The European Union has granted generalized system of preferences (GSP) to 89 countries including developing, least developed countries (LDCs) and separate customs territories. The current GSP scheme is governed by the Commission Regulation (EU) No. 1063/2010, which has been in effect from 1 January 2011.
The EU has 28 countries members: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Poland, the Netherlands, Portugal, Romania, Spain, Slovakia, Slovenia, Sweden, and the United Kingdom. Croatia became the 28th member of the EU on 1 July 2013. Iceland, Macedonia, Montenegro, Serbia and Turkey are candidate countries. (Click here for details)
The GSP of the EU includes 3 types as follows:
1) General Arrangement: extended to over 40 developing countries, by tariff exemption or reduction of the MFN normal tariff rate covering more than 6,200 items which are categorized into sensitive and normal products.
2) Special Arrangement for Least Developed Countries: known as the Everything But Arms (EBA) with duty free and quota free access extended to 49 LDCs including Lao PDR. In other words, all products except arms and ammunition (HS chapter 93) exported from Lao PDR to the 28 member states qualify for zero duties provided that the rules of origin are fulfilled.
3) Special Intensive Arrangements or GSP+: is the preference scheme that is extended to vulnerable countries by tariff reduction for products originating from countries that effectively ratify and enforce the Convention on Sustainable Development including environment protection, labor right and drugs control.
Rules of Origin (ROO)
In order to qualify for the ROO of the EU, the exporter must fulfill the origin criteria and provide a certificate of origin Form A.
The new ROO of the EU use the following origin-conferring methods:
1. Wholly Obtained or Produced (WO) criteria which mostly covers agricultural and agricultural processed products, minerals etc which will be exempted from import duty at 0% automatically.
2. Substantial transformation criteria:
§ Change in Tariff Heading (CTH);
§ Regional value contents (RVC) of 60% of the product value.
The EU allows exporting countries to use imported materials with RVC with a 40% criteria in the following scenario:
1. ASEAN country members, except Myanmar (As of July 2013, the EU is considering reinstating GSP for that country);
2. The EU, Switzerland, Norway and Turkey (except for agricultural products); and
3. Cumulation from countries with which the EU has a free trade agreement (FTA) and SAARC countries but must be first approved by the EU.
Normally for the preference to be granted the requirement for direct transport from beneficiary countries to the EU has to be fulfilled. However, the direct transport provision of the EU has been replaced by a relaxed “non-manipulation” requirement. Unless customs authorities have reasonable doubts, products imported under GSP will be assumed to have met direct transport requirements and systematic evidence of direct transport is no longer required. In case of doubt, however, EU customs authorities may still request evidence of compliance. It is also possible to split consignments in route to the EU, as long as such consignments remain under customs supervision.
The EU Preference will be waived for: 1) Goods that do not have a commercial purpose and do not exceed 500 £; and 2) Good from travelers that not exceed 1,200 £.
Export below 6,000 £ only require an Invoice Declaration instead of Form A.
The certificate of origin Form A may be acquired from the Department of Import and Export, or the Provincial Departments of Industry and Commerce and the Authority on Special and Specific Economic Zone. Documents required for the application are:
1). Application Letter;
2). Completed Form A;
3). Invoice and Packing List;
4). Detailed Customs Declaration;
5). Copy Bill of Ladding;
6). Invoice (In case of buying)
7). Cost statment or working process (in case of imported raw material).
From 1 January 2017, the EU will allow self-certification whereby the exporter from the beneficiary countries that are ready to join this scheme may use an Invoice Declaration instead of Form A.
In short: for the exports to be granted GSP, exports from Laos shall fulfill the following origin criteria : 1) being wholly obtained or produced products such as agricultural and mineral products ; or 2) in the case of imported raw materials (outside ASEAN and the EU) substantial transformation criteria must be met.
Any inquiry regarding GSP and ROO of the EU can be addressed to: Certification of Origin Division, Department of Import and Export, Ministry of Industry and Commere
Tel/Fax: 021-450255, email: email@example.com
Export Help of the EU: