American World Trade Chamber of Commerce
American World Trade Chamber of Commerce
There’s a popular expression among those involved in chamber work that’s used to convey the level of organizational, operational, and structural diversity throughout the chamber industry. You’ve probably heard it before: “If you’ve seen one chamber of commerce, then you’ve seen one chamber of commerce.”
While that sentiment is absolutely correct, I would still say that at its most basic, fundamental level, pretty much every chamber of commerce is working toward the same goal: providing a wide range of services to their local business community, and helping to stimulate the local economy in the process. And while the work that goes into achieving that common objective manifests differently at every chamber, this overarching principle has emerged as a common thread running through the work of every chamber that the NCR has worked with. That is, of course, until a couple weeks ago.
The American World Trade Chamber of Commerce, with offices in Dallas, Detroit, and New York City, does exactly the opposite of what I’ve just described: they provide a single service to businesses of every variety, from all over the country.
The American World Trade (AWT) Chamber is a national chamber of commerce whose central focus is US exporters and, more specifically, the certificates of origin that accompany exporters’ products when they’re shipped overseas.
A certificate of origin is a document attesting to where exported goods were produced, manufactured, or processed; perhaps counter-intuitively, it has nothing to do with where the product is being shipped from. The country in which goods are manufactured, in turn, informs the application of tariffs, duties, and other trade policies that might affect the shipment, as well as whether or not the imports should benefit from preferential treatment.
Wendy Fichter, President and CEO of the American World Trade Chamber of Commerce, used the following scenario to exemplify the role of certificates of origin in international trade: “If you wanted to send cereal to China, their general tax, or duty, on cereal is 80 percent of the value, which is pretty high,” she explained. “However, the United States has what we call ‘most favored nation’ status with China … [which] allows anything manufactured in the US to only pay a 25 percent tariff.” The way you take advantage of that “most favored nation” status is by including a certificate of origin that proves the product in question was made in the United States.
In order to be valid, a certificate of origin must be signed by the exporter, and then countersigned by a chamber of commerce. Businesses are not allowed to approve their own (or anyone else’s) certificates of origin. Chambers of commerce were granted this unique authority as part of the 1923 Geneva Convention, when governments all over the world officially recognized chambers as credible, competent third-parties in the issuance of certificates of origin.
The rules for issuing certificates of origin are set forth by the International Chamber of Commerce, whose World Chambers Federation established a universal set of “best practices” aimed toward reinforcing the trust and integrity of what’s called the “Certificates of Origin Accreditation Chain.”
To join the Accreditation Chain, a chamber goes through a process similar to that which a local chamber applying for accreditation with the US Chamber of Commerce would have to complete. The only difference is that it has a more specific focus, and the standards that chambers have to meet have to do with security and credibility in issuing certificates of origin. The American World Trade Chamber is the only chamber of commerce in the US that belongs to the Accreditation Chain, and that membership and accreditation brings with international recognition at customs agencies all over the world.
Membership to the Accreditation Chain represents a chamber of commerce’s commitment to following the International Chamber of Commerce World Trade Federation International Certificate of Origin Guidelines. These guidelines, otherwise, are only adhered to on a voluntary basis—which is exactly what created a need for a place like the AWT Chamber.
The American World Trade Chamber first opened its doors back in 2011. Fichter explained that the move was prompted by a small group of people who worked with exporters discovering, through their work, that an alarming number of US chambers were not following the international guidelines for issuing certificates of origin. This can cause a multitude of problems for the exporter—paying too much in import taxes; products becoming compromised as they sit in storage at customs awaiting entry; even issues of inadequate cybersecurity, which can leave exporters and their goods vulnerable to hackers and pirates. (Yes, pirates.) Wanting to be able to work with a chamber of commerce that did adhere to international guidelines, they decided to start their own chamber, and the American World Trade Chamber came to fruition.
While the AWT Chamber undoubtedly addresses an important need in the chamber industry, the underlying issue has yet to disappear entirely. In fact, according to Fichter, one of the biggest problems in her line of work is the number of chambers that issue certificates of origin with no idea of what the rules even say. When chambers authorize documents that are not in compliance with international guidelines, Fichter explained, it lowers the quality of work that customs agencies all around the world are looking for when examining certificates of origin. That, in turn, increases the risk of documentary fraud, which can be hugely detrimental to international trade and the world trade environment as a whole.
But the ramifications of inaccurate documentation are felt at the level of the individual business as well. As mentioned previously, if an exporter’s paperwork isn’t accurate, it can delay the importation of their product, which will typically be put into storage until the exporter is able to get their paperwork in order. This can be problematic for multiple reasons: for one thing, the exporter is fined for each day that their product spends in storage. On top of that, as the container sits in storage, the quality of its contents may begin to diminish. (Food, for example, will start to rot.)
