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29-09-2008, 07:13 PM
http://www.mondaq.com/article.asp?articleid=64560
On 6 August 2008, Council Regulation 732/2008, applying a scheme of generalized preferences for the period from 1 January 2009 to 31 December 2011, was published in the Official Journal of the European Union, granting preferential access into the European Union of imports from 176 Developing Countries and Territories. The current Generalised System of Preferences (GSP) Regulation will come to an end on 31 December 2008. The substance of the current scheme remains unchanged and modifications that are introduced result from the regular implementation of the scheme, such as the review of the graduation system and eligibility for the GSP + scheme.
Like the current GSP Regulation, the new Regulation will provide for three arrangements namely:
1. A general arrangement with no duties for non-sensitive products and duty reductions for sensitive products,
2. A special incentive arrangement (GSP +) granting duty free access, and
3. A special arrangement for the least developed countries (LDCs), also known as "EBA" (Everything But Arms) basically providing for duty and quota free treatment for imports from these countries.
Product and country coverage of the new GSP Regulation also remain unchanged, with the exception of Moldova which has recently been removed from the list of beneficiary counties due to it being granted preferences under a separate legal instrument by the European Council in March 2008. Myanmar and Belarus remain temporarily excluded from coverage due to violation of ILO conventions.
The principle of GSP + will continue to exist. Countries that believe that they fulfill the eligibility conditions can apply to the European Commission by 31 October 2008. It is thus possible that new countries will obtain GSP + status. For the 14 countries that currently already enjoy GSP + status, this status will not be extended automatically, but they, too, will have to lodge a new application to the Commission by 31 October 2008, in order to benefit as of 1 January 2009.
In order to obtain or maintain GSP + status, countries must fulfill the conditions of Article 8 of the Regulation, i.e. they must have ratified and effectively implemented the 27 conventions listed in Annex III to the Regulation (conventions on human and labour rights, sustainable development and good governance) and undertake to maintain this ratification and their implementing legislation. Furthermore the country must be considered to be a "vulnerable country" within the meaning of Article 8(2).
An additional opportunity to apply for GSP + status is provided for mid-2010: applications for GSP + must reach the Commission by 30 April 2010 in order to benefit from GSP + by 1 July 2010.
A number of changes will occur with regard to "graduation", i.e. the exclusion of certain product sectors for certain countries from GSP benefits: country/product sections currently graduated can be reversed and new country/product sections can be introduced.
The new Regulation introduces, as of 1 January.2009, graduation for Section XII (footwear, headgear, umbrellas etc.) from Vietnam.
All other changes concern "degraduation", i.e. current graduations will be reversed and GSP benefits can thus be reinstated. This is true for the following country/product sections:
China:
Section X (wood pulp, paper and articles thereof)
Algeria:
Section V (mineral products)
Indonesia:
Section IX (wood and articles thereof)
India:
Section XIV (pearls, precious stones, jewelry)
Russian Fed.:
Section VI (products of the chemical and allied industry)
Section X (wood pulp, paper and articles thereof)
Section XV (base metals and articles thereof)
Thailand:
Section XVII (vehicles, aircraft, vessels and associated transport equipment)
South Africa:
Section XVII (vehicles, aircraft, vessels and associated transport equipment)
For the time being, the existing Rules of Origin will continue to apply ; these consist of a mix of origin tests, such as specific processing tests, tariff shift tests and value added tests. A review of these rules was launched in 2003, and it was intended that revised rules of origin could enter into force together with the new GSP by 1 January 2009, which would take as a point of departure a single across the board value added test (with exceptions for particular product categories).
However, this new origin approach has run into considerable opposition from the EU Member States. It is therefore impossible for the new rules to enter into force on the first of January 2009, and, thus, the current origin rules will continue to apply.
The new GSP Regulation will be of interest to all importers into the European Union of goods from developing countries and they should check whether they will be affected by any of the changes introduced by the new Regulation.
Mayer Brown is a global legal services organization comprising legal practices that are separate entities ("Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP, a limited liability partnership established in the United States; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales; and JSM, a Hong Kong partnership, and its associated entities in Asia. The Mayer Brown Practices are known as Mayer Brown JSM in Asia.
