Proposed simplification of Generalised System of Preferences

The EU has proposed a new Generalised System of Preferences (GSP) aimed at simplifying the current GSP rules. The new GSP scheme, for which an implementation date is awaited, will last until 31 December 2008. The new GSP scheme will provide;

  • A general arrangement for standard GSP beneficiary countries;
  • Special arrangements for Least Developed Countries (LDCs); and
  • New incentives for certain beneficiary countries – to be known as GSP+

The general arrangements applicable to standard GSP beneficiary countries will be split into Sensitive and Non-sensitive products, with eligible Non-sensitive products attracting a nil preferential rate of duty and eligible sensitive products (with some exceptions) attracting a reduction of 3.5% from the full rate of customs duty.

The LDCs will receive nil preferential rates of duty for all products with the exception of arms covered in Chapter 93 of the Tariff, and specific types of bananas, rice and sugar.

Countries eligible for the new GSP+ will receive nil rates of duty for all eligible products (Sensitive and Non-sensitive) except goods classified in heading 0306 13. GSP+ countries will also receive a nil rate of specific duty (where payable) for eligible products with a number of exceptions.

In a change to the current rules the new GSP scheme will not allow for the re-introduction or removal of products under the graduation method until the scheme ends on 31 December 2008.

A number of new countries and products have been added to and removed from the current GSP scheme. For further or more detailed information on these countries and products, or any other GSP issue please call your usual Deloitte contact.

Simplified Rules of Origin Proposed

The European Commission has proposed a strategy for simplifying the rules of origin for products and countries covered under the EU’s preferential trade arrangements. The Commission deemed that the current origin rules are too complicated and rigid, in addition to being open to abuse.

The Commission’s proposal includes;

  • replacing the current rules with a single value-added method for determining the origin status of goods;
  • re-evaluating the rights and responsibilities of operators and administrators;
  • replacing origin certificates with statements of origin by registered exporters; and
  • developing methods to ensure that beneficiary countries comply with the new rules.

News in Brief

  • The World Customs Organisation (WCO) has accepted the Republic of Chad into its membership, increasing the total number of WCO members to 165.
  • Update : please note the following amendment to last week's item "New CFSP requirements". We now understand that where a Direct Representative's deferment account is used to secure the payment of duty and/or import VAT, he will be considered to have the same joint and several liabilities as an Indirect Representative. We apologise for any confusion this may have caused.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.