Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) No 978/2012 of the European Parliament and of the Council of 25 October 2012 applying a scheme of generalised tariff preferences and repealing Council Regulation (EC) No 732/2008
Date: 2023-07-04
Institutions: Directorate-General for Trade and Economic Security, European Commission
Subjects: EU market, developing countries, development aid, generalised preferences, market access, rule of law, sustainable development, tariff preference

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   EUROPEAN COMMISSION  Brussels, 4.7.2023  COM(2023) 426 final 2023/0252 (COD)  Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) No 978/2012 of the European Parliament and of the Council of 25 October 2012 applying a scheme of generalised tariff preferences and repealing Council Regulation (EC) No 732/2008  
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

• 
The European Union (EU) has granted trade preferences to developing countries1 through the 
Generalised  Scheme  of  Preferences  (GSP)  since  1971.  It  is  part  of  its  common  commercial 
policy, in accordance with the general provisions governing the EU's external action2.  

The GSP is one of the EU’s key instruments to assist developing countries to integrate in the 
world economy through trade, reduce poverty, and support sustainable development through 
the  promotion  of  core  human  and  labour  rights,  environmental  protection,  and  good 
governance. The GSP consists of three arrangements: 

 

 

 

Standard GSP: for low and lower-middle income countries, providing for a reduction 
or full removal of customs duties on two thirds of EU tariff lines. 

GSP+:  the  special  incentive  arrangement  for  sustainable  development  and  good 
governance, which reduces tariffs to 0% for broadly the same tariff lines as Standard 
GSP.  It  is  granted  to  vulnerable  low  and  lower-middle  income  countries  that 
implement  27  international  conventions  related  to  human  rights,  labour  rights, 
protection of the environment and good governance. 

EBA (Everything But  Arms): the special arrangement for least developed countries 
(LDCs),  providing  them  with  duty-free,  quota-free  access  to  the  EU  market  for  all 
products except arms and ammunition. 

The current scheme is based on Regulation (EU) No 978/20123 and applies until 31 December 
2023. Unless a new Regulation replacing the existing Regulation is adopted prior to that date, 
the  Standard  GSP  and  the  GSP+  arrangements  will  cease  to  apply  from  1  January  2024. 
Imports  from  developing  countries  under  Standard  GSP  and  GSP+  would  thus  be  charged 
with  Most  Favoured  Nation  (MFN)  duties.  However,  imports  from  LDCs  would  still  be 
covered by the EBA arrangement, which does not have an expiry date.  

On  22  September  2021,  the  European  Commission  adopted  a  Proposal4  for  a  Regulation  of 
the European Parliament and Council on applying a generalised scheme of tariff preferences. 
The new Regulation would repeal Regulation (EU) No 978/2012 of the European Parliament 
and  of  the  Council  and  enter  into  force  from  1  January  2024.  The  ordinary  legislative 
procedure  is  ongoing  but  has  not  been  concluded  and  there  is  a  risk  that  it  will  not  be 

1 

2 

3 

4 

The  expression  “developing  countries”  is  used  following  WTO  terminology,  see  for  instance  the 
chapeau of the Marrakesh Agreement Establishing the WTO (“Recognizing further that there is need for 
positive efforts designed to ensure that developing countries, and especially the least developed among 
them, secure a share in the growth in international trade commensurate with the needs of their economic 
development”)  and  the  GATT  Enabling  Clause  (“Decision  on  Differential  and  More  Favourable 
Treatment, Reciprocity and Fuller Participation of Developing Countries”). 
Treaty  on  European  Union  -  TITLE  V:  GENERAL  PROVISIONS  ON  THE  UNION'S  EXTERNAL 
ACTION AND SPECIFIC PROVISIONS ON THE COMMON FOREIGN AND SECURITY POLICY 
Chapter 
21 
http://data.europa.eu/eli/treaty/teu_2008/art_21/oj.  
Regulation  (EU)  No  978/2012  of  the  European  Parliament  and  of  the  Council  of  25  October  2012 
applying  a  scheme  of  generalised  tariff  preferences  and  repealing  Council  Regulation  (EC)  No 
732/2008 (OJ L 303, 31.10.2012, p. 1). 
COM(2021) 579: Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE 
COUNCIL  on  applying  a  generalised  scheme  of  tariff  preferences  and  repealing  Regulation  (EU)  No 
978/2012 of the European Parliament and of the Council. 

the  Union's 

1:  General 

-  Article 

provisions 

external 

action 

on 

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concluded in time. It is necessary to ensure continuity in the operation of the scheme beyond 
31 December 2023. The consequences of any discontinuity 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,  with  significant  economic  shocks  for  companies  in  the  EU  and  in  beneficiary 
countries.  

