Trade Talk Blog A
s an importer, staying organized and on top of compliance regulations is essential to guarantee the successful importation of your goods. One way to do this is by obtaining a Certificate of Origin (CO), which can serve as an authoritative document that identifies the origin country for products shipped across borders. But what exactly is a CO, and why is it important? This blog post will cover what COs are, why and when you need one, and how their proper use is key for ensuring a smooth importation process.
What is a Certificate of Origin (CO)?
A Certificate of Origin (CO) is documentation stating the country where an item or good was manufactured. It also includes information on the product itself and the destination. This important trade document indicates the country from which a product has been exported. It may determine whether or not goods can be legally imported into a particular country and, if so, under what duty charges. Therefore, having a CO on hand is an essential requirement for successful cross-border trading.
Customs authorities in certain countries have established criteria for the CO, requiring it to be a separate document from any commercial invoice or packing list. Notably, exporters must sign and notarize the CO, which then needs to receive further endorsement by an appropriate chamber of commerce. Depending on local preference, destination customs authorities may also demand validation from a specific local chamber—ensuring that only those declarations based upon verifiable information are certified. Otherwise, if accuracy can’t be confirmed externally, chambers will merely stamp their attestation regarding supplied goods as well as the sender’s identity.
Formal proof of review is often required in the form of a chamber’s official embossing stamp and signature. To meet this requirement, some countries provide digital certificates with signatures from chambers of commerce. Furthermore, buyers can request additional certifications or language within letters of credit to be noted on COs. Fortunately, obtaining an electronic CO (eCO) has made this step easier than ever: submit your documentation online for fast approval and receive an electronic certificate stamped by a chamber within 24 hours or opt for expedited paper delivery overnight!
The types of Certificates of Origin
The world of global trade is complex and requires documentation of varying details. To ensure success in international shipments, documentations such as CO forms need to be developed and adhered to. These COs will typically hold information on item specifics, tariff codes, exporter/importer name, and origin country, among other pieces necessary for border control upon importation.
There are three types of COs:
Non-preferential Certificate of Origin
With no preferential trade agreement in place or goods excluded from reduced tariffs, a non-preferential, or ordinary CO, is the necessary course of action for any international shipment. Careful consideration should ensure that the required paperwork fully demonstrates compliance with these uncompromising laws and regulations when exporting goods between countries.
Preferential Certificate of Origin
The USMCA free trade agreement between the United States, Mexico, and Canada has allowed for reduced tariffs on certain exports. By contrast, other nations granted preferential status in the Generalized System of Preferences (GSP) enacted by Congress can be exempt from duties completely due to their lower economic standing. In these cases, a commercial invoice or bill of lading is used rather than customs declaration documents.
Bolivia, Cambodia, Haiti, Namibia, and Pakistan are only a few of the many nations currently listed as benefactors from global economic programs like the Generalized System of Preferences (GSP). The European Union has implemented its own GSP to nourish promising economies through trade. Nations around the world have adopted this strategy in an effort to spur growth for these developing countries.
Free Trade Agreement Certificates of Origin
International trade is facilitated through free-trade agreements, enabling businesses to access advantageous duty rates across borders. To prove that their goods qualify for preferential treatment, exporters must submit a certificate of origin form. Sample Cos are provided by the U.S Customs and Border Protection website, the International Trade Administration, and those from customs or chamber websites in the destination country’s jurisdiction.
How to get a Certificate of Origin
Exporters requiring a Certificate of Origin can access the service provided by their local chamber of commerce. Applicants need to:
- Complete and notarize an appropriate affidavit
- Provide either manufacturer’s invoices or commercial invoices that show where the goods were manufactured
- Fill out the certificate of origin document
- Submit the documents as mentioned above to the chamber of commerce
- Specify the documents that need to be stamped
Memberships in chambers come at a fee but provide additional incentives like reduced charges on stamping services for COs.
What’s included in a Certificate of Origin
- A Certificate of Origin will usually include the following:
- The name and contact information of the item’s manufacturer and the country of origin
- The name and contact information of the exporting agent
- The name and contact information of the importing agent
- A description of the item, including HS codes
- The item’s quantity, size, and weight
- A bill of lading number
- The means of transportation and route information for shipping
- A commercial invoice of payment with a date
- Any additional notes or comments
Certificate of Origin vs Title
A Certificate of Origin is a key document that showcases the origin country and its associated trade documents and information, yet it does not serve as legal proof of ownership.
Transferring title to any given product requires more than just origin verification — a separate purchase invoice or other evidence must be supplied for a successful transaction exchange.
International trading requires declarations of a product’s origin, which is where the CO comes into play. It assures customs officers that goods have been shipped from one country to another, detailing all relevant specifications, such as those about exporter and importer identities. If applicable, preferential COs are also used in agreement with regional free trade agreements, simplifying the required information submitted and overall inspection needs by authorities involved. Otherwise, non-preferential COs are the way to go for international shipments. Ultimately, it falls upon the shoulders of exporters — verified by chambers of commerce — when issuing these certificates for import or export purposes. Now that you understand what a Certificate of Origin is and why it’s important to obtain one for your exported goods, you’re ready to start your import/export process.
How GHY Can Help You
At GHY, we are committed to helping you throughout every step of importing your goods. While your Chamber of Commerce provides Certificates of Origin, our experienced team will help you meet compliance requirements, so you enjoy cost-efficiency in every transaction. Streamlining processes through an informed examination is another way we can help your business succeed.
We also provide full-service solutions for managing, tracking, and filing all required paperwork associated with international trade. This ensures that all processes are handled efficiently and accurately so that your shipments arrive on time and comply with applicable regulations. With GHY at your side, you can rest assured that you’ll receive the best service possible at a competitive rate. Book a meeting with one of our GHY today and we’ll help you import your goods into the United States and/or Canada as timely as possible!