On 25 June the World Customs Organization (WCO) published its updated version of the Comparative Study on Certification of Origin. The study captures the present state of affairs regarding certification of origin, both in the areas of non-preferential origin as well as preferential origin.
According to the WCO the study has been updated to take into consideration new trends both on non-preferential and preferential certification of origin and to enrich procedural material on origin as part of the Phase IV of the Action Plan on Revenue Package endorsed in 2019. The initial findings in relation to non-preferential rules of origin from the 2013 version of the study have been kept in the current version to ensure consistency and to maintain a possibility to see the development from the initial study conducted in 2001 and to anticipate similar studies in the future.
The main updated content includes, for the first part on non-preferential rules of origin, reconsolidation of the assessment of the costs of certificates of origin issued by Chambers of Commerce in the previous study, development in e-COs and digitisation of certificates by Chambers. For the second part on preferential rules of origin, the update is mainly linked to the introduction of new origin certification features in recent EPA/FTAs (Pan-Euro-Med, EU-Korea, EU-Japan, CPTPP, CETA, USMCA and several others) and the REX system in EU GSP. Moreover, a section on further developments in relation to certification of origin has been added, which includes the use of blockchain for origin (function analysis, features, and pilots) and the review of Specific Annex K of the Revised Kyoto Convention (RKC).
The study shows that the vast majority of members do not require any non-preferential proof of origin for import, but also that some members use non-preferential certificates of origin for purposes that are not supported by the WTO Agreement on Rules of Origin. This approach appears to imply inconsistency with international standards such as the RKC.
Certificates of origin appear to be causing extra costs in doing business with certain countries. According to replies from members in 2013, the average issuing fee charged by the Chambers of Commerce was around US$23. According to the International Chamber of Commerce (ICC), the issuance fee for certificates of origin, whether physical or electronic, this year still ranges between 0 and US$50.
Over the last years a number of WCO members have started using and/or accepting electronic certificates of origin (e-COs). The same development is confirmed by the ICC when it comes to certificates issued by Chambers. China, the UK, the Netherlands, Belgium, South Korea, and Spain have reported the largest e-CO issuing volume and among them, China and South Korea offer only e-COs.
As for certification of origin in Free Trade Agreements (FTAs), more than half of the FTAs studied introduce a kind of self-certification of origin, i.e. approved exporter, fully exporter-based certification, or importer-based system. Recently concluded regional agreements appear to prefer self-certification of origin, particularly the fully exporter-based certification system and the importer-based certification system with less or no involvement of the competent authority of the exporting country.
The introduction of new technologies, such as blockchain technology, can support both the origin certification and origin verification procedures. The study explains the features and functionalities of blockchain technology in relation to origin and refers to pilot projects in this area.
Finally, the study refers to the ongoing process of the Working Group on the Review of the Revised Kyoto Convention (RKC) explaining the review of Specific Annex K (SA K) on rules of origin with a view to modernising international standards for origin procedures established by the RKC.
Story by: Riaan de Lange