Certificate Of Origin: Azerbaijan's Notarization Requirements For Imports

Azerbaijan has specific requirements and restrictions for importing and exporting goods. A certificate of origin (CO) is a document used in international trade to certify the country of origin of a product. It is used for customs purposes, especially when import duties are required. While it is not clear whether Azerbaijan requires a notarized certificate of origin for imported goods, the State Customs Committee requires importers to provide a certificate of origin, among other documents, for imported merchandise.

Azerbaijan's import requirements and documentation

When importing goods into Azerbaijan, importers must provide the State Customs Committee with the following documentation:

• A signed import contract (and contract number)
• Customs declaration
• Permission(s) from the relevant state entity(ies) (if applicable)
• Bill of lading
• Sales invoice and packing list
• Certificate of origin
• Certificate of quality for the imported merchandise

The certificate of origin is a vital document in international trade, certifying the country of origin of the goods being exported. It plays a crucial role in fostering fair trade practices, protecting workers' rights, and promoting economic cooperation among nations. It is used to levy the appropriate import tax, if any, and is often mandated by importing countries and included in trade agreements. In the United States, the American World Trade Chamber of Commerce (AWTCC) provides electronic COs for export.

In Azerbaijan, goods imported for processing and re-export are subject to normal duties and taxes at the time of importation. Once the processing is completed and the goods are re-exported, a drawback procedure can be initiated to recover the taxes and duties paid. There is no formal procedure to submit an application for this. The State Customs Committee establishes the time for the processing and re-exporting of the goods, usually within two years.

Additionally, the State Customs Committee might stipulate a minimum amount of finished product to be held to ensure that the imported goods are utilized for their intended purpose. Provisions for importing goods and equipment are covered in production sharing agreements (PSAs) in the energy sector. Goods, tools, equipment, supplies, and services required to carry out the PSA's objectives are generally exempt from import duties and taxes. Foreign firms registered to do business in Azerbaijan, providing services for contractor parties or foreign subcontractors participating in PSAs, may also be exempt from duties and VAT on imported goods and equipment.

The Government of Azerbaijan must approve, certify, or license the exporting or importing of specific goods, including weapons, military equipment, explosives, and special types of scientific and technical information for the production of weapons. Other goods that require government approval for exporting or importing include wild animals and plants, medical equipment, and works of art and antiques.

The role of the State Customs Committee

The State Customs Committee of the Azerbaijan Republic is a governmental agency within the Cabinet of Azerbaijan. It is responsible for customs clearance for imports and exports, and the regulation of all customs activities within the country. The committee is led by a chairman, currently Shahin Baghirov, and its main functions include:

• Enforcing customs policy and preparing development programs for customs activity in Azerbaijan.
• Preparing economic programs and licensing goods passing through customs checkpoints.
• Collecting taxes and tariffs on goods crossing the border.
• Issuing certificates and arranging the registration of cargo and transport.
• Participating in the development and implementation of state policies for the effective utilisation and protection of natural resources in the Azerbaijani sector of the Caspian Sea.
• Assisting law enforcement agencies in combating international terrorism and drug trafficking.
• Providing statistical data on foreign trade customs and special customs bodies of Azerbaijan.
• Protecting the rights and interests of individuals and legal enterprises carrying out customs activities.
• Participating in the activities of international customs organisations.
• Arranging scientific research in the customs sector.

The State Customs Committee plays a crucial role in Azerbaijan's economic development and sovereignty. It has expanded its relations with foreign customs authorities, contributing to the deepening of reforms and the formation of state budget revenues. The committee's successful implementation of customs policy has accelerated commodity turnover and streamlined import-export procedures in the country.

Importers are required to provide the State Customs Committee with several documents, including a signed import contract, customs declaration, bill of lading, sales invoice, and a certificate of origin. The committee also plays a role in determining the time allowed for the processing and re-exporting of goods.

The need for a certificate of origin

A certificate of origin (CO) is a crucial document in international trade. It certifies the country of origin of the goods being exported. This document is issued by the exporter and may be stamped by a chamber of commerce. The CO is often mandated by the importing country and included in trade agreements, as it is used to levy the appropriate import tax, if any.

Azerbaijan requires a certificate of origin for imported goods. The State Customs Committee of Azerbaijan demands several documents for imported goods, including a certificate of origin. This certificate is necessary for the customs clearance of goods entering the country.

The CO is essential for several reasons. Firstly, it helps verify that traders are complying with customs and tariff requirements. Secondly, it determines eligibility for preferential treatment under trade agreements. Thirdly, it ensures that goods are not from a country subject to trade sanctions or restrictions. Finally, it helps verify that goods are not produced under unethical or exploitative conditions.

Obtaining a CO typically involves registering with an accredited chamber of commerce and submitting an application with detailed information about the shipment. The chamber of commerce will review the application to ensure it adheres to international rules and guidelines. Once approved, the chamber will issue an electronic CO with a unique identification number and security elements like a QR code. The importer or customs authorities in the destination country can then verify the CO's authenticity using the appropriate platform.

