Monday Dec 23, 2024
Monday Dec 23, 2024
Saturday, 20 July 2024 00:55 - - {{hitsCtrl.values.hits}}
The European Commission has adopted a favourable decision on 09 July 2024 on the joint application made by Sri Lanka and Indonesia, granting permission for Sri Lanka to use fabrics and materials of Indonesian origin falling under HS Chapters 51 to 55, 58 and 60 for manufacturing certain textile and apparel products under HS Chapters 61, 62 and 63 destined for the EU region, and for such products to qualify for duty concessions under the EU GSP Scheme. This flexibility will continue provided that both countries remain GSP beneficiary countries.
Under the current EU GSP scheme, the rule of origin to be met for the products of HS Chapters 61, 62 and 63 is a rule of double transformation, which requires that the fabrics used in the manufacturing in Sri Lanka are either produced locally, imported from the Union, imported from South Asia, or upon request, imported from another country of regional group I. Sri Lanka submitted the joint application with Indonesia which belongs to regional group I, since it is a very strong textile producer covering cotton, manmade fibres and synthetics which could adequately supply fabrics to Sri Lanka where the fabric supply base is insufficient to cater to the export-oriented garment sector.
Since Sri Lanka largely sources fabrics from China, a considerable proportion of textile and apparel products exported to the EU region falls outside the EU GSP Scheme, and therefore do not qualify for duty concessions. In this context, the flexibility granted by the EU region for Sri Lanka to use fabrics and other materials sourced from Indonesia for its exports to the EU region would provide greater market access to the region for the Sri Lankan apparel sector exporters and would improve the utilisation of the benefits granted under the EU GSP Scheme. The decision shall apply with effect from 08 August 2024.
The application was a joint effort by the Department of Commerce Sri Lanka, Joint Apparel Association Forum of Sri Lanka, Embassy of Sri Lanka in Jakarta, Embassy of Sri Lanka in Brussels and the Ministry of Trade of Indonesia. Both countries have undertaken to ensure compliance with the GSP rules of origin and with all other provisions concerning the implementation of the rules of preferential origin.
The European Commission (EC) has previously approved a joint request submitted by Sri Lanka and Indonesia on tobacco sector in 2012 allowing Indonesian tobacco growing sector to supply materials of Indonesian origin to Sri Lankan cigar manufacturing sector to benefit from the EU GSP under the Cross Regional Cumulation.
