- Generalised System of Preferences — Taxation and Customs Union — European Commission
- b) Legal framework
- c) Specific provisions
- Regional cumulation of origin
- Extended cumulation of origin
- Cumulation with goods originating in Norway, Switzerland and Turkey
- «Insufficient working and processing» (Minimal operations)
- General tolerance rule
- Principle of territoriality
- Non-manipulation/Non- alteration rule
- Proof of origin applicable until the full application of REX
- Generalized System of Preferences (GSP)
- GSP Renewed
- GSP through April 21, 2018
- GSP Retroactive Refund
- Phased GSP Refund Processing
- Post Summary Correction GSP Claims for Importations during the Lapse
- GSP Goods Subject to Section 232 (aluminum and steel)
- Post-Importation GSP Claims on Importations Prior to Expiration
- GSP Mail Entry Refunds
- African Growth and Opportunity Act (AGOA) and ACE Programming of SPI “A”
- Contacts and Additional Information
- Competitive Need Limitations
- Resource Links on the 2018 Re-authorization of GSP
- Additional Resource Links
Generalised System of Preferences — Taxation and Customs Union — European Commission
|Summary:Facility granted unilaterally to developing countries including the 'Everything but arms initiative' for Least Developed Countries.|
The principle of GSP was agreed at the United Nations Conference on Trade and Development (UNCTAD), and is a facility granted to developing countries («beneficiary countries») by certain developed countries («donor countries»). It is not negotiated with them: the preferential treatment is non-reciprocal.
The GSP schemes offered by the various donor countries and their rules of origin differ fundamentally. Goods complying with the conditions of the GSP of the USA, for example, will not necessarily comply with the EU GSP.
Special arrangements have been established in order to address the special needs of the least developed countries. Following the so-called «Everything But Arms» (EBA) initiative introduced in 2001, the EC GSP grants these countries duty-and quota-free access for almost all their exports.
For more detailed information on general aspects of the GSP and its background, see the GSP pages of DG Trade.
Exporters in developing countries may also be interested to see the Export Helpdesk for Developing Countries of DG TRADE.
For more detailed information on the rules of origin aspect, see the Commission's guide for users on GSP rules of origin (The European Union's rules of origin for the GSP: A Guide for users).
Warning : not all countries listed as beneficiaries may actually qualify. Belarus for example is temporarily suspended from GSP, while some other countries have not yet complied with the administrative cooperation requirements, which are a pre-condition for goods to be granted the benefit of the preference. If in doubt, your competent customs authorities will advise.
b) Legal framework
GSP rules of origin are contained in
- Articles 37 and 41-58 of the Commission Delegated Regulation (EU) 2015/2446 of 28 July 2015 supplementing Regulation (EU) No 952/2013 of the European Parliament and of the Council as regards detailed rules concerning certain provisions of the Union Customs Code;
- Articles 60 and 70-112 of the Commission Implementing Regulation (EU) 2015/2447 of 24 November 2015 laying down detailed rules for implementing certain provisions of Regulation (EU) No 952/2013 of the European Parliament and of the Council as regards detailed rules concerning certain provisions of the Union Customs Code.. The list rules are contained in Regulation 2015/2446, Annex22-03 (Introductory notes and list of working or processing operations which confer originating status).
Please note that these are large regulations, which do not concern only origin.
However, the Commission's guide for users on GSP rules of origin (The European Union's rules of origin for the GSP: A Guide for users) includes an unofficial consolidated version of the legal text concerning GSP rules of origin.
It is pointed out that GSP is a single regime. The special arrangements it includes (EBA, the Special Incentive arrangement for sustainable development and good governance (GSP Plus)) are part of GSP, so the same rules apply to them.
The GSP regulation for the period to 31/12/2023 is Regulation (EU) No 978/2012 of the European Parliament and of the Council applying a scheme of generalised tariff preferences and repealing Council Regulation (EC) No 732/2008. The text may be found on the GSP pages of DG Trade.
c) Specific provisions
NOTICE: These specific provisions only contain information on cases where the rules of the particular arrangement differ from the common provisions, or where these common provisions need to be complemented. Therefore, always check the common provisions too.
- Bilateral cumulation
- Regional cumulation
- Extended cumulation
- Cumulation with goods originating in Norway, Switzerland and Turkey
Neither diagonal cumulation nor full cumulation is permitted.
Regional cumulation of origin
The groups that may benefit from this are:
- Group I: Cambodia, Indonesia, Laos, Myanmar/Burma, Philippines and Vietnam;
- Group III: Bangladesh, Bhutan, India, Nepal, Pakistan and Sri Lanka.
Two other groups contain now only one country (Group II: Bolivia and Group IV: Paraguay) therefore the cumulation is impossible.
Regional cumulation between countries in the same regional group shall apply only under the condition that the working or processing carried out in the beneficiary country where the materials are further processed or incorporated goes beyond «minimal» operations and, in the case of textile products, also beyond the operations set out in Annex 22-05 (Working excluded from GSP regional cumulation (textile products)).
