SA Customs Procedure Guideline and Chart – 2019

SARS Customs clearance has operated under a Customs Procedure Code (CPC) regime for almost 10 years now. To commemorate the 10-year anniversary, the accompanying CPC Chart and External User Guideline is intended for expert users and newcomers to Customs clearance, alike. In particular, it is important for cross-border traders to understand that the CPC combinations cannot be used indiscriminately; but, have specific meanings and associations with various other Customs rules for the electronic processing of goods for import, transit and export. Attempts to ‘fudge’ a CPC for any particular purpose or reason, may lead to a negative result downstream. Accuracy in the use and application of CPCs results in improved trade compliance, more accurate trade statistical data and fewer declaration amendments hence less penalties and lost time. Over the last decade, it is certain that most international freight forwarders and tertiary Customs training institutes and universities have introduced some or other CPC methodology into their curricula. Feel free to use this guide in support of such curricula. I do however, request that in so doing, the attached material – made freely available to you – will be delivered ‘intact’ in the form as compiled and presented here.

The files can be dowloaded below –

External CPC Tutorial & Self-Assessment Guide 2019

CPC Chart October 2019

Compilation of Customs Integrity Practices

WCO Compilation of Integrity PracticesThe WCO Secretariat has undertaken a new initiative involving the compilation of good internal control [governance] practices by Customs administrations, and their relationship with external controls. The Secretariat carried out a survey of Members to find out how they implement principle 6 of the Revised Arusha Declaration. The responses indicated that internal control functions can be structured differently and do not operate in the same way.

The survey collected material on the experiences of Members and on their integrity practices, with a view to compiling a good practice guide which Members could use to enhance their integrity strategies, including external oversight. It consisted of 18 questions, and was divided into four sec- tions: (1) Governance of Internal Control; (2) Operational Aspects; (3) Relationship with External Controls; and (4) Sharing Good Practices with Other Members. Responses were received from 58 Member administrations. Download this link.

 

 

Customs Tariff – Mobile-learning course on the HS 2017 Edition

WCO-HS-Mob-App.jpg

A new online course on the 2017 Edition of the Harmonized System (HS) has just been released by the WCO.

Through educational videos and a knowledge test, this course allows you to learn about the major changes in the 2017 version of the HS.

This course is available on CLiKC!, the WCO online learning platform, but is also the first WCO e-learning course which is built using mobile learning technologies. By downloading the app, available on the App Store and on Google Play, users will benefit from more features such as a search engine which indicates if a specific HS code has been amended in the 2017 version.

The app is available for free to anybody who wishes to learn about HS2017.  The added feature for our Member administrations’ Customs officers, who have an account on this website, is that it will be synchronized with CLiKC!

Source: WCO

Angola – New Customs Tariff

Angola CustomsThe introduction in the coming months of a new customs tariff in Angola is feeding expectations among economic agents that replacing the current regime will be a stimulus to the country’s growth.

A new customs tariff system, submitted to the Council of Ministers and expected to be implemented this year, proposes cuts on import duties on foodstuffs such as fruit and vegetables, cooking oils and grains (including wheat flour), as well as raw materials such as iron, steel and aluminium products as well as second-hand cars, the Angolan press reported.

The aim is to replace the existing customs tariff system – introduced in 2014 before the start of the economic and financial crisis now facing the country – which is generally regarded as protectionist of local farmers and manufacturers, seeking to make imports more expensive in order to encourage diversification of an economy that is highly dependent on oil.

The current tariff has been the subject of much criticism from local and international companies as well as from the World Trade Organization (WTO).

In its most recent report on Angola, the Economist Intelligence Unit (EIU) said replacing the current tariff would likely be a positive move, as it had the effect of increasing the cost of domestic production and reducing competition in the market.

Despite tariff protection, the EIU points out that operational challenges – such as a lack of electricity, poor supply chain management and lack of human resources – have kept the country dependent on imports.

In addition to this, the fall in the price of oil following the introduction of the 2014 tariff has limited access to foreign currency for Angolan companies, making payments to suppliers abroad difficult and, as the kwanza has weakened, imports have become significantly more expensive.

“If and when (the new tariff is) applied, the cost of imports should fall and this should help fight inflation. A less protectionist customs regime should also stimulate Angola’s trade with its neighbours and can help the country finally meet the long-standing promise of joining the Southern African Development Community’s free trade zone,” the EIU said.

“A review of Angola’s current punitive customs regime should give a positive boost to the national economy. However, it is still unclear when the new tariffs will be applied,” it said.

