Korea Customs Service: "Canadian Crude Oil Now 'Duty-Free' as FTA Obstacles Resolved"

It has become possible to import Canadian crude oil without tariffs. This is the result of resolving the issue of origin certification, which had been an obstacle to the Free Trade Agreement (FTA) between the two countries.

The Korea Customs Service announced on April 20 (local time) that it had issued a "Joint Statement on Simplifying Origin Certification Documents for Alberta Crude Oil" together with the Alberta provincial government in Edmonton, Alberta, Canada.

Lee Myunggu, Director of the Korea Customs Service (left), signs the "Joint Statement on Simplifying Origin Certification Documents" with Daniel Smith, Premier of Alberta, Canada, on the 20th in Edmonton, Alberta. Korea Customs Service

The joint statement is significant in that it resolves the issue of origin certification, which had been a barrier to applying the FTA preferential tariff rate (from 3% to 0%) when Korea imports Alberta crude oil. It is also seen as a starting point for alleviating the global crude oil supply crisis.

Canada is an energy powerhouse with the third-largest crude oil reserves in the world. In particular, the province of Alberta accounts for 80% of Canada's total crude oil production as of 2025.

However, despite the FTA between Korea and Canada, Korea has faced structural difficulties in proving the origin of crude oil, which has limited the application of the FTA preferential tariff rate during crude oil imports.

This is because, as crude oil produced at the extraction site is transported to the shipping port, oil from multiple producers is mixed and transported, making it practically difficult to separate and verify the origin for each individual producer.

For the same reason, Canadian local suppliers have been reluctant to issue complex origin certification documents, and Korean refiners have had to forgo the benefits of the FTA preferential tariff rate when importing Canadian crude oil. This has also been an obstacle to diversifying the energy supply chain for domestic companies.

To address these structural issues, the Korea Customs Service activated a consultation channel with the Alberta provincial government's representative to Korea (the Embassy of Canada in Korea) and formed a "Task Force for Diversification of Crude Oil Supply Channels." The agency has intensively reviewed comprehensive support measures, ranging from the application of the FTA preferential tariff rate to customs clearance for Canadian crude oil.

As a result, the existing method, which required each producer to certify the origin on a case-by-case basis, has been improved to a special system in which the provincial government oversees verification. The Alberta provincial government will directly aggregate and verify both crude oil production volumes and the amount of offshore crude oil input, and will issue an official confirmation document verifying whether the origin requirements are met. The Korea Customs Service will recognize this document as valid proof of origin.

This means that individual Canadian exporters can now benefit from the FTA preferential tariff without the burden of origin certification, potentially lowering the domestic supply price of Canadian crude oil, according to the Korea Customs Service.

In particular, Canadian crude oil entering through Pacific routes is not affected by geopolitical crises in the Middle East and is expected to contribute to establishing a stable energy supply chain. The shift from a Middle East-centric crude oil import structure to diversification through Canadian imports is seen as laying the groundwork for strengthening national energy security.

Lee Myunggu, Director of the Korea Customs Service, said, "This joint statement is an example of 'demand-driven regulatory innovation' achieved by cooperating with the Alberta provincial government within the FTA origin rules to resolve a structural challenge. The Korea Customs Service will continue to identify core items essential for national resource security and work to build a stable supply chain."

This content was produced with the assistance of AI translation services.