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BPL Inform - May 2018

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May 2018


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


The country of origin is very important when trading internationally; Customs is not only required to collect the correct duties on imports, but also to ensure that statistics relating to quantity and origin are collected.


Origin is important for importers because it often determines the types and amounts of duty payable on the goods: South Africa is currently party to four bi-lateral trade agreements which offer certain products originating in the partner countries preferential (reduced rate) access to the South African home market.


All goods originating in SADC states qualify for duty-free entry to South Africa. Reduced rates apply to goods emanating from the MERCOSUR area, the European Union and the European Free Trade Association area.


In all cases origin must be verified by the customs authority in the country of origin, usually by means of a certificate in a prescribed format. For all qualifying countries in Europe this form is the EUR.1.


Importers are only allowed to import at the preferential rate of duty if their broker has the original of the EUR.1 relating to that consignment in their possession (or a suitable original invoice declaration where permitted). The broker is required to retain this document for inspection by customs for five calendar years after clearance.


It is the importer's responsibility to establish whether the goods they buy qualify for preferential treatment in South Africa: the only person that can really answer this question is the manufacturer, who is solely responsible for ensuring that his national customs authority certifies the authenticity of the claim. Bidvest Panalpina Logistics can offer advice on the duty rates and qualifying criteria for specific tariff items.


Determining whether a specific product qualifies for origination status in a country is the sole prerogative of the customs authority in that country.



Containers have been in common use for South Africa's foreign trade for over forty years and somewhat longer in other countries. Many of the boxes currently in circulation are thus old and showing signs of wear.


Containers are expensive to repair or replace and carriers can recover the cost of repairs to damaged boxes from the importers to whom they were delivered.


Both importers and exporters must protect themselves against damage claims from carriers by ensuring that any and all external damages to containers are carefully noted on receipts given to transporters; particularly dents, scrapes, holes and rusty areas. Roofs should be checked if possible (e.g. from an upstairs window) as well as undersides if containers are delivered on skeletal trailers.



Smuggling, the illicit and secret movement of goods or persons, is not specifically defined in South Africa's customs legislation even though the legislation makes it clear that this activity is a criminal offence.


Any failure by an importer or exporter to fully and correctly declare all the items in a consignment may be construed as an attempt at smuggling that could result in the importer or exporter being heavily fined or even prosecuted and imprisoned. This is one of the reasons that importers must ensure that supplier's invoices match the goods received in a shipment and that any excess receipts are reported to Customs and the relevant duty/taxes brought into account without delay. The same principal applies to samples, advertising materials and items supplied at no charge: all must be documented by the supplier (invoiced) and valued at the regular prices for such merchandise, which is the value for Custom Duty Purposes.


In law South African importers may be held accountable for the actions of suppliers and would have to prove their innocence should any smuggling occur or be suspected of occurring. Importers should ensure that their suppliers are fully acquainted with importance of ensuring that invoices are complete and correct and that no un-invoiced cargo is loaded.


The 2014 Customs Control Act prescribes a maximum fine of one million Rand and/or a five-year prison sentence for convicted offenders, who may also be fined up to three times the value of the merchandise involved and have the goods confiscated.


These penalties are relatively mild compared to other countries: in the USA smuggling is a federal offence which carries a maximum 20-year jail term.


Fun Fact: The Corsican language, mother tongue of the mafia, does not apparently have a word for smuggling.



Pro-forma invoices have no legal standing in the South African customs process and are not acceptable for customs clearance purposes. This is because documents of this type do not reflect the actual details of a transaction and its value. Importers and exporters are required to always present to customs the final invoice/document relating to a specific shipment.


Invoices are legal documents that trigger various events; for exports these include liability for VAT and acceptance of exporter's obligations, all of which need to be accomplished within very specific time-frames. Because of this "pro-forma" or draft documents should be restricted and used for illustrative, planning and sales negotiation processes only.


In South Africa customs brokers are not allowed to make declarations to customs on behalf of clients based on pro-forma documentation. The use of such documents is only permissible with SARS' prior approval. Their use inevitably delays clearance, increases costs and frequently requires provisional payments to be lodged pending the later production of the final complete documents to customs.



Shipping lines have begun imposing cancellation fees more strictly on exporters who cancel or reduce export bookings at short notice. 


As a rule, any amendment cancellation or postponement made less than about eight calendar days before the estimated departure date may be subject to this penalty. Amounts vary widely depending on the carrier and the route: from US$ 50 to US$ 500 per container not shipped.



The fuel surcharge on airfreight from Hong Kong has been increased by HK$0.50 per Kg to HK$2.10 per Kg effective 1st May. Carriers on other routes are reported to also be reviewing and revising their fuel surcharges.



Botswana is implementing a Customs Management System for traders that allows them or their agents to pre-clear cargo at the country's border posts. The procedure is designed to promote rapid transit at border posts and to reduce congestion at these places.


As is the case in South Africa, Botswana entities wishing to use the system must be either registered to clear goods in Botswana or appoint a licensed Customs Clearing Agent in that country and be registered on the BURS (Botswana Unified Revenue Service) e-services platform.



The Department of Agriculture has called for public comment on a proposed prohibition on the acquisition, sale or use of the antibiotic Colistin (polymyxin E) as a Farm Feed or Stock Remedy. Written comments must be submitted by the 19th June 2018. (Government Gazette 41581, 2018.04.20).


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.