Proposal for a Regulation (EU) of the European Parliament and of the Council amending Council Regulation(EC) No 732/2008 applying a scheme of generalised tariff preferences for the period from 1 January 2009 to 31 December 2011
Date: 2010-04-14
Institutions: European Commission
Subjects: common commercial policy, common tariff policy, developing countries, development aid, generalised preferences, least-developed country, sustainable development

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EUROPEAN COMMISSION 

Brussels, 26.5.2010 
COM(2010) 142 final 

2010/0140 (COD) 

Proposal for a 

REGULATION (EU) OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Council Regulation (EC) No 732/2008 applying a scheme of generalised tariff 
preferences for the period from 1 January 2009 to 31 December 2011  

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EXPLANATORY MEMORANDUM 

The European Union grants trade preferences to developing countries in the framework of the 
generalised  system  of  preferences  (the  GSP).  The  GSP  is  implemented  through  successive 
Regulations applying a scheme of generalised tariff preferences with a period of application 
of  three  years  at  a  time.  The  current  scheme  is  established  by  Council  Regulation  (EC)  No 
732/2008 which will expire on 31 December 2011. After this date operation of the GSP will 
lapse unless appropriate legislative action is taken to ensure continuity.  

The  successor  GSP  Regulation  should  be  based  on  a  proposal  from  the  Commission  taking 
appropriately into account relevant considerations on the effectiveness of the current GSP in 
achieving  its  objectives  and  proposing  such  amendments  as  would  ensure  its  continued 
effectiveness  in  the  future.  Internal  work  to  prepare  a  Commission  proposal  on  a  successor 
Regulation started with a public consultation launched in March 2010. It is expected that the 
Commission will be in a position to agree its proposal to the Council and Parliament in early 
2011.  The  length  of  the  subsequent  legislative  procedure  cannot  be  predicted  with  certainty 
but it is likely to last at least 15-18 months. However, it is the Commission's wish that the new 
GSP Regulation would apply as soon as possible at which point this temporary prolongation 
of the existing scheme should end.  

The remaining period of application of the GSP Regulation is therefore insufficient to permit 
the  preparation  of  a  Commission  proposal  for  this  purpose  and  subsequent  agreement  on  a 
successor  regulation  through  the  ordinary  legislative  procedure.  It  is  however  desirable  to 
ensure  continuity  in  the  operation  of  the  scheme  beyond  31  December  2011.  The 
consequences of any discontinuity in legal cover for GSP would be that all imports under GSP 
would  revert  to  standard  most  favoured  nation  treatment,  except  for  those  from  least 
developed countries which would be covered by the Everything But Arms (EBA) regime. 

Consequently  and  in  parallel  to  the  work  on  the  next  GSP  Regulation,  it  is  proposed  to 
maintain the current Regulation beyond 31 December 2011 with minimum changes until such 
time as a successor Regulation is agreed and enters into force. Given prevailing uncertainties 
about the time it will take to complete the legislative process on a successor Regulation, it is 
proposed to extend the validity of the current GSP Regulation until 31 December 2013. This 
should  create  an  adequate  window  for  the  successor  Regulation  to  be  prepared  and  agreed 
with  sufficient  notice  for  economic  operators  and  beneficiary  countries  to  make  themselves 
ready for any changes made without running the risk that an open-ended extension would in 
effect perpetuate the status quo and delay opportune reforms in the scheme.  

This  proposal  amends  only  those  elements  of  Regulation  (EC)  No  732/2008  which  are 
necessary for the extension of its validity to 31 December 2013. No changes are proposed to 
the  graduation  of  specific  product  sections  in  respect  of  individual  beneficiaries  as  already 
provided  for  in  the  current  Regulation.  The  proposal  introduces  adjustments  to  permit 
developing  countries  which  fulfil  the  criteria  for  being  eligible  for  the  special  incentive 
arrangement  for  sustainable  development  and  good  governance  (GSP+)  to  benefit  from  the 
additional tariff preferences under this agreement if, upon their request by 31 October 2011 or 
30  April  2013,  the  Commission  decides  to  grant  them  the  special  incentive  arrangement 
respectively  by  15 December  2011  or  15  June  2013.    Developing  countries  which  have 
already  been  granted  benefits  under  the  special  incentive  arrangement  as  a  result  of  the 
relevant  Commission  Decisions  of  December  2008  and  June  2010  should  retain  that  status 
during  the  extension  of  the  present  scheme.  Commission  Decision  2008/938/EC  of  9 

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December  20081  on  the  list  of  beneficiary  countries  which  qualify  for  GSP+  limited  the 
period of validity of this preferential treatment from 1 January 2009 to 31 December 2011.  

