Importing Products from Korea Under FOB Busan Terms - A Practical Guide for U.S. Buyers
Importing Products from Korea Under FOB Busan Terms
A Practical Guide for U.S. Buyers
Many U.S. companies are interested in importing Korean products but often find the customs clearance process confusing, especially when the shipment term is FOB Busan.
This guide explains the import process in a simple and practical way for U.S. buyers who are purchasing products from Korean suppliers under FOB Busan, Incoterms 2020.
1. What Does “FOB Busan” Mean?
FOB Busan means that the Korean seller is responsible for preparing the goods, transporting them to the Port of Busan, completing Korean export customs clearance, and loading the goods onto the vessel.
Once the goods are loaded onto the vessel at the Port of Busan, the responsibility transfers to the U.S. buyer.
In simple terms:
Korean Seller’s Responsibility:
Product preparation → inland transportation in Korea → delivery to Busan Port → Korean export customs clearance → loading onto the vessel
U.S. Buyer’s Responsibility:
Ocean freight → cargo insurance → U.S. arrival charges → U.S. customs clearance → duties and fees → inland trucking → delivery to warehouse or final destination
The easiest way to understand FOB Busan is:
The Korean supplier is responsible until the cargo is loaded onto the vessel in Busan. After that point, the U.S. buyer is responsible.
2. Quotation Stage: Requesting an FOB Busan Price
When requesting a quotation from a Korean supplier, the buyer may see wording such as:
FOB Busan Price: USD 10,000
This means the quoted price generally includes the cost of the goods, transportation within Korea, export customs clearance in Korea, port handling in Busan, and loading onto the vessel.
However, the following costs are usually not included in the FOB price and must be paid separately by the U.S. buyer:
Ocean freight
Marine cargo insurance
U.S. port and terminal charges
U.S. customs clearance fees
Customs duties
Merchandise Processing Fee, or MPF
Harbor Maintenance Fee, or HMF
Customs broker fees
FDA, USDA, CPSC, or other agency filing fees, if applicable
Container pickup and trucking
Warehouse receiving fees
Demurrage or detention charges, if delays occur
3. What U.S. Buyers Must Check Before Importing
Before placing an order, the U.S. buyer should confirm several important items.
HTS Code / HS Code
The HTS Code is the product classification code used by U.S. Customs and Border Protection. It determines the duty rate, whether the product may qualify under the Korea-U.S. Free Trade Agreement, and whether additional agency requirements may apply.
The Korean supplier may provide the Korean HS Code, but the U.S. buyer or customs broker should confirm the correct U.S. HTS Code.
Product-Specific Import Regulations
Some products may require additional review or filings before they can be imported into the United States.
Examples include:
Food products: FDA facility registration and Prior Notice may be required.
Cosmetics: ingredient review, labeling compliance, and possible FDA-related requirements may apply.
Children’s products: CPSC testing and certification may be required.
Agricultural or plant-based products: USDA APHIS review may be required.
Animal-based products: USDA or FDA requirements may apply.
Electronics: FCC compliance may be required.
Chemical products or batteries: safety documents such as SDS may be required.
Korea-U.S. Free Trade Agreement
Some Korean-origin products may qualify for reduced or zero duty under the Korea-U.S. Free Trade Agreement, commonly known as KORUS FTA.
However, the product does not automatically qualify just because it is shipped from Korea. The product must meet the applicable rules of origin, and the importer must have sufficient origin documentation to support the claim.
4. Key Parties Involved in the Import Process
For a typical FOB Busan import shipment, the following parties are involved:
| Party | Main Responsibility |
|---|---|
| Korean Supplier / Exporter | Produces the goods, prepares export documents, completes Korean export customs clearance, and loads the goods onto the vessel in Busan |
| Freight Forwarder | Arranges ocean freight, shipping schedule, booking, documentation, and transportation coordination |
| U.S. Customs Broker | Files the U.S. customs entry, confirms duties and fees, and assists with agency requirements |
| Importer of Record | The U.S. company legally responsible for the import declaration |
| Trucking Company | Picks up the cargo from the U.S. port and delivers it to the warehouse or final destination |
| Warehouse / 3PL | Receives, stores, and distributes the imported goods |
For first-time importers, it is highly recommended to work with an experienced freight forwarder and a licensed U.S. customs broker.
5. Documents the Korean Supplier Should Provide
The Korean supplier should provide the following documents before shipment:
| Document | Purpose |
|---|---|
| Commercial Invoice | Shows seller, buyer, product description, quantity, unit price, total value, country of origin, and Incoterms |
| Packing List | Shows carton count, weight, dimensions, packaging details, and CBM |
| Bill of Lading Draft | Confirms shipper, consignee, notify party, port of loading, port of discharge, and cargo details |
| Certificate of Origin or Origin Statement | Used to support Korean origin and possible KORUS FTA benefits |
| Product Specification Sheet | Provides product details and technical specifications |
| Ingredient List or Material Composition | Important for food, cosmetics, supplements, chemicals, textiles, and similar products |
| Test Reports or Certificates | Required or useful for regulated products such as children’s goods, electronics, cosmetics, or food-related items |
| SDS / MSDS | Required for chemicals, liquids, batteries, aerosols, or potentially hazardous products |
The buyer should request these documents early, ideally before finalizing the shipment schedule.
