Business Bayani PH

The World Customs Organization (WCO) conducted a study to advance fair trade, revenue collection, and societal protection. The report, just released, reveals a swift move towards digitalizing Certificates of Origin (COs), marking substantial progress in this area.

This initiative reflects WCO’s dedication to promoting smooth global trade, reaffirmed during its June 2022 sessions. The WCO Council backed the Strategy Plan 2022-2025, emphasizing inter-Customs cooperation and the digitalization of origin-related processes.

To start this transformation, the WCO Secretariat surveyed the digitalization of COs in autumn 2022. Out of 184 WCO-member Customs, 84 responses were received and analyzed, forming the study’s foundation.

The report explores how Customs administrations certify origin, highlighting a shift to electronic methods. It notes that 73.8% of respondents use both authority issuance and self-certification, showing a clear trend away from physical documents.

The study also delves into the issuance of non-preferential and preferential COs. Notably, 81 WCO members indicated that the competent authority issued preferential COs, with diverse entities such as Customs authorities, Chambers of Commerce, and Ministries of Trade playing key roles.

A significant focus of the report is on the comparison between paper-based and electronic COs. The findings reveal that the electronic system offers advantages such as ease of application, faster transaction completion, and lower administrative costs. Interestingly, 61.5% of respondents highlighted the electronic system’s faster issuance time compared to the paper-based counterpart.

The report sheds light on the acceptance of electronic Certificates of Origin (e-COs), with 31.7% of respondents accepting both electronic non-preferential and preferential certificates. However, challenges persist, and 36.7% of respondents do not accept any e-CO, citing reasons such as the absence of digital signatures or missing key data elements.

Addressing concerns related to irregularities and fraud, the study indicates that while the reduction of fraud was not the primary driver behind adopting e-COs, cases of irregularity/fraud were similar to those related to paper-based certificates. 

Various methods were identified to address irregularities, including online verification portals, specimen information, risk-based approaches, and post-clearance audits.

The study also explores the challenges faced in establishing and maintaining an e-CO issuance program. Key challenges include legislative developments, negotiation hurdles within free trade agreements (FTAs), technology selection, resource allocation, and overcoming hesitancy among officials.

Highlighting success factors, the report emphasizes the importance of political support, effective communication, clear technical standards, dedicated technical resources, ongoing support, and awareness and engagement among stakeholders.

Finally, the study provides insights into the state of play among WCO-members concerning data exchange on COs. It indicates a steady increase in electronic data exchange since 2004, with 26.2% of members implementing such systems. T

The challenges before and after establishing an electronic data exchange programme are also outlined in the report, emphasizing mutual agreement, technical alignment, ongoing monitoring, and harmonization of agreements.

In conclusion, the WCO’s study underscores a global shift towards digitalizing the CO, with implications for streamlined trade processes, reduced administrative burdens, and enhanced security measures.

 As digitalization continues to evolve, the study provides a crucial benchmark for future initiatives and guidance for WCO Members navigating this transformative journey.◼