[FTA HONG] Summary of the Korea-United Kingdom(UK) FTA (FTA utilization rate, FTA utilization by industry, and summary of highlights)
The UK already has an FTA with Korea through the Korea-EU FTA, but due to Brexit, the UK left the EU, and the Korea-UK FTA came into effect on January 1, 2021 to maintain existing trade preferences.
“UK” means the United Kingdom of Great Britain and Northern Ireland.
The Korea-UK FTA has very similar rules to the Korea-EU FTA. However, in light of Brexit, there are special rules in areas such as Direct transport to the EU and Cumulation of origin
concerning the definition of ‘originating products’ and methods of administrative cooperation provides that
Article 3 Cumulation of origin 1. Notwithstanding Article 2, products shall be considered as originating in a Party if such products are obtained there, incorporating materials originating in the other Party or in the EU, provided that the working or processing carried out goes beyond the operations referred to in Article 6. It shall not be necessary that such materials have undergone sufficient working or processing*. *Cumulation with the EU as provided for in Article 3 will cease to apply three years after the entry into force of this Agreement. Not later than two years following the date of the entry into force of this Agreement, the Parties shall commence a review of this Article. The Parties shall continue to seek and work towards mutually beneficial and business-friendly rules of origin in the future which facilitate trade between Korea and the UK. 2. Notwithstanding Article 2, working or processing carried out in the EU shall be considered as having been carried out in a Party when the products obtained undergo subsequent working or processing in the Party, provided that the working or processing carried out in the Party goes beyond the operations referred to in Article 61 |
Article 13 Direct transport 1. The preferential treatment provided for under this Agreement applies only to products, satisfying the requirements of this Protocol, which are transported directly between the Parties or through the EU*. However, products constituting one single consignment may be transported through other territories with, should the occasion arise, *In line with the review period referenced in footnote 1 of Article 3, “or through the EU” shall be deemed to be deleted from paragraph 1 of Article 13, three years after the entry into force of this Agreement. trans-shipment or temporary warehousing in such territories, provided that they are not released for free circulation in the country of transit or warehousing and do not undergo operations other than unloading, reloading, or any operation designed to preserve them in good condition. 2. Evidence that the conditions set out in paragraph 1 have been fulfilled shall be supplied to the customs authority, in accordance with the procedures applicable in the importing Party, by the production of: (a) evidence of the circumstances connected with trans-shipment or the storage of the originating products in third countries; (b) a single transport document covering the passage from the exporting Party through the country of transit; or (c) a certificate issued by the customs authorities of the country of transit: (i) giving an exact description of the products; (ii) stating the dates of unloading and reloading of the products and, where applicable, the names of the ships, or the other means of transport used; and (iii) certifying the conditions under which the products remained in the country of transit. |
As of 2022, the export utilization rate of the Korea-UK FTA is 89.3% and the import utilization rate is 63.9%. In terms of FTA utilization by industry, machinery is the highest at 94.9% for exports and minerals and miscellaneous products are the lowest at 0.0%. For imports, machinery has the highest utilization rate of 79.6% and textiles has the lowest utilization rate of 41.1%.
(Unit: Thousands of dollars)
Category | FTA | total amount | FTA preference eligible exports and imports | Apply actual FTA preferential tariffs | utilization rate(%) |
amount | amount | ||||
Export | Korea-UK FTA | 6,341,108 | 3,372,074 | 3,010,324 | 89.3 |
Import | 1,032,283 | 290,472 | 200,038 | 68.9 |
A brief summary of the provisions of the Korea-UK FTA related to trade in goods is as follows. However, it is intended as a guide only and companies should refer to the Agreement for the exact Agreement-specific interpretation.
Category | Contents | |
into force date | 2021. 01. 01. | |
Agreement other party | “UK” means the United Kingdom of Great Britain and Northern Ireland. | |
Certificate of Origin | Issuing Modality C/O | Self - Issued |
Issuer | Exporter, Approved Exporter | |
Government Authorities | - | |
Form of Certificate | Invoice Declaration (invoice, a delivery note or any other commercial document) | |
Validity Period (yrs) | 1 | |
Submission Exemption | Case 1: Products sent as small packages from private persons to private persons (a) 1,000 US dollar(USD) for importation into Korea (b) 500 euro for importation into the UK Case 2: forming part of a traveller’s personal luggage (a) 1,000 US dollar(USD) for importation in Korea (b) 1,200 euro for importation into the UK | |
Value- Content Rule | Requirement | MC |
Product Price | Ex-works Price | |
Calculation Modality | - | |
Origin Verification | verification method | Indirect verification Request to the customs authority of the exporting party (The customs authority of the importing party is allowed to join the inquires.) (in exceptional cases)) |
Replied within | 10 months | |
Replied by | Customs authority | |
It is important to have the status of a Approved Exporter(AEX) for the Korea-UK FTA. This is because only Approved Exporter can utilize the Korea-UK FTA for exports over €6,000.
concerning the definition of ‘originating products’ and methods of administrative cooperation provides that
Article 16 Conditions for making out an origin declaration 1. An origin declaration as referred to in Article 15.1 of this Protocol may be made out: (a) by an approved exporter within the meaning of Article 17; or (b) by any exporter for any consignment consisting of one or more packages containing originating products whose total value does not exceed 6,000 euros. |
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