Customs News Bulletin

20 November 2013

 

Latest International Trade News

 

From time to time certain government departments publish draft legislation to inform stakeholders about their intention to amend legislation, and to invite comments. The commentary period ranges from 2 week to longer periods, depending on the urgency of the matter.

The Bulletin focuses on the publication of information relating to such matters which impact on Customs and Excise legislation and on broader import and export legislation.

 

Latest International Trade News

CORRECTION NOTICE to LIST 14/2013

The following application was published under List 14/2013 in Notice 860 of 2013 which was published in Government Gazette 36760 OF 23 August 2013. Download the Customs News Bulletin of 27 August 2013 from the new Jacobsens website for more information.

Amendment of Tariff subheadings 8302.30.30, 8302.41.10 and 8302.42.10

The tariff subheadings refer to:

“- - Fittings of iron, steel or copper, commonly used in the manufacture of windows, doors and door frames (excluding window opening mechanisms), of base metal

“- - - Fittings of iron, steel or copper, commonly used in the manufacture of windows, doors and door frames

“- - - Fittings of iron, steel or copper, commonly used in the manufacture of doors and door frames

ITAC has received an application from SARS that wording of the three subheadings be amended as follows:

“8302.30.30 - - Fittings of iron, steel or copper, commonly used in the manufacture of windows(excluding window opening mechanisms), doors and door frames (excluding window opening mechanisms), of base metal

“8302.41.10 - - - Fittings of iron, steel or copper, commonlyof a kind used solely or principally for in the manufacture of windows, doors and door frames of base metal”; and

“8302.42.10 - - - Fittings of iron, steel or copper, commonlyof a kind used solely or principally for in the manufacture of doors and door frames of base metal.

The current descriptions are misleading and lead to tariff classification issues which have not been foreseen when the original 8-digit subheadings were created.

This amendment is proposed in order to reduce the possible incorrect interpretations that could lead to costly and unnecessary litigation when disputes arise. 

ITAC Ref 18/2013, Enquiries Mr. N Mahlalela, Tel.: (012) 394 3684 or e-mail nmahlalela@itac.org.za.

   Download Notice 860 of 2013 for more information on the reasons for these applications.

Representations should have been submitted by 20 September 2013.

ITAC has now published a Correction notice to this application.  The omission of the word “windows” and the inclusion of the phrases “of base metal” in tariff subheadings 8302.41.10 and 8302.42.90 were erroneous.  The application has thus been amended to read as published in NOTICE 1090 OF 2013 (CUSTOMS TARIFF APPLICATION LIST 17/2013).

Comments on the application are due on 22 November 2013.

Enquiries and ITAC reference: ITAC Ref 18/2013, Enquiries Mr. N Mahlalela, Tel.: (012) 394 3684 or e-mail nmahlalela@itac.org.za.

 

CUSTOMS BILLS PUBLISHED

The long-awaited Customs Control Bill and Customs Duty Bills introduced in the National Assembly (Parliament) on 24 October 2013.

The public hearings took place last week.

Public hearings take place when there is great public interest in a Bill.  These public hearings are organised by the relevant Portfolio Committee to allow interested parties to submit written comments and to make oral representations on the provisions of the Bill. The members of the relevant Portfolio Committee are then tasked with considering and debating the Bill in order to determine whether they are satisfied with the provisions of the Bill. If the Portfolio Committee is not satisfied with the provisions of the Bill, it is then amended to incorporate the submissions of the Portfolio Committee. At the conclusion of its work, the Portfolio Committee submits the Bill together with a report to the National Assembly for a second reading debate and a vote. If the National Assembly passes the Bill, it is referred to the National Council of Provinces ("NCOP") for consideration.

The rest of the parliamentary process prior to signing Bill into law will be that the Bill is only referred to the President after it has passed through both the National Assembly and NCOP. The Constitution requires that the President must assent to and sign a Bill, however if the President has reservations about the constitutionality (whether the provisions of a Bill are in line with the Constitution or not) of a Bill, he or she may refer it back to the National Assembly for reconsideration.

If the Bill affects the provinces, the NCOP must participate in the reconsideration of the relevant Bill. If a reconsidered Bill accommodates the President’s reservations, the President must assent to and sign the Bill, however if a reconsidered Bill does not fully accommodate the President’s reservations, the President may either accept this and assent to and sign the Bill or refer it to the Constitutional Court for a decision on its constitutionality. If the Constitutional Court decides the Bill is constitutional, the President must sign it.

