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How Does a Certificate of Origin Decide the Rate of Traded Goods?

To start with, a certificate of origin (COO) is an important trade document that an exporter may need to prepare as a part of export documentation. As the name suggests, it certifies the origin of goods that a country exports to another. For example, if you export certain products that are produced, manufactured or processed in Australia to Thailand, you must obtain a TAFTA (Thailand-Australia Free Trade Agreement) COO.

So, what would this certificate imply? In simple words, it certifies that the exported goods have their origin in Australia and no other country. Now, the bigger question is that how does it matter? Under the TAFTA regulations, the goods traded between Thailand and Australia would enjoy preferential tariffs. By preferential, it means reduced or lower tariffs that benefit the importers as well as exporters.

Obviously, importing such goods at reduced tariffs let importers extract more profits. For exporters, it is a great opportunity to turn their products competitive in the international markets. Apart from the above-mentioned example, there are different COOs required when you export from Australia to other countries. For instance:

  • JAEPA COO for export to Japan
  • ChAFTA COO for export to China
  • KAFTA COO for export to Korea
  • AANZFTA COO for export to New Zealand and various ASEAN countries

To summarize, a COO decides whether your goods get preferred rates or not. In order to build trade relations with more importers, you must understand and adhere to the requirement of this certificate.

It should be noted that what you read so far is about the preferential COOs. In addition, there is another type of COO called the non-preferential COO. Though the purpose of this certificate is the same as it certifies the origin of the imported goods, but it doesn’t demand preferential rates for the same. Among many of its purposes, the most important one is that it is required by an importer to authorize his or her bank for issuing the letter of credit.

You need to type and submit a certificate of origin to a Chamber of Commerce for stamping. In order to accelerate the process, you can do it online using an electronic export documentation tool.

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