Issuing the Certificate of Origin under the

Asia-Pacific Trade Agreement

by Khulan. Ts

Senior officer at the Customer Service Department of the MNCCI

LEGAL BASIS

Article 60.3.5 of the Customs Law of Mongolia.

In accordance to the international treaty of Mongolia, proof of origin shall be submitted to the customs if required by an authorized entity.

Pursuant to the Article 6.2.3 of the Mongolian Law on Chamber of Commerce and Industry, the Chamber shall issue a Certificate of Origin within the scope of its full authority to certify the origin of export goods.

The issuance of certificates of origin is regulated by the “Procedure for Determining the Origin of Export Goods of Mongolian Origin and Issuing Certificates of Origin”.

History

Since 1898, Chambers of Commerce and Industries in all over the world have started to issue certificates of origins. A study made by the International Chamber of Commerce in 2018 found that more than 2,000 Chambers of Commerce around the world issue 15 million certificates of origins each year to facilitate trade.

The MNCCI has been issuing certificates of origin since 1990. As of 2019, more than 18,000 certificates of origin have been issued throughout its branches in 21 provinces.

According to the conventions of Geneva and the Kyoto in 1923, third party is authorized to issue certificates of origin, and government agencies have officially recognized that chambers of commerce play a key role in this process.

“Preferential tariff treatment

• The treatment stipulates that all WTO member states will provideeach other with the YHTH-MFN-most favored nation treatmenttariff conditions in terms of customs duties, and that all othermember states will not be discriminated.

• Article 24 of the General Agreement on Tariffs and Tradestipulates that two or more WTO members may mutually agreeand apply more preferential tariffs to each other. (EPA, APTA).

a) Accordingly, Mongolia has established Economic PartnershipAgreement (EPA) with Japan. (EPA-Economic PartnershipAgreement).

b) APTA-Asia Pacific Trade Agreement

“Preferential tariff treatment

• In 1970, under the initiatives of the United Nations Conferenceon Trade and Development (UNCTAD), the developed countriesbegan to provide unilateral customs tariff reductions todeveloping and least developed countries under the GSP. Underthis system, developed countries are able to exempt some goodsfrom developing countries from certain customs duties, createmore favorable trade conditions and reduce taxes.

Types of the Certificate of origin issued by the MNCCI

1. A preferential certificate of origin◆ Applies to preferential tariff regulation◆ ・GSP (Generalized System of Preferences)・ FTA/EPA (Free Trade Agreement and EconomicPartnership Agreement)

2. Non-preferential certificate of origin◆Which is used for trade statistics, anti-dumping measures,and WTO tariff rates.

Specimen of preferential certificate of originand non-preferential certificate of origin

Major Elements of Origin

Rules applicable to a

specific productsOrigin

Criteria

3 Rules of

originConsignment

criteria

Procedural

provisions

Wholly obtained or

produced goods

Goods produced

exclusively from

originating materials

Significant

changes have

made

- Issuing the certificate

- Confirmation

- Not allowing to be applied

under preferential tariff

Change in tariff

classification criterion

Value-added criterion

Sufficiently worked or

processed in Mongolia

Exceptions to the

significant changes.

(a) Livestock born and raised in the exporting country(Pets, etc.)

(b) Products obtained in Mongolia from live animals(semi-processed yak hides, etc.)

(c) Products derived from livestock in the exporting country

(pet food, etc.)

(d) Plants and herbal products harvested in the exporting country(traditional herbs, etc.)

(eMineral products extracted from Mongolian soil or from Mongolian seabed(coal, mineral products, etc.) not specified in (a) - (d) mined in the exporting country

(f) Products of sea fishing and other products taken from the sea by Mongolian vessels(fishes collected in the surrounding sea, etc.)

Products obtained by raised or fishing conducted in Mongolia(a). (meat products)

Wholly obtained or produced goods

9

Yarn Cotton

Initial process Secondary process

weaving

Clothes

Cutting, sewing

etc.

Specific processing and production criteria (Rules of Procedure)

Sufficiently worked or

processed in Mongolia

Non-origin materials are considered to be goods of origin if they are specifically treated.

10

Raw material

Spinning

1 2 34

1. Goods of origin transported under the following conditions shall be deemed to have met the conditions of transportation:

2. Goods of origin shall not be deemed to be goods of the country of origin if they do not meet the criteria of consignment specified in the goods of origin.

Shipment criteria

(a) Shipped directly from the Contracting Party; means The products must be transported directly from Mongolia to the importing country.(b) Unless there are changes other than loading, unloading and other protection activities, it may be

transmitted only through the country of one or more non-negotiating parties or in a temporary warehouse

Japan

Third country

Mongolia

Direct shipment

In case goods transported through a third

country, the goods should satisfy above

mentioned condition.

11

IN CASE OF EXPORTING GOODS UNDER

THE EU GSP+:

If you are not able to obtain a certificate of origin when exporting goods

to the EU, you will not benefit from GSP+ and will be able to enter the

market at MFN rates.

Certificate of Origin of GSP+ Form A-related documents can be obtained.

Since January 1, 2020, Mongolia has successfully implemented the EU

REX system jointly with the Ministry of Foreign Affairs (MFA) of Mongolia,

the Mongolian Customs General Administration (MCGA), and the

Mongolian National Chamber of Commerce and Industry (MNCCI).

• Product code: 6110 12 – Knit sweater

6110 12 90 - other

• Customs Tariff: = 12% → GSP+ = customs tariff 0%

• VAT: Every EU country is applied differently

• Mandatory procedure :

– Chemical ingredients in the product is limited

– Knitted product label

– Need to focus on the basic materials of the products in

this group. There must be at least two-step process.

– Voluntary procedures:

– Eco-label for textiles

The Certificate of origin of Mongolia

shall not be issued for those:

✓ Measures to ensure proper conditions for protection of goods

during transportation and storage (ventilation, drying, cooling,

salting, etc.)

✓ Fermenting, dyeing, washing, sorting and dusting

✓ Changing packages, packaging types Ex: Coffee

✓ Paste and identify other distinguishing marks, such as

trademarks and signs

✓ Butchering of animals does not meet the requirements of the

rules of origin.

Some articles for regulation for issuing the certificate of origin:

The following documents are attached. These include:

A copy of the state registration certificate of the business entity

Copy of foreign trade agreement,

Invoice, Packing list

Raw material documents

Attach the relevant permits obtained for the product.

The certificate of origin is valid for 1 year from the date of issue.

Archiving the certificate of origin and related documents for 3 years.

Thanks for your kind

attention!

export@mongolchamber.mn