The Generalized System of Preferences (GSP) was a program initiated in 1976 to allow preferential duty-free entry of various products originating from certain developing countries. The program had expired July 31, 2013, but was just renewed with the signing of the Trade Promotion Authority and Trade Preferences Extension legislation on June 29, 2015.
Although there is still some uncertainty as to how CBP will be dealing with historical imports that could now fall within the guidelines of GSP, early speculation is that CBP will issue duty refund checks on those import transactions since July 31, 2013 that were flagged for GSP consideration but were duty-paid due to the expiration of the GSP program. Importers who did not flag their import entry with an “A+,” “A” or “A*” must submit a formal request to CBP within 150 days of the reauthorization’s July 29 effective date.
From a duty drawback perspective, it is important that drawback claimants identify those imports in their import data banks that will be eligible for a GSP duty refund, and remove them from their drawback import banks. The GSP refund will afford you a 100% refund of duty versus only 99% refund through the drawback process, and you do not want to be in a position where you have claimed drawback on the import and have also received a refund through the GSP program.
Please contact us if you have any questions on how the renewal of GSP will impact your drawback program.
