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Customs News Bulletin

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29 January 2015

Latest Amendments and News

 

Draft Rules: Chapters 32 to 41 and Annexure A to the Customs Control Act No. 31 of 2014

The fourth and final batch of draft Rules to the Customs Control Act has been published for comments by SARS Customs.

Annexure A contains the “penalty list” and has been incorporated in the document for ease of reference. Although it doesn't currently form part of the Rules, it will be published at a later stage in section 876(1)(a) of the Customs Control Act.

The draft amendments proposed for Chapter 37 are aimed at establishing uniform appeal and dispute resolution procedures for the Customs Control Act and the Tax Administration Act (TAA) and for that purpose to align the provisions of Chapter 37 of the Control Act with the corresponding provisions contained in Chapter 9 of the Tax Administration Act.

Download the Draft Rules, Annexure A and the Comment Sheet by clicking on the links below:

·         Draft Customs Control Rules - Chapters 32 to Chapter 41 and Annexure A

·         Draft Customs Control Rules Comment Sheet

·         Draft Chapter 37 Amendments

See links at http://www.sars.gov.za/Legal/Preparation-of-Legislation/Pages/Draft-Documents-for-Public-Comment.aspx.

The WCO reveals Customs’ priorities for 2015

International Customs Day is celebrated annually on 26 January. Every year there is a specific theme. International Customs Day 2015 heralds the launch of the WCO Year of Coordinated Border Management (CBM). During 2015, Customs administrations are encouraged to actively promote the partnerships they have built to improve and expedite border processing.

The theme entails the coordination of practices that Customs have implemented within their own administrations, with other Customs authorities, and with other government departments that are also operating at borders, as well as with economic operators involved in cross-border trade.

The slogan “Coordinated Border Management - An inclusive approach for connecting stakeholders,” signals the aspiration of the international Customs community to further enhance its collaboration, co-operation and working relationships with its many partners in international trade.

The World Customs Organization advocates closer cooperation between border agencies as it offers many benefits.

Amongst the benefits of CBM are:

·         Better service delivery

·         Less duplication

·         Cost-savings through economies of scale

·         Fewer but better targeted interventions

·         Cheaper transport costs

·         Less waiting times

·         Lower infrastructure improvement costs

·         Wider sharing of information and intelligence

·         Strengthened connectivity between all border stakeholders

Coordinated border management will also enable the multiple public service functions undertaken at borders posts to be to be delivered more successfully, leading in turn to an improved investment climate, an enhanced trading environment, and increased economic growth.

Under the umbrella of the WCO, Customs administrations have produced numerous instruments and tools in support of better coordinated border management.

The Revised Kyoto Convention (RKC) contains several standards that specifically deal with coordinated border management (CBM), such as coordinating border opening hours, performing joint controls, and setting up juxtaposed Customs offices, all of which facilitate trade. In addition to the RKC Guidelines, the CBM Compendium offers technical guidance for improvements in this domain.

Integrating stand-alone border agency systems into one unified Single Window system is a core CBM principle to Customs administrations and other government departments to combine the policy, legal, and technology elements of such systems in one system.

Currently the WCO SAFE Framework of Standards to Secure and Facilitate Global Trade (SAFE Framework) rests on two pillars, namely Customs to Customs network and Customs to business partnerships.  It is anticipated that a third pillar will be added to the SAFE Framework namely “Customs to other government agencies”, making the annual theme particularly apt and timely. It will coincide with the third anniversary of the SAFE Framework.

 

 

 

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 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.

The International Trade Administration Commission (ITAC) published a notice regarding several applications concerning amendments to the Customs Tariff for South Africa and Botswana, Lesotho, Namibia and Swaziland on 19 December 2014. The Notice was published in Government Gazette 38319

Comments were due by 23 January 2015.

The first application relates to an increase in the general rate of customs duty on zinc-coated/galvanized steel, aluminium-zinc coated steel and paint-coated steel, classifiable under tariff subheadings 7210.41, 7210.49, 7212.30, 7210.61, 7210.90, 7225.99, 7210.70 and 7212.40 from free of duty to 10% ad valorem.  (ITAC Reference 05/2014. Enquiries: Ms Ramphabana and/or Mr N. Mahlalela. Telephone: (012) 394 3627, (012) 394 3684. E-mail: nramphabana@itac.org.za and/or nmahlalela@itac.org.za.

The second application relates to the reduction in the general rate of customs duty on primary cells/batteries, cylindrical (excluding those of a height not exceeding 7 mm), of a diameter exceeding 19 mm, classifiable under tariff subheading 8506.50.25, from 10% ad valorem to free. (ITAC Reference 07/2014. Enquiries and correspondence
to be directed to Ms M Moloto. Telephone:
(012) 394 3676. Fax: (012) 394 4676. Email:
mmoloto@itac.org.za. Download the notice (Government Notice No. R. 1155 of 2014)  http://www.gov.za/sites/www.gov.za/files/38319_gen1155.pdf

 

 

 

 

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 no tariff amendments since the amendments that were released on 22 December 2014.

Download the latest Customs Watch to have access to the latest tariff 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. 

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

There were no rule amendments at time of publication. The last amendment (DAR/140) was published on 8 August 2014. Government Notice No. R.600 was published in the Government Gazette 37890 of
8 August 2014.

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

 

 

 

 

 

 

 

 

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Contact Information:

Mayuri Govender

Jacobsens Editor

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

 

 

Contact the Author:

Leon Marais 
GMLS Associate: Customs Specialist
Tel: 053-2030727

e-mail: leon.marais@intekom.co.za/leon@gmls.co.za