Country of Origin Determination

When you are trading goods internationally, “country of origin” can be used in a customs and logistical sense. For example:

• The country where the seller is sending the goods from.
• The country where that leg of transport is shipped from.
• The country where the goods were manufactured or processed.

For transport, there can be several countries involved in the same shipment. 

Consider a shipment which leaves Poland and goes through Germany by road, then boards a vessel for Indonesia for onward shipping to China.

You would see Poland and Germany as the two countries of origin on the road and sea documents. Internally, the sea carrier may see Indonesia on one of their documents, but this would not be on the Bill of Lading.

From a customs perspective, neither of these origins is guaranteed to be correct.

If the goods were brought into Poland from Ukraine and then sold, then the country of origin might be Ukraine if the goods were produced there. This would be the customs origin.

However, there is the possibility that the goods will be considered of Polish origin if the goods were significantly processed in Poland.

Because of how complex supply and manufacturing chains can be, it is best to get professional advice on country of origin determination.

The Customs Support Group provides origin determination across Europe and globally. Contact us for a no-obligation consultation.

The right country of origin is important for customs because it can affect your obligations around your international trade. 

Even though your commodity code will be the same for a product, you may have benefits or disadvantages attached when trading goods from a particular country. You may also be unable to trade these goods when there are sanctions involved.

Some of the variables that you can get from a country of origin are:

• Reduced or eliminated duty payments because of a trade deal, also known as preference. The rules around proof of preferential origin may also change.
• An additional duty, such as anti-dumping charges, which prevents the market from being flooded by cheaper goods. This promotes fair competition.
• Additional checks for health-related goods, such as the need for an aflatoxin certificate when importing nuts from high-risk countries.
• Prohibited importing of some products.

You can rely on CSG for expert advice on origin determination, with many of our specialists having a history of working with the authorities. This means we ask the right questions and help to safeguard your business from noncompliance.

Contact us for more information. 

Your preferential origin will always be the same as your customs origin, but you do not always have preferential origin just because your customs origin has the opportunity for preference. This is especially true when working with manufactured goods.

For example, if a machine is assembled using parts as follows:

• 40% EU
• 30% China
• 30% India

The machine could be considered to have a customs origin of the EU, because this is the highest majority of parts.

However, the country which is importing the machine may specify that the car is only able to obtain a preferential duty rate if 50% or more of the parts are from the EU. 

In this case, the customs origin is the EU, but there is no preferential origin as the machine is not eligible for preference. Therefore, the importer must pay the full duty.

This is why it is important not to make assumptions about your preference. A simple mistake like this could mean paying back the duty on several years’ worth of shipments, which can completely erase your profit margin or mean financial difficulty.

For peace of mind, it is best to get binding advice on your country of origin determination to help safeguard yourself from complications.

When we look at your country of origin, there are a few main questions to consider:

1. Where were the goods wholly obtained, meaning grown, mined, manufactured, or otherwise produced?
2. Has there been a substantial transformation which can mean a change of origin, such as processing or assembly?
3. Are there any deeper regulations which still consider a previous state?

For example, iron which is mined, refined into bars, made into wire, and finally made into nails has undergone several significant changes. With each part of processing, the commodity code has changed and this may constitute a change in customs origin.

However, there are currently sanctions on iron sourced from certain countries, which means that the origin shown on the melting certificate must also be considered despite the additional processing. Similarly, these components cannot be added to an assembled product which then holds a different origin due to the percentage of the parts used.

This is to prevent circumnavigation through processing goods in a non-sanctioned country.

Therefore, it is important to work with an expert to determine your country of origin is right for customs purposes.

Contact us to find out more.

A certificate of origin is one of the most used documents for proving origin, but it does not automatically mean that preferential origin is given. For this, you will need a clause on the paperwork or an additional document – depending on the requirements for your commodity and country of origin. i.e. a GSP certificate from India or an EUR1 from Egypt.

When you are claiming preference with clauses on paperwork, it is important that you are able to prove that the statements are correct because you are liable. Many exporters have been asked to include origin statements on their paperwork by their customers so that they can obtain preference, but their goods may not necessarily meet the requirements for preference.

Although many of these cases are not malicious, and are simply a lack of awareness and knowledge of the subject, you as the importer will be liable for misdeclared preference.

Therefore, it’s important to get professional advice so that you can protect your business. 

CSG provides origin determination throughout Europe and globally. Contact us for more information.