Day / January 19, 2012

by Mike Poverello

IDZs to be replaced with SEZs

Department of Trade and Industry (South Africa)Heard this before? In line with the Industrial Policy Action Plan and the New Growth Path, the Department of Trade and Industry (the dti) aims to continue fostering its efforts to create employment and economic growth by establishing a strong industrial base in South Africa. The new initiative aims to improve on the concept of industrial development zones (IDZs) which have enjoyed mixed success since being introduced in December 2000 through the Manufacturing Development Act. 

An IDZ is a purpose-built industrial estate linked to an international airport or seaport which is tailored for the manufacturing and storage of goods. It offers investors certain rights within the zone, in addition to incentives such as customs duty and VAT relief. One important priority of the IDZs is to boost job creation and skills in underdeveloped regions. The IDZ programme led to the establishment of five zones – Mafikeng, OR Tambo International Airport, Richards Bay, East London and Coega. The Richard’s Bay IDZ only commenced its first phase of development in September last year while OR Tambo International Airport is not yet fully operational.  The Industrial Policy Action Plan, issued by the Department of Trade and Industry in February 2011, has also identified, as a key milestone, the establishment of an additional IDZ at Saldanha Bay. 

The Special Economic Zones (SEZs) programme is one of the most critical instruments that can be used to advance government’s strategic objectives of industrialisation, regional development and job creation. Moreover, the programme can assist in improving the attractiveness of South Africa as a destination for foreign direct investment.

In order to ensure that the SEZ programme is an effective instrument for industrial development, the dti has developed the SEZ Policy and Bill. Through the Bill there will be a dedicated legislative framework for special economic zones.

The main objectives of the SEZ Bill are to provide for the designation, development, promotion, operation and management of Special Economic Zones; to provide for the establishment of the Special Economic Zones Board; to regulate the application and issuing of Special Economic Zones operator permits; to provide for the establishment of the Special Economic Zones Fund; and to provide for matters incidental thereto.

Furthermore, the SEZ Bill will enable government to move towards a broader Special Economic Zones Programme, through which a variety of special economic zones can be designated in order to address the economic development challenges of each region and address spatial development inequalities.

Although national laws may be suspended inside industrial zones, government is currently not offering regulatory incentives to derogate from labour rules, a concession which is seen by some as crucial to stimulate investment in special zones. It is however unlikely that a relaxation of labour laws will be considered under the SEZ initiative. Benefits are rather expected to come in the form of enhanced incentives for labour intensive projects and additional tax relief for investors. A further question arises – just how flexible an inventive will the customs and VAT requirements be allowed to be?

The key provisions include the establishment of a Special Economic Zones Board to advise the Minister of Trade and Industry on the policy, strategy and other related matters; establishment of the Special Economic Zones Fund to provide for a more coherent and predictable funding framework that enables long-term planning; strengthening of governance arrangements including clarification of roles and responsibilities of key stakeholders. Source: Department of Trade and Industry.

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by Mike Poverello

New Zealand releases trade implementation guidelines for GOVCBR

New Zealand Customs ServiceThe New Zealand Customs Service has recently released draft guidelines for it’s Trade Single Window (TSW), which is currently under development. This will require all potential users to be able to send and receive electronic messages. The introduction of the TSW therefore means that organisations will need to submit lodgement messages that meet the WCO3 data model. Current message format for import entries, export entries, inward and outward cargo reports, will be accepted for 18 months after TSW is introduced (likely to be in the first quarter of 2013). However, following that 18-month period, all users of TSW will need to have adopted the new NZ WCO version 3 data model for messages.

New Zealand Customs expects that some users of TSW may adopt the new messages earlier to take advantage of the benefits, which include the ability to submit cargo manifest and Customs data in one message.To understand the new messages, a draft set of message implementation guidelines is now available for consultation and feedback from software developers and companies intending to use the TSW on the following draft messages:

  • Advance Notice of Arrival
  • Advance Notice of Departure
  • Cargo Report Export
  • Excise Declaration
  • Inward Cargo Report
  • Import Declaration
  • Outward Cargo Report
  • Border Agency Response Message.

Message implantation guidelines for the new export declaration is still be drafted, and will be made available as soon as possible.

Five main government agencies operate at the border – the Customs Service, the Ministry of Agriculture and Forestry, the Department of Labour, the Ministry of Transport, and the Department of Internal Affairs. With the participation of almost 20 other associated agencies, they work to prevent the traffic of prohibited goods and materials in and out of the country. They also collect government revenue, promote travel and trade, support New Zealand’s national interests, and uphold international laws and agreements. Now, as the border sector grows more complex and volumes of goods and travellers increase, a new era of inter-agency collaboration aims for more control, easier flows, and greater efficiency. Source – New Zealand Customs Service

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