The Legal Basis of Origin Certification
Determining and certifying the origin of goods is one of the fundamental institutions of customs law. Under the current Tax Code, origin is determined upon the introduction of goods into, or their export from, the customs territory of Georgia for the purpose of applying protective trade measures. Article 24 of the same Code gives foreign trade participants the possibility of obtaining advance decisions on commodity classification and origin, and the Minister of Finance is empowered to define further cases in which advance decisions on other factors are issued.
The practical significance of origin certification is that a properly executed document determines the customs-tariff regime of the goods: the amount of import duty, access to preferential benefits, and the application of non-tariff measures. An error in determining origin means re-qualification, additional charges and often administrative liability as well.
Non-Preferential and Preferential Origin
Origin may be non-preferential or preferential. Non-preferential origin is used for import duty purposes — save where benefits under an international treaty apply — and for applying non-tariff regulatory measures of foreign trade. Goods acquire non-preferential origin and are considered to originate in the country where they were wholly obtained, or where they underwent their last substantial transformation when more than one country participated in their production.
The criteria and procedure for determining preferential origin, as well as the form of the document confirming preferential origin and the rules for completing it, are determined by the relevant international treaty of Georgia. This means that for each trade regime the requirements of the applicable agreement must be verified separately — a step exporters skip at their peril.
Confirmation and Customs Control
Where a customs declaration indicates information on the country of origin, the customs authority may request the declarant to confirm origin. Where confirmation is required by legislation, and a reasonable doubt exists, the customs authority may request additional evidence to satisfy itself that the information on origin is indicated according to the applicable rules of determination. The procedures for issuing confirmation documents for goods bearing Georgian origin status are regulated by government decree.
For an exporter this means: every figure in the declaration must be documented. The reasonable-doubt standard allows the customs service a broad inquiry, so production documents, supply chain evidence and descriptions of technological processes must be ready.
Special Provisions on Non-Georgian Goods
Special attention is due to the regime where goods without Georgian origin status are used to produce a product for which an origin confirmation document is issued or subscribed under a preferential agreement. Where the agreement prohibits refund or exemption of import duty for such goods, the customs obligation arises upon registration of the re-export declaration related to the product manufactured from those goods.
In that case the import duty is computed as it would be computed for the completion of the inward processing procedure on the day of registration of the re-export declaration. The liable person is the presenter of the re-export declaration; under indirect representation, the person on whose instruction the declaration is presented is liable as well. These norms target the abusive use of drawback schemes, and their violation carries serious financial consequences.
Practical Advice for Exporters
Proactivity matters most in origin cases: an advance decision on classification and origin can be obtained, reducing the risk of re-qualification. For each new market, the preferential rules and document form of the applicable treaty should be verified. The production chain documentation should stand ready as a file answering any reasonable doubt.
The importer stands on the same principles: the authenticity and completeness of the origin confirmation document do not release the importer from responsibility, and a preference is reliable only where the document is issued in the form and under the procedure of the applicable treaty.
In disputed cases the customs decision is subject to challenge: the levying of additional charges is not a final station, and a legally well-constructed appeal frequently corrects the qualification.
Frequently Asked Questions
What is the difference between non-preferential and preferential origin?
Non-preferential origin serves import duty and non-tariff measures; preferential origin serves beneficial regimes and its criteria are set by treaty.
When are goods considered to originate in a country?
Where they are wholly obtained there, or where they underwent their last substantial transformation if more than one country participated in production.
Can customs request additional evidence?
Yes — where a reasonable doubt exists and confirmation is required by legislation. The declarant must keep production documentation ready.
What happens on export built on foreign materials?
If the preferential agreement prohibits exemption, the customs obligation arises at registration of the re-export declaration and the duty is computed under the established rule.
How We Help on Legal.ge
The Legal.ge team assists exporters and importers on all issues of origin certification: preparation of advance decisions, audits of documentation, and conduct of customs disputes. Contact us already at the planning stage of your trade operation.