- Economies negotiating Preferential Free Trade Agreements should ensure the Rules of Origin Chapter provisions include an equivalent multi system
- The ICC World Chambers Federation Certificate of Origin Council in a new paper said this would allow traders to choose between third-party certified origin and self-declared origin statement methods
- The dual system ensures legal security for business, safeguards data quality, and promotes harmonization, which reduces costs for traders and governments
Economies negotiating Preferential Free Trade Agreements (FTAs) should ensure that the Rules of Origin Chapter provisions include an equivalent multi system, the International Chamber of Commerce World Chambers Federation Certificate of Origin Council said in a new paper.
This would allow traders to choose between third party certified origin and self-declared origin statement methods when satisfying their preferential origin data, the council said.
The report, “ICC WCF CO Council Recommendation – Dual system paper,” recommends dual systems to ensure legal security for business, safeguard data quality, and promote harmonization, which reduces costs for traders and governments.
ICC said in a press release that the recommendation had been noted and reviewed by the ICC Global Customs and Trade Facilitation Commission.
In recent decades, the proliferation of FTAs and the different requirements for evidencing origin have overcomplicated the system, creating inefficiencies for both regulators and traders, particularly small- and medium-sized enterprises (SMEs), the ICC WCF CO said.
“It is now time to harmonize and standardize the available systems to reduce costs and improve efficiency,” the council said.
There are more than 400 free or preferential trade agreements in force around the world, and each agreement can be extremely specific on many levels, particularly when it comes to determining origin to claim a tariff preference.
“In that respect, third party certified origin and self-declared origin statements have both developed and been tested in many of these agreements. Both methods should, however, not be seen as competing processes, but as two viable options which the commercial parties can choose from according to their needs and risk profile,” ICC WCF CO.
The council urged economies negotiating FTAs “to ensure that the Rules of Origin Chapter provisions include an equivalent multi system that would give traders a choice between the two methods when satisfying the data provisions for meeting the preferential origin criteria; namely, electronic or documentary Certificates of Origin certified by an authorized third-party, or self-declared statements of origin supported by a high quality ‘trust’ ecosystem.”
The inclusion of this multi system will ensure traders always have access to harmonized data-sharing across multilateral trade and diverse economies and FTAs, said ICC WCF CO.
The council said this will facilitate international trade, support data accuracy and integrity, ensure traceability of digitalized COs, reduce financial risk and fraud, and enhance a reliable and trustful ecosystem for export supply chain partners, such as exporters, importers, customs, authorised certification bodies, regulators, and governments.
Particularly beneficial to SMEs, such multi systems will also help promote legal security for business, safeguard data quality and reduce trade costs for traders and governments alike, the council said.
Andrew Wilson, ICC Global Policy director, said: “The proliferation of different origin rules in bilateral trade agreements creates an enormous challenge for small businesses looking to tap new market opportunities. We hope this new paper will help stimulate debate on how the use of common-sense systems could help more SMEs take advantage of preferential trade agreements.”
Martin Van der Weide, chair of ICC WCF CO, said that through its council, ICC WCF hopes to contribute towards the harmonization of rules of origin and the issuing process of COs.
“It is our role to address a problem faced by many SMEs who cannot easily navigate self-certification systems. The core objective of the paper is to advocate for multi-tier systems for origin in preferential trade agreements and to give the choice of two methods to exporters. We do hope these recommendations would be a valuable input for businesses as well as for Customs authorities,” said Van der Weide.
