The new EU GSP rules of origin for the LDC Countries

The new EU GSP rules of origin applicable as from the beginning of next year (see Commission Regulation 1063/2010 adopted by the Commission College of Commissioners on 18 November 2010) for the Less Developed Countries, among which by far the main LDCs beneficiary of the EU GSP regime is Bangladesh.


Origin determination for Textiles and Clothing items exported by LDCs to the EU will be based on a “single transformation “ process, which means for a garment assembled in e.g. Bangladesh, although made from let say a Chinese fabric, further exported to the EU, that it will continue to benefit of “zero duty”, while today such garment has not the Bangladeshi origin and thus cannot enter duty free in the EU market.


This has been the result of the compromise that was finalized with EU MS support in order to maintain, on the other hand, the double transformation principle for origin determination of textiles and clothing items from all other GSP countries sources benefiting of the EU GSP regime (except the printing rule, another weak point for Eurocoton from the spinning and weaving perspective, though not used in fact in the EU-GSP trade… at least for the time being).


In the meantime, DG TAXUD has reminded that in fact Bangladesh government complained against the simple transformation origin rule endorsed by the EU for GSP applicable to the LDCs and was also against the facilities agreed with origin cumulation between ASEAN (o.w. Bangladesh is included) and SAARC countries (India, Pakistan, Sri-Lanka, Nepal). Bangladesh Government has further stated officially (as apparently seen also in press statements published in domestic and International media) that it will refuse to give to its exporters an origin certification for garments not manufactured (knitted or woven from yarns) in the country, as part of the Industrial Policy and Investment Strategy developed by Bangladesh in the decade.


This is certainly an excellent news, and to the extent that the Bangladesh Government will be able to control its traffic (we all remember OLAF sanctions against frauds on origin for Tee shirts from Bangladesh exported to the EU, and other similar complaints for jeans). Of course, the situation might change at the end of the transitional period with as from 2017, the self-certification made by registered exporters for the GSP regime.

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