Customs News Bulletin

	19 July 2017

Latest News

INVITATION TO NATIONAL ROADSHOW FOR WOOD PACKAGING MATERIAL (ISPM  15) AND DISCONTINUATION OF METHYL BROMIDE: SOUTH AFRICAN DEPARTMENT OF AGRICULTURE FORESTRY AND FISHERIES (DAFF)

The South African Department of Agriculture, Forestry and Fisheries (DAFF) is about to embark on a national roadshow for wood packaging material (ISPM 15) and discontinuation of methyl bromide.

An invitation has been sent to all role players in manufacturing, treating, exporting of wood packing material (WPM) using Methyl bromide and Heat Treatment, as well as importers of Methyl Bromide fumigant including Freight Forwarders and Agents of principals representing manufacturers, exporters and importers of these commodities.

The purpose of the roadshow is to appraise role players on the following:

• ISPM 15 regulation

• Registration;

• Auditing procedure and requirements;

• Compliance for Pest Controllers in terms of the Fertilizers, Farm Feeds, Agricultural Remedies and Stock Remedies Act, 1947 (Act No. 36 of 1947); and

• Discontinuation of Methyl Bromide and exempted MB uses (QPS & ISPM 15).

All attendees will be presented with certificates of attendance.

Registrants on the DAFF database who do not attend a roadshow will be suspended from the DAFF database.

The roadshows will take place between 09h00 and 13h00 on 11 August 2017 in Gauteng, 14 August 2017 in Durban, 16 August 2017 in Port Elizabeth and 18 August 2017 in Stellenbosch.

Contact Petunia Salmo at PetuniaS@daff.gov.za for more information about the roadshows.

ISPM 15 is an international measure regulating the treatment of wood packaging materials of a thickness greater than 6mm.

Phytosanitary measures relate to the regulation of plants (againsts pests/diseases) in international trade, and the purposes of international standards for phytosanitary measures are to:

• harmonize phytosanitary measures;

• facilitate trade; and

• prevent the use of technically unjustified phytosanitary measures.

The purpose of the ISPM 15 regulation is to reduce the risk of introduction or spread of quarantine pests associated with wood packaging materials used in international trade.

Methyl bromide (MB) is the synonym for bromomethane. Another synonym is Halon-1001.

Methyl bromide (MB) has been banned from most uses. 

Bromomethane (methyl bromide) is a highly toxic pesticide.  It is thus controlled by the Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade), a multilateral environmental agreement (MEA) in relation to the international trade in hazardous chemical substances.  The Rotterdam Convention covers pesticides and industrial chemicals that have been banned or severely restricted for health or environmental reasons.

Bromomethane (methyl bromide) is also subject to import and export permits (licenses) under Schedule 2 to the Import and Export Control Regulations of the International Trade Administration Commission of South Africa (ITAC). Schedule 2 to the ITAC Import and Export Control Regulations regulate the importation and exportation of ozone depleting substances (ODS) under the Montreal Protocol.

Methyl bromide is regulated by the Montreal Protocol because it is highly destructive to the stratospheric ozone layer in the upper atmosphere. Destruction of this protective ozone layer results in more damaging ultraviolet (UV) radiation getting to the earth's surface, which increases our risk of skin cancer, cataracts, immune disorders, and other diseases.

Other risks associated with bromomethane (methyl bromide) include:

• Lung inflammation and impaired breathing; and

• neurological effects including headaches, dizziness, fainting, weakness, speech impairment, numbness, twitching and tremors; in severe cases paralysis and convulsions.

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) received three applications to amend the Common External Tariff of the Southern African Customs Union (SACU). The notices were published in Government Gazette No. 40945 of 30 June 2017. The Notice numbers were Notice 489 of 2017 (Customs Tariff Application List 06/2017) and Notice 492 of 2017 (List 07/2017) List o6/2017 relates to reduction of the general rate of Customs duty on digital smart cards, classifiable under tariff subheading 8523.52.10. For more information contact Pharero Phaswana (pphaswana@itac.org.za) at (012) 394 3628 or Muklliwe Manyoni (mmanyoni@itac.org.za) at telephone (012) 394 3676. List 07/2017 relates to an application by SARS for the review of rebate item 311.12/54.07/03.04. The reason for the application is that the extent of rebate needs to be reviewed as the rebate is higher than the rate of duty in Schedule No. 1 Part 1 to the SACU Tariff. For more information contact Chris Sako (csako@itac.org.za) at (012) 394 3669 or Ms T Morale (tmorale@itac.org.za) or at telephone (012) 394 3694.

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 tariff amendments at time of publication.  The last tariff amendment was published in a Government Gazette on 23 June 2017.

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 Rules to the Customs and Excise Act, 1964 at time of publication. The last Rule amendment (DAR/168) was published in Government Gazette 40486 of 19 May 2017.

Contact Information:
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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