In exercise of powers conferred under paragraph 103 and 204 of the Foreign Trade Policy

## Report on Amendment to Handbook of Procedures, 2015-2020 Regarding GSP Scheme **1. Executive Summary:** This report analyzes a Public Notice issued by the Directorate General of Foreign Trade (DGFT), amending the Handbook of Procedures, 2015-2020, specifically paragraph 2.104. The amendment concerns the verification process for exporters' self-certification of the Rules of Origin under the Generalized System of Preferences (GSP) scheme, particularly regarding exports to the European Union (EU). The key change involves formalizing procedures for post-verification of self-certified Certificates of Origin and outlining responsibilities for local authorities and beneficiary countries in ensuring the system's integrity. This aims to streamline trade and ensure compliance with GSP rules while maintaining verification standards. **2. Introduction:** This report aims to provide stakeholders with a clear understanding of the recent amendment to the Handbook of Procedures, 2015-2020, concerning the GSP scheme. The analysis is based solely on the text of Public Notice No. 39/2015-2020, dated February 15, 2021, issued by the DGFT. **3. Policy Overview:** * This report concerns an **amendment** to the Handbook of Procedures, 2015-2020. * **Core Objective:** The core objective of this amendment is to insert a provision for verification of exporters' declarations made on a self-certification basis concerning the Rules of Origin under the GSP Scheme, particularly for exports to the EU. This objective is explicitly stated in the "Subject" line of the Public Notice. **4. Background and Rationale:** This amendment appears to be driven by the need to formalize and standardize the verification process for self-certified Certificates of Origin under the GSP scheme. The EU has implemented a Registered Exporter System (REX) allowing exporters to self-certify the origin of their goods. To maintain the credibility and integrity of this self-certification system, this amendment seems designed to establish a framework for post-verification and ensure compliance with GSP requirements, responding to potential requests from importing countries' customs agencies. Additionally, the amendment emphasizes the beneficiary country's role in having a verification system for self-certified certificates of origin. **5. Key Provisions / Changes:** This amendment specifically revises paragraph 2.104 of the Handbook of Procedures, 2015-2020. The key changes introduced by the amendment are as follows: * **Specific Part Changed:** Paragraph 2.104(c) of the Handbook of Procedures, 2015-2020. * **New Rule/Provision:** * The amendment acknowledges the EU's implementation of a self-certification scheme under the GSP, effective from 01.01.2017, utilizing the Registered Exporter System (REX). * It formalizes that competent Local Authorities will undertake post-verification of self-certified Certificates of Origin based on requests from importing countries' customs agencies. Fees for this verification are detailed in Appendix 2K. Agencies may charge TA and DA separately. * The amendment mandates that beneficiary countries must have a verification system for self-certified certificates of origin to avail GSP benefits under the self-certification system. A standard operating procedure for the verification of self-certified eCoOs is detailed in Annex II to Appendix 2C. * **Difference/Effect of Change:** The amendment introduces formal procedures for verifying self-certified origin declarations. This ensures that the GSP scheme, particularly under the EU's REX system, operates with a built-in mechanism for accountability and compliance, addressing potential concerns about fraudulent or inaccurate self-certifications. It also places a responsibility on beneficiary countries to have a verification system in place. **6. Target Audience and Stakeholders:** The primary target audience and stakeholders affected by these changes include: * Exporters registered under the REX system exporting to the EU under the GSP scheme. * Competent Local Authorities responsible for post-verification of Certificates of Origin. * Customs agencies in importing countries (EU member states). * Beneficiary countries availing GSP benefits and needing to establish verification systems. **7. Implementation Aspects (Inferred):** * **Responsible Agency/Bodies:** * Directorate General of Foreign Trade (DGFT) is responsible for issuing the amendment. * Competent Local Authorities are responsible for post-verification. * Customs agencies of importing countries initiate the verification process through requests. * Beneficiary countries are responsible for establishing verification systems. * **Timelines/Procedures:** * The EU's self-certification scheme under GSP is effective from 01.01.2017. * Post-verification is initiated based on requests from importing countries. * Fees for verification are detailed in Appendix 2K. * The standard operating procedure for verification is detailed in Annex II to Appendix 2C. **8. Expected Outcomes / Impact of Changes:** The likely intended outcomes of these specific changes introduced by the amendment are: * Enhanced credibility and integrity of the GSP scheme, particularly the self-certification process under the EU's REX system. * Improved compliance with Rules of Origin requirements for exports to the EU. * Increased accountability for exporters self-certifying the origin of their goods. * Standardized verification procedures across competent local authorities. * Increased scrutiny of self-certified origin declarations, potentially leading to the detection and prevention of fraudulent claims. **9. Conclusion:** The amendment to the Handbook of Procedures, 2015-2020, concerning the verification of self-certified origin declarations under the GSP scheme, represents a significant step towards ensuring the integrity and effectiveness of the program. By formalizing the verification process and assigning responsibilities to local authorities and beneficiary countries, the amendment aims to strengthen compliance, enhance accountability, and ultimately, facilitate legitimate trade under the GSP scheme. This amendment is significant because it addresses potential weaknesses in the self-certification process and provides a framework for maintaining the credibility of the GSP program.

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