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Customs News Bulletin

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12 May 2017

 

 

Latest News

NEW CUSTOMS ACCREDITATION PROGRAMME LAUNCHED

The South African Revenue Service (SARS) officially launched its new accredited client programme for Customs, the Preferred Trader Programme on Monday 8 May 2017. According to the SARS website "this marks the culmination of an extensive process aimed at introducing one of the most significant trade facilitation initiatives in SARS’ customs modernisation journey".

The Preferred Trader Programme is a programme which forms a partnership between SARS Customs and those clients who have an appropriate record of compliance, financial stability, and who maintain a high quality of internal operational processes and computer systems. In return, SARS Customs offers certain benefits to these clients.

South Africa currently has two levels of Customs accreditation:

The Accredited Client Scheme was amended in the Rules to the Customs and Excise Act No. 91 of 1964 on 29 July 2011. The old accreditation scheme was then closed. Clients that were registered under the old scheme are currently regarded as Level One Accreditation clients. They will still maintain the benefits that were awarded to them until the implementation of the Customs Control Act and the Customs Duty Act. Once proclaimed the accredited client status of all Level One accredited clients will be terminated.

The Preferred Trader Programme for Customs clients in South Africa is a Level Two Accredited Programme. It was introduced with effect from 1 August 2011 in response to the need to further improve trade facilitation, whilst securing international supply chains and encouraging greater compliance.

The Preferred Trader programme is based on international standards as defined in the Revised Kyoto Convention and aims to enhance Customs to business partnerships. The SARS Preferred Trader Compliance programme has been designed to be equivalent to the European Union (EU) Authorised Economic Operator (AEO) Compliance model.  It is also aligned to the WCO SAFE Framework of Standards. 

The programme is thus aimed at compliance and supply chain security.  Compliance is aimed at the concepts of "sufficient knowledge" and a "compliance measurement programme". These matters are addressed in the Rules to the Customs and Excise Act.

The main objective of the Preferred Trader Programme is to move away from the traditional Customs gate-keeper approach, to a more risk-based approach. Customs knowledge is thus essential. Compliant traders will receive benefits as stipulated in legislation for accredited clients. This will reduce the frustrations of unnecessary detentions and costs associated therewith.

The requirements for accreditation are listed on the SARS Accreditation website at http://www.sars.gov.za/ClientSegments/Customs-Excise/Processing/Pre-assessment/Accreditation/Pages/default.aspx.

While doing research on the effect of the cost of supply chain interruptions due to Customs detentions, I came across the costs of crime on supply chain interruptions. Crime in South Africa is also highlighted in the Report.

Research from the British Standards Institute (BSI) has found that global supply chains lost a combined $56bn in extra costs during 2015, incurred by crime, extreme weather, terrorist threats and the migrant crisis in Europe.

The 2015 SCREEN Global Intelligence Report from BSI concluded that $22.6bn was lost globally due to cargo crime.

 The British Standards Institute cited a 30% increase in truck theft in South Africa in 2015 alone, "with thieves using high levels of violence and switching from targeting only high value goods to also targeting lower value items".

See https://theloadstar.co.uk/supply-chain-disruption-cost-56bn-last-year-and-theres-more-risk-to-come/.

 

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.

There were no applications to amend the SACU Tariff at the time of publication. The latest application was published in Government Gazette under List 02 of 2017.

The application was 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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