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Customs News Bulletin

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15 September 2017

 

 

Latest News

DELAYS IN IMPLEMENTING NEW DUTY RATES ON WHEAT AND WHEATEN FLOUR FRUSTRATES PRODUCERS

The rates of duty on certain products are amended more frequently than others. Some of these products include wheat and wheaten flour, sugar and steel.

The rates of customs duty on wheat and wheaten flour are amended frequently in terms of a variable tariff formula which is calculated as the difference between the domestic reference price of the wheat and the 3 week moving average US NO. 2 HRW (ord) Gulf Settlement price for wheat.

The fluctuating world prices of wheat triggers amended duty rates. However, the duty rates cannot be amended unless SARS, through a notice which is signed by the Minister of Finance implements the changed rates by arranging for publication thereof in a Government Gazette Notice.

The South African grain industry is very concerned about the fact that there are delays in the publication of amendments.

The latest amended entered into force through a notice (R. 984) which was published in Government Gazette 41101 of 8 September 2017.

The previous amendment was published in a Government Gazette which was published on 23 June 2017. 

The rates of duty on wheat and wheaten flour has been reduced from 94.72c/kg to 37.93c/kg and from 142.18c/kg to 56.90c/kg respectively, in terms of the existing variable tariff formula.

Amended duty rates would have been published earlier, for example the rates on 11 June 2017 were 37,93c/kg, and on 11 June 2017 the rates increased to 75,23c/kg as a result of fluctuating world prices. On the 7th of September 2017 the rates were 92,00c/kg.

The fact that the publication of the amendments is delayed has a negative impact on South African producers but benefits the consumer. The rates that were published in the Gazette of 8 September 2017 were the rates of 11 July 2017.  In other words, by the time it was published the rates were already outdated.

 

Classification Corner                                                                                                                    

Goods are classified on the basis of particulars on the commercial invoice.

Trade names alone are not enough to classify the commodities. Descriptions such as "Indian Almond Leaves", "Enlive", "Biofilm", etc are not sufficient.

In the event of such descriptions, there should be item code numbers, and there should be supporting literature which should assist with tariff classification.

For example if it is a product such as "Shrimp Soil", the invoiced particulars should either indicate what the function of the product is, as well as a composition. In many instances that will not be possible. Then there should be a code, and supporting literature should be reconcilable with the code number. The supporting literature should be sufficient for tariff classification purposes. Photographs alone will not be sufficient.

You may submit requests for classification in the "Classification Corner" to jacobsens@lexisnexis.co.za.

In the subject line indicate "Classification Corner". Please do not include cases which are currently under dispute at SARS.  Your case will be treated as confidential in that the names of importers, exporters and customs brokers will not be revealed, only information that assists with the classification of the product. As far as possible trade names will be avoided as well.

 

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.

The rates of duty on wheat and wheaten flour has been reduced from 94.72c/kg to 37.93c/kg and from 142.18c/kg to 56.90c/kg respectively, in terms of the existing variable tariff formula.

The amendment was published in Government Gazette 41101 of 8 September 2017. The Notice number is R. 984.    

The rate of duty on sugar of (the subheadings of) heading 17.01 has also been increased from free to 213,1c/kg. The amendment was published in the Government Gazette of 15 September 2017.

The loose-leaf pages to amend the Jacobsens Harmonized Customs Tariff in respect of the updated sugar rates will be sent to Jacobsens subscribers under cover of Supplement 1094.

 

 

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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