Clearit.ca's Blog on Customs Brokerage and News Updates
A Certificate of Origin, or CO, is described by the Canadian Chamber of Commerce as a “document attesting that goods exported in a shipment have been wholly obtained, produced, manufactured or processed in a particular country.” It is considered one of the most commonly certified documents within the chamber, seeing as millions of these documents are reviewed each year in order to make trade possible between countries.
There are a number of reasons why COs are crucial for engaging in international trade, but the most essential reason for many countries, including Canada, is that they need verification on certain products’ country of origin.
Once they’ve determined the origin, Canada, for example, can impose specific duties and tariffs — or determine the legality of the goods.
Customs Agents can easily identify CO forms because the certificate is normally added to the commercial invoice. The invoice lists all of the goods being exported and the country of origin follows per line.
One option for an alternative to a CO is obtaining a separate letter altogether from the Chamber of Commerce. Most countries prefer to see a signed letter, stamped with the seal of approval from a countries’ chamber of commerce, because it carries more weight than a signed form from an exporter.
What does a Certificate of Origin say?
In order for a business to import into Canada, they are required to present proof of origin to the Canada Border Services Agency. A Certificate of Origin is an acceptable form of proof of origin for most cases of importing into Canada.
A country’s Chamber of Commerce issues COs at the point of origin. For importing into Canada, COs should provide:
- Information about the importer and exporter
- Description of the goods
- Harmonized tariff codes
- Country of origin
Once the document is submitted to any chamber, from any country, they will also be labeled into two categories: Preferential CO or Non-Preferential CO.
What does this mean?
Simply put, some countries receive specialized treatment depending on the trade agreements made with other countries.
A document that receives “Preferential CO” certifies that the goods fall under reduced tariffs or potentially certain tax exemptions, depending on the agreement reached between countries.
A “Non-Preferential CO” is quite the opposite. It doesn’t fall under any special treatment, and so tariffs will be applied accordingly. Typically, these are the most common documents to land on the desk of a member of the Chamber of Commerce.
What you need to do?
If you’re about to embark on a business venture that requires processing goods through Canadian customs, make sure to obtain all of the necessary documents. Without the proper country of origin forms, stamps, or seals, your goods could be subject to heavy fines, or worse: being rejected by the country.
Within Canada, the process is long and requires specific paperwork, so it’s best to start early in an effort to get ahead of the entire procedure. Although it might seem daunting, all of this could save your business money, especially if you fall under “Preferential CO.”