EU Amendments on GSP come into force

Posted on: 02/01/2014

European Parliament vote grants Pakistan GSP+ status: A vote by the European Parliament on 12th December 2013 to allow preferential market access to the European Union (EU) for a group of developing countries has finally granted Pakistan its long-awaited GSP+ status. The voted overwhelmingly defeated a resolution objecting to the European Commission's proposal to grant GSP+ to ten countries including Pakistan. The resolution was defeated by 409 votes against, while 182 voted in favour.   GSP+ will now become effective from 1 January 2014 for Pakistan, which already benefits from reduced tariffs under the overall GSP scheme. With the new status, Pakistani companies are expected to benefit from zero tariffs on all products exported to the EU.

An additional 9 countries were also granted GSP+ status to start on 1st January 2014 – the full list is Armenia, Bolivia *, Costa Rica #, Cape Verde, Ecuador *, Georgia *. Mongolia, Peru #, Pakistan, Paraguay *

# Also under an EU FTA. * FTA under negotiation

Countries no longer eligible for GSP customs duty at import into the EU under the new agreement for any goods are: Argentina; Bahrain; Belarus; Brazil; Brunei Darussalam; Cuba; Gabon; Kazakhstan; Kuwait; Libya; Macao (SRA); Malaysia; Oman; Palau; Qatar; Russia; Saudi Arabia; UAE; Uruguay and Venezuela.

Countries losing GSP customs duty for some commodity codes at import into the EU from 1st January 2014 are:

·         Costa Rica – all qualifying products covered by EU FTA from 1st October 2013

·         Ecuador – losing GSP on goods within Chapters 6 and 16. Full list in Annex V of EU Regulations reference L303/30 dated 31/10/2012. 

·         China – losing GSP on goods within Chapters 1-5, 7-13, 17-23, 28-29, 31-46, 50-76, 78-79 and 81-96.  Full list in Annex V of EU Regulations reference L303/30 dated 31/10/2012.  Also under surveillance so further GSP duty rates subject to removal within 2014-2016 (graduating             out of the sheme)

·         India – losing GSP on goods within Chapters 25, 27, 28, 29, 31-38, 41, 50-60 and 87-89. Full list in Annex V of EU Regulations reference L303/30 dated 31/10/2012. Also under surveillance so further GSP duty rates subject to removal within 2014-2016 (graduating out of the            scheme)

·         Indonesia – losing GSP on goods within Chapters 1-5, 15 and 31-38. Full list in Annex V of EU Regulations reference L303/30 dated 31/10/2012. Also under surveillance so further GSP duty rates subject to removal within 2014-2016 (graduating out of the sheme)

·         Nigeria – losing preference on goods within Chapter 41. Full list in Annex V of EU Regulations reference L303/30 dated 31/10/2012

·         Thailand – losing preference on goods within Chapters 16, 17 and 71. Full list in Annex V of EU Regulations reference L303/30 dated 31/10/2012. Also under surveillance so further GSP duty rates subject to removal within 2014-2016 (graduating out of the sheme)

·         Ukraine – losing preference on goods within Chapter 86. Full list in Annex V of EU Regulations reference L303/30 dated 31/10/2012

The new scheme starts 1st January 2014 for a rolling 10 years.  Subject to review and changes as required.

WARNING: EU GSP Scheme to change again – China and Thailand removed: one of the main things we are going to have to get used to with the new EU GSP Scheme (starting 1st January 2014) is that it is a dynamic, chargeable scheme.  This is clearly demonstrated in the fact that the EU has announced 4 more countries that will be removed from GSP from 1st January 2015.  This is because, under the new conditions of EU GSP, when a country has been classed by the World Bank as a Middle Growth Economy for 3 years they cease to be eligible for GSP.  Earlier this year the World Bank issued their report which showed that China, Ecuador, the Maldives and Thailand have met these criteria so they are removed from the scheme entirely from 1st January 2015.  This has nothing to do with graduating out of the scheme (which may still affect India and Indonesia GSP status in coming years).

            Therefore you can claim GSP for these markets (China, Ecuador, the Maldives and Thailand) during 2014 (apart from on the tariff lines removed from GSP on 1st January 2014) but have to plan for no GSP duty benefits from 2015.  If the economy of these or any other countries removed under the World Bank criteria falls below Middle Growth of 12 months or more then the EU can add them back into the scheme.  If you rely on GSP you must know your supply countries and monitor their economy so you can keep up to speed with developments.

 

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