Determining the Origin of Goods for Customs Procedures
Understanding the Origin of Goods
Concept: The country in which goods were wholly obtained or produced. The origin of goods is proven by a certificate of origin, which is normally issued by a chamber of commerce.
Preferential Origin
Preferential origin is granted to goods from countries with which there is a preferential trade agreement regarding tariffs. This preferential treatment involves the application of reduced or zero tariff rates. The Generalized System of Preferences (GSP) is one such scheme.
Community vs. Non-Community Goods
What is the difference?
Community Goods: Goods obtained (produced, collected) entirely within the Community customs territory.
Non-Community Goods: Goods wholly produced in the customs territories of third countries outside the EU.
Determining Origin: Specific Cases
Origin of Animals
What is the origin of a calf born and raised in France but slaughtered in Valencia?
Article 23 of relevant customs regulations presents a detailed list of goods considered wholly obtained in one country. These include:
- Live animals born and raised there.
- Goods obtained in that country from animals raised there.
(Based on these rules, the origin would likely relate to where the animal was born and raised, but specific regulations should be consulted.)
Goods Transformed in Multiple Countries
What is the origin of goods transformed in two or more countries?
Goods whose production involves more than one country shall originate in the country where the last substantial transformation occurred. This transformation must be carried out in an undertaking equipped for that purpose and result in the manufacture of a new product or represent an important stage of manufacture.
Significant Transformation Criteria
Under the Customs Community Code, what defines significant transformation?
A transformation is considered significant when:
- The resulting product possesses properties and composition it lacked before the transformation.
- The resulting goods have a different classification code in the Combined Nomenclature (CN) than the original materials used.
Insufficient Transformation
Name three manipulations considered insufficient transformation.
Manipulations generally considered insufficient to confer origin include:
- Operations to ensure the preservation of products in good condition during transport and storage.
- Simple packaging operations (e.g., bottling, bagging, boxing).
- The slaughter of animals.
Preferential vs. Non-Preferential Origin Explained
What is preferential origin?
Preferential origin is granted to goods from countries with which a preferential trade agreement on tariffs exists. This preferential treatment involves applying reduced or zero tariff rates to goods imported from these specific countries.
The Generalized System of Preferences (GSP) aims to encourage developing countries’ exports by allowing their products preferential access to the markets of developed countries. It is specifically designed to benefit certain developing countries. The primary objective of the GSP is to contribute to poverty reduction and promote sustainable development and good governance.
Non-Preferential Origin
Non-preferential origin rules apply for other purposes (e.g., trade statistics, quotas, anti-dumping duties) but do not result in reduced or zero tariff rates under trade agreements.
Certificate of Origin Details
What is the certificate of origin? Who applies for it?
The certificate of origin is the document that justifies and proves the origin of goods. It is typically required for products to benefit from preferential tariff rates.
It is issued by the competent authorities (e.g., customs authorities or Chambers of Commerce) in the country of origin, upon written request from the exporter.
Required Information on a Certificate of Origin
A certificate of origin must typically contain the following information:
- Name and address of the exporter
- Name and address of the importer
- Description of the goods
- Harmonized System (HS) tariff classification number of the goods
- Indication of whether the exporter is the producer of the goods
- Regional Value Content (RVC) indication (if applicable)
- Country of origin of the goods
- The name, signature, and/or stamp or seal of the certifying authority