Resolution of Customs Valuation Disputes for Tax Base Determinations (Customs Value)

Since “customs valuations” determine the tax base (customs value) for imported goods, effectively addressing customs valuations issues are, without exception, the key to resolving disputes between tax payers and the customs authority.  Differences of opinion as to the correct tax base (customs value) are resolved by administrative and judiciary proceedings following application to the RADI.  Drawing upon extensive experience, our Litigation Department represents clients through every aspect of customs authority litigation from RADI applications, audit requests, and Tax Tribunal adjudication requests to administrative and judiciary actions.

Settlements for Disputes over Tariff Classification

According to the Harmonized System Code, customs offices must classify imports and exports and apply relevant tax rates.  When an error is found in the report of a tariff classification, a criminal proceeding for tax evasion, customs evasion or smuggling may be initiated.  We provide anticipatory services that consider these possibilities, including applications for the pre-review of tariff classifications with field experts and patent attorneys.  When disputes arise, we conduct post-verification of tariff classification and other alternative courses of action in preparation for litigation.

Responses to Customs Tariff Administrative Litigation on Origin Verification

Firms of foreign countries that have executed a Free Trade Agreement (FTA) with Korea are entitled to tax benefits by declaring the origin of items imported; however, when the customs office deems a declaration incorrect, the relevant customs office may exclude the company from tax benefits and assess original customs duties and additional taxes.  The standards of origin determinations and qualification procedures are different among the 40 FTAs entered by Korea.  As such, the possibility of errors occurring when interpreting and applying the different standards is high.  Because these matters must be settled through appeals procedures, we work with origin verification experts to determine whether the benefit is applicable, establish strategies in preparation for litigation, present alternatives, and provide integrated services for appeals procedures.

Appeals to Tariff and International Trade

When clients must resolve various sanctions imposed by customs authorities through appeals procedures, it is crucial to have the support of highly-skilled professionals.  Our experience with such procedures includes RADI applications for audit requests, requests for Tax Tribunal adjudication, and administrative and judiciary actions, among others.  By collaborating with the firm’s relevant practices, we have successfully represented clients in new areas that lacked precedents and provided top-quality service in customs appeals, and administrative and judiciary actions.

We represent companies engaged in foreign exchange dealings and international trade in almost every industry, including general trading, petroleum, petro-chemistry, shipbuilding, steel, medical devices, medicine, alcoholic beverage, food and beverage, distribution, automobile, automobile components, sporting goods, clothing, semiconductor, agricultural products, electronics, electronic appliances, optics, and industrial machinery, among others.

Representative matters that our Litigation Department has worked on include:

• Application to the RADI for customs valuation on ingredients of imported beverages;
• Application to the RADI for taxable value of sales commission;
• Customs administrative actions for customs valuation of imported agricultural products;
• Customs administrative actions for customs valuation of imported liquors;
• Customs administrative actions for customs valuation of imported clinical medicines;
• Customs administrative actions for customs valuation of imported automobiles;
• Customs administrative actions for customs valuation of imported clothing;
• Customs administrative actions for calculation of demand for customs drawbacks;
• Customs administrative actions for verification of FTA-member country of origin;
• Customs administrative actions against imposing customs duties exempted for imported equipment;
• Customs administrative actions concerning tariff classification of imported electronic appliances;
• Request for adjudication on quota tariff of imported crude oil;
• Requests for adjudication and actions on tariff classification of imported semiconductors;
• Requests for adjudication and actions on additional royalty and special relationship impact;
• Request for adjudication on deferred interests deduction of imported crude oil; and
• Case on special relationship impact of foreign medicines regarding the profit rate of the pharmaceutical industry.