For those who have just started importing, the shipping documents may be too many and too complicated. The certificate of origin is one such document that many people find problematic. This is because most newbies are told about it by the suppliers or freight forwarders but they cannot comprehend its significance.
This guide has been written using layman’s language so that you can understand everything even if you are not a customs or logistics expert. After going through this article, you will know what a certificate of origin is, when it should be used and some tips on preventing delays in shipments due to simple errors.
What Is a Certificate of Origin (C/O)?
An official document that is used in transportation is known as a certificate of origin. It indicates the nation in which your commodities were manufactured. In other words, this is like an identification card for your merchandise.
Customs officers issue the document to establish the origin of goods. This has an impact on import legislation, taxes, as well as trade pacts. Failure to produce a legitimate certificate of origin may lead to customs holding clearance or demanding increased levies.
For instance, if one were importing items from China, the certificate would reveal that the products were manufactured in China. With such evidence, customs can treat the shipment according to its nation of origin and ensure that there are no false country declarations; this also explains why people need to know about Made in PRC vs Made in China when preparing their export papers.
Therefore, for those who are new and wondering what a certificate of origin is. It is a document that confirms where you manufacture your goods and enables customs authorities to apply the appropriate rules.
Who Issues the Certificate of Origin in China?
One of the two authorities issues a certificate of origin to buyers of goods from China.
The first one is the China Council for the Promotion of International Trade (CCPIT). This organization functions like a chamber of commerce. It is a quasi-official body, and its certificates are recognized worldwide.
The other authority is known as China Customs. It is the formal governmental institution that oversees trade and border matters.
A certificate of origin may be issued by either party. Such a document will typically contain a stamp from CCPIT or China Customs. When buying goods from China, it is normal to see such stamps.
Why Do You Need a Certificate of Origin?
For Customs Clearance
Before allowing imported goods into the country, it is important that the customs officers confirm their origin. The certificate of origin is a document that contains this information in a reliable, standardized form.
Failure to produce the document may result in customs detaining the cargo for scrutiny. As a result, there are usually delays as well as extra expenses involved.
To Save on Import Duties and Taxes
Importers ask for the document mainly because of this. The charges on imported goods are usually dependent on where the commodity was manufactured. Some nations charge lower duties on products from certain areas.
When one has a legitimate certificate of origin, it becomes easy for customs to apply the correct tax rate. Most of the time, this leads to a decrease in import duty.
Special Certificate Requirements
A majority of nations recognize the ordinary certificate of origin. Nonetheless, there are some places that will demand specific ones. For instance, Form F is used when shipping specific goods from China to Chile.
One should always double-check since different countries have different requirements. Nevertheless, this does not change the fact that the document serves its intended function. It shows the exact location where the commodity was produced.
What Information Is Included in a Certificate of Origin?
The content of a certificate of origin may be arranged differently, although some specific details don’t change. It is supposed to contain clear, coherent information that corresponds to other documents of carriage.
In most cases, a standard certificate of origin will have these details:
- Exporter – This is the seller or provider of the goods who is exporting them and he or she is most likely based from China.
- Consignee – The person purchasing the product and the client for the shipment.
- Transport details – Description of shipment methods, such as sea, air, land transport, etc.
- Product information – Description of commodity, including HS code and quantity
- Invoice number – The reference number that links the certificate to the commercial invoice.
Accuracy is very important because customs officers use these details to compare the shipment with other documents. As such, any slight errors or inconsistencies may delay customs clearance or result in unnecessary waiting.
CCPIT vs China Customs Certificate of Origin: What’s the Difference?
When you bring in goods from China, there are two types of stamps that are commonly found on the certificate of origin: CCPIT or China Customs.
- The certificate of the China Council for the Promotion of International Trade (CCPIT) is one that is widely recognized and used in many parts of the world for normal shipments like those to the Middle East.
- China Customs is under the Ministry of Finance. Shipments under free trade agreements such as ASEAN or RCEP may require customs documents from China Customs.
All these certificates hold in a court of law. Nevertheless, they serve different purposes. A CCPIT certificate suffices for standard customs clearance, while a China Customs certificate is required for claiming tax savings under a free trade agreement.
In case of doubt, ask a local customs broker for advice on the most appropriate stamp.
Do You Always Need a Certificate of Origin?
Not all shipments require a certificate of origin. It may be determined by the following factors:
- Where the goods are being sent
- The nature of the commodity in question
- Value of the total shipment
- The agreed shipping terms, such as FOB shipping from China
Even if not compulsory, it is better for one to have this document to facilitate customs clearance, with fewer interrogations by customs officers and a faster processing time.
To be on the safest side, you should consult your freight forwarder or customs broker before shipping. They will let you know if you need it or if it is just a recommendation.
Who Applies for the Certificate of Origin?
The certificate of origin is to be applied for by the supplier. It is not possible for a buyer to apply for the certificate of origin.
The application can only be made by companies that have been issued an export license. Normally, this is applicable to manufacturing and trading firms in China.
For this reason, one should communicate with their supplier early enough. The certificate must form part of the supplier’s export preparation process.
When Should the Certificate of Origin Be Applied For?
Timing is crucial. It is typical for the certificate of origin to be issued from China before the cargo sails; this is commonly done based on an estimated time of departure.
Late applications may hold back the release of documents. This delay could, in turn, result in complications with customs upon arrival at the final destination port.
For smooth flow, communicate with your supplier early enough to ensure you will require the certificate.
How Long Does It Take to Get a Certificate of Origin?
In most cases, the process is quick.
- Normally, it takes 2-3 working days for issuance.
- The same period is applicable in standard circumstances for both CCPIT and China Customs
The certificate is usually issued as a paper document. Some customs offices accept scanned copies, while others require the original. This depends on local regulations.
How Much Does a Certificate of Origin Cost?
The cost of a certificate of origin is not very expensive.
- The charges by the authorities are typically between $10 and $20
- Additional charges for handling or preparing may be imposed by suppliers
The cost is still insignificant in comparison to the shipment’s value, even with these costs. As such, it is not common to ignore the document on such occasions.
What Is the Most Important Rule Importers Must Follow?
The rule that is most problematic if ignored is as follows: every item of information indicated in the certificate of origin should be consistent with that in the shipping documents.
Such information may comprise the exporter’s name, the buyer’s name, as well as the invoice number indicated on the bill of lading. If there is a difference in any detail, it is not good for you with the customs. The certificate would prove to be of no use, and this could result in some goods being shipped later than expected, or, rather, without certain tax benefits.
Ensure that you scrutinize the document well prior to shipment at all times.
Conclusion
Even though it may appear to be just a piece of paper, the certificate of origin is an important document in global trade. It shows where products come from, assists customs in enforcing the right regulations, and may also lower customs duties if applied correctly.
When one is starting off, following the fundamentals makes the whole process less complicated. The vendor will apply for the document. Your customs broker verifies that it is needed. Before you transport the goods, take the time to review the information provided and make sure everything is in order. Such a simple procedure prevents delays as well as unnecessary expenses.
This is the kind of documentation advice we explain to importers at SourcingXPro every day. Confidence levels during shipping increase with knowledge of certificates of origin operation, leading to reduced unexpected issues.
