AMCHAM, FCCISL clarify GSP position

The American Chamber of Commerce (AMCHAM) and the Federation of Chamber of Commerce and Industry (FCCISL) in consultation with the US Embassy in Sri Lanka wishes to inform its members and all other exporters to USA that the United States Congress did not reauthorize the Generalized System of Preferences (GSP) trade benefit before the authorizing law lapsed on December 31, 2010.

The GSP program provided trade preferences for 131 countries, and all of these exporters will not receive GSP benefits until the program has been reauthorized. This decision applies to the entire world, and is not specific to Sri Lanka.

The GSP program has lapsed before, and each time the GSP program was reauthorized, and it is expected that the GSP program will be re-authorized again. Exporters are encouraged to continue to claim GSP benefits, because in the past benefits were made retroactive to the expiration of the program.

Exporters to USA are kindly requested to consider the following:-

* Sri Lankan eligible export products which were hitherto benefited from US GSP scheme will also be excluded and liable to pay normal custom duties when entering into the US market as stated above.

It should also be noted that the American importers who keep proper records can claim duty free treatment for eligible products as and when the US Congress extend the duration of the US GSP Scheme.

Since Form ‘A’ is no longer use by the US Customs, it is the responsibility of the American importer to keep the proper documents and submit them to claim benefits from the US Customs at the appropriate time.

We also urge Sri Lankan exporters to the USA under US GSP Scheme to request their buyers upon importers to keep all import records as ‘If and when GSP is renewed retroactively the US custom authorities will automatically process refunds of duties deposited on program eligible entries.’

Sri Lanka has been a beneficiary of the US GSP Scheme since its inception. Sri Lanka has been ranked as 14th Top Exporter under US GSP Scheme in 2006. Rubber tires, plastic sacks and bags, rubber gloves, activated carbon weighing machine weights, gold jewellery, porcelain and China household ware and Rubber floor coverings were among the major export products benefited from the US GSP Scheme.

To qualify the eligile and apparel articles, footwear, handbags and luggage flat goods, kitchen and bed linens, leather products, electronic products are not eligible to receive duty free treatment under this scheme.

In order to qualify the eligible products for duty free treatment, the product must have 35 percent of domestic value addition and ‘substantially transformed’ the imported material and input.

We will closely monitor the future developments of the scheme and keep Sri Lankan exporting community informed of any developments.

More analytical information on trade policy issues of this nature can be accessed via the Trade Watch Series of the FCCISL on their blog.

(www.blog.fccisl.lk)