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Customs News Bulletin

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7 September 2017

 

 

Latest News

REBATE PROVISION TO PROMOTE THE MANUFACTURE OF FURNITURE IN THE SOUTHERN AFRICAN CUSTOMS UNION

Various amendments to the Southern African Customs Union Tariff, the HS-based Common External Tariff of Botswana, Lesotho, Namibia, South Africa and Swaziland were published on 1 September 2017.

The amendments were published in Government Gazette 41083 of 1 September 2017 under Notices R. 948 to R. 952.

The rate of duty on rack and pinion steering assemblies, classifiable within subheading 8704.94.20 has been reduced from 20% to free as recommended in ITAC Report 553.  (Notice R. 948)

The Tariff Rate Quota (TRQ) allocation of soya beans traded under the Preferential Trade Agreement (PTA) between the Common Market of the South (MERCOSUR) and Southern African Customs Union (SACU) has been amended under Notice R. 949 by amending General Note M to Schedule No. 1.

The rates of duty on gabions of wire netting, classifiable in tariff subheading 7326.20.10, have been increased from free to 30% as recommended in ITAC Report 552 and the rates of duty on welded link chain and forged grinding balls, classifiable in tariff subheadings 7315.82.01, 7315.82.03, 7315.82.05, 7315.82.07, 7315.82.90 and 7326.11 have been increased for a period of three years as recommended in ITAC Report No. 546 under Notices R. 950 and R. 951.

Under Notice R. 952 rebate provisions were created under item 320.01 for certain components for the manufacture of furniture classifiable under tariff headings 94.01, 94.02 and 94.04 as recommended in ITAC Report 544.

 

Classification Corner                                                                                                                    

Trade compliance starts with customs tariff classification. Therefore, the Jacobsens Customs News Bulletin will periodically provide tips and guidance for more accurate tariff classification under the column "Classification Corner.

The Customs Tariffs of more than 200 countries are based on the "Harmonized Commodity Description and Coding System" ("Harmonized System"/"HS"). The HS entered into force on 1 January 1988. It is a multi-purpose international product nomenclature that has been developed by the World Customs Organization (WCO). (The convention was signed in 1983).  

There are many uses of the HS. The most important use is arguably that of a combined tariff/statistical nomenclature. The HS code determines the treatment of international traded products by Customs administrations.

An international trade transaction starts with an export. It is therefore important that the exporter (in conjunction with his freight forwarder) allocates the correct HS code for every product he deals in.

"Jacobsens" is the HS-based Common External Tariff (CET) of the Southern African Customs Union (SACU) comprising the Republic of Botswana, the Kingdom of Lesotho, the Republic of Namibia, the Republic of South Africa and the Kingdom of Swaziland. The HS-based SACU Tariff is used by exporters and importers in South Africa and the BLNS-Countries as well as customs brokers (clearing and forwarding agents) and by the governments of the SACU Countries.

The ITAC Import and Export Control Regulations are also arranged by HS code numbers with their related descriptions. The Consolidated Prohibited and Restricted Import and Export Goods Indexes, which is a South African publication only, are also arranged by HS code numbers and descriptions. Since Import and Export Control legislation has not been harmonised throughout the Southern African Customs Union, the individual SACU Countries publish their own import and export control legislation.

Many countries have individual export tariffs. The United States of America uses a Schedule B number, which is a 10-digit number used to classify goods for export to another country. The Schedule B is based on the international Harmonized System (HS) of 6-digit commodity classification codes. The HTSUS (Harmonized Tariff Schedule of the United States) is the combined Tariff/Statistical Nomenclature that is used by importers in the United States.

The Australian Harmonized Export Commodity Classification (AHECC) is also based on the HS.

The Combined Nomenclature (CN) of the European Union is also based on the HS.

Many of these HS-based numbers appear on trade documents such as commercial invoices, transport documents (ocean bills of lading or airway bills) or packing lists.

Many South African Customs brokers and importers look for any of these code numbers and then use the first six digits of the code numbers as a starting point for classification.

 

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 received an application for the creation of a rebate provision for the importation of stainless steel fasteners (screws, bolts, coach screws, screw hooks, rivets, cotter-pins, washers (including spring washers) and similar articles, of stainless steel, classifiable in tariff heading 73.18, subject to a permit stating that the goods are not available in the SACU Region.

Contact Mr Pfarelo Phaswana and / or Mr Njabulo Mahlalela at (012) 394 3628 or 3684 or e-mails pphaswana@itac.org.za or nmahlalela@itac.org.za for more information.  (The ITAC Reference is 10/2017)

The notice was published in Government Gazette No. 41064 of 25 August 2017. The Notice number is 635 of 2017. Written submissions should be made within four (4) weeks after the publication date which was 25 August 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 have been various amendments to the Customs Tariff of the Southern African Customs Union on 1 September 2017. These amendments were published in Government Gazette of 41083 of 1 September 2016The Notice numbers were R. 948 to R. 952.    

 More information will be provided in next week’s Bulletin and in the Jacobsens Customs Watch.

The loose-leaf pages to amend the Jacobsens Harmonized Customs Tariff will be sent to Jacobsens subscribers under cover of Supplement 1093.

 

 

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

 

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