Possible Retroactive Renewal of the Generalized System of Preferences (GSP)

After a nearly two-year hiatus, Congress appears ready to reinstate the Generalized System of Preferences (GSP), which provides duty-free treatment for selected goods from “beneficiary developing countries”.  Moreover, Congress appears ready to make the renewal retroactive to July 31, 2013, when it expired, and to provide a mechanism for importers to receive retroactive refunds of duty deposits.

H.R. 1891, introduced by House Ways and Means Committee Chairman Paul Ryan (R-WI), would extend the GSP, the African Growth and Opportunity Act (AGOA) and duty preferences for Haiti. It is expected to be joined with legislation providing the Administration with “fast track” trade negotiating authority, and forwarded to the President for signing.

The bill would reinstate GSP through December 31, 2017.  It would also provide retroactive application for certain entries liquidated and/or reliquidated without GSP treatment.  Retroactive GSP treatment may be granted only if a request for GSP treatment is filed with U.S. Customs and Border Protection (CBP) within 180 days after the effective date of the act.  The request must contain sufficient information to enable Customs –

(i)              To locate the entry; or

(ii)            To reconstruct the entry if it cannot be located.

Upon approval of an application, Customs will liquidate or reliquidate the entry with duty free GSP treatment. Refunds of duty deposits would be paid, without interest, within 90 days after such liquidation or reliquidation.

The bill would also amend GSP to allow the designation of certain cotton articles as GSP eligible, but only if made in “least developed developing countries” (LDDCs).

We will monitor the progress of the bill and report. In the meantime, your company may want to identify any records which might be necessary for Customs to locate or reconstruct subject entries so that retroactive refunds can be claimed once the GSP re-authorization takes effect.

Please do not hesitate to contact us if you have any questions.