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Customs News Bulletin

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30 September 2015

 

 

Latest News

DEPARTMENT OF TRANSPORT RELEASES GREEN PAPER ON NATIONAL RAIL POLICY 2015

(Comments due by 21 November 2015)

The South African National Department of Transport has published a Green Paper on the National Rail Policy for comment.

The green paper deals with:

·         the history of rail transport in South Africa;

·         the structure of the South African rail industry;

·         the role of rail in socio-economic development;

·         policy, legislation and strategies;

·         the global experience and SA rail challenges; and

·         the way forward.

The notice was published in Government Gazette 39227 of 22 September 2015 under Notice 853.  Download the notice from http://www.gov.za/sites/www.gov.za/files/39227_gon853ss.pdf.

Rail transport in South Africa has been neglected and one wonders in the government would be able to revive the industry.  The recent PRASA issue would not help Government a lot.

Rail freight wagons (goods wagons) can be bulk wagons, wagons transporting containers and wagons for general freight and specialized wagons. In the latter case it would require substantial investments from South Africa.

There are also many other challenges, for example:

When considered in terms of kilometers/ton per unit of energy consumed, rail transport has the potential to be more efficient than other modes of transport. South Africa’s electricity crisis will present a challenge.

Maximum economies are typically realized with bulk commodities when transported by rail over long distances however, the mining and mineral industries are under pressure and bulk transport is decreasing.

Further shipment by rail is less versatile than road freight and internationally road freight is the preferred mode of transport.

Rail transport often involves trans-shipment costs, and in South Africa’s case equipment to handle the containers will require substantial investments.

Another negative aspect is the fact that many railway stations in the countryside have been closed.

The revival of the rail industry is worthwhile, however, and investigating it will certainly have many benefits which would include job creation and less traffic on our national roads, hopefully leading to fewer accidents and deaths on our national roads and a decrease in the maintenance costs on the roads.

Rail transport should also enable importers and exporters to be in a better position to predict their landed costs in the long term. The monthly changes to fuel prices lead to uncertainty and unpredictability if one plans landed costs.

 

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.

The following tariff amendments were published in Government Gazette No 39235 of 25 September 2015, under Notices Numbers R. 894 and R. 895:

Under the first amendment,  the rates of duty on iron and steel of subheadings 7210.41, 7210.49, 7210.61, 7210.70, 7210.90, 7212.30, 7212.40 and 7225.99 are increased from free to 10%.

Under the second amendment, the rates of duty on wheat and wheaten flour of tariff subheadings of tariff subheadings 1001.91 and 1001.99, as well as 1101.00.10 and 1101.00.90 is increased from 51.06c/kg and 76.59c/kg to 91.12c/kg and 136.68c/kg respectively.

The loose-leaf pages to amend the Jacobsens Harmonized Customs Tariff were sent to subscribers under cover of Supplement 1058.

 

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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