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Joint statement with Alberta…Introduction of provincial government verification method, easing import burden
The Korea Customs Service, in cooperation with the Canadian province of Alberta, has resolved the issue of origin verification, which had been an obstacle to applying preferential tariffs under the Free Trade Agreement (FTA) when importing crude oil.
The Customs Service announced on the 21st that both sides released a 'Joint Statement on Simplifying Origin Documentation' in Edmonton, Canada, on the 20th (local time).
The joint statement includes the introduction of an exception where the provincial government comprehensively verifies production volume and blending ratios, instead of the existing individual producer certification method.
This is expected to enable the 0% FTA tariff benefit for Canadian crude oil, which had previously seen limited application.
Until now, it has been difficult to verify the origin of Canadian crude oil due to its structural characteristic of mixing volumes from various producers during production and transportation.
As a result, local exporters have been reluctant to go through complex verification procedures, and domestic refiners have often given up tariff benefits, thus limiting the utilization of the FTA.
The Customs Service expects this measure to significantly reduce the burden on individual exporters and lead to cost-saving effects, such as lower domestic import prices.
In particular, Canadian crude oil using the Pacific shipping route is relatively less affected by the political situation in the Middle East, so the Customs Service explains that it will contribute to diversifying import sources and enhancing energy supply chain stability.
Commissioner Lee Myung-goo of the Korea Customs Service stated, "We will continue to take the lead in identifying key items essential for national resource security and establishing a stable supply chain."
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