In 2016, Angola formalised its accession to the International Convention for the Simplification and Harmonization of Customs Procedures (Kyoto Convention) of the World Customs Organisation, which aims to facilitate international trade.

Each acceding country has a deadline of 36 months to apply the general rules of this agreement, which provides for the minimisation of customs controls between members, thus facilitating and simplifying international trade. Source: macauhub

Mozambique – Single Road Cargo Manifest Phase II

Mozambique flagThe Maputo Corridor Logistics Initiative (MCLI) recently published a communication informing it’s stakeholders about the Single Road Cargo Manifest as received from the Mozambican Revenue Authority (MRA).

The MRA has informed MCLI that the 2nd phase of the Single Road Cargo Manifest process will come into effect from the 16th of June 2017, when all international road carriers transporting goods to Mozambique through the Ressano Garcia border post will be required to submit the Road Cargo Manifest on the Single Electronic Window platform in compliance with national and international legislation. MRA Service Order Nr 17/AT/DGA/2017, in both Portuguese and English, is attached for your consideration.

For information and full compliance by all members of staff of this service, both (National and Foreign) International Cargo Carriers, Clearing Agents, Business Community, Intertek and other relevant stakeholders, within the framework of the ongoing measures with a view to adequate procedures related to the submission of the road cargo manifest, for goods imported through the Ressano Garcia Border Post, in strict compliance to both the national and international legislations, it is hereby announced that, the pilot process for transfer of competencies in preparation and submission of the road cargo manifest to Customs from the importer represented by his respective Clearing Agent to the Carrier is in operation since December 2016.

Indeed, the massification process will take place from 15th of April 2017 to 15th of June 2017, a period during which all international carriers (national and foreign) who use the Ressano Garcia Border, are by this means notified to register themselves for the aforementioned purposes following the procedures attached herewith to the present Service Order.

As of 16th of June 2017, the submission of the road cargo manifest into the Single Electronic Window (SEW) for the import regime, at Ressano Garcia Border, shall be compulsory and must be done by the carrier himself.

International road carriers must therefore register for a NUIT number with the Mozambican Revenue Authority between the 15th of April and the 15th of June 2017 and the necessary application form is included. Road carriers are urged to do so as soon as possible to enable the continued smooth flow of goods through the border post.

Specific details can be found here! 

Source: MCLI

WCO’s “Guidelines”on Customs-Tax Cooperation

customs-taxThe “Guidelines for strengthening cooperation and exchange of information between Customs and Tax authorities at the national level” have been formulated with the support of WCO Members and development partners, especially the Organisation for Economic Co-operation and Development (OECD) and the International Chamber of Commerce (ICC). The Guidelines aim to provide reference guidance to Customs and Tax authorities who wish to go further in their cooperation and develop operational models which enable agencies to work together to their mutual benefit.

Although there is no limit to the ways in which these two agencies can work together, and countries should consider new and innovative methods based on their organizational structure, needs and operational requirements, the Guidelines highlight some overarching principles and associated benefits concerning enhancement of Customs-Tax cooperation.

The WCO Guidelines for Strengthening Cooperation and the Exchange Of Information between Customs and Tax Authorities at the National Level are intended to supplement the ongoing initiatives in this domain. The aim is to provide general, overarching principles for cooperation which take account of operational considerations, bearing in mind the different organizational structures and national requirements of countries. It is expected that these Guidelines will be useful to Member Customs administrations in developing a sustainable cooperation mechanism (including a MoU where needed) tailored to their unique situation, in close cooperation with their respective Tax authorities

In particular, the Guidelines provide a comprehensive overview of the enablers for mutual cooperation and the exchange of information, address the scope and remit of information exchange, cover different information exchange mechanisms, list the type of activities that Customs and Tax authorities may undertake together, and provide key principles and points to consider when developing a Memorandum of Understanding/Agreement (MOU/MOA). Source: WCO

Revision of Correlation Tables between HS2012 and HS2017

HS_HandbookFollowing the accepted complementary amendments to the Harmonized System Nomenclature listed in the Council Recommendation of 11 June 2015, the Correlation Tables between the 2012 and 2017 versions of the HS have been revised. The revised Correlation Tables show the correlation resulting from both the amendments to the Nomenclature which have been accepted as a result of the Council Recommendation of 27 June 2014 and the complementary amendments to the Nomenclature which have been accepted as a result of the Council Recommendation of 11 June 2015.

For more details visit the WCO website.

