Transport document
Certificate of Origin
A certificate of origin states the country in which goods were produced. It is usually non-preferential, which means it is not about reducing duty — it exists because somebody else requires proof of origin.
Non-preferential origin answers a different question
The preferential certificates used under trade agreements exist to obtain a duty benefit. A non-preferential certificate of origin exists because origin matters for some other reason: an import requirement in the destination country, a term of a letter of credit, a tender condition, a trade measure applying to goods of a particular origin.
The two are frequently confused, and presenting one where the other is required does not work. Which is needed is determined by whoever is asking for it, and the reason they are asking usually indicates which one it is.
Issued by a body, not by the shipper
Certificates of origin are typically issued or certified by a chamber of commerce or a comparable body in the country of export, on the basis of a declaration by the exporter. The issuing body's stamp is what gives the document standing with the party relying on it.
That means it takes time and it happens in a particular place. Where a shipment depends on one, obtaining it belongs in the schedule alongside the export declaration rather than after the goods have left.
Letters of credit are unforgiving about it
Where payment runs through a documentary credit, the certificate has to match what the credit specifies — the issuing body, the wording, the description of the goods. A document that is correct in substance but does not match the credit is a discrepancy, and a discrepancy can hold up payment.
This is worth flagging because the consequence is financial rather than logistical: the goods may arrive perfectly well and the seller still not be paid on time.
The origin stated has to be right
The exporter declares the origin and the issuing body certifies on that basis. Where goods are assembled or processed in more than one country, determining the origin is a technical question under the destination country's rules rather than a matter of where the last operation happened.
An incorrect declaration is the exporter's problem regardless of who stamped the certificate, and it is not resolved by the fact that a third party issued the document.
What it does
The job this document performs.
- States the country in which the goods were produced
- Satisfies a requirement imposed by an importing authority, a buyer, a bank or a tender
- Carries the certification of an issuing body, which is what gives it standing
- Supports documentary credit presentations where the credit calls for it
- Says nothing about duty preference, which is the separate preferential regime
Cautions
What goes wrong.
- It is not a substitute for a preferential origin document, and does not reduce duty
- The wording must match a documentary credit exactly or payment can be delayed
- Obtaining it involves a third party and therefore takes time — it belongs in the schedule
- Determining origin for processed or assembled goods is a technical question, not a matter of the last location
- Which form of origin evidence a destination country, a bank or a buyer will accept is decided by whoever is asking for it. Establish that with them, and confirm the origin determination itself with a customs authority or representative where the goods are processed or assembled in more than one place.
Use the reference
Apply the definition to the actual contract and shipment.
A reference explains the role of a rule or document. The applicable edition, terms and requirements still need to be confirmed for the case.
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