Contents
What is DCTS and why is it important for international trade?
DCTS is a trade preference scheme that replaces the Generalised Scheme of Preferences (GSP). DCTS improves access to the UK market for developing countries and supports sustainable growth for these countries through a more generous unilateral trade and tariff offer.
What is DCTS?
DCTS applies to qualifying countries and includes improvements such as lower tariffs and simpler rules of origin requirements for countries exporting to the UK. While British households and businesses benefit from lower prices and more choice
What countries does DCTS cover?
DCTS covers 65 countries, which are split into 3 preference tiers (see Annex 1 for further information):
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The Comprehensive Preferences are those that are Least Developed Countries (LDC)
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The Enhanced Preferences are those that are economically vulnerable, Low income (LICs) and Low-middle income (LMICs) countries
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Countries under the Standard Preferences are LICs and LMICs
How is DCTS different from GSP?
Tariff
In the Tariff space, this includes more than 150 new tariff cuts for Enhanced Preference countries.
8 economically vulnerable countries (Algeria, Republic of Congo, Cook Island, Micronesia, Nigeria, Niue, Syria, and Tajikistan) have moved to Enhanced Preference and, as economically vulnerable low income and lower-middle income countries, receive duty free trade on 92% of goods.
Least developed countries continue to benefit from duty-free, quota-free trade on everything but arms.
Rule of origin
Rules of origin determine a product’s national origin by defining the minimum local content and processing required to qualify for preferential tariffs.
The rule of origin is simpler, with more generous product-specific rules and increased threshold for non-originating content up to 75% for LDCs. 40% of product specific rules have an alternative rule.
Significantly there are more flexible cumulation rules, with LDCs being able to benefit from extended cumulation with EPA countries that have a trade agreement with the UK for tariff-free exports.
Suspensions
The DCTS has conditions which, if not met, allow for suspension or variation of preference from any beneficiary in any tier of the scheme.
The DCTS conditions are clearer and have a broader base for suspension based on international conventions, and now includes climate change and environment, in addition to human rights and labour rights.
Furthermore, all economically vulnerable countries automatically get Enhanced Preferences, there is no longer a need to ratify 27 international conventions.
Goods graduation
Goods graduation is the suspension of preferential rates of customs duty on certain imports. These imports are deemed to be highly competitive and no longer need preferences to compete in the UK market. Competitive products for India and Indonesia continue to be excluded from preferential tariffs, protecting the interests of economically vulnerable producers of these goods.
Renaming
There has been a renaming of the tiers of preferences within the DCTS:
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The GSP LDC Framework is the DCTS Comprehensive Preferences.
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The GSP Enhanced Framework is the DCTS Enhanced Preferences.
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The GSP General Framework is the DCTS Standard Preferences.
This is intended to reflect the UK’s offer in each tier and the progression of most countries as their economies grow from DCTS Comprehensive Preferences to DCTS Enhanced Preferences and then DCTS Standard Preferences.
Proof of origin
There will be no change to the administrative requirements and proof of origin. To claim preferential tariffs under the DCTS, businesses will require a valid proof of origin, which can be either of the following:
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A GSP “Form A”
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An origin declaration - which must include information to enable the identification of an originating good.
Businesses can self-certify documents. An official stamp from the exporting country is not required.
Origin declarations
An origin declaration must:
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be made out on an invoice or any other commercial document that describes the goods in sufficient detail to enable them to be identified
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include the following data elements:
- exporter’s name and business address
- date of direct shipment to the UK
- other references, e.g. purchase order no.
- consignee’s name and business
- purchaser’s name and address (if not the consignee)
- country of transhipment
- country of origin of the goods. If the shipment includes goods of different origins, enter details against data element 12
- transportation details
- terms of sale
- currency
- number of packages
- specification of commodities (kind of packages, marks and numbers, general description and characteristics, i.e. grade, quality)
- quantity
- unit price
- total price
- net weight
- gross weight
- invoice total
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include the text below incorporating the information required by the footnotes.
The exporter of the products covered by this document (customs identification No…. (1)) declares that, except where otherwise clearly indicated, these products are of …. (2) preferential origin in accordance with the rules of origin of the Developing Countries Trading Scheme of the UK and that the origin criterion met is … … ( 3 ).
(Place and date (4))
(Name and signature of the exporter)
- Enter your customs identification number if allocated. Exporters in the UK exporting goods under bilateral cumulation.
- Enter the origin of the goods.
- Products wholly obtained: enter the letter ‘P’; Products sufficiently processed: enter the letter ‘W’ followed by a heading of the Harmonised System (example ‘W’ 9618).
- This may be omitted if included in the document itself.
Using a Form A
Form A must bear a serial number, printed or otherwise, or, where there is no serial number, a reference to the commercial invoice by which it can be identified does not need to be stamped and signed by an authority designated by the beneficiary country, so does not need to be an original
Box 1
Enter the full name and business address of the exporter.
Box 2 Consignee
The completion of this box is optional, but you are recommended to enter the name and address of the consignee where this is known. For exports to exhibitions which are later sent on to the UK, insert also the name and address of the exhibition.
Box 3 Transport details
You should complete this box on the basis of available information. If you do not have details of the transport arrangements, then leave this box blank.
Box 4 For official use
This box is reserved for the use of the certifying authority. However, if the Form A has been made out after the goods have been shipped, stamp or write “Issued Retrospectively”.
Box 5 Item number
If different types of goods are shown separately on the invoice(s), show each type separately on the Form A and itemise them (1, 2, 3 etc), so they can be cross-checked to the invoice if necessary.
