The Certificate of Origin or CO is a document which all exporters in global trading need to be familiar with. It is one of the many international shipping documents which must accompany cargo across national borders.
What is Certificate of Origin?
Certificate of Origin (CO) is an important document used in international trade to certify that the goods being exported are manufactured, processed, produced or obtained from a particular country. It must be submitted with an exported shipment.
What is a Manufacturer’s Certificate of Origin?
The MCO is a certificate required by the American Association of Motor Vehicle Administrators (AAMVA) for conveying ownership of all new vehicles. It has nothing to do with the global export-import industry per se.
What is a NAFTA Certificate of Origin?
NAFTA stands for the North American Free Trade Agreement. It was a treaty between the United States, Canada and Mexico which eliminated most tariffs between the countries.
On 1 July 2020, it was replaced by the United States-Mexico-Canada Agreement (USMCA). When NAFTA was in effect, the CO issued by any of these 3 countries in the agreement was called NAFTA Certificate of Origin.
Is Certificate of Origin mandatory?
Yes, for most countries, regardless of whether they are a party of the FTA or any inter-country agreement for trade.
When do I need a Certificate of Origin?
The Certificate of Origin is usually requested by customs, banks, private stakeholders and importers. It is needed for three instances.
The first is for customs clearance. Almost every country requires the CO for this purpose. The certificate helps in determining the duty to be charged on the goods, or in identifying whether the goods can be legally imported into a country.
Aside from the customs officer, it will also be used by the importer’s freight forwarder, customs agent or customs broker during the import customs clearance process. These agents use the CO to prove to customs that the goods were manufactured within the country of export.
Customs officials expect this document to be separate from the commercial invoice or packing list. They do not expect it to be signed by the exporter, but the signature on the CO needs to be notarized.
They may also ask for a proof of review of the CO from a specific Chamber of Commerce. In this instance, the Chamber’s official may only add an embossing stamp and a signature of an authorized chamber representative on the CO.
Some countries can accept electronically issued COs that are electronically signed by a Chamber.
The second instance is when the country of export and the country of import involved in a trade have a current Free Trade Agreement (FTA) in place. The FTA allows for import duties and tariffs in the country of import to be reduced or eliminated.
The third instance is when the importer needs the CO as a documentary requirement for a Letter of Credit.
How to get a Certificate of Origin
There are a few ways to go about this, depending on who the issuer of the CO is.
Where to get Certificate of Origin
A shipper or exporter, which does not manufacture or produce the goods to be exported, has to request for the CO from the supplier of the goods, i.e. the manufacturer.
The certificate can also be obtained from a local Chamber of Commerce where the goods are produced. Each country has its own Chamber of Commerce which specializes on certifying and issuing CO documents.
For example, if an exporter is shipping products from the USA to Canada, the exporter has to contact any local or state American Chamber of Commerce (AmCham). He must then submit his USMCA certificate or a Declaration of Origin template.
Most Chambers still manually sign and stamp original documents. Others may offer a digital CO.
Who can issue Certificate of Origin
A CO can be issued by a few different parties:
- Chamber of Commerce
- Manufacturer or producer of the goods to be exported
A Chamber of Commerce is authorised to issue COs. The procedures and requirements of a Chamber may vary from one country to another. Applicants for the certificate must submit a number of supporting documents for the goods to the Chamber for processing.
If the CO is provided by a manufacturer or equivalent, the exporter which is arranging for the export of the goods in question must have the CO certified by a local Chamber of Commerce. Chambers of Commerce usually only certify documents that are verifiable.
The exporter can also create a template for the CO and have it filled by the manufacturer. Then, have the document certified by a local Chamber of Commerce.
Alternatively, the exporter could create a Declaration of Origin (DO) template to make a declaration on behalf of his company. This document states the country in which the goods were made for the export shipment.
However, it will likely need to be certified by a local Chamber of Commerce as the customs department of most import countries require this. The Chamber acts as a 3rd party which verifies the exporter’s declaration.
If the Chamber is unable to check the accuracy of the details in a declaration, it might confine itself to only stamping the document attesting to the position and the identity of the signatory. The Chamber will then charge a fee to sign and stamp the declaration.
This document is therefore ‘certified’ and must be emailed to the importer so that it can be used in the customs clearance process. This step must be done before the goods arrive at the country of import to avoid any problems or delays with the customs clearance process.
Types of CO
Chambers of Commerce can issue two types of CO: non-preferential and preferential.
Non-Preferential Certificate of Origin
Also known as Normal CO, this type certifies that the goods to be exported are subject to no preferential treatment. It is the main type of CO issued by a Chamber of Commerce.
Preferential Certificate of Origin
This type tends to be closely associated with Regional Trade Agreements (RTA). It certifies that the goods to be exported are subject to reduced tariffs or exemptions when they are exported to countries, which are a party of a RTA.
How to create a Certificate of Origin
These steps are for creating the paper version of a CO.
- Complete and notarize an appropriate affidavit.
- Provide either a manufacturer invoice or commercial invoice which shows where the goods for export are manufactured.
- Fill out the CO form.
- Submit the notarized affidavit, CO and corresponding invoices to a local Chamber of Commerce.
- Indicate which documents need to be stamped.
How much does Certificate of Origin cost?
There are two types of costs. One is the fee for stamping the certificate. Another is the issuance of a CO form.
The costs of these services are quite affordable, and are usually on a per sheet or per copy basis. The Chamber of Commerce in each country will have its own rates.
Certificate of Origin template
There is no standardized CO form for global trade. However, the certificate must contain the details below:
- Exporter’s (shipper) company name, address and contact details (phone number and email address)
- Importer’s (consignee) company name, address and contact details (phone number and email address)
- Port of loading
- Port of discharge
- Vessel Name and Voyage Number
- Date of departure
- Final destination
- Certificate of Origin number
- Exporter’s reference (invoice number)
- Letter of Credit number (if required)
- Third party details (if required)
- Details of products included in the shipment – including shipping marks and numbers, number and kind of packages, description of goods, HS Code / Tariff Code, gross weight
- Statement of the country of origin of goods
- Name, date and signature of the authorized company representative
- Declaration by a Chamber of Commerce
- Declaration by the exporter
Detail requirements may depend on the type of goods being exported and where they are to be shipped. For countries which are part of the USMCA, there might be a specific CO form.
Having a freight forwarding agent which can also offer customs representative services is advantageous to an exporter and importer. For instance, TRANS Oriental Partner (TOP) Logistics in Russia has a partnership with GTK-Service, a Russian customs representative.
This representative removes unnecessary intermediaries, thereby saving time for the exporter and importer. It can assist with the provision of supporting documents throughout the entire processing cycle.
It can give professional advice on reducing costs as well as foreign exchange legislation and application of customs. The professionals at GTK-Service are able to calculate preliminary taxes and duties so that clients have an early estimate of the total costs of the trade.
Because GTK-Service is a legally recognised customs representative, it is able to register permits, shipping documents and any required conclusions as well as provide certification of goods.
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