In international trade, the Certificate of Origin (C/O) plays a pivotal role: it serves as legal proof confirming the origin of goods and acts as the “key” enabling businesses to enjoy tariff preferences under Free Trade Agreements (FTAs). Beyond taxation, the C/O also affects contractual commitments, customs procedures, legal liability, and brand credibility in export markets.
This article, prepared by DNP Viet Nam Law Firm, provides essential legal information on the role of the C/O, along with guidance on procedures, common risks, and compliance measures for enterprises.
1. Definition and classification of C/O
- A C/O (Certificate of Origin) is a document issued by a competent authority or organization certifying the origin of goods.
- Classification by purpose:
- Preferential C/O: Issued for goods exported from countries participating in FTAs or preferential tariff arrangements. This type of C/O allows the exporter or importer to benefit from special preferential import duties.
- Non-preferential C/O: Issued for goods not covered by preferential trade agreements. Goods with this C/O are subject only to the MFN or normal tariff rate. This type is mainly used for commercial purposes, statistical reporting, or trade defense measures.
2. Essential roles of C/O in import and export
- A valid preferential C/O is a mandatory condition for goods to enjoy preferential tariff rates under FTAs. Without a valid C/O, the enterprise will lose the benefit and be subject to MFN or normal duty rates.
- A valid C/O helps customs authorities determine the correct HS code and applicable tax rate, often facilitating faster customs clearance.
- A C/O serves as reliable evidence in international payments and trade contracts, as banks and import partners frequently require it as a supporting document for L/C payments or contract dispute resolution.
- A C/O helps verify the product’s origin; in the context of increasing technical barriers (such as origin rules or green import controls), it enhances transparency in the supply chain.
- When examined by authorities, a valid C/O along with supporting documents (invoices, raw material purchase records, production sheets) serves as the legal basis for handling misdeclaration of origin.
3. Key notes on C/O
- Businesses must ensure their goods comply with Rules of Origin (ROO) under the relevant FTA.
- Conditions for C/O issuance vary: Depending on the exported goods and destination country, with specific C/O forms such as Form A, E, ICO, AJ, AK, etc.
- C/O issuance procedure: Provided under Article 16 of Decree No. 31/2018/NĐ-CP.
“The above content is provided by DNP Viet Nam Law Firm for reference purposes only. For detailed, accurate, and tailored legal advice that meets your specific needs, please contact us using the information provided below.”
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