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International Trade & Customs

"Kim & Chang´s lawyers are at the top of their profession in Korea and have a very deep base
of knowledge concerning trade remedies and customs matters."
– Chambers Asia-Pacific 2019

Overview

For over 40 years, Kim & Chang’s International Trade & Customs Practice has acquired an unparalleled level of experience in Korea.  

The scope of our international trade and customs experience ranges from legal issues arising under the WTO Agreement, FTAs, the Korean Customs Duties Law, the FTA Implementation Act, the Foreign Exchange Transactions Law, to other customs- and trade-related treaties, laws, and regulations. 

Our practice has earned the reputation as the leading Korean law firm assisting companies in developing and executing strategies to ensure market access, and to minimize international trade-related risks.  We represent companies in a wide variety of industries on customs and trade matters.  In bilateral and multilateral settings, we also provide legal advice to the Korean government in negotiations and dispute resolution proceedings.

Rich Pool of Specialists

Kim & Chang’s International Trade & Customs professionals are unmatched in the scope and depth of our experience and expertise.  Our practice consists of over 90 experienced professionals, including attorneys, certified public accountants, certified customs brokers, and former high-ranking government officials.  Using a task force approach, our professionals work together to advise our Korean and international clients, both in Korea and overseas. 

Extensive Experience in Customs and International Trade Matters

Over four decades, our practice has acquired extensive experience in handling numerous cases involving customs and international trade issues.  Since 2000, we have represented clients in more than 2,000 cases in all areas of customs and trade law practice, including customs audits, customs valuation, classification, ACVAs, import and export clearance, administrative and judiciary appeals, free trade agreements, trade remedies, customs criminal defense, import and export controls, compliance, WTO/FTA dispute settlement, and statutory implementation and amendments to legislation and regulations. 

Fully Integrated Service

Our International Trade & Customs professionals possess a deep and nuanced understanding of the complexities and challenges confronting our clients.  We take great pride in our ability to deliver comprehensive legal solutions by forming form uniquely tailored response teams, comprised of professionals with the right subject matter and industry expertise.

Key Servicesshow

Audit Defense
  • Customs Valuation: Customs valuation refers to the appraisal of the dutiable value on of imports administered by the Korea Customs Service (KCS), the principal customs authority in Korea, and is often raised as a major point of dispute between taxpayers and the the Korea Customs Service (“KCS”) KCS during customs audits.  Our practice has acquired exceptional experience in customs valuation through our advisory work in representing numerous clients in the customs audit and appeal process. 

  • ACVA: The Advance Customs Valuation Arrangement (ACVA) system allows companies to seek advance review and approval from the KCS regarding the customs valuation of goods.  Our practice represented the KCS, and through the representation, directly participated in the process to design and implement legislation to establish the ACVA system.  The creation of the ACVA system has been praised for its benefits to importers, and for improving Korean customs administration.  Since the launch of the ACVA system, our practice has advised companies on the majority of successful ACVA applications.

  • Customs Classification: The KCS administers the customs classification of imported and exported goods in accordance with the Harmonized Commodity Description and Coding System.  Accurate customs classification by companies results in the application of the appropriate duty rate, and minimizes potential risks of later impositions of penalties, and even criminal prosecution for customs evasion or smuggling.  In this field, our classification specialists work closely with our firm’s patent attorneys with appropriate industry expertise to provide our clients with comprehensive legal advice, including applications for advance rulings. 

  • Duty Drawback: While exporters need to make proper use of duty drawbacks to maintain price competiveness, exporters must also exercise caution to avoid penalty impositions and even customs evasion criminal charges for excessive duty drawbacks.  Our practice has provided exporters extensive advice regarding duty drawbacks, including on the method of calculating estimated drawbacks, and the filing of applications for drawbacks.

 

FTA Origin Verification

Korea has entered into free trade agreements (FTA) with 49 countries, and FTAs with four countries, including China, are currently pending ratification.  Importers and exporters should undertake a careful review of the different provisions of each FTA,  and also evaluate how each country administers the standards set forth in the applicable FTA on how the origin of goods is determined and verified.  Our practice has extensive experience in the origin verification process and is able to provide our clients with outstanding legal service in this field.

 

Customs Appeals

Due to the unique and complex nature of customs-related issues, it is crucial for importers to seek and receive assistance from highly skilled legal advisors, when attempting to resolve customs impositions through appeals.  This includes requests to the Committee on the Review of Adequacy of Duty Imposition (“RADI”), as well as , requests to the Tax Tribunal, and administrative court appeals.  In this area, our practice has successfully resolved a great number of cases involving many novel and difficult issues..

