Does Your Shipment Need a Certificate of Origin?

If you’re shipping goods by air or ocean, a certificate of origin is one of the many official documents customs officials are likely to require.

But what is the document? What purpose does it serve, and is it required for every single shipment? We’ll answer these and other questions in this article, so you’ll know exactly how vital this certificate is to your export consignment.

All international shipments require several important documents to be presented to customs officials at the port of departure and arrival. Knowing which rules and regulations apply to your assignment is a complex business, and is something we’ve dealt with in detail in our article about customs clearance.

What Is a Certificate of Origin?

A certificate of origin is an important document that shows in which country the items listed for export on the certificate are manufactured or obtained. You can see an example of a certificate on our documents list page.

***The COO contains details about the origin of the goods being exported and is usually, but not always, required to satisfy customs and trade requirements. ***

You’re likely to see a certificate of origin abbreviated to COO, C/O, or CO. Sometimes it’s even called a declaration of origin, or DOO for short. Rest assured, all these terms relate to the same document.

It’s usually the responsibility of the exporter or manufacturer to complete the certificate, and some COs must be countersigned and stamped by an authorized third party to be valid.

A certificate of origin also acts as the exporter’s statement of origin. However, the CO does not necessarily detail the exporter’s country of origin. Some certificates state only the country in which the product is manufactured. While the country of origin and the country of the exporter will often be the same, it’s not always the case.

What Is a Certificate of Origin Used For?

A CO is usually submitted to customs authorities in the importing country to prove the product's eligibility for entry. It is also used to establish whether the goods are eligible for preferential treatment under the terms of any trade agreement existing between the countries of origin and import.

Information on the certificate will determine the level of duty applicable to the goods and can, if a trade ban or sanctions are in place, determine whether or not goods can be legally imported.

COs are particularly useful for customs teams in nations that:

• Restrict imports from certain countries
• Limit the quantity of goods that can be imported
• Give preference to products manufactured in certain territories

Why Is a Certificate of Origin Important?

COs are vital for importers. Buyers of goods are unlikely to know how the products they are importing meet the origin-criteria required to benefit from reduced tariffs. The CO provides them with the proof of origin that customs officials need to calculate the payable duty upon import.

Confirming the Source of a Product

A CO plays a crucial role in certifying the source of a product. This could be essential, for example, for a customer who wants proof that the Belgian chocolates they are buying are made in Belgium. By showing the customer the CO, the importer can confirm the prestige of the product, proving that the chocolates are authentic.

Establishing the Legality of Imports

Trade relations between countries are subject to change, with trade wars, bans, and sanctions affecting the treatment of goods imported from certain territories. A CO enables customs officials at the port of entry to decide if such a ban or sanction needs to be applied.

Occasions When a CO Is Not Required

A certificate of origin is not essential for every shipment. Much depends on the nature and value of the goods being shipped and the terms of the trading agreement between the countries of origin and entry.

For preferential consignments, although a certificate of origin is usually required, small consignments of low monetary value are often exempt. Some consignments can receive preferential importation treatment even if not accompanied by a CO. Moreover, a refund can be issued at a later date if it’s proven that a consignment was eligible for preferential treatment.

As the requirements of a certificate of origin differ depending on the trade agreement, it’s vital to examine a trade agreement carefully to establish whether a CO is necessary.

How Certificates of Origin Are Checked

COs will be examined by customs officials at the port of entry to ascertain the nationality of the goods. Confirming the document’s authenticity involves a check of:

• The CO’s unique reference number
• The signatures on the form
• Whether the CO is within its validity period
• The official stamps on the certificate
• The accuracy and consistency of the information on the form (especially when compared to the commercial invoice and bill of lading)

Forms must be correctly filled in. Errors in the documentation—such as any discrepancy between the descriptions and amounts stated on the CO compared to those on the commercial invoice—can result in a CO being rejected. However, minor mistakes will not usually result in rejection.

Types of Certificates of Origin (COs)

There are two types of certificate of origin—Non-Preferential COs and Preferential COs. Let’s take a look at both.

Non-Preferential COs

As the name suggests, these certify that the consignment is not subject to any preferential treatment. This is the main type of CO and is also known as a normal CO.

As well as denoting the country the product originated from, the form acknowledges that the goods listed are not entitled to reduced tariffs under the terms of any trade agreement between the countries of origin and import.

