Country of origin determination in Ukraine

The purpose of definition of country of origin of the goods is application of tariff and not tariff measures of regulation of import of the goods on customs territory of Ukraine and export of the goods. In other words, the purposes of definition of country of origin of the goods as follows:

1. Charge and collection of payments for the goods. Depending on goods country of origin full or preferential rates of the duty can be used.
2. The goods country of origin indirectly influences the price of the goods and, accordingly, customs value. For example, customs value of the goods from China can be several times less than customs value of the same goods from the Great Britain or Federal Republic of Germany. Besides, customs value is a basis of charge for the majority of payments.
3. Application to the goods from the certain countries established by the current legislation, certain not tariff measures.


Processing sufficiency criteria

Country of origin of goods is considered as follows:
a. The goods have been completely made, or
b. The goods have been completely made with use of raw materials, semi-finished products or the finished articles occurring from other country, or
c. The goods of an unknown origin are subjected sufficient processing.

It is necessary to note that at mutual trade of Ukraine with Estonia, Latvia, Lithuania and the countries of the European Commonwealth the rule of computation applies. It means, that materials are considered occurring of these countries if they have undergone sufficient processing, more than simple warehouse, assembly and packing operations, an attachment of signs on products and their labels, simple mixing of products, cattle slaughter.

It is necessary to note that at definition of country of origin of the goods the origin of electric energy, cars, equipment and tools is not considered.

Goods are considered completely made in the given country:
a. The minerals extracted within its territory or an economic zone;
b. The vegetative production which has been grown up on its soil;
c. The live animals who have been grown up in it;
d. Production received in it from live animals;
e. Production of the hunting, fishing and sea craft made in it.

If two or more countries participate in goods manufacture, the goods origin is defined by criterion of sufficient processing according to which the goods are considered from the country in which it has been subjected to last essential processing, sufficient for giving to the goods of its characteristic properties.

Processing of the goods in the given country is considered sufficient, if:
• The declared goods are classified in a tariff position other, than materials occurring from the third countries or a product and used for their manufacturing (for example, the footwear made in Ukraine from raw materials, bought abroad, completely meet this criterion);
• In cost of the declared goods the share of the added cost makes not less than 20 percent (for example, not trimmed carpet bought abroad, after strengthening by a lining, will be classified still in a commodity position 5701, but expenses for its processing will increase cost more than 2 times).

Such technological operations cannot be considered as sufficient processing of the goods:
• storage or transportation;
• Preparation of the goods for sale and transportation (formation of sendings, sorting and repacking);
• Simple assembly operations;
• Mixing of the goods (components) without giving of received production of the characteristics essentially distinguishing it from initial components.

Legislatively the concept of country of origin of the goods in Ukraine is fixed by article 18 of the Law of Ukraine "On Uniform custom duties", and also Rules of definition of country of origin of the goods, confirmed by the Decision of Council of heads of the Governments of the Commonwealth of Independent States on Rules of definition of country of origin of the goods from 24.09.93.


Confirmation of origin of the goods

The goods country of origin can be defined on the basis of the certificate of origin, and also by shipping documents, other documents which can confirm an origin of the goods.

Thus the certificate of goods origin is shown to customs body:
• On the goods imported from the countries with which agreements on free trade are signed. The list of these countries is in the first part of the appendix to the Law of Ukraine from 03.04.97 N 170/97-ВР (these are the Baltic States and the CIS (except Tajikistan)). It is necessary to pay attention, that in this case acknowledgement of country of origin by the certificate of the established form is one of obligatory conditions for payment of customs duties;
• On the goods imported from the countries with which trading - economic unions with most favoured nation treatment or national treatment granting are concluded.

For example, at definition of customs value of the goods the certificate can play an essential role in the absence of shipping documents.

The certificate on goods origin can be applied from one of the purposes

1. At import of the goods on customs territory of Ukraine:
o If it is provided by the international agreements of Ukraine;
o If the goods occur from the countries in relation to which, according to the legislation of Ukraine, the preferential rate of the duty are applicable;
o If in shipping documents there are no data on origin of the goods and it can influence procedure of customs clearance;
o If import of the goods from the given country is regulated by quantitative restrictions (quotas) or other measures of regulation of foreign trade activities;
o If the customs body has proved assumptions, that in the customs declaration shown to customs clearance, are declared doubtful data concerning country of origin of the goods.

