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Latest News
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OPERATION PHAKISA – THE OCEANS
ECONOMY – MUST SUCCEED
Stats SA announced the unemployment statistics for the third quarter of 2017
yesterday (31 October 2017).
During the first quarter of 2017, the unemployment rate reached the highest
levels since 2003, namely 27.7%. The unemployment rate for 2017 remained
unchanged in the second quarter of 2017.
According to Stats SA more than 67% of South Africa’s youth are jobless.
More than 2 million people with Senior Certificates (matric) are without
jobs.
The picture for the future seems bleak, and therefore the Operation Phakisa
for the Oceans Economy, which sounds very ambitious, must succeed.
According to President Zuma, Operation Phakisa, which is modelled on
Malaysia’s Big Fast Results Methodology, which President Zuma was introduced
to in August 2013, have already unlocked a combined R24.6 billion in
investment from government and the private sector, and have created more
than 6 500 jobs.
The picture would thus have been even more bleak was it not for Operation
Phakisa.
According to the website of the Department of Environmental Affairs of South
Africa, the Malaysian Big Fast Results Methodology assisted the Malaysian
government in achieving significant government and economic transformation
within a very short time. The Malaysian initiative also addresses national
key priority areas such as poverty, crime and unemployment. These areas are
all South African national concerns.
The Big Fast Results approach was adapted to the South African context with
the support of the Malaysian government. South Africa’s initiative was named
Operation Phakisa (“phakisa” meaning “hurry up” in Sesotho) to highlight the
urgency of the approach.
Operation Phakisa will focus on the oceans economy and health.
Under the Oceans Economy, the Government will focus on six priority growth
areas, the Oceans Economy to unlock the economic potential of South Africa's
oceans, through significant GDP growth and job creation. There will be two
enablers, namely: (1) Skills and Capacity Building, and (2) Research,
Technology and Innovation.
The two enablers will support the six priority growth areas (work streams),
which are:
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Marine
Transport and Manufacturing work stream;
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Offshore Oil and Gas Exploration work stream;
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The
Aquaculture work stream;
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Marine
Protection Services and Ocean Governance work stream;
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Small
Harbours work stream; and
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Coastal
and Marine Tourism work stream.
Operation Phakisa has medium to long terms goals.
In terms of the short-medium term goals forty-seven detailed initiatives
have been identified, which on implementation, will increase the Oceans
Economy's GDP contribution by 20 million and lead to the creation of 22 000
direct new jobs by 2019.
In terms of the long-term goals, the focuses will be on unlocking the
economic potential of South Africa's oceans, which could contribute up to
R177 billion to the GDP by 2033 and between 800 000 and one million direct
jobs.
For more
information on Operation Phakisa, please click the following link:
https://www.environment.gov.za/projectsprogrammes/operationphakisa/oceanseconomy. |
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Classification Corner
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AN INTRODUCTION TO RULES OF CLASSIFICATION UNDER THE HS
In most cases, goods are classified in HS-based Customs Tariffs by
application of Rule 1, which states, in part, that the terms of the heading
and legal Section and Chapter Notes dictate. In many instances there can be
no argument about the classification.
GRI 2 has 2 parts. Under GRI 2 (a), goods in unassembled form (semi-knocked
down or completely knocked down) are classifiable within the same heading as
the complete article. GRI 2 (a) also deals with the classification of
incomplete or unfinished goods.
GRI 2 (b) directs the classifier to GRI 3, which applies when goods could
potentially be classified in more than one heading.
The first
binder of the HS Explanatory Notes provides useful guidance (explanatory
notes) on the application of the General Rules of Interpretation and should
be consulted.
GRI 3 (a)
deals with the classification of goods which could fall in more than one
heading but which is eventually classified in one heading only because that
heading has a more specific description than the other heading. See for
example windscreens for vehicles are classified as articles of glass of
Chapter 70 and not Section XVII as parts of vehicles. (This is an example of
classification by application of GRI 3 (a) which states that when goods are
potentially classifiable in one or more headings, the goods are to be
classified in the more specific heading.
Rules 3 (b)
states that, if goods cannot be classified by application of GRI 3(a), then
one needs to determine the essential character of the goods and classify
them accordingly. These cases should generally be submitted to SARS for
determination as there are many factors that determine the essential
character of a good.
If goods
cannot be classified by application of GRI 3 (a) or GRI 3 (b), then the
applicable headings must be considered and the goods must be classified in
the last heading that could potentially apply.
GRI 4 is
seldom used. It deals with akinship. It basically states that, when there is
no provision for a product in the HS, goods must be classified in the
heading to which they are most akin to.
GRI 5 deals
with the classification of packing materials and containers – for short term
or long term use – for example camera cases imported with the cameras. Refer
to the first part of the Harmonized System Explanatory Notes for a detailed
explanation.
GRI 6 deals
with the classification of goods in the subheadings, on the same principles
of GRI 1 to 5. In this regard the number of dashes in the subheading are
comparable and must be used. One must consider all the one-dash subheadings
in a heading, then the two-dash subheadings, if applicable, then the
three-dash subheadings if applicable. The SACU CET is only subdivided up to
four-digit dashes. |
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Customs Tariff
Applications and
Outstanding Tariff Amendments
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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.
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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
applications to amend the Common External Tariff (CET) of the
Southern African Customs Union (SACU) at the time of
publication.
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Customs Tariff Amendments
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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.
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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 latest tariff amendments were
published on 6 October 2017.
The tariff amendments
were sent to subscribers under Jacobsens Supplement 1095.
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Customs Rule Amendments
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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.
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Forms are also
prescribed by rule, and are published in the Schedule to the Rules.
There were no rule
amendments at the time of publication.
The latest Rule
amendment (DAR/169) was published in the Government Gazette 41165
of 6 October 2017. The notice number is R. 1081. |
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