While that is undoubtedly an inconvenience, Fichter does point out that this doesn’t happen to everyone whose documents are inaccurate; sometimes, people get lucky, and things get to where they’re going, regardless of the quality of their paperwork. But say you’re an American exporter shipping to China and there’s an issue with your certificate of origin; even though your product might get through customs anyway, it means that you will almost certainly be paying the highest possible tax on that product. If you recall the “cereal to China” scenario, that’s the difference between a 25 percent tax with a valid certificate of origin, and an 80 percent tax without.
“Who can afford to pay that kind of difference on an export?” Fichter said. “You’re not doing business in an efficient way if you’re not claiming that difference on the taxes that you have to pay. … It’s not of value if you’re doing it wrong.”
By Fichter’s estimates, the AWT Chamber issues about 25,000 certificates of origin every year. In her two years at the chamber, the AWT Chamber has not had anybody’s shipments held up because of paperwork that they issued.
“They say that a bank teller knows counterfeit money instantly [when they see it] because they’re so familiar with the real thing,” Fichter explained. “That’s the same thing with us. We know where the problems are [with certificates of origin] because we’ve seen so many that are done correctly. We’re able to flag them right away.”
On top of the immense volume of certificates of origin they’ve dealt with, Fichter and her staff also went through an extensive training, which consisted of six months of online study, and cost roughly $1,000 per person. Consequently, Fichter became the first chamber executive in the US to be certified by the International Chamber of Commerce to authorize certificates of origin; with the rest of her staff following suit, the AWT Chamber became the first chamber to be wholly certified by the International Chamber. And it’s this type of expertise that makes the AWT Chamber such a valuable partner not only to businesses, but to chambers of commerce all over the country.
The AWT Chamber does have some of its own direct members, but their preference is for establishing partnerships with local chambers of commerce through what they call an “affiliate export program,” wherein the AWT Chamber manages a certificate of origin program on behalf of the local chamber. Fichter says this kind of service is perfect for smaller chambers, or for chambers who may only have one or two members who need certificates of origin. Because, she explained, if you only have one or two members that require the service, do you really want to spend all that time and money receiving proper training, when you might have hundreds of other members with their own set of needs that need addressing? Probably not; to do so would be impractical.
When the AWT Chamber partners with a local chamber, members of the local chamber can apply online for certificates of origin by going to their chamber’s website and logging in through a portal (all of which is branded to the local chamber) in order to have the American World Trade seal on their certificate of origin. And that seal, alone, is of immense value: “Since we’re the only chamber accredited by the International Chamber,” Fichter explained, “our seal is recognized worldwide. We’re registered around the world with customs.” That makes for an all-around smoother bureaucratic experience for customers trying to sell their products overseas.
Additionally, a partnership with the American World Trade Chamber can benefit local chambers directly, and not just their members: aside from affording chambers the ability to offer this service in an effective and efficient manner without having to undergo extensive training, a partnership with the AWT Chamber is also a great source of non-dues revenue. Establishing the partnership is free to the local chamber; they don’t have to do anything other than continue to sign up their own members. Members pay for the service themselves on an as-needed basis, each time they request a certificate of origin. Then, the AWT Chamber gives a portion of the revenue generated by those fees back to the chamber that the customer came through.
Another important, though perhaps easily-overlooked, reason that the pay-as-you-go, “software as service” model makes sense is because it keeps everything equitable among members of a local chamber. As Fichter pointed out, if only a small fraction of a chamber’s membership requires certificates of origin, “Why would you offer that service for free? Why give them something for free, when everyone else is paying for it by their dues?” she asked, adding, “That doesn’t seem right.”
Ultimately, what really motivates Fichter and her staff is a passion for helping small businesses and, by extension, chambers of commerce. “The big businesses, they have legal teams and people who tell them what they need to do and instruct them to do it the right way,” Fichter explained. “I feel like it’s those small businesses that need help; that ‘mom and pop’ shop who’s making something really unique and sending it overseas, and paying more for it than what they sold it for. We’re really providing a big value to them, as well as to the chambers that have these small business [members] who need help, [but] aren’t in a position to help them.”
The goal of the American World Trade Chamber’s partnership program is to support small businesses by bolstering the value of a membership to a local chamber of commerce. This priority is reflected in the fact that the chamber’s business model is not built on member dues, but on the revenue generated by certificate of origin fees. Because of all this, the AWT Chamber really isn’t in the market for its own members (though direct enrollment does happen from time to time).
“The local chamber has so much value to offer, besides just certificates of origin,” Fichter said. “We’re not really looking to increase our membership at all. What we really want to do is increase our partnership with chambers so that we can help them help their members.”
For more information on the American World Trade Chamber of Commerce (or to fill out an application to partner with the AWT Chamber), visit www.awtcc.org.