6. ISF Filing Before Shipment
For ocean shipments to the United States, the importer must file an Importer Security Filing, commonly known as ISF 10+2.
The ISF must be filed before the cargo is loaded onto the vessel bound for the United States. If the ISF is late, incomplete, or inaccurate, the importer may face penalties or delays.
The ISF usually requires the following information:
Seller
Buyer
Importer of Record number
Consignee number
Manufacturer or supplier
Ship-to party
Country of origin
HTS Code
Container stuffing location
Consolidator
Bill of lading information
This is one of the most important steps in the FOB Busan process.
If the Korean supplier provides documents too late, the ISF filing may also be delayed. Therefore, the U.S. buyer should request all required information several days before the vessel loading date.
7. Loading at the Port of Busan
Once the goods are transported to Busan Port, the Korean seller completes Korean export customs clearance and arranges for the goods to be loaded onto the vessel.
At this point, under FOB Busan terms, the Korean seller’s responsibility is generally completed.
After the cargo is loaded onto the vessel, the risk and responsibility transfer to the U.S. buyer.
Because of this, the U.S. buyer should consider purchasing marine cargo insurance, especially for high-value goods, fragile products, temperature-sensitive items, or first-time shipments.
8. Bill of Lading and Ocean Transportation
After the cargo is loaded onto the vessel, the carrier or freight forwarder issues the Bill of Lading, also known as the B/L.
The Bill of Lading usually includes:
Shipper
Consignee
Notify Party
Vessel name
Port of loading
Port of discharge
Container number
Seal number
Cargo description
Weight and volume
Freight terms
The U.S. buyer should carefully review the B/L to make sure all information is correct.
Common U.S. arrival ports include:
Los Angeles / Long Beach
New York / New Jersey
Savannah
Houston
Seattle / Tacoma
Oakland
9. Arrival Notice Before U.S. Port Arrival
Before the vessel arrives at the U.S. port, the freight forwarder or carrier will issue an Arrival Notice.
The Arrival Notice may show charges such as:
Ocean freight balance
Destination charges
Terminal handling charges
Documentation fees
Delivery order fees
Chassis fees
Port charges
Possible demurrage or detention charges
Under FOB terms, most charges after the cargo is loaded in Busan are the responsibility of the U.S. buyer.
10. U.S. Customs Entry
The U.S. customs broker files the import entry with U.S. Customs and Border Protection.
The customs broker will usually need:
Commercial Invoice
Packing List
Bill of Lading
HTS Code
Country of origin
Product value
Quantity
Weight
Importer of Record information
Customs bond
KORUS FTA origin information, if applicable
FDA, USDA, CPSC, FCC, or other agency documents, if required
The U.S. buyer, as the Importer of Record, is responsible for providing accurate information regarding product classification, value, origin, and applicable import requirements.
11. Duties, MPF, HMF, and Other Charges
When importing goods into the United States, the buyer may need to pay several types of charges.
| Charge | Description |
|---|---|
| Customs Duty | Based on the HTS Code and country of origin |
| MPF | Merchandise Processing Fee charged by U.S. Customs |
| HMF | Harbor Maintenance Fee for ocean shipments |
| Customs Broker Fee | Fee charged by the customs broker for entry filing |
| PGA Filing Fee | Fees related to Partner Government Agencies such as FDA, USDA, CPSC, or FCC |
| Exam Fee | May occur if the shipment is selected for inspection |
| Port / Terminal Fees | Charges related to U.S. port and terminal handling |
| Trucking Fee | Cost to deliver cargo from the port to the warehouse |
Even if the duty rate is zero under KORUS FTA, other charges such as MPF, HMF, broker fees, port fees, and trucking costs may still apply.
12. Customs Examination Possibility
U.S. Customs or another government agency may release the cargo without inspection, or they may select the shipment for examination.
Common types of exams include:
| Exam Type | Description |
|---|---|
| Document Review | Review of customs documents only |
| X-Ray Exam | Non-intrusive inspection using scanning equipment |
| Tailgate Exam | Container door is opened for a basic visual inspection |
| Intensive Exam | Cargo is moved to an examination station for detailed inspection |
If the shipment is selected for examination, additional costs and delays may occur.
Products such as food, cosmetics, children’s products, electronics, branded goods, and items with unclear descriptions or unusual values may have a higher chance of inspection.
