TradeLane

Korea is introducing a new Importer Self-Assessment (ISA) program allowing companies the opportunity to file an annual ISA report in lieu of undergoing a Customs Assessment.  It also provides the extra benefit of allowing VAT recovery on additional duties payable, which is an obstacle under the current system. 

The reality of the ISA program is that it is practically impossible for customs to verify the legality of all import declarations due to the limited manpower of the auditors. Given this circumstance, customs audits were primarily focused on the collection of additional duties. This increased the number of objections and appeals filed against Customs, proving to be a burden for both businesses and tax collection.

If you are being attacked by a stronger opponent, sometimes you need a strong shield. Korea Customs is such an opponent with all the power of the government behind them, how can importers protect themselves?  

One defensive shield available is the ‘ACVA’ program.

With the Brexit in full motion, the Britons should never have to worry about the infamous Euro-sausage ever becoming a threat to the English banger again. That should put many an Englishman at ease (watch the 1984 Christmas Special of the BBC’s “Yes Minister” if you are pondering the origin of this joke). The prospect of losing the liberty to fill up at the gas station though, is probably less of a laughing matter, especially if petrol and diesel powered vehicles have been a way of life for at least the last 60 years if not longer.

The Korea Customs Service (KCS) has benchmarked the successful US Importer Self-Assessment (ISA) program and decided to establish a similar program in Korea for importers to use. Similar to the US, the ISA process starts with membership in Authorized Economic Operator (AEO). Korean AEO import companies are eligible to utilize the newly implemented ISA program, which is expected to become effective this month.

This is one of those scenario’s we see all the time:

Asia Customs Broker: Hello, Mr. Ahmad, we are sorry. The customs manual documentation cannot be completed because we are missing the HS codes. Can you provide us with the correct one so that we can proceed with the permit application and import declaration, please?

Logistics Employee: Can’t you check our previous shipments? This is not the first time we have imported similar materials into our warehouse! You should have all the details!