1. INTRODUCTION  

The Generalised System of Preferences (GSP) was negotiated under the auspices of United Nations Conference on Trade and Development (UNCTAD).

The objectives of the GSP programme are:-

• to increase the export earnings of preference-receiving countries;
• to promote their industrialisation; and
• to accelerate their rate of economic growth

2. WHAT IS GSP

1. The GSP is a system whereby developed countries grant preferential treatment to eligible products imported from developing countries, so that export of developing countries would be competitive in the developed countries markets. The preference-giving country is also known as the donor country, and the preference-receiving country as the beneficiary country;
2. The preferential treatment is in the form of reduced import duty, and granted without reciprocal obligation on the part of the developing countries; and
3. The preference giving countries under the GSP scheme are: European Union (Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Germany, Greece, Finland, France, Hungary, Ireland, Italy, Latvia, Lithuana, Luxemborg, Malta, Netherlands, Poland, Portugal, Romania Slovakia, Slovenia, Spain, Sweden and United Kingdom), Norway, Switzerland, Belarus, Russian Federation and Turkey.

3. PURPOSE OF GSP

1. The purpose of the GSP is to enable exports of developing countries to be competitive in the developed countries' markets; and
2. The lower tariffs or duty free entry make it attractive for importers in the donor countries to import from exporters in the beneficiary countries.

4. PRODUCT COVERAGE

1. The Regulation contains rules for both industrial and agricultural products:
   • Agricultural products falling within HS Chapters 1-25;
   • Industrial products, as well as ferro-alloys, falling within HS Chapters 25-97 are covered by the EC scheme. The list of products covered and treatment applied is contained in Annex IV of Regulation 2501/2001 (attached).
2. In 1 January 2006, EU has reinstated most of the product under Chapter 39, 40, 61-63, 84 and 85 except for Chapter 15.

5. GOODS ELIGIBLE FOR GSP

1. The most essential part of the GSP scheme is the rules of origin. These rules are prescribed by the donor countries to ensure that the GSP benefits are confined to products genuinely originating from the beneficiary countries. Goods are only eligible for GSP treatment when certain origin conditions are satisfied. They must be transported directly from the exporting preference receiving country to the preference-giving country.
2. They must also either be wholly obtained or have undergone substantial transformation in the country of origin. Products which are wholly obtained will automatically qualify for preferential treatment, while products with imported content can qualify provided they have undergone substantial transformation or have not exceeded certain percentage of import content.
3. The basis for determining substantial transformation of products differ form one scheme to another. These can be generally grouped into two which are the process criteria and the percentage criteria. Under the process criteria, product encompasses imported materials, parts or components can obtain originating status if it has gone through substantial transformation.
4. Several GSP schemes have added another dimension to the origin criteria by granting Several GSP schemes have added another dimension to the origin criteria by granting "cumulative" "cumulative" origin in which processes or value-added in more than one preference-receiving country in a regional grouping may be added together in order to determine whether the exported finished products qualify for GSP. The GSP scheme allows accumulation of ASEAN origin products/components, i.e. Malaysian manufacturers can source components/inputs produced in other ASEAN countries. They would be deemed to be of Malaysian origin and hence their value will be taken into consideration when calculating local value-added.
5. The claim for GSP treatment must be supported by appropriated documentary evidence as to origin and consignment. The documentary evidence accepted for purposes of GSP is the Certificate of Origin, which is more commonly referred to as The claim for GSP treatment must be supported by appropriated documentary evidence as to origin and consignment. The documentary evidence accepted for purposes of GSP is the Certificate of Origin, which is more commonly referred to as "Form A". In most instances, Form A has to be officially certified by an authorised governmental agency. In Malaysia , the authorised issuing authority is MITI. For GSP exports to the Canada and Australia however, official certifications is not required and exporters can "self-certify” "Form A". In most instances, Form A has to be officially certified by an authorised governmental agency. In Malaysia , the authorised issuing authority is MITI. For GSP exports to the Canada and Australia however, official certifications is not required and exporters can "self-certify” the Form A.