This proposal is tabled with a view to ensure continuity and sufficient time for the legislative 
procedure  necessary  to  prolong  the  application  of  the  existing  rules  and  avoid  the  negative 
consequences outlined  above. The Commission is of the view  that the new GSP Regulation 
should apply as soon as possible, at which point this temporary prolongation of the existing 
scheme  should  end.  It  is  therefore  proposed  to  maintain  the  current  Regulation  beyond  31 
December 2023, with no changes, until the moment a successor Regulation is agreed among 
legislators and enters into force, after an appropriate transition period.  

Given  the  prevailing  uncertainties  about  the  time  it  will  take  to  complete  the  legislative 
process on the new GSP Regulation, it is proposed to extend the validity of the current GSP 
Regulation until 31 December 2027. This will create a window for the successor Regulation 
to  be  prepared,  agreed,  and  adopted  with  sufficient  notice  for  economic  operators  and 
beneficiary countries to prepare for any changes made, without running the risk of an open-
ended extension which would in effect perpetuate the status quo and delay opportune reforms 
in the scheme.  

This proposal amends only the date of application of Regulation (EU) No 978/2012.  

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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2023/0252 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Regulation (EU) No 978/2012 of the European Parliament and of the Council 
of 25 October 2012 applying a scheme of generalised tariff preferences and repealing 
Council Regulation (EC) No 732/2008 

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 draft legislative act to the national parliaments, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

Since  1971,  the  Community  has  granted  trade  preferences  to  developing  countries 
under its Generalised Scheme of Preferences. 
Regulation (EU) No 978/2012 of the European Parliament and of the Council1provides 
for the application of the scheme of generalised tariff preferences ('the scheme') until 
31  December  2023  except  for  the  special  arrangement  for  the  least-developed 
countries to which such expiry date does not apply.  

On 22 September 2021 the European Commission adopted a proposal for a Regulation 
of  the  European  Parliament  and  of  the  Council  on  applying  a  generalised  scheme  of 
tariff  preferences  and  repealing  Regulation  (EU)  No  978/2012  of  the  European 
Parliament and of the Council2. The proposed Regulation is set to enter into force on 1 
January 2024. The ordinary legislative procedure is ongoing and there is a risk that it 
will not  be concluded by  31 December 2023.  It is  therefore necessary to  propose  an 
extension of Regulation (EU) No 978/2012 to ensure continuity in the operation of the 
scheme  beyond  31  December  2023  until  the  moment  a  successor  Regulation  is 
adopted and applies.  

The period of extension of the current Regulation should provide the time needed for 
the legislative process for the adoption of the new Regulation. Accordingly, the period 
of application of Regulation (EU) No 978/2012 should be extended until 31 December 
2027. In case the Regulation based on Commission Proposal COM(2021)579 becomes 
applicable  before  that  date,  the  extension  of  the  period  of  application  of  Regulation 
(EU) No 978/2012 should be correspondingly shortened, while providing an adequate 
transition  period.  To  ensure  the  continued  application  of  Regulation  (EU)  No 

1 

2 

Regulation  (EU)  No  978/2012  of  the  European  Parliament  and  of  the  Council  of  25  October  2012 
applying  a  scheme  of  generalised  tariff  preferences  and  repealing  Council  Regulation  (EC)  No 
732/2008 (OJ L 303, 31.10.2012, p. 1). 
COM(2021) 579 final. 

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978/2012, if the publication of this Regulation takes place after 31 December 2023, it 
should apply retroactively from 1 January 2024, 

HAVE ADOPTED THIS REGULATION: 

In  Article  43(3)  to  Regulation  (EU)  No  978/2012  the  year  “2023”  is  replaced  by  the  year 
“2027”. 

Article 1 

This Regulation shall enter into force on the day of its publication in the Official Journal of 
the European Union.  If the publication takes place after 31 December 2023, this Regulation 
shall apply retroactively from 1 January 2024.  

Article 2 

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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LEGISLATIVE FINANCIAL STATEMENT 

LEGISLATIVE FINANCIAL STATEMENT ‘REVENUE’- FOR PROPOSALS 
HAVING BUDGETARY IMPACT ON THE REVENUE SIDE OF THE BUDGET 

1. 

NAME OF THE PROPOSAL: 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Regulation (EU) No 978/2012 of the European Parliament and of the Council of 25 
October  2012  applying  a  scheme  of  generalised  tariff  preferences  and  repealing  Council 
Regulation (EC) No 732/2008  

2. 

BUDGET LINES: 

Revenue line (Chapter/Article/Item): Article 120 

Amount budgeted for the year concerned: n/a 

(only in case of assigned revenues):  

The revenues will be assigned to the following expenditure line (Chapter/Article/Item): n/a 

3. 

