http://www.lexisnexis.co.za/images/jacobsens/jacobsens_logo.jpg

Customs News Bulletin

http://www.lexisnexis.co.za/images/jacobsens/jacobsens_img01.jpg

 

http://www.lexisnexis.co.za/images/jacobsens/jacobsens_img02.jpg

 

http://www.lexisnexis.co.za/images/jacobsens/jacobsens_img03.jpg

http://www.lexisnexis.co.za/images/jacobsens/jacobsens_img04.jpg

http://www.lexisnexis.co.za/images/jacobsens/jacobsens_img05.jpg

 

http://www.lexisnexis.co.za/images/jacobsens/jacobsens_img06.jpg

http://www.lexisnexis.co.za/images/jacobsens/jacobsens_img07.jpg

http://www.lexisnexis.co.za/images/jacobsens/jacobsens_img08.jpg

http://www.lexisnexis.co.za/images/jacobsens/jacobsens_img09.jpg

 

24 October 2016

 

 

Latest News

SARS CUSTOMS IMPLEMENTS SADC EPA AND SACU/MERCOSUR TRADE AGREEMENTS

SARS Customs have published various notices to implement two free trade agreements between the Southern African Customs Union Countries (Botswana, Lesotho, Namibia, South Africa and Swaziland) and trade partners, namely the . Preferential Trade Agreement between the Common Market of the South (MERCOSUR) and the Southern African Customs Union (SACU) and the Economic Partnership Agreement (EPA) between the European Union (EU) and the Southern African Development Community EPA States.

The Preferential Trade Agreement between the Common Market of the South (MERCOSUR) is an agreement between the countries of MERCOSUR (Argentina, Brazil, Paraguay and Uruguay) on the one part and the Southern African Customs Union (SACU), comprising South Africa and the BLNS-Countries (Botswana, Lesotho, Namibia and Swaziland).

The first agreement leading to the SACU/MERCOSUR PTA was signed at the end of the year 2000 when these countries signed a framework agreement towards the creation of the free trade area between MERCOSUR and the Southern African Customs Union.

Four years later, in December 2004, MERCOSUR and the Southern African Customs Union (SACU) signed a preferential trade agreement. In conjunction with the agreement, they issued an understanding on the conclusion of their preferential trade agreement. The final agreement was only signed after many rounds of negotiations on 15 December 2008.

The Preferential Trade Agreement between the Common Market of the South (MERCOSUR) and the Southern African Customs Union (SACU), was signed on 15 December 2008, in Salvador, Brazil; and, on 03 April 2009 in Maseru, Lesotho.

The rates of duty on about 1,000 product lines on each side of the border will be reduced under the PTA between SACU and Mercosur.

The Economic Partnership Agreement between the SADC EPA States, of the one part, and the European Union and its Member States, of the other Part, have entered into force on 10 October 2016. In terms of the SADC EPA, which is an agreement between the SACU Countries and Mozambique (referred to as the SADC EPA Group) and the European Union (EU), the trading regime between SACU and the EU has been harmonized to secure further market access in agriculture (beyond the SA-EU Trade Development and Co-operation Agreement (TDCA) provisions). 

The Economic Partnership Agreement between the SADC EPA States and the EU covers most products. It replaces the Trade Chapter of the Trade Development and Co-operation Agreement (TDCA) between the European Union and South Africa which existed between 2000 and 2016. South Africa will enjoy better market access under the SADC EPA than it had under the TDCA.

An extra column, titled “Mercosur” will be added after the SADC column in Part 1 of Schedule No. 1 to the Customs and Excise Act, which is also the common external tariff of Botswana, Lesotho, Namibia and Swaziland. At the same time SARS Customs will publish notices to implement the amendments that will replace the once controversial SADC Economic Partnership Agreement. The effective dates of the agreements are as follows:

Preferential Trade Agreement between the MERCOSUR and the SACU with retrospective effect from 1 April 2016; and

Economic Partnership Agreement (EPA) between the EU and the SADC EPA States with retrospective effect from 10 October 2016.

There were six notices to amend the Southern African Customs Union (SACU) Tariff resulting from the implementation of the two agreements:

  • The General Notes to Schedule No. 1 are amended to give effect to the implementation of the Preferential Trade Agreement between the Common Market of the South (MERCOSUR) and the Southern African Customs Union (SACU) by the insertion of Note M, the renumbering of General Note M as General Note N, the amendment of General Note N and by the insertion of  Part D which includes the Rules of Origin (SARS Reference 1/1/1150 wef 1 April 2016) (Notice No. R. 1285);

  • The entire Schedule No. 1 Part 1 (with the exception of the Section and Chapter Notes) are substituted by the addition of the Mercosur column with effect from 1 April 2016 (SARS Reference 1/1/1149 with retrospective effect from 1 April 2016) (Notice No. R. 1287);

