When you import goods into Canada, you must include a Certificate of Origin that clearly states the shipment’s Country of Origin. Local authorities use this certificate to determine any tariffs on your goods before they’re released from Canadian customs. 

While listing your shipment’s Country of Origin may seem straightforward, it’s far from reality, and incorrectly listing the country of origin can lead to penalties like delays in clearance, increased chances of audits, and fines.

 

What does Country of Origin mean?

The Country of Origin is the country where the goods were grown, produced, or manufactured—not necessarily the country from which the product was shipped to Canada. 

For some items, the Country of Origin and the place of export might be the same. But for others, such as clothing made in Vietnam and then shipped from warehouses in Singapore, Turkey, and Germany without significant changes, the Country of Origin can be less clear.

 

How to Determine Country of Origin

To determine your goods’ Country of Origin and avoid headaches during the import process, follow these practical steps:

  • Identify if the product is subject to Free Trade Agreements (FTAs): If your product is subject to an FTA or duty preference program, the Country of Origin is defined in detail according to the HTS classification and specific rules of the FTA. These rules include requirements like shipping directly from the beneficiary country and meeting a regional value content, often around 35%. For products not eligible for duty preference or free trade agreements: 
    • Check if the product is ‘wholly obtained or produced’: Verify whether the product or its materials are entirely sourced and manufactured in a given country, or made in one country from parts from others. The former would be labeled “Made in China,” while the latter would be “Made in China from Taiwanese Materials.”
    • Apply the De Minimis rule: If your product includes non-originating materials, ensure their value doesn’t exceed the threshold specified by the applicable rules of origin (see below), typically 7-10% of the total value of the product.
    • Use the Substantial Transformation rule: Identify the last country where the product underwent a significant change in form, appearance, or nature, or where it was assigned its Harmonized Tariff Schedule (HTS) classification. This country is considered the Country of Origin.

 

Country of Origin Marking Requirements

Marking the Country of Origin of imported goods helps customers understand where products are made and can influence their purchasing decisions. Here are the key requirements:

  • Clarity: Every imported article must be clearly marked with the name of the Country of Origin in English, unless an exception is provided by law. The markings should be located where they can be seen without disassembling or altering the product, even when the item is handled casually.
  • Abbreviations: While abbreviations or variant spellings that indicate the name of a country are acceptable, it is preferable to fully spell out the country’s name to avoid any confusion.
  • Use of ‘Made in’: The words ‘Made in’ should be used when another locality name appears on the product besides the country where it was manufactured. For example, if a product has a city name, you need to specify ‘Made in’ followed by the country.
  • Use of ‘Assembled in’: The words ‘Assembled in’ can be used to indicate the country where the final assembly of the product took place.

 

Exceptions to Country of Origin Marking

While most imported goods need to be marked with their Country of Origin, there are some exceptions:

  • If the article simply can’t be marked due to its nature.
  • If marking the item before shipping would cause damage or injury.
  • If marking the item before shipping is too costly, making importation economically unviable.
  • If the container clearly indicates the article’s identity.
  • If the article is a raw material or crude substance.
  • If the item is imported for the importer’s personal use, rather than for sale.
  • If the item will be processed in a way that any marking would be concealed or destroyed.
  • If the item was produced 20+ years before being shipped.

 

Preferential Vs Non-Preferential Rules Of Origin

Rules of origin, whether preferential or non-preferential, help you determine products’ national origin, ensuring that goods receive the correct tariff treatment and comply with trade agreements.

Criteria

 

 Preferential Rules of Origin

 

 Non-Preferential Rules of Origin

 
Relevance

 

 For countries to which specific trade agreements between countries, such as free trade agreements (FTAs) apply.

 

 General application for purposes like anti-dumping, countervailing duties, origin marking, and import quotas.

 
Benefits

 

 Tariff concessions, including lower or zero-duty rates.

 

 No specific tariff concessions, used for regulatory and statistical purposes.

 
Requirements          

 

 Goods must meet specific rules based on the Harmonized Tariff Schedule (HTS) classification. Direct shipment and regional value content criteria must be met.

 

 Goods must be wholly obtained or produced in one country. Substantial transformation rules apply.

 
Examples

 

 Goods entirely produced within FTA member countries. Products containing parts originating from the FTA region.

 

 Products made from materials originating in multiple countries but assembled or transformed in one country.

 

 

For a comprehensive list of product-specific rules of origin, refer to Global Affairs Canada’s document.

Note that turning to a customs broker like Clearit can help ensure the correct Country of Origin is determined, the right labeling and tariff payments are made, and your shipments clear customs swiftly and smoothly, every time.

 

SCHEDULE A MEETING WITH A CLEARIT CUSTOMS BROKER