The Trade Preference Scheme (Developing Countries Trading Scheme) Regulations 2023

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations revoke the Trade Preference Scheme (EU Exit) Regulations 2020 (S.I. 2020/1438) and establish a new trade preference scheme for developing countries known as the Developing Countries Trading Scheme (“DCTS”). The DCTS offers lower rates of import duty than applies under the Customs Tariff (Establishment) (EU Exit) Regulations 2020 (S.I. 2020/1430). These lower rates are available on certain goods originating from certain countries.

Regulations 5 to 7 establish the DCTS and set out its key elements, specify the qualification rules for both countries and goods, and specify the conditions that must be met to apply a DCTS rate. Regulations 8 to 10 set out the three frameworks under the scheme and specify the countries covered by these frameworks. Regulation 11 specifies which goods are covered by the frameworks.

Regulations 12 to 15 set out the rules for calculating the DCTS rate under the frameworks. The codes for calculation of the DCTS rate applicable to EP or SP goods are listed in the DCTS Specified Goods Table contained in Part 3 of the document entitled “the Developing Countries Trading Scheme Specified Goods Table, version 1.0, dated 22 May 2023”.

Regulation 16 provides that the Secretary of State may specify customs cooperation and verification of proof of origin conditions for qualifying DCTS countries in a published notice. Serious and systematic failures to comply with conditions of such a notice may result in suspension of a country or the suspension or variation of the DCTS rate.

Regulations 17 to 20 set out other grounds relating to suspension and variation. Regulation 17 allows for the suspension of a country or suspension or variation of a DCTS rate in relation to the conventions listed in Schedule 2. Regulation 18 allows for the DCTS rate to be suspended where the goods graduation ground applies. Regulation 19 allows for the suspension and variation of DCTS rates through the application of a trade preference safeguard measure. Regulation 20 deals with additional import duties imposed on certain goods from certain countries and provides for the suspension of the DCTS rate.

Regulation 21 provides for a warning and assessment procedure and regulations 22 to 24 go into further detail on the relevant steps of the procedure. Regulations 25 and 26 make provision about notices. Regulation 25 applies to all notices published in accordance with the Regulations while regulation 26 applies to suspension and variation notices only.

Regulation 27 makes amendments to the list of other eligible developing countries in Schedule 3 to the Taxation (Cross-border Trade) Act 2018(1).

A full impact assessment has not been prepared for this instrument as the policy is considered a tax related measure. An Explanatory Memorandum is published alongside the instrument at legislation.gov.uk.

(1)

2018 c. 22.