[FTA HONG] Summary of the Korea-Israel FTA (FTA utilization rate, FTA utilization by industry, and summary of highlights)
With the signing of the Korea-Israel FTA, Korea became the first country in the Middle East to sign an FTA with Israel, and Israel became the first country in Asia to sign an FTA with Korea.
The Korea-Israel FTA went into effect on December 1, 2022, so there is no data on FTA utilization in 2022.
However, as of the first quarter of 2023, the utilization rate of the Korea-Israel FTA is 50.1% for exports and 43% for imports. In terms of FTA utilization by industry, electronic and electrical products are the highest at 66.8% for exports, while mineral and miscellaneous products are the lowest at 0.0%. For imports, miscellaneous products have the highest utilization rate of 0%, while steel and metal products have the lowest utilization rate of 9.3%.
(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-Israel FTA | 2,418,304 | 469,954 | 235,627 | 50.1 |
Import | 3,730,149 | 59,079,440 | 46,779,326 | 79,2 |
A brief summary of the provisions of the Korea-Israel 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 | 2022. 12. 01. | ||
Agreement other party | Israel | ||
Certificate of Origin | Issuing Modality C/O | Authority – Issued or Self - Issued | |
Issuer | Authority – Issued | Israel(Customs Directorate of the Israel Tax Authority of the Ministry of Finance), Korea (Customs, KCCI) | |
Self - Issued | Approved Exporter or any exporter(where the value of the originating good does not exceed 1,000 US dollars) | ||
Government Authorities | - | ||
Form of Certificate | Authority – Issued | Uniform Certificate | |
Self - Issued | Invoice | ||
Validity Period (yrs) | 1 | ||
Submission Exemption | total value of these goods shall not exceed 1,000 US dollars in the case of small packages or 1,000 US dollars in the case of goods forming part of travellers’ personal luggage | ||
Value- Content Rule | Requirement | MC | |
Product Price | Ex-works Price (any internal taxes which are, or may be, repaid) | ||
Calculation Modality | - | ||
Origin Verification | verification method | Principles : Indirect verification (Request to the customs authority of the exporting Party) Exceptions : Direct verification (If the customs authority of the importing Party is not satisfied with the results provided by the customs authority of the exporting Party, under exceptional circumstances, written requests for additional information, documents or explanations, to the customs authority of the exporting Party or a verification visit to the premises of the exporter or producer in the exporting Party) | |
Replied within | 10 months (indirect) 90 days (direct - written requests for additional information, documents or explanations) | ||
Replied by | the customs authority of the exporting Party (indirect) importer, exporter, or producer (direct) | ||
In the case of the Korea-Israel FTA, unlike other agreements, there may be cases where goods that are currently part of the territory of "Israel" may not be subject to preferential tariffs (when imported into Korea) under the Korea-Israel FTA.
This is because the Korean government has decided not to apply the preferential tariffs to goods originating in areas occupied by Israel since 1967.
[Applicable territory] In accordance with the United Nations (UN) Security Council resolution, the application of the FTA, including preferential tariffs, is excluded to the areas occupied by Israel since 1967. These are the West Bank of the Jordan River and East Jerusalem.
This appears to be a matter of interpretation under international law, as East Jerusalem is not part of Israel under international law, but has been occupied and controlled by Israel since the 1967 War.
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