/ By che / China Freight News

Certificate of Origin: The Definitive Guide

I know you want to learn more about certificate of origin.

Or, you would like to know what it is, who issues certificates or origin.

Or maybe, you want to know why a certificate of origin is important.

If that’s the case, then read this guide since it covers everything you’re looking for about certificate of origin.

What is a Certificate of Origin?

It refers to an importing document often used in international trade transactions issued by the exporter.

Normally, it authenticates the product imported or shipped was obtained, manufactured, or processed from a specific country.

Additionally, certificate of origin contains vital information regarding the item, country of export as well as destination.

It is a necessary document required for cross-border trade by many treaty agreements.

In most cases, certificate of origin is issued by the exporter or supplier and authenticated by the Chamber of Commerce.

It is also anchored by a commercial invoice, which declares the same information.

Certificate of origin

Why is a Certificate of Origin Necessary?

  1. It helps in determining whether or not particular products are eligible for importing from China.
  2. It helps to establish whether the goods are subject to duties and taxes or if they are exempted from the same.
  3. It enables products to clear seamlessly at the customs department of the country of destination. Many customs authorities require this document to validate country of origin.
  4. It sets controls management of imported products by informing importers the countries subjected to foreign quotas.
  5. It determines the rate of customs duty the product is charged. The importer must always submit a copy of CO at the time of making a declaration.
  6. It helps to differentiate the product from competitors and providing statistical reporting
  7. It is essential in fulfilling appropriate product marking requirements. The markings must be of adequate size and clear enough.

What Details are included in a Certificate of Origin Form?

A certificate of information contains numerous details, which include the following;

  • Exporter’s information including name of the company, address, and contact details
  • Consignee details including name, address, and contact details
  • Port of loading
  • Port of discharge
  • Name of the vessel and voyage number
  • Departure date
  • Final destination
  • Letter or credit where applicable
  • Certificate number
  • Product details – These include description, weight, quantity, HS code, shipping marks, etc.
  • Statement of country of origin of products
  • Third-party details where applicable
  • Name, date, and signature of the representative of authorized company

Which Countries need a Certificate of Origin?

Any country, which is involved in international trade requires a certificate of origin.

It is a requirement for any country, which imports goods manufactured in a different nation.

In other words, any country which imports goods and products from different countries requires a CO.

When is a Certificate of Origin Required?

  • It is a requirement when there is a bilateral Free Trade Agreement between the exporting and importing countries. In this instance, it enables the importer to reduce or eliminate import duties pegged on the goods.
  • It is also required during clearance of the imported products by the customs authority. The customs at the buyer’s country use this document to determine tariffs, duties, and taxes.
  • It is required during customs clearance to determine the actual origin of the goods.

What is the Difference Between a Certificate of Title and a Certificate of Origin?

Certificate of origin refers to an affidavit or document, which accompanies the product or item.

It outlines the company, which manufactured it and denotes transfer to the importer.

CO is a critical document required for cross-border trade.

It is used in clearance at the customs to determine the payable tariffs and duties pegged on the item.

On the other hand, a certificate of title refers to a document issued to a person upon purchasing or possessing a property.

It is often issued after the property is transferred to the buyer to denote legal ownership of the same.

Certificate of title is given out locally by the respective authorities overseeing such transactions.

How does C/Os Work in the Import/Export Process?

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Ideally, there is no standard C/O or global trade.

This document is often prepared by the supplier who must have the basic information about the product and country of origin.

The exporter documents all the relevant information based on knowledge of border control requirements of importing countries.

The exporter then ensures the Certificate of Origin is notarized by the chamber of commerce of the exporting country.

Then the form is submitted to the importer or agent with the shipment.

Detailed information and requirements depend on the type of products being shipped and the specific country they are headed to.

The importer submits the C/O at the customs department of importing country.

This is alongside other import documents, including the commercial invoice and packing list, among others.

At this point, the customs official will determine all the applicable functions of the C/O and provide a conclusive report.

Mostly, it helps to reduce or eliminate customs duties payable on imported goods.

The goods are then allowed into the country subject to the report by the customs authority.

The importer must meet specific conditions where applicable before goods are cleared to get into the country.

What are the Different Types of Certificate of Origins?

Certificate of origin come in two types, which include the following;

Certificate or origin document

1) Non-Preferential

It is the most common and largely used in many cross-border trades.

It is a type of CO, which specifies the product is ineligible for lower tariffs or preferential treatment.

In other words, goods under non-preferential CO do not qualify for tariff-free treatment or lower tariffs.

Different rules are used in application of all types of non-preferential commercial policy measures.

Some of these measures include anti-dumping duties, trade statistics, government procurement, trade embargoes, and countervailing duties, etc.

This type of CO is obtained in circumstances where the goods are entirely sourced in one country.

It can also apply where two or more countries are involved in manufacturing of the product.

