Archives For July 2015

Namibian Trade PortalThe Namibia’s Ministry of Finance and Namibia’s Customs & Excise, in partnership with the U.S. government has recently launched a powerful new tool to increase and facilitate cross-border trade. The “Namibia Trade Information Portal” is a web-based platform that provides an authoritative “one-stop shop” of readily accessible trade, customs and compliance information. It is designed to significantly reduce the time and effort required for local and international traders to access current information and documentation required for doing business. The portal is the culmination of many years of collaboration between government of Namibia agencies and ministries and the U.S. government, working through the U.S. Agency for International Development (USAID) Southern Africa Trade Hub Project.

In his keynote address, Minister of Finance Calle Schlettwein said that the Trade Portal reflects the commitment of the Namibian government to build a “robust, knowledge-based society” through various modernization projects. However, he cautioned that the portal must be kept up-to-date if it is to be sustainable and relevant.

“For this reason, I strongly appeal to my fellow and counterpart ministers to designate focal points in their ministries who shall administer and avail timely updates, preferably online transmission of such information to our designated team in the Ministry of Finance who will, in turn, keep the portal updated,” Schlettwein said.

According to Namibia Trade Information Portal’s project manager, Melannie Tjijenda, the portal will save people time when they enquire about trade-related matters, so they will no longer be sent ‘from office to office.’

“International traders will now know how they can invest in Namibia,” she said, adding that this will save money on expenses like phone calls.

Tjijenda said the fact that most government websites are not regularly updated will not be the case with this portal. “When something changes, we will update it” she said, further pointing out that they have a team of content managers who will be checking and updating the content on regular basis. Source: The Namibian/USAID

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Barrington_Freight_Crazy_Customs_RegulationsBarrington Freight (UK) website features a humorous infographic on strange customs regulations around the world. Customs officials are the front line in preventing prohibited items from entering the country. They quiz passengers at air and sea ports, and search freight shipments for concealed goods.

Most countries share a standard list of banned items, such as guns and explosives. However, some nations are stricter than others, and there are some very unusual regulations around the world. For example, Saint Lucia bans the import of Japanese shaving brushes, thanks to an anthrax contamination scandal in the early 1900s.

From communist contraband to banned books, here are some of the most unusual customs regulations from around the world.

Container weighingThe responsibility for verifying the gross weight of loaded containers under next year’s new box-weighing rules will in many cases rest with freight forwarders, logistics operators or NVOCCs, according to freight transport insurance specialist TT Club.

Welcoming the initiative of the World Shipping Council (WSC) in its recent publication of guidelines to the industry in relation to implementing the SOLAS requirements that become mandatory on 1 July 2016, TT Club noted that unlike the CTU Code, which forensically seeks to identify the chain of responsibility for everyone involved in the movement of freight, the amendment to the Safety of Life at Sea Convention (SOLAS) mandating the verification of gross mass of container overtly only names the ‘shipper’, the ‘master’ and the ‘terminal representative’, and – by implication – the competent authorities.

TT Club said the complex nature of logistics means that the term ‘shipper’ may encompass a range of people involved in the contracting, packing and transporting of cargo. However, as stated in the WSC guidance, it said the key commercial relationship in question is with the person whose name is placed on the ocean carrier’s bill of lading.

“Thus, in many cases, the responsibility for actual ‘verified’ declaration will rest with a freight forwarder, logistics operator or NVOC. This means that often reliance will have to be placed on others to have adequate certified methods to provide verified gross mass – particularly for consolidation business,” TT Club said.

It noted that of course many suppliers of homogenous shipments will already have advanced systems, which merely require some form of national certification, adding: “Apart from having a sustainable method by which the gross mass is verified, the shipper also needs to communicate it (‘signed’ meaning that there is an accountable person) in advance of the vessel’s stow plan being prepared.

“The information will be sent by the shipper to the carrier, but with joint service arrangements there may be a number of carriers involved, with one taking responsibility to consolidate the manifest information, in addition to communication with the terminal.”
It said the ‘master’ comprises a number of functions within the carrier’s organisation.

“Implicit in the SOLAS amendment is that the carrier sets in place processes that ensure that verified gross mass is available and used in planning the ship stow,” TT Club said. “Arguably, each carrier will need to amend systems and processes to capture ‘verified’ information.

“However, the simplest might be to amend the booking process, so that the gross mass information is left blank in the system until ‘verified’ data are available. This will be effective if it is clearly understood by all partner lines and terminals with whom the line communicates.”

TT Club said the explicit obligation of the master was simply that he shall not load a container for which a verified gross mass is not available. “This does not mean that one with a verified gross mass is guaranteed to be loaded, since that would derogate from the traditional rights of a master,” the insurance specialist added.

