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Customs News Bulletin

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3 September 2015

 

 

Latest News

WORLDBANK REPORT SUGGESTS SOUTH AFRICA GROWS EXPORTS

According to a recent Worldbank report,  South Africa needs faster export growth to propel economic growth and job creation.

The report examined the export patterns of 20,000 South African non-mineral export companies over a period of 12 years (from 2001) to identify factors that could be holding back exports from realizing their potential.

The SA government has identified the export sector as a key driver of faster growth. The country’s National Development Plan targets export volume growth of 6% a year, and tackling high unemployment is one of South Africa’s priorities.  Despite this, South Africa’s total exports have grown in real terms by only 0.6% a year since 2005 while the other BRICS countries  – Brazil, Russia, India and China – are making inroads into global markets. Growth in South Africa’s exports of non-minerals and services also fell behind the other BRICS countries, while the volumes of minerals exported remained virtually flat.

The report indicates that the bulk of South African exports are concentrated in few mega firms (about 1000 companies) which accounts for 93% of South Africa’s exports. The other 19 000 companies account for the other 7% of the exports. 

It was further discovered that the mega companies are losing momentum as they are creating fewer new products and not expanding into new markets.

The report indicates that South Africa’s market share in Sub-Saharan Africa in terms of on-mineral exports is growing. This shows that the SA Government’s efforts to grow the African market are working. However, the report suggests that SA should not neglect Europe as its main trading partner since the African market is still too small to drive overall export growth. According to the Report the European market is still 30 times larger than Africa’s market.

The report suggests three remedies for South Africa’s poor export performance:

First, it argues that boosting competition would increase efficiency and productivity. In other words more companies should start exporting.

It is further recommended that infrastructure bottlenecks must be resolved and logistic costs must be reduced by cutting the charges exporters incur for the use of ports, rail and telecommunications.  It would promote competitiveness and benefit small and medium-size exporters and nontraditional export sectors.

Thirdly, exports could benefit from deeper regional integration in goods and services within Africa including by creating production and service value chains that cut across national borders, and draw on all the region’s resources and capabilities.

The Worldbank concludes that progress on all three fronts would help propel South Africa towards faster growing exports and help the country realize its goal for the higher, more inclusive, job-intensive growth outlined in the National Development Plan.

 

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.

The application dealt with the WITHDRAWAL OF PARTIAL REBATE ITEM 316.23/85.29/03.06 ON DISPLAY PANELS FOR THE ASSEMBLY OF MONITORS.

Comments were 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.

Refer to the Bulletin of 26 August 2015 for more information.
 

 

 

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 No 39126 of 21 August 2015. (See the Customs News Bulletin of 26 August 2015 for more information).

Those notices related to the creation of rebate item 315.05 and rebate item 315.05/7308.90.90/01.01 to provide for a rebate on steel panels used for the manufacture of raised access flooring systems; and.

The amendment of the rates of duty on  the rate of customs duty on wheat and wheaten flour from 80,01c/kg to 51,06c/kg and 120,02c/kg to 76,59c/kg respectively of tariff subheadings 1001.91 and 1001.99, as well as 1101.00.10 and 1101.00.90

The loose-leaf pages to amend the Jacobsens Harmonized Customs Tariff were sent to subscribers under cover of Supplement 1055.

 

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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