The supplier declaration of origin (DOF): everything you need to know to simplify your international trade

The Supplier Declaration of Origin (SDO) is an essential document in international trade, particularly for companies engaged in cross-border transactions within the European Union and with its trading partners. It enables suppliers to certify the origin of goods, offering greater transparency and traceability throughout the supply chain. By certifying the origin of products, DOF facilitates the correct application of preferential customs tariffs, and plays a crucial role in reducing the risk of regulatory non-compliance, thus avoiding financial penalties or logistical delays. In addition, by ensuring that products meet the specific rules of origin of trade agreements, DOF helps to optimize costs and maximize the benefits of free trade agreements. This article aims to explain what a DOF is, the different types of DOF, and the particular importance of the Long-Term Declaration (LTD). We will explore how these declarations facilitate international trade by certifying the origin of goods and simplifying administrative processes for companies engaged in regular deliveries, while enabling them to take advantage of preferential trade regimes.

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Types of supplier origin declarations (DOF)

There are two main types of Supplier Declaration of Origin (SDO), each adapted to specific needs depending on the product's origin status.

Declaration for products with preferential origin status

This type of declaration is used when products have acquired preferential origin status under trade agreements or customs regulations. For example, a product manufactured in the European Union from materials originating in the EU may benefit from reduced customs duties when exported to a country with a free trade agreement with the EU. The declaration for products with preferential origin status certifies that the product meets the preferential origin criteria, enabling the exporter to benefit from preferential tariffs. An example of use could be a company in France exporting automotive parts made with materials originating in the EU to Canada under the Comprehensive Economic and Trade Agreement (CETA).

Declaration for products without preferential origin status

This declaration is used for products which, although processed or manufactured in a country, have not achieved preferential origin status due to the nature or origin of the materials used. For example, a manufacturer in Germany could produce garments from fabrics imported from China. If the rules of origin of the trade agreement with the importing country require that the fabrics also originate in the EU, the final product would not benefit from preferential origin status. The declaration for products without preferential origin status informs the buyer that the products are not eligible for preferential tariffs, but this information can be essential for cost calculation and supply chain management.

Both types of DOF enable companies to effectively manage their regulatory obligations and maximize the benefits of international trade agreements.

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Long-Term Declaration (LTD)

The Long-Term Declaration (LTD) is a specific form of the Supplier Declaration of Origin (SDO). Unlike a standard DOF, which is usually issued for a single shipment of goods, the DLT is designed to cover several shipments of similar products over an extended period. It is particularly useful for companies making regular deliveries of goods with the same origin status, simplifying the administrative process by avoiding the need to issue a new declaration for each shipment.

Terms of use for DLT

DLT can be used when the supplier is able to guarantee that the origin status of the goods will not change throughout the period of validity of the declaration. It is often used in stable, ongoing business relationships, where the supplier regularly supplies the same products to the same customer. For a DLT to be valid, the supplier must ensure that the goods comply with the stipulated rules of origin at all times, and must inform the customer immediately if these conditions change.

Validity period and conditions

The period of validity of a DLT may vary according to the company's needs, but may not exceed two years. Validity dates must be clearly indicated on the declaration, including three specific dates:

• Issue date: the date on which the DLT is issued.
• Start date: the beginning of the period covered by the DLT, which cannot be more than 12 months before or 6 months after the issue date.
• End date: the end of the period covered, which cannot be more than 24 months after the start date.

Explanation of possible validity periods

DLT validity periods can be past, future, or a combination of both.

• Past periods: A DLT can cover shipments already made. For example, a DLT issued on November 15, 2024 may be retroactive for shipments made from January 1, 2024 to November 15, 2024.
• Future periods: It may also be applicable for future shipments. For example, the same DLT issued on November 15, 2024 could be valid from January 1, 2025 to December 31, 2026.
• Mixed periods: A DLT can cover a period that includes both past and future dates. For example, a DLT issued on November 15, 2024 could be valid for shipments made from January 1, 2024 to December 31, 2025.

Examples of validity periods

1. Future period only: A DLT issued on March 1, 2025 could be valid for all product shipments made between April 1, 2025 (start date) and March 31, 2027 (end date).
2. Past period only: A DLT issued on November 15, 2024 could cover all shipments made between January 1, 2024 (start date) and November 15, 2024 (end date).
3. Mixed period: A DLT issued on November 15, 2024 could be valid for all shipments made from July 1, 2024 (start date) to June 30, 2025 (end date).

DLT offers companies great flexibility, while simplifying administrative formalities, enabling exporters and importers to better manage their customs obligations and take full advantage of international trade agreements.

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Procedure and requirements for issuing DOFs and DLTs

To issue a Supplier Declaration of Origin (DOF) or a Long-Term Declaration (DLT), certain procedures and formal requirements must be met to ensure compliance with customs and trade regulations.

Formal requirements for issuing DOFs and DLTs

Certain formal requirements must be met before a DOF or DLT can be issued. These declarations must be drawn up without the intervention of the customs authorities, and are the responsibility of the supplier, who must ensure the accuracy of the information provided. The declaration must include :

• Precise description of goods, enabling them to be clearly identified.
• Indication of product origin status, whether or not the product has preferential origin status.
• The appropriate validity dates for a DLT, including the date of issue, the start date, and the end date.

