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THE INDUSTRIAL CERTIFICATE OF
ORIGIN
Typically, a Certificate of Origin is a signed statement
indicating the country of origin of the exported goods for a particular
shipment. The country of origin is NOT the country from where the product is
shipped. The country of origin is the country where the product was
manufactured or last underwent a substantial change or transformation. A
primary indicator of the degree of industrial substantial transformation is the
added value incorporated into the product that must equal 40% or more to
warrant Lebanese origin to the product.
The industrial certificate of origin is a document issued
and/or endorsed by designated local authorities; it is required by foreign
governments, declaring that goods in a particular international shipment are of
a certain origin. The certificate has to be accurately completed in accordance
with the rules of the importing country. Even though the commercial invoice
usually includes a statement of origin, many countries require a separate
certificate issued from authorities of the exporting country. Customs' offices
use this document to determine whether a preferential duty rate applies on the
products being imported and whether a shipment may be legally imported during a
specific quota period.
In Lebanon, industrial certificates of origin are issued
to certify that goods are either of National or foreign origin.
Goods of Lebanese origin must comply with the
following criteria in order to be eligible for Lebanese certification of
origin:
- Incorporated added-value must be equal or greater than
forty percent (40%)
- Comply with specified processes of production
However, these criteria may vary based on
bilateral/multilateral agreements between Lebanon and the importing countries.
Additional rules may be required by the importing country such as the change in
the customs tariff classification of the "Harmonized System of Tariff
Nomenclature" (HS).
Goods of foreign origin are entitled to obtain
industrial certificates of origin based on specific documents required by the
concerned authorities.
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RULES OF ORIGIN
Rules of Origin are specific rules and conditions
stipulated in international trade agreements among nations. Upon compliance,
certificates of origin are granted to exporters of goods.
Rules of Origin for Arab countries members of the League
of Arab States mandate the added-value measure as a compulsory criterion. One
out of the two other criteria should be fulfilled in addition to the added
value for the League to confer origin to manufactured goods.
- The added-value criterion requires transformation to
incorporate added-value equivalent to or greater than 40%. Debate is continuing
among member States of the League regarding the calculation of such value; the
issue is whether to include the packaging activities with the production
process (i.e. calculate the added-value at the final ex-factory value of the
good) or to consider strictly the production process (i.e. calculate the
added-value at the end of the production cycle excluding packaging and similar
activities).
- The specified process criterion of origin requires that
the manufactured product be subject to specific workflow or processing
operations carried out on non-originating input materials.
- The change in tariff classification criterion considers
the change in tariff classification of the "Harmonized System of Tariff
Nomenclature". As a general rule, imported materials, parts, or components are
considered to have undergone substantial transformation when the resulting
manufactured product is classified at a different HS level from the
non-originating inputs.
However, revision of certain conditions of the Agreement
is still underway between member states of the Arab League.
The EUROMED Agreement's Rules of Origin include the three
criteria defined above with emphasis on the specified process criterion of
origin. It confers origin to the manufactured product based on predefined lists
of working or processing operations when carried out on non-originating input
materials.
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RELEVANT AUTHORITIES
The Ministry of Industry
The Ministry and its regional representative offices do
not issue industrial certificates of origin; they only endorse all three types
of certificates issued by the Chambers in addition to two other types of
certificates required for circulation of Lebanese manufactured merchandise in
the United States and the European Union.
In addition to the mandatory endorsement of the Ministry
of Industry, the exporting entity may, upon its discretion, request from the
Chambers the endorsement of FORM-A or EUR-1 certificates required by the United
States and the European Union respectively.
Endorsing authorities are regional representative offices
of the Ministry of Industry:
- Beirut and Mount Lebanon
- South Lebanon
- North Lebanon
- Beqaa
- Nabatieh
The Ministry of Industry may endorse FORM-A and EUR-1
forms. Although not mandatory, exporters may seek the additional endorsement of
the Chambers.
