17. Generalized System Of Preferences (GSP)

 

17. Generalized System Of Preferences (GSP) 

The Generalized System of Preferences (GSP) is a preferential program that provides  duty-free treatment to products of beneficiary designated countries and territories. The program  was authorized by the Trade Act of 1974 (19 U.S.C. 2461 et seq.) as a means of promoting  economic development in the developing countries and was instituted on January 1, 1976. The  GSP periodically expires and must be renewed by Congress to remain in effect. CBP provides  the trade community with notification of these expirations and renewals. 

ELIGIBLE ITEMS 

The GSP eligibility list contains a wide range of products classifiable under 3,400  different subheadings in the Harmonized Tariff Schedule of the United States (Tariff Schedule).  These items are identified by the symbols “A”, “A*”, or “A+” in the “Special” subcolumn under 

column 1 of the tariff schedule. Merchandise classifiable under a subheading designated in this  manner may qualify for duty-free entry if imported into the United States directly from any of  the designated countries and territories. Items identified by an “A*” may be excluded from the  exemption if imported from certain designated countries. 

The list of countries and exclusions, as well as the list of GSP-eligible articles, will  change from time to time. For example, countries immediately lose GSP eligibility upon joining the European Union. Consult the Federal Register at www.ustr.gov for the most current  information regarding country and/or commodity eligibility. Click on the link to “Trade and  Development” and then the link for the “USTR Reference Programs.” A GSP guidebook is  available at 

http://www.ustr.gov/assets/Trade_Development/Preference_Programs/GSP/asset_upload_file890 _8359.pdf.

Importers and other interested parties may obtain an advance ruling to determine whether  a particular product is eligible for GSP treatment, see Chapter 13 for details regarding the  issuance of administrative rulings. 

Claims 

For commercial shipments requiring a formal entry, a claim for duty-free status is made  under the GSP by declaring on the entry summary that the country of origin is a designated  beneficiary developing country and by placing the symbol “A” as a prefix to the subheading of  the tariff schedule for each article for which such treatment is claimed. Eligible merchandise will  be entitled to duty-free treatment provided the following conditions are met: 

• The merchandise must be the “product of” a beneficiary country. This  requirement is satisfied when: 

(1) The goods are wholly the growth, product, or manufacture of a beneficiary  country, or 

(2) When an article is produced from materials imported into the beneficiary  developing country and those imported materials are substantially transformed  into a new or different article of commerce in a beneficiary country. A 

statement to that effect shall be included on the commercial invoice. 

• The merchandise must be imported directly from any beneficiary country into the  customs territory of the United States. 

• The cost or value of materials produced in the beneficiary developing country  and/or the direct cost of processing performed there must be at least 35 percent of  the appraised value of the goods. 

The cost or value of materials imported into the beneficiary developing country may be  included in calculating the 35-percent value-content requirement of the GSP only if such  materials undergo a “double substantial transformation” in the beneficiary developing  country. That is, such materials must be substantially transformed in the beneficiary  developing country into a new and different intermediate article of commerce, which is then  transformed a second time in the production of the final good. The phrase “direct costs of  processing” refers to costs directly incurred in, or which can be reasonably allotted to, the  processing of the article. Such costs include, but are not limited to: all actual labor costs  involved with production of the good; dies, molds, tooling, and depreciation on machinery  and equipment; research and development; and costs of inspecting and testing the  merchandise. Profit and general expenses are not considered direct costs of processing.  General expenses are those that cannot be allocated to the good or costs that do not relate to production of the good, such as administrative salaries, insurance, advertising, and salaries  for sales employees. 

Sources Of Additional Information 

CBP rules and regulations on the GSP are incorporated in sections 10.171-10.178 of the  CBP Regulations. Address any question you may have on the administrative or operational  aspects of the GSP to: 

CBP Trade Agreements Branch 

 U.S. Customs and Border Protection 

1300 Pennsylvania Avenue, NW 

Washington, DC 20229 

 Requests for information concerning additions to or deletions from the list of  merchandise eligible under the GSP, or changes to the list of beneficiary developing countries,  should be directed to: 

Chairman, Trade Policy Staff Subcommittee 

Office of U.S. Trade Representative 

600 17th St., NW 

Washington, DC 20506 

GSP Independent Countries 

[note: typesetter should have countries in two or three columns per page]  

Afghanistan 

Albania 

Algeria 

Angola 

Antigua and Barbuda 

Argentina 

Armenia 

Bahrain 

Bangladesh 

Barbados 1

Belize¹  

Benin ²  

Bhutan 

Bolivia³

  

1 Member countries of the Caribbean Common Market—CARICOM (treated as one country). 

2 Member countries of the West African Economic and Monetary Union—WAEMU (treated as one country).  3 Member countries of the Cartagena Agreement—Andean Group (treated as one country).  

