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Customs News Bulletin

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2 June 2016

 

 

Latest News

DRAFT AMENDMENTS TO THE HARMONIZED SYSTEM-BASED CUSTOMS TARIFF OF THE SOUTHERN AFRICAN CUSTOMS UNION

(Comments due by 30 June 2016)

The Commissioner for the South African Revenue Services (SARS) Customs, on behalf of the Customs administrations of Botswana, Lesotho, Namibia, South Africa and Swaziland (SACU) published draft notices to indicate how the changes to the Harmonized System Commodity Description and Coding System of the World Customs Organization (WCO) will impact on the Common External Tariff (CET) of the Southern African Customs Union (SACU).

Amendments to the Harmonized System (HS) will come into effect on 1 January 2017. As the HS forms the basis of the Customs Tariffs of most countries the changes will have an impact on the tariff classification of many products that are exported or imported.  The customs (import) duty rates may not be affected by the changes.  Importers, exporters and customs brokers in the Southern African Customs Union (SACU) should download the amendments from the SARS website to see if and how the products they export/import will be affected by the changes.  Download the draft HS 2017 amendments to the SACU CET from the SARS website at  http://www.sars.gov.za/Legal/Primary-Legislation/Pages/HS-2017.aspx.                   

The new nomenclature, which will be called HS 2017, and which will be valid with effect from 1 January 2017 until 31 December 2021, will be the sixth version of the Harmonized System since the Convention entered into force on 1 January 1988.

There are 233 sets of amendments to the current version of the HS (HS 2012), divided as follows:

  • agricultural sector (Chapters 1 to 24, with the most amendments in Chapter 3 for fish) eighty five (85);

  • chemical sector (Chapters 28 to 38) forty five (45);

  • wood sector (Chapter 44) thirteen (13);

  • textile sector (Chapters 50 to 63) fifteen (15);

  • base metal sector (Chapters 72 to 83) six (6);

  • machinery sector (Chapters 84 and 85) twenty five (25);

  • transport sector (Chapters 86 to 89) eighteen (18); and

  • other sectors (Chapters 27, 39, 40, 42, 48, 68, 69, 90, 92, 94, 95 and 96) twenty six (26).

New versions of the Harmonized System Explanatory Notes and the Alphabetical Index to the Harmonized System will be issued by the WCO.  Click on the link at the bottom of this newsletter for more information or to order.

 Environmental and social issues are a major feature of these amendments, due to the importance of the HS as a global tool for collecting trade statistics and monitoring trade.

 

Customs Tariff Applications and Outstanding Tariff Amendments

The International Trade Administration Commission (ITAC) is responsible for tariff investigations, amendments, and trade remedies in South Africa and on behalf of SACU.

Tariff investigations include: Increases in the customs duty rates in Schedule No. 1 Part 1 of Jacobsens. These applications apply to all the SACU Countries, and, if amended, thus have the potential to affect the import duty rates in Botswana, Lesotho, Namibia, Swaziland and South Africa.

Reductions in the customs duty rates in Schedule No. 1 Part 1. These applications apply to all the SACU Countries, and, if amended, thus have the potential to affect the import duty rates in Botswana, Lesotho, Namibia, Swaziland and South Africa.

Rebates of duty on products, available in the Southern African Customs Union (SACU), for use in the manufacture of goods, as published in Schedule No. 3 Part 1, and in Schedule No. 4 of Jacobsens. Schedule No. 3 Part 1 and Schedule No. 4, are identical in all the SACU Countries.

Rebates of duty on inputs used in the manufacture of goods for export, as published in Schedule No. 3 Part 2 and in item 470.00. These provisions apply to all the SACU Countries.

Refunds of duties and drawbacks of duties as provided for in Schedule No. 5. These provisions are identical in all the SACU Countries.

Trade remedies include: Anti-dumping duties (in Schedule No. 2 Part 1 of Jacobsens), countervailing duties to counteract subsidisation in foreign countries (in Schedule No. 2 Part 2), and safeguard duties (Schedule No. 2 Part 3), which are imposed as measures when a surge of imports is threatening to overwhelm a domestic producer, in accordance with domestic law and regulations and consistent with WTO rules.

To remedy such unfair pricing, ITAC may, at times, recommend the imposition of substantial duties on imports or duties that are equivalent to the dumping margin (or to the margin of injury, if this margin is lower)

Countervailing investigations are conducted to determine whether to impose countervailing duties to protect a domestic industry against the unfair trade practice of proven subsidised imports from foreign competitors that cause material injury to a domestic producer.

Safeguard measures, can be introduced to protect a domestic industry against unforeseen and overwhelming foreign competition and not necessarily against unfair trade, like the previous two instruments.

Dumping is defined as a situation where imported goods are being sold at prices lower than in the country of origin, and also causing financial injury to domestic producers of such goods. In other words, there should be a demonstrated causal link between the dumping and the injury experienced.

