4 Tips To Manage Your Country Of Origin Certificates (And Why It’s Imperative To Your Bottom Line That You Do!)
If you are a part of a manufacturing organization that sources your goods globally, you may run into a common problem: How can our Certificate of Origin (COO) be managed efficiently? Who is responsible for ensuring they are up to date? Where should the information be stored? How often should it be reviewed?
A clear country of origin statement or certificate is a requirement of many Free Trade Agreements, which then allows the import of those goods at a reduced or eliminated rate of duty. A certificate of origin also plays a part in labeling and marking requirements such as “Made in the USA.” It can also determine whether there are additional requirements or special duties applicable. Without the careful and accurate use of a certificate of origin, companies will find themselves in the crosshairs of Customs and the legal system.
Determining the country of origin can be quite complex if the commodity is comprised of multiple parts from different countries of manufacture. Rules of Origin help to decipher what will qualify and what will not. Because the seller of these goods is the most familiar with them, they are typically the party that provides this information. However, during the buying and shipping process, this very important document/certification can be easily overlooked, leading the buyer’s team to scramble at the time of import. Here are 5 tips on how to avoid this situation.
"In navigating the intricate web of global manufacturing, the precision and foresight applied in managing Certificates of Origin are not just about compliance—they embody the synthesis of enterprise architecture and data analytics, ensuring seamless and cost-effective international trade." - Mark Unak , Resident AI Expert at nvisia
1: Make Certificates of Origin Part Of Your Contract Negotiations
As the seller is most attentive when a deal is about to be closed, ensure you negotiate how your company will receive the certificate of origin data for all new and existing orders moving forward. Ensure a clause on these requirements is within your terms and conditions, which includes an annual review of all parts/SKUs and confirmation of their country of origin.
2: Create An SOP On Certificates of Origin
Create a standard operating procedure (SOP) that details the steps to be taken by each team member at the onset of entering a new part, as well as the ongoing maintenance of such information. The SOP should include:
3: Run Regular Reports To Look For Gaps
A member of your team should be reviewing certificate of origin data regularly to ensure the correct data is on file and to look for any missing or inaccurate information. Some suggested reports are as follows:
4: Educate Your Team
The manufacturing country is not the same as the country of origin.
Let’s repeat that very important detail:
The country of manufacture is NOT the same as the country of origin.
Contrary to popular (but misinformed) belief, these two are not one and the same. Therefore it’s very important that you educate all members of your purchasing and logistics teams to not use the country shipping or seller’s country of business to populate Country of Origin fields.
As mentioned earlier, it is a good idea to make the certificate of origin fields mandatory in your ERP system or parts database to ensure that this data is attached to each part or SKU of your purchase. However, mandatory fields can quickly become those pesky fields we must override before we can do what we are trying to do! As a result, the annoyance of having to input a data element into that field will soon drive “quick fixes.” Too often, the quick fix is to use the country where the goods were sold from or manufactured. Unfortunately, this is not always accurate, and extra time and attention must be given to determine an accurate country of origin instead.
Failure to comply with country of origin marking and labeling comes with hefty monetary and possibly criminal penalties.
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About the Expert: Meet Mark Unak
Expertise: Enterprise architecture, machine learning, cloud computing, data analytics, and artificial intelligence
Before joining nvisia, Mark Unak spent more than 25 years in the technology industry, having served as CTO of various organizations such as: Amdocs, Codifyd, Harqen, Scratch Digital + Data, and Forj. He has a BA in Economics from Yale University, and a PhD in Computer Science from the?University of Chicago.
Check out Mark's LinkedIn Profile here.