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ARE YOU READY FOR SOUTH AFRICA’s NEW CUSTOMS
LEGISLATION?
Globalisation and a number of other events that are affecting the
global economy have forced Customs in South Africa to modernize its
administration in line with international standards.
During the last two decades South Africa’s international trade
grew at an enormous pace and South African producers and exporters felt
the pressure that were caused by trade liberalisation
and other effects of the 1995 WTO Trade Agreements - lower import
tariffs, the abolition of import control and subsidies to mention a
few.
The South African motor vehicle industry has reaped the benefits
of very successful programmes such as the Motor Industry Development
Programme (MIDP) and the Automotive Production and Development
Programme (ADPD) but the global motor vehicle industry is equally
competitive and South African manufacturers and producers are facing
serious competition from the North and abroad. Labour unrest in
the form of strikes have also crippled many
South African industries.
The promulgation of the Customs Duty Act (Act 30 of 2014) on
10 July 2014 and the Customs Control Act (Act 31 of 2014) create two
new challenges that South African exporters are now confronted with
since export compliance have increased under the new
dispensation. The playing field is becoming more complex but it is
a matter of do or die. Sitting on the side
line will not help at all.
South African traders (importers, exporters and manufacturers)
will need to become more compliant than ever before in order to reap
the benefits that have now also fortunately been introduced in the form
of trade facilitation. Trade facilitation is aimed at making importers
and exporters more competitive and South African exporters in
particular will have to familiarise them with the concepts and
challenges of international trade to become more competitive at an
international level.
Currently there are many initiatives to prepare our traders
for these challenges, such as the training of SAAFF Members who are
service providers of traders, the services of the Department of Trade
and Industry and other agencies such as the Small Enterprise
Development Agency (SEDA) and Provincial Investment Agencies, mentoring
programmes, the National Export Strategy.
Although the new Customs legislation has been promulgated the
Customs Control Act and the Customs Duty Act will only take effect once
the President has published the date in a Government Gazette. In the meantime you are advised to
download the legislation from the SARS website www.sars.gov.za
under Legal and Policy/Primary Legislation/Acts Administered by the
Commissioner and study it to see how it enactment will affect your
business.
The Bulletin will also keep you updated.
NOTE:
Comments
are due on the Draft Rules to Chapters 11 to 24 and Chapter 24 of the
Customs Control Act (Act 31 of 2014) before 26 September 2014.
Refer to the Jacobsens Customs News Bulletin of 13 August 2014 for more
information.
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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 the 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.
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. 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.
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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. In the WTO
system, a member may take a safeguard action, which is, restricting
imports temporarily in the face of a sustained increase in imports that
is causing serious injury to the domestic producer of like products.
Safeguard measures are universally applied to all countries, unlike
anti-dumping and countervailing duties that are aimed at a specific
firm or country.
Schedule
No. 2 is identical in all the SACU Countries.
ANTI-DUMPING DUTY INVESTIGATIONS
ITAC has published the following documents relating to the
SACU tariff and tariff amendment applications:
NOTICE OF INITIATION OF
AN INVESTIGATION INTO THE ALLEGED DUMPING OF PORTLAND CEMENT
CLASSIFIABLE UNDER TARIFF SUBHEADING 2523.29 ORIGINATING IN OR IMPORTED
FROM PAKISTAN.
The
applicants, four major cement producers, submitted sufficient evidence
and established a prima facie case to enable ITAC to arrive at a
reasonable conclusion that an investigation should be initiated on the
basis of dumping, material injury and/or threat of material injury and
causality.
For
more information download
Government Notice No. R.675 of 2014 which was published in Government Gazette 37915 of 22
August 2014.
APPLICATION FOR CREATION OF A REBATE
PROVISION:
An
application for creation of a rebate provision has been made on Sodium
hydroxide (caustic soda) in aqueous solutions (soda lye or liquid
soda), classifiable in tariff subheading 2815.12 for use in the
manufacture of sodium hypo chlorite solution, classifiable in tariff
subheading 2828.90.
Enquiries:
Mr Nkulana Phenya –
nphenya@itac.org.za or Ms Ayanda Ndou- endou@itac.org.za.
Download
Government notice No. R.674 of 2014 of 22 August 2014 (List 08/2014)
for more information.
Comments
are due within four weeks of the date of the notice.
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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.
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.
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Subheading
3207.20 was amended by the creation of two 8-digit subheadings to
increase the rate of Customs duty on vitrifiable enamels and similar
preparations from free of duty to 5% as recommended in ITAC Report No.
478.
The amendment
was published in Government
Gazette 37916 of 22 August 2014 under Government Notice No. R. 632
(Jacobsens Reference A1/1/1493).
The rate of
Customs duty on wire of iron or non-alloy steel, plated or clad with
other base metals, classifiable in tariff subheading 7217.30, is
increased from free of duty to 10% as recommended in ITAC Report No.
477.
The amendment
was published in Government
Gazette 37916 of 22 August 2014 under Government Notice No. R.633 (Jacobsens Reference A1/1/1494).
Download the latest Customs Watch to have access to the latest tariff and
rule amendments.
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