The Trump administration has taken a more active approach to enforcement of the Generalized System of Preferences, which provides duty-free treatment for imports of thousands of products. This shift presents both challenges and opportunities for companies utilizing this program.
Since 1974 GSP has eliminated tariffs on about 3,500 products when imported from any of 120 beneficiary developing countries and territories. GSP also provides benefits for about 1,500 additional products from least-developed countries. The program has most recently been authorized through Dec. 31, 2020.
To benefit from GSP a product must be either wholly obtained or sufficiently manufactured in a BDC. Sufficiently manufactured means that all third-country materials have undergone a substantial transformation and at least 35 percent of the good’s value has been added in the BDC. The product must also be imported directly from the BDC.
In addition, BDCs must meet statutorily-established eligibility criteria, including respecting arbitral awards in favor of U.S. citizens or corporations, combating child labor, respecting internationally recognized worker rights, providing adequate and effective intellectual property rights protection, and providing the U.S. with equitable and reasonable market access.
© 2019, Sandler, Travis & Rosenberg, P.A. Originally published in the [March 20, 2019] issue of the Sandler, Travis & Rosenberg Trade Report. Reprinted by permission.
- Posted by Joe DeSilvetri
- On March 29, 2019
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