Guidance

Tonga and Ukraine removed from the General System of Preference (CIP7)

Find out why Tonga and Ukraine have been removed from the General System of Preference and how to claim a repayment of duty.

Background

Article 4(1) of EU Regulation 978/2012 provides that a country that has been classified by the World Bank as a high income or an upper-middle income country for 3 consecutive years, or a country that benefits from a preferential market access arrangement which provides the same tariff preferences as General System of Preference (GSP) or better for substantially all trade shouldn’t benefit from GSP.

The European Commission have published EU Regulation 2017/217 announcing changes to the GSP status of Tonga and Ukraine.

Tonga

In 2013, 2014, 2015 Tonga was classified by the World Bank as an upper middle income country and therefore was to be removed from the list of GSP beneficiary countries in Annex II of EU Regulation 978/2012 with effect from 1 January 2017.

However in 2016 Tonga was classified by the World Bank as a lower middle income country. Therefore it has been re-instated to the list of GSP beneficiary countries in Annex II of EU Regulation 978/2012 with effect from 1 January 2017.

Therefore there has been no interruption to Tonga’s entitlement for eligible goods to benefit from GSP preference.

Tonga has informed the European Commission it is to implement Registered Exporter (REX) system with effect from 1 January 2017. Customs Information Paper 67/2016 explains how to claim preference using REX.

Ukraine

The deep comprehensive free trade agreement between the EU and Ukraine took effect from 1 January 2016. As it provides better tariff preferences than the GSP for substantially all trade, Ukraine will be removed from the list of GSP beneficiary countries in Annex II of EU Regulation 978/2012 with application from 1 January 2018.

Reclaiming duties

If you have paid full duties on goods eligible for preference you can submit a claim for repayment (C285) to the National Duty Repayment Centre.

Any queries on this paper should be emailed to dutyliability.policy@hmrc.gsi.gov.uk.

Issued on 4 April 2017 by Customs Directorate, HM Revenue and Customs (HMRC).

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Published 4 April 2017