Country of Origin System
What is the country of origin?
- The “country of origin” of goods means the nationality of exported or imported goods and also refers to the area where such goods have grown up or have been produced, manufactured or processed.
In general, the country of origin means a country with a political entity, but a colony, a territory, a protectorate, or an area which is not an independent country such as Hong Kong reverted to China, Macao, etc. can also be the country of origin of goods.
However, such a regional cooperative organization as EU, NAFTA or ASEAN which is not a political and economic independent entity cannot become a country of origin of goods.
- International norms related to the country of origin include Article 9 (Marks of Origin) of WTO GATT, Agreement on Rules of Origin, and Annexes (D.1 to D.3) of WCO Kyoto Convention.
- Despite these international norms, there are cases where countries interpret and apply them in favor of their own profits, thus hindering smooth international trade, and thus WTO is pushing ahead with establishment of more clear and internationally uniform country of origin regulations.
- Korea’s country of origin labeling system has been implemented since July 1, 1991. There are provisions on the “criteria for determining the country of origin”, “goods subject to country of origin labeling”, “penalties against violations”, etc. in foreign trade laws and ordinances, and there are provisions on confirmation of the country of origin of goods and the labeling thereof, crackdown in the process of distributing goods on the market, etc. during customs clearance in the customs duty laws and ordinances.
Reasons why the country of origin is licensed on exported or imported goods
- As goods produced by two or more countries are increasing as a result of the phenomenon of globalization of production activity, country of origin labeling prevents low-quality goods, low-priced imported goods produced in low-wage countries, and/or imported goods produced on an OEM basis from being disguised as domestic products so that consumers may not suffer a loss during a purchase, and producers (countries) of goods from particular areas (for example, ginseng produced in Korea) or high-quality goods may gain benefits of preferential purchase from consumers by labeling the country of origin on their goods.
- Country of origin labeling performs the function of protecting public health and natural environment by making it possible to control import of goods from areas (countries) suffering any crop damage caused by diseases and harmful insects and international trade in endangered animals and plants, etc.
- When taking reciprocal measures to provide special benefits, such as tariff concessions, for particular goods imported from a particular or area or when imposing anti-dumping duties on low-priced imported goods, taking emergency import restriction measures against such goods or allocating import quotas on such goods, the country of origin of the relevant goods forms the basis for taking such measures. Therefore, country of origin labeling also plays an important role in industrial and trade policies.
Goods subject to country of origin labeling
In accordance with Article 33 of the Foreign Trade Act, the Minister of Trade, Industry and Energy has announced 674 4-digit HS code items as items subject to country of origin labeling, centering on consumer goods such as agro-fishery products, food items, clothes, bags, electronics, and games among the imports and mandates labeling country of origin for establishing the order of fair trade and consumer protection.
Country of origin labeling has also been mandatory for each tank in live fish storage facilities and transportation vehicles since September 1, 2004. Therefore, although country of origin labeling is not mandatory for goods not designated as items subject to country of origin labeling, they must not carry false or misleading country of origin labels.