CONTENTS
- 1. Customs Consulting | Comprehensive Advice for Import and Export Companies
- 2. Customs Consulting | The Importance of HS Code Classification
- - Advance Classification Ruling Systems by Country
- 3. Customs Consulting | Response Strategy for U.S. Additional Tariff Measures
- - CBP Advance Ruling
- - The Reasonable Care Obligation
- - Preparing for a Focused Assessment (FA)
- - Using the Reconciliation and First Sale Rule Programs
- - Using the FTZ (U.S. Free Trade Zone)
- 4. Customs Consulting | Protection of Taxpayer Rights
- - Pre-Assessment Review and the Appeals System
- 5. Customs Consulting | The Need for Professional Legal Review
1. Customs Consulting | Comprehensive Advice for Import and Export Companies
Customs consulting is tailored legal, tax, and trade advice that helps companies engaged in importing and exporting, or companies affiliated with them, prevent and eliminate in advance the various risks they may face under the Customs Act.
As trade disputes intensify, including the onset of a U.S.-led tariff war and shifts in the global supply chain, each country's trade regulations, the interpretation of HS codes, and rules of origin have grown more complex, so advice from customs attorneys and customs specialists has become essential to maintaining a company's international competitiveness.
The customs consulting that this firm provides is handled primarily by customs attorneys and customs specialists who hold licensed customs broker qualifications.
We provide advice and dispute-response services across all areas that import and export companies may face in practice, including not only the Customs Act but also international trade law, free trade agreements (FTAs), HS code classification, determination of origin, and determination of customs value.
2. Customs Consulting | The Importance of HS Code Classification
HS code classification is the core of customs consulting.
As a rule, HS codes are used internationally in common up to six digits, but the additional digits (8 to 10 digits) vary according to each country's laws, customs, and interests, and import duty rates and clearance requirements vary accordingly.
Because the duty rate applied varies depending on which category a particular product falls under, and because the regulations, quarantine, and origin requirements of each importing country also vary, accurate classification is indispensable.
A company planning to import or export should therefore obtain a preliminary HS code review and an authoritative interpretation from the counterpart country through a customs attorney and a customs specialist, so as to prevent unnecessary additional duties or delays in shipping in and out.
Advance Classification Ruling Systems by Country
Korea : Advance Classification Ruling | -Filed by the exporter/importer, manufacturer, or agent -Submission of product description materials, samples, etc. -60-day processing period, valid until the classification changes |
China : Customs Advance Ruling | -Filed by a foreign trade operator -Filed 3 months before import, attaching the import/export contract, product description materials, etc. -60-day processing period and a 3-year validity period |
United States : Advance Classification Ruling | -Filed by the exporter/importer or agent -Materials such as product description materials and samples attached -30-day processing period; validity period varies case by case |
Japan : Advance Classification Instruction | -Filed by the exporter/importer or agent -Filed in writing with product description materials and samples attached -30-day processing period and a 3-year validity period |
3. Customs Consulting | Response Strategy for U.S. Additional Tariff Measures
The United States imposes high additional tariffs on steel and aluminum products on grounds such as the Trade Expansion Act.
Accordingly, when a Korean company exports steel, aluminum, and the like to the United States, the following responses are needed.
When clearing imports through U.S. customs, the declaration of taxes, duties, fees, and the like for the imported goods should include the following information.
- Importer and customs broker information
- Country of origin and HS code
- Tax and duty calculation (steel products: 9903.80.01 / aluminum products: 9903.85.01)
- Price and quantity of the imported goods
- Shipping information (mode of transport, point of departure, destination, etc.)
If the classification or customs value is entered incorrectly by mistake, risks such as high tariffs, customs investigations, and fines may arise, so the declaration must be made clearly.
This firm provides the following customs consulting.
CBP Advance Ruling
U.S. Customs and Border Protection (CBP) uses advance rulings to clarify the application of duties, streamline import procedures, and ensure regulatory compliance.
[Advance Ruling Application Items]
Even a finished product manufactured from Korean raw materials may, under the U.S. 'substantial transformation' standard, be determined to be non-originating (Chinese).
It is therefore necessary to clarify the country of origin in advance through a CBP advance ruling.
The Reasonable Care Obligation
CBP requires importers to exercise reasonable care (Reasonable Care).
This requires import and export companies to make sufficient efforts on their own to comply with the customs laws, and neglecting it may make a company subject to civil and criminal penalties and further investigation.
[Reasonable Care Review Items]
Preparing for a Focused Assessment (FA)
Through a risk-based audit procedure called the FA (Focused Assessment), CBP reviews the adequacy of a company's import control system and duty payments.
[FA Stages]
- Pre-Assessment Survey(PAS): preliminary survey
- Main Audit: main review (evaluation of the internal control system)
- Corrective Action: order to remedy deficiencies
In preparation for this, companies should maintain a Reasonable Care standard through thorough recordkeeping, strengthened internal rules, and ongoing consulting from customs experts.
