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HOW CUSTOMS AND
TRADE COMPLIANCE CAN
BENEFIT EVERYONE
According to the
World Economic
Forum, the ratio of
trade to GDP for the
world as a whole has
increased from 39%
in 1990 to 59% in
2011. The total
value of global
trade exceeded US$
20 trillion in 2013.
The explosion in
global trade that
has occurred in the
last two decades,
which South Africa
joined in 1994, is a
reflection of the
successes of the
World Trade
Agreement, 1994 and
a combination of
other initiatives
and innovations (for
example innovations
in logistics and
changes in policies
around the globe).
The explosion in
international trade
has led to a
reduction in the
costs of
transporting goods
internationally and
related services.
However, the
explosion of global
trade has also
forced South Africa
to modernise and
reform its Customs
administration.
It was mentioned in
the Jacobsens
Customs Bulletin of
11 February 2015
that there is a
direct relationship
between logistic
performance and
customs and trade
compliance. South
Africa’s logistic
performance compare
well with developed
countries but there
is room for
improvement in the
BLNS-Countries
(Botswana, Lesotho,
Namibia and
Swaziland).
There is no doubt
that the new Customs
legislation will
improve South
Africa’s logistic
performance and the
GDP of the country.
If traders are
compliant they will
also benefit and
increase the own
competitiveness and
the global
competitiveness of
the industries they
operate in.
Global supply chains
and value chains,
like good logistic
performance, are
prominent features
of global trade that
has the ability to
reduce costs.
Nowadays goods are
produced and value
are added in many
countries. Modern
production often
implies that raw
materials are
imported into a
country,
manufacturing to a
certain extent is
taking place, in
many instances the
goods re returned to
the country of
origin where the
manufactured product
is incorporated into
the final product
from where it will
find its way to the
retailer in that
country or it may
even be exported to
another country.
The best example of
how efficient this
process of
“splintering” of the
production process
can be is arguably
the case of the
automotive
industry. It
illustrates that
production costs can
be reduced can be
reduced by
allocating different
parts of the
production process
across different
countries. The
economic principle
of specialisation is
also relevant and
further reduces the
costs of different
components.
Efficient logistic
services on the one
hand and customs and
trade compliance on
the other hand are
critical to make
supply chains
viable. The lower
the costs and the
greater the quality
of services provided
by logistics
companies, the
better off customers
and consumers.
This is logical as
delays in the supply
chain increase costs
and these costs are
passed on to the
customer and the
consumer.
In order to become
more competitive
importers and
exporters should
focus on issues that
affect supply chain
efficiency and on
the identification
of the aspects in
the new legislation
that has been
inserted to improve
economic
performance.
Collectively these
issues are focussed
on areas which
reduce risks (once
identified) and the
cost of
transportation and
thus the overall
costs of goods and
services. There are
no better way for
governments and
industry to increase
economic growth and
create jobs than to
make efforts to and
take action to
further reduce costs
in the supply chain
– for example
logistic costs and
the cost of
compliance/non-compliance.
International trade
is document and
information
sensitive and there
are many parties
with different roles
in the supply
chain. Errors on
documents or even
lack of
communication
between different
parties at the right
time lead to delays
in the supply chain
with resultant
financial losses.
Timing in terms of
what information and
the timing of when
it needs to be
produced is
important that all
parties. Importers
and exporters and
the customs brokers
must know what their
own roles and
responsibilities
are. They must also
know what the roles
and responsibilities
of other parties in
the supply chain are
in order to prevent
delays.
A
holistic supply
chain management
approach will ensure
that everyone – and
it includes
governments, customs
brokers, importers,
exporters,
manufacturers,
customers and
consumers – will
benefit from
economic growth and
lower costs.
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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
second 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.150 of 2015) was
published in
Government Gazette
38478 on 20 February
2015.
Comments are due by
20 March 2015.
The application is
in relation to
amendments to Part 1
of Schedule No. 3.
The application is
entitled AMENDMENT
OF THE WORDING FOR
QUALIFYING FABRICS
UNDER REBATE ITEM
320.01 FOR THE
MANUFACTURE OF
UPHOLSTERED
FURNITURE.
The amendment of the
rebate description
is proposed to read
as follows:
320.01/5407.61/01.06
Woven fabrics
surface treated to
resemble suede
containing 85 % or
more by mass of
non-textured
micro-fibre
polyester filament
yarns, of a mass
exceeding 150g/m2
and of a width not
exceeding 150 cm, 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
94.01.320.01/5903.20.90/01.08
Other textile
fabrics commonly
known as imitation
leather, laminated
with polyurethane,
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
320.01/5907.00.90/01.08
Textile fabrics
commonly known as
imitation leather
backed with bonded
leather, 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.
[Enquiries: Ms.
Khosi Mzinjana, Tel:
(012) 394 3664. Fax:
(012) 934 4664.
E-mail:
kmzinjana@itac.org.za.
Ms. Amina Varachia,
Tel: (012) 394 3732.
Fax: (012) 934 4732.
E-mail:
avarachia@itac.org.za. |
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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 a number
of tariff amendments
since last week.
The amendments were
published in the
following Government
Gazettes: |
Provisional payments
in relation to
alleged dumping of
wheelbarrows,
classifiable in
tariff subheading
8716.80.10,
originating in or
imported from the
People's Republic of
China (China) have
been imposed as
recommended in ITAC
Report 489.
The amendment was
published in
Government Gazette
38538 of 6 March
2015 under Notice R.
185.
The tariff amendment
will be sent to
subscribers under
cover of Supplement
1044
Download the
two latest Customs
Watch to have access
to the latest tariff
amendments. |
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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.
The rules under
sections 59A and 60
have been amended in
that persons who may
apply for
registration or
licensing must now
include a public
officer appointed in
terms of section 246
of the Tax
Administration Act,
2011. This is in
line with SARS’
efforts to align
Customs legislation
with the Tax
Administration Act.
The rule amendment
(DAR/141) was
published on 6 March
2015 in 38521 under
Notice R. 178.
Download the
latest Customs Watch
to have access to
the latest tariff
and rule amendments. |
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