The Generalized System of Preferences Program (GSP) expired on December 31, 2020, as Congress failed to reach a deal before the end of the year that would have extended the GSP program. There were bills in both the Senate and House which were put forward to extend GSP for sixteen months and six months respectively. The primary disagreement is over eligibility criteria. There continues to be quite a bit of debate in Congress on whether to reauthorize the program “as is” or to update the eligibility criterion to include labor and environmental conditions creating a “NEW GSP.”
In the meantime, the trade must now pay the duties for imports from GSP countries. Congressional practice, in the past, was to always renew GSP retroactively and allow importers to reclaim their duties and taxes. In Cargo Systems Messaging Service CSMS Message 45244051, dated December 31, 2020, U.S. Customs and Border Protection (CBP) outlined the procedures for brokers to continue to flag all GSP eligible shipments with the special program indicator (SPI) “A” during the lapse starting January 1, 2021. CBP has programing in place to automate the refund process in the event that GSP is renewed with a retroactive refund clause.
For more information, please contact your local Noatum Logistics USA representative.