korean Customs Authority – however, this may incur additional costs and can take up to 90 days for Korean Customs to make a determination after the full application has been received. Provided here are a series of steps that should get you reasonably close.
The first step is to look up your U.S. Schedule B classification. This serves two purposes. The first is that it may be required on your export documentation. Secondly, the initial six-digits (referred to as the HS Code) will tend to be, if not the same, in the same neighborhood as your product’s classification in the Korean tariff schedule and its listing in the KORUS Rules of Origin Annex. Since HS Codes are largely standardized from country-to-country, identifying your product’s HS Code under the U.S. Schedule B puts you well on the path to finding your product’s classification in Korea. However, despite this standardization, it is ultimately up to the Korean Customs Service to determine how your product will be classified. For example, what would be the classification of a security device that combines a flashlight, pepper spray and an alarm? The U.S. Customs Service classified this as a flashlight, but the Korean Customs Service might view it as an alarm.
To find your Schedule B classification, we recommend starting with the U.S. Census Bureau’s Schedule B database. This plain language tool, where you can enter “laptop” instead of “portable digital automated data processing machine”, helps you discover the probable U.S. Schedule B for your product.
Example: The U.S. Schedule B classification for laptop computers is 8471.30.0100. The first six digits of the Schedule B is the HS Code. For laptops the HS code is 8471.30. To learn more about product classification, including a video on using Schedule B, visit Tariff and Import Fees.
Enter the first six-digits of your product’s U.S. Schedule B classification (the HS Code), into the FTA Tariff Tool with “FTA Partner” set to “Korea”. This will pull up all the 10-digit tariff subsidiary codes that form part of that six-digit heading, in order. Looking at all the results that start with the same six digits will show you how Korea sub-divides your product’s HS Code when assigning tariff rates. You will need to determine whether your product is likely covered by the product descriptions attached to one of those tariff lines or, if not elsewhere specified, under the sub-heading catch all of “other”. The 10-digit code in the first column should be your product’s tariff classification in the Korean Harmonized Tariff Schedule. From the results page in the FTA Tariff Tool, click on View Details to see the FTA-negotiated preferential tariff rate (FTA rate) and phase-out schedule for your product. Remember your HS Code too, as that is relevant for determining the appropriate rule of origin for your product.
Tip: At the present time, the FTA Tariff Tool only includes the FTA rates for industrial products. Agricultural and textile and apparel products should be added in the near future. In the meantime, the Customs Info Database or Korean Tariff Schedule, described in Step 2 can provide current FTA rates.
Tip: Sometimes it is helpful to look at an overall Tariff Schedule structure to understand how it is organized. The U.S. tariff schedule can be found here.
Tip: In some cases, your importer or freight forwarder may be able to provide the likely Korean tariff classification for your product, but only the Korean Customs Service can make the definitive determination.
Note: The information presented on this website is meant to serve as a general guide. Only the agreement text and the customs regulations issued to implement the agreement are definitive. For complex issues or where interpretation is required, U.S. exporters should seek legal assistance or an advance ruling from the Korean Customs Service.