  • Schedule No. 10 is amended by the insertion of Part 7 (the legal text of the PREFERENTIAL TRADE AGREEMENT BETWEEN THE COMMON MARKET OF THE SOUTH (MERCOSUR) AND THE SOUTHERN AFRICAN CUSTOMS UNION (SACU)) (SARS Reference 10/14 with retrospective effect to 1 April 2016) (Notice No. R. 1286); and the following Annexes:

ANNEX I: Offer of MERCOSUR to SACU (based on HS 2007);

ANNEX II: Offer of SACU to MERCOSUR (based on HS 2007);

ANNEX IV: Safeguard measures;

ANNEX V: Dispute settlement procedure;

ANNEX VI: Sanitary and Phyosanitary measures.

The Rules to implement the SADC EPA Agreement were published in a 60 page South African Government Gazette Notice on 10 October 2016 but Rules for the SACU Mercosur Agreement have not been published yet.

The following notices (four plus various annexes) were published to implement the EU/SADC EPA:

  • The General Notes to Schedule No. 1 are amended to give effect to the implementation of the Economic Partnership Agreement (EPA) between the European Union (EU) and the Southern African Development Community EPA States by amending General Note IJ and by replacing Part A (the Rules of Origin of the SA/EU TDCA with the Rules of Origin of the SADC EPA (SARS Reference 1/1 1151 with effect from 10 October 2016)(Notice No. R. 1289);

  • The rates of duty on fish products of Chapters 3 and 16 are amended to give effect to the implementation of the EPA agreement between the EU and the SADC EPA States (SARS Reference 1/1/1153 with effect from 10 October 2016)(Notice No. R. 1283);

  • The rates of duty on various industrial products classifiable in Schedule No. 1 Part 1 are amended to give effect to the implementation of the EPA agreement between the EU and the SADC EPA States (SARS Reference 1/1/1152 with effect from 10 October 2016)(Notice No. R. 1284);

  • Schedule No. 10 by the renumbering of Part 1 as Part 1A and the insertion of Part 1B to give effect to the implementation of the EPA agreement between the EU and the SADC EPA States (SARS Reference 10/15 with retrospective effect to 10 October 2016)

SARS also published various annexes to the Schedule No. 10 notice.

The Notices were published in Gazette No. 40356 of 21 October 2016.

The learning material for the SAQA Unit Standard 252248 which is titled “Certify certificates of origin and other commercial documents” will be updated within the next two weeks.

The Unit Standard deals with the reasons for the certification of Certificates of Origin and other commercial documents, supporting documents and the regulations, processes and procedures relating to certificates of origin.

SADC ECONOMIC PARTNERSHIP AGREEMENT TAKES EFFECT: RULES PUBLISHED

SARS published a rule amendment to implement the Economic Partnership Agreement between the SADC EPA states, of the one part, and the European Union and its member states, of the other part.

The rules numbered 49A are rules contemplated in section 49(6)(b) in respect of the Economic Partnership Agreement between the SADC EPA states, of the one part, and the European Union and its member states, of the other part.

Where any rule reflects a number or numbers in brackets after a serial number, for example, 49A.01(5), the number in brackets refers to the Article number or numbers of Protocol 1 entitled “concerning the definition of the concept of ‘originating products’ and methods of administrative co-operation” of the Agreement to which the rule relates.

Various expressions are defined in Rule 49A.01(d).

Rule 49A.01(f) deals with the registration of exporters and producers and the relevant forms that need to be completed.

There are also Rules in respect of the Rules of Origin in respect of the following under Annex 1, Protocol 1 (if an Article is not mentioned in the table below there are no rules to that Article):

TITLE II - DEFINITION OF THE CONCEPT OF “ORIGINATING PRODUCTS”

Rule number

Article of EPA

Topic

 

 

 

49A.04(3),(4),(5),(6)

Article 3

Bilateral cumulation

 

 

 

 

Article 4

Diagonal cumulation

 

 

 

 

Article 5

Cumulation with respect to materials which are subject to Most Favoured Nation (MFN) duty free treatment in the European Union

 

 

 

 

Article 6

Cumulation with respect to materials originating in other countries benefiting from preferential duty-free quota-free access to the European Union

 

 

 

49A.05(7)

Article 7

Wholly obtained products

 

 

 

49A.06(8), (9)

Article 8

Sufficiently worked or processed products

 

 

 

 

Article 9

Insufficient working or processing operations

 

 

 

49A.09(12)

Article 12

Sets

 

TITLE III - TERRITORIAL REQUIREMENTS

Rule number

Article of EPA

Topic

 

 

 

49A.11(14)

Article 14

Principle of territoriality

 

