Argentina to Lose GSP Benefits

May 14, 2012

In a Presidential Proclamation issued March 26, 2012, President Obama suspended Argentina’s Generalized System of Preferences (GSP) eligibility because of Argentina’s failure to act in good faith in enforcing two longstanding arbitral awards. According to U.S. Customs and Border Protection, goods from Argentina will lose GSP eligibility if entered or withdrawn from warehouse for consumption on or after May 28, 2012 (CSMS #12-000162).

The Presidential Proclamation states that President Obama determined it is appropriate to suspend Argentina’s GSP beneficiary status because Argentina has not acted in good faith in enforcing arbitral awards in favor of U.S. citizens or a corporation, partnership, or association that is 50 percent or more beneficially owned by U.S. citizens. According to U.S. Trade Representative Ron Kirk, Argentina’s government has not paid two longstanding arbitral awards in favor of U.S. companies, which were awarded under the United States-Argentina bilateral investment treaty and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States. These arbitral awards, which amount to over $300 million, were first rendered in 2005 and 2006. Ambassador Kirk, in a statement regarding the President’s proclamation, urged the Government of Argentina to pay the awards and noted that such payment would allow the United States to consider reinstating Argentina’s GSP eligibility.

For further information, please contact a Barnes/Richardson attorney.