This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.
On 6 August 2008, Council Regulation 732/2008, applying a scheme of generalized preferences for the period from 1 January 2009 to 31 December 2011, was published in the Official Journal of the European Union, granting preferential access into the European Union of imports from 176 Developing Countries and Territories. The current Generalised System of Preferences (GSP) Regulation will come to an end on 31 December 2008. The substance of the current scheme remains unchanged and modifications that are introduced result from the regular implementation of the scheme, such as the review of the graduation system and eligibility for the GSP + scheme.
Like the current GSP Regulation, the new Regulation will provide for three arrangements namely:
1. A general arrangement with no duties for non-sensitive products and duty reductions for sensitive products,
2. A special incentive arrangement (GSP +) granting duty free access, and
3. A special arrangement for the least developed countries (LDCs), also known as "EBA" (Everything But Arms) basically providing for duty and quota free treatment for imports from these countries.
Product and country coverage of the new GSP Regulation also remain unchanged, with the exception of Moldova which has recently been removed from the list of beneficiary counties due to it being granted preferences under a separate legal instrument by the European Council in March 2008. Myanmar and Belarus remain temporarily excluded from coverage due to violation of ILO conventions.
The principle of GSP + will continue to exist. Countries that believe that they fulfill the eligibility conditions can apply to the European Commission by 31 October 2008. It is thus possible that new countries will obtain GSP + status. For the 14 countries that currently already enjoy GSP + status, this status will not be extended automatically, but they, too, will have to lodge a new application to the Commission by 31 October 2008, in order to benefit as of 1 January 2009.
In order to obtain or maintain GSP + status, countries must fulfill the conditions of Article 8 of the Regulation, i.e. they must have ratified and effectively implemented the 27 conventions listed in Annex III to the Regulation (conventions on human and labour rights, sustainable development and good governance) and undertake to maintain this ratification and their implementing legislation. Furthermore the country must be considered to be a "vulnerable country" within the meaning of Article 8(2).
An additional opportunity to apply for GSP + status is provided for mid-2010: applications for GSP + must reach the Commission by 30 April 2010 in order to benefit from GSP + by 1 July 2010.
A number of changes will occur with regard to "graduation", i.e. the exclusion of certain product sectors for certain countries from GSP benefits: country/product sections currently graduated can be reversed and new country/product sections can be introduced.
The new Regulation introduces, as of 1 January.2009, graduation for Section XII (footwear, headgear, umbrellas etc.) from Vietnam.
All other changes concern "degraduation", i.e. current graduations will be reversed and GSP benefits can thus be reinstated. This is true for the following country/product sections:
China:
Section X (wood pulp, paper and articles thereof)
Algeria:
Section V (mineral products)
Indonesia:
Section IX (wood and articles thereof)
India:
Section XIV (pearls, precious stones, jewelry)
Russian Fed.:
Section VI (products of the chemical and allied industry)
Section X (wood pulp, paper and articles thereof)
Section XV (base metals and articles thereof)
Thailand:
Section XVII (vehicles, aircraft, vessels and associated transport equipment)
South Africa:
Section XVII (vehicles, aircraft, vessels and associated transport equipment)
For the time being, the existing Rules of Origin will continue to apply ; these consist of a mix of origin tests, such as specific processing tests, tariff shift tests and value added tests. A review of these rules was launched in 2003, and it was intended that revised rules of origin could enter into force together with the new GSP by 1 January 2009, which would take as a point of departure a single across the board value added test (with exceptions for particular product categories).
However, this new origin approach has run into considerable opposition from the EU Member States. It is therefore impossible for the new rules to enter into force on the first of January 2009, and, thus, the current origin rules will continue to apply.
The new GSP Regulation will be of interest to all importers into the European Union of goods from developing countries and they should check whether they will be affected by any of the changes introduced by the new Regulation.
Mayer Brown is a global legal services organization comprising legal practices that are separate entities ("Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP, a limited liability partnership established in the United States; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales; and JSM, a Hong Kong partnership, and its associated entities in Asia. The Mayer Brown Practices are known as Mayer Brown JSM in Asia.
This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.