The CO contains information concerning the product, the shipment’s destination country, and the COO. A CO is not required for most shipments, but it is sometimes needed for shipments to receive the benefits of applicable free trade agreements.
Free trade agreements may require a CO to prove to the country of import’s customs authorities that the goods are eligible for import altogether or if the good qualifies for reduced import fees. If a good qualifies, it receives preferential treatment. Preferential treatment is when a qualifying import reaps benefits, such as reduced or exempted duty, based on the classification of the goods and the COO. However, there are scenarios where a CO is not needed to get a preferential duty rate. For example, USMCA only requires the certificate for shipments over 2,500 USD, but shipments valued below the threshold can still get the preferential tariff without the CO. Retailers should check the details of trade agreements to see what is required.
In addition to fulfilling trade agreement requirements for import and preferential treatment, COs are required for the following:
While COs are usually requested by customs, banks, private stakeholders, and importers, if it is unclear whether or not a CO is needed, retailers can check with their local chamber of commerce. The local chamber of commerce refers to the exporter’s local chamber of commerce. Another reliable resource to check is the International Trade Administration. If retailers are trying to qualify their shipments for preferential treatment, then they should check the free trade agreements in which they are engaging. Trade agreements state if a certificate is required or if just the COO on the commercial invoice is sufficient.
Only exporters can issue a CO, and they must follow the steps below to acquire one for their shipment(s):
The COO is a section on the commercial invoice that is used when determining tariff rates. It also confirms the shipment’s legality and keeps track of the maximum quantity that can be imported into a country before incurring anti-dumping duty.
The exporter’s chamber of commerce can help with the process of acquiring a CO. They can also let exporters know what is needed for certificate approval. Here is how it works:
Failure to comply with the certification regulations, whether it is the exporter or any person involved in creating the required certification, can result in the following consequences:
In 2022, a Utah-based company, Lions Not Sheep, owned by Sean Whalen, claimed that their products were made in the U.S. The company had been replacing the “Made in China” tags and putting on their own fake “Made in the U.S.” tags. Whalen has been ordered to pay over 200,000 USD and cease all fraudulent claims.
Electronically issued certificates of origin are not accepted in all countries as of 2023.
No, preferential treatment is based on the classification of the goods (the HS code) and the COO. If the product’s HS code and COO qualify for a reduced duty rate, then a CO may be needed. Other times, the COO on the commercial invoice suffices.
You should check the free trade agreements from which you are trying to get preferential treatment. Trade agreements state which documents are required.
See Zonospolicies and agreements.
Certificate and country of origin
Learn the difference and importance of a certificate and country of origin.
A certificate of origin provides information about the goods in a shipment to the country of import, allows certain shipments to qualify for duty reductions or exemptions, and confirms the product’s validity. Determining a product’s country of origin and providing a certificate of origin to customs is required for particular goods.