REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Report on the status of ratification and recommendations by monitoring bodies concerning conventions listed in Annex III to Council Regulation (EC) No 732/2008 applying a scheme of generalised tariff preferences pursuant to Article 8(3) of this Regulation GSP+   REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Report on the status of ratification and recommendations by monitoring bodies concerning conventions listed in Annex III to Council Regulation (EC) No 732/2008 applying a scheme of generalised tariff preferences pursuant to Article 8(3) of this Regulation GSP+
Date: 2011-05-17
Institutions: European Commission
Subjects: common commercial policy, common tariff policy, developing countries, development aid, generalised preferences, least-developed country, sustainable development

EUROPEAN COMMISSION 

Brussels, 17.5.2011 
COM(2011) 271 final 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

Report on the status of ratification and recommendations by monitoring bodies 
concerning conventions listed in Annex III to Council Regulation (EC) No 732/2008 
applying a scheme of generalised tariff preferences pursuant to Article 8(3) of this 

Regulation 

GSP+   

{SEC(2011) 578 final} 

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THE EU SCHEME OF GENERALISED TARIFF PREFERENCES  

The European Union’s scheme of generalised tariff preferences (hereinafter referred to as the 
‘GSP’) is a generalised, non-reciprocal and non-discriminatory scheme of preferential trading 
arrangements  through  which  the  EU  grants  developing  countries  preferential  access  to  its 
markets. In line with Article 208 of the Treaty on the Functioning of the European Union and 
with the EU’s overarching long-term goal of sustainable development, the overall objectives 
of the GSP are to assist developing countries to reduce poverty by granting them preferential 
EU market access and to promote sustainable development. 

The GSP aims to stimulate developing countries’ exports to the EU by means of preferential 
tariffs, focusing on countries most in need, encouraging the growth of developing countries’ 
exports  of  existing  products,  or  their  diversification  into  new  products.  The  objective  is  to 
enable  countries  to  develop  their  industries,  leading  to  increases  in  productivity  and 
competitiveness,  and  possibly  to  encourage  diversification  and  investment.  In  line  with  the 
EU’s  policy  for  sustainable  development,  the  GSP  also  aims  to  provide  incentives  for 
developing  countries  to  make  commitments  to  ratify  and  effectively  implement  core 
international  conventions  on  human  and  labour  rights,  environmental  protection  and  good 
governance.  

The  EU  adopted  the  GSP  following  the  United  Nations  Conference  on  Trade  and 
Development  (UNCTAD)  1968  recommendation  to  create  a  ‘Generalized  System  of  Tariff 
Preferences’ under which developed countries would grant trade preferences to all developing 
countries.  In  the  WTO/GATT  system,  the  GSP  is  covered  by  the  ‘Decision  on  Differential 
and  More  Favourable  Treatment,  Reciprocity  and  Fuller  Participation  of  Developing 
Countries’ (the so-called ‘Enabling clause’). 

The European Community was the first to implement  the GSP scheme in 1971. Since then, 
the GSP has changed considerably. In order to adjust the scheme on a regular basis according 
to the changing environment of the multilateral trading system, it was decided that the GSP 
scheme should be implemented over 10-year cycles. The current cycle began in 2006 and will 
expire  in  2015.  The  scheme  is  implemented  through  successive  Regulations  that  apply  for 
three  years,  to  ensure  that  the  GSP  can  be  updated  on  a  regular  basis  to  take  account  of 
evolutions  in  relevant  trade  data.  The  current  GSP  scheme  was  established  by  Council 
Regulation  (EC)  No  732/20081  (the  GSP  Regulation)  that  entered  into  force  on  1  January 
2009,  and  expires  on  31  December  2011.  On  26  May  2010,  the  Commission  adopted  a 
proposal  to  extend  the  validity  of  this  Regulation  to  31  December  2013,  to  allow  time  to 
prepare  the  revision  of  the  GSP.  The  proposal  was  sent  to  the  Council  and  the  European 
Parliament2 on the same date. 

The  GSP  has  three  types  of  arrangements  for  beneficiaries:  the  general  arrangement,  the 
special incentive arrangement for sustainable development and good governance (hereinafter 
referred to as the ‘GSP+’) and the ‘Everything But Arms’ (EBA) initiative. 

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2 

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 (OJ L 211, 6.8.2008, p.1). 
Pursuant  to  Article  207  (2)  of  the  Treaty  on  the  Functioning  of  the  European  Union,  the  European 
Parliament and the Council, acting by means of regulations in accordance with the ordinary legislative 
procedure, shall adopt the measures defining the framework for implementing the common commercial 
policy. The previous GSP Regulations were adopted by the Council alone. 

