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Customs News Bulletin

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12 August 2015

 

 

Latest News

WHAT WILL SARS CUSTOMS FUTURE ROLE BE IN BORDER MANAGEMENT?

Prior to March 2003, the United States Customs Service was responsible for the collection of duties and taxes and performed other selected border security duties.

The United States Customs Service was merged with the border elements of the US Immigration and Naturalization Service (which is the US counterpart of South Africa’s Department of Home Affairs) in March 2003 as a result of the US homeland security reorganization following the terrorist attacks on the World Trade Centre's Twin Towers on 11 September 2001.

The new Customs administration was called Customs and Border Protection (CBP), and the new administration now comprises the former Border Patrol section of the US Immigration and Naturalization Service, former Immigration and Naturalization Service Inspectors, and former border Agriculture inspectors.

The U.S. CBP is thus a single, unified border agency for the U.S. On the other hand, the investigative office of U.S. Customs was split off and merged with the Immigration and Naturalization Service investigative office and the Immigration and Naturalization Service’ interior detention and removal office to form Immigration and Customs Enforcement, which among other things, is now responsible for interior immigration enforcement.

The pre-2003 United States Customs Service had three major missions, namely collecting tariff revenue, protecting the U.S. economy from smuggling and illegal goods, and processing people and goods at ports of entry.

If one studies the provisions of the Customs Control Act, 2014 (Act 31 of 2014) you will see that SARS Customs has many similar functions. These functions include:

·         SARS Customs’ role in international trade and tourism in order to ensure effective controls that secure revenue recovery, facilitation of legitimate trade and protection of society at large;

·         SARS’ contribution towards the implementation of the WTO Trade Facilitation Agreement that is due to enter into force in 2017 and the SARS’ role contributing towards the economic competitiveness of the country while controlling and facilitating the movement of people and goods at our borders; and

·         SARS’ role in implementing the new legislative framework to achieve a balance between customs control – in the broad sense – the secure movement of goods and people into and from the Republic and the facilitation of trade and tourism (travel).

The Minister of Home Affairs published the Draft Border Management Agency Bill, 2015 in Government Gazette 39058 under Government Notice R. 675 of 6 August 2015.

The Border Management Bill provides for the establishment, organisation, regulation and control of the Border Management Agency;  the transfer, assignment, and designation of law enforcement border related functions to the Border Management Agency; and for matters connected thereto.

Agencies such as the Department of Home Affairs, the Department of Agriculture, Forestry and Fisheries, the Department of Police, the Department of Health, the Department of Environmental Affairs, the South African Revenue Service and any other organ of state that administers legislation that regulates the passage of persons and goods through ports of entry and the borderline and their legislation will play a role in the Border Management Agency. Many of these Acts also depend on the platform of the Customs Control Bill for their implementation.

Section 3 of the Border Management Agency Bill deals with the purpose of the proposed Act, which will be to establish the agency and empower the agency to:

·         exercise border law enforcement functions;

·         manage the legitimate movement of persons and goods across the border line and at ports of entry;

·         coordinate with other organs of state, through the principles of cooperative governance, the functions performed by these organs of state, in respect of border management generally; and

·         provide an enabling environment to facilitate legitimate trade.

Section 3 of the Bill should be read with the preamble of the Bill, which states that multiple organs of the state are responsible for border management, border protection and the protection of the national interests of the country.

There is thus a necessity of an Act which provides for an integrated and coordinated border management policy that facilitates secure travel and legitimate trade, in accordance with the Constitution, international and domestic law, in order to:–

·         contribute to the prevention of smuggling and trafficking of human beings and goods;

·         prevent illegal cross -border movement;

·         contribute to the protection of the Republic's environment and natural resources;

·         contribute to the facilitation of legitimate trade and secure travel;

·         ensure effective and efficient border law enforcement at ports of entry and on the borderline;

·         contribute to the socio- economic development of the Republic; and

·         protect the Republic from harmful and infectious diseases, pests and substances.

The establishment of border management agencies is also prescribed by the Revised Kyoto Convention, which is one of the international instruments on which the Customs Control Act, 2014 is based.

If you are really familiar with the functions of Customs administrations, you will realise that SARS Customs will play a meaningful role in the administration of the Border Management Agency.

You are advised to study the Bill and comment on the Bill by 4 September 2015.

Download the Bill at http://www.gov.za/sites/www.gov.za/files/39058_gon675s.pdf

 

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.

ITAC published the following application to amend the Customs Tariff of Botswana, Lesotho, Namibia and Swaziland under List 07/2015. The application was published under Notice R.792 of 2015 in Government Gazette 39045 of 31 July 2015.

WITHDRAWAL OF PARTIAL REBATE ITEM 316.23/85.29/03.06 ON DISPLAY PANELS FOR THE ASSEMBLY OF MONITORS.

ITAC is the applicant and argues that there has been a significant shift from the semi-knocked down (SKD) model of assembly towards full completely-knocked down (CKD) manufacturing in the local industry and subsequently, the CKD manufacture has resulted in higher value-addition and capital investment.

Enquiries: ITAC Ref 06/2015: Ms L Maliaga, Tel: 012 394 3835, Email: lmaliaga@itac.org.za.

Comments are due by 31 August 2015.

ITAC also published a notice to maintain the anti-dumping duties on CLEAR DRAWN AND FLOAT GLASS ORIGINATING IN OR IMPORTED FROM THE PEOPLE’S REPUBLIC OF CHINA (CHINA) AND INDIA.  The provisions exist in Schedule No. 2, item 213.03.

The Notice (R.793 of 2015) was published in Government Gazette 39045 of 31 July 2015.

List 06/2015 was published under Notice R.589 of 2015 in Government Gazette 38877 of 19 June 2015.

 

 

 

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 at time of publication.

The latest tariff amendments were published in Government Gazette 93035 on 31 July 2015.

The loose-leaf pages to amend the Jacobsens Harmonized Customs Tariff were sent to subscribers under cover of Supplement 1053.

 

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.

On 3 July 2015, SARS Customs published an Amendment of the Customs and Excise Rules under section 21A relating to special economic zones (SEZs).

The rule amendment (DAR/156) was published on 3 July 2015 in Government Gazette 38925 under Notice R. 566.

The effective date of this amendment will be on the date that the regulations under the Special Economic Zones Act, 2014 come into effect.

Download the latest Customs Watch at www.jacobsens.co.za to have access to the latest tariff and rule amendments.

 

LexisNexis

 

 

 

 

 

Contact Information:

 

Contact the Author:

Mayuri Govender
Jacobsens Editor

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

 

Leon Marais
Independent Customs Consultant
Tel: 053-203 0727
e-mail to:
leon.marais@intekom.co.za

 

LexisNexis

 

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