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 weeks 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.

Customs Tariff Applications and Outstanding Tariff Amendments

List 10/2013: Notice 476 of 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.

OUTSTANDING TARIFF AMENDMENTS

Following the tariff amendments of 10 May 2013, the following possible tariff amendments are still outstanding and due and some of them may be published soon:

·      Increase in the rates of customs duty on MEAT AND EDIBLE MEAT OFFAL, OF POULTRY OF HEADING 01.05, and more specifically frozen carcasses and cuts and offal, classifiable in Tariff subheadings 0207. 12 AND 0207.14.

·      Creation of a rebate facility on sodium hydroxide (caustic soda) in solid classifiable under tariff subheading 2815.11, for use in the manufacture of sodium metasilicates classifiable in 2839.11.

·      Creation of a rebate facility on petroleum bitumen, classifiable under tariff subheading 2713.20 to full duty rebate.

OUTSTANDING TARIFF AMENDMENTS CONTD.

·      Ad valorem customs duty (luxury tax) on small aircraft and boats as mentioned by the South African Minister of Finance during the 2012 Budget Speech.

·      Review of the Customs duty on photographic film of tariff subheading 3701.10.90.

The ITAC has received the following application concerning amendments to the SACU Customs Tariff:

LIST 10/2013 – NOTICE 476 OF 2013 PUBLISHED IN GOVERNMENT GAZETTE 36454 OF 17 MAY 2013:

INCREASE IN THE DOMESTIC DOLLAR-BASED REFERENCE PRICE FOR WHEAT FROM US$ 215 / TON to US$ 294 / TON

The International Trade Administration Commission (ITAC) has advised interested parties of the outcome of the above-mentioned investigation. 

The investigation has been approved by the Minister of Trade and Industry in ITAC Report No. 427.

In Report No. 427 it was recommended that the domestic dollar-based price for wheat be increased from US$215.00 per ton to US$294.00 per ton.

At present the resulting specific duty in terms of the variable tariff formula will remain free of duty.

Adjustments to the level of protection will be based on the quantum movements in the world wheat reference price as follows:

The difference between the 3-week moving average of the US No. 2 HRW (ord) Gulf settlement price (world reference price) and the domestic dollar-based price of US$294/ton for wheat will be calculated on a weekly basis.  If the 3-week moving average of the US No. 2 HRW (ord) Gulf settlement price shows a variance of more than US$10/ton from the existing level for 3 consecutive weeks, an adjustment to the tariff is triggered and a new duty will be calculated.  The resulting dollar specific duty will be converted to Rand according to the Rand/Dollar exchange rate prevailing on the day that the adjustment is triggered.

The duty on wheaten flour is recommended to be maintained in the form of a specific duty at the level of 150% of the rate applicable to wheat.   

Contact Ms M Masithela (012) 394 3682 or email mmasithela@itac.org.za for more information.

Download ITAC Report No 427 for more information.

Customs Tariff Application List 09/2013 was published under Notice 387 of 19 April 2013.

SUNSET REVIEW OF THE ANTI-DUMPING DUTIES ON PLATES, SHEETS, FILM, FOIL AND STRIP OF POLYMERS OF VINYL CHLORIDE (PVC) ORIGINATED IN OR IMPORTED FROM THE PEOPLE’S REPUBLIC OF CHINA AND CHINESE TAIPEI: FINAL DETERMINATION

On 1 July 2011, the ITAC notified all interested parties, through Notice No. 226 of 2011 in Government Gazette No. 31342, that unless a substantiated request is made by the SACU industry indicating that the expiry of the anti-dumping duties on plates, sheets, film, foil and strip of pvc originated in or imported from the People’s Republic of China and Chinese Taipei would likely lead to the continuation or recurrence of dumping and material industry, the relevant anti-dumping duties in items 207.01/3920.49/01.06(62) and 207.01/3920.49.02.06(67) would expire on 25 October 2012.

 The sunset review investigation was initiated pursuant to Notice No. 760 of 2012 in Government Gazette No 35690 of 21 September 2012, and initiation letters were sent to interested parties on 25 September 2012.  The due date for responses was 1 November 2012.  None of the exporters responded to ITAC’s sunset review questionnaire.

After considering all the comments received to the essential fact letters, the ITAC made a final determination that the expiry of the anti-dumping duties on the goods in question origination form the areas in question would lead to the recurrence of dumping and material injury.

The ITAC therefore recommended to the Minister that the anti-dumping duties in items 207.01/3920.49/01.06(62) and 207.01/3920.49.02.06(67) imported from China and Taiwan be maintained at 32,7% and 22,6% respectively.

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, 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.

The latest tariff amendment was published on 10 May 2013, which increased the general rate of customs duty on polytetrafluoroethylene tape from 10% to 20% as recommended in ITAC report No. 426. Notice No. R. 388 of 12 April 2013 refers.

The amended pages relating to this amendment will be sent to Jacobsens subscribers under cover of amending supplement 1020.

   Download the amendments from SARS at:

http://www.sars.gov.za/Legal/Secondary-Legislation/Tariff-Amendments/Pages/Tariff-Amendments-2013.aspx

Refer to Jacobsens Customs News Bulletin dated 15 April 2013 for an overview of the tariff amendments which have been published so far this year.

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.

The last amendment was published in Government Gazette No 36433 of 10 May 2013 under Notices No. R. 339 and R. 340. The reference number for Notice No. R. 340 was DAR/116.  In terms of these notices:

The Rules for section 76 for the purpose of a refund application contemplated in section 76(4) of the Act are amended by the insertion of form VOC CR 001; and

Rule 59A.03(1)(a) is amended to give effect to risk based use of temporary registration code 70707070.

Download the amendments to view the notices.