 

 

49A. 12(15)

Article 15

Non-alteration

 

 

 

49A.13(16)

Article 16

Accounting segregation

 

 

 

49A.14(17)

Article 17

Shipment of sugar

 

 

 

49A.15(18)

Article 18

Exhibitions

 

TITLE IV - PROOF OF ORIGIN

Rule number

Article of EPA

Topic

 

 

 

49A.16(19), (20)

Article 19

General requirements

 

 

 

 

Article 20

Procedure for the issue of a movement Certificate EUR1

 

 

 

49A.17(21)

Article 21

Movement Certificates EUR1 issued retrospectively

 

 

 

49A.18(22)

Article 22

Issue of a duplicate movement certificate EUR1
     

49A.19(23)

Article 23

Issue of movement certificates EUR1 on the basis of a proof of origin issued or made out previously (“Replacement Movement Certificate”)

 

 

 

49A.20(24),(25)

Article 24

Conditions for making out an origin declaration

 

Article 25

Approved exporter

 

 

 

49A.21(26)     

Article 26

Validity of proof of origin

 

 

 

49A.22(27)

Article 27

Submission of proof of origin

 

 

 

49A.23(28)

Article 28

Importation by instalments

 

 

 

49A.24(29)

Article 29

Exemptions from proof of origin

 

 

 

49A.25(30)

Article 30

Information procedure for cumulation purposes

 

 

 

49A.26(31)

Article 31

Supporting documents

 

 

 

49A.30(32)

Article 32

Preservation of proof of origin and supporting documents (Record keeping requirements)

 

 

 

49A.27(33)

Article 33

Discrepancies and formal errors

 

 

 

49A.29(34)

Article 34

Amounts expressed in EURO

TITLE V – ARRANGEMENTS FOR ADMINISTRATIVE CO-OPERATION

Rule number

Article of EPA

Topic

 

 

 

49A.32(37)

Article 37

Mutual assistance

 

 

 

49A.33(38)

Article 38

Verification of proof of origin

 

 

 

49.34(38) s/b (39)

Article 39

Verification of suppliers’ declarations

 

 

 

49A.35(40)

Article 40

Dispute settlement

 

 

 

49A.37(42)

Article 42

Free zones

 TITLE VII – FINAL PROVISIONS

Rule number

Article of EPA

Topic

 

 

 

49A.45

 

General. Deals amongst other with:

Documents to be submitted and procedures to be followed on presentation of bills of entry for goods in respect of which preferential treatment is claimed.

 

 

 

 

 

Tariff rate quotas

 

 

 

49A.48.03

 

Export to the European Union of goods subject to tariff quotas

 

 

 

49A.49.04

 

Imports from the European Union of goods subject to tariff quotas

 

 

 

 

The list of originating materials (List Rules) referred to in paragraph (a) under the Rules to Article 4 (diagonal cumulation) is published as Appendix 1 to Part A to the General notes to Schedule 1 (the Rules of Origin for the SADC EPA). It will appear in a Government Gazette Notice which will be published by SARS on 21 October 2016.

In addition to the Rule amendments above, the customs duty rates in Schedule No. 1 Part 1 will be affected. The legal text of the agreement will be published in Schedule 10 to the Customs and Excise Act. The quota rates for importation into SACU will be published under rebate item 460.25 which will be amended.

The following forms have also been amended in item 202 of the Schedule to the Rules:

Form Number

Form Name

 

 

DA 185

Application form: Registration/Licensing of Customs and Excise Clients

 

 

DA 185.4A2

Registration Client Type 4A2 - Exporter (Local or Foreign)

 

 

DA 185.4A7

Registration Client Type 4A7 - Producer

 

 

DA 185.4A11

Client type 4A11 - Special Economic Zone Operator (SEZ) and/or designation of a Customs Controlled Area (CCA) - (Sections 21A, 59 and Rule 21A.04)

 

 

DA 185.4B9

Client type DA 185.4B9 - Special Storage Warehouse (Customs Controlled Area Enterprise) - (Sections 19A, 21, 21A, 60, 61 and Rule 21A.10)

 

 

DA 185.4B10

Client type DA 185.4B10 - Manufacturing Warehouse (Customs Controlled Area Enterprise) - (Sections 19A, 21A, 27, 59A and Rule 21A.10)

WCO HS 2017 COMPLIMENTARY PUBLICATIONS

In addition to the entry into force of the Southern African Development Community (SADC)/European Union (EU) Economic Partnership Agreement (EPA) and the Southern African Customs Union (SACU)/Mercosur Free Trade Agreement which necessitated the replacement of Schedule No. 1 Part 1 of the South African Customs and Excise Act, which is also the HS-based Southern African Customs Union (SACU) Common External Tariff (CET), the Harmonized System will also be replaced by a new version, HS 2017, with effect from 1 January 2017.