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THE GSP+ 

The GSP+ arrangement offers additional tariff reductions, on top of those available under the 
general GSP, to a selected group of developing countries that are vulnerable due to a lack of 
diversification  in  traded  goods  and  insufficient  integration  into  the  international  trading 
system. To qualify for GSP+, they have to ratify and implement specified core international 
human,  labour,  environmental  and  good  governance  conventions.  GSP+  is  designed  to 
promote  further  economic  growth,  and  thereby  to  respond  positively  to  the  need  for 
sustainable development.  

In  accordance  with  the  eligibility  criteria  for  GSP+,  as  set  out  in  Article  8(1)  of  the  GSP 
Regulation, preferences under the special incentive arrangement for sustainable development 
and good governance may be granted to a country which: 

– 

– 

has ratified and effectively implemented all the conventions listed in Annex III, and 

gives  an  undertaking  to  maintain  the  ratification  of  the  conventions  and  their 
implementing  legislation  and  measures,  and  accepts  regular  monitoring  and  review 
of its implementation record in accordance with the implementation provisions of the 
conventions it has ratified, and 

– 

is considered to be a vulnerable country. 

Vulnerability  criteria  are  set  out  in  the  Article  8(2)  of  the  GSP  Regulation.  A  vulnerable 
country is one:  

– 

– 

which  is  not  classified  by  the  World  Bank  as  a  high-income  country  during  three 
consecutive years, and of which the five largest sections of its GSP-covered imports 
into the EU represent more than 75% in value of its total GSP-covered imports; and  

of which the GSP-covered imports to the EU represent less than 1% in value of total 
GSP-covered imports into the EU. 

The GSP+ arrangement was granted if a country or territory made a request for it either by 31 
October  2008  or  by  30  April  2010  and  an  examination  of  the  request  showed  that  the 
requesting country or territory fulfilled the conditions.  

STATE OF PLAY 

Under Article 8(3) of the GSP Regulation, before the end of the period of application of this 
Regulation  and  in  time  for  the  discussion  on  the  next  Regulation,  the  Commission  has  to 
present to the Council a report on the status of ratification of the conventions listed in Annex 
III and available recommendations by relevant monitoring bodies. 

The  present  report  describes  the  status  of  ratification  and  effective  implementation  of  the 
Conventions  listed  in  Annex  III  by  16  GSP+  beneficiary  countries:  Armenia,  Azerbaijan, 
Bolivia,  Colombia,  Costa  Rica,  Ecuador,  El  Salvador,  Georgia,  Guatemala,  Honduras, 
Mongolia, Nicaragua, Panama, Peru, Paraguay and Sri Lanka.  

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On  9  December  2008,  the  Commission  adopted  a  Decision3  establishing  a  list  of  GSP+ 
beneficiaries.  The  GSP+  arrangement  was  granted  to  those  countries  that  fulfilled  the 
requirements  set  out  in  the  GSP  Regulation.  The  list  comprised  the  following  16  countries: 
Armenia,  Azerbaijan,  Bolivia,  Colombia,  Costa  Rica,  Ecuador,  El  Salvador,  Georgia, 
Guatemala, Honduras, Mongolia, Nicaragua, Peru, Paraguay, Sri Lanka and Venezuela. 

In  comparison  with  the  previous  GSP+  arrangement,  for  the  years  2006-2008,4  there  were 
three  new  countries  covered  by  GSP+  preferences:  Armenia,  Azerbaijan  and  Paraguay. 
Moldova  and  Venezuela  ceased  to  be  beneficiaries.  In  March  2008,  Moldova  was  removed 
from  the  list  of  beneficiary  countries  as  it  was  granted  autonomous  preferences  under  a 
separate  EU  legal  instrument.  In  August  2009,  Venezuela  was  removed  from  the  list  of 
beneficiary  countries5  as  it  did  not  ratify  the  United  Nations  (UN)  Convention  against 
Corruption. 

Panama did not submit an application for the GSP+ by the 31 October 2008 deadline, so it did 
not benefit from the GSP+ arrangement from 1 January 2009 to 30 June 2010.6 

As  of  16  August  2010,  the  GSP+  arrangement  was  temporarily  withdrawn  from  Sri  Lanka 
(for details see the section on the Human Rights Convention). 

A. State of play on ratification 

All  beneficiary  countries  have  ratified  all  conventions  listed  in  Annex  III  of  the  GSP 
Regulation.  

