A Certificate of Origin (often abbreviated to CO or COO) is a document used in international trade. It traditionally states from what country the shipped goods originate, but "originate" in a CO does not mean the country the goods are shipped from, but the country where their goods are actually made. This raises a definition problem in cases where less than 100% of the raw materials and processes and added value are not all from one country. An often used practice is that if more than 50% of the sales price of the goods originate from one country, that country is acceptable as the country of origin (then the "national content" is more than 50%). In various international agreements, other percentages of national content are acceptable.
When countries unite in trading agreements, they may allow Certificate of Origin to state the trading bloc as origin, rather than the specific country.
The document may be informal, i.e. issued for example by the exporter, but often the importing country may require a formal document, often to be confirmed by an official body in the exporting country. In many cases specific formal documents are required, such as for shipments under the North American Free Trade Agreement, or for preferential customs treatment in importing countries for shipments of processed/manufactured goods from less developed countries to developed ones (often referred to as the green CO form "A", or GSP (Generalized System of Preferences) Form A CO).
The CO is primarily important for classifying the goods in the customs regulations of the importing country, thus defining how much duty shall be paid. But it may also be important for import quota purposes and for statistical purposes, and especially for food shipments, it may also be important for health regulations.
Before concluding a transaction, the exporter and importer should always clarify whether a CO is required, and if so, agree on exactly the form and content of the CO.
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