A Bill that has been assented to and signed by the President becomes an Act of Parliament and must be published shortly thereafter in the Government Gazette ("the Gazette"). An Act takes effect (becomes binding on everyone) when it is published in the Gazette or on a date determined in terms of the Act. An Act may require certain actions to be taken by the Department before it can be implemented, for instance the publication and preparation of subordinate legislation (regulations, determinations or rules) to be promulgated to further regulate certain aspects in terms of an Act. In such instances, an Act contains a provision that provides that the Act comes into operation on a date determined by the President by proclamation in the Gazette. Once the necessary actions have been finalised, the President is requested to put the Act into operation on a certain date. After the President has assented to the implementation of the Act, a proclamation is published in the Gazette and the Act comes into operation on a date determined in the proclamation.

It is thus unlikely that these Bills will become acts in 2013.  It is anticipated that the Bills will be published for a third period before they become the Customs Control Act and the Customs Duty Act respectively.

Download the Bills and the explanatory memoranda from the SARS website for more information.

 

ANTI-DUMPING DUTY INVESTIGATION ON FROZEN CHICKEN IMPORTED FROM OR ORIGINATING IN GERMANY, THE NETHERLANDS AND THE UNITED KINGDOM

(Comment due 25 November 2013)

 

The South African Poultry Association (SAPA) supported by its counterparts in the SACU Countries: Namib Poultry Industries (Pty) Ltd, Swazi Poultry Processors, Botswana Poultry Association, Basotho Poultry Farmers Association, Grain S.A., and the Animal Feed Manufacturers Association of South Africa (AFMA), lodged an application alleging that frozen bone-in portions of fowls of the species Gallus domesticus were being dumped in the SACU market, causing material injury to the SACU industry concerned.  

The applicant submitted sufficient evidence and established a prima facie case to enable the International Trade Administration Commission of South Africa (ITAC) to arrive at a reasonable conclusion that an investigation should be initiated on the basis of dumping, material industry, threat of material industry and causality.

The South African chicken producers, AFGRI, Country Fair, Early Bird (Olifantsfontein and Standerton), Rainbow Chicken, Sovereign Foods and Supreme Poultry provided injury information in this regard. These producers are responsible for a major proportion of SACU production.

Frozen bone-in portions of fowls of the species Gallus domesticus fall in tariff subheading 0207.14.90.

The application was published in Government Gazette No 36951 dated 25 October 2013 under NOTICE 1047 of 2013.  Download NOTICE 1047.

Comments on the application are due on 30 November 2013, and should be submitted to:

The Senior Manager, Trade Remedies II, Private Bag X753, PRETORIA, 0001, Republic of South Africa.  The physical address is The Senior Manager: Trade Manager II, International Trade Administration Commission (ITAC), Block E, The dti Campus, 77 Meintjies Street, SUNNYSIDE, PRETORIA.

 

 

 

 

Customs Tariff Applications and Outstanding Tariff Amendments

Notice 1031 of 2013; List 16/2013

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 the 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.

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. 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. In the WTO system, a member may take a safeguard action, which is, restricting imports temporarily in the face of a sustained increase in imports that is causing serious injury to the domestic producer of like products. Safeguard measures are universally applied to all countries, unlike anti-dumping and countervailing duties that are aimed at a specific firm or country.

Schedule No. 2 is identical in all the SACU Countries.

ITAC has received the following applications concerning amendments to the Customs Tariff of the Southern African Customs Union (SACU).  These applications related to:

1.       Increase in the rate of Customs duty on uncoated paper and paperboard of subheadings 4802.56.20 and 4802.56.90

ITAC has received an application from Paper Manufacturers Association of Southern Africafor an increase in rate of Customs duty on uncoated paper and paperboard classifiable under tariff subheadings 4802.56.20 and 4802.56.90 from free of duty to the WTO bound rates of 5% and 20% respectively.Enquiries: Mzukisi Skenjane, Tel: (012) 394 3675, fax (012) 394 4675 or e-mail: mskenjana@itac.org.za.

Representations should have been submitted by 15 November 2013.

2.    Increase in the rate of Customs duty on windscreen wiper blades

Windscreen wiper blades fall within tariff subheading 8512.90. 

ITAC has received an application to increase the rate of duty on windscreen wiper blades from free of duty to 30% ad valorem.

Enquiries: Sipho Tshabalala, tel. (012) 394 3739 or Daniel Thwala, tel. (012) 394 5162.

Representations should have been submitted by 15 November 2013.