B. State of play on effective implementation 

According to Article 8(3) of the GSP Regulation, the Commission is required to keep under 
review  the  status  of  ratification  and  effective  implementation  of  GSP+conventions  by 
examining  available  information  from  relevant  monitoring  bodies.  The  Commission  is 
expected  to  monitor  the  effective  implementation  of  the  international  conventions  in 
accordance  with  their  respective  implementing  mechanisms.  Accordingly,  the  review  of 
compliance with the requirements of the scheme is based on reports and observations from the 
monitoring bodies of relevant international organisations.  

3 

4 

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6 

Commission Decision 2008/938/EC of 9 December 2008 on the list of the beneficiary countries which 
qualify  for  the  special  incentive  arrangement  for  sustainable  development  and  good  governance, 
provided  for  in  Council  Regulation  (EC)  No  732/2008  applying  a  scheme  of  generalised  tariff 
preferences for the period from 1 January 2009 to 31 December 2011 (OJ L 334, 12.12.2008, p. 90). 
Commission Decision 2005/924/EC of 21 December 2005 on the list of the beneficiary countries which 
qualify  for  the  special  incentive  arrangement  for  sustainable  development  and  good  governance, 
provided  for  by  Article  26(e)  of  Council  Regulation  (EC)  No  980/2005  applying  a  scheme  of 
generalised tariff preferences (OJ L 337, 22.12.2005, p. 50). 
Commission Decision 2009/454/EC of 11 June 2009 amending Decision 2008/938/EC on the list of the 
beneficiary countries which qualify for the special incentive arrangement for sustainable development 
and  good  governance,  provided  for  in  Council  Regulation  (EC)  No  732/2008  applying  a  scheme  of 
generalised  tariff  preferences  for  the  period  from  1  January  2009  to  31  December  2011  (OJ  L  149, 
12.6.2009, p. 78). 
Panama  resumed  benefiting  from  GSP+  arrangement  as  of  1  July  2010 according  to  the  Commission 
Decision  2010/318/EU  of  9  June  2010  on  the  beneficiary  countries  which  qualify  for  the  special 
incentive  arrangement  for  sustainable  development  and  good  governance  for  the  period  from  1  July 
2010  to  31  December  2011,  as  provided  in  Council  Regulation  (EC)  No  732/2008  (OJ  L  142, 
10.6.2010, p.10). 

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This  Report  provides  a  general  overview  of  the  monitoring  bodies’  findings.  The  detailed 
recommendations of the UN and International Labour Organisation (ILO) monitoring bodies 
and  other  compliance/implementation  committees  are  attached  in  Annex  IV  of  the 
Accompanying document to the GSP+ Report. In particular, monitoring has focused on how 
the situation has changed since the previous report. 

Human Rights Conventions  

the  effective 
Beneficiary  countries  generally  comply  with  requirements  regarding 
implementation of human rights conventions. However, there were delays on the part of most 
countries  in  reporting  to  UN  monitoring  bodies.  Nevertheless,  monitoring  bodies  noted  a 
number of positive developments, including the adoption of legislative and policy measures 
taken  with  a  view  to  implementing  conventions.  The  monitoring  bodies  welcomed  these 
positive developments and recommended strengthening efforts to bring domestic law into full 
compliance with the relevant conventions.  

At  the  same  time,  the  monitoring  bodies  drew  attention  to  certain  shortcomings  concerning 
legislative alignment with the conventions, and their implementation in practice. In this light, 
monitoring bodies adopted recommendations for further action that beneficiary countries need 
to take. The Commission is using its bilateral dialogues (for details see the section on GSP+ 
dialogue) to closely monitor the progress made by  beneficiary  countries to  comply with the 
requirements  of  the  conventions  and  to  catalyse  further  progress.  Action  will  be  taken  if 
justified, as was done in the case of Sri Lanka. 

In  2008,  information  received  by  the  European  Commission,  including  publicly  available 
reports and statements from UN sources, as well as information from other relevant sources, 
including non-governmental organisations, indicated that the national legislation of Sri Lanka 
incorporating international human rights conventions, in particular the International Covenant 
on  Civil  and  Political  Rights,  the  Convention  against  Torture  and  other  Cruel,  Inhuman  or 
Degrading Treatment or Punishment and the Convention on the Rights of the Child, was not 
being effectively implemented. In October 2008, the Commission initiated an investigation7. 
The  investigation  drew  on  expert  external  advice  and  concluded  that  Sri  Lanka  was  not 
effectively  implementing  these  three  conventions.  On  15  February  2010,  the  Council  of 
European  Union  decided  to  temporarily  withdraw  GSP+  preferential  tariff  benefits  with 
respect to Sri Lanka8. The special incentive arrangement for products originating in Sri Lanka 
should be re-established if the reasons justifying the temporary withdrawal no longer prevail. 
The EU remains committed to using GSP+ as an incentive to underpin improvements in the 
human rights situation in Sri Lanka. The temporary withdrawal took effect on16 August 2010.  

