A Certificate of Origin Declaration of Origin (often abbreviated to C/O or CO or DOO) is a document widely used in international trade transactions which attests that the product listed therein has met certain criteria to be considered as originating in a particular country. A certificate of origin/declaration of origin is generally prepared and completed by the exporter or the manufacturer and may be subject to official certification by an authorized third party. It is often submitted to a customs authority of the importing country to justify the product's eligibility for entry and/or its entitlement to preferential treatment. Guidelines for issuance of Certificates of Origin by chambers of commerce globally are issued by the International Chamber of Commerce.
The importance of certificate of origin
In general, a certificate of origin is essential in international trade transactions because it is the proof certifying the origin of the product, which is, in turn, the basis to determine the tariffs and other trade measures that will be applied.
Although satisfying rules of origin in principle means that a product has qualified for the originating status, and is thus entitled to preferential tariffs, in most cases, a claim for preferences must be accompanied by a certificate of origin presented to the customs authority at the port of entry. Unlike the exporter or manufacturer, who is responsible for (and capable of) proving to the issuing authority (or self-certifying) the origin of the product, the importer often has little knowledge of how the product meets the origin criteria. The importer is instead required to present a proof, e.g., a certificate of origin issued or obtained by the exporter or manufacturer. Such separation of obligations means that even if a product may originate in a particular country, the importer's failure to submit a certificate of origin may cause the good to be barred from enjoying preferences. Exemption of GCC exports to Singapore from all customs duties.
Exempting 99% of Singapore's exports to the GCC countries from customs duties.
Recently Federal Law No. (6) of 1983 with respect to identifying the fees imposed on certificates of origin for the national products of the United Arab Emirates has been amended with, Federal Law No. (11) of 2019 on the Rules and Certificates of Origin which narrates the following rules and regulations to be implemented.
Article,6,7 and 8 of Federal Law No (11) of 2019 addresses the details about certificate of origin.
Article 6 is about Issuing the Certificates of Origin
The Ministry shall issue the preferential certificates of origin for the national commodities exported abroad following the rules and forms set out in the agreements and procedures determined by the Executive Regulation of this law.
The Ministry shall issue the preferential certificates of origin for the national commodities exported abroad, and the Chamber shall issue them in coordination with the Ministry, in accordance with the general rules and forms and procedures determined by the Executive Regulation of this law.
The Chamber shall issue the certificates of origin for the foreign commodities re-exported in accordance with the regulations and procedures adopted thereby.
What is Preferential certificate of origin
A preferential certificate of origin is a document attesting that goods in a particular shipment are of a certain origin under the definitions of a particular bilateral or multilateral free trade agreement. This certificate is usually required by the importing country's customs authority in deciding whether the imports should benefit from preferential treatment allowed under the applicable agreement.
Unlike non-preferential certificate of origin which often indicates only the country of origin in its title, a preferential certificate will indicate at the top of the document under which trade agreement it is issued.
As compared to a non-preferential certificate of origin, preferential certificate of origin has more practical use because it enables the claim of benefit beyond the MFN treatment (Most Favored Nation). Therefore, most of the discussion on certificate of origin normally focuses on preferential one.
Article 7 narrates the Validity of Certificate of Origin
The validity of preferential and non-preferential certificate of origin shall be in accordance with the periods determined by the Executive Regulation of this law unless otherwise stated.
The Executive regulation says that the validity of the Certificate of Origin shall be 12 months from the date of its issuance.
Article 8 narrates about the register of certificate of origin
The department shall establish a register to record all the preferential and non-preferential certificates of origin and shall keep a copy at least for three years.
The Executive Regulation of this law shall determine the rules and controls to establish and keep these registries.
All the certificate whether they are preferential or non- preferential their record must be kept for three years. and the rules related to the register will be determined by the executive legislation.
Take home
Certificate of Origin is one of the required documents for import customs clearance in most of the importing countries. As per the government policies of each country from time to time, and the bilateral and unilateral business agreement between countries, the import duty may be exempted under the specified goods from particular countries. Or as per the availability and consumption goods, certain commodities are imposed import duty to control the import of such goods. Duties are also levied against the goods importing from certain countries because of political policies also. So, the importance of certifying the origin of goods plays a vital role in the international trade between countries.
Why it’s important?
Certificate of origin is the document, certifying the origin of the country wherein the export goods are procured and manufactured originally. Most of the cases, the buyer needs only the certificate issued by the local Chamber of commerce.
In this article I have explained about the importance of Certificate of Origin in International business, the reason for insisting for Certificate of Origin as one of the documents required for import clearance, duty exemptions for importing goods from certain countries based on unilateral or bilateral trade agreement between countries etc.
Composed by: Sheher Bano
Source: Abu Dhabi Chamber of Commerce and Wiki Pedia