Day / June 18, 2011

by Mike Poverello

Penalties for non-compliant Cargo Reporters

Recently SARS issued a communication signalling its intention to penalise non-conforming cargo reporters as of 1 July 2011, if they fail to report their cargo manifests electronically to SARS. Following international practice, all parties who engage in the contract of carriage of goods internationally are obliged to report the details of such cargoes. While customs has traditionally placed more emphasis on the correctness of the goods declaration alone – due to it being the sole means of duty and tax assessment and collection of revenue, the introduction of measures to safeguard the supply chain and combat other forms of nefarious activities, implies that all supply chain operators are ‘known’ and share in the responsibility for their actions and activities.

Perhaps seen in this guise, the whole matter of supply chain security encompassing the universal adoption of the Authorised Economic Operator (AEO) concept seems less appealing than it did a few years ago. Yes, Customs wants to know more and more about your business and who you do business with. Freight forwarders / Clearing Brokers have borne much of the brunt from customs over the years, it’s now time for parties involved in the conveyance of cargoes to come forward and be counted.

Because international shipping by its very nature transcends borders, it has always been difficult for national authorities to apply effective controls over information and parties who in all honesty are representatives/agents for those supplying the ‘original’ shipping documents. What the law now says is that those acting on behalf of foreign principles, liable for the import leg of imported goods are obligated to submit the ‘manifest information’ of those goods (electronically) to SARS.

For those customs brokers who operate as freight forwarders, this is in essence a further requirement which SARS places on your organisation. In essence a freight forwarder has a dual requirement with SARS – declaring the manifested contents of a consignment, as well as making due clearance for regulatory compliance and payment of duties. Another party with a similar dilemma are certain ‘ground handlers’, specifically those who are contractually responsible for the inbound operations of foreign air carriers, as well as the deconsolidation of aircargo upon arrival in their transit shed. They too must report the aircargo manifests electronically to SARS, and secondly to report the outturn of such goods, once unpacked for temporary storage and customs clearance and release.

The NVOCC or Vessel’s Agent must also report all cargo – for which they are contractually responsible – for the inbound leg into the Republic. These parties represent the foreign carrier and must consequentially report the carrier’s manifest (electronically) to SARS.

SARS is for now focussing principally on the reporting of master and house (sea and air)cargo manifests in this phase. Other reports are to follow.

Details for the registration for reporting electronically to SARS’ Automated Cargo Management (ACM) system have been widely distributed, and for sake of convenience are available for download here.

Consequences for non-compliance post 1 July 2011

SARS has put into place mechanisms to identify non-reporters. In such instances customs officers will call for administrative penalties to the extent of R1000,00 for each ‘manifest’ not reported. Moreover, should SARS take measures to ensure that these penalties are not ‘passed on’ to the importer – this would surely defeat the object of SARS’ intentions? Shortly, we’ll discuss the future matching of electronic cargo reports and goods declarations, but first lets endeavour to accomplish the first milestone.

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by Mike Poverello

Help with applying CPCs is here!

Apply-CPCs-betterSARS has recently produced a two-part guide to assist Customs Users in the application of Customs Procedure Codes (CPCs). This comes on the back of several enquiries concerning procedures from both the trade community and customs officers. The guides have been prepared in two parts to begin with.

Part 1 provides the user with a table of the permissible CPCs against which he/she can identify the appropriate codes that preceed that which appears in the table. For example, if you wish to clear warehoused goods, in bond, from one customs warehouse to another customs warehouse using CPC E43 42, then you must already have lodged a preceding clearance with CPC E42 00; E42 20; or E42 37. Part 2 provides the same table of CPCs, this time illustrating what CPC codes are available for use for a secondary or followup clearance. For example, , if your original or primary declaration declared goods directly into a Customs Warehouse under CPC E40 00, then your follow-up or subsequent options will be A10 40; A11 40; A13 40; A14 40; A15 40; E41 40; E43 40; F53 40; H67 40; J80 40; or K85 40.

It is important for the Customs User to understand that these are the ONLY applicable CPC combinations, and that the customs system will not permit any variations on these. Most computer service providers have likewise built-in system rules which only allow the CPC codes as permitted. It is precisely because of past mis-use of purpose codes that lead to CPCs being introduced. Users will also now notice that any CPC combination where the previous procedure code is not ’00’ must reference a previous customs declaration. This therefore provides a complete audit-trail of a transaction from point of entry/exit through to its final state, providing the trader improved evidence of his/her compliance with the law. In the coming months, my companion blog Paperless Customs Clearance will provide detailed guidance for all CPCs.

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