Certificate of Origin | Trade Samaritan

Certificate of Origin

Certificate of Origin is an important document to determine the Customs duty or to avail any preferential customs duty (GSP) and/or incentive based on the geographic location.

Certificate of Origin is a document that certifies the country of origin of the goods.

Though a certificate of origin on the face of it appears to be a document of very less utility or interest, this document not only certifies the origin of goods but has a great utility when it comes to participating in the Trade Block and Free Trade Agreements (FTA) such as North American Free Trade Agreement (NAFTA)Asean Free Trade Agreement (AFTA), Generalized System of Preference (GSP) or various such schemes.

Customs duty is usually calculated basis 3 parameters:

  1. the type of goods
  2. the country the goods are being imported into
  3. where they are judged to be originated from (country of origin)

Defining the country of origin can get complicated if raw material or parts are imported from one or more countries, in which case the country wherein substantial assembling function is conducted is deemed to be the country of origin. And in such a scenario importer/applicant may insist for a certificate of origin to make sure that manufacturing and assembling is done as per the LC/Contract terms.

Contents of a typical certificate of origin can be viewed in the below template.

Certificate-of-Origin-Template-Trade Samamritan

Basics

1. When a credit calls for a ‘Certificate of origin’, a signed document which relates to invoice and certifies the country of origin of goods is acceptable

2. It should ‘relate’ to invoice means that

  • the certificate states the goods description that corresponds (does not conflict) with the credit.

or

  • it states the goods description appearing on any other stipulated document (such as invoice or transport document etc)

such a description can be stated either on the actual certificate or on a document that is attached to and forming an integral part of the certificate of origin

3. If a credit calls for a certificate of origin in GSP Form A or any such specific form, a document in that specific form must be presented

GSP stands for Generalized System of Preference. GSP is a scheme wherein industrial and agricultural products originating from specific developing countries are given preferential access to the markets of the European Union. Preferential treatment is also given by levying zero/subsidized customs duty.

One of the conditions to avail GSP is submission of Certificate of origin in GSP Form A. Hence ISBP 745 is rigid when it comes to fulfilling the requirement of certificate of origin in a specific format or type.

4. If the country is origin is indicated on the credit but no certificate of origin is called, the country of origin (if stated) on any document presented under this credit should not conflict with the country of origin stated on the credit.

If the credit states the country of origin as ‘Belgium’ then the country of origin(if stated) on any on every document presented such as  invoice, certificates, packing list, transport document, insurance document  should be ‘Belgium’ only.

Issuer

5. If the credit does not provide the details of the issuer of the certificate of origin, any entity can issue the certificate.

6. If a credit calls for a certificate of origin to be issued by the beneficiary/manufacturer/exporter, then a document issued by Chamber of Commerce (or a similar organization) with the details of the beneficiary/manufacturer/exporter quoted on it is accepted.

7. If a credit states that the certificate of origin is to be issued by the Chamber of Commerce, it can be issued by similar organizations/entities such as (this is not an all inclusive list)

  • Chamber of Industry
  • Association of Industry
  • Economic Chamber
  • Customs Authority
  • Department of Trade
  • Consignor/Consignee

8. If the consignor/exporter stated on the certificate of origin is not the same as the beneficiary then the certificate can quote a different,

  • Invoice number
  • Invoice date
  • Shipment route

9. Consignor/Shipper on the certificate of origin can be different than the one mentioned on the credit or any other document. But has to be the same in case of point 6 above.

10. Consignee details if stated on the certificate of origin should match with the credit.

11. When a credit calls for a transport document in following format, consignee on the certificate of origin can be any party mentioned on the credit except the beneficiary.

12. In case of a transferable LC, the first beneficiary can be named as the consignee in the certificate of origin.

Functions

Certificate-of-Origin-Types-Trade Samamritan

The main type issued by chambers are “Non-Preferential COs“, i.e. “ordinary Certificate of Origins” which certify that the country of origin of a particular product does not qualify for any preferential treatment.

Preferential COs” refer to COs which enable products to enjoy tariff reduction or exemption when they are exported to countries extending these privileges: e.g. GSP, Commonwealth Preference Certificate or FTA, Free Trade Agreements between two or more countries.

And in almost all the cases it is importer’s responsibility to submit the certificate during the clearance of goods at customs to validate the participation in the scheme.

Preferential CO (GSP Form A) looks like this

Certificate-of-Origin-Template-Trade Samamritan

Depending on the type and arrangement of the Trade Block, other certificates such as ‘Certificate of Free Sale’ or ‘Certificate of Analysis’ may be required. These certificate may also be required to be ‘legalized’ or ‘stamped’ or ‘notarized’.

Certificates of Origin may be needed to comply with Letters of Credit, foreign Customs requirements or a buyer’s request.

In most countries, chambers of commerce are the key agent in the delivery of certificates of origin. However, in some countries, this privilege may also be extended to other bodies such as ministries or customs authorities.

Reference:

International Chamber of Commerce

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