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Country of Origin Certificate

Where a Product Is Produced Determines Country of Origin

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Country of Origin Certificate

Photo courtesy ©2011 Laurel Delaney

Country of origin (COO) is an international term that indicates where a product is manufactured, produced, processed or grown. Think of it as where a product is born. On import/export shipments, a Country of Origin Certificate is important for the following reasons:

  1. Entitles business owners to a preferential duty program under U.S. Customs law or through a trade agreement. Many Free Trade Agreements (FTAs) have a specific COO Certificate; e.g., NAFTA.

  2. Determines rate of duty (e.g., a producer or manufacturer usually completes a certificate of origin and makes sure the importer has a copy at the time the declaration is made).

  3. Determines whether goods can be legally imported/exported (a certificate of origin may be required by the government of an importing country).

  4. Sets control management on imports/exports; e.g., informs business owners of the countries subject to quotas or embargoed countries.

  5. Provides statistical reporting.

  6. Complies from a legal standpoint with a specific request for a Certificate of Origin (from an importer).

  7. Fulfills proper product marking requirements (the markings must be legible - of adequate size and clear enough to be easily read by a person with normal vision).

  8. Differentiates the product from competitors.

  9. Allows the product to clear customs smoothly (to validate country of origin, some countries require a COO document).

According to International Chamber of Commerce World Chambers Federation, there are two varieties of certificates. The main type issued by chambers is a "Non-Preferential CO." For example, an "ordinary CO," which certifies the country of origin of a particular product, does not qualify for any preferential treatment.

Country of Origin Certificates may be needed to comply with the terms and conditions of a Letter of Credit, fulfill a buyer's request or satisfy a foreign customs requirement and is most often accompanied by an invoice.

Prior to moving goods, check with an international transportation company to determine whether you need a certificate of origin (typically based on a certain shipment value) to accompany a standard invoice on an international shipment. The bigger global transport companies usually allow you to download a form online (once the shipment takes place, there is a nominal processing fee) and will assist in making sure the form is completed accurately.

Note: Should you make an incorrect origin declaration or misrepresent the country of origin (too vague or deliberately confusing), the shipment may be refused, confiscated at the border, assessed a penalty fee or subject to a rigorous compliance program. And you surely don't want that to happen, so err on the side of being overly cautious here!

Photo courtesy ©2011 Laurel Delaney licensed to About.com, Inc.

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