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BPL Inform August 2017

 

August 2017

APPLICATIONS FOR CHANGES IN CUSTOMS DUTIES

The following applications for changes in rates of customs duty were published in the past month. Interested parties must submit comments to ITAC within 4 (four) weeks of the date the notice was first published unless otherwise stipulated.

Reductions

Government Gazette 40945 – 2017.06.30

  1. Digital "smart cards" classifiable under tariff sub-heading 8523.52.10

Amendment of Rebate Provisions

Government Gazette 40945 – 2017.06.30

  1. Re-wording of rebate items 405.04/01.00 and 405.04/02.00 to extend these provisions to persons affected by all forms of disability and to make use of the rebate-provision more accessible to applicants
  2. Reduction of the period for which motor cars and motor vehicles specially adapted for use by disabled persons must be used exclusively by that person from 5 years to 3 years in order to avoid liability for duties and taxes.
  3. Reduction of the period of eligibility by disabled persons to use these rebate provisions from once every 5 years to once every 3 years.
  4. Review of rebate item 311.12/54.07/03.04 in order to amend the amount of the rebate or to withdraw it.

REBATE GUIDELINES

ITAC published new guidelines for applicants wishing to import fabrics under rebate item 320.01 for the manufacture of upholstered furniture in Government Gazette 40965 on 7th July. Imports under this rebate provision are subject to the issue of a specific rebate permit issued by ITAC: application forms together with the questionnaires that must accompany them are available from ITAC on request.

Rebate permits under this item will only be issued if an applicant can meet a number of conditions, including confirmation that the applicant complies with all relevant labour laws and regulations; has a certificate of compliance from the relevant Bargaining Council; a SARS PIN to enable ITAC to verify the applicants tax compliance status and proof that local fabric mills are unable to meet their needs, among others.

Importers wishing to import under this rebate provision must ensure that they have the necessary permits in their possession before placing orders on foreign suppliers.

FAR EAST FREIGHT RATES UPPED

Many of the shipping lines operating between the Far East and South Africa having given notice of increases in their freight rates to take effect during the coming weeks.

Increases are in the range of US $150-$300 per 20' container and twice as much for 40' boxes.

CLEARING INSTRUCTIONS

Written clearing instructions for all shipments are a legal Customs requirement in South Africa. Most of the information requested on the standard BPL clearing instruction forms for both imports and exports is mandated by SARS in their external standard for customs clearing: importers/exporters are legally obliged to provide the requested information.

The new Customs Control Act, when implemented, will impose an extra requirement on principals that the person signing the instruction be authorised by the board of the entity to do so. A certified copy of the relevant resolution will have to held on file by Bidvest Panalpina Logistics for each client/signatory. We suggest that clients begin looking at this requirement and complying now, rather than wait for the implementation date.

CONTAINER DAMAGE

The containers in which your goods are shipped are the property of the carrier and the carrier may hold both shippers and consignees responsible for any damages (and the high cost of repairs) from the time a container leaves the terminal or depot for delivery to the consignee or shipper till the time that container is returned into the custody of the carrier.

Containers have a fairly hard life: constant movement and handling; constant packing and unpacking; wide temperature variations and constant exposure to the elements including moist and salt-laden atmospheres.

For this reason, it is vital that containers be inspected on receipt and any damages carefully noted on the delivery note before the container is signed for; it's a bit like checking a hire car for scratches and dents before accepting it: fail to note the damages and you will be expected to pay for their repair.

Carriers have begun taken a sterner line with perceived damage to equipment returned to them. The only way that transporters, importers and exporters can ensure that they are not held liable for pre-existing damages to containers is by carefully checking them on receipt and noting any damages on the receipt given to haulier in writing at the time. Using one's phone to take photographic evidence of the nature and extent of damages may also be helpful.

The picture below shows a container recently delivered to a BPL client where the carrier has attempted to hold the importer liable for repairs. It is clear from this picture that the damage is quite old, possibly having occurred over an extended period.

