What Is a Certificate of Origin?
A Certificate of Origin is an important document used in international trade. This document attests that goods in a particular shipment are wholly obtained, produced, manufactured, or processed in a particular country. Basically, the exporter uses the Certificate of Origin to officially declare where the goods originate.
Why Is the Certificate of Origin So Important?
Consumers aren’t the only ones who care where their products are coming from. The Certificate of Origin is extremely important to the officials of the country where the goods are heading. Virtually every country in the world requires the origin of the goods in order to determine the amount of import duty assessed on the goods. In some cases, the country of origin also determines whether the goods may be legally imported at all.
The Different Types of Certificates of Origin
There are two types of Certificates of Origin. The most common type that’s issued is called a non-preferential Certificate of Origin. This is to certify that the country of origin of a particular product does not qualify for any type of preferential treatment.
Preferential Certificates of Origin are different. Goods with this type of documentation may enjoy tariff reductions or exemptions when they are exported to countries extending these privileges. Under various Free Trade Agreements, many countries have decided to make it easier to trade with each other. One example of such an agreement is NAFTA.
NAFTA Certificate of Origin
The North American Free Trade Agreement (NAFTA) between Canada, USA, and Mexico went into effect on January 1, 1994. Since then, many tariffs between these countries have been reduced or eliminated.
As a result, the exporter is responsible for filling out the NAFTA Certificate of Origin if the exported items going to Canada or Mexico are valued at more than $1,000. Otherwise, the exporter only needs to make a written declaration on the commercial invoice stating that the goods are qualifying under NAFTA.
The exporter should send the original Certificate of Origin to the importer and include a copy of it with the shipment. As an exporter, you’re required to keep all documentation for 5 years or more.
What Is Included in the Certificate of Origin?
A Certificate of Origin has to include a great deal of detailed information about the shipment, where it’s coming from, and where it’s going.
Here is a list of items that need to be included on the Certificate of Origin:
- Importer’s name, address, country, phone number, and email address (if unknown, put “Unknown”
- Exporter’s name, address, country, phone number, and email address
- Producer’s name, address, country, phone number, and email address (if more than one, put “various” and attach a list of all producers and their contact information)
- Period of time the certificate is valid for (maximum of 12 months): this is used for multiple shipments, and they all must take place within the time period specified on the certificate
- Complete description of merchandise, detailed enough to match contents with invoice and tariff schedule
- Tariff classification for merchandise described above
- Country of origin
Obviously, the Certificate of Origin is only required when you export goods to another country. Unfortunately, every country has different rules on what is required on the Certificate of Origin. Some countries are satisfied with a statement of origin printed on company letterhead. Other countries need the Certificate of Origin to be notarized, certified by a local chamber of commerce, and legalized by the commercial section of their own consulate. The latter requirements apply to numerous Middle Eastern countries.
The Hassles Associated with Certificates of Origin
Considering the sheer number of potential trading partners, it becomes quickly apparent that it’s no easy task to provide the correct ocean freight shipping documents.
Additionally, if the shipping documentation is not filled out correctly or is missing, there can be serious consequences, including:
- Delayed shipments
- Non-payment for the seller
- Assessment of fees for missing or incorrect information
- Additional storage costs until proper documentation arrives
Proper Shipping Document Management
Managing shipping forms in a way that reduces error and increases compliance with each country’s requirements is critically important. Fortunately, at eFileCabinet we’re here to help you make it easier to meet those requirements.
We can help you in a diverse range of ways:
- Keep your documentation accessible anywhere
- Make it easy to search for files using full-text search
- Allow you to have the right forms on hand when you need them
- Manage your documents for different areas of the world from a central location
- Authorize user-specific access to the correct documentation
- Automatically archive documentation on a prescheduled basis
At eFileCabinet, we help you manage your freight shipping forms the right way. Let us show you what we can do for you! Simply fill out the form on this page and get started with your free demo.