2. At export of the goods from customs territory of Ukraine:
o If it is provided by the international obligations of Ukraine;
o If its presence is provided by rules of the country of import;
o If its presence is provided by the contracts between Ukrainian subject of foreign trade activities and foreign.

On the basis shipping documents and other documents which can confirm origin of the goods, the country of origin is defined on the goods imported from the countries with which the trade and economic unions with most favoured nation treatment or national treatment are concluded.


Certificates of origin

For acknowledgement of country of origin of the goods the certificate of origin is given to customs bodies of the state of import.

If the presentation of the certificate on goods origin is necessary, it is given together with the cargo customs declaration, other documents necessary for realisation of the customs control and customs clearance. Thus, it is necessary to pay attention that privileges under certificates on goods origin extend exclusively on subjects of foreign trade activities.

In most cases customs bodies the certificate on goods origin interests at import. Country of origin of the goods confirmed with the certificate on its origin influences customs value of the goods, on application of full, preferential rates of the duty and application of certain not tariff measures.

At export of goods from Ukraine the certificate on goods origin is not required by customs bodies. At export the certificate is made out by the Ukrainian subject of foreign trade activities in commercial and industrial chamber, if:
• It is provided by the international obligations of Ukraine;
• Its presence is provided by rules of the country of import;
• Its presence is provided by contracts between the Ukrainian subject of foreign trade activities and foreign.

For example, on some kinds of goods the export duty is established. At export of the Ukrainian goods to the certain countries (according to bilateral agreements on free trade) the export duty is not paid.

Conditionally all certificates can be divided on right to certain privileges, and for any other purpose.


Bases for refusal of goods release

Non presentation of properly issued certificate is not the basis for refusal in customs clearance and goods release in the free circulation. In other words, the refusal coupon in customs clearance in this case is not given.

If the origin of the goods authentically is not established, they are subject to taxation by the duty under the full rate of Uniform custom duties of Ukraine.

In this case it is necessary to notice that to the goods can be applied to (be restored) a most favoured nation treatment or a preferential mode under condition of granting to customs bodies of the certificate on goods origin not later than in a year after delivery (release) of the goods. Thus the certificate should be issued according to all requirements.

So, for certificates of form СТ-1 it makes 12 months from delivery date; for certificates of EUR1 - 4 months from delivery date in the country-exporter, and during this period the certificate (or the goods) should be presented customs bodies of the country-importer (item 22 of the Report on definition of an origin of the goods and methods of administrative cooperation to the Agreement between Ukraine and the Estonian, Latvian Republics about free trade).


Verification of certificates of origin in Ukraine

At occurrence of doubts concerning certificate or data contained in it customs bodies can address to the organisations which have issued the certificate, or to other competent bodies of the country specified as country of origin of the goods, with the request. Check of certificates on an origin of the goods is done selectively or when customs bodies of the country-importer have proved doubts concerning reliability of such documents or the status of an origin of the goods.

The goods are not considered originating from the given country until appropriate acknowledgement on an origin or the requested data will be presented.

If as a result of the check which have been carried out through the State customs service of Ukraine a falsification established, the report on infringement of customs rules is made.

Giving certain privileges under the given certificates, officials of the state where the Ukrainian goods are exported, can have doubts concerning legitimacy of delivery of certificates and the correctness, the data declared in it, including correctness of definition of criterion of an origin.

Certificates of origin of the goods from Ukraine are issued by chamber of commerce of Ukraine and regional chambers. These certificates are shown to customs bodies of Ukraine by granting of the customs privileges.

We pay attention that if customs bodies at certificate`s check find out the facts of infringements from the subject of foreign trade activities which have entailed to complication of conditions of export of the Ukrainian goods, it offers Ministry of economy to apply to this subject the sanctions provided by article 37 of the Law of Ukraine "On foreign trade activities".