A Certificate of Origin (CO) is a document used to certify an international shipment’s country of origin. It is required for shipments from a certain group of countries that form a trading bloc-such the Northern America Free Trade Agreement (NAFTA), for example- for preferential tariff treatment. The document-also known as declaration of origin-is usually issued by a trade promotion office, or chamber of commerce.
The essence of the Certificate or Origin is to authenticate where the goods are originating. Goods in international trade are subject to varying tariff rates depending on the trade relationship between or among the countries involved. The United States, for example, has various trading arrangements with countries across the globe. In each of the countries, a CO is used to assess duty if the exporter needs to pay any at all. These must be goods manufactured and legally sold in America. Conversely, CO for imports to the U.S. must confirm they are manufactured in countries they profess to come from.
Notarized and Attested
The CO is prepared by the exporter, or freight forwarder. It is then notarized and attested by a local chamber of commerce, or a World Trade Center. Apart from tariffs, some countries do not allow certain goods for reasons of environmental infractions where they are manufactured. Other reasons might be political. Shipments from countries under U.S. or United Nations trade sanctions, for instance, will not be allowed into the country.
Types of Certificates of Origin
There are various types of Certificates of Origin issued in the U.S., including the NAFTA Certificate or Origin. The NAFTA certificate is not required for shipments between the U.S. and Mexico or Canada. It is only necessary if the goods qualify under the NAFTA rules of origin for preferential tariff treatment. A product with foreign parts-from countries outside of the regional trading bloc-does not qualify as having originated within NAFTA.
Other Certificates of Origin are: Israeli Certificate of Origin, Japanese Certificate of Origin, South African Certificate of Origin, South African Certificate of Origin. Each of them spells out the terms of trade with the U.S.