Govt proposes independent body for CoO

KATHMANDU, Aug 12: As two major apex business organizations continue to dispute over sharing the royalty coming from issuing certificate of origin (CoO), Ministry of Commerce and Supplies (MoCS) has mooted an idea of establishing an independent body to deal on issuance of CoO and distribution of royalty.[break]



Holding a meeting in this connection, the ministry handed over Operational Guidelines on CoO to Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and Confederation of Nepalese Industries (CNI) on Wednesday.



In the guidelines, the ministry has proposed to establish an independent authority to grant permissions to different agencies for issuing CoO, monitor their operations and activities and also distribute royalty among different business bodies.



“Despite the new institutional set up, the ministry has proposed that CoO be issued under the banner of FNCCI,” said a source, elaborating that the ministry´s vision was to continue to allow FNCCI use its letterhead to certify that the goods holding the CoO is genuinely manufactured in Nepal.



According to the guidelines, the authority will be headed by a joint secretary at MoCS and its executive committee will have representatives from Trade and Export Promotion Committee (TEPC), FNCCI and CNI, among others. The authority will take decisions on granting licenses to agencies for issuing the CoO under FNCCI´s banner.



“All the royalty generated from the CoO will be deposited in the proposed authority´s accounts and it will distribute the money to FNCCI, CNI, bilateral and district chambers, commodity associations and TEPC at the rate as provisioned in the guidelines,” said the source.



The royalty is collected at the rate of 12 paisa per Rs 100 worth of exports. MoCS has also revised the rate of royalty share for different agencies. Of the 12 paisa, the ministry has proposed that agency issuing CoO be given 5 paisa, and rest 7 paisa be distributed among FNCCI, CNI, TEPC, district chambers and bilateral chambers, among others.



As of now, FNCCI has been taking 2.25 paisa of the total royalty and the rest is shared among different business associations, including 1.3 paisa to CNI.



However, controversy on CoO surfaced after different commodity associations blamed FNCCI of not distributing the royalty as per its commitment. The problem further deepened after CNI demanded equal treatment with FNCCI on royalty sharing.

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