Evidence of Origin
The rules of origin are contained in the relevant agreements to which they relate. Attempts have been made to provide common procedural and administrative rule. However, the specific rules applicable in any given case will depend on the international agreement that applies.
An EU regulation applies to certificates of origin and cooperation between administrative authorities of importing and exporting states. It covers preferential and non-preferential cases. The provisions for non-preferential origin are separate to those for preferential origin. There may be further particulars applicable to particular agreements and states in the circumstances.
Annex D2 of the Kyoto Convention deals with evidence of origin. It was adopted by the European Union. The revised Kyoto Convention has also been adopted by the EU.
The provisions on preferential origin provide that products originating in a country benefitting from preferential tariffs may obtain preferential tariff treatment based on a certificate of origin in the required form or in some cases on the basis of an invoice declaration, based on a commercial document describing the product in sufficient detail with a declaration.
Documentary evidence of origin should be required only where necessary for preferential customs duties economic or trade measures adapted either unilaterally or in bilateral or multinational agreement or for measures required for health and public order.
The recommended practices are that further documentary evidence should be required from the country of origin concerned only where there is a reason to suspect fraud. The Annex provides for a model certificate of origin. The certificate should be in English or French as well as the exporter selected language under the recommendation.
It is recommended that the country of import should not require a translation as a matter of course where the certificate is not in its language.
It is recommended that those issuing certificates should retain the applications or copies of certificates issued for at least two years. The revised recommendation provides for cooperation where there are reasonable grounds to question the authenticity of a document or its accuracy. It may be required on a random basis. Random requests are to be kept to a minimum.
Issued by Exporter’s Country Authorities
Certificates of origin in the Kyoto recommended form are issued on the basis of an application by the exporter or his agent. The certificate of origin is issued by the authorities of the beneficiary concerned in accordance with the substantive rules on origin. The exporter must furnish the authority with proof of origin. This would be based on an application, documents and other verification, as required or as they consider appropriate.
The competent authorities of the country of export must take steps to verify the authenticity of the origin. EU states may require proof of origin to be translated. They may require the declaration to be accompanied by a statement by the importer that the goods comply with the provisions of the preferences.
Authorised Exporters and Facilitation
Invoice declarations may be used by exporters who are authorised. One category is an approved community exporter. An invoice declaration may be made out by other exporters on assignments of one or more packages less than a de minimis value (€6,000) provided that the authorities of the country concerned, assist the EU authorities by allowing it to verify the authenticity of the documents and the accuracy of information on origin. The declaration must be in French or English.
An EU approved exporter is one who undertakes frequent exports of goods originating in the EU and gives the relevant guarantees to the satisfaction of the EU customs authority to verify originating status and to comply with administrative requirements.
The customs authority must monitor the authorised exporter and may withdraw approval where it no longer provides the requisite guarantees or complies with the conditions.
Scope of Certificate
There may be a single declaration of origin for each item or a global certificate or declaration covering multiple goods. This is permissible where the goods are within the same code over a period by the same exported not to exceed three months, or where goods are in sets.
A single proof of origin may be allowed at the request of the importer, subject to conditions in relation to certain categories of goods and components.
Proof of origin is generally valid for 10 months after issue in the exporting country. It is presented to the customs authorities in the importing country.
Certificates of origin are not required in relation to small packages present between private persons or forming part of traveller’s personal baggage provided they are not imported as a trade and meet conditions. Imports that are occasional and consist of products for personal use of the traveller or his family, having regard to their nature and quality are not considered by way of trade, provided their value does not exceed certain de minimis amounts (€500 small package, €1,200 personal baggage).
Audit of GSP Certificates
Countries which benefit from the general system of preferences with the EU (GSP) must notify the Commission of their governmental authorities with the power to issue certificates of origin. They must provide specimen stamps for use in authentication.
The EU Commission has a role in monitoring and verifying certificates of origin. They may communicate information regarding origin and quantities imported. Under general mutual assistance and cooperation obligations, EU representatives may visit beneficiary countries in order to establish origin pursuant to the mutual assistance provisions between the states concerned.
The customs authorities may undertake audit and verification of the authenticity of certificates of origin on a random basis or when there are reasonable doubts in relation to the authenticity or accuracy of the documents or their compliance with requirements.
The EU may suspend tariff preferences pending investigation. They may allow the release of products subject to security where there is a question or doubt on origin.
Copies of Form A certificates and export documents must be retained for at least three years by the governmental authorities of the exporting country. The EU may request copies of the documents. They may return the certificates of origin together with invoice declarations and other relevant documents to the relevant governments in the country of export. They should give reasons for their inquiry where appropriate. The results of the verification should be communicated to the EU customer authorities within six months with certain documentation, with provision for extension of time.
Withdrawing or Denying Preference
If the authenticity is not determined within this period, preference may be denied. Where there is evidence that the rules are being breached the exporting country must on its own initiative or at the EU’s request, carry out enquires to identify and prevent the contraventions. The EU may rely on the investigations and verification undertaken in the state of origin and may demand duty if it is shown that the certificates are inaccurate.
Generally, the principle is that customs authorities should act on the basis of mutual recognition and assurance. However, the EU is not bound to do so and may disagree with the foreign customs authority, where it determines the position on the basis of its own findings.
Where verification shows that the certificate of origin is inaccurate, or further customs duty may be recovered. The burden is on the importer to prove the preferential origin and is not completed by the presentation of a statement or a certificate of origin, where there is later evidence regarding its accuracy.
The importer may be required to produce further evidence to retain the preferential treatment. This may place the risk on the importer if it emerges that the certification of origin was fraudulent. The trader, therefore, has a responsibility to make sure and guard against fraud in his dealings with third countries’ exporters. There has been a recognition that this can be burdensome for traders. They may have remedies under the relevant contract against the exporter although there may be difficulties in enforcement and recovery.