Importing Goods into Germany (EU): Five Essential Customs Considerations for Korean Businesses

The European Union and South Korea maintain a strong and stable trade relationship supported by a Free Trade Agreement (FTA). However, when entering the German market, Korean companies face a complex customs and regulatory environment.  

Early consideration of these five customs requirements not only ensures compliance but also helps avoid delays, penalties, and unnecessary costs: 

1. Importer of Record Requirement 

Under EU customs law, the importer of record must be established within the European Union. This means that Korean companies cannot directly act as the importer for customs purposes. 

In practice, companies typically choose between two approaches: 

• The German customer (buyer) takes responsibility for importation 
• A specialized EU-based service provider acts as an indirect customs representative on behalf of the Korean exporter 

This structural requirement has implications for liability, VAT handling, and contractual arrangements, and should therefore be clarified at an early stage of market entry. 

2. Duties and Taxes 

Importing goods into Germany generally triggers several types of duties and taxes, which impact pricing and cash flow: 

• Customs duties, depending on the tariff classification and origin of the goods 
• Excise duties on specific product categories such as energy products incl. electricity, alcohol, tobacco, and coffee 
• Import VAT, which is payable upon importation but can typically be reclaimed by the importer as input tax 

A structured customs setup can significantly improve liquidity, especially through VAT optimization mechanisms. 

3. Additional Regulatory Requirements 

Beyond standard customs duties, many products are subject to additional regulatory and compliance requirements, which may considerably increase administrative burden and costs. 

Relevant frameworks include: 

• Carbon Border Adjustment Mechanism (CBAM) for carbon-intensive goods 
• Deforestation regulations affecting certain raw materials and supply chains 
• Pharmaceutical and medical product regulations 
• Military and dual-use goods controls 
• Environmental and “green” taxes 
• Product safety and labeling requirements 

These regulations vary depending on the product category and require careful classification and documentation to ensure compliance. 

4. Preferential Duty Reduction under EU–Korea FTA 

The EU–Korea Free Trade Agreement offers significant customs duty reductions or even full exemptions, making it a key lever for cost optimization. 

To benefit from preferential treatment, the following conditions must be met: 

• The goods must qualify as originating in Korea according to FTA rules 
• A “Declaration of Origin” must be correctly stated on the commercial invoice 
• The exporter must be authorized by the Korean authorities to issue such declarations 

It is important to note that incorrect or missing documentation can lead to the denial of preferential treatment, resulting in higher duty payments. 

5. Customs Optimization and Special Procedures 

EU customs law provides several procedures that allow companies to optimize duty payments and improve cash flow: 

• Customs Bonded Warehousing: Goods can be stored without immediate payment of duties and taxes 
• Inward Processing: Duty-free import of goods for processing, provided the finished products are re-exported 
• Temporary Admission: Duty relief for goods that are only used temporarily within the EU 

The appropriate use of these procedures can significantly reduce overall import costs and increase operational flexibility. 

How Baker Tilly Can Support You 

Baker Tilly’s customs and foreign trade experts, together with the Korean Desk, support companies throughout their market entry and ongoing operations by: 

• Assessing customs and compliance risks 
• Designing efficient and compliant import structures 
• Identifying cost-saving opportunities 
• Providing hands-on operational guidance