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GSP Set to Expire on December 31, 2017

The Generalized System of Preferences (GSP) is set to expire on December 31, 2017. Importers who have enjoyed lower duty or duty free status for products under GSP need to prepare themselves. This is not the first time that Congress has failed to reauthorize GSP at expiration. Assuming we do not see any quick action by Congress in the remaining days of 2017, entries of product from GSP countries will be treated as general column products beginning January 1, 2018.

Here are some possible scenarios that may play out in the coming year:

Scenario #1.) GSP is renewed at a later date with retroactive adjustment. In the past, we have seen Congress renew GPS while allowing for retroactive claiming of GSP benefits for entries of product that entered while GSP benefits were temporarily in lapse. Each importer’s Customs Broker should mark applicable entries during this period so that there is a record of entries that would be eligible to claim back duties in case GSP is reauthorized with retroactive benefits. We also do recommend that importers keep their own record of entries rather than relying completely on the Customs Broker’s records.

Scenario #2.) GSP is renewed without any retroactive adjustment. In such an instance, entries entered during the period when GSP was not authorized would remain in the same status after GSP is renewed. Importers would be responsible for paying normal duties and not expect any refund back on product entered when GSP was in lapse.

Scenario #3.) It is entirely possible that GSP may fundamentally change. The Trump administration has been vociferously arguing against a number of trade agreements. It may be that certain countries may have their GSP privileges removed permanently. It is difficult to say under the current political climate.

In the past, we have seen Congress take many months to reauthorize GSP. However, given the current political climate, I think it is impossible to predict when/if GSP benefits will be reauthorized. Importers should not proceed with the expectation that GSP will be reauthorized in the same way it has in the past.

Category: News, CustomsDecember 22, 2017

Author: Jason Ting

http://www.cargocentric.com

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