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ARE YOU READY
FOR THE NEW CUSTOMS ACTS?
South Africa’s new Customs Acts are based on international
instruments such as the WCO Revised Kyoto Convention and other
instruments of the World Customs Organization (WCO).
The International
Convention on the Simplification and Harmonization of Customs
procedures (Kyoto Convention), went into force in 1974. The Kyoto Convention was then revised and
updated in 1999 and entered into force in 2006. The convention
is now known as the Revised Kyoto Convention (RKC).
The revision of the 1974-International Convention on the
Simplification and Harmonization of Customs Procedures in 1999 became
necessary to ensure that it meets the current demands of governments
and international trade that were the result of globalization and the
successes of the WTO Agreement. The Revised Kyoto Convention, which
entered into force in 2006, provides international trade with the
predictability and efficiency that modern Customs administrations and
trade requires. The RKC elaborates several key governing principles
that provide Customs administrations with modern Customs control tools
that assist with trade facilitation for compliant traders.
South Africa will be the first African Country to modernize
its Customs legislation in line with the Revised Kyoto Convention.
Some of the new concepts that will be introduced in South Africa’s
new legislation will be:
·
Transparency and predictability of Customs actions (in line with
the Revised Kyoto Convention and the new World Trade Organization
Agreement on Trade Facilitation)
·
Standardization and simplification of the goods declaration and
supporting documents
·
Simplified procedures for authorized persons (see Chapters 24 and
30 of the Customs Control Act)
·
Maximum use of information technology
·
Minimum necessary Customs control to ensure compliance with
regulations
·
Use of risk management and audit based controls by making use of
information technology
·
Coordinated interventions with other border agencies
·
Partnership with the trade (customs brokers and
importers/exporters)
Draft versions of the new Customs legislation was published in
2009, 2011 and 2013 and the new Customs Control Act (Act 31 of 2014)
and the Customs Duty Act (Act 30 of 2014) was published in Government Gazettes on 23 July
2014 and 10 July 2014 respectively. However, the Acts will only take
effect on a date which will be proclaimed by the President. In this
regard section 944 of the Customs Control Act and section 229 of the
Customs Duty Act.
At a SARS Strategic Stakeholder Meeting held in Pretoria on 24
November 2014, and attended by LexisNexis’ Customs Consultants, GMLS,
SARS have indicated that a possible entry into force date for the new
Acts will be around June/July 2015.
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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.
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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.
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.
The
International Trade Administration Commission (ITAC) published a notice
to exclude mirrors made from glass coloured
throughout the mass (tinted glass) from existing anti-dumping duties
applicable on unframed glass mirrors originating in or imported from
China.
Comments
are due by 5 December 2014.
Download
the notice
(Government Notice
No. R1051 of 2014)
from http://www.gov.za/sites/www.gov.za/files/38215_gen1051.pdf.
THE SACU 2015 TARIFF AMENDMENTS
The amendments to the Customs Tariff for the year 2015 will be
published soon.
The EFTA rates of duty on a wide range of commodities will be
reduced with effect from 1 January 2015.
In addition, there will also be technical amendments and the insertion
of additional
8-digit tariff subheadings for goods classifiable in Chapters 2, 4, 15,
30, 32, 33, 38, 39, 70 and 85 and in Schedule No. 2 with effect from
1 January 2015.
Subscribers will be advised as and when the updates are
published.
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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.
There
were a number of tariff amendments released on 24 November 2014. It
should however be noted that the amendments will only be effective from
1 December 2014.
The
tariff amendments dealt with the following:
The
tariff subheading on certain plastic bags in Part 1 of Schedule No. 1
is amended to include thermoplastic materials under the compulsory
specifications for plastic bags and flat bags as recommended by the
National Regulator of Compulsory Specifications (VC 8087/2013).
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See below, all information
relating to these tariff amendments:
·
Government Notice No. R922
of 24 November 2014 is effective from 1 December 2014 up to and
including 31 December 2014 only.
·
Additional Note 3 to Chapter 39 will be
amended through Government Gazette 38240 on 28 November 2014 and with
effect from 1 December 2014.
·
The new tariff subheadings will be amended again
through Government Gazette 38240 dated
28 November 2014 to reflect the EFTA rates that will come into
effect on 1 January 2015.
·
The deletion of tariff subheadings 3923.21.05,
3923.21.15, 3923.29.05 and 3923.29.15.
·
The insertion of the tariff subheadings 3923.21.07,
3923.21.17, 3923.29.40 and 3923.29.50.
·
The deletion of the following items relating
to environmental levies: 147.01.01/3923.21.05, 147.01.03/39.21.15,
147.01.05/3923.29.05, and 147.01.07/3923.29.15.
·
The insertion of the following items relating
to environmental levies: 147.01.01/3923.21.07, 147.01.03/3923.21.17,
147.01.05/3923.29.40 and 147.01.07/3923.29.50.
·
Part 3A of Schedule No. 1 will also be amended
to reflect the changed tariff subheadings referred above to include
thermoplastic materials under compulsory specifications for plastic
bags and flat bags as recommended by the National Regulator of
Compulsory Specifications (VC 8087/2013).
Download the latest Customs Watch to
have access to
the latest tariff amendments
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