3.      Reduction in the General rate of Customs duty on wheel hubs

Wheel hubs (excluding those of unmachined cast metal) fall within tariff subheading 8708.50.20.

ITAC has received an application for a reduction in the general rate of duty from 20% to free on hubs of subheading No 8708.50.20 ITAC Ref 20/2013, Enquiries: Mr N Mahlalela, tel (012) 394 3684, fax 394 4684.

Representations should have been submitted by 15 November 2013.

4.       Creation of a rebate provision for methyl ester sulphayte for the manufacture of washing preparations.

Methyl ester sulphate falls within tariff subheading 3402.11.  The subheading is subdivided into two 8-digit subheadings, namely 3402.11.10 covering anionic organic surface-active agents, whether or not put up for retail sale, in immediate packings of a content not exceeding 10 kg.  All preparations of this subheading is free of duty when imported into the Southern African Customs Union (SACU).

Those preparations in immediate packings of a content exceeding 10 kg fall within tariff subheading 3402.11.20 and are subject to a general rate of duty of 15% and a rate of duty of 3,7% when imported from the EFTA Countries, Iceland, Liechtenstein, Norway and Switzerland.  

ITAC has received an application for the creation of a rebate provision on methyl ester sulphate of the latter subheading, for the manufacture of washing preparations (detergents) classifiable in tariff heading 34.02.

ITAC Ref 16/2012, Enquiries Mr Nkulana Phenya fax (012) 394 4677 or e-mail Nphenya@itac.org.za or Ms Ayanda Ndou at fax (012) 394 4724 or e-mail endou@itac.org.za

The applications were published under LIST 16/2013 in Notice No. 1031 OF 2013 which was published in Government Gazette No. 36923 of 18 October 2013.

 

Customs Tariff Application List 15/2013 was published under Notice 945 of 2013 in Government Gazette 36849 of 20 September 2013.

 

The following applications were published under List 15/2013:

·         Increase in the domestic dollar-based reference price (DBRP) for sugar from US$ 358/ton to US$ 764/ton through an adjustment of the calculation of the DBRP for sugar by basing it on the domestic cost of production

·         Comments requested on the increase in the allocation of quota levels for the importation of used overcoats under rebate item 460.11/00.00/01.00 for 2014

·         Creation of a rebate provision for full customs duty on (other) pile fabrics, knitted or crocheted, of man-mad fibres, classifiable in tariff subheading 6001.92, for the manufacture of footwear with uppers of textile materials, classifiable in Chapter 64

·         Withdrawal of the application for an increase in the rate of duty on Biaxially oriented polypropylene classifiable under tariff subheadings 3920.20.25 and 3920.20.30 from 10% to 20%

View Jacobsens Customs News Bulletin dated 22 October 2013 for more information.

 

 

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.

Subscribers can expect to receive the following loose-leaf amendments under cover of Supplement 1027 which was sent to the printers on the 15th of November 2013.

The amendment relates to the following tariff amendment which were published in  Government Gazettes on 25 October 2013 and 15 November 2013: 

Part 3 of Schedule No. 6 is amended by the substitution of Note 6(ij)(ii)(aa)(C) in respect of refunds for diesel used in commercial fishing vessels.

The statistical unit relating to certain petroleum products in Chapter 27 is amended from kilograms (kg) to litres (li), with effect from 9 May 2008.

Tariff subheading 8545.11 is amended to increase the general rate of duty on carbon electrodes of a kind used in furnaces from free of duty to the WTO bound rate of 10 per cent as recommended in ITAC Report No. 438.

Part 1 of Schedule No. 2 is amended by the substitution of items 215.02/7315.82/01.06 and 215.02/7315.82/02.06 to amend the description in respect of non-articulated welded link chain from China to replace "imported from" with "manufactured by" as recommended in ITAC Minute M1/2013.

Download the latest Customs Watch to have access to the latest tariff and rule amendments.

 

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. 

Various forms DA 199 were amended resulting from the introduction of the Automotive Production and Development Programme (APDP), with effect from 1 January 2013 .

​The forms were amended by Notice No. R. 823.

The notice and amended forms were published in Government Notice Gazette No. 36965 of 1 November 2013. The SARS reference number for the amendment is DAR127.

Download the amendments to view the notices.

 

 

 

 

 

Contact Information:

 

 

Contact the Author:

Mayuri Govender

Jacobsens Editor

Tel: 031-268 3273
e-mail:  
jacobsen@lexisnexis.co.za

 

 

Leon Marais 
Customs Specialist
Tel: 053-203 0727

e-mail: leon.marais@intekom.co.za