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Customs News Bulletin

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9 December 2015

 

 

Latest News

The Influence of the Falling South African Rand on Customs Duties

It is anticipated that the import duties on wheat will be increased to record levels in the new year. 

On Monday the prices of grain on the Chicago Board of Trade traded near a five-and-a-half year low while the Rand sank to a record low. In the afternoon the price of maize in South Africa increased to a 21-month high.

The combination of the high maize price, the weak South African Rand and the current drought is bad news for consumer who will end up paying more for their food.

According to Mr Jannie de Villiers, the CEO of Grain the drought now starts to take its toll.  It is too late to plant now and it is estimated that the total crop at the end of the season will be substantial less than the required 10,5 million tonnes which is required for local consumption. 

It is thus clear that we will have to import maize in 2016. The price of white maize is now more than 70% higher than at the beginning of the year as people realised that it is too late to plant more maize. 

In the meantime South Africa imported the most yellow maize in 11 years last week due to the current drought.  Yellow maize is used mainly used for animal feed.   It is estimated that SA will need to import 900,000 tons of yellow maize to April 2016.

In the next couple of months South Africa will thus be a net importer of maize and it will have a negative impact on South Africa’s balance of trade.   

Maize is subject to a variable tariff formula that manifests as specific duties changing from time-to-time, depending on the changing variables in the recommended pricing formula. The variable tariff formulae take account of international price movements and duties are adjusted or triggered periodically without prior publication. These formulae operate on the premise that South African domestic prices should equal domestic prices in developed countries including the subsidies available to the producers there (world reference price) and then subtracting transport cost to South Africa from this reference price.   

The table below indicates the amendments on the duty rates of wheat for 2015 resulting from the fluctuations in the international and domestic price movements of maize.  It will be interesting to look at a similar table next year.

Date

Gazette

Notice

Rate

 

-

-

-

122,43 c/kg

Anticipated increase of 31,31 c/kg

25 September 2015

39235

R. 895

91,12 c/kg

Increase of 40,06 c/kg

21 August 2015

39126

R. 743

51,06 c/kg

Reduction of 28,95 c/kg (ITAC Minute M03/2015)

19 June 2015

38891

R. 533

80,01 c/kg

Increase of 33,91c/kg (ITAC Minute M02/2015)

13 March 2015

38563

R. 209

46,1 c/kg

Increase of 30,4 c/kg (ITAC Minute M09/2014)

10 October 2014

38082

R. 781

15,7 c/kg

Increase (ITAC Minute M5/2014)

 

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 published the following applications to amend the SACU Tariff under Notice No. 1168 of 2015 (List 12/2015) in Government Gazette 39433 of 20 November 2015.

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/m˛ but not exceeding 119 g/m˛, 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 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.

The rates of duty on large bore steel pipes of certain tariff subheadings to tariff headings 73.03, 73.05 and 73.06 are increased from free and 10% to 15% as recommended in ITAC Report 507.

The amendment was published in Government Gazette 39478 of 4 December 2015 under Notice No. R. 601.The loose-leaf pages to amend the Jacobsens Harmonized Customs Tariff were sent to subscribers under cover of Supplement 1063.

 

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.

 

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Contact Information:

 

Contact the Author:

Havandren Nadasan
Jacobsens Editor

Tel: 031-268 3510
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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