 

X 

 

FINANCIAL IMPACT 

Proposal has no financial implications 

Proposal has no financial impact on expenditure but has a financial impact on revenue 

Proposal has a financial impact on assigned revenue 

The effect is as follows:  

Revenue line 

Impact on revenue34 

12 months period starting 
01/01/2024 (if applicable) 

Year 2024 

(EUR million to one decimal place) 

/Article/ 120 

Impact on own 
resources 

Chapter/Article/Item … 

-2,977.6 

Situation following action 

Revenue line 

[N+1] 

[N+2] 

[N+3] 

[N+4] 

[N+5] 

Chapter/Article/Item … 

Chapter/Article/Item … 

3 

4 

The amounts per year need to be an estimation based on the formula or method defined under section 5. 
For the starting year, the yearly amount is normally paid without a reduction or prorata. 
In the case of traditional own resources (customs duties, sugar levies), the amounts indicated must be 
net amounts, i.e. gross amounts after deduction of 20 % for collection costs. 

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(Only  in  case  of  assigned  revenues,  under  the  condition  that  the  budget  line  is  already 
known): n/a 

Expenditure line5 

Year N 

Year N+1 

Chapter/Article/Item 
… 

Chapter/Article/Item 
… 

Expenditure line 

[N+1] 

[N+2] 

[N+3] 

[N+4] 

[N+5] 

Situation following action 

Chapter/Article/Item 
… 

Chapter/Article/Item 
… 

1. 

ANTI-FRAUD MEASURES 

N/A 

OTHER REMARKS 

The scheme of generalised preferences (GSP) gives, under conditions, customs preferences to 
certain products entering the EU. 
Based on the last available data (2019)6, these preferences represent under the proposed GSP 
regulation a loss of revenue for the EU of 2.977.6 Mio EURO (annex 1). 

The  new  regulation  would  perpetuate  existing  preferences.  Additionally,  the  possibility  of 
countries  losing  coverage  of  the  scheme  due  to  reaching  upper-middle-income  statues  or 
signing an FTA with the EU would contribute to lowering the revenue losses. 

The total loss of revenue would be 3,970 Mio EURO (gross amount). Deducting 25% that are 
retained in the Member States to compensate for collection costs the loss of revenue  for the 
EU  budget  would  be  2,978  Mio  EURO  distributed  among  the  different  regimes  in  the 
following way: 

Mio 
EURO 

Pref. Imports  

Loss of 
revenue  

25% reduction 
"Member States 
collection costs" 

EBA 

25,171  

2,764 

GSP + 

8,406 

776 

2,073 

582 

5 
6 

To be used only if necessary. 
Data for 2020 and 2021 is available, but was not chosen as a basis for the calculations as it is considered 
an unusual and non-representative year. 

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GSP 

Total 

13,005 

430 

46,583 

3,970 

323 

2,978 

Annex 1: Effect on EU revenue by GSP beneficiary 

EBA Countries  

Total Imports x EURO 
1,000  

Eligible Imports x 
EURO 1,000  

Preferential 
Imports x EURO 
1,000  

MFN 
average  

EBA 
rate 
average  

EU loss of 
revenue x 
EURO 1,000  

- 

- 

- 

- 

Afghanistan 

49,655 

19,501 

14,802 

2.9% 

Angola 

3,520,990 

37,270 

31,004 

7.7% 

Bangladesh 

15,927,629 

15,874,498 

15,366,176 

11.7% 

Benin 

Bhutan 

19,183 

2,854 

2,059 

7.0% 

10,022 

9,817 

9,435 

5.7% 

Burkina Faso 

242,090 

20,944 

20,000 

6.1% 

Burundi 

Cambodia 

31,505 

262 

142 

5.3% 

4,574,251 

4,428,234 

4,173,909 

11.9% 

Central African Republic 

12,149 

66 

Chad 

Comoros 

135,515 

1,950 

23,416 

9,408 

8,691 

6.6% 

Congo (Democratic Rep) 

