1. BILATERAL/MULTILATERAL ISSUES

“The level of agricultural market opening under Korea – China FTA will be lower than KORUS FTA” (Korean, WMJ)

http://www.nongmin.com/article/ar_detail.htm?ar_id=219541&subMenu=articletotal

2. MARKETING ISSUES

Discussion on expansion of GMO Labeling (Korean, WMJ)

http://news.khan.co.kr/kh_news/khan_art_view.html?artid=201307091732182&code=900303

3. OTHER MISCELLANEOUS ISSUES

Further Info Request from FAS/Washington on a Media Clipping (July 9, 2013)

Korea Customs Service decided to change the way to impose the tariff on agricultural products. (Korean, WMJ)

http://economy.hankooki.com/lpage/economy/201307/e2013070717553270070.htm

Summary: Korea Customs Service (KCS) disclosed that they decided to change the way to impose the tariff on imported agricultural products.  Many importers make a false return of an import price to take a customs evasion.  Because of that situation, KCS plans to change the way to impose tariffs.  According the KCS, customs value will be calculated by an on-the-spot investigation, not declaration of importer anymore.

Full Text : A tariff on imported agricultural products will be imposed on the basis of the price investigated in exporting country, not by the importer’s declaration anymore.

Under an existing regulations, the customs value is decided by the importer’s declaration (how much they paid for buying products), but many importers declare import price lower than they really paid for making the customs value be decided lower. Because of that situation, Korea Customer Service (KCS) disclosed that they decided to change the way to calculate customs value at July 7th.

This is a follow-up action by KCS after the passage of revision of Customs Act, which reflects the recent court’s ruling in last May that it is proper that the customs value calculated by combining investigated purchase price in farm area by a reputable organization and extra costs admitted by KCS. 

Until now, it is difficult to decide a fair customs value even though there are many false declarations of agricultural products (beans, mung beans and garlic with 300 to 400 percent tariffs) for taking customs evasion.  Because the agricultural products have variable price and also its quality is irregular.  An official in KCS said “According to revision, we’ll impose a proper tariff on agricultural products by building up collaboration with reputable organization such as Korea Agro-Fisheries & Food Trade Corporation (AT), Korea Rural Economic Institute (KREI)”

BYK’s translation of the Press release put out by Korea Customs Service:     

◇     A court decision, first of its kind, has been made that it is rational for Korea Customs Service (Administrator: Woon Chan Baek) to impose duties based on the price survey that was made by a third party agency with public confidence in order to eliminate the undervalue reporting of import prices of agricultural products.

            ◦     The Seoul High Court recently ruled that “The price for calculating the duty based on the farm procurement price that was surveyed through an agency with public confidence after adding the incidental costs recognized by the plaintiff was in accordance with the rational standard as provided in Article 35 of the Customs Act.”

            ◦     There have been difficulty up to now in determining the proper price for imposing the duty on agricultural products such as soybean, mung beans, garlic, etc., where the duty rate is 300-400%, and where there were cases where the import report price was being undervalued in order to avoid paying the due duties. 

◇     The Korea Customs Service has been in the process of revising the Customs Act since May in order to clearly have the content of the court ruling stipulated in the statute, and is about to enforce this regulation (mid-July).  We hope that we will be able to eliminate the undervalue reporting of agricultural products that is being a threat to the domestic farmers livelihood and something that has been encouraging evasion of duties. 

◇     The Korea Customs Service plans to purse follow-up measures soon, such as the establishment of a cooperation system with third party agencies with public confidence, such as aT, Korea Rural Economic Institute, etc., in order to enhance the efficiency of the revisions being made to the Customs Act. 

            ◦     At the same time, in order to immediately legalize or systemize the taxation rationale that has been recognized as being appropriate and rational through a court decision, such as this case, we plan to re-enforce the reflux system of court decisions.

      ◇   The aforementioned court decision that resulted in the revision of the Customs Act was possible due to the fact that the newly established Customs Lawsuit Team was able to win the legal dispute as it had carefully prepared the case from the beginning of the lawsuit, such as review of the requirements for imposing duties, analysis of similar court decisions, etc.

            ◦     The Customs Lawsuit Team (9 teams composed of 34 people) was established in September 2012.  They are fully responsible for the lawsuits at Korea Customs Service headquarter and Headquarter Customs Office, depending on the importance and degree of difficulty.

            ◦     After the establishment of this team, it has contributed in securing the taxation right of Korea Customs Service by winning legal disputes amounting to 116.2 billion won in total value of the lawsuit cases, which are the major lawsuits that are worth over 5 billion won in lawsuit value or cases where the impact on Customs Administration is huge.

Status of Lawsuit Cases and Winning Rate of Lawsuits