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On 19 July 2013, Myanmar/Burma’s reinstatement in the EU’s Generalised System of Preferences (“EU GSP”) will take effect and apply retrospectively from 13 June 2012. All products ‘originating’ in Myanmar, except ammunition and arms, will benefit from full duty-free and quota-free access to the EU market.[1] Claims for refunds of duty paid on imports from 13 June 2012 will be possible in certain circumstances.
Myanmar/Burma’s reinstatement comes less than three months after the EU’s decision in May 2013 to formally lift its sanctions regime on Myanmar/Burma (with the exception of the arms embargo, internal repression controls and related ancillary services), as reported in our previous client alert.
Background
Myanmar/Burma’s access to EU GSP was temporarily withdrawn in 1997 as a result of serious, systematic and pervasive practices of forced labour that were identified by the International Labour Organization (“ILO”). Progress on reforms led to the European Commission recommendation in September 2012 that Myanmar/Burma’s access to EU GSP be reinstated. This triggered the EU legislative procedure and the adoption of Council Regulation (EU) No 607/2013 (“Regulation”), which was published in the EU’s Official Journal on 29 June 2013.
By way of additional information, the restoration of the U.S. Generalised System of Preferences for Myanmar/Burma is also under consideration at present.
Practical Implications
We understand that importers will be eligible to receive a full refund of duties paid on the import of goods originating from Myanmar/Burma into the EU between 13 June 2012 and 19 July 2013 (the date of the Regulation’s entry into force). A belated claim for preference should be submitted to the relevant Customs authority of the EU Member State into which the goods were imported.
Myanmar/Burma’s reinstatement will be of particular relevance for importers of clothing, agricultural products, fuels and mining products. According to statistics published by the European Commission, these comprised the majority of goods imported into the EU from Myanmar/Burma in 2012 (clothing – 67.6%; agricultural products – 20.1%; fuels and mining products – 4.4%).
Recommended Actions
Companies are advised to review the impact of Myanmar/Burma’s reinstatement in EU GSP. In particular:
● current importers of goods originating in Myanmar/Burma into the EU should identify whether imports were made between 13 June 2012 and 19 July 2013 with a view to submitting a belated claim for preference. Early engagement with the relevant EU Customs authority is advised to ensure the process is as smooth as possible and the claim is not time barred;
● those that do business in the ASEAN region but not in Myanmar/Burma should consider the potential benefits of sourcing from Myanmar/Burma; and
● importers of goods originating in Myanmar/Burma into the EU must ensure they have the appropriate documentation in place to claim preferential treatment under EU GSP going forwards. They will be required to submit a valid proof of origin (certificate of origin Form A) to the Customs authority of the EU importing country on import.
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If you have any queries about how these changes might affect your company or if you require advice on any specific transactions or proposed refund claims, please do not hesitate to contact a member of Baker & McKenzie’s International Customs Group.
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[1] As a ‘Least Developed Country’, Myanmar benefits from the EU GSP’s ‘Everything But Arms’ scheme.
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