Customs News Bulletin

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

TARIFF AMENDMENTS FOR 2014 PUBLISHED

Various tariff amendments were published on the 29^th of November 2013. 

These amendments include the reduction of the duty rates on goods imported from the European Free Trade Association (EFTA) Countries, Iceland, Liechtenstein, Norway and Switzerland in terms of SACU’s commitments under the SACU/EFTA Free Trade Agreement.

Please note that nine Government Gazette notices were published with various implementation dates.

These amendments will be sent to Jacobsens subscribers under cover of Supplement 1028.

Supplement 1028 contains amendments to the Jacobsens Harmonized Customs Tariff arising as a result of the following amendments which were published in Government Gazettes Numbers 37061 and 37063 on 29 November 2013:

1.         In terms of section 48 of the Customs and Excise Act, 1964, Part 1 of Schedule No. 1 to the Customs and Excise Act 91 of 1964 is amended to the extent indicated below:

Part 1 of Schedule No. 1 is amended by the substitution of tariff subheading 3919.90.03.

The Customs duty on self-adhesive polyethylene terephthalate (PET) film is reduced to free as recommended in ITAC Report No. 446.  The effective date of this amendment is the 29th of November 2013.

·                                   Government Gazette 37063, R. 906                        29.11.2013           A1/1/1481

2.         In terms of section 48 of the Customs and Excise Act 1964, Part 1 of Schedule No. 1 is amended to the extent indicated below:

The EFTA rates of duty on a wide range of goods are reduced in terms of SACU’s commitments under the SACU/EFTA Free Trade Agreement with effect from 1 January 2014.

The General rate of duty on paper and paperboard of tariff subheading 4811.41.90 is reduced to 2% and the EFTA rate of duty is reduced to 0,3% with effect from 1 January 2014, as recommended in ITAC Report 151.

·                            Government Gazette 37061, R. 895          29.11.2013           A1/1/1479

3.         In terms of section 75 of the Customs and Excise Act, 1964, Schedules Numbers 3, 4 and 5 to the Customs and Excise Act 91 of 1964 is amended to the extent indicated below:

Note 8 to Schedule No 3 is deleted with effect from 1 January 2014 because it has become redundant;

Note 5 to Schedule No 4 is deleted with effect from 1 January 2014 because it has become redundant;

Note 14 to Schedule No 5 is deleted with effect from 1 January 2014 because it has become redundant;

·                                 Government Gazette 37061, R. 900                         29.11.2013           A3/698

·                                 Government Gazette 37061, R. 901                         29.11.2013           A4/366

·                                 Government Gazette 37061, R. 902                         29.11.2013           A5/108

4.         In terms of section 48, Section B of Part 2 of Schedule No. 1 to the Customs and Excise Act 91 of 1964 is amended to the extent indicated below:

Tariff item No 124.85.40/8528.71.90 is deleted and tariff item 124.75.40/8528.71.90 is inserted to rectify the sequence of tariff subheading No. 8528.71.90 in Section B of Part 2 of Schedule No. 1.

·                                 Government Gazette 37061, R.897                          29.11.2013           A1/2B/160

CUSTOMS BILLS PUBLISHED

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

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 a Bill into law will be that the Bill is only referred to the President after it has passed through both the National Assembly and the NCOP. The Constitution requires that the President must assent to and sign a Bill, however if the President has reservations about the constitutionality of a Bill (that is whether the provisions of a Bill are in line with the Constitution or not), 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.

 The current Customs and Excise Act is a 1964 Act. It entered into force in 1965. 

It is very likely that we will have new Customs legislation after 50 years.

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

Customs Tariff Applications and Outstanding Tariff Amendments

Notice 1129 of 2013; List 18/2013

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.       Application for creation of a rebate provision on plates, sheets, film, foil and strips of poly (methyl methacrylate)

ITAC has received an application from Libra Bathrooms for the creation of a rebate provision for other plates, sheets, film, foil and strips of poly (methyl methacrylate) non-cellular and not reinforced, laminated, supported or similarly combined with other materials, classifiable in tariff subheading 3920.51, for the manufacture of sanitary ware of plastics classifiable in tariff heading 39.22.

Enquiries: Ndivhudza Ramphabana, Tel: (012) 394 3627or e-mail: nramphabana@itac.org.za.

Representations should be submitted by 22December 2013.

2.    Amendment of the duty structure for certain new pneumatic tyres of rubber

Tariff subheading 4011.10 covers new pneumatic tyres of rubber, of a kind used on motor cars, including station wagons and racing cars.

Currently the tariff subheading is not subdivided into 8-digit subheadings.  The current general rate of duty is 30%. 

ITAC has received an application to revise the duty structure by the introduction of different 8-digit subheadings with different proposed formula duties, for example 30% or 2884c/kg less 70% and 25% or 2780c/kg less 75%.

Some of the reasons for the application are that there has been a massive influx of low-priced and under-invoiced tyres, mainly from China.

The intention of the introduction of the reference price into the duty structure is to counter under-invoicing.

ITAC Reference 34/2013, Enquiries: Ms Lufuno Maliaga at (012) 394 3835 or  lmaliaga@itac.org.za orMr Oatlhotse Madito tel. (012) 394 3692 at omadito@itac.org.za.

Representations should be submitted by 22 December 2013.

3.     Amendment to Rebate Item 498.00

Rebate item 498.00 provides for Imported goods admitted under rebate of duty for use in specified activities in the Customs Controlled Area (CCA) contemplated in Section 21A.

The Department of Trade and Industry (the dti) has applied for the amendment of Note 1 to rebate item 498.00 and the insertion of Note 9 to Schedule No. 3 because companies located within a CCA, intending to import manufacturing inputs are currently at a disadvantage in terms of customs duty which has to be paid on the imported content at the time the manufactured goods are declared for domestic use in terms of rebate item 498, and under Schedule No 3 which applies outside the CCA a manufacturer qualifies for a rebate of customs duty but pays Value Added Tax (VAT), if they choose to supply their finished products into the domestic market.

ITAC Ref 231/2013, Enquiries:Dumisani Mbambo, tel (012) 394 3743, dmbambo@itac.org.za, or Ndivhudza Ramphabana, tel (012) 394 3627, nramphabana@itac.org.za

Representations should be submitted by 22 December 2013.

4

Customs Tariff Application List 17/2013 was published under Notice 1090 of 2013 in Government Gazette 36996 of 8 November 2013.

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.

Various tariff amendments were published on the 29^th of November 2013.  These amendments include the reduction of the duty rates on goods imported from the European Free Trade Association (EFTA) Countries, Iceland, Liechtenstein, Norway and Switzerland in terms of SACU’s commitments under the SACU/EFTA Free Trade Agreement. 

Please note that nine Government Gazette notices were published with various implementation dates.

The amendments will be sent to subscribers under cover of Supplement No 1028. Subscribers can view a .pdf version of the amended pages at new.jacobsens.co.za.  

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.

 A new rule 35.06 is inserted.  This Rule applies to licensed special customs and excise warehouses in order to place certain restrictions on the removal of wine in bulk. 

The notice and amended forms were published in Government Notice Gazette No. 37093 of 6 December 2013. The SARS reference number for the amendment is DAR 128.

Download the amendments to view the notices.