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Customs News Bulletin

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7 October 2015

 

 

Latest News

Expect more changes to Customs legislation in the Southern African Customs Union

While South Africans (and their trade partners) await the proclamation of the Customs Control Act 31 of 2014 and the Customs Duty Act 30 of 2014, governments in the region are working behind the screens in anticipation of other legal instruments that will enter into force over the next couple of months and up to June 2017.

Here are some of the changes one can expect:

The Agreement on Trade Facilitation of the World Trade Agreement (the WTO TFA) was signed in Bali, Indonesia in December 2013, and an amendment protocol for the Trade Facilitation Agreement was adopted by the General Council of the WTO in November 2014 to bring the TFA into the legal framework of the WTO. The Agreement will enter into force once two-thirds of WTO members have ratified the TFA and deposit their instruments of acceptance with the WTO Secretariat. Hong Kong, China, became the first member to do so in December 2014.

The WTO ATF is the first multilateral trade agreement to be concluded since the WTO was established in 1995 (20 years ago). The Agreement will simplify international trade and make it more predictable and transparent.  Once it enters into force, the Agreement is expected to reduce total trade costs substantially by streamlining the flow of trade across borders.

The South African Special Economic Zones Act 16 of 2014 was published in Government Gazette No 37664 of 19 May 2014 undetr Notice No 388.

The SEZ Act aims to support balanced regional industrial growth by fostering the development of more competitive and productive regional economies in South Africa.

According to Mr Rob Davis, the South African Minister of Trade and Industry, the SEZ Act seeks to boost private investment, both domestic and foreign, in labour-intensive areas in order to increase job creation, competitiveness, skills and technology transfer, and exports of beneficiated products.

The final amendments to the Nomenclature of the HS 2017 (the 6th edition of the Harmonized System) were accepted and have been published on the website of the World Customs Organization.  The current version of the HS, HS 2012 is thus no longer the latest version of the HS, although the HS 2017 will only enter into force on 1 January 2017.

SACU can expect many changes to the Jacobsens and SACU Customs Tariff.  South African importers, exporters and users of chemicals and fish products can also expect drastic changes to the country’s import and export control legislation.

 

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.

 

 

 

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 39235 of 25 September 2015, under Notices R. 894 and R. 895:

Refer to the Jacobsens Customs News Bulletin 407 dated 30 September 2015 for more information.

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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