Contacts:

55 11 5067 7023

55 11 5067 7022

Rafael or Gian

rciffani@acsp.com.br

What is it?

It is an official document certifying that goods originate from a specified country and can be required by the importing country, depending on the product, in order to obtain tax reduction or exemption at the destination, which is determined by some kind of Preferential Trade Agreement signed between the exporting and importing countries.

The certificate states that the exported good is national and is in accordance with the Origin Regulations determined in the signed Preferential Trade Agreement.

Who benefits from the Certificate

The direct beneficiary is the importer who will receive a tax reduction or exemption in the importing taxes. In some situations the certificate is demanded in order to meet the importing quota depending on the product/country.

Why is the certificate required?

The main reason for a country, when negotiating a bi or multilateral agreement, asking or offering favorable tax treatment preferences (reduction/exemption of import taxes), and therefore have access to these markets is to help companies from that country, specially industries, to open their markets to goods produced by themselves.

The certificate is required in order to prevent companies (industries or sellers) from operating with the known “triangulation” trade scheme, importing the finished good from other countries and selling it to the country who signed the Preferential Trade Agreement taking advantage of the tax benefits.

In order to be considered national a product must not necessarily have 100% of national components. Each agreement and its Origin Regulations stipulates the percentage of components from other countries which are allowed. Or which goods / groups should receive more favorable treatment.

What are Origin Regulations?

Origin Regulations are the conditions foreseen in each agreement in order to stipulate what is a national product. The Rules of Origin Regulations must be in the Certificate of Origin, varying according to the Agreement and to the kind and composition of the good to be exported.

What is a Declaration?

No certification entity keeps a group of employees “in loco” to verify the manufacturing conditions of a good to be exported, specially the origin of the raw material and components which are part of the product (imported items from other countries). It is not feasible and could be easily circumvented, as the company could present national components for assessment and use imported items right after.

The certification entity must demand, before the certificate is issued, an affidavit from the manufacturer addressing at least the following requirements:

·       company’s name

·       address

·       denomination and classification of the good to be exported

·       FOB (Free on Board) value of the goods (per unit, kilo, meter, barrel, dozen, etc)

·       summarized description of the manufacturing process

·       product components of the good to be exported, compulsorily indicating

o         materials, components and national parts

o         materials, components and parts from other countries (in case of MERCOSUL - Southern Common Market), with the MCN-HS (MCN (Mercosur Common Nomenclature) – one of the codes of the Harmonized Commodity Classification and Coding System (HS), an international method of product classification based on a code structure and related descriptions) codes, CIF (Cost Insurance and Freight) value in US$ and percentage in the final product

o         materials, components from third countries with CIF (Cost Insurance and Freight) value in US$ and percentage in the final product

This is the most important document because it exonerates the certification entity from responsibility if the exporter doesn’t fullfil the Origin Regulations demanded by the Agreement.

Characteris­tics of the Declaration:

·       one for each product

·       printed in company’s paper

·       signed by a company’s director or by proxy

·       valid for 180 days from the issue date, as long as no material or component used is altered. However, in Agreement 59, the declaration is valid for 3 years from the issue date, as long as no material or componet used is altered.

The requirement for the affidavit by the certification entity is foreseen in the Governmental Regulation MF/MICT/MRE number 11/97, from January 21^st 1997, in Appendix I. Amends, letter h, that regulated the 15^th Article Appendix I 1^st Article  from ACE 18 VIII Supplementary Protocol.

Stated Period for Certificate Issuing

The Certificate of Origin will be valid for 180 days from the issue date. Only the Common Origin Certificate has no expiration date.

Certificate Expiration Date

The Certificate of Origin should be issued as from the issue date of the corresponding commercial invoice or in the following 60 (sixty) days. Only the Common Origin Certificate has no stated period for its issuing.

Precautions when filling in the Certificate

a – The Certificate must be handed to the entity filled in by the exporter, except in the fields reserved for the entity;

b – There musn’t be any kind of correction, obliteration or amend. It is not accepted any kind of correction even with products such as opaque correction fluids (liquid paper);

c – The Certificate issue date, in the field of the exporting company, can’t be prior to the issue date of the commercial invoice.

d – The number of copies of the Certificate will be requested by the company. Remember that one copy will be retained by the entitiy and stapled with one copy of the commercial invoice;

e – The stated period for the company to present the issued Certificate is 60 (sixty) calendar days, as from the issue date of the commercial invoice or 10 (ten) working days as from the shipping date;

f – Each Certificate presented will correspond to one commercial invoice;

g – The signature in the Certificate must belong to one of the exporting company’s director or by proxy. In this case the entity should request and file the proxy;