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BPL Inform - July 2018

 

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July 2018

 

APPLICATIONS FOR CHANGES IN CUSTOMS DUTIES

 

No applications for changes in rates of customs duty were published in the past month.

 

PEAK SEASON LOOMS

 

As the world moves into the second half of 2018, all signs suggest that there will again be record demand for cargo space in the final months of the year. This will directly affect South African importers, especially those whose cargo moves via a transit hub.

 

We urge importers to make their space requirements known as soon as possible so that space can be secured in good time.

 

HONG KONG FUEL SURCHARGE

 

The Hong Kong fuel surcharge on airfreight has been increased by 16% to HKD2.90/Kg. Effective date: 1st July 2018

 

SACU UCR CODES REVISED

 

A revised format for Unique Consignment Reference numbers (UCRs) for cargo exported from South Africa becomes mandatory from Friday 13th July. All imports to South Africa from Botswana, Namibia, Lesotho and Swaziland (now eSwatini) are also affected as are all transits to through South Africa to or from those countries.

 

The SACU UCR may not exceed 35 characters and must now be constructed as follows:

DigitExplanationExample
1Last digit of calendar year in which export/transit occursFor 2018: "8"
2-3UNLOCODE for the nationality of the declarantFor South Africa: "ZA"
4-16Entity code: SARS exporter or agent code or individual's ID Number or Taxpayer's reference noIf exporter's code is less than 8 digits the number must be zero-filled to 8 digits from the left. ID numbers and tax numbers must be shown in full (13 digits).
17Type of entity code

"C" for customs registration no

 "T" for taxpayer reference no

"P" for ID Number

18-20Type of unique reference: "INV" for invoice
  "PON" for purchase order
  "CON" for contract
  "DEL:" for delivery note
  "INF" for handmade goods or household consumables
  "CUS" where the UCR is generated by SARS-Customs
  "DCL" where the UCR is generated by the declarant
  "OTH" for any other party
21-34Entity's unique reference E.g. "JNBFER2345876"
35Indicate whether UCR is single or multiple useSingle ="S", Multiple = "M"
Example: SACU UCR for a single consignment exported by BPL as vendor against an invoice numbered JNBFER2345876:
 
8ZA00281124CDCLJNBFER2345876S

 

For imports from Swaziland the SACU UCR must be generated by the Swazi supplier and must be used in South Africa on the import declaration. For consignments in transit through South Africa the SACU UCR generated in the originating country must be used for both the import and export legs.

 

FOOD REGULATIONS

 

Changes have been made to the regulations governing permitted metal levels in a variety of foodstuffs (Government Gazette 41704 15th June 2018). The changes come into effect on 15th September.

 

For canned foods, permitted levels of tin (Sn) vary based on whether the container is made from tinplate. We suggest that suppliers be encouraged to reflect the constituent materials of containers for these products on their invoices.

 

SUGAR DUTY PROTESTS

 

Small -scale sugar farmers staged protests at ITAC's Pretoria offices during the third week in June in support of higher import duties on sugar. The farmers have asked that hearings on their application for an increase in duties earlier this year be fast-tracked.

 

In recent years the number of small-scale sugar growers is claimed to have shrunk by over 60% and about 70 000 hectares of land taken out of sugar production.

 

THE TRUE COSTS OF RCG

 

As South Africa moves toward full implementation of SARS' RCG (Reporting of Conveyances and Goods) requirements, some shipping lines have announced charges for complying with the pre-loading report requirements. In line with international standards carriers must now provide detailed reports of all containerised cargo intended for loading and shipment to South Africa before vessel loading begins at each port. This will in time be extended to all traffic.

 

From 1st August Mediterranean Shipping Company will be charging US $30 per bill of lading for this service; ONE (Ocean Network Express) will be charging US$35 per bill of lading beginning on 1st July. Similar announcements from other carriers are likely in the coming weeks and months.

 

SARS processes over 60000 seafreight import declarations per month. While some shipments do have multiple declarations and not all seafreight imports are in containers, based on these figures the cost to South African industry and ultimately consumers, at a minimum of $30 per consignment will exceed US $1,8 million monthly. At current exchange rates this is over R280 000 000 per year.

 

Reporting costs form part of the Customs Duty Value and must be included when calculating duties and taxes. This will add a further tax burden of at least R46 000 000 per year to the South African economy in VAT alone.

 

GERMANY RAISES TOLLS

 

Germany has revised and increased its toll fees for heavy vehicles from 1st July. These changes will increase transport costs for exports from German ports and airports by between 3% and 5%. The increases will directly affect South African importers who buy on EXW or FCA Incoterms®2010. Importers buying on other Incoterms®2010 will be affected indirectly as suppliers adjust prices over time.

 

PROTESTS, BLOCKADES AND INSURANCE

 

The Institute Cargo Clauses (the standard terms used by most insurers for marine/transport insurance), specifically exclude certain activities or behaviours from the cover provided by the insurer.

 

These behaviours embrace loss damage or expense caused by strikers, locked out workmen, persons taking part in labour disturbances, riots or civil commotions or loss damage or expense resulting from strikes, lock-outs, labour disturbances, riots or civil commotions.

 

Also excluded are loss damage or expense caused by an act of terrorism or caused by any person acting from a political, ideological or religious motive.

 

In South Africa these risks can be covered by a type of special additional insurance known as SASRIA cover at a very low cost. South African insurers generally include SASRIA cover automatically in offerings to their clients.

 

A growing number of incidents have occurred in recent months where major roads have been closed or blockaded by protestors and damage has been done to goods vehicles and/or their cargoes.

 

Importers buying cargo on CIF Incoterms®2010 or CIP Incoterms®2010 are particularly at risk at these times, because even if their foreign supplier has obtained the most comprehensive type of cover available (Institute Cargo Clauses (A)) on their behalf, the inland transport may be outside the scope of the insurance contract, the amount insured may not accurately reflect the cargo replacement cost and the risks detailed above are excluded from the cover.

 

Importers buying cargo on CIF Incoterms®2010 or CIP Incoterms®2010 are urged to review the insurance policies/certificates received from their suppliers and to consult with their underwriter, broker, or other suitably qualified financial adviser to minimise their exposure.

 

LETTERS OF CREDIT FOR ANGOLA?

 

The Governor of the National Bank of Angola has stated that exporters to Angola will shortly be required to supply against Letters of Credit only.

 

When exporting against Letters of Credit sellers should always make sure that they are able to comply with its terms and conditions before proceeding to supply product: non-compliance with Letter of Credit requirements can mean non-payment by the buyer.

 

 

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.