SARS – COVID-19 Frequently Asked Questions

SARS has published list of frequently asked questions in regard to the clearance of goods under the COVID-19 pandemic.

Source: SARS, 22 April 2020

Update to SARS Customs requirements under COVID-19

Visit the SARS Customs & Excise Webpage for an update on Customs import and export requirements under COVID-19.

The update can be accessed at this link!

Source: SARS, 19 April 2020

SA Parliament adopts report on Border Management Authority Bill

Several media reports have recently published misleading information in regard to the South African Revenue Service and the Border Management Authority Bill. The following statement by Parliamentary Communication Services offers context in the matter –

Parliament adopts report on Border Management Authority Bill

Border Management Authority bill takes another step towards becoming law

The Portfolio Committee on Home Affairs adopted a report on the Border Management Authority Bill [B9B-2016] and will recommend to the house to adopt and pass the Bill into an Act of Parliament.

The adoption follows the recommendations and amendments made by the Select Committee on Security and Justice while processing the Bill. The committee agreed that the amendments are valid and strengthen the Bill to ensure that it delivers on its mandate.

An important amendment made by the National Council of Provinces is to highlight the consensus reached between the Minister of Finance and Minister of Home Affairs, which removes the South African Revenue Services from the application of the Act. “We appreciate that the two departments have reached a consensus on how to handle the custom-related issues at port of entries, which has been a major sticking point impeding the completion of the Bill,” said Advocate Bongani Bongo, the Chairperson of the committee.

The committee welcomes the fact that as a result of this consensus, the Bill commits both the Department of Home Affairs and National Treasury to agree on an implementation protocol to enable seamless functioning and co-ordination of border management areas within six months of the implementation of the Act.

The committee is of the considered view that the passing of the BMA Bill is a step in the right direction to secure our borders and end fragmentation within this environment. The committee will table its report before the National Assembly and recommend that the Bill be passed and sent to the President for assent into law.

Regarding the performance of the department in quarter three and four, the committee notes the piloting of an e-visa in Kenya. While the committee is aware that this pilot phase should have been rolled out to six missions across the world, it nonetheless welcomes the announcement that the pilot will be extended to India, Nigeria and China in the course of this quarter. The committee has urged the department to fix teething problems identified and to conclude the piloting stage with the aim of introducing the programme.

The fight against corruption is an important pillar in strengthening accountability and good governance. In line with this, the committee welcomes the announcement that 86.6% of the department’s fraud and corruption cases are finalised within 90 days. The committee continues to emphasise the need for the speedy finalisation of corruption cases and the sanctioning of departmental employees.

The committee will continue to monitor the implementation of the Annual Performance Plan to ensure delivery of services to the people.

For media enquiries or interviews with the Chairperson:

Committee’s Media Officer
Malatswa Molepo 
Parliamentary Communication Services

18 February 2020

Guide: Goods and Conveyance Reporting in South Africa

A companion guide in support of increased compliance in the reporting of goods and conveyances (RCG) to Customs, South Africa.

Necessary information for – Air, Sea and Road carriers, vessel’s agents, NVOCCs, freight forwarders, Air and Sea terminal operators, container depot operators, transit shed operators and de-grouping depots. Also, all private software service providers to the trade.

The guide offers easy navigation through –

  • registration and electronic trading with SARS Customs
  • the various electronic messages mandated by law, covering import and export movements, across all modes of permissible international transportation
  • message types for each transaction type
  • scenarios to facilitate easier understanding across operators in the supply chain on how the various electronic reports are sequenced, ensuring that Customs formulates a comprehensive end-2-end view of a international trade transaction
  • reference webpages, official notifications, Customs rules and other pertinent information concerning cargo reporting.

All information is hyperlinked to SARS documentation, found on the official SARS website www.sars.gov.za

You may download the Guide below (File size: 3MB)

South African Customs – Recent Illicit Goods Busts

Customs teams from Durban, Cape Town, Gauteng and the Free State recently dealt a blow to non-compliant traders by busting drugs, illicit cigarettes and undeclared fuel.

