A reminder to businesses importing goods under GSP preference that the new GSP regulation comes in to force from 1 January 2014. We have previously written at length about these changes and HMRC has issued a Customs Information Paper (CIP76) outlining these changes.
- The number of countries benefiting under GSP will fall from 176 to 87;
• 49 least developed countries will receive duty free access as will a further 38 countries if they implement certain international conventions (labour standards etc.,);
• The number of products benefiting from relief will increase;
• The new scheme will operate for a period of 10 years; and
• The status of beneficiary countries (whether they qualify or not) will be revised continuously and if a country no longer qualifies it will be removed from benefit following a period of at least one year.
We recommend businesses review these new measures to determine their impact. Note that certain rules must be met for goods to benefit under preferential arrangements. These include the goods meeting a specific origin rule set out in the agreement (e.g. including 60% local content), documentary evidence is available, the goods are shipped directly (or if indirectly there is an audit trail and the goods have not been worked).
The customs authorities audit businesses entitlement to preference and will collect any underpayments going back up to three years where the conditions are not met. As such, we recommend businesses implement processes to monitor and manage these compliance risks.
If you would like to discuss implementing such procedures then please contact us.