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Belissima!

March 29, 2017 — Leave a comment

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-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

 

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-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!

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

Red Flags hang over BMA

August 16, 2016 — 1 Comment

Mesina-Beitbridge border crossing - Google MapsAccording to Eye Witness News, a draft law aimed at creating a new, overarching border control entity has run into problems.

Parliament’s Home Affairs Portfolio Committee has been briefed on the Border Management Authority Bill by the department, the South African Police Service (Saps) and National Treasury.

Cabinet approved the Bill in September 2015 to deal with weaknesses in the state’s ability to secure the country’s ports of entry.

The Bill proposes harnessing the responsibilities of Home Affairs, the police and the South African Revenue Service (Sars) among others in one agency under a commissioner.

The authority will take over the customs control functions currently undertaken by the South African Revenue Service. There are fears within the industry that it could compromise SARS’s achievements in modernising its customs administration that has facilitated the movement of goods across the border.

Red flags have been raised by both the SA Police Service and National Treasury over the Border Management Authority Bill.

Treasury’s Ismail Momoniat says while they support a single border control body, SARS must remain in charge of customs and excise and revenue collection.

“We’re talking of significant revenue collection, and that is a speciality… The Bill is a framework, it’s important it doesn’t generate uncertainty for an important institution like SARS.

The authority will be governed by a commissioner and overseen by an interministerial consultative committee, a border technical committee and advisory committees.

The SAPS’ Major General David Chilembe says the Constitution says South Africa must have a single police force. He says it may have to be amended if the new border authority takes over policing duties.

Chilembe also says the police, and not Home Affairs, should lead the new entity. Source: EWN.

The WCO, in its effort to assist Members with Strategic Planning activities and WTO TFA implementation held two back to back accreditation workshops in Pretoria, South Africa. These events were held during the week of 1-5 February 2016 and 8-12 February 2016, were funded by the United Kingdom within the framework of the WCO-DFID ESA project and HMRC-WCO-UNCTAD project and organizationally supported by the South African Revenue Service.

24Customs officers from the WCO ESA and WCA regions participated in the workshops and were assessed against the Customs Modernization Advisors (CMAs) and Mercator Programme Advisors (MPAs) required profile through a series of testing exercises, presentations, role-plays, group activities and plenary discussions.

Participants were also required to demonstrate their knowledge and strategic application of core WCO tools and instruments and the WTO Trade Facilitation Agreement along with their potential to facilitate discussions with senior Customs and other officials in a strategic context.

At these two events 15 participants successfully completed step 1 of the accreditation process as they demonstrated their potential to become CMA’s/MPA’s during the range of workshop activities.

From the five WCO CMA/MPA accreditation events held to date a total of 41 participants have been assessed as being suitable to become CMAs and MPAs under step 1 of the accreditation process and will be invited to participate in TFA implementation support missions under the Mercator Programme in order to complete the accreditation process. It is expected that the successful candidates are made available by their Customs administrations for further support missions in the future. Source: WCO

SARS Customs intercepted a male traveller from Tanzania carrying narcotics worth over R12-million at OR Tambo International Airport yesterday (24 January 2016).

The bust took place when the 36-year old man, who was carrying two large suitcases, was asked to put his luggage through the Customs scanner. The scanner image revealed 10 clear plastic bags that contained a white crystal substance.

Upon investigation this turned out to be 10 bags of Ephedrine. The total weight of the consignment was 40.20 kg with an estimated street value of R12 060 000. The man has been handed over to the South African Police Service and he is expected to appear in court. Source and photos: SARS

The SARS Customs Detector Dog Unit (DDU) recently deployed two trained detector dog handlers and dogs on foreign soil in Maputo, Mozambique. This forms part of a Customs co-operation agreement between the governments of South Africa and Mozambique.

The capacity-building programme provides for the training of at least eight detector dog handlers and dogs for Mozambique in over a period of 14 weeks followed by a ‘Train-the-Trainer’ programme for purposes of sustainability.

The deployment of SARS Detector Dog Handlers and dogs trained to interdict endangered species and narcotics in Maputo will promote and strengthen a  cross-border intergovernmental approach in the prevention and detection of smuggling of illicit, illegal goods or substances via ports of entry between Mozambique and South Africa.

The programme is designed to capacitate Mozambique Customs in the establishment of its own canine unit that will further enhance its current non-intrusive scanning enforcement capability at ports of entry and exit. Source and pictures: SARS

WCO Data Model Workshop, Pretoria, South Africa, Dec. 2015

SARS’ EDI and Customs Business Systems representatives with WCO Data Model facilitators Mr. Giandeo Mungroo (2nd from the left) and Ms. Sue Probert (2nd from the right) [Photo – SARS]

Officials of the South African Revenue Service (SARS) last week attended a WCO workshop on the Data Model facilitated by Ms. Sue Probert and Mr. Giandeo Mungroo. The event, held in Pretoria, South Africa was sponsored by the CCF of China as part of the WCO’s Capacity Building endeavours to promote the adoption and use of customs standards and best practice amongst it’s  member states.

