Origin of good in international trade

The origin of goods is one of the key aspects of international trade and customs clearance. It affects not only the amount of customs duties but also the possibility of benefiting from preferential rates or avoiding anti-dumping duties. Incorrect determination of origin may result in additional costs, financial penalties, or even the detention of goods by customs authorities. In this article, we will explain what the origin of goods is, its significance, and the necessary documents to confirm it.

What is the origin of goods?

The origin of goods is a fundamental concept in international trade that determines the country from which a product originates. It influences the level of customs duties, the application of anti-dumping duties, applicable quotas, and required documents. Proper determination of origin is essential to avoid legal issues and additional costs during customs clearance.

How to determine the origin of goods?

Wholly obtained goods vs. originating goods

The determination of the origin of goods depends on their nature and method of production. There are two main approaches:

a) Wholly obtained goods – refers to products that are entirely produced in a single country, such as:
– Minerals and raw materials extracted from the earth,
– Plant-based products like fruits, vegetables, and cereals,
– Animals born and raised in a specific country,
– Products derived from farm animals, such as milk, eggs, and wool,
– Fish and other aquatic organisms caught in a country’s territorial waters,
– Goods manufactured exclusively from materials wholly obtained in a given country.

b) Originating goods – applies to products that have undergone substantial processing in a specific country. In such cases, customs regulations establish criteria to determine whether the processing was significant enough to confer a new origin to the product.

Insufficient processing or transformation

Not all processing operations result in a change of origin. Regulations clearly specify processes that are considered insufficient to confer a new origin, such as:
– Packing and repacking,
– Simple mixing of ingredients,
– Labeling or marking,
– Cleaning, sieving, or sorting. 

If only the above-mentioned operations were performed during production, the country of origin of the goods remains unchanged.

Preferential vs. non-preferential origin

The classification of goods’ origin affects trade conditions:

• Non-preferential origin – applied under WTO and EU rules, used for statistical purposes, „Made in…” labeling, and anti-dumping duties.

• Preferential origin – applies to goods originating from countries with which the European Union has trade agreements. If a product meets specific requirements, it may qualify for reduced customs duties or full duty exemption.

Why is the origin of goods important?

Knowing and correctly determining the origin of goods is crucial for businesses, as it affects:

a) The amount of customs duties – incorrect declarations may result in higher customs tariffs or financial penalties.
b) Qualification for trade agreements – preferential origin allows for lower or eliminated customs duties.
c) Application of trade protection measures – some goods may be subject to anti-dumping duties or tariff quotas, affecting import costs.

Documents confirming the origin of goods

Various documents are used to certify the origin of goods, including:

1. Certificate of origin – required for certain international transactions, issued by chambers of commerce.

2. Origin declaration on the invoice – used under preferential agreements if the shipment value does not exceed a specified threshold.

3. Preferential documents (EUR.1, FORM A, ATR) – required for benefiting from reduced customs duties under EU trade agreements.

How does PKS International CARGO S.A. assist with goods’ origin?

Proper determination of goods’ origin is a key element of customs clearance, impacting duty amounts and eligibility for preferential rates. Incorrect declarations can lead to legal issues, import/export delays, and financial penalties.

PKS International CARGO S.A., as an experienced customs agency, supports its clients in:
   Verifying goods’ origin documents for compliance with current regulations.
   Explaining origin determination rules and requirements arising from trade agreements.
   Assisting in the preparation of accurate declarations based on the information provided by clients.

Our expertise helps businesses avoid errors and streamline customs procedures. If you have any questions regarding the origin of goods or need assistance with customs formalities – contact us!