Certificate of Origin (CO) Definition - Investopedia

A certificate of origin (CO) is a document declaring in which country a commodity or good was manufactured. The certificate of origin contains information ... TableofContents Expand TableofContents WhatIsaCertificateofOrigin(CO)? UnderstandingCertificatesofOrigin TwoTypesofCO CertificatesofOriginandTradeAgreements StepsforObtainingaPaperCertificateofOrigin Markets InternationalMarkets WhatIsaCertificateofOrigin(CO)? Acertificateoforigin(CO)isadocumentdeclaringinwhichcountryacommodityorgoodwasmanufactured.Thecertificateoforigincontainsinformationregardingtheproduct,itsdestination,andthecountryofexport.Forexample,agoodmaybemarked"MadeintheUSA"or"MadeinChina". Requiredbymanytreatyagreementsforcross-bordertrade,theCOisanimportantformbecauseitcanhelpdeterminewhethercertaingoodsareeligibleforimport,orwhethergoodsaresubjecttoduties. KeyTakeaways Acertificateoforigin(CO)recordsthecountryoforiginthatamimportedgoodhascomefrom.TheCOisoftenmandatedbyimportingcountriesandincludedintradeagreements,asitisusedtolevytheappropriateimporttax,ifanyapply.ACOcanexisteitherinpaperordigitalformat,andmustbeapprovedbytherequisitechamberofcommerceorcustomsauthority. UnderstandingCertificatesofOrigin CustomsofficialsexpecttheCOtobeaseparatedocumentfromthecommercialinvoiceorpackinglist.Customsinthesecountriesalsoexpectittobesignedbytheexporter,thesignaturenotarized,andthedocumentsubsequentlysignedandstampedbyachamberofcommerce.Insomecases,thedestinationcustomsauthoritymayrequestproofofreviewfromaspecificchamberofcommerce.Chambersofcommerceusuallyonlycertifythatwhichisverifiable.However,ifthechamberispresentedwithadeclarationattestingtocommercialdetails,theaccuracyofwhichitcannotcheck,itmustconfineitselftostampingthedocumentattestingtothepositionandtheidentityofthesignatory. Theproofofreviewusuallyamountstothechamber’sofficialembossingstampandasignatureofanauthorizedchamberrepresentative.Somecountriesareacceptingelectronicallyissuedcertificatesoforiginthathavebeenelectronicallysignedbyachamberofcommerce. Acertificateoforiginmayalsoberequiredbythebuyerinthedocumentaryrequirementsstatedwithinaletterofcredit.Theletterofcreditmayspecifyadditionalcertificationsorlanguagewithinthatmustbenotedinorderforthecertificateoforigintocomplywiththestatedrequirements Withanelectroniccertificateoforigin(eCO),youcansubmittherequireddocumentationonlineandgetanelectroniccertificatestampedbyachamberofcommerceinlessthanadayorgetanexpeditedpapercertificateovernight. TwoTypesofCO Thereisnostandardizedcertificateoforigin(CO)formforglobaltrade,butaCO,normallypreparedbytheexporterofgoods,hasatleastthebasicdetailsabouttheproductbeingshipped,atariffcode,theexporterandimporter,andthecountryoforigin.Theexporter,withknowledgeofthespecificrequirementsofbordercontrolattheimportingcountry,willdocumentthesedetails,gettheCOnotarizedbyachamberofcommerce,andsubmittheformwiththeshipment.Detailrequirementsdependonthetypeofgoodsbeingexportedandwheretheyaregoing. ThetwotypesofCOsarenon-preferentialandpreferential.Non-preferentialCOs,alsoknownas"ordinaryCOs,"indicatesthatthegoodsdonotqualifyforreducedtariffsortariff-freetreatmentundertradearrangementsbetweencountries,whilepreferentialCOsdeclarethattheydo.IntheU.S.theGeneralizedSystemofPreferences(GSP),enactedbyCongressin1974topromoteeconomicdevelopmentofpoornations,eliminatesdutiesonthousandsofproductsimportedfromoveronehundredcountriesaccordedpreferentialstatus.CountrieslikeBolivia,Cambodia,Haiti,Namibia,andPakistanarepresentlyonthelist,asarenumerousotherthird-worldordevelopingcountries.TheEuropeanUnionandcountriesaroundtheworldhavetheirownversionsofaGSP,mainlygearedtofosteringeconomicgrowththroughtradewithfriendlynations. CertificatesofOriginandTradeAgreements FreetradeagreementsmadebytheU.S.withothercountriesmaynecessitateaspecificformbeissuedbytheexporterasproofoforiginsoproductscanqualifyforpreferentialdutyrates.Samplesofthoseformscanbefoundatthe U.S.CustomsandBorderProtectionwebsite, export.gov,orthecustomsorchamberofcommercewebsitesofthedestinationcountry. Inaddition,theshippingsolutionswebsiteallowsyoutodownloadsamplecertificatesoforiginfor Australia, CAFTA-DR, Chile, Colombia, Korea, and NAFTA. StepsforObtainingaPaperCertificateofOrigin Completeandnotarizeanappropriateaffidavit.Provideeitheramanufactureinvoiceorcommercialinvoicethatshowswhereyourgoodsaremanufactured.Filloutthecertificateoforigindocument.Submitnotarizedaffidavit,certificateoforigindocument,andcorrespondinginvoicestoyourchamberofcommerce.Indicatewhichdocumentsyouwouldliketobestamped. Thereisusuallyafeeforstampingcertificatesoforigin—however,ifyou’reamember,thatfeemaybereduced.Thisisanincentiveforbecomingamember. CompareAccounts AdvertiserDisclosure × TheoffersthatappearinthistablearefrompartnershipsfromwhichInvestopediareceivescompensation.Thiscompensationmayimpacthowandwherelistingsappear.Investopediadoesnotincludealloffersavailableinthemarketplace. Provider Name Description RelatedTerms DeliveredDutyPaid(DDP) Underdelivereddutypaid(DDP),thesellerisresponsibleforthecostoftransportinggoodsuntilcustomsclearsthemforimportatthedestination. more HowDoestheEuropeanCustomsUnionWork? TheEuropeanUnionCustomsUnionregulatesthetariff-freemovementofgoodswithintheEuropeanUnionandstandardizesdutiesonimportedgoods. more ConsularInvoice:ProofofaShipment'sContents Aconsularinvoiceisadocumentcertifyingashipmentofgoodsandshowsinformationsuchastheconsignor,consignee,andvalueoftheshipment. more IncotermsDefinition Internationalcommercialterms(Incoterms)clarifytherulesandtermsbuyersandsellersuseininternationalanddomestictradecontracts. more NorthAmericanFreeTradeAgreement(NAFTA) TheNorthAmericanFreeTradeAgreement(NAFTA)wasimplementedin1994toencouragetradebetweenthecountriesofUnitedStates,Mexico,andCanada. more Brexit BrexitreferstotheU.K.'swithdrawalfromtheEuropeanUnionaftervotingtodosoinaJune2016referendum. more PartnerLinks RelatedArticles Laws&Regulations NAFTA'sWinnersandLosers Economics TheBasicsofTariffsandTradeBarriers CorporateFinance IhavelostmyoriginalBillsofLading.CanIobtainanewset? Government&Policy CountriesOfferingDigitalNomadVisas Banking BanksCanNotarizeYourDocumentsforFree SupplyChain Whatisanendorsementinblankonabilloflading?