On 16 December 2024, the International Chamber of Commerce (ICC) issued a reminder that it had unveiled in July 2024 a new digital trade tool, ICC Genesis, offering a simpler and more secure way to trade within Free Trade Agreements (FTAs).
To understand the groundbreaking solution and how the ICC facilitates trade under FTAs, the ICC offered the following as part of its ‘ICC Explained’ series, which provides insider insight into how the ICC’s work makes a difference in the real economy.
1. How are Rules of Origin relevant to Free Trade Agreements?
An FTA is a formal agreement between two or more countries or economies designed to promote trade and reduce trade barriers to imports and exports between the countries. Used at the very beginning of an international trade journey, Rules of Origin (Roo) are the backbone of all FTAs negotiated worldwide. They can be very complex and technical to understand for exporters and importers, especially for smaller businesses.
2. A brief overview of ICC Genesis
ICC Genesis is a new digital trade tool that allows chambers of commerce members of ICC to verify and certify preferential origin declarations made by exporters in the framework FTAs. We have ten participating chambers using the tool.
Exporters do not need to ask for a Certificate of Origin (CoO) issued by their chamber of commerce and can ‘self-certify’ themselves the preferential origin of the goods they export. However, they need to refer to the FTA and check if their product can qualify for preferential treatment so that their importer can benefit from less or zero import duties. However, this can be very complex and technical and lead to mistakes in the declaration.
That’s why we believe that Chambers of Commerce, who have played a role in the origin field for more than 100 years are best placed to help exporting communities, especially smaller businesses, to declare the right preferential origin in an invoice declaration, and fully benefit from the advantages the FTA.
3. Why was there a need for a tool like ICC Genesis?
We developed the tool because of the number of FTAs negotiated worldwide. There are more than 400, according to the World Customs Organization (WCO). Self-certification is the most common method to declare the origin of the goods exported. Still, exporters who don’t know how to use the rules of origin or read free trade agreements have often reported mistakes and confusion.
A recent WCO study tells us that a lack of knowledge of requirements compounds self-certification errors and irregularities.
That’s why we are bringing ICC Genesis as a trade solution to reduce the irregularities and mistakes made by exporters when they self-certify the origin of the goods they export. It is designed to help exporters have the right declaration of origin in the statement.
ICC Genesis is part of ICC’s DNA, providing its members with rules, standards, and best practices as we support them in our mission to facilitate international trade.
4. What are ICC and WCF’s roles in this?
Through our World Chambers Federation (WCF), ICC has represented, supported and connected chambers of commerce worldwide for decades. Much of what we do is helping their business communities export and effectively navigate the global trading system.
The first certificate of origin was issued by the Vienna Chamber of Commerce in 1889, and chambers have been the trusted issuers of certificates of origin ever since.
With this long experience, it makes sense today for them to guide exporters, helping them check and take full advantage of FTAs.
5. What evolution would you like to see for ICC Genesis and, in general, for trading under FTAs?
We’d love to see exporting companies use ICC Genesis to reap the benefits and, in turn, see importers pay less, too, thanks to the accurate preferential statement on the invoice declaration. In the long term, we would ideally like a new module listing all FTAs worldwide. We think this will be useful for exporters as it enables them to go into the FTAs and check the rules of origin of the products they are exporting. With more than 400 FTAs currently, this would be a great challenge!