13. Customs Release and Final Delivery
Once U.S. Customs and any applicable government agencies release the shipment, the cargo can be picked up from the port.
The freight forwarder, customs broker, or trucking company will coordinate delivery to:
Buyer’s warehouse
3PL warehouse
Amazon FBA preparation warehouse
Retail store
Distributor warehouse
Final customer location
The buyer must also monitor free time at the port or terminal. If the cargo is not picked up on time, demurrage or detention charges may apply.
14. Overall Process at a Glance
| Step | Process | Main Responsible Party |
|---|---|---|
| 1 | Product selection and FOB Busan price negotiation | Buyer / Seller |
| 2 | HTS Code, duty rate, and import regulation review | Buyer / Customs Broker |
| 3 | Product production and packaging in Korea | Seller |
| 4 | Ocean freight booking | Buyer / Freight Forwarder |
| 5 | Delivery to Busan Port and Korean export customs clearance | Seller |
| 6 | ISF filing before vessel loading | Buyer / Customs Broker |
| 7 | Cargo loaded onto vessel at Busan Port | Seller |
| 8 | Bill of Lading issued and ocean transportation begins | Carrier / Forwarder |
| 9 | Arrival Notice issued before U.S. arrival | Forwarder / Carrier |
| 10 | U.S. customs entry filed | Customs Broker |
| 11 | Duties, MPF, HMF, and fees paid | Buyer |
| 12 | Customs release issued | CBP / Broker |
| 13 | Cargo picked up from port and delivered | Forwarder / Trucker |
| 14 | Cargo received at warehouse or final destination | Buyer / 3PL |
15. Cost Responsibility Under FOB Busan
| Cost Item | Korean Seller | U.S. Buyer |
|---|---|---|
| Product manufacturing cost | Included | |
| Inland transportation in Korea | Included | |
| Korean export customs clearance | Included | |
| Busan port loading cost | Included | |
| Ocean freight | Responsible | |
| Marine cargo insurance | Responsible | |
| U.S. port charges | Responsible | |
| U.S. customs clearance fee | Responsible | |
| U.S. customs duty | Responsible | |
| MPF / HMF | Responsible | |
| FDA / USDA / CPSC filing fees | Responsible | |
| U.S. inland trucking | Responsible | |
| Warehouse receiving fees | Responsible |
16. Practical Step-by-Step Procedure for First-Time Importers
For first-time importers, the process can be simplified as follows:
Step 1: Request an FOB Busan Quotation
Ask the Korean supplier to clearly state:
Incoterms: FOB Busan, Incoterms 2020
Step 2: Request Draft Shipping Documents
Ask for the Commercial Invoice, Packing List, product details, country of origin, manufacturer information, gross weight, net weight, carton count, and CBM.
Step 3: Send Documents to a U.S. Customs Broker
The customs broker should review the HTS Code, duty rate, KORUS FTA eligibility, and any FDA, USDA, CPSC, FCC, or other agency requirements.
Step 4: Request an Ocean Freight Quote
Ask a freight forwarder for an ocean freight quote from Busan to the U.S. destination port, such as Los Angeles / Long Beach.
Step 5: File ISF Before Vessel Loading
The ISF must be filed before the cargo is loaded onto the vessel in Busan.
Step 6: Prepare for U.S. Customs Clearance
Before the cargo arrives in the United States, the broker prepares the customs entry, and the buyer prepares to pay duties, fees, and other charges.
Step 7: Arrange Port Pickup and Final Delivery
After customs release, the cargo is picked up from the port and delivered to the buyer’s warehouse, 3PL, store, or other final destination.
17. Sample Email to Request Documents from a Korean Supplier
Please provide the following documents and information for U.S. import customs clearance under FOB Busan terms:
Commercial Invoice
Packing List
Product specifications
Country of Origin information
Manufacturer name and address
HS Code used in Korea
Certificate of Origin or origin statement for KORUS FTA review
Product ingredient list or material composition
Test reports or certificates, if available
Estimated cargo ready date
Total carton count, gross weight, net weight, and CBM
Please also confirm that the shipment term is:
FOB Busan, Incoterms 2020
18. Conclusion
When importing products from Korea under FOB Busan terms, the key point is simple:
The Korean supplier is responsible for the shipment until the goods are loaded onto the vessel at the Port of Busan.
The U.S. buyer is responsible from that point until the goods arrive at the final U.S. destination.
The five most important items for U.S. buyers are:
Confirm the correct HTS Code
Review KORUS FTA eligibility
Check FDA, USDA, CPSC, FCC, or other agency requirements
File ISF on time before vessel loading
Work with an experienced freight forwarder and licensed U.S. customs broker
For first-time importers, the safest approach is to select a freight forwarder and customs broker before shipment, obtain all documents from the Korean supplier in advance, and have the documents reviewed before the cargo is loaded in Busan.
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