Box 6 Marks and numbers
Enter the identifying marks and numbers that appear on the packages. If the packages are marked with the address of the consignee, state the address. If they are not marked in any way, put ‘No marks and numbers’. If both originating and non-originating goods are packed together, add ‘Part contents only’ at the end of each entry.
Box 7 Number and kind of packages, description of goods
Bulk Goods
Identify the goods by giving a reasonably full commercial description e.g. ‘photocopiers’ or ‘typewriters’ rather than ‘office machinery’. However, if the invoices give full identifying details (which need not necessarily include details of the marks and numbers of the packages) only a general description is needed.
For goods in bulk which are not individually packed, insert ‘In bulk’. The quantity shown must be the same as, or relatable to, the quantity shown on the invoice for the goods (e.g. if the invoice shows 100 cartons and these are loaded on to 10 pallets, specify ‘100 cartons’ NOT ‘10 pallets’).
Mixed consignments
For consignments containing both originating and non-originating goods, describe only the originating goods on the Form A. You may be unable to avoid showing originating and non- originating goods on the same invoice. In this case, mark the invoice (for example, with an asterisk) to show which goods are non-originating and put an appropriate statement in Box 7 immediately below the description of the goods, e.g. ‘Goods marked * on the invoice are non-originating and are not covered by this Form A’.
The same considerations will apply if you have a mixed consignment of goods qualifying by virtue of a derogation and others which are not covered by that derogation.
Unused space
Draw a horizontal line under the final item in this box and rule through the unused space with a ‘Z-shaped’ line.
Box 8 Origin criterion
This box signifies to HMRC which origin rule has been applied to the goods.
As described in the note about it on the reverse of the Form A, enter the code:
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“P” for wholly obtained goods and
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“W”, followed by the heading, where the goods have been sufficiently processed
For example: for wholly obtained goods of, say, heading 96.18, the indication should read: “P” and for sufficiently processed goods of the same heading, it should read: “W” 96.18.
Failure to complete this box correctly could lead to the rejection of the Form A.
Box 9 Gross weight or other quantity
Insert the quantity in metric units (e.g. kilograms, litres etc).
Box 10 Number and date of invoice
You are recommended to enter the details of the commercial invoice as this ensures the signatory has verified the ex-works price.
Box 11 Certification
This field may be left blank. The UK no longer requires the Form A to be certified by a designated authority in the exporting DCTS country.
Box 12 Declaration by the exporter
Complete this box by inserting the name of the country in which the goods are considered to have originated. You should take into account that where the provisions for regional cumulation have been applied, that country may not be the same as the country of final processing or the country of exportation.
For the importing country you must put ‘United Kingdom’; indicating a different importing country (e.g., European Union) will lead to the Form A not being accepted. Only the exporter, or a person duly authorised by the exporter, can sign this declaration. Forwarding agents acting simply in that capacity are not exporters and must not sign this box. By signing this form, you declare that the goods qualify under the provisions of the Trade Preference Scheme (Developing Countries Trading Scheme) Regulations 2023 and the Customs (Origin of Chargeable Goods: Developing Countries Trading Scheme)) Regulations 2023.
If the declaration is incorrect, you will have committed an offence which may incur penalties.
Grace period
The UK GSP ceases to have effect when DCTS comes in place on 19 June 2023. However, there will be a grace period for a proof of origin made out in accordance with the former UK GSP that is issued on or before 31 December 2023.
Goods that have been entered into customs warehouse on or before this date will retain their 2-year validity.
Claiming DCTS on the Customs Declaration Service (CDS)
A CDS customs declaration to free circulation should include the following current data elements (DE):
| Data element | Requirement |
|---|---|
| DE 2/3 | Either 9001 (origin declaration) or N865 (Form A) |
| DE 4/17 | A code from the 200 series of preference codes |
More information on DCTS
Details of the policy changes to UK preferential trading arrangements were published in August 2022.
Further information on the DCTS will be published at the links below when the Scheme enters into force on 19 June
Guidance for governments and businesses including six guides on different elements of the scheme including a Rules of Origin specific guide and an interactive tool which provides tariff information and a look-up tool for product-specific rules
Customs arrangements:
DCTS legislation
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The Customs (Origin of Chargeable Goods: Developing Countries Trading Scheme) Regulations 2023
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The Trade Preference Scheme (Developing Countries Trading Scheme) Regulations 2023
Annex 1: Overview of DCTS countries
DCTS beneficiaries
The Comprehensive Preferences are those that are Least Developed Countries (LDC)
- Afghanistan
- Angola
- Bangladesh
- Benin
- Bhutan
- Burkina Faso
- Burundi
- Cambodia
- Central African Republic
- Chad
- Comoros
- Democratic Republic of Congo
- Djibouti
- East Timor (Timor-Leste)
- Eritrea
- Ethiopia
- Gambia
- Guinea
- Guinea-Bissau
- Haiti
- Kiribati
- Laos
- Lesotho
- Liberia
- Madagascar
- Malawi
- Mali
- Mauritania
- Mozambique
- Myanmar
- Nepal
- Niger
- Rwanda
- Sao Tome and Principe
- Senegal
- Sierra Leone
- Solomon Islands
- Somalia
- South Sudan
- Sudan
- Tanzania
- Togo
- Tuvalu
- Uganda
- Vanuatu
- Yemen
- Zambia
The Enhanced Preferences are those that are economically vulnerable, Low income (LICs) and Low-middle income (LMICs) countries:
- Algeria
- Bolivia
- Cape Verde
- Republic of Congo
- Cook Islands
- Kyrgyzstan
- Micronesia
- Mongolia
- Nigeria
- Niue
- Pakistan
- Philippines
- Sri Lanka
- Syria
- Tajikistan
- Uzbekistan
Countries under the Standard Preference are LICs and LMICs:
- India
- Indonesia