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Customs News Bulletin

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25 November 2015

 

 

Latest News

What is the state of knowledge in the Customs Clearing and Forwarding Industry in South and Southern Africa

Importers and exporters rely on Customs clearing and forwarding agents (brokers) to act on their behalf when they deal with customs administrations. The problem is that many importers and exporters are not aware of their own roles and responsibilities.

Customs clearing and forwarding agents are merely agents (brokers), and they act on behalf of their principles.  Every shipment which is cleared by a customs broker must be accompanied by duly completed clearing instructions.  In the clearing instructions the customs broker must be instructed how the goods must be cleared – and under the (draft) Rules to the Customs Control Act, 2014 – technical details such as the customs valuation method, tariff classification, customs procedure and other details few importers are aware of.

If one looks at the clearing instructions that accompany most shipments as supporting documents you will notice that these shipments are accompanied by blank clearing instructions.

A customs broker carries on customs business on behalf of his clients.  The duties of a customs broker include:

  •  Subject to certain exclusions, submission of customs clearance declarations on behalf of importers and exporters for the purposes of clearing the goods through customs;

  • Arranging the receipt, delivery or transport of goods imported into or exported from the Republic on behalf of their clients;

  • Arranging for the or consolidation of goods on behalf of their clients; or

  • Arranging for any other formalities relating to the customs clearance and release of goods.

(See definition of "customs broker" in the Customs Control Act, 2014 (Act No 30 of 2014).

All these duties are obviously performed for a reward. If one looks at the duties above you will realise that these people earn their living by providing specialised services to the importing and exporting community. These service relate to government legislation and the completion of forms, but it does not relieve the importer and exporter from the knowledge he should have.

As a customs consultant and auditor I can see the state of knowledge in the South African industry. However, we do not have instruments in South Africa to measure the performance and knowledge in South Africa like in many other countries.

In the United States goods can only be cleared by qualified customs brokers. And there are strict requirements to become a customs broker. It includes:

One must be in possession of a customs broker license, which can only be obtained if:

  • You are a citizen of that country, are at least eighteen years of age, have a good morale character and they may not be a government official at the time of writing a compulsory customs broker exam.

  • Customs brokers in the United States must have an understanding of customs clearance procedures, clearance requirements, customs valuation, fines and penalties, tariff classification, and the rates, duty, taxes and fees for imported goods.

  • In addition, they must pass the customs broker exam and they must submit a customs broker license application form and pay the relevant fees.

In order to pass the exam, which takes place twice a year, (in April and October/November, the candidate must write an  examination which  lasts four hours and consists of 80 multiple questions. Each question only has one correct answer.  To pass the exam, candidates must achieve 75 percent correct answers or better. If a candidate fails, that person can retake the examination it until he/she passes.

The applications are reviewed by three parties which must make recommendations and approve them.

Only 24% of the candidates pass the examination in the US.  During the most recent examinations in the Philippines only 700 of 1700 candidates passed the examinations.

One wonders how South African customs brokers will perform.

 

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 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.

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.

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.

The International Trade Administration Commission (ITAC) has received 2 applications to amend the Customs Tariff of the Southern African Customs Union (SACU), comprising Botswana, Lesotho, Namibia, South Africa and Swaziland.  A correction notice to replace a previous application was also published.

The applications relate to:

1.   Increase in the general rate of duty on:

gas stoves classifiable in 7321.11 from 15% to 30%, as requested by Defy Appliances (Pty) Ltd.  (Comments due by 18 December 2015 – within four (4) weeks of publication date);

Enquiries: ITAC Ref: 24/2015, Enquiries: Mr Dumisani Mbambo/ Mr Daniel Thwala, Tel: 012 394 3743/5162 or email dmbambo@itac.org.za/dthwala@itac.org.za.

2.   REBATE OF CUSTOMS DUTY ON:

  • Woven fabrics of polyester staple fibres, containing 60 per cent or more by mass of such fibres but not exceeding 70 per cent, mixed mainly or solely with cotton, with a dtex of 115 but not exceeding 145, of a mass exceeding 100 g/m² but not exceeding 119 g/m², dyed, plain weave, classifiable in tariff subheading 5513.21 in such quantities, at such times and subject to such conditions as the International Trade Administration Commission may allow by specific permit for the manufacture of shirts classifiable in tariff headings 62.05 and 62.06, as requested by Pep Stores Clothing.

Enquiries: ITAC Ref: 24/2015, Enquiries: Ms T Morale, Tel: 012 394 3694 or email tmorale@itac.org.za; or

Chris Sako Tel No (012) 394 3669, Fax no: (012) 394 4669 Email: csako@itac.org.za.

(Comments due by 18 December 2015 – within four (4) weeks of publication date).

3.  REDUCTION IN THE CUSTOMS DUTY ON:

  • Aluminium printing plates classifiable under tariff subheading 3701.30.25, from 15% ad valorem to free of duty.

[Ref: 14/2015] Enquiries: Ms. Amina Varachia, Tel: (012) 394 3732, Fax: (012) 934 4732, E-mail: avarachia@itac.org.za or Ms. Khosi Mzinjana, Tel: (012) 394 3664, Fax: (012) 934 4664, E-mail: kmzinjana@itac.org.za

The applications were published in Government Gazette 39433 of 20 November 2015 under Notice No. 1168 of 2015 (List 12/2015).

Download the Notice at  http://www.gov.za/sites/www.gov.za/files/39433_gen1168.pdf

List 11/2015 was published under Notice No. 1007 of 2015 in  Government Gazette 39324 of 23 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 was one tariff amendment at time of publication.

In terms of the amendment, rebate item 318.03/9028.30/01.06  was amended with retrospective effect from 3 July 2015 to provide for goods of any description (excluding mounted or populated circuit boards) for the manufacture of electricity meters classifiable in tariff subheading 9028.30 as recommended in ITAC Report 494.

The  amendment was published in Government Gazette 39434 of 20 November 2015 under Notice R. 1159, with retrospective effect from 3 July 2015.The loose-leaf pages to amend the Jacobsens Harmonized Customs Tariff were sent to subscribers under cover of Supplement 1062.

 

 

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.

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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