The International Trade Commission of South Africa (ITAC) also publishes Sunset Review Applications in relation to anti-dumping duty in terms of which any definitive anti-dumping duty will be terminated on a date not later than five years from the date of imposition, unless the International Trade Administration Commission determines, in a review initiated before that date on its own initiative or upon a duly substantiated request made by or on behalf of the domestic industry, that the expiry of the duty would likely lead to continuation or recurrence of dumping and material injury.

The International Trade Administration published the latest applications to amend the Customs Tariff of the Southern African Customs Union (SACU) under a document entitled: "International Trade Administration Act: Customs and Excise Tariff Applications: List 3/2016".

The document was published in Government Gazette No. 39960 under General Notice No. 264 of 2016.

The application relates to an increase the creation of a rebate facility on flat-rolled products of iron or steel, of a width of 600 mm or more, plated or coated with aluminium-zinc alloys, classifiable in tariff subheading 7210.61, in such quantities, at such times and subject to such conditions as the International Trade Commission of South Africa (ITAC) may allow by specific permit, provided that the products are not available in the SACU market; and flat-rolled products of iron or steel, of a width of 600 mm or more, painted, varnished or coated with plastics, classifiable in tariff subheading 7210.70, in such quantities, at such times and subject to such conditions as the International Trade Commission of South Africa (ITAC) may allow by specific permit, provided that the products are not available in the SACU market.

Contact Ms Lufuno Maliaga or Mr Njabulo Mahlalela at telephone numbers (012) 394 3835 or (012) 394 3684, or at
e-mail lmaliaga@itac.org.za or  mmahlalela@itac.org.za.

The applicant was Defy Appliances (Pty) Ltd, PO. Box 12004, Jacobs, Durban, 4026.

Representations should be made by Friday 27 May 2016.

Customs Tariff Application List 02/2016 was published in Government Gazette 39943 of 22 April 2016 under Notice  No. 251 of 2016.

 

 

 

Customs Tariff Amendments

With the exception of certain parts of Schedule No. 1, such as Schedule No. 1 Part 2 (excise duties), Schedule No. 1 Part 3 (environmental levies), Schedule No. 1 Part 5 (fuel and road accident fund levies), the other parts of the tariff is amended by SARS based on recommendations made by ITAC resulting from the investigations relating to Customs Tariff Applications received by them. The ITAC then investigates and makes recommendations to the Minister of Trade and Industry, who requests the Minister of Finance to amend the Tariff in line with the ITAC's recommendations. SARS is responsible for drafting the notices to amend the tariff, as well as for arranging for the publication of the notices in Government Gazettes.

During the annual budget speech by the Minister of Finance in February, it was determined that parts of the tariff that are not amended resulting from ITAC recommendations, must be amended through proposals that are tabled by the Minister of Finance.

Once a year, big tariff amendments are published by SARS, which is in line with the commitments of South Africa and SACU under international trade agreements.

Under these amendments, which are either published in November or early in December, the import duties on goods are reduced under South Africa's international trade commitments under existing trade agreements.

There were three amendments to the Southern African Customs Union (SACU) Common External Tariff (CET), i.e., the HS-based Customs Tariff of Botswana, Lesotho, Namibia, South Africa and Swaziland.

The first two amendments relate to the insertion of new 8-digit subheadings for frozen potato chips under international subheading 2004.10 in Schedule No. 1 Part 1 to the Customs and Excise Act 91 of 1964, and the consequential alignment of safeguard duty provisions in Part 3 of Schedule No. 2 of the Customs and Excise Act, 91 of 1964 with the amendments in Schedule No. 1 Part 1.

The safeguard duty on frozen potato chips in Part 3 of Schedule No 2 will lapse on 4 June 2016.

The Notes to Part 3 of Schedule No. 6 is also amended to clarify the position with regard to certain provisions under the diesel refund item.

The amendment to the Common External Tariff of the Southern African Customs Union (SACU) was published in Government Gazette No. 40014 dated 27 May 2016 under Notice Numbers R.591 to R. 593

The loose-leaf pages reflecting the amendments will be sent to subscribers under cover of Jacobsens Supplement 1073. For more information about these amendments see the subscribers notice to Supplement 1073 or view the Customs Watch.

 

Customs Rule Amendments

The Customs and Excise Act is amended by the Minister of Finance. Certain provisions of the Act are supported by Customs and Excise Rules, which are prescribed by the Commission of SARS. These provisions are numbered in accordance with the sections of the Act. The rules are more user-friendly than the Act, and help to define provisions which would otherwise be unclear and difficult to interpret.

Forms are also prescribed by rule, and are published in the Schedule to the Rules.

The latest Customs Rule amendment (DAR/158) was published on 6 May 2016 in Government Gazette 39976 under Notice No. R. 509. The amendment relates to the accession of the Republic of Croatia to the European Union Protocol of Trade.

 

 

 

 

 

 

 

Contact Information:

 

Contact the Author:

Havandren Nadasan
Jacobsens Editor

Tel: 031-268 3510
e-mail to:
jacobsens@lexisnexis.co.za

 

Leon Marais
Independent Customs Consultant
Tel: 053-203 0727
e-mail to:
leon.marais@intekom.co.za

 

LexisNexis

 

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