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BPL Inform June 2016

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 39960 – 2016.04.29

  1. Flat-rolled products of iron or non-alloy steel, of a width of 600mm or more, plated or coated with aluminium-zinc alloys. (Application for rebate).
  2. Flat-rolled products of iron or non-alloy steel, of a width of 600mm or more, painted, varnished or coated with plastics. (Application for rebate).

GOVERNMENT ISSUES POLICY ON DUTY APPLICATIONS

The Department of Economic Development has issued a policy directive detailing the following considerations for evaluating any future applications for amendments to customs duty rates by ITAC.

  1. Whether it is desirable for the applicant to make an objectively verifiable binding commitment to raising incomes, promotion of investment or promotion of employment.
  2. The nature of such commitments.
  3. The likely impact of such commitments on incomes, investment or employment.

Where it is claimed that the proposed changes will protect, maintain or increase the market share of local producers applicants ITAC may now also require the applicants to make objective and quantifiable commitments to ensure that market share will be maintained or increased. ITAC is also required to consider the potential for job retention/creation, industrial output, investments in plant, equipment, skills or research and development, economic investment by the enterprise as well as the pricing of outputs.

Future applications to ITAC must make reference to these requirements in order to ensure consideration.

IMPORTS FROM CROATIA

Imports of goods originating in Croatia now qualify for preferential duty treatment in South Africa in terms of Croatia's membership of the European Union. The amendment to the regulations is retrospective to 1 July 2013.

Importers who believe that they may be entitled to a refund of duty paid on imports in transit despatched on or after 1 July 2013 from Croatia must first obtain a EUR.1 movement certificate for the affected consignment(s) from their Croatian suppliers in order to apply to Customs for a refund. This certificate must be issued retrospectively by the Croat customs authority. Importers should take note that refund applications become automatically time-barred after 3 years: any claims for affected imports cleared during July 2013 will expire on the clearance anniversary this year. EUR.1 certificates expire four months after date of issue.

IMO CALLS FOR VGM MORATORIUM

The International Maritime Organisation (IMO) has called for a three-month delay in implementing the 1 July SOLAS requirement that no container be shipped worldwide without the gross mass being verified and declared by the shipper prior to loading.

The IMO's Maritime Safety Committee is urging member states to postpone enforcement of the rule until 1 October because of widespread confusion as to how individual shippers are to comply and the failure by many governments and national safety associations to provide concise guidelines for their territories.

The IMO has urged "practical and pragmatic" enforcement of VGM (verified gross mass) over the first three-month settling-in period resulting from teething problems in documenting, communicating and sharing VGM information.

In South Africa Portnet has stated that it will not automatically weigh containers prior to shipment. Responsibility lies solely with the shipper who must either have the loaded, sealed container weighed at a certified/approved weighbridge or must be approved to weigh all container contents prior to stuffing, using approved and certified equipment.

Bidvest Panalpina Logistics clients may also make use of the certified weighbridges at certain of the company's facilities on payment of the prescribed fees.

RED FLAG FOR RED TAPE?

A proposed private member's motion is to be introduced to parliament with the stated objectives of forcing authorities to assess the impact and cost of the regulatory measures that they impose; to measure and reduce the amount and cost of red tape and to assist in creating a business friendly climate. This is to be known as the Red Tape Impact Assessment Bill.

Although this may be one of the more sensible suggestions to be placed before the legislature in the past hundred years, it may only have limited support given the tendencies of bureaucracies to be self-perpetuating. The authors may also have missed the irony of the fact that the proposed anti-red tape law currently runs to twenty-two pages.

CONTAINER DELAYS, STORAGE AND DEMURRAGE

The frequent and numerous delays being experienced at Durban's container terminal impact clients both directly and indirectly in numerous ways.

While the port does adjust the "free" storage periods applied to containers held in the terminal to allow for these delays, these adjustments are often insufficient to compensate for the true delays that have been experienced. Delays at the port are not simply a one-off incident. They reduce the efficiency of transporters and reduce the number of trips that transporters can make. This creates a feedback loop and often worsens the delays being experienced.

Delays in handling ships lengthens the turn-around time for containers per voyage: excessive turn-around times result in increased costs that find expression in upward pressures on freight rates.

Freight charges are calculated to include the cost of use of containers for the expected duration of a voyage and provide for additional fees ('demurrage') to be raised where these periods are exceeded.

Unfortunately these delays are entirely out of Bidvest Panalpina Logistics' hands, do not arise as a result of service failures on the part of Bidvest Panalpina Logistics and no liability can be accepted for them.

IMDG DECLARATIONS

Importers and exporters must ensure that all hazardous cargoes are correctly documented and labelled. This includes the full and correct completion of hazardous goods declarations and the inclusion in all shipping/transport documents details of the proper chemical names of the products being transported, their IMDG class and number as well as their UN Number.

Failure by cargo owners to comply with these requirements could expose them to severe penalties in the event of an incident and could affect their insurance cover.

NUTS

Government notice R.1983 of 23 August 1991 governing export standards for agricultural products has been amended to include a variety of nuts.

Standards and Requirements for the export of all in-shell tree nuts (macadamia, pecan, walnut, hazel, cashew and others) were promulgated on 22 April with implementation from 29 April 2016.

Copies of the standard are available from The Executive Officer, Agricultural Product Standards at the Department of Agriculture, Fisheries and Forestry.

LICENCES, PERMITS, REGISTRATIONS AND LETTERS OF AUTHORITY.

Importers are required by law to have all necessary permits of whatever description in place before any goods that are subject to any form of control by any government department are shipped to South Africa. Examples of such products include medicines, foodstuffs, second hand goods, tyres, electrical products and all products subject to a compulsory specification to mention just a few.

Customs has in the past been able to exercise some discretion in the application of these requirements, often allowing the import and storage of affected products conditionally on production of evidence that the necessary permit has been applied for and pending production of same.

The new Customs Control Act (31 of 2014) specifically prohibits these practices and stipulates that such goods may only be cleared into a licensed bonded warehouse for a maximum dwell time of 90 days from date of clearance. If the necessary permit(s) Licence(s) registration letter(s) or letter(s) of authority are not forthcoming within this 90 day window the goods must be surrendered to the Customs Authority for destruction.

Importers may, subject to permission from Customs, also re-export such goods or return them to the supplier provided that this happens before the expiry of the 90-day period.

All transport, handling, storage and destruction charges related to such goods are for the account of the importer/owner. The seizure and destruction of cargo by the Customs Authority strips the importer/owner of all legal title to such goods but does not relieve them of their payment obligations to the suppliers.

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From a recent news report in Business Day.

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.