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What is Origin? Simply, it is stating where a product originates. For natural goods, such as raw materials, flora, and fauna, this is where they are obtained, born, or grown. For manufactured items its where the last substantial economically justified process takes place.
Simple? Not really, as we have such an integrated, complex trading system that establishing the final origin of some goods can be confusing, and therefore we have international rules.
A common error on import (and export) customs declaration is to state that the country of origin is the same as the country from which the goods were shipped. This is known in the customs world as the Country from Whence Consigned – CWC. This is not always the origin of the goods, though as raw materials, parts, subassemblies and finished products crisscross the globe not just to be manufactured but also for storage to aid the speed of supporting customers, especially in after-sales markets.
A note on the European Union: non-preference origin is the country, eg German, Swedish, Spanish, etc you cannot state “the EU” as a non-preference origin.
Why is it important?
The origin of goods being shipped internationally is used for many reasons by authorities, companies, and consumers alike. Though the World Trade Organisation (WTO) has established an international rule for determining non-preference origin, it has not been taken up as enthusiastically as the WCO Harmonised coding System (HS) for commodity codes. The economic nationality of goods – i.e., the origin – is linked to key trade factors:
- Tariff Restrictions – for example, imposing additional duties to deter the purchasing of goods made outside the domestic market.
- Marketing purposes – to distinguish imported consumer goods from domestic products.
- Consumer choice – where a product is made may affect a buyer’s decision on whether to purchase it or not.
- Political and economic reasons – campaigns such as Buy British or linked to government procurement contracts or the monitoring of trade with embargoed and sanctioned countries.
- Brand recognition – e.g., Swiss watches should be made in Switzerland.
- Quality marking.
- Legal requirements for Country-of-Origin Labelling (COOL).
- Geographical Indicators (GIs) – goods, usually food and drink, which have been granted protected geographical status, e.g., champagne must come from champagne in France.
- To establish where the Intellectual Property Rights including Copyright of products is held, e.g., iPhone shows “Designed by Apples in California USA. Assembled in China.”
If you are interested in exploring this topic further, you might find it worthwhile to consider the training courses and live clinics offered by Strong & Herd LLP:
Understanding Origin & Preference
What is the difference between origin and preferential origin? This interactive workshop explains this by using case studies and exercises to help the learner understand when they are important in both export and import scenarios. It examines the documents and statements used to declare origin and preference and how to verify if your goods meet preference rules across different trade agreements. With HMRC audits increasing, you and the business need to be comfortable with this complex area.
Focus On: Understanding Free Trade Agreements
With the UK developing new independent trade arrangements both to encourage the export and import of goods and services from affiliated markets, this session is a must. Some knowledge of customs regulations is recommended or attendance on courses introducing this topic. This course looks at the structure of new and old UK international trade agreements, the key rules of origin and how to understand the whole agreement coverings goods, services and other trade issues.
International Trade Compliance Manager
Two Day Face to Face Course
This popular workshop is aimed at anyone involved in international trade and customs compliance within a business. Whether from a management or administrative point of view, this course will illustrate how to promote a strong "compliance culture" throughout an organisation. It assists in the understanding of international regulations and how to establish performance metrics (KPIs). It covers classification, valuation, origin, duty minimisation schemes, licences, AEO, and audits.
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