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Customs News Bulletin

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21 April 2017

 

 

Latest News

FIVE PROBLEMS SOUTH AFRICAN IMPORTERS FACE

International trade appears complex. It involves many different countries and there are many rules and regulations to comply with. These rules and regulations differ from country to country. There are also differences between local and international trade.

Importers (and exporters as their suppliers) must understand these rules and regulations in order to anticipate and avoid potential problems. Fortunately there are many role-players, such as customs clearing and forwarding agents (customs brokers) in international trade to assist the importer and exporter. 

Importers and exporters must be aware that these brokers are merely agents and that the importer and exporter, as principals are legally responsible for all customs processes and procedures even if they make use of customs brokers. The importer or exporter should thus have a working knowledge of international trade even if they rely on a customs clearing and forwarding agent (customs broker) to ship their goods. 

A typical international trade transaction usually involves three steps: clearing customs, shipping the goods and payment for the goods.

The two most important parties in international trade are exporters and importers. After all, if it was not for them there would not have been a transaction.

Taking into consideration the different parts of a supply chain and the many parties involved in the transaction a lot can go wrong during the transaction.

Here are 5 common problems South African importers can face. You are advised to share this article with your suppliers in order to avoid some of these errors. South African exporters should also take note as their clients will experience similar problems in their destination countries in the vent of ignorance or non-compliance from their part.

  1. Improper packing of cargo.  It leads to cargo damage during transportation.

  2. Incorrect information leads to many problems, from not knowing where to pick up cargo, to expensive delays and penalties.

  3. Customs stops are sometimes performed on a routine basis. Make sure that your supplier is honest and knows what is expected from him. Also make sure that you know what your legal responsibilities are and that your customs broker is experienced enough to help you to be compliant.  

  4. Missing documents can cause several problems, from not getting release (in the case of a bill of lading) to paying more duties in the absence of a certificate of origin. In the absence of a permit for a specific commodity the goods will not be allowed into the country.

  5. Inaccurate information required for customs clearance or lack of information lead to delays in the customs release process. The more accurate the information you produce, the lower your risk profile. Invoices should enable customs to classify the goods and to determine a customs value (which are both importers’ responsibilities). If the invoiced particulars are not sufficient you should provide identifiable supplier’s literature to enable customs to classify the goods. You must agree with classification.

From a customs compliance perspective the most important document is the commercial invoice from the supplier (exporter) to the importer. The importer must be in a position to make a self-tariff determination, self-valuation determination or self-origin determination on the basis of invoiced particulars.  When in doubt the customs authority may make a determination on the same goods on the basis of the invoiced particulars, irrespective of any self-determinations. It is therefore of vital importance that the supplier provides the importer with an accurate invoice to avoid any delays in the customs clearance process or to avoid penalties.

The invoice must contain all information that are required for customs purposes. In this regard see section 41 of the Customs and Excise Act No. 91 of 1964 and convey the information to your supplier.

 

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.

ITAC published a notice which is titled "Initiation of sunset review of anti-dumping duties on frozen bone-in portions of fowls of species gallus domesticus imported or originating from the United States of America" under Notice 270 in Government Gazette 40717 of 24 March 2017. Comments are due by 24 April 2017.

The response to the questionnaire and any information regarding this matter and any arguments concerning the allegation of dumping and the resulting threat of material injury must be submitted in writing to the Senior Manager: Trade Remedies II at ITAC.

Enquiries may be directed to the investigating officers, Ms Thuli Nkomo at telephone number +27 12 394 1190 or Ms Boniswa Mehlomakulu at telephone number +27 12 394 3636 or at fax number +27 12 394 0518.

Comments are due by 24 April 2017. ITAC published an application to increase the current duty rates on dairy spreads of subheading 0405.20 and certain extracted oleoresins of subheading 3301.90 from the current rates of duty to the WTO bound rates in a Government Gazette under List 02 of 2017.

The applications were published in Government Gazette No. 40691 of 17 March 2017 in Notice No. 224 of 2017.

Comments were due by 13 April 2017.

Refer to the Jacobsens Customs Bulletin of 23 March 2017 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.

There were no amendments to the Common External Tariff (CET) of the Southern African Customs Union (SACU) at time of publication. The latest tariff amendments were published on 31 March 2017.

These amendments were forwarded to Jacobsens Subscribers under cover of Supplement 1088.

The amendments have been published in the Customs Watch which is also available on the Jacobsens website at www.jacobsens.co.za.

 

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 amendments to the Customs and Excise Rules at time of publication. The latest Rule amendment (DAR/166) was published in Government Gazette 40594 of 3 February 2017.

 

 

 

 

 

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

 

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