Using the Reconciliation and First Sale Rule Programs
Reconciliation is a CBP special program that allows items not finalized at the time of the import declaration (such as customs value and country of origin) to be corrected and supplemented in a later declaration.
Through this, customs declarations can be adjusted to match the actual transaction conditions, which mitigates risk and improves the ability to respond to an audit.
The First Sale Rule is a program that allows the first transaction price, rather than the intermediate transaction price, to be recognized as the customs value in a manufacturer→middleman→final importer structure, thereby reducing duties.
Securing documents that can prove the independence and transparency of the transaction is indispensable, and it is necessary to review the structure in advance and prepare supporting evidence in collaboration with a customs attorney.
Using the FTZ (U.S. Free Trade Zone)
The U.S. FTZ (Foreign-Trade Zone) is a special area where duties are deferred or exempted.
By moving into an FTZ, a company can make logistics, processing, assembly, and the like more efficient and can expect cost savings.
FTZs established at major ports and airports such as New York, LA, and Chicago are a useful strategy for optimizing the supply chains of global manufacturing and logistics companies.
In addition, through measures such as an Exclusion Request for duty exemption, we can work with U.S. customers to help apply for duty exemption by submitting evidence that a substitute product cannot be produced within the United States.
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4. Customs Consulting | Protection of Taxpayer Rights
If you have faced an unfair situation during a customs investigation, you can pursue procedures to protect and restore your rights through customs consulting.
Pre-Assessment Review and the Appeals System
Through customs consulting, you can pursue the pre-assessment review system as well as step-by-step appeal procedures such as a request for review and administrative litigation.
The pre-assessment review system is a system that allows a taxpayer who has received advance notice of assessment to contest the legality of the assessment beforehand and prevent an unjust tax payment.
- Period to file: within 30 days from the date of notice
- Deadline for decision: the head of the customs office decides within 30 days after deliberation by the Customs Review Committee
- Effect of the decision: the same binding force as a decision on an objection or a request for review
Even afterward, you can seek relief by filing a request for review, a request for adjudication, a request for review by the Board of Audit and Inspection, administrative litigation, and the like.
Depending on the circumstances, a company should obtain customs consulting and choose the best means of response.
5. Customs Consulting | The Need for Professional Legal Review
Through customs consulting, you can review risks and respond after the fact to customs disputes by means of HS code classification, CBP advance rulings, Reasonable Care compliance, FA audit responses, FTZ strategy, duty exemption applications, and the like.
In particular, a taxpayer undergoing a customs investigation has rights protected by law, so if you have received a disposition that is hard to accept, you should begin relief procedures right away.
This firm forms a task force of customs attorneys and customs specialists to safeguard the rights and interests of companies.
If you would like advice that covers the stable customs clearance and cost efficiency of import and export companies, as well as ways to reduce duties and strengthen corporate competitiveness, please leave a legal consultation request with this firm.
[Other Customs Consulting Advisory Areas]
Review of import/export contract conclusion | - Detailed guidance on the types of trade contracts and the methods of conclusion by type - Clarification of which party bears the costs and responsibilities under the standard trade terms - Review of the basic conditions for concluding a trade contract (quality, quantity, price, packing, shipment, insurance, etc.) - Review of trade dispute resolution clauses (force majeure, claims, arbitration, jurisdiction clauses, governing law clauses, etc.) - Review of special terms by trade contract, such as exclusive supply agreements |
FTA origin compliance | - Review of certificate of origin requirements - Review of whether the procedure for applying preferential tariffs is appropriate - Response to customs voluntary origin checks - Specialized response to origin verification by the customs of the importing country |
Response to global export controls on strategic items | - Review of whether items are subject to U.S. export control regulations (EAR) - Review of whether items are subject to the Entity List, SDN List, etc. - Representation in specialized determination of strategic (dual-use) items - Representation in specialized determination of items subject to situational permits - Review of whether items are subject to brokering permits |
Comprehensive import/export clearance advice | - Review of import/export contracts and classification (HS code) - Review of customs valuation, including additions and deductions related to customs value - Review of whether duty reductions or exemptions, such as re-importation exemption and re-exportation exemption, apply - Review of whether transactions are subject to Article 16 of the Foreign Exchange Transactions Act, such as set-off, third-party payment/receipt, and payment beyond the period - Review of violations of Article 18 of the Foreign Exchange Transactions Act, such as equipment lease transactions, overseas direct investment, and real estate acquisition |
Analysis and diagnosis of non-tariff barriers | - U.S. Customs Clearance Eligibility Service (CCES) - U.S. FDA Red List removal support service - Import/export goods classification service - Support service for overseas certification, labeling, FSVP, and overseas clearance difficulties - Advice on customs-related investigations, reviews, and origin verification - Advice on appeals, requests for adjudication, and litigation |
Other advice | - Country-specific specialized consulting for K-food exports (review of raw materials, testing and analysis, conformity review, etc.) - AEO certification agency service |
