The rules of origin are the criteria used to determine the country of origin of a product within the international trade.
Correctly determine the origin is especially important when a company is looking for access to preferential tariff treatment established by a treaty or trade agreement.
The country from which the user sends an merchandise does not necessarily determine its origin. To set it must be tested for the characteristics of the product and the relevant criteria.
What are rules of origin?
The rules of origin to determine if a product may be considered as originating in a particular country in accordance with the framework.
In the context of trade agreements, this allows you to identify whether the product can fulfill one of the elements necessary to gain access to certain tariff preferences.
They also allow to distinguish the source of the goods of their origin.
What is the difference between origin and provenance?
The source refers to the place from which it is shipped merchandise.
The origin is determined by the criteria established to identify where a commodity was obtained, produced or sufficiently transformed.
For example, a product may be sent from the united States, but that does not automatically mean that it is native to the united States.
How do you determine the origin of a product?
The criteria depend on the product and the trade framework applicable.
Among the elements that can be used are:
- Goods wholly obtained or produced in a specific territory.
- Transformation of non-originating materials.
- Change of tariff classification.
- Content, or a regional value.
- Production processes specific.
Therefore, to determine the origin may require analysis of both the finished products and their materials and manufacturing process.
What is the relationship between rules of origin and trade treaties?
Trade agreements can establish tariff preferences for goods originating from the participating countries.
The rules of origin to determine which goods meet the conditions to be considered as originating under this agreement.
For this reason, buying a product for a provider located in a country with which Mexico has a treaty does not guarantee by itself that the goods can reach out to a tariff preference.
Why are they important for importers and exporters?
Correctly determine the source allows to evaluate possible benefits of trade, identifying documentary requirements and the decisions of supply for more information.
For companies with recurring transactions, it can also be a variable to consider when designing their supply chain and assess international suppliers.
In Core Global Logistics we understand that every international operation requires the analysis of different variables before you move a commodity, integrating planning and coordinating to develop solutions tailored to the needs of each company.
Learn about the origin and conditions of a commodity form part of that planning.