In order to guard against distortion of trade between countries having different levels of tariff preference, certain sensitive products are excluded from regional cumulation as set out in Annex 22-04 (Materials excluded from regional cumulation). In addition, cumulation is now possible between individual Group I and Group IV countries, upon request and under certain conditions.
Extended cumulation of origin
Extended cumulation between a beneficiary country and a country with which the European Union has a free-trade agreement in force, may be granted by the Commission upon request of a beneficiary country, provided that the countries involved in the cumulation have undertaken, inter alia, to provide the necessary administrative co-operation both with regard to the European Union and also between themselves and that the undertaking has been notified to the Commission by the beneficiary country concerned.
Materials falling within Chapters 1 to 24 of the Harmonized System are excluded from extended cumulation.
Cumulation with goods originating in Norway, Switzerland and Turkey
Because the GSP schemes offered by Norway, Switzerland and Turkey are similar to EU GSP, a certain linkage between them is possible. Beneficiary countries have, since 2001, been permitted to cumulate origin with goods falling within Chapters 25 to 97 of the Harmonized System originating in Norway and Switzerland.
This cumulation will continue and is extended to Turkey.
Materials (other than agricultural products or products covered by a derogation) which originate in Norway, Switzerland or Turkey which undergo more than a minimal operation in a beneficiary country, are considered to originate in that beneficiary country, and may benefit from preferences when imported to the EU, to Norway, to Switzerland or to Turkey.
In addition, the customs authorities in the EU, Norway, Switzerland or Turkey may, for the purpose of sending the goods to one of the other parties, replace a Form A issued by the authorities of a beneficiary country.
The legal provisions are complemented by an agreement in the form of an exchange of letters between the parties, published in OJ L 38, 8/2/2001, p. 25.
«Insufficient working and processing» (Minimal operations)
The list of minimal operations may be found in Article 47 of Delegated Regulation (EU) 2015/2446.
General tolerance rule
The general tolerance rule is set out under Article 48 of Delegated Regulation (EU) 2015/2446.
Principle of territoriality
Working or processing outside the territory of the beneficiary country (without prejudice to regional cumulation) is not permitted. Goods exported and subsequently returned may be considered as originating only if it can be demonstrated that they are the same as those exported, and that they have not undergone any operations beyond those necessary to preserve them in good condition.
Non-manipulation/Non- alteration rule
The long-standing direct transport rule previously existing in the GSP rules of origin has been replaced by a more flexible non manipulation principle (see Article Article 43 of Delegated Regulation (EU) 2015/2446).
This means that the products declared for release for free circulation in the European Union must be the same products as exported from the beneficiary country in which they are considered to originate.
They must not have been altered, transformed in any way or subjected to operations other than operations to preserve them in good condition.
Proof of origin applicable until the full application of REX
The normal proof of origin for goods exported from a beneficiary country to the EU is the certificate of origin Form A. Except for derogations, an invoice declaration may be used for goods whose total value does not exceed Euro 6 000.
Where goods of EU origin are exported to a beneficiary country with a view to bilateral cumulation, the EU exporter must use a movement certificate EUR 1.
An invoice declaration may be used by approved exporters and also by any exporter for goods whose total value does not exceed Euro 6.000.The period of validity is 10 months.
The maximum value limit of the exemption from the requirement to present a proof of origin for small packages sent from one private person to another is Euro 500 and for goods contained in travellers' personal luggage, it is Euro 1.200.
Generalized System of Preferences (GSP)
The Generalized System of Preferences (GSP) provides duty-free treatment to goods of designated beneficiary countries. The program was authorized by the Trade Act of 1974 to promote economic growth in the developing countries and was implemented on January 1, 1976.
On Friday, March 23, 2018, the President signed into law H.R.
1625 (Public Law 115-141), the “Consolidated Appropriations Act, 2018,” which in addition to providing full-year federal appropriations through September 30, 2018, extended GSP with retroactivity, for goods entered or withdrawn from warehouse for consumption from January 1, 2018 through December 31, 2020.
The new law, effective April 22, 2018, also provided for the retroactive refund of all duties (without interest) to the importer of record (IOR) on GSP-eligible goods entered during the January 1, 2018 through April 21, 2018 lapse period.
GSP through April 21, 2018
Importers should continue to flag GSP-eligible importations with the Special Program Indicator (SPI) “A” and pay normal trade relations (column 1) duty rates until the effective date of the Act, April 22, 2018, at which time Automated Commercial Environment (ACE) programming will obviate the duty payment.
GSP Retroactive Refund
GSP-eligible formal and informal entries summaries filed electronically via the Automated Broker Interface (ABI) using SPI “A” as a prefix to the tariff number will be processed automatically by U.S. Customs and Border Protection (CBP) and no further action by the filer is required to initiate the refund process.
GSP-eligible Non-ABI filers, and ABI filers that did not include SPI “A” on the entry summary may submit a duty refund request to CBP no later than September 19, 2018. For more information on refund requests, see Post Summary Correction (PSC) instructions below.
To facilitate expeditious refund processing, importers should insure that their mailing address is up-to-date in ACE, to include the Automated Clearinghouse (ACH) number, for ACH program participants.
