Certificate of Origin (CO) Explained
A Certificate of Origin (CO) is a vital document in international trade that specifies a product's country of origin, its details, and the parties involved in the trade.
Basics
A Certificate of Origin is a crucial document used in international trade to declare the country in which a commodity or good was manufactured. It provides essential information about the product, its intended destination, and the exporting country. For instance, goods may bear labels such as "Made in the USA" or "Made in China." COs are mandatory for many cross-border trade agreements and play a pivotal role in determining import eligibility and applicable duties.
Key Points:
- COs must be separate documents from commercial invoices or packing lists.
- They require the exporter's signature, notarization, and certification by a chamber of commerce.
- Some countries accept electronically issued COs signed by chambers of commerce.
- Buyers may request COs as part of the documentary requirements in a letter of credit.
- Electronic COs (eCOs) can be obtained swiftly online through chamber certification.
Types of Certificates of Origin
There is no universal CO form for global trade, but a typical CO, prepared by the exporter, includes essential product details, tariff codes, exporter and importer information, and the country of origin. Specific requirements vary based on the type of goods and their destination. COs can be broadly classified into two categories: non-preferential and preferential.
- Non-Preferential COs
Also known as "ordinary COs," these certificates indicate that goods do not qualify for reduced tariffs or tariff-free treatment under trade agreements between countries. They are essential when no treaty exists between the exporting and importing nations or when specific products are excluded from tariff relief.
- Preferential COs
Preferential COs are used to indicate the presence of free trade agreements or reduced tariffs between countries. For instance, the USMCA free trade agreement between the United States, Mexico, and Canada provides preferential COs for exported products. Commercial invoices or bills of lading are often used instead of COs in these cases. The Generalized System of Preferences (GSP) in the United States eliminates duties on thousands of products from over one hundred countries, promoting economic development in disadvantaged nations. Various countries, including those in the European Union, have their versions of GSP.
CO Forms for Free Trade Agreements
Exporters may be required to issue specific CO forms to qualify for preferential duty rates under free trade agreements established by the US with other nations. These forms can be found on the U.S. Customs and Border Protection website, export.gov, or the Customs and Chamber of Commerce websites of the destination country. Sample certificates of origin for countries such as Australia, CAFTA-DR, Chile, Colombia, Korea, and the USMCA (which replaced NAFTA) can be accessed on shipping solutions websites.
Obtaining a Certificate of Origin
To get a Certificate of Origin for export, follow these steps from your local chamber of commerce:
- Fill out and notarize the necessary affidavit.
- Provide an invoice (manufacturer's or commercial) showing where your goods are made.
- Complete the Certificate of Origin document.
- Submit the notarized affidavit, Certificate of Origin document, and invoices to your chamber of commerce.
- Indicate which documents need to be stamped.
Usually, there's a fee for certifying certificates of origin. However, if you're a member, this fee may be lower, which encourages membership.
Typical Information Included in a CO
A typical CO includes the following crucial information:
- Description of the goods, including Harmonized System (HS) codes.
- Means of transportation and route details.
- Quantity, size, and weight of the items.
- Producer's name and contact details, including the country of origin.
- Exporting agent's name and contact information.
- The receiver or importing agent's name and contact information.
- Dated commercial invoice of payment.
- Waybill or bill of lading number.
- Any additional notes or remarks.
Conclusion
Certificate of Origin is a vital document used in international trade to declare the country in which a commodity or good was manufactured. It is necessary for determining import eligibility and applicable duties, and there are different types of COs depending on the products and destination. Obtaining a CO requires filling out necessary affidavits and providing an invoice showing where the goods are made, among other steps.