How Does Certificate of Origin Work?

A certificate of origin (CO) is among the most important international trade terms. In this article, we will examine this term in detail. Below you can find all the details about how the certificate of origin works.

What is a Certificate of Origin?

A certificate of origin verifies the country of origin of a product. It indicates the place of manufacture and processing of the product. The CO is essential to the import process. Customs offices of countries usually need this document as an integral part of the customs clearance process. The certificate of origin specifies details about the product, destination, and country of export.

Who Issues the Certificate of Origin?

A certificate of origin is vital to global business. Importers and exporters have been using this document since 1898. Different countries rely on a network of chambers of commerce to create this document. The International Certificate of Origin Council of the International Chamber of Commerce serves this purpose. This council supports the position of the chambers of commerce. Besides, the ICC has established a set of procedures for the compliant issue of COs. ICC’s Certificates of Origin Guidelines assist chambers of commerce in this regard. As a result, the chamber of commerce of the relevant country usually issues the certificate of origin.

Types of Certificates of Origin

There is no standard form of a certificate of origin. However, there are two basic types of COs.

Non-Preferential Certificate of Origin

A non-preferential certificate of origin confirms that the products are not subject to preferential treatment. Another name for this type of document is “normal CO.” A non-preferential CO is one of the basic documents that chambers of commerce can issue.

Preferential Certificate of Origin

Sometimes goods are subject to discounted tariffs and exemptions. Preferential COs are essential if the goods are going to a country that provides these privileges. Relevant institutions can issue preferential COs for target countries where the Free Trade Agreement (FTA) is in effect.

Importance of Certificate of Origin

When moving goods across borders, the certificate of origin is essential. It proves the place of manufacture of the goods. Hence, it is vital to make sure that the country of origin is obvious. Many cross-border treaties require a CO. Because this document indicates whether the products are suitable for import. Besides, the CO indicates whether the products are subject to import duties.

The application of tariffs or the exemption of the product becomes simple if the origin is clear. Furthermore, being able to import commodities is essential. Also, certain commodities are prohibited in some places. Thus, failing to follow these restrictions can result in severe penalties. For this reason, many traders in the international arena disclose their country of origin. Because the parties involved in shipping desire to know the country of origin of each item.

The certificate of origin removes many barriers to traders in trade. For example, it reduces or eliminates customs duty at the ports of origin and destination. It also provides for the temporary acceptance of goods. Finally, the CO provides exemptions from certain trade quotas and tariff restrictions.

What Details Are Included in the Certificate of Origin?

Usually, the exporter prepares the certificate of origin. As we mentioned earlier, there are different types of COs. But some details should be in all these documents. Details, such as the name and contact information of the exporter, manufacturer, and buyer, should always be on the CO. Also, details of the goods, such as weight and quantity, should be on the certificate of origin. Furthermore, the CO must show the number of air waybills. Finally, the country of origin should be one of the details in the certificate of origin.

Many countries have no particular standards for a CO. But, some countries have stringent guidelines, third-party qualifications, etc. Thus, you should learn the rules of the country where you will trade.

Which Countries Require Certificate of Origin?

Many countries may require a CO for many types of goods. You can contact your local chamber of commerce to find out this information. Some countries may require special COs with specific characteristics.

  • Use a EUR.1 or EUR-MED document when shipping from the European Union to a country with an EU trade agreement.
  • For shipping between Canada, the USA, and Mexico, you must use a NAFTA certificate of origin.
  • Use a CAFTA-DR certificate of origin for shipments between the US, Central America, and the Dominican Republic.

Moreover, many countries in the Middle East, Africa, and Asia demand certificates of origin. These documents do not have specific names like the ones above.

How to Get a Certificate of Origin?

You usually have to do three things to get a certificate of origin.

First, you must have a tariff harmonization code for your goods. The tariff code is a product-specific code. The Harmonized System (HS) provided by the World Customs Organization (WCO) documents this code. It is not just customs officers who use the HS code to classify goods. This code is also helpful for chambers of commerce. Secondly, you must make sure that your goods follow the rules of origin. The rules of origin determine whether a product qualifies as an FTA origin. Finally, you must arrange for the shipment of your goods to your buyer.

In some countries, you can apply for a CO online. In other countries, you must complete a standard certificate of origin form. You must send this document to your local chamber of commerce for stamping and approval.

You must prepare the certificates of origin before shipping. The information in this document must match the information in other documents.

Electronic Certificates of Origin (e-CO)

The development of technology and e-business provides many conveniences for processes. One of them is electronic certificates of origin. These certificates make the process much easier for traders. Many chambers of commerce in the world issue electronic certificates of origin. Electronic certificates of origin are very secure and easy to use. With e-CO, you can forward the necessary documents to the chambers of commerce online. Thus, chambers of commerce stamp your electronic certificate. Then, they send it to you online.

For all your questions about the import process, click here to contact the experienced Turkish Goods team.

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