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Customs News Bulletin

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20 May 2015

 

 

Latest News

HOW IMPORTER COMPLIANCE WILL INCREASE UNDER THE SOUTH AFRICAN CUSTOMS CONTROL ACT

SARS Customs legislation require self-reporting or self-accounting and self-assessment by the various parties directly or indirectly involved in importing and exporting. Importers and exporters make use of customs brokers and rely on them for accurate information.  Section 166 (2) of the Customs Control Act, 2014 (Act No 31 of 2014) states that clearance declarations submitted by a customs broker on behalf of a principal  (a person referred to in section 165 (1) (a)) is regarded to have been submitted by the principal and not the customs broker.

 

In order to comply with the obligations of the importer/exporter (and sometimes for the purpose of qualifying for certain benefits), importers must make declaration within prescribed times. Under the current legislation this is within seven days of importation. Under the new legislation the pre-clearance can be made or goods must be cleared within 3 working days.

 

This amended time frame is representative of many time frames that has been changed.  The customs profession is now becoming more professional in future importers will and must make use of lawyers (attorneys), accountants and customs consultants (global trade specialists) who will work in tandem with their existing customs clearing and forwarding agents (customs brokers).

 

In terms of section 166(2) of the Customs Control Act it is important that customs brokers obtain a properly completed clearance instruction (clearing instruction) from the importer on which the importer gives the customs broker specific instructions about the clearance (for example about the destination, customs procedure codes, tariff classification, customs value, origin, origin and any determinations that apply to the goods).

 

Importers (and exporters) must be knowledgeable about these areas and by providing the customs broker with the clearance instruction they also authorize the customs broker to submit the customs declaration (bill of entry) on his / her behalf.

 

In terms of section 166(2) it is in the own interest of the importer to conduct their own post-clearance audits in respect of each clearance declaration in order to make sure that customs do not pick up any errors. If any errors are found, they must be rectified immediately and importers must complete clearance instructions for amended clearance declarations (vouchers of correction) as well.  In this regard refer to section 176 of the Customs Control Act read with Draft Customs Control Rule 7.6.

 

The responsibility for customs compliance is squarely on the importer and exporter and the need expert assistance.  However, should they wish not to make use of expert assistance they can appoint global trade specialists and buy legal publications such as the Jacobsens Harmonized Customs Tariff, the Customs and Excise Act, the Rules, and LexisNexis Early Reference Handbook or subscribe to LexisNexis’ online solutions containing these Acts.

 

Compliant trader will not only avoid penalties. They will also benefit from trade facilitation – simplified procedures, quicker release, lower costs and eventually global competitiveness which will distinguish them from their competitors.

Customs compliance is as dynamic the profession.  It is revolving and changing constantly.  Under the new customs legislation it will be essential that importers and exporters meet with their customs consultants (global trade specialists) – or recruit customs compliance specialists to develop a customs compliance programme.  This programme will also not be a one-time event and will be changing.

Customs compliance is an ongoing process that requires commitment and resources. But companies that are able to commit and invest will reap the benefits.

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.

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

 

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.

The notice relating to the latest application was published in Government Gazette 38707 of 24 April 2015 and it related 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.

Comments on the application are due by 22 May 2015.  Refer to the Bulletins of 6 and 13 May 2015 for more information.

 

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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