GSP Program Expired July 31
The GSP expiration affects U.S. companies that import from the 127 eligible countries that receive preferential duty treatment (duty free status). GSP is intended to foster trade with developing countries and the duty free status is based on the country of origin.
The GSP program is regularly reviewed to ensure the beneficiary countries are still considered to be ‘developing’. And, because GSP reduces US revenue it must be reviewed and renewed on a regular basis by the US Congress. The Generalized System of Preferences expired on July 31, 2013, having not been brought forward for a vote in Congress prior to their summer recess. The earliest GSP can be renewed is after Congress returns from summer recess on September 6th.
Companies importing from previously GSP-eligible countries are now responsible for all applicable duties and taxes. U.S. Customs and Border Protection requires importers to pay the normal trade relations duty rate but continue to flag GSP-eligible importations with the applicable Special Programs Indicator for GSP (“A” or “A+” or “A*”). If GSP is renewed with a retroactive clause, which historically it has been, use of the SPI will allow CBP to process automatic duty refunds.
We will keep you updated with upcoming changes or renewal of the Generalized System of Preferences. If you have any questions or concerns, please do not hesitate to reach out to us.