Recognising the pivotal nature of the port interface, it noted that the ‘terminal representative’ has been drawn into the new regulation as a key recipient of information for ship stow planning “and, critically, in a joint and several responsibility not to load on board a ship if a verified gross mass is not available”.

It added: “There has been considerable debate as to whether terminals need to position themselves to be able to weigh containers, not least because of the cost of creating appropriate infrastructure, and amending systems and procedures, with uncertain return on investment. In addition there are commonly incidences of containers packed at the port, in which case the terminal activities could include assisting the shipper in producing the verified gross mass.

“The SOLAS amendment places responsibility on national administrations to implement appropriate standards for calibration and ways of certifying. The overtly named parties rely on this to work smoothly and, preferably, consistently on a global basis.”
TT Club said clarity of such processes needed to be matched by consistency in enforcement. “Talk of ‘tolerances’ is disingenuous,” it said. “SOLAS calls for accuracy. Everyone appreciates that some cargo and packing material may be hygroscopic, thereby potentially increasing mass during the journey, but that need not mask fraudulent activity, nor entice over-zealous enforcement.”

It said the UK Marine Guidance Note may be instructive here, stating that enforcement action will only be volunteered where the difference between documented and actual weight exceeds a threshold. TT Club concluded: “It is suggested that key measures of success of the revised SOLAS regulation will include not only safety of containerised movements, but also free movement of boxes through all modes of surface transport, and a shift in behaviour and culture throughout the unit load industry.”

Customs 175 Years Seal

Customs 175 Years Seal

A new NZ$140 million border management system was supposed to replace and retire twenty year old software but New Zealand’s Customs Service is now describing the legacy CusMod system as “suitable for continued use” after server and software upgrades.

In a hearing on Budget estimates before Parliament’s Foreign Affairs, Defence and Trade committee, Customs was unable to set a date for retirement of the old system even after having spent NZ$104 million so far on its replacement.

In 2007, Customs said there was a significant risk CusMod couldn’t continue to respond to changes in global trade and travel, continue to manage emerging risks such as international crime or meet revenue collection objectives.

Eight years later, the agency is told Parliament “very large” amounts of information are still stored in CusMod, it is still considered an important tool and will be retained “for the time being”.

The hearing also revealed the planned second tranche of the Joint Border Management System (JBMS) project, focusing on risk and intelligence, will not proceed as planned and is being replaced with modular implementations with no specified delivery date.

Customs also explained that “legal discussions” were required to manage the agency’s relationship with vendor IBM and to recast the original JBMS contract.

The first tranche of the JBMS started life with a budget of just NZ$75.9 million and was to be completed by the end of 2012, but Customs Minister Nicky Wagner is denying suggestions of a budget blowout.

Wagner said the project was within budget, and additional funding was not expected to be sought.

“The minister commented that the combined cost for tranche one and two was originally planned to total NZ$140 million, and NZ$104 million has been expended so far,” the committee’s report says.

Customs assured the committee the completed JBMS would meet the aspirations of functionality set out in 2011. The project is expected to be completed by 2015/16. Source: ZDnet.com

DBN Relocatable ScannerThe following article suggests the need for greater consultation and collaboration between all supply chain parties. While the associated costs relating to supply chain movements is not the purview of SARS, these should be considered as part of the overall impact assessment in the lead up to such an implementation. For all intents and purposes this is an unintended consequence. Stakeholders should also note that the SA government has not imposed any fee for the scanning of cargoes to re-coup costs. Non-intrusive inspection (NII) capability is a tenet of international customs control intended to mitigate security threats and incidents of cargo misdeclaration, even legitimate cargo that can be used to mask harmful products stowed in vehicles/containers. The issue of increased cost of compliance has unfortunately been a trait of many international customs developments ever since the advent of ‘heightened security’ – post 9/11 and seems destined to remain a ‘challenge’ as we supposedly move into an era of increased trade facilitation.Joint collaboration between all parties not only assists in better understanding of the broader supply chain landscape but can also contribute to positive measures on the ‘ease of doing business’.

Freight & Trade Weekly (issue no. 2158, 10 July 2015) reports that Industry has called on customs to look into processes around its cargo scanners which they say are currently driving up costs.

Two state-of-the art scanners are currently operational at the Port of Durban and Cape Town and are part of South African Revenue Service’s (Sars) countrywide approach to risk management that aims for less intrusive inspections at ports and border entries.

The scanners were introduced in order to improve efficiency, with stopped containers being released more speedily than has been the case to date.

“It has however in some cases increased costs because it has resulted in double handling of containers,” said Dave Watts, a maritime consultant for the SA Association of Freight Forwarders (Saaff).

