What is the certificate of origin and how does it impact your business

International trade requires exporters and importers to furnish a wide range of documents. These documents may include licenses, permits, bills of exchange, letter of credit, and a certificate of origin. All of these documents have their importance in the trade process. However, one of the most commonly used materials is the certificate of origin. This certificate includes details about the originating country of a product. Therefore, traders must be aware of this document. This article discusses the critical aspects of the certificate of origin and reviews how it impacts your business.  

A certificate of origin is a crucial document that is needed to facilitate international trade. This certificate is required to certify whether the goods have been produced, obtained, or processed in a particular country. There are two major types of certificates of origin, non-preferential and preferential. Non-preferential certificates of origin are also known as standard certificates because they indicate that the goods being traded do not need any preferential treatment. On the other hand, preferred certificates of origin suggest that the products may be eligible for lower tariffs or certain exemptions. Preferential certificates of origin are interlinked with regional trade agreements between countries.

It is also essential to understand how a certificate of origin can impact your business. Firstly, these certificates can be requested by several entities, including your customers, banks, as well as other stakeholders. Therefore, you must ensure that you have ready access to the certificate. If you do not have access, your trade may be delayed. Secondly, it is essential to note that certain jurisdictions, such as the US, have specific rules related to the origin of products. In case a product has been manufactured in a sanctioned country, then its movement is restricted. Thirdly, not having a certificate of origin may have a significantly negative impact on your ability to trade internationally. Therefore, you must have these certificates ready so that you get customs clearance.

For more information about the certificate of origin and international trade, please visit Export Portal today.