Certificate of Origin (CoO)
What is a Certificate of Origin (COO)?
A Certificate of Origin (COO) is a crucial document in international trade that proves that goods have been produced, manufactured or processed in a specific country. It is the equivalent of a product’s “proof of nationality”. This document contains information about the product, destination, and exporting country.
Why do you need a certificate of origin?
A certificate of origin plays several key roles in international trade:
- Customs clearance: Most countries require a COO to clear goods through customs.
- Determination of customs duties: The COO helps customs determine the applicable import duties. This can reduce trade costs, especially if a free trade agreement (FTA) between the two countries may entitle the goods to preferential or even zero tariffs.
- Trade compliance: The COO helps traders comply with customs and tariff regulations.
- Trade policy helps verify whether goods come from countries subject to trade sanctions or restrictions and ensures that goods are not produced under unethical or exploitative conditions.
- Goods declaration: COO can also be used for advanced goods declaration, such as government import statistics.
Some freight forwarders also require a COO to be attached to the shipper’s instruction letter in case the goods are prohibited from being imported or additional documents are required.
Are certificates of origin required and compulsory?
Yes, certificates of origin are usually compulsory, and customs officials usually expect them to be a separate document from the commercial invoice and packing list. Generally, the COO needs to be signed by the exporter, then notarized and stamped by the appropriate chamber of commerce in the exporting country. Sometimes, customs officials may require additional proof of review from a specific chamber of commerce.
Although many countries do not have specific requirements for the format of the COO, others may have strict requirements for the format and content or even require third-party certification. These forms are submitted to customs upon arrival of the goods at the destination as proof of country of origin.
How do I obtain a certificate of origin?
Obtaining a certificate of origin usually involves the following steps.
- Complete and notarize the relevant affidavit.
- Provide a manufacturing invoice or commercial invoice to prove the place of manufacture of the goods.
- Complete the certificate of origin form.
- Submit the notarized affidavit, certificate of origin and other required invoices to the local chamber of commerce, and specify which documents require stamping.
Summary
For small and medium-sized businesses (SMBs), understanding COOs is critical if they handle international trade independently or work with a freight forwarder. Failure to understand or misuse COOs can complicate customs clearance, resulting in potential delays and additional fees. The importance of COO is even more pronounced when it comes to free trade agreements such as the US-Mexico-Canada Agreement (USMCA), which can help companies enjoy lower tariffs or even tariff-free treatment. In such cases, it may be beneficial to seek the help of a freight forwarder who can interpret and apply the nuances of the relevant trade agreement to ensure that companies make the most of the available trade benefits.
