U.S.-Korea Free Trade Agreement

Rules of Origin

A Change in Tariff Classification (Tariff-Shift)

A Tariff-Shift rule is one type of rule of origin used in Annex 6-A of KORUS. If the product specific rule in Annex 6-A for your product is a tariff shift rule, then to qualify for the FTA-negotiated preferential tariff rate, the non-originating inputs of the product must be substantially transformed in Korea or the United States.

This transformation is defined by the tariff-shift rule in terms of a change in the HS Code of the input to the HS code of the final product (e.g., processing wood into furniture). This type of tariff shift test shows that non-originating inputs have been sufficiently changed in either the United States or Korea to allow them to qualify for a preferential tariff.

The relevant rule for your product may indicate that the change in HS code must be from another chapter, from another heading or from another sub-heading. A chapter is indicated by the first two digits of the HS Code, the heading by the next two digits, and the sub-heading by the third pair of digits.

For example, the HS code for an electric shaver is 8510.10 85 is the chapter; 8410 is the heading; and 8510.10 is the subheading. The rule for this product shows a simple tariff shift: "A change to subheading HS 8510.10 through 8510.30 from any other subheading”.

Step 3: Identify the Rule of Origin under KORUS

Note: The information presented on this website is meant to serve as a general guide. Only the agreement text and the customs regulations issued to implement the agreement are definitive. For complex issues or where interpretation is required, U.S. exporters should seek legal assistance or an advance ruling from the Korean Customs Service.