Council Regulation (EC) No 732/2008 contains certain powers reserved to the Council which 
are not based on Council Decision 1999/468/EC laying down the procedures for the exercise 
of  implementing  powers  conferred  on  the  Commission2.  The  Commission  will  make  a 
proposal which will revise all such procedures in the common commercial policy in the light 
of the system of implementing acts set out in Article 291 of the Treaty on the Functioning of 
the  European  Union  and  the  regulation  on  the  rules  and  general  principles  concerning  the 
Commission's  exercise  of  the  implementing  powers  adopted  on  the  basis  of  Article  291(3). 
That  proposal  will  also  address  Articles  16(4),  19(4)  and  (5)  and  22(2)  of  the  present 
Regulation. This proposal will be presented as soon as possible and will follow the adoption 
by  the  Commission  on  9  March  2010  of  its  proposal  on  the  rules  and  general  principles 
concerning the Commission's exercise of its implementing powers.  

The proposal on the extension of the current GSP Regulation does not incur costs charged to 
the EU budget. Its application would also not entail any loss of customs revenue compared to 
the current situation. 

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OJ L 334, 12.12.2008, p. 90. 
OJ L 184, 17.7.1999, p. 23.  

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2010/0140 (COD) 

Proposal for a 

REGULATION (EU) OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Council Regulation (EC) No 732/2008 applying a scheme of generalised tariff 
preferences for the period from 1 January 2009 to 31 December 2011  

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 207(2) thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the proposal to the national Parliaments, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

Since 1971, the European Union has granted trade preferences to developing countries, 
in  the  framework  of  its  generalised  system  of  preferences  (the  GSP).  The  GSP  is 
implemented  through  successive  Regulations  applying  a  scheme  of  generalised  tariff 
preferences  (hereinafter  referred  to  as  "the  scheme")  with  periods  of  application  of 
generally three years at a time. 

The current scheme is established by Council Regulation (EC) No 732/2008 of 22 July 
2008 applying a scheme of generalised tariff preferences for the period from 1 January 
2009  to  31  December  2011  and  amending  Regulations  (EC)  No  552/97,  (EC) 
No 1933/2006  and  Commission  Regulations  (EC)  No  1100/2006  and  (EC) 
No 964/20073 which applies until 31 December 2011, after which date the operation of 
the  scheme  will  lapse  unless  appropriate  legislative  action  is  taken  to  ensure  that  it 
continues to apply. 

Future  improvements  to  the  scheme  should  be  based  on  a  proposal  for  a  new 
Regulation  which  takes  into  account  relevant  considerations  on  the  effectiveness  of 
Regulation  (EC)  No 732/2008  in  achieving  the  objectives  of  the  scheme.  The  new 
Regulation  should  include  the  necessary  amendments  to  ensure  the  ongoing 
effectiveness of the scheme. It is also essential that the Commission's proposal takes 
into account statistical trade data, which will only become available in July 2010, on 
imports  covered  by  the  scheme  for  the  period  including  2009,  a  year  marked  by  a 
sharp  fall  in  global  trade,  including  that  of  developing  countries.  It  is  equally 
important  to  ensure  that  economic  operators  and  beneficiary  countries  are  given 

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OJ L 211, 6.8.2008, p. 1. 

