The U.S. Generalized System of Preferences (GSP) program expired on July 31, 2013. We expect the program to be renewed once Congress returns after Labor Day, but there is no established timeframe for the renewal.
Recently, renewal of the GSP program has been controversial as opponents are concerned that more advanced developing countries, such as Brazil and India, do not need the benefits of the program to spur growth, and instead GSP benefits may negatively impact domestic industries. Moreover, many opponents feel that extending or removing GSP benefits to or from countries is an effective means of promoting our foreign policy, such as intellectual property rights in Ukraine or worker-safety in Bangladesh. As a result, there have been lapses between the expiration of the program and its renewal in recent years.
GSP last expired two years ago and was not renewed for almost 11 months. When the program was finally renewed it was made retroactive to the date of expiration, but the time for filing post entry claims was limited. During the interim period prior to its renewal, importers who continued to claim GSP upon entry (but paid the applicable duties) received refunds automatically after the program was renewed. Importers who did not claim GSP at the time of entry had to file a request with U.S. Customs and Border Protection (CBP) within 180 days after the new GSP bill was signed into law in order to receive the GSP duty preference (either by Post Summary Correction or Protest, depending on liquidation status). No retroactive claims were allowed after the 180 day period.
While we await renewal of the GSP program, importers should consider the best method for claiming duty-free treatment in the event the renewal is made retroactive (a very likely scenario). CBP may follow the same guidelines as it applied two years ago and provide a limited time for filing post entry claims. Accordingly, we recommend that importers carefully track entries that would qualify for GSP treatment or continue using SPIs. For assistance in receiving refunds when the GSP program is renewed, or if you have any questions in the interim, please do not hesitate to contact Randy Rucker or any member of Drinker Biddle & Reath LLP’s Customs and International Trade team.