Fact Sheet on Hong Kong's origin certification system

The Hong Kong rules of origin follow the internationally accepted practice of adopting the criterion of substantial transformation. In other words goods are accepted to be of Hong Kong origin if either they are the natural product of Hong Kong or they have undergone in Hong Kong the manufacturing process which has changed permanently and substantially the shape, nature, form or utility of the materials used in manufacture.

2. The Trade and Industry Department is the agency of the Government of the Hong Kong Special Administrative Region (HKSAR) which issues Certificates of Origin (CO). Apart from the Trade and Industry Department, there are five organizations in Hong Kong which have been designated by the HKSAR Government as competent to issue COs under Article 11 of the International Convention for the Simplification of Customs Formalities 1923. These Government Approved Certification Organizations (GACOs) are :
   1. The Hong Kong General Chamber of Commerce
   2. The Federation of Hong Kong Industries
   3. The Indian Chamber of Commerce, Hong Kong
   4. The Chinese Manufacturers' Association of Hong Kong
   5. The Chinese General Chamber of Commerce

   To maintain the integrity of the Hong Kong Certificate of Origin System, the Trade and Industry Department ensures that all the above-mentioned CO issuing organizations adopt the same practices and procedures in the issue of Certificates of Origin; and in particular, that the Hong Kong rules of origin are followed. The Trade and Industry Department assists the GACOs in the training of their administrative and inspection staff and ensures maintenance of a uniform high standard of integrity by all the above-mentioned certification organizations. The COs issued by GACOs are protected by Hong Kong law and have the same status as those issued by the Trade and Industry Department.

3. The issue of COs by the Trade and Industry Department and by the GACOs is governed by laws ^{(Note 1)} in Hong Kong. The laws provide the Director-General of Trade and Industry with power to run the certification system and also provide penalty for certification offences. The Commissioner of Customs & Excise of the HKSAR Government has legal responsibility for the enforcement of the laws.
4. The detailed Hong Kong origin criteria for specific products are established in accordance with internationally accepted practice and the provisions contained in the Agreement on Rules of Origin of the World Trade Organization. They are subject to review periodically to take account of technological changes and industrialization in Hong Kong. However, any changes to the origin criteria for specific products follow the basic principle of substantial transformation. The origin criteria for specific products and periodic refinement to them are published in circulars. The latest circular on origin criteria for specific products is Certificate of Origin Circular No. 1/2022 published on 12 January 2022.
5. Besides the origin criteria, the Department also defines in the above-mentioned Circular the principal process(es) for specific products. Basically, principal processes are the manufacturing processes which confer origin to a finished article, whereas subsidiary processes are any processes, other than the principal processes, which contribute towards the manufacture of an article.
6. For implementation of the certification system, all factories whose products require certain types of COs ^{(Note 2)} must be registered with the Trade and Industry Department. Pre-registration inspections are conducted by Customs & Excise Department. Factories can register only if they have the appropriate machinery and labour for producing the products for which they are registered. They are also required to keep records of production. All registered manufacturers have an obligation to notify the Trade and Industry Department immediately on any changes in registration particulars and the Department conducts an annual updating exercise to ensure that the registration particulars are up-to-date. In parallel, the Customs & Excise Department also conducts re-inspections on registered factories periodically to ensure their registrations are in order.
7. Inspections of consignments under applications for certificates of origin are carried out to prevent abuses of the certification system. Consignment inspections may be conducted at the premises of the declarant exporter, manufacturer and/or subcontractor to verify the accuracy of the particulars declared in the certificate applications. In the course of an inspection, inspection officer may make physical checks on the goods and examine such books and records as those relating to raw material consumption, production, workers wages and so on, to establish that the goods are manufactured in the manner as declared in the application.

Trade and Industry Department

Factory Registration and Origin Certification Branch

February 2018