For a DLT, the supplier must also ensure that the origin status of the goods remains constant throughout the period covered by the declaration.

Required documents and declaration retention

When issuing a DOF or DLT, several documents must be kept by the supplier to prove the origin of the goods and the veracity of the declarations:

• Commercial invoices or delivery notes corresponding to the goods declared.
• Any supporting document attesting to the original status of the materials used.
• Copies of the declarations themselves.

These documents must be kept for at least three years from the date of issue of the proof of origin. However, specific regulations or agreements may require a longer retention period. For example, under the EU-Korea Free Trade Agreement, documents must be kept for five years.

Consequences of incorrect or erroneous declarations

Issuing an incorrect or erroneous DOF or DLT can have serious consequences for the company. If an incorrect declaration leads to the issue of an invalid proof of origin, the importer may be required to pay customs duties retroactively for one or more shipments, as the preferential rate cannot be applied without a valid proof of origin.

In addition, an incorrect declaration may result in the loss of customers or obligations to reimburse costs incurred as a result of the error, depending on the terms of the commercial contract. Customs authorities may also take additional measures against a supplier who has issued incorrect declarations, including tax or criminal penalties if serious violations are found.

It is therefore important for companies to ensure the accuracy and conformity of all declarations of origin provided, in order to minimize risk and maintain the confidence and satisfaction of their trading partners.

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Practical applications of DOF and DLT

Supplier Origin Declarations (SODs) and Long-Term Declarations (LTDs) have a variety of applications, depending on the business context and the trading partners involved. Their use is crucial to ensuring compliance with rules of origin and maximizing the benefits of trade agreements.

Within the European Union: Application in intra-EU trade

Within the European Union (EU), DOF is commonly used for intra-EU trade to certify the origin status of goods between member states. This is particularly relevant when products are sold or transferred between several companies before being exported outside the EU. For example, a manufacturer in Germany may supply spare parts to a company in France, which uses them to manufacture a finished product. The DOF enables the French company to prove that the spare parts meet EU origin criteria, making it easier to obtain preferential customs tariffs when exporting the finished product.

DLTs, on the other hand, are very useful in stable business relationships where the same goods are delivered repeatedly. For example, a Spanish company regularly supplying electronic components to an Italian manufacturer can issue a DLT to cover all shipments over a two-year period. This simplifies the documentation process and reduces the administrative burden, while ensuring that shipments benefit from the EU's preferential origin status.

Trade with partner countries: Specific rules for trade with partner countries (e.g. Canada)

DOFs and DLTs are also used in trade with EU partner countries under various preferential trade agreements. Each trade agreement has its own rules of origin and conditions for products to benefit from preferential tariffs.

As part of the Comprehensive Economic and Trade Agreement (CETA) with Canada, DOF enables exporters to prove that their goods meet the agreement's specific origin criteria. This is essential to gain access to the reduced or zero tariffs provided for under the agreement. For example, a French company exporting agri-food products to Canada can use a DOF to certify that its products comply with CETA rules of origin, thereby optimizing access to the Canadian market.

These practical applications demonstrate the importance of DOF and DLT for companies operating in international trade. They help ensure compliance with customs regulations, facilitate commercial transactions and optimize the benefits of preferential trade agreements, while reducing the risk of sanctions and administrative costs.

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Importance of DOF and DLT for companies

Supplier Origin Declarations (SODs) and Long-Term Declarations (LTOs) play a crucial role in international trade, offering numerous benefits to companies by facilitating trade, optimizing the supply chain and reducing commercial risks.

How do these declarations facilitate international trade?

DOFs and DLTs simplify the export process by providing clear, standardized proof of origin, essential to benefit from preferential customs tariffs under free-trade agreements. By certifying that products meet established origin criteria, these declarations make it easier for companies to navigate the complexities of international customs regimes. This reduces customs clearance times, minimizes customs fees and opens up opportunities to access new markets. By eliminating the need to issue individual declarations for each shipment, DLT, in particular, offers an efficient solution for companies making regular shipments of the same goods.

Impact on supply chain and logistics

The use of DOF and DLT has a significant impact on companies' supply chains and logistics. By guaranteeing product compliance with rules of origin right from the start of the supply chain, companies can better plan and manage their inventories, optimize their purchasing and production processes, and avoid costly border delays. In addition, DLTs enable greater predictability in long-term business relationships, reducing potential disruptions in supply chains. By ensuring product traceability and facilitating the management of customs documents, these declarations also help to maintain a smooth and efficient logistical flow.

Benefits for compliance and business risk reduction

DOFs and DLTs contribute to regulatory compliance, by providing complete documentation that complies with international customs requirements. This is essential to avoid financial penalties, sanctions, and delays in customs clearance caused by declaration errors or non-compliances. By ensuring that goods are correctly declared according to their origin, companies can reduce the risk of trade disputes and protect their reputation in the global marketplace. What's more, by having rigorous origin documentation in place, companies are better prepared for audits and verifications by customs authorities, minimizing disruption to their business operations.

DOFs and DLTs are indispensable tools for companies seeking to optimize their international trade operations. They facilitate compliance with regulations, improve supply chain efficiency, and reduce commercial risks, which is essential for maintaining a high level of competitiveness in the global marketplace.

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