 

Investigations 
  • Customs Criminal Defense: “Customs-related crimes” refer to various criminal offenses committed in the course of trade under the Korean Customs and Duty Law (“KCDL”) and the Foreign Trade Law, including smuggling, customs evasion, illegal importation, trade price manipulation, false declarations, and origin marking.  In this area, we have a successful track record in defending clients in numerous cases .

  • F/X Criminal Defense: “Foreign exchange (F/X)-related crimes” include criminal offenses involving payments and receipts using foreign currency, such as offsetting transactions, third party payments and uncollected credit.  Our practice includes former KCS and Bank of Korea officials, as well as attorneys specializing in foreign currency transactions, industry experts, tax attorneys, and certified public accountants.  This depth and breadth of experience and expertise allows us to provide unmatched service in F/X criminal matters to our clients.

  • Individual Export/Import Compliance: Various Korean laws and regulations can be implicated in the import and export of goods.  Depending on the nature of the goods, in addition to the KCDL and the Foreign Trade Act, other laws may apply (e.g., the Pharmaceutical Affairs Act, Medical Device Act, Cosmetics Act, Safety Management of Industrial Products Act, Radio Waves Act, Electrical Appliances Safety Control Act, Food Sanitation Act, Health Functional Food Act, Automobile Management Act, Construction Machinery Management Act, Toxic Chemicals Control Act, and the Control of Livestock and Fish Feed Act).  Both exporters and importers find it difficult to stay well-informed and up-to-date on the relevant information required to comply with all of the licensing, reporting, registration, inspection, verification, confirmation, and recommendation obligations specific to the import and export of individual goods under the various laws and regulations. To avoid compliance breaches in this complicated environment, companies should review the potential issues in advance, and maintain current compliance manuals and guidelines, and conduct employee training.  Our practice, working together with our firm’s other industry and practice experts, is able to provide comprehensive advice on compliance matters. 

 

Other Customs Compliance Matters
  • Free Trade Zones: Companies within free trade zones receive many benefits, such as customs exemptions when importing foreign goods.  They also receive certain corporate and income tax exemptions for business activities conducted within the free trade zones.  In order for companies to enter into a free trade zone, various actions are required to be taken, including submitting foreign investment reports, applying for occupancy permits, leasing business sites and factories, and obtaining purchase and factory construction permits.  Our practice provides our clients with both legal and business advice regarding entering into and operating businesses within free trade zones.

  • Bonded Area Compliance: “Bonded areas,” which are overseen by the customs authorities, impose complex and strict compliance protocols (including carry-in reports and reports of use).  As a result, it is important for importers and exporters to be aware of the requirements, and develop and maintain appropriate and current compliance manuals.  In this area, our practice provides expert advice regarding compliance issues involving bonded areas.  We have assisted our clients in developing compliance programs and manuals, and in providing training sessions.

 

International Trade Issues
  • Trade Remedies: Our practice, comprised of highly experienced trade remedy attorneys, accountants, and advisors, regularly handles all aspects of trade remedy proceedings, including anti-dumping, countervailing duty, and safeguard investigations.  We have a successful record of representing producers, exporters, and importers in prosecuting and defending cases before authorities in Korea, the U.S., the EU, Canada, Australia, Brazil, India, and China, among other countries.  We also advise our clients on evaluating and minimizing the risk of trade remedy actions both in Korea and overseas.

  • Unfair Trade Practices: Recently, additional provisions relating to the protection of patent and design rights have been introduced to the customs laws. We anticipate that disputes regarding such intellectual property rights at the customs clearance stage will increase significantly in the future.  Our practice, working together with our IP attorneys and other specialists within the firm, provides our clients with effective and efficient services regarding unfair trade practice issues.

  • WTO Compliance: The World Trade Organization’s (“WTO”) standards apply not only to the trade in goods, but also to a wide range of other subjects, including various service sectors, foreign investments, and intellectual property rights.  WTO standards also cover a wide variety of topics, including customs valuation, and technical barriers to trade.  Our practice, which is comprised of international trade lawyers, certified public accountants. and former government officials, is uniquely positioned to offer expert and comprehensive advice regarding compliance with WTO standards.

