Purpose
A Preferential Certificate of Origin (PCoO) is a document that certifies that goods in a particular shipment qualify for preferential tariff treatment under a specific Free Trade Agreement (FTA).
Sender/receiver
The document is issued by a government agency in the exporting country, such as a chamber of commerce. It is sent by an exporter or authorised representative (e.g. freight forwarder).
The receiver of the document is usually the importer and the Customs authority of the importer country.
Legal framework
The overall framework is provided by the WTO Agreement on Rules of Origin, and the revised Kyoto Convention on Simplification and Harmonization of Customs Procedures. Every FTA has its own legal framework, the text/layout of the preferential CoO is described in the relevant FTA.
Usage
More than 15 million a year
Key standards
Most preferential CoOs have a similar layout.
Differences
The layout of a PCoO is mostly similar, and there are no major differences between the definitions of different key data elements.
Platforms
In some countries, electronic CoO exchanges are enabled by National Single Window services.
Key data elements
- Document: CoO certificate number; additional numbers (LC number etc.)
- Party: exporter - consignor (applicant); importer - consignee – to order (facultative); Certifying body (details of the issuing organisation including place and the date of issuance and authorisation)
- Location: Origin of the goods
- Transport: Particulars of transport details (facultative)
- Goods: Marks and numbers; Number and kind of package; Description of the goods
- Measure: Gross weight - quantity
- Countries involved in the FTA
- Number of the Customs declaration
- Other information
A CoO is connected to a shipment, therefore information about the exporter and description of the goods has to be the same as that used in other documents.
Adoption
Digitalisation must be allowed in the text of the FTA, which may be a long process.
Document-specific challenges
Framing the problem: The following challenges should be taken into consideration regarding the digitalisation of preferential CoO.
- Legal framework: Achieving and concluding negotiation within the framework of an FTA with contracting parties to reach mutual agreement on the digital CoO, noting that e-COs will not be accepted without the agreement of importing countries. However, currently many of the FTAs do not include legal options for digital CoOs.
- There are around 400 FTAs globally. Most countries do have more than one FTA. Digitalisation from a technical perspective is not that difficult in a single FTA. The difficulty is that solution A developed in FTA X might not work in FTA Y because the countries are not the same in both FTAs. The WCO is developing an Interconnectivity Framework for e-CoOs with the aim to streamline and harmonise the interconnectivity of e-CoOs at the global level.
- Self-certification: In a lot of FTAs, self-certification is becoming the standard practice. Self-certification (invoice declaration) might be a an aspect that has an influence on the digitalisation of preferential CoO. For example, if the aim is to use only self-certification in most FTAs of a country, the focus will be on the promotion of self-certification instead of the development of an e-CoO.
Document specific solutions
The main challenge will be the legal aspect. Many older FTAs do not have a provision to work with digital CoOs. If this legal aspect is not solved between contracting countries within an FTA, it is not an option to start the development of an e-CoO system.