Even so, its origin is obtained for the country where the goods went last.

Essentially, each product has a non-preferential origin, and it can be different from its preferential origin.

2) Preferential

It refers to a certificate attesting products in a particular shipment of a particular origin under the conditions of a bilateral or multilateral free trade agreement.

It shows a product qualifies for relatively low or reduced tariffs.

It also specifies any other exemptions, which may exist in the trade agreement.

Essentially, preferential CO is conferred on products from specific countries upon fulfilling stipulated policies.

Notably, not all goods necessarily have a preferential origin.

What does Preferential Origin Mean?

It refers to products conferred from specific countries, which have met the set criteria hence allowing claiming of preferential rates of duty.

It has a connection with trade agreements, which enable members to access domestic markets at preferential tariffs.

Preferential origin sets out the minimum amount of processing or working needed on non-originating materials.

The essence is to make it possible for the resulting products to attain the originating status.

To obtain preferential origin, the products must attain the relevant conditions set in the origin protocol of concerned country.

Preferential origin provides two grounds, which a product must meet to be considered as originating;

  • The products must be manufactured from components or raw materials produced in beneficiary country.
  • The products must undergo a particular amount of processing in the beneficiary county.

Who can issue a Preferential Certificate of Origin Document?

It is issued by a competent authority of an exporting country appointed by a relevant body overseeing the operations of this trade.

It is considered as an effective option to undertake since they are verified by the chamber of commerce of the particular country.

In some instances, the certificate of origin can as well be issued by a supplier, manufacturer, exporter, or importer.

These are often referred to as self-issued certificates of origin and declarations of origin.

However, self-issued CO’s are often subjected to thorough scrutiny by the customs department during clearance.

At times this can lead to unprecedented delays, especially if the goods are coming from a country with unclear bilateral trade agreements.

What are Preferential Rules of Origin?

They refer to a set of criteria, which products must comply with to be considered as having originated from when exported to FTA partner.

They are policies used in determining whether or not a product is legible for preferential tariff offered under the agreement.

Preferential rules are based on HS classification, but it has to be product-specific. Negotiations for these rules is independent for each FTA.

Preferential rules of origin come in two main types, which are wholly obtained and substantial transformation.

Wholly obtained goods are products acquired entirely within the territory of an FTA party.

This is without factoring in any addition of non-originating materials.

Substantial transformation is a rule, which requires products to undergo a particular process to be considered originating from a particular country.

How do you Fill Certificate of Origin Form?

It is quite a simple exercise, which requires you to provide the specific details outlined in the document.

Even so, the information required may vary depending on the originating and destination countries.

Basically though, in filling out the document, you need to provide the name and address of both the shipper and consignee.

You must also indicate the name of the shipper or the shipping company used.

Ensure you list the numbers, marks, or identities identifiable on the outside surface of the shipment. Provide the number of units for the particular product on the form.

Also, give the full weight of the consignment and incorporate packaging in kilograms or applicable mass units. Provide a detailed description of each item.

Ensure you sign, stamp, and date the form upon filling all the relevant details accordingly.

What is a Generic Certificate of Origin?

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It refers to a non-specific form, which you can use for any country that lacks Free Trade Agreement, particularly with the USA.

It is also issued in circumstances where the goods do not qualify for FTA.

It is used for facilitating importation of goods from partners who do not have unilateral or bilateral trade agreements.

It contains exporter’s and importer’s information, description, and harmonized tariff or products and country of origin.

A local chamber of commerce must authenticate a generic certificate of origin.

It also has to be legalized by the commercial department of the consulate of the country of destination.

Who Signs a Certificate of Origin Form?

It is prerogative of the exporter to sign the certificate of origin form.

It has a provision, which allows the exporter to declare knowledge of the details provided on the form.

Additionally, the local chamber of commerce of the originating country must also append a rubber stamp on this form.

The essence is to corroborate the items are indeed originating from the country.

Which Party Provides a Certificate of Origin Form?

The shipper can choose to create their template for declaration of origin and make declaration on behalf of the company.

For non-preferential certificates, the local chamber of commerce is responsible for giving it out to the exporter.

The exporter fills out the form by providing relevant details regarding the products and country of destination.

The exporter, in this case, could be a manufacturer, supplier, or general merchant.

The chamber of commerce acts as the third party, thus responsible for verifying the shipper’s declaration.

The chamber of commerce then reviews the form and notarize it before it is submitted to the importer.

However, if it is a preferential certificate of origin, it is the Global System of Trade Preference (GSTP) that issues it.

But the country must be a member of GSTP to obtain this document through Export Inspection Council (EIC)

What are the Formats of a Certificate of Origin?

Certificate of origin is available in two major formats;

Generic format – It refers to the general format, which is non-specific and can be used in situations where goods do not qualify for FTA.

