What is a Certificate of Free Sale?
A Certificate of Free Sale (CFS), which is sometimes referred to as a ‘Certificate to Foreign Governments (CFG)‘, or ‘Certificate for Export‘, is a document that certifies that a particular product has been legally marketed and freely distributed and sold on the open market. It provides validation that the item is safe for use or consumption, won’t harm citizens.
The certificate of free sale are provided by the shipper/exporter of goods, and are usually used in industries that supply medical devices, food or ingredients, cosmetic and biological products. Importing countries require them as verification of the applicable requirements of international trade and commerce.
What Purpose of this certificate?
The purpose of a Certificate of Free Sale is to provide assurance to the importing country about the status and quality of imported goods. It is issued to the export of items that are not limited to medical uses, but also cosmetics and food grade goods for example. The certificate certifies that the exported goods listed in the certificate are freely sold and consumed in their country of origin and approved for export. It is required for customs clearance in the country of import to determine product validity and also tariff classification and country of origin details.
Who issues free sales certificate?
Certificate of Free Sales are issued by different authorities in various countries, depending on local regulations and the type of product. They are issued to shippers of products to be exported.
In the United States, the Food and Drug Administration (FDA) or the U.S. Department of Commerce can issue Certificate of Free Sales for a broad range of products, including food items, pharmaceuticals, and cosmetics. These certificates confirm that the products are freely sold in the U.S. and comply with local regulations.
In the United Arab Emirates (UAE), the Ministry of Health and Prevention (MOHAP) or other designated authorities issue Certificate of Free Sales. These certificates are necessary for exporting healthcare products and devices to the UAE, ensuring they meet the country’s health and safety standards.
In India, the Directorate General of Foreign Trade (DGFT) through its Regional Authorities (RA) issues these certificates for medical devices and equipment not covered under the Drugs & Cosmetics Act. The process involves submitting an application in a specific format and paying a fee through the DGFT’s payment system. In India, an Importer Exporter Code, or IEC, is mandatory for all goods to be imported or exported from India. The IEC is a 10-digit code issued by the Directorate General of Foreign Trade (DGFT), and it’s essential for exporters to have an active IEC linked to their company profile before applying for a Certificate of Free Sale.
Overall, the issuing body for Certificate of Free Sales varies by country and product type, serving as a key document in international trade by certifying that products are legally sold in their country of origin and meet specific regulatory standards. For India, the U.S., and the UAE, the respective authorities ensure that exported products adhere to both local and international safety and health regulations.
Getting a Certificate of Free Sale
Obtaining a Free Sale and Commerce Certificate is a crucial task for manufacturers who wish to expand their business into markets other than their country of origin. The certificate provides assurance to the importing country about the status and quality of imported goods. It is issued by the national regulatory authority of the exporting country and certifies that the export goods listed in the certificate are freely sold and consumed in their country of origin and approved for export.
Documents Required to Obtain a Certificate of Free Sale
Different regions’ authorities may have different processes or requirements, and it is essential to check with the relevant authority for specific details. To secure a Certificate of Free Sale, the required documentation can vary by country but generally includes:
- Business Registration: Proof of the company’s legal status and its authorization to operate, similar to how businesses in specific countries need to register with a trade authority.
- Quality and Manufacturing Licenses: Documents showing that the company is authorized to manufacture the products and that these products meet the local quality standards.
- Product Approval: Official permissions or certifications for the products intended for export, indicating compliance with health and safety regulations.
- Export Product List: A comprehensive list detailing the products for which the Certificate of Free Sales are sought.
- Official Request: A formal request from the importing country or a relevant authority for the Certificate of Free Sale, indicating the need for such documentation.
- Authorization Letter: If applicable, a document authorizing a representative to apply for the certificate on behalf of the company.
The validity of Certificate of Free Sales
The validity of a Certificate of Free Sale is two years from the date of issue, unless otherwise specified. The certificate is issued to the exporter for the products that are not covered under the Drugs & Cosmetics Act, 1940, have usage in nursing homes, clinics, and hospitals for medical and surgical purposes, and are not prohibited for export. The certificate certifies that the export goods listed in the certificate are freely sold and consumed in their country of origin and approved for export.
What is the difference between a certificate of free sale and a certificate of origin?
A Free Sale Certificate proves a product can be sold, verifying that the product follows local rules. This is important for items like food, beauty products, and health tools. It means these items are safe and approved for sale and import export.
A Certificate of Origin is completely different, it confirms details of exactly where a product has originated or been manufactured. These certificates are sometimes required to be issued from the exporting country’s local chamber of commerce, and can be used to reduce or eliminate import duties in the country of import, if the 2 countries have favorable Free Trade Agreements in place.
What are the consequences of not having a certificate of free sale for exports
Not having a Certificate of Free Sale can lead to big problems along the supply chain. If compliant documentation is not provided, shipments can be held or rejected by customs authorities. Thus causing delays or in some cases attract fines or even having goods sent back to the country of export, or the products being destroyed by customs authorities.