Before the introduction of the scanners all stopped containers were moved by shipping lines to licensed depots for examination by Sars. Once the inspection was concluded and the container released the importer or his agent could collect it using their own transport.

The new process however sees the stopped container transported by the shipping line to the scanner where it is either released or has to be moved for a physical inspection to a depot.

If released at the scanner the container is however still on the shipping line’s appointed truck and not that of the importer or its agent’s nominated haulier.

There are no facilities to move it from one truck to the other at the scanners which means carrier haulage moves it to a depot anyway.

“The extra cost comes in simply because of the double handling,” explained Watts.

In Durban, where the new technology scanner was introduced just over a year ago, several importers maintain it is cheaper to just have their stopped containers taken to the depot for unpacks rather than going through the scanner and not unpacking.

According to Mike Walwyn, chairman of the Port Liaison Forum, the issue of carrier choice also comes into play as the importer now has to use carrier haulage for delivery as opposed to his or her own transport.

Whilst the Cape Town scanner has only been operational for a week, some very real challenges are foreseen and increased cost is one of them.

“The issue is not necessarily around the scanner,” says Watts, “but the rules and regulations around the customs act that stipulates all containers remain the liability of the shipping line until released by customs. In other words it has to be taken to the scanner by the carrier.”

It has been suggested that instead of doubling the handling of containers the carrier should just make the final delivery of the container, but it is generally accepted that carrier cartage rates are much higher than contracted cartage rates. In some cases the cost is said to be four times higher.” Source: FTW

Oz Tax Office2Global pharmaceutical companies paid tax of just $85 million in Australia on revenues of more than $8 billion, including $3.5bn from taxpayer-subsidised drugs, Labor senator Sam Dastyari says.

“What is so extraordinary is that you’ve had companies that have been able to arrange their affairs to be able to drive down their revenue to such an extent that their taxable income is simply one per cent of the revenue that they have,” Senator Dastyari said.

Senator Dastyari addressed media during a break at a senate inquiry into corporate tax avoidance in Sydney that is hearing from nine of the biggest drug companies operating in Australia.

“The question before us today was ‘Is this a genuine representation of how profitable these companies have been?’,” Senator Dastyari said.

“The evidence is that they have done what they can to drive up their costs to make themselves as artificially unprofitable as possible in Australia and make themselves more profitable in other jurisdictions to avoid paying tax here.”

Senator Christine Milne, who is also on the senate committee conducting the inquiry, said Johnson and Johnson’s vice president of global taxation had given extraordinary evidence that the company had a profit formula that the Australian subsidiary was required to meet.

“Then they work out their tax affairs so that they move their profits offshore and they maximise their costs here,” Senator Milne told journalists.

“And the extraordinary thing is in the negotiation with the government on the pharmaceutical benefits scheme they ask what the market will bear in terms of the cost of those drugs but they don’t reveal what they actually pay for those drugs from their head office.

“People in the community are saying well look the government keeps coming after us to pay more tax – what about the big end of town?” Source: theaustralian.com.au

2nd hand clothingZimbabwe’s manufacturing firms want government to consider banning the import of second-hand clothes as part of reforms to protect the local industry, Parliament heard on Tuesday.

Used clothes have flooded the domestic market, compounding the woes of a local textile industry on the verge of collapse. Industry experts say Zimbabwe has a market for 80 million garments but only 20 million of those are locally manufactured. Almost 90 percent of imported new clothes are exempt from duty because of regional trade agreements, analysts noted.

Confederation of Zimbabwe Industries (CZI) national council member Jeremy Youmans told a parliamentary portfolio committee on industry and commerce that industry requires access to long-term capital, as well as clarity on the indigenization and empowerment law among other measures to compete on the same terms with foreign companies that have established a foothold in the country.

“Second hand clothing in South Africa is banned, if they catch (anyone selling) they will burn it. Maybe that is something we need to consider,” Youmans said.

“As a clothing industry certainly, we have always said we don’t want to stop it because that clothing is being donated to some people who cannot buy clothes themselves.

“The problem is that they are not going to those people, they are going into our markets and somebody is buying those clothes, it’s a very difficult situation.”

He added that the revival of the cotton industry would be key in boosting capacity of the country’s textile industry.CZI vice-president Sifelani Jabangwe said Zimbabwe should improve its business climate to become competitive by doing away with bureaucracy which drives the cost of doing business.

“One of the challenges is that in order to comply with being formally registered, we have to be registered with a number of bodies depending with the nature of the business and they charge licence fees,” he said.

“When you add up these costs, individually they seem to be so low but when you add them up just to be formally operational it is actually a significant cost to the extent that this causing other businesses to close down.”