由 caicai8478 In international trade, the “nationality” of goods—that is, their place of origin—directly determines the tariff rate they pay when entering a country’s market. Correctly understanding and applying rules of origin can save you and your customers significant tariff costs and significantly enhance your export competitiveness.
Part I: Core Concepts
- What is Origin?
Wholly Obtained: Goods grown, mined, or produced entirely within a single country or region, such as minerals and agricultural products.
Substantial Transformation: This is the most common principle. If materials from other countries are used in the production of goods, the country of origin is the last country to undergo “substantial transformation.” Changes in the Customs Service Code (HS Code) are often the core criterion for determining “substantial transformation.”
- What are Preferential Rules of Origin?
These are products of free trade agreements or special trade arrangements (such as the Generalized System of Preferences). They define how exported goods must be deemed “originating” in a member country, thereby qualifying for zero or low tariffs.
- Core Document: Certificate of Origin
This is the “passport” for goods to enjoy preferential tariffs. Issued by the exporting country’s official or authorized agency, it certifies that the goods comply with the relevant preferential rules of origin.
Part II: Main Certificate Types and Applicable Markets
Certificate Type Full Name Applicable Destination Core Value
Generalized System of Preferences Certificate of Origin (FORM A) Generalized System of Preferences Form A For the European Union, the United Kingdom, Canada, Turkey, etc. (Note: The United States has abolished the GSP for China). This allows Chinese products, as a developing country, to enjoy unilateral tariff reductions and exemptions when exported to preferential countries.
Preferential Certificate of Origin (e.g., EUR.1) Movement Certificate EUR.1 For the European Union, the United Kingdom, Turkey, etc. (countries with free trade agreements with the EU). Based on bilateral or multilateral free trade agreements, goods from both parties can enjoy reciprocal tariff preferences.
Regional Certificate of Origin (e.g., FORM E) ASEAN-China Free Trade Area Certificate of Origin For ASEAN member countries, etc. Used in specific free trade zones (such as the China-ASEAN Free Trade Area) to enjoy preferential tariffs. Self-Declaration of Origin EU (applicable to low-value goods): Exporters can issue their own declarations in lieu of official certificates, streamlining the process and reducing costs.
Key Points:
EU/UK: Currently, Chinese exporters primarily utilize Form A (based on the Generalized System of Preferences) and self-declarations.
US: Because the US has withdrawn its GSP treatment for China and there is no free trade agreement between China and the US, there are currently no GSP or preferential certificates of origin applicable to most Chinese products. Chinese products entering the US are primarily subject to the “most-favored-nation” tariff rate.
Part III: Practical Guide: How to Apply for and Use These Certificates
Step 1: Determine Whether Your Product Meets the Origin Criteria
This is the most critical step. You need to determine whether your product has undergone a “substantial transformation” based on the regulations of the destination country. The main criteria are:
Tariff Classification Change Criteria: Non-originating materials used in production have their HS code changed by a specific chapter, heading, or subheading in the final product.
For example, cotton (HS Chapter 52) is imported from China to Vietnam, woven into fabric (HS Chapter 52), and then exported to the EU. If the rules require a “change of chapter,” the Vietnamese fabric would not meet the origin criteria because cotton and fabric are both covered by Chapter 52.
Regional Value Content: The product must contain a certain percentage of value content originating from the region or a specific country (e.g., 40%, 50%, or 60%).
Formula: (Product Ex-factory Price – Value of Non-Originating Materials) / Product Ex-factory Price ≥ RVC Requirement
Processing Procedure: The product must have undergone a specific processing step in the exporting country.
You will need to consult the EU or specific country’s Rules of Origin Implementing Rules to determine the exact criteria for your product.
Step 2: Prepare and Apply for Certificates
Using Form A and EUR.1 issued by the China Council for the Promotion of International Trade as an example:
Company Registration: First, you must complete the registration of the Certificate of Origin with the China Council for the Promotion of International Trade or the customs.
Documents to Prepare:
Application Form for Certificate of Origin/Certificate of Processing and Assembly for Export Goods of the People’s Republic of China
Commercial invoice, packing list, etc. for Certificate of Origin of Export Goods of the People’s Republic of China.
Online Application: Complete and submit the application online through the China International Trade “Single Window” platform.
Accurate Application: Ensure all information (manufacturer, consignee, shipping details, cargo description, HS code, etc.) is identical to the commercial invoice and bill of lading.
Review and Issuance: After approval by the China Council for the Promotion of International Trade or the customs, you can collect or print the electronically signed Certificate of Origin.
Step 3: Customs Clearance for Customers
Timely Delivery: Provide the original or electronic version of the certificate to your overseas customers before or upon arrival of the goods.
Customer Declaration: Your customer or their customs broker must submit this certificate to the customs during customs clearance at the port of destination to claim preferential tariff treatment.
Part 4: Cost-Benefit Analysis and Common Misconceptions
Cost-Benefit Analysis:
Cost: The application fee itself is very low, primarily due to administrative and time costs.
Benefits:
Direct Benefit: Tariffs are reduced from the most-favored-nation rate (which may be 5%-10%) to 0%.
Indirect Benefit: Reduced costs for your customers significantly enhances the competitiveness of your offer and customer retention.
Common Misconceptions and Pitfall Avoidance Guides:
Myth 1: Having a certificate automatically entitles you to preferential treatment.
Fact: The certificate is just an entry ticket. Customs in the destination country has the right to verify the authenticity of goods. If they find that the goods do not meet the origin criteria, they will not only recover the tax but may also impose fines.
Myth 2: Origin criteria can be estimated “roughly.”
Fact: Rules of origin are very specific and complex. Rules must be accurately verified for each product. Misclassification errors are the main cause of certificate invalidation.
Myth 3: Form A applies to all developed countries.
Fact: As mentioned earlier, the United States has eliminated its GSP system for China. Form A is invalid for exports to the United States.
Myth 4: Certificate information can differ slightly from other documents.
Fact: Customs adheres to the principle of “document-to-document consistency.” The amount, quantity, and product name on the certificate must strictly match the commercial invoice; otherwise, the document will be considered invalid.
Part V: Future Trends and Strategic Recommendations
GSP Graduation: With China’s economic development, preferential countries such as the EU are gradually tightening or even eliminating their GSP treatment for China. In the future, bilateral free trade agreements will be the primary means of enjoying tariff preferences.
Digitalization Trend: The electronicization of certificates of origin is a global trend, and the process will become increasingly streamlined.
Strategic Recommendations:
Proactive Inquiry: Before quoting, proactively check whether your product has tariff preferences in the target market and inform your customer.
Compliance First: Ensure that your product truly meets the origin standards and establish an internal audit mechanism.
Integrate into the Sales Process: Include “assistance in obtaining preferential certificates of origin” as a value-added service in your sales contracts or promotional materials.
Summary:
Making effective use of certificates of origin such as Form A and EUR.1 is a key sign that you are transitioning from “passive exporting” to “proactive international trade planning.” It’s more than just paperwork; it’s a business strategy that reduces supply chain costs, increases product value, and strengthens customer relationships. Mastering it with minimal effort can provide a long-term competitive advantage.