Labour Rights Conventions  

Beneficiary  countries  generally  comply  with  the  requirements  regarding  the  effective 
implementation of core ILO labour standards, as set out in the fundamental ILO conventions. 

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8 

Commission Decision 2008/803/EC of 14 October 2008 providing for the initiation of an investigation 
pursuant  to  Article  18(2)  of  Council  Regulation  (EC)  No  980/2005  with  respect  to  the  effective 
implementation of certain human rights conventions in Sri Lanka (OJ L 277, 18.10.2008, p. 34). 
Implementing  Regulation  (EU)  No  143/2010  of  the  Council  of  15  February  2010  temporarily 
withdrawing  the  special  incentive  arrangements  for  sustainable  development  and  good  governance 
provided for under Regulation (EC) No 732/2008 with respect to the Democratic Socialist Republic of 
Sri Lanka (OJ L 45, 20.2.2010, p.1). 

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However,  shortcomings  in  the  implementation  of  some  conventions  have  been  reported  by 
ILO  monitoring  bodies,  especially  regarding  the  implementation  of  the  Conventions  No  87 
and  98,  but  also  Conventions  No  100,  111,  138  and  182.  Notwithstanding  these  issues,  the 
monitoring  bodies  recognise  the  constructive  engagement  of  beneficiary  countries  in  the 
monitoring  process,  and  the  steps  these  countries  are  taking  to  address  the  situation.  The 
Commission is using its bilateral dialogues (for details see the section on GSP+ dialogue) to 
closely  monitor  the  progress  beneficiary  countries  are  making  to  comply  with  the 
requirements of the conventions, and the dialogues can catalyse further progress. Action will 
be taken if justified.  

On  31  March  2008  the  Commission  initiated  an  investigation9  to  establish  whether  the 
national legislation of El Salvador still incorporated the ILO Convention No 87; and whether 
that  legislation  was  being  effectively  implemented.  Pursuant  to  Article  19(2)  of  the  GSP 
Regulation, the Commission decided, in accordance with the procedure referred to in Article 
27(5)  of  the  Regulation,  that  the  findings  of  the  investigation  did  not  justify  temporary 
withdrawal of the special incentive arrangement. The investigation was therefore terminated.  

Environmental protection and Good Governance Conventions 

According to reports issued by the monitoring bodies, the compliance with environmental and 
good  governance  conventions  was  generally  satisfactory.  The  monitoring  bodies  have 
reported a number of positive developments over the reporting period, including progress in 
the enforcement of some conventions. However, there still are some shortcomings in terms of 
reporting  obligations.  Again,  the  Commission  is  using  its  bilateral  dialogues  (see  the 
following  section)  to  closely  monitor  the  progress  beneficiary  countries  have  made  in 
complying with the requirements of conventions, and to catalyse further progress. Action will 
be taken if justified. 

GSP+ Dialogue 

As the GSP+ scheme serves as an incentive for beneficiary countries to encourage effective 
implementation  of  relevant  conventions,  in  2009,  the  Commission  established  a  set  of 
bilateral dialogues with individual GSP+ beneficiary countries regarding this, particularly on 
areas  where  international  monitoring  processes  identified  issues  of  concern  and  where  this 
in  effective 
dialogue  could  most  usefully  contribute 
implementation  of  GSP+  conventions.  All  governments  of  GSP+  beneficiary  countries 
responded  positively  to  this  process,  and  particularly  appreciated  its  informal,  constructive, 
results-oriented nature. 

to  supporting 

improvements 

The  Commission  intends  to  maintain,  and,  wherever  necessary,  to  intensify  its  bilateral 
dialogue  with  individual  GSP+  countries  so  as  to  encourage  ongoing  progressive 
improvement in the implementation of GSP+ conventions.  

9 

Commission Decision 2008/316/EC of 31 March 2008 providing for the initiation of an investigation 
pursuant to Article 18(2) of Council Regulation (EC) No 980/2005 with respect to the protection of the 
freedom of association and the right to organise in El Salvador (OJ L 108, 18.4.2008, p.29). 

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