The European Union (EU)-South Korea Free Trade Agreement (FTA) comes into force on a provisional basis on 1 July 2011. This should provide substantial benefits for UK exporters as it is suggested that 98% of import duties and other trade barriers will be removed between the EU and South Korea. Amongst other sectors, the agreement is likely to result in new opportunities for UK companies (with some exceptions) in legal and financial services, manufactured goods, pharmaceuticals, advanced engineering and the low carbon industry, including the renewable sector.
Only goods originating from the EU and South Korea will benefit from the FTA.Normally, when trading with a country with an EU preferential trade agreement, a EUR 1 movement certificate is required. This is a document that EU exporters use to prove that the exported goods qualify for EU preference. What is different with this new trade agreement with South Korea is that only origin/invoice declarations are to be issued as proof of preferential origin– exporters in the EU and South Korea will not have to issue EUR1 Movement Certificates as proof of origin.
An exporter can issue a declaration of preferential origin on an invoice for consignments up to the value of €6,000. Where an exporter has been authorised by the customs authorities to do so (“Approved Exporter”), invoice declarations can be issued for consignments of any value. In order to become an “Approved Exporter”, you should contact the ‘Excise & Customs Helpline’ on 0845 010 9000. Exporters who are already approved to issue invoice declarations for goods being exported under one of the EU’s other preferential trade agreements can apply to have that approval extended to South Korea.
The approved exporter facility provides clear benefits to exporters who will no longer have to complete 11 boxes on a EUR1 preference certificate, and then get it stamped by HM Revenue & Customs (HMRC), or a Chamber of Commerce. Approved exporters can simply insert the required preferential origin declaration on a commercial document which can be transmitted and stored electronically.
Written by Angela Haworth, Strong & Herd LLP on 30th June 2011
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