Certificates of Origin (COs) serve as proof that confirms the country where a product was manufactured, produced, or substantially transformed into a finished good. COs play a major role in determining how your imports will be treated at the border.
For Canadian importers, certificates of origin are more than just paperwork. They affect tariffs, trade compliance, and eligibility for benefits under free trade agreements (FTAs). Accurate COs for your goods are needed when you want to take advantage of preferential tariffs negotiated in agreements with Canada’s trading partners.
A Certificate of Origin is a document that officially determines which country the goods were produced in before export. Customs authorities rely on COs to determine the appropriate tariffs and duties for imported goods. A CO also verifies that the goods qualify for preferential treatment under free trade agreements. This type of certificate is also used to enforce sanctions, quotas, or import restrictions on goods from certain countries..
A preferential CO can be used when the product and its origin qualify for reduced or even zero tariffs under a free trade agreement (FTA). This type of CO is meant to certify that the goods meet the rules of origin” determined in the FTA.
Some examples of significant FTAs available to Canadian importers include:
A CO for these FTAs can help to avoid tariffs and reduce duties when used in the right circumstances.
A non-preferential CO can be used for goods that are imported from countries that don’t have a FTA with Canada. These certificates help customs authorities apply accurate tariffs, collect data about trade, and ensure compliance.
The rules of origin are criteria that are used to define where a product comes from for the purposes of customs. Typically, the origin can be determined in two different ways. Goods can be considered wholly obtained, which means that they were produced or manufactured in one country. Agricultural products like raw fruits and vegetables are one example of a wholly obtained good.
The other way to determine the origin of goods focuses on goods that undergo substantial transformation. This could mean that the goods are made of materials sourced through importing, but are then significantly altered or assembled the a different country.
Compliance with these rules is essential to avoid retroactive duty payments and additional fees. False, misleading, or incorrect declarations can lead to significant consequences, including retroactive duty payments, and civil or criminal penalties. For importers, verifying origin is a legal obligation that must be fulfilled.
Certificates of Origin can be issued by exporters or producers when a CO is needed for preferential treatment under a FTA. The Canadian Chamber of Commerce also recognizes external authorized bodies and accredited chambers of commerce for COs that aren’t part of a FTA.
Digital CO platforms are used to enable a faster and more secure certification process. These digital COs can be integrated with the International Chamber of Commerce (ICC) verification network, which can provide digital authentication.
The details in a CO must accurately reflect the following information:
Any error in the detail of a CO can trigger customs holds at the border or eliminate preferential tariff treatment for your imports.
Certificates of Origin directly influence your bottom line when importing goods. Canadian businesses can unlock tariff benefits, stay compliant with trade regulations, and solidify their reputation with customs agents and trading partners. Integrating CO verification into your importing processes can be done seamlessly with the right approach. An experienced customs partner can show you how.
Customs consulting is what we’ve been doing for more than half a century. Connect with Cole today.