German Customs dispute disrupts plywood imports from China

Laminated woodThe importance of tariff classification and its impact on statistical and economic data – German imports of hardwood plywood from China continue to be affected by a dispute between the German trade and customs officials. In the last three years, customs officials, particularly at the port of Bremerhaven, have been checking Chinese plywood to ensure that boards are cross-laminated rather than laid parallel to each other.

According to German customs, boards should be reclassified as Laminated Veneer Lumber (LVL) if not fully cross-laminated. This is frequently the case with lower-quality Chinese plywood manufactured using small veneer pieces for the cores. LVL incurs a higher rate of duty of 10% compared to 7% for plywood. Roughly 40% of Chinese hardwood plywood deliveries into Germany were reclassified in this way in 2012.

German import merchants and the timber trade federation GD Holz have held talks with German customs to try to more clearly define which products should be considered plywood and which LVL. According to GD Holz, these talks have been unproductive so far and customs continue to reclassify Chinese plywood. Several German importers have now filed lawsuits and results are still pending. At the same time, GD Holz report that since 2014, several importers have been reimbursed for some instances of excessive duty paid. However, customs has not revealed why reimbursements were offered in some cases but not in others.

The uncertainty created by the dispute in Germany may partly explain the recent rise in imports of Chinese hardwood plywood into ports in Belgium and Netherlands. German buyers may be avoiding excess duty by buying from stocks landed in these neighbouring European countries.

The reclassification process has led to inconsistencies in the statistical data on German hardwood plywood imports. Data derived from Eurostat indicates that German imports fell by 18.3% to 34,700 cu.m in the first five months of 2015. This followed a decline of 5.5% to 103,000 cu.m for the whole year 2014.

However, the Eurostat data deviates from figures published by the German Federal Statistical Office (Destatis) which indicate a 62% increase in German hardwood plywood imports from China in the first quarter of 2015. On enquiry, Destatis note that they have adjusted their data downwards for 2014 to take account of plywood reclassified as LVL.

However Destatis have not yet made the same adjustment to the 2015 data. As a result, Destatis data on deliveries to Germany appear to surge this year. Overall, once all adjustments are made, Destatis reckon German imports of Chinese hardwood plywood in the first five months of 2015 were probably around the same as last year.

The BMA Bill – a little more for stakeholders to ponder over

The BMA Bill No.39058In recent months ‘Joe Public’ has witnessed developments relating to new visa requirements regarding international travel to and from South Africa. Tourism and the hospitality industry have been impacted in no small way while government has now established a committee to investigate the claims to the effect that the country’s tourism industry has been severely impacted.

It is now commercial trade’s time to consider the next set of legal requirements emanating from the Department of Home Affairs which, in the main, affect legislation under other departments and organ’s of state – in particular SARS Customs. Interested parties can find/download the document by clicking the link http://www.gpwonline.co.za/ and searching for eGazette No.39058.

In essence function of the Border Management Agency (BMA) Bill is – To provide for the establishment, organisation, regulation and control of the Border Management Agency; to provide for the transfer, assignment, and designation of law enforcement border related functions to the Border Management Agency; and to provide for matters connected thereto.

Be sure to digest the content of the Schedules to the Bill which contain the extent of the ‘meat’ and authority which the proposed Border Management Agency will exert if, or once approved. The Department of Home Affairs (DHA) invites comments to the draft Bill which must reach DHA no later than 14 September 2015.

Namibia Launches Trade Portal

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

US Customs to assist exporters in resolving disputes with foreign customs

CBP logoU.S. Customs and Border Protection (CBP) published a Federal Register Notice inviting U.S. exporters to request CBP’s assistance in resolving disputes with foreign customs agencies over the tariff classification or customs valuation of U.S. exports. CBP explains that it is willing to assist U.S. exporters with these disputes under the auspices of the World Customs Organization (WCO). CBP is very active at the WCO and regularly participates in meetings concerning the application of the Harmonized Commodity Description and Coding System (HS System) and the World Trade Organization’s (WTO) Customs Valuation Agreement (CVA). According to CBP, this process was helpful in providing a successful outcome for clients who disputed a foreign customs agency’s classification of imported goods.

Tariff Classification
CBP represents the United States at meetings under the auspices of the International Convention on the Harmonized Commodity Description and Coding System (“HS Convention”). The HS Convention is the international agreement that provides that WCO Members will implement the HS System and comply with decisions of the various committees organized under the convention. CBP attends semiannual meetings of the WCO’s Harmonized System Committee (HSC), where contracting parties to the HS Convention examine policy matters, make decisions on classification questions, settle disputes, and prepare amendments to the HS System and its Explanatory Notes.

