Why Did My Korean-Made Product Get Charged Duty in Canada?

"I exported my Korean-made product to the U.S., and then shipped it to Canada—but I didn't get the Free Duty (FTA) benefit. It's made in Korea, so why was it taxed?"

This is actually a common issue.

Many sellers assume that simply because a product is made in Korea, it automatically qualifies for duty exemption under the Canada–Korea Free Trade Agreement (FTA).But the reality is: the FTA has specific conditions that must be met.

Not All Korean-Made Goods Automatically Qualify for Duty-Free Treatment

One of our clients at Trufulfillment was shipping Korean-manufactured cosmetics to the U.S. before re-exporting them to Canada. Since the goods were clearly of Korean origin, the client expected to receive duty exemption upon arrival in Canada.

However, during the customs clearance process, duties were charged. The reason was clear: the shipment did not meet the “direct shipment” condition required by the Canada–Korea FTA.

FTA Conditions for Duty-Free Entry (as per Canadian Regulations)

Under the FTA, Canada Customs only grants Korea Tariff benefits to shipments that meet all of the following conditions:

1. The goods must be of Korean origin, as defined under Chapter Three – Rules of Origin(Certificate of Origin or FTA declaration required)

2. The goods must be shipped directly from Korea to Canada(without transiting through a third country)

3. If a third country is involved, the importer must prove that the goods:

   • Remained under customs control in the third country (e.g., bonded warehouse)

   • And provide evidence of the entire shipping route (e.g., through bill of lading).

What the Actual Regulation Says (Canada-Korea Free Trade Agreement, Interpretation Regulations)

• These conditions are clearly outlined in the official Canadian regulation:

Interpretation Regulations – Canada-Korea Free Trade Agreement “Originating goods exported from Korea are entitled to the benefit of the Korea Tariff if:(a) the goods are shipped to Canada without shipment through another country (either on a through bill of lading, or with documentary evidence of the shipping route);or(b) if shipped through another country, the importer provides:(i) evidence of the full shipping route and all transshipment points, and(ii) customs control documents proving the goods remained under customs control in that third country.”

🔗 Source: Justice Laws Website – Canada-Korea FTA Interpretation Regulations

If goods are temporarily stored or processed in a third country like the U.S., and the importer cannot prove they remained under customs control, FTA benefits will be denied.

Case Summary

Origin	Transit	Destination	FTA Benefit
Korea	None	Canada	✅ Duty-Free
Korea	U.S.	Canada	❌ Not Qualified

Even for Korean-origin products, FTA benefits may be lost if the shipment transits through the U.S. or another country without meeting the customs control requirement.

Trufulfillment Insight

Using the Korea–Canada FTA to reduce import costs is a smart strategy, but only if logistics planning and documentation are aligned.If your supply chain involves the U.S. or any third country, it’s critical to check the shipping route and customs control status in advance.

We Can Help If:

• You want to export directly from Korea to Canada and benefit from FTA

• Your goods transited through the U.S., and you’re unsure if FTA can still apply

• You’re not sure how to prepare the right documentation, routing, or FTA compliance steps

At Trufulfillment, we support sellers through the entire FTA process—from designing direct shipping strategies to reviewing certificates of origin and preparing customs documents. Our goal is to help you minimize risk and maximize savings.

Final Thoughts

FTA compliance is not optional—it’s a strategy.

Something as simple as a routing choice can make the difference between zero duty and unexpected customs costs.

Trufulfillment brings years of hands-on experience in Amazon FBA and Canadian import logistics to provide realistic, effective solutions tailored to your business.If you're shipping from Korea to Canada, make sure the direct shipment rule is clearly addressed in your logistics planning.

We’re more than a warehouse—we’re your strategic partner for Amazon and eCommerce success in Canada.

Need help with secure and compliant FTA shipping to Canada?

Reach out to us at support@trufulfillment.ca – we’re here to help.