Certificate of Origin: What, Categories, Rules and Criteria

In international trade, the Certificate of Origin (CoO) plays a pivotal role in establishing the origin of goods being imported into a country.

This document is vital for importers, exporters, and customs authorities, as it influences tariffs, trade agreements, and legal compliance.

Understanding the different types of CoO, who issues them, and the rules surrounding their use is crucial for smooth and efficient trade operations.

What is Certificate of Origin (CoO)?

Certificate of Origin is an instrument to establish evidence on the origin of goods imported into any country.

What are the Categories of Certificate of Origin?

There are two categories of CoO:

i) Preferential Certificate of Origin

ii) Non-Preferential Certificate of Origin

Who Issues the Certificate of Origin?

Only specified agencies are authorized to issue the Certificate of Origin. The list of these agencies is provided in Appendix 2B. These agencies offer services related to:

i) Issuance of CoO

ii) Details regarding Rules of Origin

iii)List of Items covered by an agreement

iv)Extent of Tariff Preference

v)Verification and Certification of Eligibility

What are the Rules of Origin?

Rules of Origin are the rules that determine the origin of a good for the purpose of exports to a trading partner. The tariff concessions are granted by an importing country only when the Rules of Origin are adhered to.

What is the Criteria of Determination of Rules of Origin for Preferential Rate of Duty?

Following are some of the criteria which can be used to determine the origin of a good:

i) Wholly obtained

ii) Change in tariff classification

iii) Value Addition

iv) Non-minimal operations

What are the Points that Need to be Taken Care of by the Importers for Claim of Preferential Rate of Duty Under Customs Act, 1962?

An importer who wishes to claim the preferential rate of duty in terms of any trade agreement must:

i) Make a declaration that goods qualify as originating goods

ii) Possess information related to country-of-origin criteria, regional value content, and product-specific criteria

iii) Exercise reasonable care as to the accuracy and truthfulness of the information furnished

Can Customs Officer Disallow or Suspend the Claim for Preferential Rate of Duty?

Yes, a customs officer may temporarily suspend or disallow the preferential rate of duty in the following scenarios:

i) If the customs officer believes that the country of origin criteria is not met, they may require the importer to furnish further information. If the importer fails to provide such information, the customs officer may suspend the preferential treatment pending further verification.

ii) The customs officer may also disallow the claim for preferential rate of duty without verification, providing reasons for the disallowance.

Conclusion

The Certificate of Origin is a critical document in international trade, ensuring that goods meet the origin requirements set by importing countries.

Understanding its categories, the issuance process, and the rules of origin is essential for importers and exporters to benefit from preferential tariffs and comply with legal standards.

Proper adherence to these regulations not only facilitates smoother trade operations but also helps in maintaining transparency and trust in global trade practices.

Get a Free Consultation