On September 14, 2016 the President issued a proclamation ending a U.S. government suspension issued in 1989 and restoring trade benefits to Burma, plus new trade benefits not previously granted, under the Generalized System of Preferences (“GSP”). The GSP is a duty reduction measure, which provides cost savings and applies to goods covered under thousands of individual tariff provisions. In short, the GSP permits duty-free entry for qualifying goods.
The restored benefits and new benefits for qualifying goods become effective November 13, 2016.
Specifically, the presidential proclamation designated Burma as a GSP-eligible beneficiary developing country or BDC. Consequently, Burmese goods qualifying as an “eligible article” pursuant to 19 USC 2463 should be eligible for duty-free entry into the United States on or after November 13th. Moreover, Burma’s GSP benefits were expanded through two additional provisions in the proclamation. First, Burma was designated as an ASEAN member country for GSP purposes. Consequently, Burma will be grouped with Cambodia, Indonesia, the Philippines and Thailand (all ASEAN members designated in the GSP) and the group will be treated as a single BDC for GSP purposes. As a result, materials, components and production from any or all of the designated ASEAN countries may be used to qualify the finished product as GSP-eligible. Second, Burma was designated as a “least-developed” BDC, which further expands the list of products from Burma potentially eligible for GSP duty-free treatment.
GSP questions and related cost savings arise in a number of different contexts. Is a particular product identified in the tariff (the HTSUS) as a GSP-eligible item? Is a particular country (or group of countries) a GSP-eligible BDC? If the production in a BDC involves non-BDC components or materials or if the production takes place in more than one country, then is the finished product GSP-eligible? What records or documents might be required for U.S. Customs and Border Protection?