What Is a Country of Origin (COT) Code?

A Country of Origin (COT) code identifies the nation where a product was manufactured, produced, or grown. It serves as a statement about a good’s “economic nationality” in international commerce. The code provides information for trade processes, including tariff application and regulations. It also informs consumers about the source of products they purchase.

Determining Country of Origin

Establishing a product’s country of origin involves specific criteria, especially for goods with components from multiple nations. Two primary methods are used: the “wholly obtained” criterion and the “substantial transformation” rule. Goods are considered “wholly obtained” if they are exclusively produced or sourced in one country without incorporating materials from other countries. Examples include minerals extracted from the earth, crops harvested, or animals born and raised in a single country.

For products manufactured using materials or components from various countries, the “substantial transformation” rule applies. This rule dictates that the country of origin is where the product underwent a fundamental change in form, appearance, nature, or character. This transformation results in a new and different article with a distinct name, character, or use from its original components. Factors considered for substantial transformation include a change in tariff classification, a specific percentage of value added, or a particular manufacturing operation.

Application and Significance in Trade

Once a product’s country of origin is determined, the COT code is applied in international trade. This code is present on documents such as customs declarations (e.g., CBP Form 7501 and CBP Form 6059B) and other import/export documentation. The code helps customs officials assess duties, taxes, and ensure compliance with import restrictions.

The significance of the COT code extends to tariff assessment, where it dictates the applicable duty rates. Products originating from countries with Free Trade Agreements (FTAs) may qualify for preferential tariff treatment, meaning reduced or eliminated duties, provided they meet specific rules of origin outlined in the agreement. For instance, under the United States-Mexico-Canada Agreement (USMCA), goods meeting origin criteria may be exempt from certain tariffs. Conversely, the COT code is also used to apply additional duties, such as anti-dumping and countervailing duties, which protect domestic industries from unfairly priced or subsidized imports.

Role in Global Supply Chains

Country of origin information plays a role in global supply chain management. Accurate COT data supports supply chain visibility and helps manage compliance risks across the entire product journey. This information helps track goods, manage inventory, and ensure adherence to regulatory requirements beyond customs clearance.

Regulations like the Country of Origin Labeling (COOL) law in the United States mandate that retailers provide consumers with information about the source of certain food products. Precise country of origin data also contributes to meeting product safety standards and other consumer labeling laws related to a product’s origin. Maintaining detailed records and tracking systems for country of origin is part of managing complex global supply chains.