GSP Preference Rules 2011

Posted on: 31/01/2011

 Summary of main changes that will enter into force on 1 January 2011:  

  • Revised (and relaxed as far as the GSP Least Developed Countries -LDCs are concerned) product specific rules of origin for goods exported on or after 1 January 2011. For example, the LDCs will be able to make a garment from imported fabric. At present they cannot import materials at a later stage than yarn, which means that they must knit or weave the yarn into cloth and then make up into the garment.
  • Deletion of the requirement in the wholly obtained fishery products rule that 50% of the crew of vessels catching fish on the high seas must be EU nationals or nationals of the GSP beneficiary country.
  • Replacement of the direct transport rule, which currently requires that goods must be transported direct from the GSP beneficiary country to the EU, with a non-manipulation requirement – i.e. the goods which arrive in the EU must be the same as those which left the GSP beneficiary. The non-manipulation requirement will automatically be deemed to be met unless the HMRC has doubts, in which case importers will be required to provide evidence of compliance.
  • An increase in the general value tolerance for the use of non-originating (i.e. imported) materials from 10% to 15% of the ex works price of the finished product (15% of the weight of the finished product in the case of a range of agricultural products).
  • Simplifications to the rules for determining the preferential origin of goods when GSP beneficiary countries have been grouped together for origin purposes. Under this facility which is known as regional cumulation of origin, countries can treat materials originating in other countries in the group in accordance with the preferential rules of origin as their own, thereby helping the finished products they are manufacturing to meet the rules for export under the GSP.
  • Subject to the necessary administrative procedures being put in place (procedures were not in place at the time of writing this paper), the formation of a new Regional cumulation group consisting of Argentina, Brazil, Paraguay and Uruguay
  • The exclusion of certain materials from the regional cumulation arrangements
  • Possibility for countries in the SAARC (Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka) and ASEAN (Brunei-Darussalam, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, Vietnam) regional groups to apply to cumulate with each other
  • Possibility for GSP beneficiaries to apply to the EU Commission to cumulate materials originating in countries who have Free Trade Agreements with the EU.

See UK Customs Notice 830 for full details.

The following changes will not enter into force until 1 January 2017:

  • Replacement of the current proofs of preferential origin - GSP Forms A, EUR1 Certificates and Invoice Declarations (for exports from the EU under the bilateral cumulation arrangements), with statements of origin issued by registered exporters on documents which can be transmitted and stored electronically – the Registered Exporter (REX) System
  • Use of commercial documents for the statement of origin – The statement of origin issued by the registered exporter will be able to be inserted on a commercial document such as an invoice delivery note or packing list, which can be transmitted and stored electronically. 
  • A simple registration process which will also apply to the UK companies who wish to export materials, components and parts to GSP beneficiary countries under the bilateral cumulation arrangements. It will involve the completion of 5 boxes on single page form which will be sent to HMRC who will issue the necessary registration number. 
  • A database of Registered Exporters – The European Commission will maintain a central database of all exporters registered in the EU and in GSP beneficiary countries to export under the GSP – it will be available for consultation by the public via the internet – and UK companies importing under the GSP will be required to consult it prior to importation, to confirm the registration number of their supplier.

 

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