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.

GUIDELINES AND CONDITIONS PERTAINING TO SAFEGUARD APPLICATIONS IN TERMS OF ARTICLE 16 OF THE AGREEMENT ON TRADE, DEVELOPMENT AND CO-OPERATION BETWEEN THE EUROPEAN COMMUNITY AND ITS MEMBER STATES AND THE REPUBLIC OF SOUTH AFRICA

The International Trade Administration Commission of South Africa (ITAC) published a notice entitled Guidelines and Conditions pertaining to Safeguard Applications in terms of Article 16 of the Agreement on Trade, Development AND Co-operation between the European Community and its Member States and the Republic of South Africa.  The notice was published emanating from the agreement, which was concluded in 2000.  Article 16 of the Agreement provides for safeguard action in defined circumstances, aligned with the General Agreement on Tariffs and Trade (GATT) and the World Trade Organisation (WTO) rules and national legislation.

Safeguard action must be aligned with the WTO Agreement on Subsidies and Countervailing Measures (SCM) which regulates the actions countries can take to counter the effects of subsidies.

Schedule 2 of Jacobsens (the Harmonised Customs Tariff of the Southern African Customs Union (SACU)) provides for anti-dumping duties, countervailing duties and safeguard duties.

Dumping is an action by a company.  The provisions governing the levy of anti-dumping duty are contained in Schedule 2 of the SACU Tariff and provides for a levy to be imposed and the collection of anti-dumping duties on goods imported into the Southern African Customs Union from outside the Customs Union territory.  In this regard, the governments of the Southern African Customs Union promulgated legislation, which is aligned with the GATT and WTO legislation, to determine the manner in which the articles liable for anti-dumping duties are to be identified; the manner in which export price, normal price, the margin of dumping is to be determined; and the manner in which the duty is to be collected and assessed under the Act. In South Africa, these rules are called Anti-Dumping Regulations, which are regulations to the International Trade Administration Act, 2002.

A subsidy is defined as either an action by a government that will grant funding directly to persons or by the action of requiring companies to subsidise certain customers. Countervailing duties are imposed, in line with the WTO Agreement on Subsidies and Countervailing Measures and the WTO Rules, if the ITAC finds evidence that the actions of the government in exporting country had a detrimental effect on industry in our country.

Article XIX of GATT read with the WTO Agreement on Safeguards (AOS) provides for Safeguard action by countries which face a situation of increased imports of any commodity which causes or threaten to cause serious injury to domestic producers of like or directly competitive products. The safeguard action can include the imposition of tariffs over and above the bound rates or Quota Restrictions or Tariff Rate Quota. In South Africa – and SACU – safeguard duties are imposed under Part 3 of Schedule 2. The ITAC Safeguard Regulations are based on WTO Agreement on Safeguards which establishes Rules for application of Safeguard measures. The ITAC regulations and its implementation are consistent with Article XIX of GATT 1994 and investigations to implement safeguard duties in Schedule 2 and the imposition of the safeguard duties are thus also consistent with these rules.

The notice the ITAC has published is a reference and procedural guide pertaining to the application of safeguard action in terms of Article 16 of the TDCA, aligned with WTO rules.

Further information can be obtained from the Senior Manger: Trade Remedies I, Ms Carina Janse van Vuuren at 012 394 3594.

Download Notice 744 0f 2013 for more information.

SUNSET REVIEWS

In accordance with the Anti-Dumping Regulations (ADR) and Countervailing Regulations (CVR), any definitive anti-dumping or countervailing duty shall be terminated on a date not later than five years from the date of imposition, unless the authorities determine, in a review initiated before that date on their own initiative or upon a duly substantiated request made by or on behalf of the domestic industry, that the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury or subsidized exports and injury.

The International Trade Administration Commission of South Africa (ITAC) has notified all interested parties, in Notice No. 664 of 2013 which was published in Government Gazette No. 36592 of 28 June 2013, that, unless a duly substantiated request is made by or on behalf of the SACU industry, indicating that the expiry of duty would be likely to lead to the continuation or recurrence of dumping and injury or subsidized exports and injury, the following anti-dumping and countervailing duties will expire in 2014:

ITAC will conduct its investigations in accordance with the relevant sections of the International Trade Administration Act, the Anti-Dumping Regulations (ADR) and the Countervailing Regulations (CVR), read with the World Trade Organisation (WTO) Agreement on Implementation of Article VI of the GATT 1994 and the Agreement on Subsidies and Countervailing Measures.

Manufacturers in the SACU of the products listed above, who wish to submit a request for the duty to be reviewed prior to the expiry date thereof, are requested to do so not later than the close of business day on 29 July 2013. In instances where no comments or replies are received within these time limits, ITAC will recommend the termination of the duties on the date of expiry.