Bosnia and Hercegovina 

Botswana 4 

Brazil 

Bulgaria 

Burkina Faso 

Burundi 

Cambodia 5 

Cameroon 

Cape Verde 

Central African Republic 

Chad 

Colombia ³  

Comoros 

Congo (Brazzaville) 

Congo (Kinshasa)

Costa Rica 

Côte d’Ivoire 

Croatia 

Djibouti 

Dominica 1 

Dominican Republic 

Ecuador 3 

Egypt 

El Salvador 

Equatorial Guinea 

Eritrea 

Ethiopia 

Fiji 

Gabon 

Gambia, The 

Georgia 

Ghana 

Grenada 1 

Guatemala 

Guinea 

Guinea-Bissau 2 

  

4 Member countries of the Southern Africa Development Community—SADC (treated as one country).  5 Association of South East Asian Nations—ASEAN (GSP-eligible countries only) treated as one country.  3 Member countries of the Cartagena Agreement—Andean Group (treated as one country).  1 Member countries of the Caribbean Common Market—CARICOM (treated as one country). 

1 Member countries of the Caribbean Common Market—CARICOM (treated as one country).  2 Member countries of the West African Economic and Monetary Union—WAEMU (treated as one country).  

Guyana 1 

Haiti 

Honduras 

India 

Indonesia 5 

Iraq 

Jamaica 1 

Jordan 

Kazakhstan 

Kenya 

Kiribati 

Kyrgyzstan 

Lebanon 

Lesotho 

Macedonia, Former Yugoslav Republic of 

Madagascar 

Malawi 

Mali ²  

Mauritania 

Mauritius 4 

Moldova 

Mongolia 

Mozambique 

Namibia 

Nepal 

Niger ⁴

Nigeria 

Oman 

Pakistan 

Panama 

Papua, New Guinea 

Paraguay 

Peru 3 

Philippines 5 

Romania 

  

4 Member countries of the Southern Africa Development Community—SADC (treated as one country).  5 Association of South East Asian Nations—ASEAN (GSP-eligible countries only) treated as one country. 

1 Member countries of the Caribbean Common Market—CARICOM (treated as one country).  4 Member countries of the Southern Africa Development Community—SADC (treated as one country). 

3 Member countries of the Cartagena Agreement—Andean Group (treated as one country).  5 Association of South East Asian Nations—ASEAN (GSP-eligible countries only) treated as one country. 

Russia 

Rwanda 

Saint Kitts and Nevis 1 

Saint Lucia 1 

Saint Vincent and the Grenadines ¹  

Samoa 

Sao Tome and Principe 

Senegal 2 

Seychelles 

Sierra Leone 

Solomon Islands 

Somalia 

South Africa 

Sri Lanka 

Suriname 

Swaziland 

Tanzania 4 

Thailand ⁵  

Togo 2 

Tonga 

Trinidad and Tobago 1 

Tunisia 

Turkey 

Tuvalu 

Uganda 

Uruguay 

Uzbekistan 

Vanuatu 

Venezuela 3 

Yemen, Republic of 

Zambia 

Zimbabwe 

Non-Independent Countries and Territories 

Anguilla 

  

1 

2 Member countries of the West African Economic and Monetary Union—WAEMU (treated as one country).  4 Member countries of the Southern Africa Development Community—SADC (treated as one country).  5 Association of South East Asian Nations—ASEAN (GSP-eligible countries only) treated as one country.  2 Member countries of the West African Economic and Monetary Union—WAEMU (treated as one country).  1 Member countries of the Caribbean Common Market—CARICOM (treated as one country).  3 Member countries of the Cartagena Agreement—Andean Group (treated as one country). 

British Indian Ocean Territory 

Christmas Island (Australia) 

Cocos (Keeling) Island 

Cook Islands 

Falkland Islands (Islas Malvinas) 

Gibraltar 

Heard Island and McDonald Islands 

Montserrat ¹  

Niue 

Norfolk Island 

Pitcairn Island 

Saint Helena 

Tokelau 

Turks and Caicos Islands 

Virgin Islands, British 

Wallis and Funtuna 

West Bank and Gaza Strip 

Western Sahara