Exchange of Electronic Certificate of Origin
+Background
++ This use case has been provided by International Chamber of Commerce. +
++ An Exporter sources and buys products from a Manufacturer for export to a destination country. At the + destination country, the Importer, who is the Exporter's customer in turn distributes the products to many + retailers in the destination country. +
++ To clear Customs at the destination country, the Importer may require the following documents from the + Exporter to be presented: +
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+
- Exporter's Invoice +
- Bill of Lading issued by shipping company +
- Certificate of Origin issued by an authorised issuing authority (e.g., a Chamber of Commerce) +
- Product Test Report issued by a testing laboratory from manufacturer +
+ Selective Redaction is used in a lossy manner to mask sensitive information that the upstream party does not + want to share with downstream parties. For example, the Exporter may redact the manufacturer's details from + the Product Test Report and Certificate of Origin before sending the report to the Importer. The Importer may + further redact the Exporter's details from the Certificate of Origin when sharing copies of the certificate + with its retailers. +
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+
+ + Note: The scenario above is highly simplified and the list of documents is not exhaustive. It is + included solely for the purpose of illustrating this use case for Selective Redaction.] +
+
+ Roles in Cross Border Trade
++ Roles in the above diagram are in blue. +
+Professional Testing, Inspection, and Certification Lab
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- Responsible for inspecting, testing, and certifying the products to ensure they meet quality and safety + standards. +
Manufacturer
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- The company that produces and supplies the products. +
Exporter
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- The company that sells and exports the products to the Importer. +
Chamber of Commerce
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- An organisation authorised to issue the Certificate of Origin, attesting the origin of the goods. +
Importing Customs
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- The governmental body in importing country that validates the Certificate of Origin and review mandatory + documents to ensure the goods comply with import regulations. +
Importer
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- The company that purchases and imports the goods from the Exporter. +
Shipping Company
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- A company that transports goods internationally, facilitating import and export operations. +
Retailers
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- Businesses that distribute goods to consumers after they are imported and cleared through customs. +
Trade Flow
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- The Manufacturer requests a product test report from a professional testing lab to certify that their goods + meet the required safety and quality standards. +
- The Test Lab sends the product test report to Manufacturer upon completion of testing. +
- Manufacturer sends the Product Test Report to Exporter. +
- Exporter submit the necessary documents to Chamber of Commerce to apply for the Cert of Origin. +
- The Chamber of Commerce (Issuer) will review, approve, and issue Certificate of Origin (Subject) to the + exporter, certifying the product's origin. +
- The Exporter arranges shipment of goods with the Shipping Company. +
- The Shipping Company issues a Bill of Lading to the Exporter for claiming goods in the importing + country. +
- The Exporter (Recipient) sends the redacted Certificate of Origin (redacting the Manufacturer Details), a
+ Bill of Lading, Exporter Invoice and a redacted Product Test Report (redacting the Manufacturer Details) to
+ the importer.
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- It is essential for the Exporter to provide the Importer with the Cert of Origin, Bill of Lading, + Exporter Invoice, and Product Test Report for the Import Customs Declaration, as this helps + facilitate faster cargo clearance and approval for importing goods. +
- The Exporter has the option to redact commercially sensitive information, such as the manufacturer's + details or pricing, to prevent the importer from bypassing him for future business. +
+ - The Importer (Recipient/Verifier) will verify the Certificate of Origin (CO) to authenticate the document
+ and review the remaining documents to prepare for the Import Declaration.
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- The CO provides a link to the issuer, which is crucial for verifying that the issuer is a recognized + authority and ensuring the authenticity of the document. +
+ - The Importer submits the Import Declaration, redacted Cert of Origin, Bill of Lading, Exporter Invoice, and + redacted Product Test Report to Import Customs. +
- Import Customs (Verifier) verifies the CO and reviews the other supporting documents to ensure the imported
+ goods meet their importing regulations.
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+
- Customs authorities primarily focus on verifying the authenticity of the CO, and essential + information provided such as product details, quality, and safety report. The redacted documentation + (which redacts the Manufacturer's name and pricing) will still meet Customs' requirements. +
+ - After clearance by the Import Customs, the Importer can distribute the goods to retailers, providing the + redacted Product Test Report and a further-redacted Cert of Origin (with Exporter details redacted). +
Actors
+Issuer
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- The Issuer is typically the Issuing Authority in the exporting country. These authorities are responsible + for issuing the CO, which attests to the origin of the goods. The issuer plays a key role in validating that + the goods comply with the necessary requirements for certification. +
Subject
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- The Subject of the CO is the certificate itself, which confirms that the goods being exported originate from + a specific country. The CO serves as proof of origin, which is used by importers to claim tariff exemptions, + demonstrate compliance with trade agreements like Free Trade Agreements (FTAs) or to meet the importing + regulations. +
Verifier
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- The Verifier is the party responsible for validating the authenticity of the CO. In the importing country, + the Customs Authority will typically verify the CO during the importation process. Banks may also act as + verifiers in situations where trade financing is involved, especially when using instruments like a Letter + of Credit (L/C). Additionally, the importer themselves may verify the CO to ensure that the goods originated + from the country they expect. +
Recipient
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- The Recipient of the CO could be the Importer (and/or their appointed customs broker), who presents it to + the importing country's Customs Authority during import clearance to secure tariff exemptions or to + facilitate cargo clearance. In some cases, the CO may also be verified by the Exporter or by Banks, + particularly when it is used in trade financing arrangements. +