  • FTA Compliance: Through its wide network of FTAs, Korea has become a FTA hub nation.  Korea ratified its first FTA with Chile in April 2004.  Today, Korea has FTAs with 49 countries, including Australia, Canada, the U.S., the EU, ASEAN, India, EFTA, Peru, and most recently Columbia.  In addition, FTAs with four countries, including China, are currently pending ratification.  We assist companies in developing tailored strategies to enjoy all the benefits provided under the various international trade agreements, treaties, and conventions regarding trade in goods and services, investment, intellectual property, environment, energy, labor, and other areas.  Our practice, which includes international trade attorneys as well as former trade and customs officials who have been directly involved in the negotiation and/or implementation of FTAs, is well positioned to provide our clients with unparalleled service in the area of FTA compliance.

Key Experiencesshow

Our International Trade & Customs Practice represents a wide array of clients engaged in diverse industries, including general trading, petroleum, petro-chemicals, shipbuilding, steel, medical devices, pharmaceuticals, alcohol and non-alcohol beverages, food, logistics, automobiles, sporting goods, clothing/apparel/accessories, semiconductors, agricultural products, electronic equipment, home appliances/white goods, optical instruments and industrial machinery.  

 

Based on over four decades of client representation, we have earned a reputation as the leading firm in Korea in the field of international trade and customs.  We are deeply committed to providing the best service to each of our clients.

 

Administrative and Judicial Actions
  • Administrative lawsuit against inclusion of advertising expense related to imports by film distributors in dutiable value

  • Administrative lawsuit against inclusion of royalties paid by a glass manufacturer in dutiable value

  • Appeal to the Tax Tribunal against duty imposition as a result of mistaken classification of goods subject to tariff concession

  • Criminal defense against charge of violation of duty to report setoff under the Foreign Exchange Transaction Act

  • Administrative lawsuit against drawback concerning identical raw material

  • Administrative lawsuit against designation as a party liable to pay customs duties on imported farm produce

  • Appeal to RADI against customs valuation of raw materials for imported beverages

  • Administrative lawsuits against customs valuation of the following imported products: agricultural products, alcoholic beverages, clinical drug, automobile and clothing

  • Administrative lawsuit against effect on the profit margin of imported pharmaceutical products from related party arrangement

  • Appeal to the Tax Tribunal against quota tariff to imported crude oil

  • Administrative lawsuit against customs imposed to imported equipment subject to taxation relief

  • Appeal to the Tax Tribunal and subsequent lawsuit against customs classification of imported semiconductors

  • Administrative lawsuit against customs classification of imported electronic goods.

  • Appeal to the Tax Tribunal and subsequent lawsuit against royalty and effect from related party issues

  • Appeal to RADI against inclusion of sales commission in customs value

  • Appeal to the Tax Tribunal against deduction of deferred payment interest for imported crude oil

 

Customs & F/X Criminal Defense 
  • Investigation of alleged violations of the Customs Act: 

  • Anti-dumping duties on tiles and steel products

  • Customs evasion regarding classification of imports subject to tariff concessions

  • Unfair tariff reduction on academic medical device

  • Omission of ship sailing under a flag of convenience on import declaration

  • Punishment of a corporation involved in the unauthorized shipping of surplus goods out of a bonded factory and suspension of business ordered against the bonded factory

  • False report concerning price of imports

  • Smuggling by electronic parts manufacturer

  • Smuggling related to classification of petroleum products

  • Illegal importation by feed importer and medical device company

  • False report by jewelry importer

  • Tester products of pharmaceutical companies

  • Disposition of notification concerning false reporting in relation to importation by a bonded factory

  • Investigations on alleged violations of the Foreign Exchange Transactions Act concerning:

  • Deposits in unreported overseas bank accounts

  • Failure to report set-off by an electronic importer

  • Undeclared importation of means of payment issued overseas

  • Multi-party set-off involving a multinational company via a set-off center

  • Unlawful setoff involving a distribution company

  • Third-party payment by an advertising agency

  • Investigations on alleged violations of other laws and regulations concerning:

  • Flight of assets abroad in relation to international trade brokerage using an undeclared overseas special purpose company

  • Flight of assets abroad in relation to trade via an overseas corporation

 

Trade Remedies

Antidumping investigation and reviews initiated by Korean Government:

 

  • H-beams imported from China

  • OPP film imported from China, Indonesia, and Thailand

  • Float glass imported from China

  • Plywood imported from China

  • Plywood imported from Malaysia.