The Chambers of Commerce, Industry, and
Agriculture
The Chambers and its regional representative offices issue
three distinct certificates of origin delivered for Lebanese manufactured goods
as well as for goods manufactured in foreign countries:
- Certificate of origin for manufactured goods of
Lebanese origin for exports to countries members of the League of Arab
States
- Certificate of origin for manufactured goods of
Lebanese origin for exports to the Republic of Syria
- Certificate of origin for goods of all origin,
including Lebanese, for exports to all other foreign countries
Issuing authorities are the Chambers of Commerce,
Industry, and Agriculture of:
- Beirut and Mount Lebanon
- South Lebanon
- North Lebanon
- Beqaa
The Chambers issue three different types of forms as
displayed below, based on agreements between Lebanon and the importing
countries.
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PROCEDURES
The Ministry of Industry Endorsement Procedures
To facilitate endorsement of FORM-A or EUR-1 certificates,
the exporter must provide the Ministry with:
- original invoices of the goods
- the industrial certificate of the manufacturing firm
issued by the Ministry of Industry
- National Social Security Fund liability quittance
The FORM-A and EUR-1 pro forma could be acquired at
selected local libraries for the price of 2,000 LBP each. The average fee
applied by the Ministry of Industry for the endorsement of each FORM-A or EUR-1
certificate is 1,000 LBP. Added to the Ministry's fee, is the Lebanese Customs
Authority's fee of 20,000 LBP per certificate.
The Chamber's Issuance Procedures
To facilitate the issuance of industrial certificates of
origin and endorsement of related invoices, the exporter must provide the
Chambers with:
A- For Lebanese manufactured goods:
- original invoices of the goods
- the industrial certificate of the manufacturing firm
issued by the Ministry of Industry
B- For foreign manufactured goods:
- original invoices of the goods certified from the local
Chambers of Commerce or authorities in the country in which goods were
purchased.
- original certificate of origin from the foreign country
in which the goods were manufactured and/or the original certificate of origin
from the foreign country from which the goods were last imported
- proof of ownership of the goods
- the bill of lading (in cases when certain prerequisite
documents are not available)
In some cases, the Chambers may request to examine the
goods to verify presented invoices.
As a final step before shipment of goods to their
destination, the exporter must endorse the industrial certificate of origin
issued by the Chambers from the Ministry of Industry. Some importing countries
may further require from the exporter other endorsements such as those of the
Ministry of Foreign Affairs and/or the consular representation of the importing
country in Lebanon.
Decree Law 13152 of August 28th, 1998, the Chambers of
Commerce may apply proportional fees across the country for the issuance and/or
endorsement of certificates of origin amounting to one-per-thousand of the
total value of the exported goods with a minimum of 35,000 LBP and a maximum of
300,000 LBP. Fees applied by the Chambers for the optional endorsement of
FORM-A or EUR-1 certificates are 15,000 LBP.
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SELF-ASSESSMENT TOOL
For those manufacturers seeking more transparency and
error free compliance with rules of origin, a Self-Assessment Questionnaire was
developed to calculate (in-house) the local added-value incorporated into
Lebanese products. The Questionnaire is a step-by-step detailed approach that
helps the manufacturer determine whether the manufactured goods are of Lebanese
origin and in compliance with applicable rules of origin.
The Questionnaire is available at the Ministry of
Industry, the Chambers of Commerce, and the Association of Lebanese
Industrialists' regional offices and representations.
Information contained in this Booklet as well as the
Self-Assessment Questionnaire could be consulted and downloaded from the main
websites of the Ministry of Industry, Chambers of Commerce, and the Association
of Lebanese Industrialists.
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USEFUL ADDRESSES
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DOWNLOADS
» download Acrobat Reader
1 Endorsement of industrial
certificates of origin involves imposition of authorized stamps and signatures
on previously issued certificates by the Chambers or on purchased pro
forma.
2 Issuance of industrial
certificates of origin involves delivery of printed certificates and imposition
of authorized stamps and signatures by the Chambers.
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