Certificate of origin, EUR.1 or REX: which proof of origin does your shipment need?

Key points

• A certificate of origin proves where goods were made. It does not reduce your customer’s import duty by a single euro.
• A EUR.1 and an origin declaration prove preferential origin under a trade agreement, and those do lower the duty.
• Up to a consignment value of 6,000 euro any exporter may issue an invoice declaration. Above that you need approved exporter status or a REX number.
• REX is replacing the EUR.1 in the newer agreements, including those with Canada, Japan, Vietnam and the United Kingdom.
• Origin follows from the origin rule attached to the commodity code, not from the country where your supplier happens to sit.

Two shipments of leather bags, both from Vietnam, both declared under the same commodity code. One clears at zero percent, the other at nine. The difference is not in the bags and not in the factory. It is in a two line declaration on the invoice that the second shipment did not carry.

Those amounts add up fast. On a 40,000 euro consignment that is 3,600 euro extra, paid on arrival, reclaimable through a slow procedure that often fails because the evidence can no longer be obtained after the fact. And it goes wrong in both directions: exporters issue declarations they are not entitled to issue, importers ask for a document that gives them nothing. The import duty you pay depends on three things: the commodity code, the customs value and the origin. Of those three, origin is the only one you cannot check in your own records.

Four documents are in circulation and they do not do the same job.

What does a proof of origin actually prove?

Origin is not the same as provenance. Provenance is the country the shipment left from. Origin is the country where the goods were produced, or where they underwent their last substantial transformation. A container transhipped in Rotterdam and forwarded from Antwerp does not change origin along the way.

Which operation counts as substantial is set out per product group in the origin rules of the agreement. Sometimes that is a change of tariff heading: the finished product must fall under a different commodity code than the materials bought in. Sometimes it is a value criterion, for instance that non-originating material must stay below a set percentage of the ex works price. Assembling bought-in parts often misses that threshold by a margin.

This is why supplier declarations matter so much. A manufacturer working from bought-in semi-finished goods can only claim preferential origin if he holds paperwork from his own suppliers stating what those materials are.

When do you need a certificate of origin?

The certificate of origin, usually shortened to CoO, is a non-preferential document. It says one thing: these goods come from this country. In the Netherlands the Chamber of Commerce issues it, for a fee, on the basis of evidence you supply.

You need it when the destination country asks for it. Many countries in the Middle East, North Africa and Latin America require a CoO on import, sometimes legalised by an embassy on top. Banks also ask for one under a documentary credit, and there a missing or deviating certificate is enough to stop the payment.

What a CoO expressly does not do is reduce import duty. That is the misunderstanding we run into most often. An importer who calls to ask why he is still paying the full rate when his supplier did send a certificate of origin is holding the wrong document.

What does a EUR.1 do that a certificate of origin does not?

A EUR.1, formally a movement certificate, proves preferential origin. That is origin under a specific trade agreement, and that is exactly what earns a reduced or zero rate on import into the partner country. The document is stamped by the customs authority of the country of export, at the exporter’s request, and it belongs with the export declaration.

The EUR.1 remains in use under the older agreements. Think of Switzerland, Norway, Egypt, Morocco, Israel and most of the Balkan countries. Ask a Canadian supplier for a EUR.1 and you will get a puzzled reply, and rightly so: that agreement has run on self certification for years.

Watch the validity period, because it is short. Under most agreements you must present the EUR.1 with the import declaration within four months of issue. A certificate that sits in a mailbox until the container is discharged may already be worthless.

When is an invoice declaration enough, and when do you need REX?

Alongside the certificate there is the declaration on the invoice. That is a fixed wording the exporter puts on the commercial invoice, signed, or under REX with only the registration number added. No counter, no waiting time, no fee.

The threshold sits at 6,000 euro of preferential origin products per consignment. Below that any exporter may issue such a declaration without authorisation. Above it you need one of two things:

• Approved exporter status from the customs authority, whose number you quote in the declaration. This applies to the agreements that still run on EUR.1 certificates and invoice declarations.
• A REX number, also issued by customs. This applies to the agreements that have moved to the registered exporter system, including Canada, Japan, Vietnam, Chile and the United Kingdom.

REX was first rolled out for the generalised scheme of preferences, under which developing countries certify their own origin, and has been expanding since. The direction is clear: away from the government stamp, towards self certification with checks afterwards. For exporters that is faster. For importers it means you lean harder on your supplier’s diligence than you used to, because nobody looks at the document before it reaches you.

Where does it go wrong in practice?

Four things keep coming back.

• The declaration sits on the packing list or on a pro forma invoice instead of the commercial invoice. That makes it invalid.
• The wording has been loosely translated or shortened. The text is fixed in the agreement and there is nothing in it to rewrite.
• The consignment is above 6,000 euro and the supplier has no authorisation number or REX number, but signs by hand anyway.
• Preference is claimed while the goods were stored in a third country en route, without non-manipulation being demonstrated.

On a check after the fact the bill goes to the importer, not to the exporter who issued the declaration. That feels unfair and it is the heart of the risk: you claim a tariff benefit on the strength of someone else’s statement, and you carry the recovery if that statement does not hold. So we advise asking regular suppliers once a year for the underlying evidence rather than only the document. It costs an afternoon and it saves the argument you would otherwise have three years later.

What we cannot judge is how strictly a given partner country verifies afterwards. That practice varies widely and is published nowhere. What is certain is that a verification request answered without evidence leads to withdrawal of the preference as a matter of course.

Frequently asked questions

Q: Is a certificate of origin the same as a EUR.1?

Ans: No. A certificate of origin is non-preferential and proves only the country of origin, usually because the destination country or a bank asks for it. A EUR.1 proves preferential origin under a trade agreement and earns a reduced import duty.

Q: Who issues a certificate of origin in the Netherlands?

Ans: The Chamber of Commerce, on the basis of supporting documents you supply yourself. The EUR.1 goes through customs instead, which stamps the certificate on export. Two documents, two counters.

Q: May I put an origin declaration on my own invoice?

Ans: Up to 6,000 euro of preferential products per consignment you may, without any authorisation. Above that amount you need approved exporter status or a REX registration, and that number has to appear in the declaration.

Q: What happens if the origin turns out to be wrong?

Ans: Customs withdraws the preference and recovers the difference from the importer, usually with interest. Recovering it from your supplier is a civil matter that sits outside the customs procedure and rarely moves quickly.

Q: How long must I keep proofs of origin?

Ans: Count on at least three years after the year of the declaration, and longer where the agreement or your own tax retention rules demand it. Keep the supporting evidence alongside the document, because that is what customs asks for in a verification.

Not sure whether your goods meet the origin rule, or whether a supplier declaration would survive a check? We test the rule against your commodity code, arrange the authorisation to declare on your behalf and handle the customs formalities for import and export. If you first want to see what a shipment costs at zero percent and at the full rate, use the import duty calculator.