  • Porcelain tiles imported from China

  • Ceramic tile imported from China

  • Ethyl acetate imported from China

  • Stainless steel bars imported from Japan, India and Spain

  • Aluminum bottle and can imported from Japan

  • Stainless steel plate imported from Japan

  • Pneumatic transmission valve imported from Japan

  • Anatase type TiO2 imported from China

  • Propylene Oxide imported from Japan

  • Guide hole puncher imported from Japan

  • Industrial robot with 6-axis vertical multi-articulation structure imported from Japan

  • Hydro sulfite imported from China

 

Antidumping/CVD/safeguard investigation and reviews initiated by Foreign Government (represented Korean producer):
  • Monosodium glutamate from Indonesia (initiated in the EU)

  • Large power transformer from Korea (initiated in the U.S.)

  • Steel nails from Korea (initiated in the U.S.)

  • Bottom mount combination refrigerator-freezers from Korea (initiated in the US)

  • Large residential washers from Korea (initiated in the U.S.)

  • Cut-to-length plate from Korea (initiated in the U.S.)

  • Corrosion-resistant carbon steel flat products from Korea (initiated in the U.S.)

  • Diamond tools from Korea (initiated in the U.S.)

  • Liquid dielectric transformers from Korea (initiated in Canada)

  • Polyethylene terephthalate (PET) from Korea (initiated in the EU)

  • Polyethylene terephthalate (PET) from Korea (initiated in Argentina)

  • Hot rolled plate steel from Korea (initiated in Australia)

  • Large power transformer from Korea (initiated in Australia)

  • Corrosion-resistant carbon steel flat products from Korea (initiated in Australia)

  • Cut-to-length plate from Korea (initiated in Australia)

  • Truck and bus tires from Korea (initiated in Brazil)

  • Passenger car tired from Korea (initiated in Brazil)

  • Heavy plate steel from Korea (initiated in Brazil)

  • Tin plate steel from Korea (initiated in Indonesia)

  • Hot rolled steel from Korea (initiated in Thailand)

  • Pre-painted steel sheet from Korea (initiated in Thailand)

  • Aluminum steel from Korea (initiated in Indonesia)

  • Ferro alloy from Korea (initiated in the Ukraine)

  • Refrigerators from Korea (initiated in the Ukraine)

  • Section steel from Korea (initiated in GCC) 

 

Unfair Trade Practices
  • Patent infringement on importation and sale of Copper Foil

  • Patent infringement on importation and sale of LCD monitors

  • Patent infringement on exportation and production for exportation of LED packages

  • Patent infringement on importation and sale of certain LED packages

  • Patent infringement on overseas supply, importation, and sale of focused ion beams

  • Patent infringement on exportation and production for exportation of PTCA balloon catheter

  • Patent infringement on exportation and production for exportation of photoconductive drums

  • Patent infringement on importation and sale of skateboards

  • Material and method patent infringement on importation and sale of Gemcitabine hydrochloride and pharmaceutical products containing the same

  • Trademark and design infringement on importation and sale of brandy bottles

  • Trademark infringement on importation and sale of bicycle parts, components, and maintenance tools

  • Patent infringement on importation and sale of display units in plasma TVs

  • Design right infringement on importation and sale of engine generators

  • Trademark infringement on importation and sale of on-line games

 

FTA
  • Lawsuit for revocation of taxation concerning origin verification under the Korea-EFTA FTA involving a multinational pharmaceutical company

  • Advice regarding origin verification including tariff shift under the Korea-U.S. FTA for a defense industry company

  • Assistance with verification by Korea Customs regarding value added in the U.S. and HS tariff shift of vehicles assembled in the U.S.

  • Legal assistance to respond to origin verification of chemical company by customs under the Korea-U.S. FTA

  • Advice regarding origin verification in relation to mistaken certified exporter number of a food company under the Korea-U.S. FTA

  • Advice regarding the creation of a FTA origin management system by a cutting machine manufacturer

  • Advice regarding the review of current status of FTA origin management by an electronic power equipment company and setting-up of a response system

  • Advice regarding the setting-up of a response system via mock verification in preparation for direct verification under the Korea-U.S. FTA for an automobile company and its partner companies

  • Legal advice regarding market access under free trade agreements

  • Legal advice regarding patent linkage under free trade agreements for multinational pharmaceutical companies

  • Legal advice regarding criminal issues under the Korea-EU FTA

  • Representation of a petrochemical company in an administrative lawsuit concerning the term of validity of a certificate of origin under the Korea-ASEAN FTA

  • Legal advice regarding strategy to utilize free trade agreements

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