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Insight | Time: Dec 7 2021 10:57AM
Brief interpretation: adjustment on GSP certificate of origin issuance
 
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Recently, some market players came to ask: I heard that China would stop issuing certificates of origin under the generalised system of preference (GSP) for exports from December 1, what impact will it have on the industry?


On October 25, the General Administration of Customs issued notice No. 84 of 2021. Starting from December 1, 2021, the customs will no longer issue certificates of origin  under the GSP for goods exported to EU member states, Britain, Canada, Turkey, Ukraine and Liechtenstein etc. 

 

In fact, the official website of the General Administration of Customs has specially interpreted the policy of the announcement on October 27 and subsequently interpreted the relevant contents in other forms.

 

In popular words, we might understand this as follows:


1. The issuance of the certificate of origin under GSP is mainly for the purpose of enjoying the tariff preference of the GSP; With the gradual cancellation of this treatment to the favored country, it is no longer necessary to issue.


EU member states, Canada, Turkey, Ukraine, Liechtenstein, and Britain and so on have all cancelled the GSP treatment given to China one after another, so there is no need to issue it again. However, Norway, New Zealand and Australia still reserve the right to give China preferential treatment, so enterprises can still apply for preferential treatment certificates for goods exported to these three countries.

 

2. The cancellation of the GSP is not sudden, but progressive. The latest countries to cancel the GSP are Russia, Belarus and Kazakhstan, while other countries have cancelled it as early as a few years ago, with limited impact on the market.


Countries and regions involved in GSP and progress of cancellation:

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3. After the withdrawal of the tax rate, there are other mechanisms that can choose to match the new agreed tax rate.


For example, Switzerland, Liechtenstein, Australia, New Zealand and other relevant countries have signed and implemented free trade agreements with China. Enterprises can apply for the corresponding certificate of origin of the free trade agreement to apply the agreed tax rate.


In addition, China and Japan established a free trade partnership for the first time through the RCEP agreement. After the RCEP agreement comes into effect in 2022, enterprises can also enjoy the corresponding agreed tax rate for products exported to Japan by applying for certificates of origin under the RCEP agreement.


On November 2, the ASEAN Secretariat, the custodian of RCEP, announced that six ASEAN member states, including Brunei, and four non-ASEAN member states, including China, Japan, New Zealand and Australia, had formally submitted their certificates of approval, reaching the entry into force threshold of the agreement. According to the provisions of the agreement, RCEP will enter into force for the above-mentioned ten countries from January 1, 2022.

[RISK DISCLAIMER] All opinions, news, analysis, prices or other information contained on this report is provided by analyst of Zhejiang Huarui Information Consulting Co., Ltd (CCFGroup) as general market commentary and does not constitute investment advice. CCFGroup will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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