Developing Country Trading Scheme (DCTS) replacing UK General Scheme of Preferences (GSP) on 19 June 2023 14/06/23

On 19 June 2023, the Developing Country Trading Scheme (DCTS) will replace the UK General Scheme of Preferences (GSP). 

The government is introducing the DCTS to improve access to the UK market for developing countries.

The DCTS aims to support sustainable growth in developing countries through a more generous unilateral offer.

This has led to provisions in the DCTS which:

• reduce tariffs
• liberalise rules of origin requirements
• simplify the conditions attached to the scheme

The DCTS applies to countries that currently benefit under the UK’s GSP.

This includes:

• 47 countries in the GSP Least Developed Country (LDC) Framework
• 18 additional countries or territories classified by the World Bank as low income (LIC) and lower middle-income (LMIC)

It does not apply to countries classified by the World Bank as upper-middle income for 3 consecutive years, or to LICs and LMICs with a free trade agreement (FTA) with the UK.

DCTS has three different regimes:

• Comprehensive preferences
• Enhanced preferences
• Standard preferences

Comprehensive preferences (1062/G073) can apply to Afghanistan, Angola, Bangladesh, Benin, Bhutan, Burkina Faso, Burundi, Cambodia, Central African Republic, Chad, Comoros, Democratic Republic of Congo, Djibouti, East Timor (Timor-Leste), Eritrea, Ethiopia, Gambia, Guinea, Guinea-Bissau, Haiti, Kiribati, Laos, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Myanmar, Nepal, Niger, Rwanda, Sao Tome and Principe, Senegal, Sierra Leone, Solomon Islands, Somalia, South Sudan, Sudan, Tanzania, Togo, Tuvalu, Uganda, Vanuatu, Yemen and Zambia.

Enhanced preferences (1061/G087) can apply to Algeria, Bolivia, Cape Verde, Republic of Congo, Cook Islands, Kyrgyzstan, Micronesia, Mongolia, Nigeria, Niue, Pakistan, Philippines, Sri Lanka, Syria, Tajikistan and Uzbekistan.

Standard preferences (1060/G022) can apply to India and Indonesia.

The procedure for claiming the preference remains the same, i.e. an origin declaration or Form A declared on the customs entry to free circulation, but with wording confirming the goods meet the DCTS origin requirements.

The measure type will be a 142 preferential measure with the DCTS regimes being shown using new country grouping.

The codes are:

What changes should you be aware of?

We have included the online guidance for the wording of the origin statement that will need to be updated by your suppliers below. We will continue to monitor and shall keep you updated of any further guidance. For now, we will keep the current Origin Statement and Form A process.

What evidence / documents will be required for goods to be regarded as originating from a qualifying DCTS country?

The proofs of origin remain the same as for UK GSP – so an origin declaration (referring to DCTS instead of GSP) and Form A, both completed by the exporter in the DCTS beneficiary country.

Discussion at JCCC Group Monthly Meeting

On Monday’s JCCC Group Monthly Meeting, the move from the UK Generalised System of Preferences (UKGSP) over to the Developing Countries Trading Scheme (DCTS) was discussed as part of the AOB agenda item, with several members raising concerns.  This has also echoed questions raised as part of the work done by our colleagues leading in the Tariff Management & Duty Liability JCCC Subgroup.

During the discussion, the question over a transition was raised, specifically in connection with goods underway or already in a UK customs warehouse (CW).  This has resulted in concerns being raised by businesses over the potential difficulty in obtaining proofs of origin that these goods meet the conditions of DCTS retrospectively.

To address these concerns, and in agreement with FCDO, for goods underway or already in CW as of 19 June and which qualify under DCTS, HMRC will accept the original proofs of origin issued under the UKGSP.  The condition is that the goods are entered into free circulation on or before 31 December 2023.  This is detailed in the attached document which we hope will be of assistance for members to share with/ support their membership communities. 

Should you have any questions at this stage, please don’t hesitate to reach out to your Customer team.