Article 10 of the HS Convention governs disputes between contracting parties concerning the interpretation or application of the HS Convention. The article provides that parties with potential disputes should first try to settle the dispute through bilateral negotiations. If such negotiation cannot resolve the dispute, the parties may refer the dispute to the HSC for its consideration and recommendations. The HSC, in turn, refers irreconcilable disputes to the WCO Council for its recommendations.

Customs Valuation
CBP represents the United States at the WCO with respect to issues arising under the CVA. Pursuant to Annex II to the CVA, the WCO’s Technical Committee on Customs Valuation (TCCV) is authorized to examine specific problems arising from the customs valuation systems of WTO Members. The TCCV is responsible for examining the administration of the CVA, providing WTO Members with advisory opinions regarding particular customs valuation issues, and issuing commentaries or explanatory notes regarding the CVA. Like the HSC, the TCCV may get involved in disputes amongst foreign customs agencies. CBP stands willing to help U.S. exporters with these disputes. This process may provide U.S. exporters with a faster procedure to resolve disputes than a typical WTO dispute.

CBP’s Role at the WCO May Resolve Export Issues for U.S. Exporters
CBP states in the notice that its communication with other customs administrations through the meetings of the HSC and TCCV at the WCO can “often serve to eliminate or resolve export issues for U.S. traders.” As an example, in 2014, a U.S. exporter notified CBP of a foreign customs administration’s misclassification of its textile exports. The U.S. exporter requested that pursuant to Article 10 of the HS Convention, CBP (1) contact the foreign customs administration to resolve the tariff classification dispute; and (2) refer the matter to the HSC at the WCO, if it could not be resolved bilaterally. After confirming it agreed with the U.S. exporter’s position, CBP engaged the foreign customs administration directly. Within seven months of the exporter’s request, CBP secured a favorable decision by the foreign customs administration to classify the merchandise in a manner consistent with the U.S. position. Consequently, the U.S. exporter obtained correct tariff treatment of its imported merchandise in the foreign country as a result of CBP’s engagement.

Source: http://www.internationaltradecomplianceupdate.com/

Event – Role of the Private Sector in Support of the Trade Facilitation Agreement

international-trade1The role of the private sector in the implementation of the World Trade Organization’s (WTO) Trade Facilitation Agreement (TFA) will be the focus of the 2015 edition of the Global Facilitation Partnership for Transportation and Trade (GFP) meeting. With the world’s customs administrations currently identifying their respective TFA  implementation commitments and setting up National Trade Facilitation Committees, trade and logistics operators can learn how they can participate in such initiatives by attending these sessions.

The GFP meeting will be held at Palais des Nations, Geneva, on 22 April, and will be divided into three thematic sessions.

The first session, ‘Governments’ Priorities: Strategies for Fostering Private Sector Participation in the TFA Implementation Process’ will look at how governments are planning to implement the TFA.

It will focus on how the private sector is consulted and how an effective participation of the private sector can be facilitated to implement the Agreement.

The second session, ‘Priorities, Perspectives, and Expectations from the Private Sector on TFA Implementation’ will assess how the private sector – including large corporates and small and medium-sized enterprises – view TFA implementation. It will look at the potential benefits from a private-sector perspective, and how the sector can contribute to national and international initiatives to implement the agreement.

The third session, ‘International Organizations’ Co-ordination and Partnership for Supporting TFA Implementation’, will provide an opportunity to share information and experiences on how the TFA can be implemented with public-private partnerships in mind, as how national trade facilitation committees can better support this process.

ITC invites all interested stakeholders to join the GFP meeting at the Palais des Nations on 22 April from 9:00. Click here for link to online registration.

Source: International Trade Centre (Geneva)

SEZs – SARS proposes changes to current Rules

Trade policy - a balancing actA draft Notice for the rules under section 21A relating to Special Economic Zones has been made available for public comment. The draft rule amendments proposed under section 21A refer to the substitution of Industrial Development Zone (IDZ) for Special Economic Zone (SEZ). The draft rules can be accessed on the SARS website. Stakeholders have until 28 November 2014 to lodge any comments. Source: SARS

New Customs Control Act published

Customs Duty ActThe Customs Control Act, 2014 (Act No. 31 of 2014) and the Customs & Excise Amendment Act, 2014 (Act No. 32 of 2014) were published in the Government Gazette on 23 July 2014. For copies of these documents lease click here!

The first batch of draft rules has also been circulated in terms of the Customs Control Act, 2014 for comment with the deadline for comments looming – 29 July 2014. The ‘draft rules’ can be located by clicking here.The rest of the rules will follow in due course. Source: SARS

All stakeholders – doing business with SARS Customs – are collectively urged to take the time and opportunity to review the draft rules as they provide further detail to the future requirements and obligations for transacting Customs business when the Customs Duty and Control Acts come into operation.

