In the complex world of global trade, a Certificate of Origin (COO) helps serve as a passport for your products, verifying their country of origin and ensuring smooth customs clearance. This essential document not only authenticates your goods but also opens doors to preferential trade agreements, reduced tariffs, and enhanced credibility in international markets. In international trade, a Certificate of Origin is an indispensable document that certifies the country where a product was manufactured. It serves as proof of the product’s origin and is often required by customs authorities, importers, or buyers to determine whether goods qualify for preferential tariffs, trade agreements, or compliance with local regulations.
Understanding the importance and process of obtaining a Certificate of Origin (COO) can significantly impact your global business success. In this blog, we will emphasize the importance of certificates of origin (COO), their types, and how they facilitate smooth trade across borders.
What is a Certificate of Origin?
A Certificate of Origin (COO) is an official document that verifies a product’s country of manufacture. It includes details about the product, the exporter, and the country of origin. This document ensures that the goods comply with the rules and regulations of the destination country.
Why Is a Certificate of Origin Important for International Shipping?
The following is why COO is important for international shipping.
1. Customs Clearance: Many countries require a COO to process imports, ensuring goods comply with local trade laws.
2. Preferential Trade Agreements: Products originating from certain countries may qualify for reduced or zero tariffs under free trade agreements.
3. Regulatory Compliance: Proves that goods meet specific origin requirements for quality standards or trade bans.
4. Boosts Buyer Confidence: Importers trust goods with verifiable origins, making COOs vital in global trade.
From Non-Preferential to Preferential: Types of Certificates of Origin
The following are the two types of Certificate of Origin (COO):
1. Non-Preferential Certificate of Origin
• Verifies the origin of goods without entitling them to reduced tariffs.
• Typically used for standard trade or compliance with import restrictions.
2. Preferential Certificate of Origin
• Issued for products eligible to pay lower or no duties for trading under some trade agreements such as NAFTA, ASEAN, or GSP.
• Examples: EUR.1 certificate for EU trade or Form A under GSP.
Documents Required to Obtain a Certificate of Origin
In order to acquire a Certificate of Origin (COO), one needs to submit the following documents:
• Cover letter to the Director General of the Indian Chamber of Commerce (ICC).
• Certificate of Origin duly completed.
• Shipping invoice, packing list, and letter of credit stamped and signed by the applicant.
• PAN along with IEC number issued to the exporter.
• A relevant clearance certificate issued by the customs department that all taxes and duties have been paid.
Certificate of Origin: A Very Quick Walkthrough of the Application Procedure
Certificate of Origin can be received from the Indian Chamber of Commerce (ICC), and for that, the documents that are needed in support, along with an application form of Certificate of Origin, a cover letter and a stamp paper with the name of a business or establishment.
DGFT also provides a portal that can be used online to obtain a Certificate of Origin. There is a simplified procedure. Here are the steps to apply:
1. Visit the COO portal of the DGFT, then choose Online Exporter Register & Login from among the online services.
2. Login into your account using your IEC number as your login.
3. Click Apply for Certificate of Origin from the menu.
4. Click on the icon of Online Application for Certificate of Origin COO/ Scheme in the dashboard.
5. Key in all the information required including invoice number, product specifics as well as a trade agreement. Save and add more to add other products if necessary.
6. Describe the products in full detail.
7. Confirm by ticking the option: Please check and confirm that you have added all export product details for the Certificate of Origin (COO).
8. Upload the necessary digitally signed documents.
9. Fill out the Declaration Summary and confirm the information.
10. Review all details, save them, and submit an application.
11. Pay the necessary fees, after which follow the main menu, “List of Submitted Applications”, to see the paid and submitted applications.
Issuance and Format
The Certificate of Origin can be issued either physically or digitally. It is authenticated and legalized by the customs authority or the Indian Chamber of Commerce. Once all required documents are obtained, you may easily register your COO and export using the most convenient e-commerce websites.
Who requires a Certificate of Origin?
• Exporters: To comply with destination country regulations and clear customs.
• Importers: To claim benefits under preferential trade agreements or strictly adhere to trade laws.
• Customs Authorities: To verify the origin of goods for tax, tariffs, or trade restrictions.
How a Certificate of Origin Simplifies International Trade?
The following are the benefits of using a certificate of origin.
1. Tariff Reduction: Benefit from lesser import duties with free trade agreements.
2. Streamlined Trade: Simplifies customs clearance and reduces delays.
3. Compliance Assurance: Ensures goods meet the requirements of the importing country.
4. Market Access: Facilitates entry into international markets with regulatory approvals.
Conclusion
Certificates of Origin play a vital role in global trade, ensuring transparency, compliance, and seamless transactions. Understanding and leveraging COOs can simplify your trade processes and open doors to international opportunities. Stay informed, choose the right certifying authorities, and ensure your trade operations meet all necessary requirements for success.