Audit Defense

Customs Valuation

• Customs valuation refers to the appraisal of the dutiable value 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 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 of designing and implementing 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 area, our classification specialists work closely with our firm’s patent lawyers 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, they must also exercise caution to avoid penalty impositions and even criminal charges for customs evasion arising out of 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 with regard to the determination and verification of origin of goods.  

Our Practice has extensive experience in the origin verification process and is able to provide our clients with outstanding legal service in this area.

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 a wide range of 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 lawyers specializing in foreign currency transactions, industry experts, tax lawyers and certified public accountants.  This depth and breadth of experience and expertise allow 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), which our Practice is fully capable of addressing. 
• 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 lawyers, accountants, and advisors, regularly handles all aspects of trade remedy proceedings, including anti-dumping duties, countervailing duties and safeguard investigations.  
• We have a successful record of representing producers, exporters and importers in prosecuting and defending cases before authorities in Korea, the US, the EU, Canada, Australia, Brazil, India and China, among other jurisdictions.  
• 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 lawyers 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 and regional unions, including Australia, Canada, the US, the EU, ASEAN, India, European Free Trade Association, Peru, and most recently Colombia.  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 lawyers 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.

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 and to continuing the tradition of excellence.

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 imported products, including 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 on 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 reporting of 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 reporting 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 setoff by an electronic importer
• Undeclared importation of means of payment issued overseas
• Multi-party setoff involving a multinational company via a setoff 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 tiles 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 six-axis vertical multi-articulation structure imported from Japan
• Hydrosulfite imported from China

Anti-dumping/CVD/safeguard investigations 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 US)
• Steel nails from Korea (initiated in the US)
• Bottom mount combination refrigerator-freezers from Korea (initiated in the US)
• Large residential washers from Korea (initiated in the US)
• Cut-to-length plate from Korea (initiated in the US)
• Corrosion-resistant carbon steel flat products from Korea (initiated in the US)
• Diamond tools from Korea (initiated in the US)
• 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 tires 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)
• Ferroalloy from Korea (initiated in the Ukraine)
• Refrigerators from Korea (initiated in the Ukraine)
• Section steel from Korea (initiated in GCC)
• Cigarettes from Korea (initiated in the US)
• Passenger vehicle and light truck tires from Korea (initiated in the US)

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 online 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-US FTA for a defense industry company
• Assistance with verification by Korea Customs regarding value added in the US and HS tariff shift of vehicles assembled in the US
• Legal assistance to respond to origin verification of a chemical company by customs under the Korea-US FTA
• Advice regarding origin verification in relation to mistaken certified exporter number of a food company under the Korea-US 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-US 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