New feature on SARS website – Customs Bills History

For those interested or concerned with the status of the Customs Bills from their first circulation until now, a ‘new’ SARS webpage contains all the official copies of the Draft Bills released for public comment in 2009 and in 2010 up until they were introduced in Parliament in October 2013. All the versions of the Bills after their introduction in Parliament are available as well, up to the final versions after publication in the Government gazette as Acts of Parliament.

These Acts, when they come into operation, will replace the current Customs and Excise Act, 1964 and provide for new modernised customs legislation. The Customs and Excise Amendment Act, 2014 will amend the 1964 Act to the extent that only the excise provisions will still be in force.

New WCO HS standards coming into force on 1 January 2017

OMD_7760The WCO Council, at its 123rd/124th Sessions in June 2014, adopted a Recommendation that lists recommended amendments to the Harmonized System (HS) nomenclature which will enter into force on 1 January 2017 (HS 2017).

This Recommendation is being promulgated under the provisions of Article 16 of the HS Convention, which implies that HS Contracting Parties now have six months to notify the WCO Secretariat of an objection to a recommended amendment.

Since the entry into force of the current version of the HS (HS 2012), the HS Committee has been revising this version of the HS nomenclature for almost five years. HS 2017 will be the sixth version of the HS since the Convention entered into force in 1983. HS 2017 will enter into force for all HS Contracting Parties, but will exclude any amendments objected to during the six month timeframe.

The new version of the HS includes 234 sets of amendments. Environmental and social issues are a major feature of these amendments, due to the importance of the HS as a global tool for collecting trade statistics and monitoring trade. This is borne out by the fact that the HS Convention currently has 150 Contracting Parties, making it the WCO’s most successful international instrument to date.

The majority of the recommended amendments were broached by the Food and Agriculture Organization of the United Nations (FAO):

  • Amendments relating to fish and fishery products are aimed at further enhancing the coverage of species and product forms which need to be monitored for food security purposes, and the better management of resources.
  • Amendments relating to crustaceans, molluscs and other invertebrates are motivated by the importance of the trade in and consumption of these species in their various product forms.
  • Amendments relating to cuttlefish and squid enlarge the coverage of the present HS codes for these species, in order to have all these species grouped together.

The classification of forestry products has also been modified, in order to enhance the coverage of wood species and get a better picture of trade patterns. The modification will enable trade data on tropical wood to be identified, resulting in better statistics on the trade in tropical wood and better data on the use of non-tropical hardwoods. In addition, the amendments include new subheadings for the monitoring and control of certain bamboo and rattan products.

Furthermore, HS 2017 amendments aim to provide detailed information on several categories of products that are used as antimalarial commodities. This will facilitate classification work, and the trade in these life-saving products.

The amendments also introduce specific subheadings to facilitate the collection and comparison of data on the international movement of certain substances controlled under the Chemical Weapons Convention.

New subheadings have also been created for a number of hazardous chemicals controlled under the Rotterdam Convention and for certain persistent organic pollutants (POPs) controlled under the Stockholm Convention. In some cases, there is a confluence of control regimes for chemicals by both the Rotterdam and Stockholm Conventions.

In addition, new subheadings have been created for the monitoring and control of pharmaceutical preparations containing ephedrine, pseudoephedrine or norephedrine, and for alpha-phenylacetoacetonitrile (APAAN), a pre-precursor for drugs.

Other amendments resulted from changes in international trade patterns. Headings 69.07 (unglazed ceramic products) and 69.08 (glazed ceramic products) were merged to take account of the fact that the main subheadings within these headings concern products which are essentially no longer manufactured, and the industry and trade no longer make a distinction between unglazed and glazed ceramic products, whilst new products with a very high trade volume are classified under subheadings 6907.90 and 6908.90 (“Other”).

Furthermore, for purposes of adapting the HS to current trade practices, certain important products will be separately identified in either existing or new subheadings.

Advances in technology are also reflected in the amendments, inter alia, the size criteria for newsprint, light-emitting diode (LED) lamps, multi-component integrated circuits (MCOs), and hybrid, plug-in hybrid and all-electric vehicles.

Finally, the HS 2017 Recommendation includes amendments to clarify texts to ensure uniform application of the nomenclature. For example, the regrouping of monopods, bipods, tripods and similar articles in a new heading, namely 96.20. Source: The WCO