Certificate of Origin 2025

Introduction – The Business Risk of Not Having a Certificate of Origin

❌ "The Certificate of Origin isn't important, they never ask for it anyway."

This is what one Hungarian exporter thought – until their shipment was held at customs. Because there was no proper Certificate of Origin, the buyer paid thousands of euros in extra customs duties, the goods were delayed, and finally, the contract was terminated. The exporter lost an important partner – all due to a single administrative error.

The Certificate of Origin is not just a piece of paper. If it's missing or incorrect, it can:

• Prevent you from claiming customs duty preferences (e.g., without EUR.1).
• Lead to fines or a customs duty repayment obligation.
• Even cause the breakdown of the business relationship between the exporter and the importer.

This article details when and why a Certificate of Origin is needed, how to issue it correctly, what documents are required to support it, and how to avoid the most common mistakes. We have one goal: to ensure you can export with peace of mind, and that customs procedures are not the biggest risk to your business.

In foreign trade, there are two types of origin statuses: preferential and non-preferential origin. The difference is not just theoretical – it means completely different documents and risks.

Preferential Origin (EUR.1, Invoice Declaration...)

This applies when the goods are manufactured in a country with which the destination country has a free trade agreement. In such cases, the importing country may apply preferential or zero customs tariffs – but only if this is proven by the origin document (e.g., EUR.1 movement certificate, or an authorized exporter's declaration).

⚠️ If there is no proper certificate, the exporter cannot claim the preference – and the importer may unnecessarily pay 10-12% duty. Officially, the customs authority (NAV) approves and certifies it.

However, in new free trade agreements (e.g., EU-Canada, EU-South Korea), exporters are increasingly responsible for the authenticity of the origin, and the customs authority only performs ex-post checks.

Therefore, it is essential for the exporter to record all data and documents precisely and traceably – so that they can prove the origin of the goods even years later.

Non-Preferential Origin (Certificate of Origin)

This is required when the importing country only wants to determine in which country the goods were actually manufactured – for example, due to restrictions, sanctions, or anti-dumping measures. This does not grant customs preferences, but may be mandatory for customs clearance. This includes the classic Certificate of Origin (C.O.), which is usually issued by the Chamber of Commerce.

It is very important that the Chamber may request supporting documents for origin: BOM list, supplier declaration, manufacturing certificate, etc.

Focusing on Non-Preferential Rules of Origin

Non-preferential origin is required for the application of general trade policy measures (e.g., import prohibitions, sanctions, registration requirements). The Certificate of Origin (C.O.), typically issued by the competent Chamber of Commerce and Industry, serves as proof.

Important: Non-preferential rules of origin are not harmonized at the EU level, so there may be differences in the practice of individual Member States.

1. What Determines Origin?

The country considered to be the country of origin of the goods is:

• Where the last substantial, economically justified processing occurred, resulting in:
  • A new product, or
  • The processing being considered a significant stage of manufacture.

This principle is also enshrined in the European Commission's delegated regulation: 

https://publications.europa.eu/resource/cellar/c61d4cc6-f90b-11ef-b7db-01aa75ed71a1.0012.02/DOC_1https://publications.europa.eu/resource/cellar/c61d4cc6-f90b-11ef-b7db-01aa75ed71a1.0012.02/DOC_1

2. Change in Tariff Heading is Not Mandatory and Not Always Sufficient

A change in customs tariff number (HS code) is only one method of measuring processing (known as "CTH – change in tariff heading"). However:

• Not mandatory – if the processing is sufficient, origin can be proven even if the final customs tariff number of the product matches that of the originating material.
• Not sufficient – if the processing is limited to simple operations (e.g., labeling, assembly, packaging), it cannot be accepted as a change of origin, even if the product falls under a new customs tariff number.

⚠️ Important: The determination of origin is always case-study based.

The determination of non-preferential origin is never based on a single rule – each case must be judged individually, based on the specific product, customs tariff number (HS code), manufacturing process, and documentation.

3. What Does the Commission Say?

The Commission's official page on non-preferential origin: 🌐 https://taxation-customs.ec.europa.eu/customs/international-affairs/origin-goods/non-preferential-rules-origin_enhttps://taxation-customs.ec.europa.eu/customs/international-affairs/origin-goods/non-preferential-rules-origin_en

This is not binding, only serves as a recommendation for the customs authorities of the Member States. Non-preferential rules of origin are applied based on Member State interpretation.

4. BOM List and Supporting Documentation

Correct origin determination often requires:

• BOM (Bill of Materials) list, indicating the origin of all raw materials.
• Supplier declarations.
• Manufacturing process descriptions.
• Invoices, documentation proving manufacturing operations.

5. Special Case – When the Place of Processing is Unclear

Annex 22-01 of the Commission Regulation contains the categories of goods for which specific rules of origin apply. For goods not listed, the following general rule applies:

• If the last working or processing is not economically justified, the origin must be determined based on the country of origin of the largest proportion of materials.
  • For goods in Harmonized System Chapters 1–29 or 31–40 → largest weight determines.
  • For goods in Chapters 30 or 41–97 → largest value determines.

