The New Year gift for exporters is allowing of self-certification for the ‘statement on origin’ for shipments to the European Union (EU) under the Generalised System of Preferences (GSP).
Certificates of Origin under various preferential trade agreements, free trade agreements, comprehensive economic cooperation agreements or partnerships agreements are issued by designated agencies. A system of self-certification was introduced, to reduce the transaction cost, when the new Foreign Trade Policy 2015-20 (FTP) was announced on March 31, 2015. However, that wasn’t implemented, as no agreement could be reached with our trading partners on the modalities.
The EU has now introduced a self-certification scheme for the rules of origin under GSP from January 1 onwards. So, the Director General of Foreign Trade has issued a public notice (Number 51, dated December 30, 2016) for implementing a Registered Exporter System (REX) with effect from January 1.
Those with a REX number will be able to self-certify the origin of their goods being exported to the EU under the GSP scheme. The registration on REX is without any fee and would eventually phase out the current system of issuance of certificates of origin (Form-A) by the competent authorities. The details are given in the said public notice, as Annexure 1 to Appendix 2C of the FTP.
Under this new scheme, the current system of issuance of Form-A will be replaced with ‘statements on origin’ to be issued by exporters themselves. This statement is to be made on any commercial document (such as commercial invoice, etc) of the exported consignment. However, during the transition period of 12 months till end-December, the competent authority would continue to issue Form-A at the request of exporters not registered in the REX system.
At the end of this period, i.e from January 2018, consignments above the value of €6,000 will be entitled to GSP preferential tariff treatment only if accompanied by a ‘statement on origin’ made out by a registered exporter. Exporters consigning low-value goods (i.e less than €6,000 per consignment) are entitled to make the statement right away, without being registered in REX.
They may apply for registration to the competent authorities. The latter will verify the details and if accepted, get the REX registration, to be then intimated to the applicant — number and validity date.
The said Public Notice 51 gives a list of India’s local administrators for registration under the EU scheme, application to become a registered exporter for the purpose of the schemes of GSP of the EU, Norway, Switzerland and Turkey (once it meets certain conditions), the format of the ‘statement on origin’ to be made by a registered exporter on any commercial documents, with relevant details. Exporters should study the annexures to the Notice and take advantage of the scheme.