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Customs News Bulletin

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13 May 2015

 

 

Latest News

DRAFT CUSTOMS DUTY RULES PUBLISHED FOR COMMENTS(Comments due by 5 June 2015)

 

The Draft Rules to Chapters 1, 3 to 9 and 11 to 13 of the Customs Duty Act, 2014 (Act 30 of 2014) were published for comments. The Draft Rules to Chapters 2 of the Customs Duty Act covering the Customs Tariff and Chapter 10 covering advance rulings will be published at a later stage.

 

Chapter 37 of the Customs Control Act, 2014 will be aligned with the Tax Administration Act in relation to procedures on dispute resolution and this will affect inter alia, Chapter 11 of the Customs Duty Act and the Draft Rules thereto.  

The numbering format of the Draft Customs Duty Rules is similar to that of the Rules to the Customs Control Act, 2014 in that the number of the rule is preceded by the Chapter number.

 

There are various definitions in the Draft Customs Duty Rules.   The definitions relate to words or expressions in the Customs Control Act and in the Customs Duty Act.

 

There are also footnotes like in the Customs Control Act, 2014 (Act No 31 of 2014), the Customs Duty Act, 2014 (Act 30 of 2014) and in the Draft Customs Control Rules (which, once approved, will become the Customs Control Rules, 2015).

There are various notes (printed in red, in text boxes), which will not form part of the Rules. 

 

One of these notes appear at the end of the Draft Rules to Chapter 3 which states that amendments which were agreed to in respect of Chapter 32 of the Control Act Rules (covering recovery of debt under the Customs Control Act) during the stakeholder comment phase, which also affect similar provisions in Chapter 3 of the Duty Act Rules, have not been effected to the Customs Duty Rules yet and will be effected in the second draft of the Customs Duty Rules. It is also stated that the majority of the of the Chapters of the Duty Act rules had been written before comments on the last batch of the Control Act Rules were received.

 

A list of non-prosecutable breaches for which fixed amount penalties may be imposed has been published separately in terms of section 201(1) of the Customs Duty Act. Section 201 (1) states that the Minister MUST list non-prosecutable breaches of the Customs Duty Act for which fixed amount penalties may be imposed by notice in the (Government) Gazette.

 

Section 201 (2) lists four categories (Category A to Category D) of breaches with maximum fixed amount penalties in increments of R5 000 to R20 000. 

 

The penalties include:

 

Section

Category

Penalty

Description of Breach

68

Category A

R2 500

Submits a refund or drawback application containing incorrect or misleading information with a resultant over-claim.

82(1)(d)

Category B

R5 000

Fails to comply with a request to submit a worksheet to the customs authority.

99(2)

Category B

R5 000

Fails to apply a tariff determination or re-determination made by the customs authority.

116 (3)

Category B

R5 000

Fails to apply a value determination or re-determination made by the customs authority.

152 (3)

Category B

R5 000

Fails to apply an origin determination or re-determination made by the customs authority.

 

SARS Customs has requested interested parties to use the Comment Sheet template to submit the comments (by no later than 5 June 2015).  The Comment Sheet and the Draft Rules can be downloaded from the SARS website at http://www.sars.gov.za/Legal/Preparation-of-Legislation/Pages/Draft-Documents-for-Public-Comment.aspx

 

ANIMAL DISEASES ACT: IMPORT REQUIREMENTS FOR CATTLE, SHEEP AND GOATS FROM BOTSWANA, LESOTHO, NAMIBIA AND SWAZILAND: AMENDMENT (Comments due by 17 May 2015)

Please refer to the Customs News Bulletin of 29 April 2015 for the full details of this article. This is also downloadable on www.jacobsens.co.za

 

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.

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.

ITAC received and published the following application to amend the tariff:

The notice was published in Government Gazette 38707 of 24 April 2015.

It relates to an application to increase the general rate of customs duty on:

Large bore welded steel pipes classifiable under tariff headings 73.03, 73.04, 73.05, and 73.06, from free of duty and 10% ad valorem to 15% ad valorem.

ITAC Ref. 11/2014.

Enquiries:

Ms Lufuno Maliaga

Tel: (012) 394 3835

E-mail:   lmaliaga@itac.org.za

Mr Pfarelo Phaswana

Tel: (012) 394 3628

E-mail   pphaswana@itac.org.za

Refer to Notice Government Notice R. 369 of 2015, published in Government Gazette 38707 dated 24 April 2015. 

Comments are due by 22 May 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 amendmentswere published in Government Gazette 38681 on 10 April 2015.

The rate of customs duty on lithium batteries classifiable in tariff subheading 8506.50.25 is reduced from 10% to free as recommended in ITAC Report 493.

Government Gazette 38681, R. 307, 10.04.2015, A1/1/1515

Tariff subheading 8507.10 is amended by the creation of two eight digit subheadings (8507.10.05 and 8507.10.10) to give effect to ITAC’s recommendation in Report No 491 to increase the rate of customs duty on lead acid batteries of a kind used for starting piston engines from 5% to 15%.

Government Gazette 38681, R. 308, 10.04.2015, A1/1/1516 

The tariff amendments were sent to subscribers under cover of Supplement 1047.

Download the latest Customs Watch to have access to the latest tariff 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.

Forms are also prescribed by rule, and are published in the Schedule to the Rules. 

There were no Rule amendments at time of publication.

The last rule amendment (DAR/144) was published on 27 March 2015 in Government Gazette 38603 under Notice R. 246.

Download the latest Customs Watch 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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