Certificate of Origin

By Paulo Camurugi

The Certificate of Origin (CO) is an essential document for anyone to import, for it is through it that you can be sure of the origin of one commodity, that is, what is the country that manufactured the product. The CO specifies rules of origin negotiated and settled in trade international agreements. Thus, to benefit from the reduction or exemption of taxes levied on import, the importer needs this certificate.

According to the Geneva Convention of 1923, the CO may be issued by the Chambers of Commerce. In some countries, some associations and consulates in origin countries are also authorized to issue such a certificate. To find the nearest location and authorized office to issue the CO, just check the directory of the Board of Trade WCN (www.worldchambers.com).

Besides the simple Certificate of Origin, there is also a certificate of origin preferred, which is a document that proves that the goods in a particular shipment are of a particular source under definitions of a bilateral or multilateral trade agreement in particular (FTAs). This certificate is required by the customs authorities of a country to decide whether imports could benefit from preferential treatment, according to the special shopping areas, or by customs unions such as the European Union or the North American Free Trade Agreement (NAFTA). It is required also by the Customs to verify the application of antidumping duties.

There are many questions about the Certificate of Origin. Many, for example, what percentage of manufacturing in the country of origin is necessary. Such question is important for the product is not always one hundred percent made in the country of origin.

It is common for an importer to evade restrictions applied to certain countries, importing only a portion of the product of these countries with restrictions and require completion of making the product in other countries where no such restrictions. There is no illegality in this triangulation. However, the importer should beware, because there is a limit to the cost of production goods originating in one country. In most cases it is required that more than 50% of the product be of domestic content. In some international agreements, these percentages may vary.

The importer must also be careful with the transfers in ships done with import goods, as it is common that smugglers, traffickers and even terrorists use the transfers to disguise the points of origin and, therefore, the certificates of origin. If there is any ship transfer, it is important that the importer report the incident to the customs authorities, as they seem to track the countries where these situations occur more frequently.