GSP scheme of the European Union

European Union's GSP scheme came into effect on July 1971.The scheme is reviewed and modified periodically. The current scheme is to expire on 31 December 2023.
The first GSP scheme of the European Community spanned an initial phase of 10 years (1971–1981) and was subsequently renewed for a second decade (1981–1991). During this time, the scheme was reviewed each year. The reviews involved changes in product coverage, quotas, ceilings and their administration, beneficiaries and depth of tariff cuts for agricultural products. In 1991, at the end of the second decade, the scheme was due for major revision. Pending the outcome of the Uruguay Round under the General Agreement on Tariffs and Trade (GATT), however, the 1991 scheme was extended with various amendments until 1994. In 1994, the European Community made another 10-year offer as the third cycle for the period from 1995 to 2004. The first phase lasted from 1 January 1995, when the Community adopted the following basic legislative acts: Council Regulation (EC) No. 3281/94, concerning industrial products, and Council Regulation (EC) No. 1256/96, concerning agricultural products. During the second phase, from 1 July 1999 to 31 December 2001, the European Community revised its GSP scheme on the basis of Council Regulation (EC) No. 2820/98. For the period from 1 January 2002 to 31 December 2005, the European Community put in place the third phase of the scheme by adopting Council Regulation (EC) No 2501/2001 of 10 December 2001 applying a scheme of generalized tariff preferences for the period from 1 January 2002 to 31 December 2004, which introduced major changes in the design of the GSP scheme of the European Community with five different arrangements: (a) General arrangements; (b) Special incentive arrangements for the protection of labor rights; (c) Special incentive arrangements for the protection of the environment; (d) Special arrangements to combat drug production and trafficking; (e) Special arrangements for the least developed countries (LDCs): Everything but Arms (EBA) initiative. Based on the guidelines drawn up in 2004 for the decade between 2006 and 2015, the European Community adopted on 27 June 2005 Council Regulation (EC) No. 980/2005 covering the period from 1 January 2006 to 31 December 2008 and simplified the scheme by reducing the number of arrangements from five to three, namely: (a) General arrangements; (b) Special incentive arrangements for sustainable development and good governance – GSP Plus; (c) Special arrangements for LDCs – EBA. This basic structure was maintained under the European Union’s new GSP scheme effective 1 January 2009 to 31 December 2011, as provided by Council Regulation (EC) No. 732/2008 of 22 July 20081 renewing the scheme for the three-year period. The scheme was further extended until 31 December 2013 with a few technical changes by Regulation (EU) No. 512/2011 of the European Parliament and of the Council of 11 May 2011. Regulation (EU) No. 978/2012 of the European Parliament and of the Council of 25 October 2012 applying a scheme of generalized tariff preferences and repealing Council Regulation (EC) No. 732/2008 introduced a major reform of the GSP scheme of the European Union that went into effect 1 January 2014 (appendix I). The reformed scheme, which preserves the general architecture of the GSP scheme of the European Union, is composed of three arrangements: a general arrangement, GSP Plus and the EBA for LDCs. The revised scheme was introduced with major changes. Chapter I of the Handbook explains these arrangements, including changes introduced in the reformed GSP of the European Union. On 1 January 2011, the reform of the GSP rules of origin of the European Union went into force and introduced four major changes in the rules for determining origin. First, while previously the same rules of origin applied to developing countries and LDCs, the new rules frequently include separate provisions for LDCs to address concerns about their capacity constraints. The origin-determining requirements for developing countries have also been modified. Second, the list of products and working or processing operations which confer originating status has been simplified to some degree, and the product-specific origin requirements contained in the current list differ from those in the previous one. Third, important changes have been made in the cumulation provisions that expand the possibility of cumulation. Fourth, the new procedures will be effective from 1 January 2017, at which time the system of registered exporters and self-certification will be introduced. By then the Governments of beneficiary countries are expected to have made necessary preparations, including the installation and management of electronic databases in their customs operations, to implement the new procedures.
The following are beneficiary countries and/or territories of the GSP of the European Union:
(a) EBA beneficiaries – Afghanistan, Angola, Bangladesh, Benin, Bhutan, Burkina Faso, Burundi, Cambodia, the Central African Republic, Chad, Comoros, the Democratic Republic of the Congo, Djibouti, Equatorial Guinea, Eritrea, Ethiopia, the Gambia, Guinea, Guinea-Bissau, Haiti, Kiribati, the Lao People’s Democratic Republic, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Myanmar,9 Nepal, Niger, Rwanda, Samoa, Sao Tome and Principe, Senegal, Sierra Leone, Somalia, the Solomon Islands, South Sudan,10 the Sudan, Timor-Leste, Tuvalu, Togo, Uganda, the United Republic of Tanzania, Vanuatu, Yemen and Zambia;
(b) General GSP beneficiaries – China, Colombia, the Republic of the Congo, the Cook Islands, Honduras, India, Indonesia, Iraq, Kyrgyzstan, the Maldives,11 the Marshall Islands, the Federated States of Micronesia, Nauru, Nicaragua, Nigeria, Niue, the Philippines, Sri Lanka, the Syrian Arab Republic, Tajikistan, Thailand, Tonga, Turkmenistan, Ukraine, Uzbekistan and Viet Nam;
(c) GSP Plus beneficiaries (as of July 2014)12 – Armenia, the Plurinational State of Bolivia, Cabo Verde, Costa Rica, Ecuador, El Salvador, Georgia, Guatemala, Mongolia, Pakistan, Panama, Paraguay and Peru.
Note: China, Ecuador, the Maldives and Thailand will receive GSP preferences until 31 December 2014. These countries, however, were classified by the World Bank as upper-middle-income countries in 2011, 2012 and 2013. Accordingly, these countries will not be entitled to status as beneficiary countries of the European Union’s GSP scheme from 1 January 2015.1