Customs News Bulletin

	25 May 2017

Latest News

AGENCY FOR FOOD SAFETY APPOINTED AS INSPECTION BODY

A Non-Governmental Organization, AGENCY FOR FOOD SAFETY (Pty) Ltd has been appointed as assignee, in terms of section 2(3)(a) of the Agricultural Product Standards Act, 1990 (Act No. 119 of 1990) to apply sections 3(1) and 4A of the said Act with respect to all regulated animal products (poultry meat and eggs, as well as any other meat and meat products for which regulations may be promulgated).

Notice was given in Government Gazette No. 40487 of 19 May 2017 under Notice No. 356 of 2017.

The inspection fees, which will be valid from 1 June 2017, have also been gazetted in the same notice.

Retailers and the informal sector will be exempted from the inspection fees. However, inspections will take place from time-to-time and samples may be taken at retail level, from road stalls, home industries, informal shops, roadside vendors, etc.

How Customs helps combat the increase in malaria

World Malaria day was "celebrated" on Tuesday 25 April 2017. Malaria impacts the developing world more than the developed world. It is preventable given the right medication and treatment. Unfortunately, according to the WHO a third of anti-malarial medicines in Africa, where most of the 429,000 annual casualties occur, are fake. Raising awareness about malaria and the importance of genuine medicine is thus paramount to defeating this treatable disease.

The fight against malaria has been identified as a key Millennium Development goal, and donors such as the WHO, other UN agencies, and Non-Governmental Organizations have made great strides in reducing the spread of this disease through a combination of actions and measures, one of which is the increased use of insecticide-treated mosquito nets.

The World Customs Organization were approached to assist in the fight against malaria and the several subheadings in the HS 2017 version of the Harmonized Commodity Description and Coding System were amended to provide detailed information for several categories of products that are used as anti-malarial commodities. This would assist governments to join the fight against malaria through trade policy formulation.

Below find information about some of the changes:

HS 2012 subheading 3002.10 has been subdivided to create new HS 2017 subheadings 3002.11 for malaria diagnostic test kits, and 3002.12 to 3002.15 for immunological products, whether unmixed, mixed or put up in measured doses or in forms or packings for retail sale.

The scope of the new subheadings 3002.12 to 3002.15 has been defined in new Subheading Note 1 to Chapter 30 in order to assist with the tariff classification of these products.

A new subheading 3003.60 has been created under HS 2017. This subheading provides separately for anti-malarial medicaments. These commodities were classified under 3003.90 under the HS 2012 version of the Harmonized System. 

The scope of the HS 2017 subheading 3003.60 has been defined in new Subheading Note 2 to Chapter 30.

Similarly a new subheading 3004.60 has been created under HS 2017 to provide separately for anti-malarial medicaments. These commodities were classified under the residual subheading 3004.90. The scope of the new subheading 3004.60 has also been defined in new Subheading Note 2 to Chapter 30.

HS 2012 subheading 3808.50 has been subdivided to create new subheading 3808.52 for DDT (ISO) (clofenotane (INN)), in packings of a net weight content not exceeding 300 g under HS 2017.

Furthermore, new subheadings 3808.61 to 3808.69 have been created under HS 2017 for certain products used as anti-malarial commodities. These products were classified under HS 2012. The scope of the new subheadings 3808.61 to 3808.69 has been defined in new Subheading Note 2 to Chapter 38.

HS 2012 subheadings 6005.31 to 6005.34 has been deleted and new subheadings have been created under HS 2017 subheadings 6005.35 to 6005.39. A new subheading note, Subheading Note 1 to Chapter 60 provides for particular fabrics of polyethylene monofilament or of polyester multifilament, as follows:

"Subheading 6005.35 covers fabrics of polyethylene monofilament or of polyester multifilament, weighing not less than 30 g/m² and not more than 55 g/m², having a mesh size of not less than 20 holes/cm² and not more than 100 holes/cm², and impregnated or coated with alpha-cypermethrin (ISO), chlorfenapyr (ISO), deltamethrin (INN, ISO), lambda-cyhalothrin (ISO), permethrin (ISO) or pirimiphos-methyl (ISO)". 

The rates of duty on these anti-malarial nets are: General 22%; EU 13%; EFTA 10% and MERCOSUR 22%.

A new subheading 6304.20 has been created under HS 2017 to provide separately for bed nets, of warp knit fabrics specified in Subheading Note 1 to Chapter 63 to be used as anti-malarial nets. 

Subheading Note 1 to Chapter 63 states: "Subheading 6304.20 covers articles made from warp knit fabrics, impregnated or coated with alpha-cypermethrin (ISO), chlorfenapyr (ISO), deltamethrin (INN, ISO), lambda-cyhalothrin (ISO), permethrin (ISO) or pirimiphos-methyl (ISO)."

The rates of duty on bed nets, specified in Subheading Note 1 to Chapter 63 (of HS 2017 subheading 6304.20) are: General 30%; EU 18%; EFTA 15% and MERCOSUR 30%.

The rates of duty on all anti-malarial commodities imported into the Southern African Customs Union are free, with the exception of anti-malarial nets of subheadings 6005.35.90 and 6304.20.

The South African Broadcasting Corporation website reported on 17 May 2017 that, according to malaria experts, the current outbreak in the Limpopo province is one of the worst outbreaks the province has ever experienced.

According to the article more than 30 people have reportedly died from malaria and it is expected that the number could rise.

A  73-year-old woman, Mamoyahabo Sethi of Sephukubje, outside Polokwane, died after she was incorrectly diagnosed with influenza by a General Practitioner.

According to the Health Department, the Department normally conducts spraying campaigns by use of chemical DDT between September and March seasonally.  However, the recent outbreak of Malaria was not anticipated according to officials and the department says it was unsure if it should conduct spraying at affected areas.

Options at its disposal include other chemicals such as the Pyrethroid insecticide, which can last for about three months on the surface of household walls.

DDT lasts for about eight months and kills 80% of mosquitoes which are exposed to Malaria.

DDT was once banned but in 2013 the WHO concluded that countries that are relying on DDT for disease vector control may need to continue such use until locally safe, effective, affordable and environmentally sound alternatives are available for a sustainable transition away from DDT.

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 Commission of South Africa (ITAC) published an application to increase the rate of duty on the importation of biaxially oriented polymers of propylene, of a width not exceeding 200 mm, classifiable in tariff subheading 3919.10.43 from 10% to 20%. The ITAC reference number is 29/2016. For comments or enquiries contact: Mrs Ayanda Gandi at endou@itac.org.za or fax (012) 394 4724 or Mr Nkulana Phenya at nphenya@itac.org.za or fax (012) 394 4677. The application was published in Government Gazette No. 40847 of 19 May 2017 under Notice No. 400 of 2017. Comments are due by 15 June 2017. Customs Tariff Application List 03/2017 was published in Government Gazette 40793 of 21 April 2017 under Notice No. 308 of 2017.

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. The Commissioner of the South African Revenue Services published an amendment to Rule 101A.12 under section 101A to the Customs and Excise Act No. 91 of 1964. Rule 101A.12 has been amended to amend the time reflected when any amended tariff heading or item to any schedule takes effect on the date of publication.

The new Rule states: For the purposes of paragraph 15 of the agreement, where the Commissioner, either by paper document or electronic communication, on the date preceding the date of publication in the Gazette gives notice of an amendment to any tariff heading or item of any Schedule, a registered user may not submit a clearance declaration giving effect to that amendment before 00.00 on the date of publication. The Rule amendment (DAR/168) was published in Government Gazette 40486 of 19 May 2017 under Notice No. R. 431.

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

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