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Customs News Bulletin

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17 September 2015

 

 

Latest News

HOW THE WORLD TRADE CENTRE ATTACKS CHANGED THE CUSTOMS PROFESSION

The terrorist attacks on the World Trade Centre (Twin Towers) in New York changed the Customs profession forever.

Customs have always been responsible for collecting duties and taxes and for controlling exports and imports, but after 9/11 the priorities of Customs administrations have changed forever. Shortly after the 2001 attacks in the United States introduced the Customs-Trade Partnership against Terrorism (C-TPAT).

Since 2001, the role of Customs has significantly changed from the collection of revenue to the protection of domestic industries to the protection of citizens and their interests while facilitating legitimate trade.

Customs best practices now focus on customs compliance, supply chain security and trade facilitation.

When the new Customs legislation takes effect in South Africa, it will be based on these international concepts, since Customs administration are now working as partners to counter terrorism and protect citizens, infrastructure and the interests of everyone involved in the supply chain.

As global trade increases, so does the risk of more terrorist attacks.  Customs administrations are facing a serious challenge, namely how best to develop and implement effective measures that will successfully protect the citizens and infrastructure of the country – and other countries - from terrorism without compromising service delivery.

In many countries, Customs administrations are already playing an important role in the fight against cross-border crime and terrorism. They do so through modern Customs legislation and techniques, which include IT systems and an efficient risk assessment, which is vital to detect illegal goods such as drugs, explosive materials or nuclear and chemical weapons.

When in operation:

South African exporters and importers will be required to provide SARS Customs with information on goods prior to exportation/importation in the form of (Pre Departure/Pre Arrival Declarations) (These will be triggered by advanced arrival notifications from carriers);

Accredited exporters and importers will benefit from trade facilitation measures through the Preferred Trader/Authorised Economic Operator (AEO) programme;

International co-operation will be key in the success of the supply chain security initiatives:

Exporters/importers require Harmonized rules in order to avoid that, while countries have different rules that must be complied with. It is, therefore, essential that Customs administrations work closely with their biggest trade partners, for example SACU with other SADC Countries, or SARS Customs with Customs administrations in the European Union and SARS must align its legislation with the WCO, and adhere to it.

 

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.

The International Trade Administration Commission of South Africa (ITAC) published the following application to amend the Customs Tariff of the Southern African Customs Union (SACU) under List 09/2015. 

The tariff amendment application relates to an increase in the rate of customs duty on certain aluminium plates, sheets, strips and foil products classifiable under tariff heading 76.06 and 76.07 from free of duty to a WTO bound rate of 15%.

List 09/2015 was published under Notice 909 of 2015 in Government Gazette 39201 of 11 September 2015.  Comments on the application are due by 9 October 2015.

List 08/2015 was published under Notice 859 of 2015 in Government Gazette 39127 of 21 August 2015.  Refer to the Jacobsens Customs News Bulletin of 9 September 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 amendment that was published imposed anti-dumping duties on  wheelbarrows originating in or imported from China.

Download the Jacobsens Customs News Bulletin dated 9 September 2015 for more information.

The loose-leaf pages to amend the Jacobsens Harmonized Customs Tariff were sent to subscribers under cover of Supplement 1056.

 

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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