Understanding the New UK Generalized System of Preferences: How FreightAmigo Can Help You Navigate Post-Brexit Trade

Introduction: Brexit Transition and the New UK GSP

As we approach the end of the Brexit transition period, the United Kingdom is set to implement new trade rules, including a new Generalized System of Preferences (GSP). This significant change will impact importers and exporters alike, making it crucial for businesses to understand and adapt to the new system. In this article, we'll explore the key aspects of the UK GSP and how FreightAmigo's digital logistics platform can support you in navigating these changes.

Key facts about the new UK GSP:

• The new system will take effect on January 1, 2021
• It aims to reduce or remove tariffs on imports from eligible developing countries
• The UK GSP will initially provide trade preferences to the same countries as the EU
• Three frameworks will be implemented: Least Developed Countries, General, and Enhanced

Understanding the UK GSP Frameworks

1. Least Developed Countries Framework

This framework applies to countries listed by the United Nations as Least Developed Countries (LDCs). Under this system, imports from these countries will enjoy quota-free access and 0% duties on all goods, except for arms and ammunition. This approach ensures continued support for the world's most vulnerable economies.

2. General Framework

The General Framework covers low-income and lower-middle income countries, as defined by the World Bank. Some imports from these countries will see a reduction in duties, though the specifics vary depending on the type of goods. The UK Generalized Scheme of Preferences provides detailed information on which goods are covered.

3. Enhanced Framework

Similar to the General Framework, the Enhanced system applies to low-income and lower-middle income countries. However, it offers additional benefits to countries that are considered economically vulnerable due to lack of export diversification and low integration with international trade. To qualify, these countries must also have signed and implemented 27 conventions related to human rights, labor rights, environmental protection, and good governance.

Rules of Origin and Proof of Origin

Understanding and complying with the rules of origin is crucial for businesses looking to benefit from the UK GSP. These rules determine which country goods have originated from, and therefore whether they qualify for preferential treatment under the GSP.

From January 1, 2021, the UK GSP will accept the following as evidence of origin:

• A UK GSP Form A
• An origin declaration
• A Registered Exporter System (REX) statement of origin (for goods released for free circulation in the UK up to 12 months after December 31, 2020, provided the REX and commercial invoice are dated no later than December 31, 2020)

It's important to note that importers who cannot provide the necessary proof of origin at the UK border will be required to pay the full non-preferential duty rate for their goods.

Key Takeaways for Importers and Exporters

As we approach the implementation of the new UK GSP, businesses should keep the following points in mind:

1. New Duty Rates

Her Majesty's Revenue and Customs (HMRC) has published a list of duty rates for goods eligible for UK General Framework tariffs. Importers should familiarize themselves with these rates to understand the potential impact on their business.

2. REX Statement Validity

REX statements dated before December 31, 2020, will remain valid for lower import duty rates (based on the 2020 tariff) until December 31, 2021. However, this is only applicable if the commercial invoice is dated before December 31, 2021.

3. Differentiation Between EU and UK Buyers

The UK GSP system treats REX statements and Form-A's as two distinct types of proof of origin under the same scheme. UK importers must ensure their suppliers understand the need to differentiate between EU and UK buyers. Suppliers will need to issue UK GSP Form-A's to qualify for lower rates after or during the grace period.

How FreightAmigo Can Support Your Post-Brexit Trade

At FreightAmigo, we understand the complexities that come with navigating new trade regulations. As a full-service, one-stop digital supply chain finance platform, we are well-positioned to help organizations, enterprises, and individuals adapt to these changes and ensure a smooth transition into the post-Brexit era.

1. Comprehensive Digital Logistics Platform

Our platform combines artificial intelligence, big data, FreighTech, FinTech, InsurTech, and GreenTech to provide a seamless logistics experience. This integration allows us to offer real-time updates and insights on changing regulations, including the new UK GSP.

2. Automated Documentation

With the new rules of origin and proof of origin requirements, accurate documentation is more critical than ever. FreightAmigo's automated shipment document feature ensures that all necessary paperwork is completed correctly and efficiently, reducing the risk of delays or additional costs at customs.

3. Customs Clearance Support

Our platform offers integrated customs clearance services, helping you navigate the complexities of the new UK GSP. We can assist in ensuring that your shipments meet all requirements for preferential treatment under the appropriate framework.

4. Real-time Shipment Tracking

With connections to more than 1000 reputable airlines and shipping lines, FreightAmigo provides real-time shipment tracking. This feature is particularly valuable during times of regulatory change, allowing you to monitor your shipments closely and address any issues promptly.

5. 24/7 Expert Support

Our team of logistics experts is available around the clock to provide guidance and support as you navigate the new UK GSP. Whether you have questions about eligibility, documentation, or compliance, we're here to help.

6. Comprehensive Quote Comparison

FreightAmigo allows you to compare door-to-door freight quotes for various shipping methods, including international courier, airfreight, sea freight, rail freight, and trucking solutions. This feature enables you to find the most cost-effective shipping options while considering the impact of new tariffs and regulations.

7. Integrated Trade Finance and Insurance

Our platform offers integrated trade finance and cargo insurance services, providing a holistic solution for your international trade needs. This can be particularly valuable when adapting to new trade regulations and managing potential risks.

Conclusion: Embracing Change with FreightAmigo

As the UK implements its new Generalized System of Preferences, businesses engaged in international trade must be prepared to adapt. The changes brought about by Brexit and the new UK GSP present both challenges and opportunities for importers and exporters.

At FreightAmigo, we are committed to helping our clients navigate these changes successfully. Our digital logistics platform provides the tools, information, and support needed to thrive in this new trade landscape. By leveraging our comprehensive suite of services, businesses can ensure compliance with new regulations, optimize their supply chains, and maintain a competitive edge in the post-Brexit era.

As we move forward, it's important to stay informed about further developments in the UK GSP. The UK government has indicated plans to improve the scheme to better support developing countries, with more details expected in 2021. Rest assured that FreightAmigo will continue to monitor these changes and update our platform accordingly, ensuring that our clients always have access to the most current information and tools.

In these times of change, having a reliable and innovative logistics partner is more important than ever. FreightAmigo is here to support your business, providing the digital solutions you need to navigate the complexities of international trade with confidence. Together, we can turn the challenges of Brexit and the new UK GSP into opportunities for growth and success.