Understand what a Certificate of Origin is and how it works

The Certificate of Origin is a very important document for professionals working in the field of foreign trade, as it has the function of attesting to the authenticity of exported products. In addition, it plays a key role in the collection of business transaction taxes.

Therefore, understanding the significance of this document is fundamental for those who wish to successfully navigate the logistical and legal challenges of the market, adding value and efficiency to operations. Continue reading and better understand what it is, what it is for and how to issue the Certificate of Origin for export.

What is the Certificate of Origin?

The Certificate of Origin is a document used to prove the origin of the products to be sent to other countries. Thus, it ensures that the production and distribution criteria defined in trade agreements between countries and economic blocks are being met.

In addition, it serves for goods to benefit from preferential tariff treatment. Therefore, even though it’s not mandatory for all international operations, it’s important for the involved parties – including exporters and their representatives – to receive tariff advantages.

Digital Certificate of Origin

In order to make processes more intelligent and agile, the Digital Certificate of Origin (COD) was created in 2005. It is composed of the same information as the traditional document. However, because it is digital, it meets strict security standards and can be signed online.

The idea is for cod to be adopted by all members of the Latin American Integration Association (Aladi). Currently, Argentina and Uruguay are the countries that accept the digital document issued in Brazil.

What is the Certificate of Origin for?

Playing a crucial role in the context of foreign trade, the Certificate of Origin has several purposes. Next, get to know the main ones.

Determines the provenance of products

The document certifies the origin of the products, indicating the country where they were manufactured or produced. Thus, it guarantees the transparency and authenticity of the exported goods.

This is a particularly relevant advantage in a global context where consumers, trading partners, and customs authorities seek assurances regarding the origin and quality of products.

Meets customs requirements

Many countries require the Certificate of Origin as an integral part of the customs requirements for the importation of certain products, which helps comply with the customs regulations of the importing country.

By validating the authenticity of the origin of goods, this document ensures that the exporting company is in full compliance with established customs procedures. In addition, the company can avoid customs penalties, delays and other possible inconveniences due to nonconformities.

Allows the negotiation of rates

The origin of products can influence tariffs and trade conditions established between countries. In this scenario, the certificate is used to determine if the products qualify for preferential tariff benefits in bilateral or multilateral trade agreements.

In addition to ensuring advantageous tariff conditions, the exporting company demonstrates its commitment to transparency and compliance in international negotiations. Thus, it strengthens its strategic position in the global market.

Prevents business fraud

By authenticating the origin of goods, the Certificate of Origin helps prevent unfair business practices. This is the case of transporting products through intermediate countries to take advantage of undue tariff advantages.

This practice contributes to the company protecting its own interests. Furthermore, it brings gains for the integrity of international trade by promoting more ethical and transparent commercial relationships.

Facilitates international trade

Another function of the document is to simplify and expedite customs processes, which provides greater clarity regarding the origin of the goods. This contributes to the efficiency and smoothness of international trade, expedites customs operations, and benefits the entire logistics chain involved in the import and export process.

When is a Certificate of Origin required?

The document must be presented before the registration of the Import Declaration (DI), the Single Import Declaration (DUIMP), or the Single Export Declaration (DU-E).

For this purpose, the operation – whether import or export – must occur between member countries of economic agreements that guarantee tariff preferences. In addition, the issuance of the Certificate of Origin must respect the rules established by each international trade pact.

What are the benefits of issuing the Certificate of Origin?

More than a regulatory obligation, the certificate adds several benefits in international business transactions, giving competitive advantages to companies that seek to operate efficiently and in accordance with established standards. Learn more in the next section. 

Access to tariff preferences

The main advantage of the Certificate of Origin is its ability to ensure that products benefit from tariff preferences established in bilateral or multilateral trade agreements. This may result in reduced or waived tariffs, which makes the products more competitive in the destination market.

Regulatory compliance

Issuing the document also helps organizations comply with the customs regulations and specific rules of origin of the countries involved in the trade transaction. This way, you can avoid penalties, delays, and other issues related to non-compliance.

Facilitation of customs clearance

Companies that want to simplify customs processes cannot leave the Certificate of Origin aside. After all, it facilitates the release of goods at borders, contributing to a more efficient movement of cargo and reducing waiting times at ports and airports.

Cost reduction

By ensuring the authenticity of the origin of the products, the issuance of the document contributes to companies avoiding the risk of customs penalties and delays in logistics operations. A direct reflection of this practice is the reduction of costs associated with non-compliance issues.

Facilitation of trade negotiations

Having the Certificate of Origin available also facilitates commercial negotiations, since it proves the origin of materials and inputs in a clear and transparent way. In complex transactions and commercial contracts, this represents a great differential.

Who can issue a Certificate of Origin?

Every Brazilian company is able to issue the Certificate of Origin, but it is essential that its performance is in accordance with current legislation. For a product to be supported by the certificate and receive preferential tariff treatment, it is necessary that operations be carried out between member countries of agreements that allow it.

Here are the agreements that allow Brazilian companies to use the Certificate of Origin:

• exports to Mercosur member countries (Argentina, Paraguay and Uruguay);
• exports from Brazil to Chile, Bolivia, Mexico, Peru, Ecuador and Venezuela;
• exports from the Mercosur automotive sector to Mexico;
• mercosur exports to Cuba, Colombia, Egypt and member countries of the Southern African Customs Union (Sacu);
• exports of the automotive sector from Brazil to Paraguay.

It is also important to know the Non-preferential Certificate of Origin, a common document that certifies the origin of the product and that can be included in the dispatch process. However, it does not guarantee any tax advantages to importers and exporters.

What documents are required to issue the Certificate of Origin?

The certificate must be issued through an entity authorized by the Secretariat of Foreign Trade (SECEX). Generally, they include the Trade, Agriculture or Industry Federations, as well as Trade Associations.

For the issuance to be possible, the company must be qualified to operate in the international market. With this requirement complied with, the exporter must deliver the following documents to the authorized entity:

• Commercial Invoice: document of a contractual nature that mirrors the purchase and sale operation between the importer and the exporter;
• Sworn Declaration of Origin (Declaration of the Production Process): contains all product data, whether national or imported, such as value, production process, tax classification, inputs that compose it, among others;
• Form of Certificate of Origin completed.

All documentation must be registered in the specific issuance system. Then, the copies must be presented in person at the service station, together with the signed original certificates, for the signature of the Certificate of Origin.

Conclusion of the Expert Cause Investigation

The Certificate of Origin is an essential tool that not only validates the origin of products but also plays a strategic role in regulatory compliance, trade facilitation, and negotiating favorable conditions in international transactions. Therefore, knowing the document and issuing it when necessary is an essential step to establish solid and transparent negotiations in your company.

If you liked this article and want to delve into other important concepts related to import and export activities, stay with us and find out how customs enforcement happens and what fees are involved.