It is a simple format, which only captures the basic information of the exporter, importer, products, and country of origin.

Special format – It refers to a customized template, which captures specific information regarding the exporter, importer, products, and country of origin.

It offers detailed information relevant to the requirements of local chamber of commerce stipulations.

What is an Electronic Certificate of Origin?

It refers to a web-based certificate created and completed online.

Most chambers of commerce around the world have started adopting electronic certificates of origin in various export operations.

The exporter needs to fill all the relevant documents on the application and submit it to the chamber of commerce for approval.

Certificate or origin

Why should you Consider an Electronic Certificate of Origin?

  • It increases transparency, saves time, and significant cost in the overall trading environment.
  • It accelerates the speed at which the document is created, approved, and submitted to the importer for customs clearance.
  • It enhances safety of trading environment hence increasing efficiency of forwarding and clearing goods from between exporting and importing countries.
  • It reduces the need for paperwork, which is increasingly becoming tedious, bothersome, and frustrating.
  • It enhances safety as far as keeping records for future reference is concerned.

How do you Determine Country of Origin?

Primarily, it refers to the country of production, manufacture, or growth where the product comes from.

Determining the country of origin in international trade is essential and relatively simple.

You merely need to figure out the specific country the product is wholly obtained or wholly produced from.

There is a label, which you will always find on the product indicating either or both.

For example, if the product is wholly produced in China, the label will indicate “Made in China.”

It shows the country of origin for the item is China since labor, materials, and other production factors are entirely obtained from China.

The product can be produced in China, but materials and other elements sourced from other countries.

In this case, the label can only indicate “Made in China” claim conditionally.

Nevertheless, you can also determine the country of origin if the product ships directly from beneficiary country.

Is Country of Origin the same as made in?

Not necessarily. Country of origin may vary from made in on different grounds.

For example, if the product is entirely manufactured in a country using the local labor and resources, it becomes a country of origin for the product.

Where the goods are processed in country using imported materials and sourced labor, there is a caveat.

It becomes made in the country from imported materials.

Generally, the terms depend on the FTA or duty preference programs.

What do you need to Apply for a Certificate of Origin?

You need to provide the following documents;

  • A duly filled and approved affidavit
  • Supplier’s corresponding commercial invoices indicating where goods are sourced from.
  • A duly filled certificate of origin request form

There is also a fee, which you must pay at the chambers for stamping the certificate of origin.

The fee is usually subsidized for members but varies from one authority to the other.

Should you only Apply your C/O at the Local Chamber of Commerce?

Yes! It is highly recommended you apply for C/O at the local chamber of commerce.

It is the only officer with authority to notarize the certificate of origin and make it valid for use.

What is the Cost of Obtaining a C/O?

It varies from one country to another.

The authorities responsible for issuing the C/O usually peg small facilitation fees for the same.

Even so, the fee is usually reduced for members of the association as an incentive of becoming a member.

The bottom line is there is no standard cost for acquiring a certificate of origin.

Prevailing factors determine it.

Can you get a Certified Certificate of Origin Replaced?

Yes! In exceptional circumstances, the local chamber of commerce can accept requests for replacing a certified C/O.

However, the request is accompanied by a letter, which explains the reasons behind the wish.

What Happens if you’re Importing Goods from different Countries of Origin?

It depends largely on your country and the specific types of goods you are importing.

Some countries will require that you have a certificate of origin for every type of product you are importing.

For analytical purposes, it is recommended you record them separately.

This may require utilization of supplementary sources of information to determine countries of origin.

In some instances, you’ll need to consolidate the goods and obtain a single certificate of origin.

And this should be issued in the last country where consolidation occurred.

In essence, it is deemed the last country ought to have confirmed origin of the other products.

However, it is a requirement to get binding origin information.

This is a written document by the customs authority, confirming the origin of products.

What does a Certificate of Origin need to Comply with?

A certificate of origin documents must meet certain stipulations required by countries of destination

Even so, many nations across the world rarely put strict measures, which these documents must comply with.

The most important thing is making sure the document is in line with a strict format and content.

Additionally, some countries of destination would also demand third party approvals for the document.

Other demands for this document, however, may depend on the specific destination country.

Therefore, it is advisable to confirm with your local chamber of commerce to determine any specific requirements to adhere to.

Can a Certificate of Origin Reduce Import Duties?

Most definitely!

If you’re importing products from countries, which have bilateral or unilateral trade agreements, a C/O can eliminate or reduce import duties.

This document ostensibly, acts as proof of origin of the commodities.

Therefore, it comes in handy in determining whether or not goods are exempted from duty.

It also allows you to know whether it is eligible for preferential duty tariffs.

But this is dependent on the specific trade agreements between the country of origin and destination country.

At Tj chinafreight, we help you import from China by processing all your shipping documents.

Contact us today for questions or inquiries about import and export documents.