822,182 

8,453 

1,794 

11.1% 

Djibouti 

3,184 

874 

81 

11.5% 

Equatorial Guinea 

886,116 

16,843 

7,407 

0.7% 

Eritrea 

Ethiopia 

Gambia 

Guinea 

1,962 

1,737 

1,681 

11.9% 

520,210 

255,691 

246,854 

8.8% 

13,247 

10,897 

10,145 

8.0% 

732,435 

4,534 

1,738 

5.9% 

Guinea Bissau 

64,299 

515 

411 

8.4% 

Haiti 

Kiribati 

Laos 

Lesotho 

33,890 

10,672 

8,747 

11.0% 

66 

65 

12 

11.0% 

285,962 

240,844 

212,040 

10.0% 

299,445 

4,710 

597 

9.1% 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

434 

2,378 

1,805,019 

145 

542 

1,225 

7 

497,288 

- 

- 

573 

200 

9 

52 

200 

21,684 

808 

103 

35 

962 

1 

21,274 

54 

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Liberia 

327,056 

3,113 

2,001 

4.5% 

Madagascar 

906,173 

698,620 

8,151 

6.9% 

Malawi 

Mali 

259,579 

246,715 

238,199 

0.1% 

30,942 

5,873 

3,700 

5.1% 

Mauritania 

675,106 

336,957 

332,825 

8.8% 

Mozambique 

1,619,461 

1,144,760 

1,099,775 

3.0% 

Myanmar 

2,731,998 

2,593,015 

2,470,859 

11.0% 

Nepal 

Niger 

Rwanda 

67,719 

59,535 

55,329 

7.9% 

6,185 

3,927 

2,583 

1.0% 

52,002 

10,968 

10,046 

5.9% 

Sao Tome and Principe 

7,659 

877 

740 

3.4% 

Senegal 

471,995 

337,004 

330,186 

10.0% 

Sierra Leone 

265,673 

2,927 

1,455 

3.3% 

Solomon Islands 

61,559 

61,419 

61,272 

22.2% 

Somalia 

23,119 

301 

South Sudan 

1,862 

1,447 

- 

- 

- 

- 

Sudan 

Tanzania 

272,348 

7,975 

6,998 

1.6% 

419,033 

232,563 

225,134 

4.0% 

Timor-Leste 

4,187 

1,256 

0 

12.3% 

Togo 

Tuvalu 

Uganda 

Vanuatu 

Yemen 

Zambia 

211,711 

17,563 

16,359 

6.4% 

224 

88 

- 

- 

416,610 

131,769 

129,242 

7.6% 

742 

77 

22 

4.0% 

95,481 

9,726 

8,723 

13.2% 

352,622 

54,298 

49,852 

2.8% 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

90 

566 

199 

189 

29,243 

33,386 

273,017 

4,377 

26 

593 

25 

32,859 

48 

13,612 

113 

9,052 

0 

1,045 

9,798 

1 

1,148 

1,371 

EBA total 

37,490,449 

26,923,416 

25,171,176 

11.0% 

2,763,751 

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GSP+ Countries  

Total Imports x 
EURO 1,000  

Eligible Imports x 
EURO 1,000  

Preferential 
Imports x EURO 
1,000  

MFN 
average  

GSP+ 
rate 
average  

EU loss of 
revenue x 
EURO 1,000  

Armenia 

334,119 

200,580 

196,657 

4.6% 

Bolivia 

547,509 

83,017 

78,203 

1.7% 

Cape Verde 

84,537 

68,040 

61,240 

20.1% 

Kyrgyz Republic 

104,734 

7,444 

4,541 

5.5% 

Mongolia 

74,705 

17,351 

14,060 

11.0% 

Pakistan 

5,917,043 

5,268,942 

5,116,967 

10.1% 

Philippines 

7,075,078 

2,437,012 

1,766,682 

7.6% 

Sri Lanka 

2,266,802 

1,922,801 

1,167,843 

8.9% 

GSP+ total 

16,404,528 

10,005,187 

8,406,193 

9.2% 

- 

- 

- 

- 

- 

- 

- 

- 

9,028 

1,319 

12,288 

249 

1,542 

514,803 

133,553 

103,391 

776,174 

General GSP Countries  

Total 
Imports x 
EURO 1,000  

Eligible Imports x 
EURO 1,000  

Preferential 
Imports x EURO 
1,000  

MFN 
average  

GSP 
rate 
average  

EU loss of 
revenue x 
EURO 1,000  

Congo 

Cook Islands 

737,147 

6,385 

2,623 

1,083 

236 

7.4% 

4.1% 

8 

- 

- 

India 

38,052,127 

8,626,452 

7,929,033 

9.6% 

6.5% 

247,014 

Indonesia 

13,531,056 

6,140,299 

4,835,094 

8.2% 

4.6% 

174,707 

Kenya 

Micronesia 

Nauru 

Nigeria 

Niue 

Samoa 

Syria 

971,904 

334,198 

1,640 

4.9% 

1.9% 

39 

202 

24 

10 

4 

11.5% 

7.0% 

- 

- 

50 

0 

17,072,490 

161,796 

129,049 

7.3% 

2.8% 

5,726 

269 

879 

35 

457 

- 

- 

- 

- 

44,378 

23,635 

4,143 

8.3% 

4.4% 

Tadjikistan 

42,091 

14,082 

12,517 

11.5% 

9.1% 

Tonga 

237 

177 

127 

9.7% 

3.2% 

162 

299 

8 

Uzbekistan 

172,288 

106,678 

93,595 

6.7% 

4.3% 

2,220 

General GSP total 

70,631,494 

15,411,550 

13,005,438 

9.1% 

5.8% 

430,195 

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