6. Origin According to Importing Country – Only Under Strict Conditions!

In certain cases, the Certificate of Origin may indicate a third country as the country of origin, according to the importing country's expectations. However, this is only possible if:

• The exporter fully documents this.
• The importing country has requested or accepted this designation in writing.
• The Chamber and customs authority agree and it does not violate EU regulations.

⚠️ This is an extremely rare and exceptional procedure, to be assessed individually in each case.

🟣 Final Warning – The Biggest Mistake You Can Make

Many businesses fall into the trap of thinking: "We've always done it this way, and we haven't had any problems so far..."

However, this is a serious risk, as the foreign trade and customs environment is constantly changing, and cooperation between countries is increasingly based on precise data exchange.

💡 A single incorrect customs tariff classification, or an unfounded change in the designation of the country of origin, can:

• Lead to the entire shipment being held.
• Cause the buyer to lose their customs preference.
• Result in penalties, subsequent investigations, and loss of trust.

Therefore, we always recommend: examine the manufacturing process, sourcing, depth of processing, and materials used in detail, item by item.

📌 The declaration of origin is not a formality – but a legal declaration that authorities and partner countries take seriously.

In foreign trade practice, the origin of a product can be proven with various documents – depending on what purpose and to which partner country the export takes place.

1. Two main types of origin documents:

2. When is it Mandatory to Issue a Certificate of Origin?

🇪🇺 EU Trade (within the EU) Generally, no official Certificate of Origin (neither EUR.1 nor C.O.) is required, as there is free movement of goods within the internal market.

🌍 For Exports to Non-EU Countries The specific partner country determines what type of origin certificate it accepts or requests:

• C.O. may be mandatory for exports to, for example, Arab countries, Turkey, India, or African countries.
• Preferential declaration or EUR.1 is required if there is a preferential agreement between the given country and the EU, and the goal is to claim the preference.

❌ Important exceptions to the application of EUR.1: EUR.1 cannot be used if there is a self-certification system in place between the EU and the given country. Such countries include:

• South Korea 🇰🇷 – The exporter must declare the preferential origin of the goods in writing, provided they are a Registered Exporter.
• United Kingdom 🇬🇧 – Under the TCA (EU-UK Trade and Cooperation Agreement), only the invoice declaration is accepted as proof of origin.

🟢 What we use in these cases:

• Invoice declaration (statement on origin) made based on REX registration, or
• Other exporter's declaration with the text specified in the agreement.

3. Important Differences

More countries are shifting to the self-certification model, especially to replace EUR.1:

• Exporter declares (e.g., "Registered Exporter System – REX")
• Customs authorities only perform ex-post checks

This practice is becoming increasingly widespread, but it also places serious responsibility on exporters. The declaration of origin is not just an administrative paper: it is a legal declaration, for the veracity of which the issuer is responsible.

Therefore, it is critically important:

• Precise and detailed knowledge of manufacturing data.
• The existence and systematic organization of supplier declarations.
• And that the applied rules of origin can be consistently proven.

In the event of a subsequent audit – even years after export – if the declaration proves to be unfounded, it could result in penalties, customs debt, or exclusion from preferential treatment.

⚠️ Important: It cannot be argued that the customs authority previously approved the document – during an audit, the responsibility for the veracity of the content always lies with the declaring company.

4. How is Origin Proven in Practice?

Issuing a Certificate of Origin always requires authentic documents:

• For manufactured products: A declaration must be made based on an internal BOM list (Bill of Materials). This list contains detailed information on the origin, quantity, value, and customs tariff number of raw materials.
• For goods purchased as finished products: It is mandatory to obtain a supplier declaration, regardless of whether it originates from the EU, China, or elsewhere.

For goods of Chinese origin, administration is generally more flexible, as destination countries often raise fewer doubts about CN origin, while for European origin, a much stricter chain of proof is expected.

Important to know: Chambers of Commerce and Industry do not substantively examine origin, they merely filter out anomalies. If suspicious data is found, they may notify the authorities, which could lead to a subsequent audit or procedure.

5. Issuing a Certificate of Origin – Step-by-Step

1. Gather procurement and manufacturing data (BOM, declarations).
2. Submit an application to the regionally competent Chamber.
3. Attach: invoice, delivery note, export declaration, other export documents.
4. The Chamber issues the Certificate of Origin in 3 copies:
   • Original copy: for the buyer, sent with the exported goods.
   • Second copy: retained by the Chamber for archiving.
   • Third copy: retained by the exporter.
5. The certificate can be paper-based or in electronic format (e-CO).

6. We Help Every Step of the Way

Smart & Smooth undertakes the completion and administration of the Certificate of Origin at a reasonable price. For Budapest-based companies, if requested, we deliver the completed document to your doorstep, or we can help with electronic submission. If you are unsure about the origin, we check your BOM list, consult with the supplier if requested, and prepare the documentation before export.

Issuing a Certificate of Origin is not just an administrative matter – it can have legal and customs consequences if mistakes are made. Below, we have collected the most common mistakes that can lead to the rejection of a Certificate of Origin or EUR.1, and even to penalty proceedings.

