UK replace General Scheme of Preferences

The Developing Countries Trading Scheme (DCTS) replaced the UK General Scheme of Preferences (GSP) last week, but proofs of origin remain the same and there will be a grace period to allow the use of UK GSP documents to claim preference for goods that qualify for a preferential duty rate under UK GSP and DCTS.

The DCTS, which came into force on the 19th June means UK businesses can import from 65 countries across Africa, Asia, Oceania and the Americas, with less red-tape and lower costs.

For goods that qualify for a preferential duty rate under DCTS, the claim to preference can be made using a UK GSP proof of origin, provided it was issued on or before 31st December 2023, BUT from 2024 onwards, any consignments making reference to GSP will not be able to clear with any Preference applied. This includes any goods in transit or stored in a bonded warehouse.

Existing Form A’s will be valid and HMRC have implemented a transition period, GSP origin statements valid until 31/12/2023.

The scheme aims to benefit the economies of the developing countries and UK businesses and consumers, by lowering the price of imported goods and making it easier to trade internationally, through simplifying and liberalising the product specific rules of origin (PSRs). For example, many of the Tariff chapters allow for 75% non-originating content in the PSRs, and almost all PSRs allow for alternative “or” rules.

The scheme means that a wide variety of products, including clothes, shoes, foodstuffs, including olive oil and tomatoes will benefit from lower or zero tariffs.

The scheme also simplifies complex trade rules such as rules of origin, which dictate what proportion of a product must be made in its country of origin. The Government gave the example of making it easier for businesses like textile firm DBL Group from Bangladesh to export.

Mohammed Jabbar, Managing Director of DBL Group, said: “These new rules will be a game changer for us. They mean we will be able to source our cotton from many more countries than we could before, which will make the business more competitive and our supply chains a lot more resilient.”

The scheme builds on a wider programme from the UK to drive a free trade, pro-growth agenda across the globe, including an initiative to grow trade between the UK and selected lower and middle-income Commonwealth countries.

Some duty rates may have changed from GSP and are subject to change at any time. If you have regular GSP shipments, we can can review your situation and explain how the changes affect you.

If you have any questions or concerns, please EMAIL Michelle Redman.