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Customs News Bulletin

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2 March 2016

 

 

Latest News

DRAFT CUSTOMS RULES TO THE CUSTOMS CONTROL ACT, ROUND TWO

(Comments due by 1 April 2016)

The Rules to the Customs and Excise Act, 1964 will be replaced by Rules under the Customs Control Act, 2014 and the Customs Duty Act, 2014 which will take effect when the new Acts take effect.

The Chapters into which the Rules to the Customs Control Act and the Customs Duty Act are divided correspond with the Chapter numbers in the Control Act and the Customs Duty Act. Each rule is numbered with a combination of two sets of numbers which are separated by a dot. The first set of numbers indicates the number of the Chapter of the Control Act or Duty Act under which the Rule is made. The second number indicates the number of the Rule.

This differs from the numbering of the Rules under the Customs and Excise Act in that the numbers of the rules under the current Customs and Excise Act correspond with the section numbers of the Act – and not with the Chapter numbers.

Under the draft Rules to the Customs Control Act certain definitions have been moved from other Chapters to Chapter 1.  See definitions of “abandoned”, “AGOA”, “air carrier”, “boarding pass”, etc. These changes are indicated in the track changes version of the new Draft Rules to the Customs Control Act for which commentary is due on 1 April 2016.   

See also the new or amended definitions of “authorised officer”, “banking details” , etc as highlighted in yellow.

Precise descriptions or six digit HS subheadings are required under the definitions for “air cargo details”, break bulk cargo details”, “bulk cargo details” and “containerised cargo details”.  Under the second draft rules to the Customs Control Act, the longer and official name of the “Harmonised Commodity Description and Coding System” is used. Under the first round of the draft Rules the name of the HS in the United States of America were used, namely “Harmonised Tariff Schedule (HTS).

There are also footnotes in the new draft rules.

Under the Customs Control Act customs clients (importers, exporters and brokers) will be assessed to determine whether or not they have “sufficient knowledge” in relation to customs laws, guides, interpretive notes, operational manuals and practices and they must achieve a score of at least 60 per cent in Customs Sufficient Knowledge Test or Customs Competency Assessment for Accreditation. 

Customs Sufficient Knowledge Test” is defined in Chapter 1 of the draft Rules to the Customs Control Act. The definition has been moved from Chapters 28 and 29 of the Customs Control Act to Chapter 1 of the draft Rules.

The test is referred to in  (draft) rule 28.25 and rule 29.42 to establish whether a person has sufficient knowledge of applicable customs laws, guides, interpretive notes, operational manuals and practices –

(a) administered by –

(i) the customs authority; or

(ii) a recognised professional body for the purposes of the National Qualifications Framework Act, 2008 (Act 67 of 2008), with the permission of the customs authority and subject to such conditions as the customs authority may determine; and

(b) the details of which are available on the SARS website or the website of that professional body.

Refer to the Draft Rules to the Customs Control Act, 2014, which may be downloaded from the SARS website at http://www.sars.gov.za/Legal/Preparation-of-Legislation/Pages/Draft-Documents-for-Public-Comment.aspx.

 

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 a document entitled International Trade Administration Act: Initiation of sunset review of anti-dumping duties on polyethylene terephthalate originating in or imported from Chinese Taipei, South Korea and India.

The anti-dumping duties subject to review is polyethylene terephthalate (PET), in primary forms (excluding liquids and pastes) classifiable under tariff subheading 3907.60.9, originating in or imported from the India, South Korea and Chinese Taipei. Refer to anti-dumping duty items 207.01/3907.60.9/0107(70) – 207.01/3907.60.9/03.07(71).

Responses and any information regarding this matter and any arguments concerning the allegation of dumping and the resulting threat of material injury must be submitted in writing by 28 February 2016.

Contact the investigating officers Mr Busman Makakola at telephone number +27 12 394 3380 or Mr Emmanuel Manamela at telephone number +27 12 394 3632 or at fax number +27 12 394 0518 for more information.

The document was published in Government Gazette No. 39636 of 29 January 2016 under Notice No. 44 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.

The last tariff amendments that were published were the Budget Proposals.

 

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.

 

There were no Rule amendments at time of publication.

On 31 December 2015, SARS Customs published an Amendment of the Customs and Excise Rules under section 120. Rule 120.09A was inserted to provide for currency conversions for determining value of goods exported or to be exported

The rule amendment (supposedly DAR/157) was published on 31 December 2015 in Government Gazette 39569 under Notice No. R. 1294.

 

 

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Contact Information:

 

Contact the Author:

Havandren Nadasan
Jacobsens Editor

Tel: 031-268 3510
e-mail to:
newjacobsens@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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