SACU manufacturers who do submit a request timeously are requested to subsequently submit duly substantiated information, indicating that the expiry of the duty would be likely to lead to the recurrence of dumping and injury or subsidized exports and injury, to the ITAC, on or before the date as specified.

The request by manufacturers in the SACU of the subject products, and duly substantiated information, indicating what the effect of the expiry of the duties will be, must be submitted in wring to:

The Senior Manager: Trade Remedies I, International Trade Administration Commission (ITAC), Block E – The DTI Campus, 77 Meintjies Street, Sunnyside, Pretoria, South Africa.

The postal address is: The Senior Manager: Trade Remedies I, Private Bag X753, PRETORIA, 0001, SOUTH AFRICA.

Enquiries may be directed to the Senior Manager: Trade Remedies I, Ms Carina Janse van Vuuren at telephone (012) 394 3594 or at fax (012) 394 0518.

Customs Tariff Applications and Outstanding Tariff Amendments

Notice 745 of 2013; List 13/2013

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.

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

LIST 13/2013 – NOTICE 745 OF 2013 PUBLISHED IN GOVERNMENT GAZETTE 36666 OF 19 JULY 2013:

Creation of a rebate provision for non-linear glass tubes (envelopes) equipped with mountings and leading-in wires for the manufacture of compact fluorescent lamps (CFL)

The International Trade Administration Commission (ITAC) has received an application for the creation of a rebate provision for non-linear glass tubes (envelopes) equipped with mountings and leading in wires, classifiable in tariff heading 85.39, for the manufacture of compact fluorescent lamps (CFL) classifiable in tariff subheading 8539.31.90.

Enquiries: ITAC Ref 07/2013, contact Mr Daniel Thwala, telephone (012) 394 5162 or email: dthwala@itac.org.za .

Amendment of rebate item 316.18/8504.10/01.06

In addition to the application above, ITAC has also received an application to amend rebate item 316.08/8504.10/01.06 by changing the minimum power rating from 8W to 5W.

The rebate provision will be amended to cover electronic ballasts, for the manufacture of fluorescent discharge lamps (excluding ultra-violet lamps) of tariff subheading 8539.31.90, with a power rating of 5W or more but not exceeding 23W.

The effect of the amended rebate provision will be that electronic ballasts, for the manufacture of fluorescent discharge lamps (excluding ultra-violet lamps) of tariff subheading 8539.31.90, with a power rating of between 5 W and 8W which are currently excluded from the rebate provision will also qualify for the rebate provision once it is amended.

The applicant was Eveready (Pty) Ltd, and the reason for the application is to provide support for the compact lamps manufacturing industry in the SACU region and to also advance the national initiative to develop the local green economy.  It is further stated that the new and amended rebate provisions will lead to job creation in SACU.

Enquiries: ITAC Ref 07/2013, contact Mr Daniel Thwala, telephone (012) 394 5162 or email: dthwala@itac.org.za .

Representations should be submitted to The Chief Commissioner, ITAC, Private Bag X753, PRETORIA, 0001 within four (4) weeks, that is by 16 August 2013.

Download Notice 745 of 2013 for more information.

Customs Tariff Application List 12/2013 was published under Notice 634 of 21 June 2013 in Government Gazette 36575.

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 last week.

The last amendments were published on the 12^th of July 2013.

Under these notices, the SACU Customs Tariff was amended as follows: The notices were published in Government Gazette No 36638 of 12 July 2013).

A new rebate provision (rebate item 315.03/7616.99/01.06) was created to provide for aluminium slugs for impact extrusion used in the manufacture of aerosol cans as recommended in ITAC Report No. 431.  (Notice No R.  473).

The General rate of customs duty on wire nails had been increased from 5% to 15% as recommended in ITAC Report No. 432 by the deletion of subheading 7317.00.10 (wire nails) and by the insertion of three new subheadings (7317.00.02, 7317.00.04 and 7317.00.06).  (Notice No R.  474).

The General rate of duty on constant-velocity (CV) joints had been reduced from 20% to free of duty as recommended in ITAC Report No. 433 by the insertion of subheading 8708.50.30.  (Notice No R. 475).

Rebate item 311.40/5208.4/01.05 was amended to include boxer shorts classifiable in tariff headings 62.07 and 62.08 as part of the manufactured products as recommended in ITAC Report No. 434.  (Notice No R.  476).

Subscribe to the Jacobsens Customs Watch or 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.

The last amendment was published in Government Gazette No 36433 of 10 May 2013 under Notices No. R. 339 and R. 340 (DAR/117 and DAR/116 respectively). 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.