6. HOW TO EXPORT UNDER GSP

1. Establish the tariff classification of product:
   • Product classification is normally in accordance with the Harmonised Commodity Description and Ceiling System (HS).
2. Check the product coverage:
   • not all products are eligible for preferential treatment under the GSP. The exporter must therefore determine whether the goods are eligible for preference in the target market (importing country);
   • to do this, the exporter must examine the product lists of the relevant GSP scheme to determine by reference to the precise tariff classification and product description of the goods, whether they are eligible for GSP treatment.
   • the preference-giving countries have lists that itemise on the products that are eligible for preference and those that are excluded from preference under GSP scheme.
   • these lists are periodically reviewed by preference giving countries and often modified.
   • Comply with Rules of Origin:
3. The Rules of Origin are an essential parts of the GSP scheme in order to ensure that the benefits of Preferential Tariff treatment under the GSP are confined to products genuinely produced by or substantially transformed in the preference receiving countries. Strict enforcement of rules of origins necessary to prevent products originating from third countries and traded in transit or products which are only slightly worked upon and do not undergo a true process of manufacture from benefiting under the GSP. The main elements of the rules of origin under the GSP are :
   • origin criteria;
   • consignment conditions; and
   • documentary evidence
4. Each GSP scheme lays down the origin criteria which have to be met if the products to be exported are to qualify for preferential treatment.

7. HOW DO MANUFACTURERS/EXPORTERS APPLY FOR GSP

Step 1: Cost Analysis Approval

• Manufacturer/exporters are required to submit application form for cost analysis approval to Trade Cooperation and Industry Coordination Section (MITI counter) or MITI's branch offices. The form could be obtained at:

MITI's Service Counter
Trade Cooperation and Industry Coordination Section
Ground Floor,
Ministry of International Trade and Industry,
Block 10, Jalan Duta
50622 Kuala Lumpur and MITI's branch offices

or can be downloaded at:

• Approval letter will be issued to products which are qualified to the rules of origin under GSP scheme.
• The approval for the cost analysis will be given within 7 working days

Step 2 : Endorsement of GSP Form A

• Form A is a certificate that is accepted as evidence of origin by all preference-giving countries to obtain preferential treatment.
• Form A can be purchased from Federation of Malaysian Manufacturers (FMM) at:

Wisma FMM,
No. 3, Persiaran Dagang,
PJU9, Bandar Sri Damansara,
52200, Kuala Lumpur.

• The endorsement of the Form A will be processed within 2 working days.

WHERE TO SEEK ADVICE

For further information you may contact:

• MITI's Service Counter at Ground Floor
  Trade Cooperation and Industry Coordination Section
  Ministry Of International and Industry
  Blook 10, Jalan Duta
  50622 Kuala Lumpur

Tel: 03-62034829
Fax: 03-62013351

Officer in-charge: Mr. Anuar Safian
Tel: 03-62000386
email: anuar.safian@miti.gov

• Trade Cooperation and Industry Coordination Section at 12nd Floor,
  Blok 10, Jalan Duta
  50622 Kuala Lumpur

Tel: 03-62000140
Fax: 03-62012972

Officer in-charge: Mr. Gan Chee Koon
Tel: 03-62000132
fax:03-62012972
email: ckgan@miti.gov.my

Officer in-charge: Mr. Ariffatri Mohammad
Tel: 03: 62000137
Fax: 03-62012972
email:ariffatri@miti.gov.my

• MITI's Branch Offices:

Johor
Officer in-charge: Ms. Aida Syukrena Mohd Idris
Tel : 07 - 223 5639 
Email : aidasyukrena@miti.gov.my  

Kelantan
Officer in-charge: Mr. Azran Hj. Deraman
Tel : 09 -748 3457 
Email : azran@miti.gov. my  

Pahang
Officer in-charge: vacant
Tel : 09 - 513 0851 
Email : @miti.gov.my

Penang
Officer in-charge: Mr. Mohd Iqbal Mohd Noor
Tel : 04 - 262 5133 
Email : iqbal@miti.gov.my  

Perak
Officer in-charge: Mr. Shuhardi Turaz Radzik
Tel : 05 - 241 7751 
Email : shuhardi@miti.gov.my  

Sabah
Officer in-charge: Mr. Azman Poji
Tel : 088 - 236 758 
Email : azmanpoji@miti.gov. my  

Sarawak
Officer in-charge: Ms. Sabariah Mohd Sofian  
Tel : 082 - 257 164 
Email : sabariah@miti.gov.my  

• MITI Service Counter (for online (e-PCO) application only):

Malacca
Officer in-charge: Ms. Haslina Mahjar
Tel : 06-253 0068/253 0069
Email : haslina.mahjar@miti.gov.my