Customs officers at OR Tambo International Airport (ORTIA) were responsible for several major drug busts over the past couple of weeks, including the following:

  • On 8 February, a female passenger arriving from Sao Paulo was stopped and her luggage scanned, which revealed suspicious images. After searching her luggage, officers discovered packages wrapped in black tape and containing a white powdery substance. The powder was tested and confirmed to be cocaine, valued at approximately ZAR54 284 349. Officers also searched a male passenger arriving on the same flight and discovered three body wraps on his torso, containing a white powdery substance. The contents were tested positive for cocaine, valued at about ZAR9 057 566. On the same day, officers intercepted a male passenger about to board a flight for Hong Kong and searched him. They discovered body wraps on his upper torso containing cocaine valued at about ZAR11 700 000.
  • On 2 February, a male passenger arriving from Sao Paulo was stopped by Customs officers and his luggage searched. After a luggage scan revealed irregular images, officers searched his bags and discovered packages wrapped in black tape containing cocaine, valued at about ZAR5 850 000.
  • On 27 January, in a similar incident to the above, a male passenger arriving from Sao Paulo was arrested after Customs officers discovered a false compartment in his luggage, which contained cocaine valued at about ZAR6 750 000.

In all the above incidents, the suspects and goods were handed over to the SAPS for further investigation.

In the Durban incident, officers became suspicious of two containers of goods arriving on a vessel in the Durban harbour from China.

The containers, which were declared to contain glassware and household goods, were placed for examination at a cargo depot in Durban. 

Upon inspection by Customs officers on 5 February 2020, the containers were found to contain various suspected counterfeit goods, and several cartons with tablets packed in plastic packets.

Members of the Customs detector dog unit reacted positively to the cartons, which were tested and found to contain Methaqualone (Mandrax).

There was a total of 15 cartons, each containing 20 000 Mandrax tablets with a street value of about ZAR24 million. The case has been handed over to the SAPS for further investigation.

In Cape Town, officers were responsible for a massive bust of illicit cigarettes, one of SARS’ key focus areas when it comes to illicit trade (particularly in terms of lost revenue due to the fiscus). 

After receiving an alert from the Compliance Risk and Case Selection team about a possible mis-declaration of a container on a ship arriving in South Africa, a detention notice was issued to the shipping liner and the goods were detained in December 2019.

After following the required legal processes, a Customs Branch Physical Inspection team searched the container at the Cape Town harbour on 20 January 2020.

During the inspection, the team discovered 1050 master cases of “LEGATE” cigarettes, each case containing 50 cartons of 10 packets, with an estimated street value of about ZAR3 150 000.

If the consignment of cigarettes was not detected, the potential loss of revenue would have amounted to about ZAR12 208 350 in Customs & Excise duties and VAT. 

The Western Cape Customs Branch Inspection team has handed over the case to Criminal Investigations from further investigation.

In the Free State, Customs officers dealt a blow to another key area of illicit trade, ie. ghost exports or false declarations of fuel. On 31 January 2020, officers stopped a truck coming from Lesotho through the Ficksburg border post. They had become suspicious of this particular trucking company, as they had recently changed their route to using South Africa as a transit route from Mozambique to Lesotho. 

Officers noticed that the same truck had driven through the border into Lesotho the day before, having declared the truck full with fuel they acquired in Mozambique. The following day it re-entered South Africa, with the driver claiming that the truck was empty (which could indicate a possible ghost export in which they were trying to avoid paying taxes and duties/levies).

They then asked the driver to park the truck at the depot for inspection. However, after the truck was taken to the depot, the truck driver disappeared and the truck company’s lawyer was called to attend an inspection. 

Customs officers then discovered the truck contained 26 000 litres of diesel, with the owners having failed to pay duties and taxes totalling ZAR176 000 due to the fiscus. The truck was detained for further investigation.