The process of obtaining a certificate of origin

A certificate of origin (CO) is a document used in international trade to certify that the goods being exported originated in a specific country. It is often mandated by importing countries and included in trade agreements, as it is used to levy the appropriate import tax, if any.

COs are important tools for promoting transparency, accountability, and informed decision-making in international commerce. They support fair labour practices, protect workers' rights, and enable governments to enforce trade policies, sanctions, and embargoes.

Chambers of commerce, designated government agencies, or other authorised bodies in the exporting country issue COs. They include essential information such as exporter and importer details, a description of the goods, the country of origin, and a digital signature and verification from the issuing authority.

To obtain a CO, exporters can follow these steps:

Registration:

Exporters or their authorised representatives must register with an accredited chamber of commerce through the chamber's online platform.

Application:

Once registered, the exporter can log in to the chamber's online system and submit an application for a CO. This involves providing detailed information about the shipment, including the exporter's and importer's details, a description of the goods, the country of origin, and other relevant information.

Verification:

The chamber of commerce will review the application to ensure it follows the relevant international rules and guidelines. This may include verifying the origin of the goods and ensuring that all required documentation is in order.

Issuance:

Once the application is approved, the chamber will issue an electronic CO with a unique identification number and security elements like a QR code for verification.

Verification by the importing country:

The importer or customs authorities in the destination country verify the authenticity of the CO using the verification platform of the International Chamber of Commerce (ICC). They can confirm its validity by entering the unique identification number or scanning the QR code on the CO.

Alternatively, accredited companies can create valid certificates on behalf of the exporter and get them certified by chambers of commerce.

Timing:

The standard time frame for requesting a CO is up to three weeks before the goods leave the country of export. Exporters can also apply for a CO while the goods are in transit or have already arrived but not yet cleared customs. Retrospective applications can be made for up to three months after the goods have been shipped.

Exemptions from import duties and taxes

Production Sharing Agreements (PSAs):

Goods, tools, equipment, supplies, and services imported under a PSA in the energy sector are generally exempt from import duties and taxes. This exemption extends to foreign firms registered in Azerbaijan that provide services to contractor parties or foreign subcontractors participating in PSAs. The specific terms of the PSA govern each situation.

Value-Added Tax (VAT) Exemptions:

Azerbaijan's standard VAT rate is 18%, but certain transactions are zero-rated or exempt:

• Exportation of goods and services.
• Importation under the PSA and HGA regimes with a VAT exemption certificate.
• Importation of goods and services provided to grant recipients funded by financial aid from abroad.
• International and transit cargo and passenger transportation, along with related freight forwarding services.
• Investment of fixed assets in the form of shares in the charter fund of an enterprise (if not acquiring other property in exchange).
• Supply of gold and other valuables to the Central Bank of Azerbaijan.

Additionally, specific exemptions include:

• Financial services.
• Sale of participation interests or shares of a legal entity.
• Provision of paid educational services.
• Investment of property (excluding fixed assets and imported property) into the charter fund of an enterprise.
• Imports of fixed assets under leasing agreements.
• Turnover of agricultural product producers for a 13-year period starting from January 1, 2014.
• Payments for aircraft and aircraft engine rentals from non-residents without a permanent establishment in Azerbaijan.
• Industrial and technology equipment imported by taxpayers for a 10-year period after their registration as residents of an industrial and technological park.
• Goods imported into special economic zones (excluding excise tax-liable items).
• Certain categories of imported goods as defined by the Cabinet of Ministers.

Customs Duties Exemptions:

Azerbaijan's customs duties vary between 0% and 15%, depending on the type of goods. Raw materials and machinery are often exempt from customs duties. Finished products and agricultural produce typically incur a 15% tariff.

Under the PSA, companies registered in Azerbaijan are exempt from import duties and restrictions on goods used for hydrocarbon activities.

Excise Duties Exemptions:

Excise duties are levied on specific goods, including motorcycles, tobacco, alcoholic beverages, vehicles, yachts, petroleum, jewellery, processed diamonds, and more. However, exemptions from excise duties are granted for:

• Industrial and technology equipment imported by taxpayers for a 10-year period after their registration as residents of an industrial and technological park.
• Goods imported into special economic zones (excluding excise tax-liable items).

Property Tax Exemptions:

Property tax is levied on movable and immovable property owned by individuals and companies. However, the following entities are exempt:

• Legal entities involved in the production of agricultural products.
• Residents, managers, and operators of industrial or technological parks.
• Micro-enterprises with total book value assets of less than AZN 1 million.
• Small and medium-sized enterprises (SMEs) are exempt from property tax on property used for SME operations for seven years from their registration date.
• Fixed assets used for environmental, fire protection, and civil defence purposes.
• Product lines, railways, communication and power lines, melioration facilities, and satellites.
• Facilities used solely for education, healthcare, culture, and sports by companies in these sectors.
• Legal and natural persons engaged in the production of agricultural products (including industrial methods) for a three-year period starting from January 1, 2024.

Mining Tax Exemptions:

The mining tax rate depends on the type of mineral extracted. However, legal entities and individuals involved in mineral recovery are obligated to pay this tax.

Frequently asked questions