 

EUROPE ON HOLIDAY

Summer holiday season in Europe is underway and continues till the end of August. During this time, many businesses and service providers either have their annual shut-down or operate with reduced staffing. Also, increased holiday traffic extends delivery and collection times for cargo in many areas; airlines experience reduced cargo capacity due to higher passenger volumes and other factors.

 

Clients should factor these circumstances into their logistics planning over the coming months.

 

EUROPEAN CONGESTION SURCHARGES

 

Shipping lines are experiencing delays in moving cargo into and out of Antwerp and Rotterdam by barge. At least one carrier, Mitsui OSK Lines (MOL), has thus far implemented a congestion surcharge of €25 per container for all carrier haulage traffic moving to/from these ports by water transport. The surcharge has been applied to all affected traffic from 21st July and will remain in place until further notice.

 

Other carriers may introduce similar measures.

 

STAGED CONSIGNMENT RULES

 

Imported goods must to declared and duties/taxes paid on them in the condition in which they are presented at the time of import. This requirement becomes problematic when multiple shipments of material for a large project are imported, in that individual components and/or shipments may carry higher rates of duty when imported alone than if they are classified under the main description applicable to the total project of which they are part. This is where the concept of staging comes into play. Staging is perhaps the biggest exception to the classification rule and is fully provided for in South African customs legislation. Although shippers may stage consignments for a variety of reasons, often this is done on simply because size of the overall project, the amount of material requiring transportation and the project's extended delivery and construction timetables. 

Staging is often a practical necessity because an order is too large to be shipped on a single vessel or because different components are required to be shipped to South Africa from different parts of the world at different times. Typical staged consignments would be major engineering projects such as power stations, steel mills, or proposed extensions on the Gautrain rapid transit project.

The concept of staged consignments and the rules regarding their clearance are well entrenched in South African customs practice. Importers must note that the granting of "staged consignment" status to any series of shipments is the prerogative of SARS alone and that a formal approach has to be made for such status well in advance of commencing with shipment. Usually only projects involving substantial freight movements of about five hundred tonnes or more are considered for staged consignment status.

SARS must be approached for permission to treat the various components as parts of a single staged consignment when projects are in their planning and design stages, not later in the project when cargo has already been dispatched or is being packed and readied for shipment

Failure to notify SARS in advance and obtain permission timeously could result in different components of a project attracting duties at higher rates than may have applied to the complete plant.

CROSS-TRADE

Cross-trade (or merchanting) transactions occur when a local entity buys goods from a supplier in another country and arranges to have these goods delivered to a consignee in a second country. In this type of transaction, the goods do not move via South Africa: they go directly from supplier to end-user. The paper trail and the money do however move through South Africa and are subject to the Reserve Bank's Exchange Control Regulations.

Where payment for goods by the end-user to the South African entity precedes payment by the South African entity to their supplier there are no specific foreign exchange requirements other than that the two transactions must be linked and proof provided by the South African entity of this. The normal bank declarations and supporting documents regarding the receipt of foreign currency and the remittance of money abroad must be provided.

Where payment to a supplier precedes payment by the end-user, a different set of rules applies. Permission for the transaction must be obtained from an authorised dealer (bank). Banks may of their own accord only give permission if the South African entity will be out of pocket for less than 60 days (African countries) or 30 days for all other countries. Traders must produce proof of the agreement(s) underlying the transactions, while the Reserve Bank has a preference that the transactions be covered by confirmed irrevocable letters of credit. If these conditions cannot be met banks are not allowed to authorise them without first seeking permission from the Reserve Bank.

LIFE AFTER BREXIT

Trade ministers of the SACU states met with their UK counterpart in Johannesburg on 19th July to discuss the implications of Britain's withdrawal from the European Union, now scheduled for 1st April 2019. An announcement after the meeting said that the two sides had agreed that trade should not be disrupted by the move and that a new agreement similar to the existing one with the European Union would be signed ahead of Britain's departure from the Union.

 

 

This communication is published for general information and is not intended as professional advice of any kind. While every reasonable care has been taken to ensure the integrity and accuracy of the information contained herein, no liability or responsibility is accepted by Bidvest Panalpina Logistics or its employees for any damage or loss of any nature whatsoever resulting from the use or reliance upon this information.