The workshop was requested by SARS ahead of new technical and systems developments and requirements informed by SARS’ new Customs Control and Duty Acts. Moreover, there are also political ambition to institute a Border Management Agency for the Republic of South Africa. All of this requires that SARS Customs has a robust electronic tool to assist the organisation in mapping national data requirements according to specific needs.

Besides the use of a value added Data Model tool – GEFEG, it is imperative for the organisation to develop capacity in the knowledge and understanding of the WCO Data Model. SARS has successfully EDI (Electronic Data Interchange) for the last 15 years with various local supply chain trading partners and government agencies. Over the last few years SARS has been actively pursuing and promoting IT connectivity with regional trading partners with the express purpose to extend the benefits of eCommerce across borders.

GEFEG.FX software is used to model data formats and develop implementation guidelines for data interchange standards such as UN/EDIFACT. It is a software tool that brings together modelling, XML schema development, and editing of classic EDI standards under a unified user interface, and supports the development of multilingual implementation guidelines.

Version 3 of the WCO Data Model brought about a distinct shift towards an ‘all-of-government’ approach at international borders with the introduction of the GOVCBR (Government Cross Border Regulatory) message. The message and underlying data requirements facilitate the exchange of customs and other government regulatory information to support a Single Window environment.

WCO Data Model not only includes data sets for different customs procedures but also information needed by other Cross-border Regulatory Agencies for the cross-border release and clearance at the border. The WCO Data Model supports the implementation of a Single Window as it allows the reporting of information to all government agency through the unique way it organizes regulatory information. This instrument is already 10 years old and is seeing increased use by WCO members.

Amongst the benefits derived from the workshop, SARS staff acquired the following competencies that will not only aid their work but business user support as well –

  • Competence in operating the tool to build a source control collaborative environment to support national and regional harmonization;
  • Competence to build a base to conduct national/ regional data harmonization based on the WCO Data Model to support national Single Window implementation as well as Regional Integration;
  • Competence to build systems/ electronic interfaces between Customs and its partner government agencies including a Border Management Agency; and
  • Provide needed competence to develop, maintain and publish national and regional information packages based on the WCO Data Model.

AfricaFrom time to time it is nice to reflect on a good news story within the local customs and logistics industry. Freight & Trade Weekly’s (2015.11.06, page 4) article – “SA will be base for development of single customs platform” provides such a basis for reflection. The article reports on the recent merger of freight industry IT service providers Compu-Clearing and Core Freight and their plans to establish a robust and agile IT solution for trade on the African sub-continent.

In recent years local software development companies have facilitated most of the IT changes emerging from the Customs Modernisation Programme. Service Providers also known as computer bureaus have been in existence as far back as the early 1980’s when Customs introduced its first automated system ‘CAPE’. They have followed and influenced Customs developments that have resulted in the modern computerised and electronic communication platforms we have today. For those who do not know there are today at least 20 such service providers bringing a variety of software solutions to the market. Several of these provide a whole lot more than just customs software, offering solutions for warehousing, logistics and more. As the FTW article suggests, ongoing demands by trade customers and the ever-evolving technology space means that these software solutions will offer even greater customization, functionality, integration and ease of use for customers.

What is also clear is that these companies are no longer pure software development houses. While compliance with Customs law applies to specific parties required to registered and/or licensed for Customs purposes, the terrain on which the software company plays has become vital to enable these licensees or registrants the ‘ability to comply’ within the modern digital environment. This means that Service Providers need to have more than just IT skills, most importantly a better understanding of the laws affecting their customers – the importers, exporters, Customs brokers, freight forwarders, warehouse operators, etc.

Under the new Customs Control Act, for instance, the sheer level of compliance – subject to punitive measures in the fullness of time – will compel Service Providers to have a keen understanding of both the ‘letter of the law’ as well as the ability to translate this into user-friendly solutions that will provide comfort to their customers. Comfort to the extent that Customs registrants and licensees will have confidence that their preferred software solutions not only provide the tools for trading, but also the means for compliance of the law. Then, there is also the matter of scalability of these solutions to keep pace with ongoing local, regional and global supply chain demands.

The recent Customs Modernisation Programme realised significant technological advances with associated benefits for both SARS and trade alike. For the customs and shipping industry quantification of these benefits probably lies more in ‘improved convenience’ and ‘speed’ of the customer’s interaction with SARS than cost-savings itself. My next installment on this subject will consider the question of cross-border trade and how modern customs systems can influence and lead to increased regional trade.

ESA_Regional-WS_South-AfricaThe WCO Regional Workshop on Strategic Initiatives for Trade Facilitation and the Implementation of the WTO Trade Facilitation Agreement (TFA) – Mercator Programme – for the WCO East and Southern Africa (ESA) region was held from 15 to 17 September 2015 in Johannesburg, South Africa. It was hosted by the South African Revenue Service (SARS) representing the WCO Vice Chair of the ESA region, and financially supported by the United Kingdom Department for International Development (UK DFID) and the Ministry for Foreign Affairs of Finland. More than 100 participants from 21 ESA Members (Customs, Trade Ministries/equivalent Ministries), the WTO and other international organizations, development partners and the private sector participated in the event.

The Workshop was opened by the Commissioner of SARS, Mr. Thomas Moyane. He expressed his view that the WCO Mercator Programme created significant conditions for contributing to intra-African as well as international trade facilitation benefits. As Vice Chair of the ESA region, he hoped that the Workshop could recommend immediate actions for the region.

The Workshop raised a lot of interest and active discussions from a variety of well-prepared and informative presentations, including the role of the WCO in TFA implementation;  TFA regulations such as Article 23.2 on National Committees on Trade Facilitation (NCTF) and specific national and (sub-)regional examples of implementation approaches; experiences of Trade Ministries and several partner institutions active in the region; and discussions on further approaches to Capacity Building and TFA implementation, including in cooperation with Development Partners.

The region agreed on next steps forward, including on a regional focus on the establishment and maintenance of NCTFs (for instance further provision of replies to the respective WCO survey; identification of the situation within ESA Members); reporting the outcomes of the Workshop to the ESA Regional Steering Committee; encouragement of ESA Members who are not yet Contracting Parties to the Revised Kyoto Convention to accede to it as soon as possible (and/or to identify related Capacity Building needs) – as one concrete way to also support TFA implementation; and responsibility of the ROCB and the Vice Chair to continue collecting and publishing information on ongoing Capacity Building projects and work of partner organizations such as SADC, COMESA, SACU and UNCTAD especially in the TF(A) area in the region – while encouraging Members and partner organizations to share such information.

The Workshop was successfully concluded with positive feedback from Members, partner organizations and development partners. A summary document on the discussions held during the Workshop is currently under finalization by the Vice Chair’s office and the ROCB and will be circulated to all participants of the Workshop in due course. Source: WCO

Johannesburg – They [smugglers] had cash stashed in 11 pieces of luggage including four backpacks – R78 million destined for the United Arab Emirates.

But eagle-eyed customs officials at OR Tambo International Airport were on to them and confiscated the bags with R23m and $3.775m in notes.

On the same day, R50m worth of cocaine stashed in hair product bottles was seized at the same airport, in one of the biggest crime-busting days at OR Tambo.

On Monday, SA Revenue Service (Sars) officials said five people had been arrested after being caught with the undeclared cash as they were about to leave South Africa.

“Risk profiling earlier by Sars custom officials identified the passengers, and led to their apprehension as they boarded the aircraft at 9.45pm.

“Upon noticing the officials, the passengers retreated and headed back to the entrance of the boarding gate. At this point, officials closed the boarding gate door and the passengers were compelled to wait for the Sars officials,” Sars said.

When asked whether they had any currency, one of the passengers apparently said he had R100 000 and that the other members of the group had currency with them.

“The five individuals were escorted back to immigration at international arrivals, booked back into South Africa and escorted to customs.”

Sars spokesperson Luther Lebelo said the bags with the cash had been handed over to the SA Reserve Bank.

“The matter has been handed over to the SA Reserve Bank for further investigations. Once the bank is satisfied that there is an element of criminality, they can take the matter to the police,” he said.

The arrests on Friday – details of which were released on Tuesday – followed a R50m drug bust at the airport. National police spokesman Brigadier Vishnu Naidoo said the consignment of cocaine, weighing about 143kg, was one of the largest drug recoveries at a South African port of entry.

“The drugs were hidden in 147 hair products bottles and were found during a routine inspection at the cargo section. The consignment arrived from Brazil, and information displayed on the cargo indicated it was in transit to Cotonou, Benin, in West Africa,” he said.

Other drug busts at OR Tambo over the past month include:

  • The confiscation of 60 000 Viagra tablets with a street value of R6m at the airport’s mailing centre.
  • Cocaine weighing 3.46kg and valued at R993 020, found in the backpack of a passenger in transit from Sao Paulo and headed for Lagos, Nigeria.
  • Sixty-five packages of crystal meth valued at R4.2m, confiscated while being loaded into a bakkie in the cargo area.
  • Heroin valued at R201 810 destined for Spain and Ireland, discovered along with 2kg of cannabis at the airport’s mailing centre.

Source: The Star

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.

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