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adequate  notice  of  the  changes  brought  about  by  the  new  Regulation.  For  these 
reasons,  the  remaining  period  of  application  of  Regulation  (EC)  No 732/2008  is 
insufficient to allow for the elaboration of a Commission proposal and the subsequent 
adoption  of  a  successor  Regulation  through  the  ordinary  legislative  procedure.  It  is 
however  desirable  to  ensure  continuity  in  the  operation  of  the  scheme  beyond  31 
December 2011 until such time as a successor Regulation is adopted and applies. At 
the same time some technical amendments to the Regulation are necessary to ensure 
coherence and continuity in the operation of the scheme. 

The  period  of  extension  of  the  current  Regulation  should  not  be  open-ended, 
consequently and in order to provide the time needed for the legislative process for the 
adoption  of  the  new  GSP  scheme,  the  period  of  application  of  Regulation  (EC)  No 
732/2008  should  be  extended  until  31  December  2013.  In  case  the  new  Regulation 
becomes  applicable  before 
the  period  of  extension  should  be 
correspondingly shortened. 

that  date, 

Developing  countries  which  fulfil  the  criteria  for  being  eligible  for  the  special 
incentive  arrangement  for  sustainable  development  and  good  governance  (GSP+) 
should be able to benefit from the additional tariff preferences under that arrangement 
if, upon their request by 31 October 2011 or 30 April 2013, the Commission decides to 
grant them the special incentive arrangement respectively by 15 December 2011 or 15 
June 2013. Developing countries which have already been granted benefits under the 
special  incentive  arrangement  as  a  result  of  the  relevant  Commission  Decisions  of 
December  2008  and  June  2010  should  retain  that  status  during  the  extension  of  the 
present scheme,  

(4) 

(5) 

HAVE ADOPTED THIS REGULATION: 

Regulation (EC) No 732/2008 is amended as follows: 

Article 1 

(1) 

In the title, the words: "for the period" and "to 31 December 2011" are deleted. 

(2) 

In the second subparagraph of Article 8(2), the following points (c) and (d) are 
added: 

"(c)  for the purpose of Article 9(a)(iii) - those available on 1 September 2010, as an 

annual average over three consecutive years; 

(d) 

for the purpose of Article 9(a)(iv) – those available on 1 September 2012, as an 
annual average over three consecutive years." 

(3) 

Article 9 is amended as follows: 

(a) 

In paragraph 1, the following is inserted after point (a)(ii): 

"or 

(iii)  by  31 October  2011,  to  be  granted  the  special  incentive  arrangement  as  from 

1 January 2012; 

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or 

(iv)  by  30  April  2013,  to  be  granted  the  special  incentive  arrangement  as  from 

1 July 2013;" 

(b)  Paragraph 3 is amended as follows:  

(i)  The second sentence is replaced by the following: 

"Countries  granted  the  special  incentive  arrangement  for  sustainable 
development  and  good  governance  on  the  basis  of  a  request  under 
paragraph  1(a)(i)  shall  not  be  required  to  submit  a  request  under 
paragraph 1(a)(ii), 1(a)(iii) or 1(a)(iv)." 

(ii)  The following subparagraph is added:  

"Countries  granted  the  special  incentive  arrangement  for  sustainable 
development  and  good  governance  on  the  basis  of  a  request  under 
paragraph  1(a)(ii)  shall  not  be  required  to  submit  a  request  under 
paragraph  1(a)(iii)  or  paragraph  1(a)(iv).  Countries  granted  the  special 
incentive arrangement for sustainable development and good governance 
on the basis of a request under paragraph 1(a)(iii) shall not be required to 
submit a request under paragraph 1(a)(iv)."  

(4) 

In Article 10(3), the full stop at the end of point (b) is replaced by a semicolon, and 
the following is added after point (b): 

"or 

(c) 

by 15 December 2011, for a request under Article 9(1)(a)(iii),  

or 

(d)  by 15 June 2013 for a request under Article 9(1)(a)(iv)." 

(5) 

In  Article  32(2),  the  words:  "31 December  2011"  are  replaced  by  the  words: 
"31 December 2013 or until a date laid down by the successor Regulation, whichever 
is the earliest". 

Article 2 

This Regulation shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union.  

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This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels,  

For the European Parliament 
The President 

For the Council 
The President 

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