⚠️ 1. Incorrect Customs Tariff Number (HS Code) Incorrectly classified goods can lead to an erroneous origin conclusion.

A single incorrectly provided number can invalidate the origin if the last substantial processing does not justify the new HS code.

📄 2. Unsupported Declaration If the supplier declaration is incomplete, inadequate, or missing, the Chamber cannot accept the application.

In the case of own manufacturing, if the BOM list is missing or not sufficiently detailed, the processing of the goods cannot be carried out, or it may lead to errors.

🛠️ 3. Cases of Simple Processing If only basic packaging, sorting, labeling, or assembly has occurred on the product, it does not qualify as economically justified processing. In such cases, it cannot be accepted as originating in the given country, even if the HS code has technically changed. This needs to be carefully monitored!

🧾 4. Error in Retrospective Issuance Sometimes, an exporter wants to have a certificate issued after the export. This is possible, but only within a specified period and in sufficiently justified cases. If the application is too delayed, the Chamber may reject it and will not issue a Certificate of Origin!

❗ 5. Overconfidence – "It hasn't been a problem so far" type of argument Many businesses fall into the trap of referring to previous approvals.

Origin must be re-examined quarterly, and it cannot be assumed that the Chamber or customs authority previously accepted it. During a subsequent audit, if it turns out that the origin was unfounded, it could pose a risk to the company's operations.

📌 Tip: If you are unsure, it's better to seek professional help for filling out the documents and compiling the supporting documentation. The Certificate of Origin is not just a formality – a bad certificate can jeopardize the shipment and result in penalties. We are happy to help you with this!

Digitalization is gaining more ground in foreign trade administration as well – so paper-based Certificates of Origin are no longer always necessary. The electronic Certificate of Origin (e-CO) speeds up processes, reduces the chance of errors, and is, last but not least, an environmentally friendly solution.

💡 When can e-CO be used? The use of an electronic Certificate of Origin is possible if the following conditions are met:

• The destination country accepts the electronic version (not all countries do!).
• The Chamber operates an e-CO system platform (e.g., MKIK system).
• The exporter is a registered user and has appropriate access to the system.

🖥️ How does it work?

1. Online registration and login to the e-CO platform.
2. Upload data – using an electronic form: product description, proof of origin, invoice, delivery note.
3. Digital signature and verification by the Chamber.
4. The issued e-CO can be downloaded, printed, and attached to the export package.

📌 Advantages:

• Faster administration – no waiting in line, no mailing.
• Fewer errors – templated forms, automatic checks.
• Traceability – all submitted documents are traceable.
• More sustainable operation – paperless solution.

⚠️ What to pay attention to?

• Always check in advance whether the destination country accepts e-CO.
• If the partner exclusively requests a paper-based certificate, it is advisable to continue with the traditional procedure.
• Certain countries still only accept copies with original signatures and stamps (e.g., some Arab countries, India).

🛠️ Our Role in This Smart & Smooth helps with registration, document uploading, and full e-CO administration. If necessary, we combine paper-based and electronic procedures – as required by the specific export market.

The Certificate of Origin is much more than a form. A single error, incomplete data, or misinterpreted rule can easily lead to loss of customs preferences, penalties, or shipment rejections. The summary below helps you avoid the most common pitfalls.

🧷 1. Understand What Type of Certificate of Origin is Needed

• EUR.1 or invoice declaration → if you want to claim customs preferences based on a preferential agreement.
• Certificate of Origin (C.O.) → if the partner country requires it or trade practice dictates it.

Always consider the destination country's requirements – don't work by routine!

🧩 2. Collect All Necessary Data and Documents

• For manufactured products: BOM list – detailed, accurate!
• For finished products: supplier declaration – an invoice is not enough.
• Check the customs tariff number – even a single incorrect number can have serious consequences.

🔍 3. Remember: The Chamber Does Not Decide on Origin – The Responsibility is Yours Chambers do not assess the legality of origin – they only formally check the application. If a subsequent audit reveals that the data is erroneous, you cannot argue that the Chamber accepted it.

🧠 4. Do Not Refer to Past Approvals "We've always done it this way, and we haven't had any problems with it." This is one of the most dangerous attitudes. Customs regulations and official practices can change – and an investigation could even jeopardize the company's operations.

📎 5. Entrust It to Professionals If you are not completely sure, it's better to ask for help. Smart & Smooth helps with:

• Choosing the appropriate type.
• Completing and checking the documentation.
• Full administration, including door-to-door delivery.

❗ Don't risk the entire export transaction with a sloppy Certificate of Origin. Be diligent and work safely – your partners and customs authorities expect it.

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Origin rules are constantly changing, and every small detail matters in an export transaction. If you want to stay up-to-date in the world of foreign trade and customs administration, subscribe to our newsletter at the bottom of the page – we send it once a month, with only useful content.

📩 Do you have questions or need help with a Certificate of Origin? Contact us confidently via the Contact menu – we are happy to help you every step of the way, whether it's advice or full administration.

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