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Customs News Bulletin

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24 August 2016

 

 

Latest News

MERCOSUR AGREEMENT AMENDMENTS TO BE PUBLISHED SOON

(Comments on draft amendments due on 29 August 2016)

A preferential trade agreement was signed between the Common Market of the South (MERCOSUR), comprising Argentina, Brazil, Paraguay and Uruguay, and the South African Customs Union (SACU), comprising Botswana, Lesotho, Namibia, South Africa and Swaziland in December 2004.  The PTA is aimed at promoting trade between MERCOSUR and SACU on a select number of products. Rules in terms of the Customs and Excise Act, 1964 have been drafted to give effect to Annex III of the trade agreement.

Preferential trade agreements can only take effect once the governments of all parties have deposited their instruments and once it has been ratified by all the governments. This has now happened and SARS have published a number of draft notices for public comments. After consideration of the comments the rules will be amended accordingly.

In addition, the notes to Schedule No. 1 will be amended to incorporate the Rules of origin of the agreement and Schedule No. 1 Part 1 of the SACU CET will be replaced by a new schedule to incorporate a column indicating the customs duty rates on goods imported from the MERCOSUR.

The draft notices can be downloaded from http://www.sars.gov.za/Legal/Preparation-of-Legislation/Pages/Draft-Documents-for-Public-Comment.aspx. Comments are due on 29 August 2016.

Also note that there are draft notices on the following matters:

Draft amendment of Part 1 of Schedule No.1 to insert new provisions for vegetable oils marketed and supplied for use in cooking food (comments due by 25 August 2016); and

Amendment of rules under section 101A – Amendment of the time reflected in Rule 101A.12 when any tariff heading or item of any Schedule is amended (comments due by 30 August 2016).

 

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: List6/2016".

The document was published in Government Gazette No. 40154 of 22 July 2016 under General Notice No. 441 of 2016.

The application relates to the review of the rates of customs duty on steel products classifiable under tariff headings: 72.17, 73.07, 73.08, 73.12, 73.18, 73.21, 83.02, 84.18, 84.26, 84.50, 84.51, 85.04, 86.01, 86.07, 86.09 and 94.06.

The investigating officers Lufuno Maliaga, Njabulo Mahlalela, Pfarelo Phaswana, Tel: 012 394 3835/3684/3628 or e-mail: lmaliaga@itac.org.za, nmahlalela@itac.org.za, pphaswana@itac.org.za. Comments are due by 19 August 2016.

ITAC also published a  directive to review the dollar-based domestic reference price and variable tariff formula for:

(1) Wheat classifiable under tariff subheadings 1001.91 and 1001.99; wheaten flour classifiable under tariff subheadings 1101.00.10 and 1101.00.90.

(2) Maize classifiable under tariff subheadings 1005.10 and 1005.90; maize flour classifiable under tariff subheading 1102.20; and

(3) Sugar classifiable under tariff heading 17.01. The investigating officers are:

Ms. R Theart, Tel: (012) 394 3674, Fax: (012) 394 4674, e-mail: rtheart@itac.org.za, Ms. M Masithela, Tel: (012) 394 3682, Fax: (012) 394 4682 e-mail: mmasithela@itac.org.za, Mr O Madito, Tel: (012) 394 3692, Fax: (012) 394 4692 e-mail: omadito@itac.org.za; or Ms. L Mulaudzi, Tel: (012) 394 1678, Fax: (012) 394 4678, e-mail: lmulaudzi@itac.org.za.

ITAC also published a notice titled: “Initiation of investigation for remedial action in form of a safeguard against increased imports of flat-rolled products of iron” for comments by 18 August 2016.

ITAC decided to proceed with an investigation for remedial action in the form of a safeguard against the increased imports of flat-rolled products of iron or non-alloy steel, or other alloy steel but excluding stainless steel, of all widths, cold-rolled (cold-reduced), not clad, plated or coated and not further worked than cold-rolled (cold-reduced).

Flat-rolled products of iron or non-alloy steel, or other alloy steel but excluding stainless steel, of all widths, cold-rolled (cold-reduced), not clad, plated or coated and not further worked than cold-rolled (cold-reduced), imported under tariff subheadings 7209.15, 7209.16, 7209.17, 7209.18, 7225.50 and 7226.92 will be affected by the amendments.

Download the notice at: http://www.gov.za/sites/www.gov.za/files/40171_gen469.pdf

Should you have any queries, please do not hesitate to contact Mr Zuko Ntsangani at telephone number +27 12 394 3662 or Ms Mosa Sebe at telephone number + 27 394 1850 or at fax +27 12 394 0518.

 

 

 

 

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.

In terms of the latest amendment to the Common External Tariff (CET) of the Southern African Customs Union (SACU), the rates of customs duty on  wheat and wheaten flour are increased from 122.43c/kg and 183.65c/kg to 159.14c/kg and 238.71c/kg respectively as recommended in ITAC Minute 02/2016.

The notice to implement the ITAC recommendations, Notice R. 939 of 22 August 2016 was published in Government Gazette No. 40223. The Jacobsens Reference is A1/1/1547.

The loose-leaf pages reflecting the latest tariff amendments were sent to subscribers under cover of Jacobsens Supplement 1077. For more information about these amendments see the subscribers notice to Supplement 1077 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.

There were no amendments to the Customs and Excise Rules. In terms of the last Rule amendment various forms DA 260 for the rendering of excise accounts were amended in the Schedule to the Rules on 8 July 2016. For more information about these amendments view the latest Customs Watch.

 

 

 

 

 

 

 

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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