And in a similar incident, two trucks were stopped at the Maseru Bridge border post on 4 February for falsely declaring fuel coming from Mozambique to Lesotho. The trucks contained 39 388 litres and 39 414 litres of petroleum respectively. Both were detained for further investigation. 

Source: South African Revenue Service [SARS]

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

SARS Customs to introduce 24-hour Advance Rule and other Supply Chain reporting

SARS-RCG

Enter SARS RCG Webpage here!

This Friday, 20 April 2018, SARS Customs will implement its new Cargo, Conveyance and Goods Accounting solution – otherwise known as the Cargo Processing System (CPS). In recent years SARS has introduced several e-initiatives to bolster cargo reporting in support  its electronic Customs Clearance Processing System (iCBS), introduced in August 2013.

Followers of SARS’ New Customs Acts Programme (NCAP) will recognise that the CPS forms part of one of the three core pillars of the new legislative programme, better known as Reporting of Conveyances and Goods (RCG). The other two pillars are, Registration, Licensing and Accreditation (RLA) and Declaration Processing (DPR). More about these in future articles.  In order to expedite the implementation of the new Acts, SARS deemed it necessary to introduce elements of the new functionality via a transitional manner under the current Customs and Excise (1964) Act.

Proper revenue accounting and goods statistical reporting, can only be adequately achieved if Customs knows what goods ‘actually’ arrive, transit and exit it’s borders. Many countries, since the era of heightened security (post 9/11), have invested heavily in the re-engineering of policies and systems to address the threat of terrorism. This lead to a re-focus of resources and energies to develop risk management systems based on ‘advanced information’. SARS has invested significantly in automated systems in the last decade. Shortly, SARS it will also introduce a new automated risk engine with enhanced capabilities to include post clearance audit activities.

It should also not come as a surprise to anyone conversant with Customs practice, that international Customs standards such as the WCO’s SAFE Framework of Standards, the RKC and the Data Model are prevalent in the new Customs legal dispensation and its operational business systems.

South Africa will now follow several of its trading partners with the introduction of ‘advance reporting of containerised cargo’ destined for South African sea ports. This reporting requires carriers and forwarders to submit ‘advance loading notices’ to SARS Customs at both master and house bill of lading levels, 24 hours prior to vessel departure.

The implementation of CPS is significant in terms of its scope. It comprises some 30 odd electronic cargo notices and reports across the sea, air, rail and road modalities. These reports form the ‘pipeline’ of information deemed necessary to ensure that the ‘chain of custody’ is visible and secure from point of departure to final destination. For the first time, South Africa will also require cargo reporting in the export domain.

SARS_RCG_ Message_Schema 2018

Download a high resolution map of SARS Cargo Report Messages here!

It is no understatement that the CPS initiative is a challenge in particular to new supply chain entities who have not been required in the past to submit electronic reports. In order to meet these reporting requirements, a significant investment in systems development and training is required on the part of SARS and external trade participants. To this end, SARS intends to focus on ramping up compliance amongst all cargo reporters across all transport modalities. The first modality will be road, which is the most significantly developed and supported modality by trade since the inception of manifest reporting under the Customs Modernisation Programme. The remaining transport modalities will receive attention once road is stabilised. 

 

WCO News – February 2018

wconews_85

This edition of WCO News features a special dossier on the theme chosen by the WCO for 2018, namely “A secure business environment for economic development”, with articles presenting initiatives and related projects that contribute to creating such an environment. The articles touch on authorized economic operators, national committees on trade facilitation, coordinated border management, performance measurement, e-commerce, data analysis, and partnerships with the private sector.

For sub-Saharan African readers, look out for the write up of the Customs systems interconnectivity and the challenges and opportunities for Customs administrations in the SACU region.

Other highlights include articles on Customs systems interconnectivity in the Southern African Customs Union, on the experience of a young Nigerian Customs officer who participated in the Strategic Management and Intellectual Property Rights Programme at Tokyo’s Aoyama Gakuin University, on how the WCO West and Central Africa region is using data to monitor Customs modernization in the region, and on the benefits that can be derived by facilitating transit procedures.

