On 22 September 2021, the EU Commission proposed new EU Generalised Scheme of Preferences to promote sustainable development in low-income countries. The GSP laws, in the EU and the UK are unilateral trade tools that removes or reduces import duties from products coming into the EU from vulnerable low-income countries. In addition, the rate of duty applicable to an importer’s product can change depending on factors such as the type of programme applicable and the level of country development. As with any free trade agreement, one can only benefit from GSP, if the rules of origin can be met including proof of origin.
WHAT IS GSP?
GSP removes import duties from products coming into a market from vulnerable developing countries. This helps developing countries to alleviate poverty and create jobs based on international values and principles, including labour and human rights.
Almost 50 years ago, the United Nations Conference on Trade and Development asked developed countries to help developing countries integrate into the world economy. The Generalised Scheme of Preferences (GSP) was born and today, about a dozen countries have GSP mechanisms in place. Today it is operated by countries such as the EU, UK or US..
HOW DOES IT WORK?
Developing countries can be automatically granted GSP if they:
Are classified as having an income level below "upper middle income" by the World Bank
Do not benefit from another arrangement (like a Free Trade Agreement) granting them preferential access to the local market
In addition, if granted GSP+, beneficiaries are required to ratify several (usually 20+)international conventions and to cooperate with the national law maker to monitor implementation of these conventions.
Least-developed countries are automatically granted the benefits of the ‘Everything But Arms’ arrangement, even if they have another arrangement in place.
WHAT COUNTRIES CAN BENEFIT?
The list is subject to change, but overall expect the following countries to be in scope (please check current rules):
This framework is for countries that the UN classifies as Least Developed Countries. Imports from these countries have quota-free access and nil rates of import duty on all goods other than arms and ammunition.
Central African Rep
Congo, Democratic Rep
São Tomé & Príncipe
and many others
HOW CAN FIRMS BENEFIT?
To receive GSP rates of import duty, goods must originate from a GSP country. Rules of origin are the criteria which establish the country of origin of imported goods. Importers will have to pay import duty at the full (non-GSP) rate, if checks carried out by the authorities reveal that the goods do not satisfy the GSP rules of origin.
WHAT DID the WEBINAR COVER
• The WTO and GSP
• What is GSP in the EU and the UK?
• What is Standard, + and EBA?
• Which countries are eligible for GSP?
• Rules of Origin under GSP?
• Proof of Origin under GSP
• How to follow GSP changes
• How to set up a GSP preferential duty management system
• Record retention and customs audits
• How to code your customs declaration with the relevant GSP codes (example UCC and HMRC’S CHIEF)
• What is in the new GSP proposal of the EU
MORE INFORMATION: EXPERT BLOG ENTRY
More details and an exclusive explainer blog entry written by leading import export consultants and global trade experts here: