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WHAT KNOWLEDGE
OF THE WCO HARMONIZED COMMODITY DESCRIPTION AND CODING SYSTEM MEANS
TO YOU
The WCO Harmonized Commodity Description and Coding System
(Harmonized System/HS) is an international tariff classification
system that enables customs and (international) trade experts and in
fact anyone dealing with many aspects of international trade, to work
together using the HS as an “international customs language”.
If one understands the HS Nomenclature (a language of
numbers), you are able to interpret the Customs legislation of any
country in the World, no matter the country you live in.
In addition to classifying goods in the Customs Tariffs of
any country in the World using the HS, HS specialists can also
interpret import and export prohibitions and restrictions that are
based on the HS (of any country) as well as customs tariff-related
information such as duties and (international) trade statistics of
any country in the World.
One does not have to be an expert to assist clients with
landed cost calculations – which you cannot do without the customs
trilogy of tariff classification, customs valuation and origin. If
customs brokers provide the tariff classification, customs value and
origin to importers they are able to do their own landed cost
calculations. However, it is very convenient if you are able to
classify without assistance. Chapters 6 to Chapter 8 of the new
Customs Duty Act, (Act 30 of 2014) deals with tariff classification,
customs valuation and origin in South Africa and Chapter 10 provides
for advance rulings in the trilogy. The trilogy plays such an
important role in trade facilitation that they are not only dealt
with in national customs legislation but also in international
conventions and agreements such as the World Customs Organisation
(Revised) Convention on the Simplification and Harmonization of
Customs Procedures and in the Agreement on Trade Facilitation of the
World Trade Organization.
Customs officials understanding the HS are able to check
customs declarations for compliance matters and for customs duty
purposes. They are also employed in the Tariff section where they can
either research tariff disputes between Customs and importers or make
recommendations about their research or they can become tariff
specialists that makes final decisions about the tariff
classification of commodities.
The HS Tariff section, although employed by Customs, must
investigate and make recommendations about the objective tariff
classification of goods in dispute, whether or not in the favour of
Customs. In order to do so one needs to understand the HS and its
legal principles by also taking notice of the grounds for similar
tariff determinations worldwide.
Customs officers with expertise in tariff classification can
also work in the Risk Management section or in the function audit
section where they do post clearance audits which in future will be
playing an increasingly important role in Customs.
The Tariff Amendment section of Customs work closely with
the investigators of the International Trade Administration
Commission of South Africa. The tariff specialists make proposals to
ITAC about whether or not proposed amendments to the tariff can be
administered. The tariff amendment section then arranges for
publication of notices to implement the recommendations of ITAC.
Tariff experts in the private sector assist clients with tariff
classification dispute resolution and they are also responsible for
training and consulting to leading companies. It is very exciting and
introduces one to many new faces and interesting characters. It also
exposes one to other exciting opportunities.
One becomes a tariff expert by experience only. All tariff
experts start from the bottom and practice and experience makes
perfect. If one does not master the basic principles of tariff
classification and learn through experience you will never become an
expert. You could be the next expert.
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MARKET ACCESS PERMITS FOR AGRICULTURAL PRODUCTS AND
EXPORT PERMITS TO THE EU FOR 2015
The National Department of Agriculture, Forestry and
Fisheries has published two notices, namely:
GOVERNMENT NOTICE NO. R.1085 of 2015 titled “APPLICATION FOR
MARKET ACCESS PERMITS FOR AGRICULTURAL PRODUCTS IN TERMS OF THE WTO
AGREEMENT FOR 2015; and
GOVERNMENT NOTICE NO. R.1084 OF 2015 titled “PROCEDURES FOR
THE APPLICATION, ADMINISTRATION AND ALLOCATION OF EXPORT PERMITS UNDER
THE TRADE, DEVELOPMENT AND CO-OPERATION AGREEMENT BETWEEN THE
EUROPEAN UNION AND THE REPUBLIC OF SOUTH AFRICA FOR THE YEAR 2015.
Government Notice No. R.1085 provides for tariff rate quota
permits to be issued by the National Department of Agriculture,
Forestry and Fisheries exclusively to importers in South Africa for
importation into the Republic for the quantities and at the reduced
levels of duty as specified in Table 1 by HS heading/subheading,
description, extent of rebate, annual quota and conditions for the
issuing of the permits.
These permits are issued in order to fulfil South Africa's
commitment under the World Trade Organisation: Marrakesh Agreement
regarding market access, as specified in Table 1 of Import
Arrangements subject to the conditions set out in the Schedule to the
notice (Government Notice No. R.1085) which was published in Government
Gazette 38261 of
28 November 2014. Download Government Notice No. R.1085 for more
information at http://www.gov.za/sites/www.gov.za/files/38261_gen1085.pdf.
Under Government Notice R.1084 which was published in Government
Gazette 38260 of 28 November 2014 the EU are returning the favour
to South African exporters under the bi-lateral Trade, Development
and Co-operation Agreement (TDCA) between the European Union (EU) and
the Republic of South Africa (RSA) which was concluded and came into
effect on 1 January 2000. (This agreement provides for the
establishment of a Bilateral Free Trade Agreement between the EU and
South Africa in accordance with the World Trade Organization (WTO)
rules and the strengthening of European development assistance to
South Africa).
As part of the concessions provided for under the TDCA, the
EU has agreed to grant tariff preferences (reduced import duty rates)
on limited quantities of selected products in the form of tariff
quotas on products which are listed in Table 1 to the Notice which
lists the export arrangements by six digit tariff subheading in the
EU – which is also the same in terms of code and description up to
six-digit level in South Africa, tariff quota (% reduction) and
conditions for the issuing of the permits.
South African export products of the type listed in Table 1
will thus become more competitive in the EU because they will be
imported at reduced rates and the landed cost in the EU will decrease
making the products more competitive in the EU.
Download Government Notice No. R.1084 at http://www.gov.za/sites/www.gov.za/files/38260_gen1084.pdf.
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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. R.1051 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 were
published on the 28 November 2014 in Government Gazette 38240
under Government Notice Nos. R. 924 to R.936.
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. (See the section
below for more information).
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).
See below,
all information relating to these tariff amendments:
- Government Notice No.
R.922 of 24 November 2014 is effective from 1 December 2014
up to and including 31 December 2014 only.
- Additional Note 3 to Chapter 39
was amended through Government Gazette 38240 on
28 November 2014 and with effect from
1 December 2014.
- The new tariff subheadings was
amended again through Government Gazette 38240 dated
28 November 2014 to reflect the EFTA rates that will come
into effect on 1 January 2015. (See Government Notice R.924
dated 28 November 2014 (1/1/1501) with effect from 1
January 2015) (Government Gazette 38240 dated
28 November 2014).
- The deletion of tariff
subheadings 3923.21.05, 3923.21.15, 3923.29.05 and 3923.29.15.
(See Government Notice R.922 dated 24 November 2014(1/1/1506) with
effect from 1 December 2014 up to and including 31
December 2015) (Government Gazette 38239 of 24
November 2014).
- The insertion of the tariff
subheadings 3923.21.07, 3923.21.17, 3923.29.40 and 3923.29.50.
(See Government Notice R.922 dated 24 November 2014(1/1/1506) with
effect from
1 December 2014 up to and including
31 December 2015) (Government Gazette 38239 of 24
November 2014).
- 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. (See Government Notice R.923 dated
24 November 2014(1/3A/18) with effect from 1 December 2014)
(Government Gazette 38239 of 24 November 2014).
- 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. (See Government Notice R.923 dated 24
November 2014(1/3A/18) with effect from 1 December 2014) (Government
Gazette 38239 of 24 November 2014).
- Part 3A of Schedule No. 1 has
also been 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).
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- Part 1 of Schedule No. 1 is
amended by a reduction in the EFTA rate of duty on certain
plastic bags classifiable in tariff subheadings 3923.21.07,
3923.21.17, 3923.29.40 and 3923.29.50 from 1,9% to
"free" in terms of the EFTA Trade Agreement (See
Government Notice No. R.924 dated 28 November 2014 (1/1/1501) with
effect from 1 January 2015) (Government Gazette 38240
dated 28 November 2014).
- Amendment of Additional Note 3 to
Chapter 39 to include the newly inserted tariff subheadings
published in Notice R.922 (Government Gazette 38239 of
24 November 2014) (See Notice No. R.925 dated
28 November 2014 (1/1/1502) with effect from
1 January 2015) (Government Gazette 38240 dated
28 November 2014).
- Separate 8-digit tariff
subheadings have been created for goods classifiable under
tariff subheading 0207.14 (See Government Notice No. R.926 dated
28 November 2014 (1/1/1503) with effect from 1
February 2015) (Government Gazette 38240 dated 28
November 2014).
- Various technical amendments
have been implemented and the EFTA rates of duty have been
phased down (See Government Notice No. R.927 dated 28 November
2014 (1/1/1504) with effect from 1 January 2015)
(Government Gazette 38240 dated 28 November 2014).
- The phase-down of EFTA rates of
duty have been implemented in terms of the SACU/EFTA Trade
Agreement, and the rates of duty on paper and paperboard of
tariff subheading 4811.41.90 as recommended in ITAC Report 151
(See Government Notice No. R.928 dated 28 November 2014
(1/1/1505) with effect from 1 January 2015)
(Government Gazette 38240 dated 28 November 2014).
- Anti-dumping item
201.02/0207.14.90/01.08 has been deleted and certain new
anti-dumping duty items on chicken have been inserted in Part 1
of Schedule No. 2 as a consequence to an earlier deletion in
Part 1 of Schedule No. 1 (See Government Notice No. R.929 dated
28 November 2014 (2/1/361) with effect from
1 February 2015) (Government Gazette 38240
dated
28 November 2014).
- Various Anti-dumping items on
plastics have been inserted in Part 1 of Schedule No 2 as a
consequence to an earlier amendment to in Part 1 of Schedule No.
1 (See Government Notice No. R.930 dated 28 November 2014
(2/1/362) with effect from 1 January 2015) (Government
Gazette 38240 dated 28 November 2014).
- Various anti-dumping items on
glassware have been inserted under item No. 213.03, and certain
existing anti-dumping duty items on glassware have been amended
under item No. 213.03, as a consequence to an amendment in Part
1 of Schedule No. 1 (See Government Notice No. R.931 dated 28
November 2014 (2/1/363) with effect from 1 January 2015)
(Government Gazette 38240 dated 28 November 2014).
- Countervailing items Nos. 235.00
and 235.01 have been deleted as they have become redundant. (See
Government Notice No. R.932 dated 28 November 2014 (2/2/4) with
effect from 1 January 2015) (Government Gazette 38240
dated 28 November 2014).
- Amendment of rebate item No.
306.02/7010.90/01.05 to correct the rebate code applicable to a
6-digit code and deletion of rebate item No. 306.14/12.01/01.04
as the expiry date was 30 June 2011. (See Government Notice No.
R.933 dated 28 November 2014 (3/1/706) with effect from 1
January 2015) (Government Gazette 38240 dated 28
November 2014).
- Rebate item No. 311.03 is
amended to read "Industry: Textile Weaving". (See
Government Notice No. R.934 dated 28 November 2014 (3/1/707) with
retrospective effect to 7 December 2012) (Government
Gazette 38240 dated 28 November 2014).
- Rebate item 497.01 is deleted as
no headers are required for these items. (See Government Notice
No. R.935 dated 28 November 2014 (4/5/1) with effect to
1 January 2015) (Government Gazette 38240 dated
28 November 2014).
- Rebate items Nos. 498.01 and
498.02 are deleted as no headers are required for these items.
(See Government Notice No. R.936 dated 28 November 2014 (4/6/1)
with effect to 1 January 2015) (Government Gazette
38240 dated 28 November 2014).
Download the latest Customs Watch
to have access to the latest tariff amendments.
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