Source: WCO, February 2018

Hamburg Süd becomes first fully electronic ‘Cargo Reporter’ in South Africa

Hamburg Sud_1

Durban-based Hamburg Süd is the first shipping line – and the first South African Revenue Service (Sars) client – to be granted exemption from the requirement to submit paper manifests to local customs branches, thus becoming the first fully electronic cargo reporter.

While the electronic reporting of pre-arrival manifests to Sars has been a requirement since August 2009, shipping lines are, to date, still required to present pre- and post-arrival paper manifests to local customs branches in order to account for cargo. This was also because the data accuracy of electronic submissions varied significantly between different reporters.

Sars’ implementation of the new Manifest Processing (MPR) system in June 2016, provided industry with the mechanism to also report acquittal manifests electronically. Additionally, the system is able to match customs clearances to their corresponding cargo reports (manifests) in order to identify instances of non-reporting.

Three months after MPR was introduced, the facility for full paperless cargo reporting was made available to shipping lines and airlines who submit both pre-arrival and post-arrival manifests to Sars electronically; submit complete sets of manifests without any omissions; achieve a reporting data accuracy rate of 90% or higher in respect of both their pre-arrival and acquittal manifests reported for each of the three months preceding any application for exemption from paper reporting requirements; and can maintain that level consistently.

A significant benefit to carriers reporting electronically is the cost-saving of hundreds of thousands of rands spent per year in the paper and administrative costs associated with submitting paper manifests to Sars offices. The process is now more efficient allowing for improved risk management, security and confidentiality.

“Hamburg Süd’s core business strategy is to deliver a premium service to our customer, and to achieve this, compliance is a core driver. SARS paperless reporting is in line with our compliance and sustainability strategy,” said Jose Jardim, general manager of Hamburg Süd South Africa.

For Customs, the mandatory submission of cargo reports forms a significant part of the new Customs Control Act (CCA) in order to secure and facilitate the international supply chain.

With the impending implementation of Reporting of Conveyances and Goods (RCG) under the CCA – targeted for 2018 – carriers of internal goods in the sea and air modalities are urged to follow Hamburg Süd’s example and ensure that they become compliant in good time so that they can enjoy a smooth transition to the new legal dispensation.

Paperless cargo reporting would bring an end to one of the last remaining paper-based processes in customs while further contributing to the expedited processing of legitimate trade through an enhanced and integrated risk management environment.

According to a Sars spokesman technical stakeholder sessions to implement the reporting requirements introduced by the new Customs Control Act are due to commence soon and carriers and other supply chain cargo reporters are urged to attend in order to ensure they adapt their systems in good time.

Source: adapted from FTW Online, Venter. L, “German shipping line first Sars client to become fully electronic reporter”, September 14, 2017.

USCBP donates border protection equipment to SARS

CBPSARS3

The U.S. Embassy in South Africa’s office of U.S. Customs and Border Protection (CBP) donated border enforcement equipment and tools to the South African Revenue Service (SARS) at their K-9 facility in Kempton Park today. The equipment will be utilized in support SARS’ efforts to safeguard the borders in South Africa. The donation, valuing more than $105,000, includes vehicle GPS units, field binoculars, night vision goggles, handheld thermal imagers, radiation detector/pagers, and contraband detection kits.

The donation is a part of the U.S. Customs and Border Protection’s longstanding partnership with the government of South Africa to support border security, trade facilitation and combat wildlife trafficking. U.S. Chargé d’Affaires Jessye Lapenn said, “Following South Africa’s success in hosting the 17th Meeting of the Conference of the Parties (COP17) to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) in 2016, we are delighted to support your continued efforts. This equipment will be used to help conserve your incredibly diverse wildlife species, promote economic development, and combat the multi-billion dollar illicit wildlife trade within your borders, across our borders, and globally. I am proud of the great work our South African and American teams have done together on these issues. Together, we are making a difference.”

An executive for Customs at SARS said, “from the South African perspective, we acknowledge and receive these ‘tools of the trade’ from the United States with gratitude. This donation will strengthen our long-lasting relationship with the United States, which has been assisting us since the 1990s. Our work together has helped us improve our fight against the illicit economy.”

With more than 60,000 employees, CBP is one of the world’s largest law enforcement organizations and is charged with keeping terrorists and their weapons out of the U.S. while facilitating lawful international travel and trade. As the United States’ first unified border entity, CBP takes a comprehensive approach to border management and control, combining customs, immigration, border security, and agricultural protection into one coordinated and supportive activity. The men and women of CBP are responsible for enforcing hundreds of U.S. laws and regulations. On a typical day, CBP welcomes nearly one million visitors, screens more than 67,000 cargo containers, arrests more than 1,100 individuals, and seizes nearly six tons of illicit drugs. Annually, CBP facilitates an average of more than $3 trillion in legitimate trade while enforcing U.S. trade laws.

Source:  APO on behalf of U.S. Embassy Pretoria, South Africa.

Belissima!

The South African Revenue Service (SARS) has seized a Ferrari that was smuggled into the country. The luxury vehicle worth an estimated R13.8m was stored at a warehouse in South Africa since 2014.

In February 2015, however, the vehicle’s owner submitted an export declaration to take the car to the Democratic Republic of Congo through Beitbridge border post. A day later, there was an attempt to have the vehicle returned to South Africa through the same border post.

The vehicle has been detained and a letter of intent has been issued to the owner in terms of the Promotion of Administrative Justice Act No 3 of 2000 to enable them to make representation to SARS.

SARS publishes external NII Standard for Customs X-Ray Scanning operations

sars-scanner-operations-at-ports-of-entry-1

SARS offers non-intrusive inspection capability at 3 ports of entry and exit to the Republic of South Africa namely, Port of Durban, Port of Cape Town and Beit Bridge border post. These facilities are intended to offer an expedited inspection service without having to physically break seals or de-van a vehicle or container. Given that the equipment offers high resolution  capability based on x-ray imaging technology, safety and and occupational health standards are a priority.

SARS has recently published a standard (SC-CC-35) for external parties relating to the scanner operation as well as health and safety standards. Source: SA Revenue Service

 

SARS Management benefits from the WCO LMD Workshop

wco-lmd

As part of its Capacity Building programme, the WCO organized a Leadership and Management Development (LMD) workshop from 14 until 25 November 2016 in Pretoria, South Africa. Nineteen middle managers of the South African Revenue Service (SARS) were inspired to strengthen their leadership and management capacities, as well as their personal effectiveness to drive reforms within their organization. The workshop was made possible with the support of the Finnish Ministry of Foreign Affairs.

During a meeting with a delegation of executive management at the end of the LMD workshop, participants were invited to not only implement their newly acquired skills and insights in their own units, but to also continue learning and developing themselves as well as the whole organization. A first follow-up meeting to that end was immediately planned.

In the LMD workshop participants learned that knowing yourself and self-awareness, managing strategically, people management, outstanding communication skills and change management are very important to address SARS’ future challenges. The participating managers were extremely participative and showed a strong motivation and commitment to know, improve and manage themselves, in order to have a great and positive impact on others, as well as on the organization. With personal testimonies at the end of the workshop participants demonstrated their motivation to bridge the gap between policy making and organization-wide implementation of changes.

In the near future SARS will implement its own Leadership and Management Development programme. For further development as a regional centre of expertise in this LMD domain SARS and WCO plan to strengthen their cooperation.

For more information on the WCO Leadership and Management Development Programme, please contact Capacity.Building@wcoomd.org. Source: WCO

SARS publishes updated EDI User Manual

sars-edi-user-manualSARS has been operating Electronic Data Interchange (EDI) with its external stakeholders since 2001. More than 98% of all customs declaration (CUSDEC) transactions are today submitted electronically to Customs and the electronic submission of multimodal cargo reports (CUSCAR) is steadily increasing. Today, declaration processing is fully electronic end-to-end thanks to the availability of highly established EDI and Customs software service providers supporting the local customs and logistics community. SARS has also recently introduced a benefit for compliant cargo reporters who will be absolved of certain manual (paper) submission requirements once they attain an acceptable level of electronic submission compliance and data accuracy.

The ultimate objective is to ensure that all Customs-to-Business (C2B) transactions are electronic to enable full supply chain connectivity between the South African business community and Customs. This in turn enables the possibility of SARS accrediting or approving ‘supply chains’ as opposed to just individual trader segments (importers and exporters). The extent of electronic compliance is also a pivotal requirement for traders operating under the new Customs Control Act, to be enacted in the future.

SARS overall EDI capability extends further than declarations and cargo reports. In recent years Customs-to-Government (C2G) messaging has also been successfully established between SARS and the Department of Trade and Industry (dti) as well as the South African Reserve Bank (SARB). SARS is also engaging other government stakeholders concerning IT connectivity and data exchange.

Moreover, developments for cross-border Customs-to-Customs (C2C) data exchange are also in the pipeline and could come to fruition with the partner administrations in Mozambique and Swaziland in the foreseeable future. These initiatives will usher in increased supply chain connectivity through active use of the Unique Consignment Reference (UCR) between participating customs administrations. The ultimate objective here is the creation of mutual recognition benefits for local and cross-border traders based on their accreditation status agreed between the participating customs administrations.

The SARS Electronic Data Interchange (EDI) Manual (which can be downloaded from the SARS EDI webpage) has been updated with the latest versions of SARS Edifact Data Mapping Guides as well as improved diagrams explaining the functional composition of the various electronic messages specified for Customs processing. Also included are the requirements for registering as an EDI user with SARS.

The manual includes recent updates relating to cargo reporting (manifests) as well as the updated customs declaration message incorporating recent inclusion of customs surety, penalty and forfeiture requirements. The latter enhancement removes another document based requirement (the Form DA70 Provisional Payment) for Customs Brokers with the view streamlining data requirements, enhancing customs billing and customs status reporting with the trade and logistics community. This EDI Manual will be an important document over the coming months and years in that it will feature updated electronic requirements in support of the new Customs Control Act. Watch this space!

Davis Tax Committee pronounces on BMA

DTCRecent speculation concerning the Border Management Agency Bill have brought about reaction from both within government and industry. While there appears widespread support for a unified agency to administer South Africa’s borders, the challenge lies in the perceived administration of such agency given the specific mandates of the various border entities.

The Davis Tax Committee (DTC) was requested to provide a view on the affect of the proposed bill insofar as it impacts upon revenue (taxes and customs and excise) collection for the fiscus of South Africa.

The purpose of the Bill is to provide for the establishment, organisation, regulation and control of the Border Management Agency (BMA); to provide for the transfer, assignment, and designation of law enforcement border related functions to the BMA; and to provide for matters connected thereto. The functions of the BMA are (a) to perform border law enforcement functions within the borderline and at ports of entry; (b) to coordinate the implementation of its border law enforcement functions with the principal organs of state and may enter into protocols with those organs of state to do so; and (c) to provide an enabling environment to facilitate legitimate trade.

In short the DTC recommends that the functions and powers of SARS and the BMA be kept separate and that the Agency should not be assigned any of the current functions and powers of SARS with regard to revenue (taxes and customs and excise) collection and the control of goods that is associated with such collection functions. Of particular concern is the extraordinarily poor timing of the Bill. According to the 2014 Tax Statistics issued by SARS, the total of customs duties, import VAT, and ad valorem import duties collected amounted to R176.9 billion for the 2013-14 fiscal year. This was approximately 19% of the total revenue collected.

The DTC is of the view that to put so significant a contribution to the fiscus in a position of uncertainty, if the Bill were to be  implemented, is fiscally imprudent at this critical juncture for the South African economy. Follow this link to access the full report on the DTC website. Source: www.taxcom.org.za