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

 

2 August 2017

 

 

Latest News

TRADE FACILITATION IN SOUTH AFRICA: A PIE IN THE SKY?

The Republic of South Africa has acceded to the Revised Kyoto Convention (RKC) on the 18 May 2004. South Africa’s new Customs legislation which was gazetted in July 2014 is based on the “modern standards” of the RKC and other (related) international instruments to which the country has assented. (Introductory paragraph of the preamble to the Customs Control Act, 2014). The Trade Facilitation Agreement (TFA) of the World Trade Organization (WTO) which is aligned to the Revised Kyoto Convention is one of the international instruments to which the country has assented but the Government needs to ratify the Agreement.

There are various definitions of the term “trade facilitation”. SARS defines the terms as follows: “The simplification and harmonization of international trade procedures, including activities, practices, and formalities involved in collecting, presenting, communicating, and processing data required for the movement of goods in international trade’, Note: This concept refers to the WTO definition of trade facilitation”.

There are various references to the terms “trade facilitation” in the preamble to the Customs Control Act No. 31 of 2014. In fact, most paragraphs of the preamble relate to the concept of trade facilitation: “simplified customs procedures” (paragraph 2) (WTO, TFA and RKC); “facilitation of legitimate trade” (paragraph 5); “customs procedures and formalities should be efficient, transparent and predictable” and “not impede legitimate international trade, economic competitiveness and the movement of people and goods across national boundaries” (paragraph 6), balance between customs control and trade facilitation (paragraph 7).

The cost of compliance is expensive. The cost of non-compliance is more expensive. Trade facilitation promotes global competitiveness and reduces the cost of compliance.

When the Trade Facilitation Agreement entered into force in February this year, the WTO predicted that global trade would be boosted by up to 1 trillion dollars each year, with the biggest gains being felt in the poorest countries resulting from the implementation thereof. The impact will be bigger than the elimination of all existing tariffs around the world.

The topic of “Trade Facilitation” in the form of an official agreement was first raised at the World Trade Organisation (WTO) Ministerial Council (MC) in Singapore in 1996.

Two-thirds of the 164 WTO Members assented to the Agreement by 22 February 2017. Currently 118 WTO Members has assented to the Agreement.

Mr Nikki Kruger, Chief Director: Trade Negotiations of the dti International Trade and Economic Development Division updated the Parliamentary Portfolio Committee on Trade and Industry of the South African process of implementation on 16 May 2017.

It was reported that the ratification processes have been finalised at that time. The establishment of the National Committee on Trade Facilitation (NCTF) was approved by the Cabinet. The NCTF was responsible for the development of South Africa’s categorisation list which was approved by the Cabinet in April 2017. Categorisation is tailor-made and specific to SA so as to meet the specific needs and capabilities of the country, and the type of reform that will be required and implemented.

Tailor-making the categorisation and thus the trade facilitation reforms, minimises any possible negative effects that may arise.

The categorisation list takes into account the implications of categorisation for the country. 

At that time there was a process underway for the simultaneous depositing to the WTO of SA’s Instrument of Acceptance of the Protocol and SA’s Category A commitments. 

In the current economic climate the acceptance of the WTO is a requirement.

 

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 notices regarding the applications to the amendment of the SACU CET at time of publication.  The last notices were published in Government Gazette No. 40998 of 21 July 2017.

The Notice numbers were Notice 546 of 2017 and Notice 547 of 2017.

Refer to the Bulletin of 28 July 2017 for more information about these Notices. 

 

 

 

 

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.

The Minister of Finance, on request of the Minister of Trade and Industry, signed a notice to implement the recommendation of the International Trade Administration Commission of South Africa (ITAC) in Report 542 regarding the review of the Dollar-based Domestic Reference Price and variable tariff formula for sugar. In terms of the revised formula the rate of duty on sugar of tariff subheadings 1701.12, 1701.13, 1701.14, 1701.91, and 1701.99 is reduced from 63.63c/kg to free.

The notice was published in Government Gazette 41012 of 28 July 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

 

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.