By: Guest Blogger Chris Mead
Something similar has happened in the export world. Many chambers of commerce have loaned or rented out their corporate seals to freight forwarders and exporters, permitting those organizations to stamp the chamber’s seal onto documents that are used for export transactions. Of the estimated 4 million certificates of origin that accompany U.S. export shipments annually, we estimate that fewer than half are actually inspected and signed by a chamber of commerce employee, as the international rules require.
Certificates of origin are used to determine where products were made and thus can affect how much duty is levied on imports, whether imports are exceeding quotas or not, and whether the imports comply with local health and product safety regulations. The simple documents, usually just a page in length, can also affect the price of imports: many people overseas will pay more for items they think are made in the United States.
So the stakes are high on these seemingly innocuous documents. Around the world, they are treated with care. In the United States, people frequently handle outgoing certificates of origin with little attention and varying standards, even though U.S. Customs monitors incoming certificates of origin with vigilance.
Legal counsel to chambers on certificate issues has been all over the lot and many chambers have little reason to believe that their current practices are anything other than business as usual. No single authority in the United States has supervised compliance with the international rules on certificates of origin, and plenty of chambers, freight forwarders, and exporters aren’t familiar with how the system is supposed to work. But things are beginning to change, spurred in part by a crackdown on phony certificates of origin by the Consulate General of Egypt in Houston earlier this year, as well as other incidents connected with specific shipments.
Chambers are learning that the stamp-lending practice is against the rules and, equally important, poor governance. The basic authority comes via the Kyoto Convention agreement that was signed by President Bush in 2005 (and previous agreements leading up to it, starting with the Geneva Convention in 1923). Groups that have cautioned against the practice of stamp lending include not just the U.S. government, but also the U.S. Chamber of Commerce, the American Chamber of Commerce Executives (ACCE), the U.S. Council for International Business, and the International Chamber of Commerce’s World Chambers Federation. As a result, several chambers, including some large, big-city business organizations, have begun asking to get their seals back from exporters. ACCE is preparing a training course for chambers on proper handling of certificates of origin. It’s also offering an electronic certificates service, which helps ensure that correct processes are followed and removes the problem for heavy exporters of constant driving back and forth to the chamber to get approvals.
Given how little attention most of us have paid to this issue in the past, any chamber, exporter, or freight forwarder that is taking steps to comply with the international rules on certificates of origin should be commended. The world’s importers should have confidence in the certificates issued in the United States. Let’s not let them down.
Chris Mead is senior vice president of the American Chamber of Commerce Executives, an organization of 1,200 chambers of commerce headquartered in Alexandria, Virginia. He can be reached at email@example.com.