Generalised System of Preferences (GSP)

The Generalised System of Preferences (GSP) Scheme of the European Union is a core part of EU´s trading strategy towards developing countries. It is aimed at encouraging exports to support developing countries in their efforts to reduce poverty, promote good governance, and achieve sustainable development. The system is currently under review, and a revised scheme is expected to be in place by 2014.

In total, the EU GSP covers 176 developing countries and territories. Within the GSP, developing countries are divided into three groups: LDCs, Ordinary GSP Countries and GSP+ countries. Under the GSP regime, products imported to EU countries from developing countries are granted tariff reductions. Products within the regime are divided into a sensitive and a non-sensitive category. Industrial goods – with the exception of textiles – are primarily non-sensitive products and subject to zero duty. Most agricultural products belong to the sensitive category, where limited tariff reductions are applied. In addition, countries that are beneficiaries of the special incentive arrangement for sustainable development and good governance (GSP+), enjoy a better treatment through extended duty free access for additional products, including sensitive products. The best terms are granted for the Least Developed Countries (LDCs), which receive duty and quota free access for all products with exception of arms under the EU’s Everything But Arms agreement. (*1)

In order for a country to obtain the GSP, it is not enough to be entitled to the preferences. GSP preferences can only be applied on exports which fulfill certain criteria and have the necessary documentation. The administration of the relevant requirements must be ensured by the country for which the preferential rules apply.

Classification of Goods
Correct and accurate classification of goods is of utmost importance for obtaining the preferences. All products that are being traded globally are classified according to an international classification system called the Harmonized Commodity Description and Coding System (HS codes). When the correct HS code is known, the preferences and duties can be checked at the EU Export Helpdesk, http://exporthelp.europa.eu. Exporters of food products are also advised to make themselves familiar with the rules on import licenses and securities in the country in question. Relevant authority in Finland is Finnish Food Safety Authority Evira, www.evira.fi

Rules of Origin and proof of origin
To benefit from preferential treatment, the export product must originate from a country covered by a free trade arrangement or a preferential arrangement. A product is generally considered as originating from a beneficiary country if it is wholly obtained or sufficiently processed in that country. If it contains elements from other countries or is processed partially elsewhere, the rules of origin define the origin of the product. To prove that the rules of origin are fulfilled, the exporter must provide the necessary documentation. A GSP proof of origin must be issued by the exporter in the developing country and certified by the customs authorities of the exporting country.

More information can be found from the Exporting to Nordic countries guide. The most recent and case specific information on customs duties, preferential arrangements, and rules of origin can be found at the Export Helpdesk, http://exporthelp.europa.eu.

(1) The only exception is sugar. For the period from 1 October 2009 to 30 September 2012 the importer of sugar shall undertake to purchase such products at a minimum price not lower than 90 % of the reference price.