Because nearly all world trade is now conducted under World Trade Organization (WTO) rules , non-WTO transactions are rare. Therefore, few WTO members demand a non-preferential certificate of origin to access most favored nation (MFN) tariffs. The reduced tariffs are applied automatically.

However, a non-preferential certificate of origin is still vital, particularly in the event of a trade war. The document permits goods to enter a country imposing trade sanctions, as long as they don’t originate from a country that is the target of those sanctions.

Preferential COs

A preferential CO certifies that the goods detailed on the form are subject to reduced tariffs or exemptions. That will typically be because they originate from a territory with which the importing country has a trade agreement.

Unlike the non-preferential certificate of origin, which usually mentions only the country of origin, preferential certificates also show the name of the applicable trade agreement.

Certificate of Origin Formats

COOs are either printed on paper or issued electronically. Let’s explore both formats in a little more detail.

Paper-Based COs

Paper COs are the most widely used format. To be valid, these forms must be signed and stamped by exporters/manufacturers and issuing authorities.

Traders are allowed to print their own certificates in certain circumstances. However, usually, COs are printed by authorized third parties and distributed to applicants as requested. Some free trade agreements require COs to be printed in a certain way, preventing traders from printing COs themselves.

To be accepted by customs authorities, all paper-based certificates of origin must be:

• Valid for 12 months after the date they’re issued
• Printed on A4 size paper
• Written in English
• Printed with a distinctive number and reference number
• Issued with an original copy printed on blue paper and three carbon copies on white paper

The original blue CO and one of the copies must be sent to the importer, who must present the original to customs officials at the entry port, and keep the copy on file. The other two copies need to be held by the exporter and the issuing authority respectively.

Electronic Certificates of Origin (e-CO)

The shipping industry is keen to introduce more technologically advanced ways of working. As a result of this innovative spirit, electronic certificates of origin (also known as e-COs) are likely to be more widely used in the future.

New platforms are emerging to facilitate this increased usage. The WTO's Trade Facilitation Agreement is also paving the way for electronic documentation to play a bigger role in streamlining international trade.

The benefits of e-COs include:

• Speedier trading
• Cost savings
• Tighter security

Despite these advantages, e-CO adoption is limited today, as it requires the widespread implementation of compatible platforms and processes to verify and accept electronic documents. The required advances are as yet, a long way off, so, at least for the short-term, paper-based COs will remain in use.

Who Issues Certificates of Origin?

Guidelines covering the issuance of certificates of origin around the world are determined by The International Chamber of Commerce. Responsibility for issuing COs often depends on whether third-party authorization of a CO is required, and if self-certification is permitted. The issuing authority can be any one of the following:

• Customs authorities
• Chambers of commerce
• Other government bodies

Self-Certified COs

If the exporter or manufacturer can self-assess whether its product complies with origin criteria, it may generate and distribute a certificate of origin. Alternatively, the exporter or manufacturer can provide a declaration detailing where the goods originate from on a different document, or as part of another relevant shipping document.

Third-Party Authorized COs

Some COs must be signed by the manufacturer or exporter and stamped or signed by an authorized body. To achieve clearance, customs officials may require the exporter to present documents detailing the manufacturing process. They may also wish to commission an inspection of the manufacturing plant.

Goods shipped under a non-preferential regime can have their CO certified by a chamber of commerce. For goods eligible to benefit from a free trade agreement, agencies of a nation’s ministry or department of trade can issue COs.

How to Obtain and Validate a Certificate of Origin

Requirements for obtaining a certificate of origin vary from country to country, but generally-speaking, you must follow these steps to obtain and validate a paper CO:

• Register as an exporter
• Complete an appropriate affidavit
• Provide a manufacturing or commercial invoice proving where your goods were manufactured
• Fill out your Certificate of Origin
• Submit a notarized affidavit and corresponding invoices along with your CO to your Chamber of Commerce, indicating which documents need stamping

To get an e-CO, the required documents can be submitted online and an electronic certification stamp provided by a chamber of commerce.

Even though a CO is not required with every shipment, when it is used, it plays an important role. By establishing where a product is manufactured, a CO is key to enabling customs officials to ascertain whether goods qualify for reduced tariffs.

So, if you are shipping freight between countries with a trade agreement that entitles your consignment to preferential treatment, a Certificate of Origin could prove very useful indeed.