This will be the sixth version of the HS since its introduction with effect from 1 January 1988.  In terms of SACU’s commitments under the HS Agreement, large parts of Schedule No. 1 Part 1 will once again be amended with effect from 1 January 2017. All complimentary World Customs Organization (WCO) HS publications will be replaced by new publications and products.

LexisNexis acts as an agent for the WCO. We import their publications from Belgium for our local customers. Please see below the latest WCO update with regards to delivery of the 2017 editions.

Due to legal requirements the 2012 edition of the Online HS Database is applicable until 31 December 2016. If you are subscribed to the online database, your database will automatically be updated with the 2017 online edition on 1 January 2017.

Some of LexisNexis’ clients have already ordered their HS 2017 publication.

LexisNexis received correspondence from the WCO stating that there has been a delay with the delivery of the 2017 printed publications.  The following new dates have been supplied by the WCO:

HS 2017 Explanatory Notes and Nomenclature:

Subscribers can expect delivery in early December 2016. 

HS 2017 Alphabetical Index:

Subscribers can expect delivery at the end of January 2017.

The updated Compendium of Classification Opinions will be dispatched with either the Explanatory Notes or the Alphabetical Index.

See https://www.lexisnexis.co.za/Promotions/LexisNexis_WCO_2017/WCO_6th_Ed_Flyer.pdf for more information about the HS 2017 publications and products.

 

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 Commission of South Africa (ITAC) also publishes Sunset Review Applications in relation to anti-dumping duty in terms of which any definitive anti-dumping duty will be terminated on a date not later than five years from the date of imposition, unless the International Trade Administration Commission determines, in a review initiated before that date on its own initiative or upon a duly substantiated request made by or on behalf of the domestic industry, that the expiry of the duty would likely lead to continuation or recurrence of dumping and material injury.

The International Trade Administration published the latest applications to amend the Customs Tariff of the Southern African Customs Union (SACU) under a document entitled: "International Trade Administration Act: Customs and Excise Tariff Applications: List 08/2016". (Comments due by 21 October 2016).

The application deals with the review of the general rate of duty on various downstream steel products classifiable under tariff headings 73.06, 73.15, 73.26 and 87.16.

ITAC Ref: 16/2016, Enquires: Lufuno Maliaga/ Njabulo Mahlalela/ Pfarelo Phaswana, Tel: 012 394 3835/3684/3628 or e-mail: lmaliaga@itac.org.za/nmahlalela@itac.org.za/ pphaswana@itac.org.za.

The document was published in Government Gazette No. 40293 of 21 October 2016 under General Notice No. 614 of 2016.

 
 

 

 

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.

SARS Customs published various amendments to implement the Preferential Trade Agreement Between the Common Market of the South (MERCOSUR) and the Southern African Customs Union (SACU) and the Economic Partnership Agreement between the SADC EPA States and the European Union.

A notice was also published to impose Anti-Dumping duties on frozen potato chips originating in or imported from Belgium and the Netherlands as recommended in ITAC Report No. 474.

The tariff amendments were published in Government Gazette No. 40356 on 21 October 2016. The amendments will be sent to subscribers under cover of Jacobsens Supplement 1080.

For more information about these amendments see the subscribers notice to Supplement 1080 or view the Customs Watch.

 

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.

The Customs and Excise Rules were amended by Rules replacing the trade part of the SA/EU TDCA with Rules to implement the Economic Partnership Agreement (EPA) between the SADC EPA States and the European Union and its Member States.

The amendments were published under Notice R. 1240 in Government Gazette No. 40343 of 12 October 2016, with retrospective effect to 10 October 2016. 

In terms of the Notice, the heading and rules numbered 49A are replaced by a new heading and rules.

For more information about these amendments view the latest Customs Watch.  Also see the main article in this Bulletin.

 

 

 

 

 

Contact Information:

 

Contact the Author:

Havandren Nadasan
Jacobsens Editor

Tel: 031-268 3510
e-mail to: jacobsens@lexisnexis.co.za

 

Leon Marais
Independent Customs Consultant
Tel: 053-203 0727
e-mail to: leon@itacs.co.za

 

LexisNexis

 

© Customs News Bulletin is prepared for distribution by LexisNexis. It is for information only, and does not constitute the provision of professional advice of any kind. No responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication can be accepted by the author, copyright owner or publisher.

Copyright: LexisNexis (Pty) Ltd retains the copyright of this email. No part of this email may be reproduced in any form or by any means without the publisher's written permission. Any unauthorised reproduction of this work will constitute a copyright infringement and render the doer liable under both civil and criminal law.

To unsubscribe e-mail jacobsens@lexisnexis.co.za.