FOCUS ON THE IMPACT OF THE
NEW CUSTOMS LEGISLATIVE
CHANGES ON TRADERS
There will be dramatic
changes to South Africa’s
import and export
legislation after the
implementation of the
Customs Control Act, 2014
and the Customs Duty Act,
2014 after June 2015. These
changes will bring about a
fundamental change in the
way the importers, exporters
and manufacturers will
interact with Customs.
Importers and exporters must
make an effort to get
information about compliance
issues. If they are
compliant they will also be
rewarded certain trade
facilitation benefits which
will increase, amongst other
things, the global
competitiveness of their
businesses.
Importers’ responsibilities
in respect of customs
clearance will increase
dramatically.
In future, Customs will
increasingly focus on
(post-clearance) audits to
evaluate importers’
compliance procedures and
internal systems.
Audits enable Customs to
determine the extent of any
non-compliance, assess the
amount of Revenue due,
penalties due and categorise
the trader as a low,
moderate or high risk client
to Customs. Audits also set
forth ways to strengthen
internal controls.
The risk classification has
and will have a direct
impact on the trader’s
future relationship with
Customs.
Audits are also there to
assist Customs to adopt a
risk-based approach to
selecting importers for
audits that involved
analysis of the essential
import attributes and
characteristics. Companies
with the highest risk scores
are selected for more
frequent audits.
Audits are also designed to
assist Customs to focus on
the evaluation of internal
controls of companies.
The new legislation provides
for advance rulings as a
mechanism to avoid problems
with Customs. Traders v=can
apply for advance rulings on
tariff classification,
Customs valuation and
origin. Advance rulings
will give importers legal
certainty of how their goods
will be dealt with by
Customs.
Regardless of the frequency
and methodology with which
they are or may be
conducted, audits can be a
major headache for any
importer. It should not be
if the importer is
compliant.
The new Customs legislation
provides for self-assessment
and self-determination by
importers. In other words
importers will be
responsible for the accuracy
of information to be
provided to Customs and need
to assess their own
compliance risks and come up
with a plan to address them.
Typical risk areas are
customs clearance, tariff
classification, customs
valuation, origin and
liability for duty payment.
The risks associated with
every business are unique
and clients must identify
the risks associated with
their operations together
with all the Customs rules
and regulations that apply
to their industry
periodically.
The audit period has been
increased from two years to
three years which means
that, if Customs picks up
any errors during audits,
records for a period of
three years will be reviewed
compared to the current
two-year period.
SOUTH AFRICAN NATIONAL
BUDGET 2015
Finance Minister Nhlanhla
Nene will table the 2015
Budget in Parliament on 25
February 2015. It will be
the Minister’s maiden Budget
speech.
The Ministry has appealed to
members of the public who
wish to send suggestions to
the Minister on the budget
to do so by using the
following contact details:
·
Link: http://www.treasury.gov.za/documents/national%20budget/default.aspx
·
Fax: 012 406
9055.
DRAFT RULES: CHAPTERS 32 TO
CHAPTER 41 AND ANNEXURE A TO
THE CUSTOMS CONTROL ACT NO.
31 OF 2014
(Comments extended to 20
February 2015)
The fourth and final batch
of draft Rules to the
Customs Control Act has been
published by SARS Customs
for comment. Comments were
due on 30 January 2015 but
it has been extended to 20
February 2015.
The draft rules are the
Rules for Chapters 32 to
Chapter 41 of the Customs
Control Act which are
entitled:
·
32. Recovery
of debt under the Act
·
33. General
enforcement functions
·
34. Detention,
seizure and confiscation of
goods
·
35.
Prohibited, restricted and
sectorally controlled goods
·
36.
Counterfeit goods
·
37.
Reconsideration of decisions
and dispute resolution
·
38. Voluntary
disclosure relief
·
39.
Administrative penalties
·
40. Judicial
matters
·
41.
Miscellaneous matters
Download the Draft Rules,
Annexure A and the Comment
Sheet by clicking on the
links below:
See
links at
http://www.sars.gov.za/Legal/Preparation-of-Legislation/Pages/Draft-Documents-for-Public-Comment.aspx.
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 TAA. |
|
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)
has published the first
amendment applications to
the Southern African Customs
Union Tariff for 2015.
The Southern African Customs
Union comprises of South
Africa and Botswana,
Lesotho, Namibia and
Swaziland.
The Notice (Government
Notice R.74 of 2015) was
published in Government
Gazette 38419 on 30
January 2015.
Comments are due by 27
February 2015.
Both applications are in
relation to amendments to
Part 1 of Schedule No. 3.
The first application
relates to the creation of
two rebate provisions for
the upholstered furniture
sector, namely:
Woven fabrics, containing
85% or more by mass of
synthetic filaments, of
yarns of different colours,
classifiable in tariff
subheading 5407.73, in such
quantities, at such times
and subject to such
conditions as the
International Trade
Administration Commission
may allow by specific
permit, for use in the
manufacture of upholstered
furniture classifiable in
tariff heading 94.01; and
Woven fabrics of polyester
staple fibres, (excluding
that mixed mainly or solely
with wool or fine animal
hair) , in such quantities,
classifiable in tariff
subheading 5515.1, at such
times and subject to such
conditions as the
International Trade
Administration Commission
may allow by specific
permit, for use in the
manufacture of upholstered
furniture classifiable in
tariff heading 94.01.
(ITAC Reference 10/2014.
Enquiries: Ms T. Morale.
Telephone:
(012) 394 3694. Fax (012)
394 4694. E-mail:
tmorale@itac.org.za.
The second application
relates to the creation of a
rebate provision for:
"Goods of any description
(excluding mounted or
populated circuit boards)
for the manufacture of
prepayment electricity
supply meters classifiable
in tariff subheading
9028.30, at such times, in
such quantities and subject
to such conditions as the
International Trade
Administration Commission
may allow by specific
permit, provided the
Commission is satisfied that
the circuit boards are
mounted and populated in the
SACU region."
(ITAC Reference 20/2014.
Enquiries and correspondence
to be directed to Ms Lufuno
Maliaga. Telephone:
(012) 394 3845. Email:
lmaliaga@itac.org.za. |
|
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 at
time of publication
The last
tariff amendments (dated 6
February 2015) have been
sent to subscribers under
cover of Supplement 1043
which should reach
subscribers soon.
Download the
latest Customs Watch to have
access to the latest tariff
amendments. |
|