Phased GSP Refund Processing
CBP will be processing GSP claims in three phases, as follows:
- Phase 1: The Trade Transformation Office (TTO) will batch process all GSP entry summaries submitted during the lapse period with the SPI “A”. Barring unforeseen matters, importers should receive all such refunds by mid-July 2018.
- Phase 2: CBP HQ will distribute spreadsheets to Field personnel for the manual processing of those entry summaries that could not be batch processed (AD/CVD, Section 232, other). These spreadsheets will cover importations with the following characteristics:
- If AD/CVD and GSP are on the same line, then no GSP refund will be issued until the AD/CVD liquidation order has been issued.
- If AD/CVD and GSP are on different entry lines, then the GSP administrative refund should be processed manually by the field.
- If Section 232 duties and GSP are on the same entry line, then no GSP refund will be issued, issued since 19 USC 2463(b)(2) precludes GSP program benefits accruing to Section 232 goods (see below for more information).
- If Section 232 and GSP are on different entry lines, then the GSP administrative refund should be processed manually.
- Phase 3: Importer-initiated claims for which the SPI “A” was not flagged at entry summary, but requested in accordance with the following post-summary correction claim instructions, will be processed by Field personnel after the completion of Phase 1.
Post Summary Correction GSP Claims for Importations during the Lapse
- Importers have until September 19, 2018 to submit post-importation GSP claims for goods imported during the GSP lapse on which the SPI “A” was not transmitted at entry summary.
- GSP refund requests should be submitted as PSCs.
If an entry has already liquidated, the refund request should be submitted as a protest.
- GSP refund requests for importations made during the lapse but submitted subsequent to September 19, 2018 will be denied.
- An importer’s failure to submit a post-importation GSP claim on or before September 19, 2018 will not be remediable via protest.
GSP Goods Subject to Section 232 (aluminum and steel)
- GSP and AGOA-eligible goods that are subject to Section 232 duties or quotas may not receive GSP or AGOA duty preference in accordance with 19 USC 2463(b)(2).
- Trade preference may be claimed for all preference programs with the exception of GSP and AGOA, as stated above.
Importers making a trade preference claim under a program other than GSP or AGOA may continue to receive the preferential duty rate and any MPF exemption that may apply in accordance with 19 CFR 24.23(c).
Section 232 duties must be paid on imports subject to Section 232 even if trade preferences apply.
Post-Importation GSP Claims on Importations Prior to Expiration
Importations made on or before December 31, 2017, remain unaffected by the aforementioned instructions. Importers may continue to make post-importation GSP claims in accordance with applicable PSC and protest procedures (19 USC 1514, 19 CFR 174).
GSP Mail Entry Refunds
The addressees on mail entries made during the lapse period must request a refund of GSP duties in writing, along with a copy of the CBP Form 3419A, to the appropriate International Mail Branch (address listed on bottom right hand corner of CBP Form 3419A). It is essential that a copy of the CBP Form 3419A be included, as this is the only means of identifying whether GSP goods have been entered and the estimated duties and fees paid.
African Growth and Opportunity Act (AGOA) and ACE Programming of SPI “A”
The expiration and subsequent reauthorization of GSP has no effect on goods entered under the African Growth and Opportunity Act (AGOA). Although ACE programming currently allows the submission of AGOA claims with either SPI «A» or «D,» future ACE functionality will limit AGOA claims to SPI «D».
Contacts and Additional Information
Questions with respect to entry summary and refund processing, PSC, protest, formal or informal entries, should be directed to Commercial Operations, Revenue and Entry Division (CORE) at firstname.lastname@example.org.
Questions with respect to GSP or AGOA eligibility, and other questions with respect to this correspondence, should be directed to the Trade Agreements Branch at email@example.com.
Some 5,000 tariff items are eligible for GSP benefits—approximately 3,500 of which are available to all GSP countries and approximately 1,500 of which are available solely to Least Developed Beneficiary Developing Countries (LDBDCs).
In order to benefit from GSP, a good must be either wholly obtained or sufficiently manufactured in a GSP country. Sufficiently manufactured means that all 3rd-country materials have undergone a substantial transformation plus at least 35% of the good’s value has been added in the beneficiary country. Additionally, the good must be “imported directly”.
Eligible tariff items are identified by the symbols “A”, “A*” or “A+” in the “Special” sub-column of the HTSUS.
- The symbol “A” indicates that all GSP countries are eligible (HTSUS General Note 4(a))
- The symbol “A*” indicates that certain GSP countries are ineligible (HTSUS General Note 4(d))
- The symbol “A+” indicates approximately 1,500 additional tariff items for which only the LDBDCs are eligible (HTSUS General Note 4(b))
Competitive Need Limitations
The GSP program imposes quantitative ceilings called Competitive Need Limitations (CNLs) on GSP benefits for all tariff items and BDC. Under certain circumstances, these ceilings may be waived. For more information see the USTR-US Generalized System of Preferences Guidebook at https://ustr.gov/sites/default/files/IssueAreas/gsp/GSP_Guidebook-December_2019.pdf.
Resource Links on the 2018 Re-authorization of GSP
- H.R. 1625 – Consolidated Appropriations Act, 2018 (Title V)
Additional Resource Links