Visit the SARS Customs & Excise Webpage for an update on Customs import and export requirements under COVID-19.
Source: SARS, 19 April 2020
Visit the SARS Customs & Excise Webpage for an update on Customs import and export requirements under COVID-19.
Source: SARS, 19 April 2020
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:
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]
The stakeholders – from various business associations and Customs umbrella bodies – were very positive after the engagement and were open to form part of an AEO Working Group going forward. The idea is to have representatives from the public and private sectors who would discuss and examine the various issues related to the design and roll-out of the future AEO programme.
An engagement with various key Customs stakeholders was held on 25 September to share Customs’ plans to introduce an Authorised Economic Operator (AEO) programme in South Africa.
The AEO programme follows in the footsteps of Customs’ Preferred Trader programme which offers various benefits to compliant Customs clients. The SARS’ Preferred Trader programme, which was officially launched in May 2017, currently has 105 accredited clients who have been awarded Preferred Trader status.
The AEO programme – based on the World Customs Organisation’s SAFE Framework of Standards – requires an extra level of safety and security compliance from traders and offers additional benefits, compared to the Preferred Trader programme. It is also open to the entire Customs value-chain, as opposed to only local importers and exporters.
SARS Customs intends to pilot the AEO programme in South Africa before the end of 2019. Clients in the motor vehicle manufacturing industry – representing big businesses have been earmarked to participate in the pilot, as well as SMMEs in the Clothing and Textile Industry. SARS is also in the planning stage of engagements with its major trading partners within BRICS and the EU for the purpose of establishing Mutual Recognition Agreements (MRAs) for its AEO Programme and intends to commence engagements within Africa as well.
At the recent stakeholder engagement session, Customs and Excise Group Executive, Rae Vivier, indicated that the AEO programme was being designed for Customs to partner with the private and public sector to improve voluntary compliance and trade facilitation in the country. She mentioned a few key points that SARS was looking at when it came to AEO, including Mutual Recognition Agreements with SACU/SADC trading partners, close cooperation with Other Government Agencies (OGAs) in South Africa to ensure the programme is recognised by all government departments, exploring modern technology such as block chain and augmenting AEO benefits in order to design a programme that would be beneficial for trade.
She also mentioned that C&E Trade Services would soon be sending a survey to Customs traders to find out what clients’ requirements are, from a trade facilitation point of view. “We need to collaborate with each other to ensure we design something for the future,” she said.
Source: South African Revenue Service
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.
Dubai Customs has introduced a sophisticated scanner that can detect 25 controlled and banned items in 25 seconds, in a bid to clamp down on smuggling. “The Ionscan 500DT can also detect as little drugs or explosives as one nanogram — which is one billionth of a gram” — according to Mohammad Juma Nasser Buossaiba, Director-General of the UAE Federal Customs Authority.
The highly sensitive scanner, equipped with HD touchscreen, is one of many other advanced equipment the authority has provided the Dubai Customs with in order to tightly secure all the crossing borders of the emirate. The new devices are in line with a memorandum of understanding signed recently between the UAE Federal Customs Authority and Dubai Customs. The Federal Customs Authority will also provide training to Dubai Customs staff on how to use the new devices, apart from the regular maintenance. Source: CustomsToday.pk and WCO IRIS
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.
Predictably, the first edition of WCO News 2017 provides a spectrum of insight on this year’s Customs theme – “Data Analysis”. Here’s a preview:
Nice to also see a contribution from one of SARS’ own titled “Customs and the environment: bringing about a better future for all” – By Roux Raath, Environmental Programme Manager, WCO. You can access and download the magazine by clicking here!
The Australian Border Force reports that four men have been arrested in Sydney and Melbourne for allegedly importing approximately 254kg of cocaine and 104kg of methyl-amphetamine into Australia.
Combined, the drugs had an estimated combined value in excess of $186 million.
An Australian Federal Police (AFP) investigation commenced in December 2016 after the Australian Border Force (ABF) targeted a cargo consignment containing mining equipment which had arrived in Melbourne from South Africa.
ABF officers at the Melbourne Container Examination Facility examined the consignment which included industrial mining equipment. X-ray images revealed anomalies within an iron ore extractor.
It will be alleged that a physical examination of the iron ore extractor by ABF officers led to the discovery of 358 1kg block packages of cocaine and methyl-amphetamine, concealed within the equipment among a load of activated charcoal.
On 19 December 2016, the AFP commenced a controlled delivery where the consignment was delivered from Melbourne to a storage facility in Sydney.
Three men were arrested after accessing the consignment in Sydney on Sunday, 5 February 2017.
During additional search warrants on Monday, 6 February, 2017 on the Central Coast of NSW, AFP officers also seized a large sum of cash in a compressed block of AUD$100 notes. The notes are currently the subject of further forensic analysis.
A fourth man was arrested in Melbourne on Wednesday, 8 February 2017.
A 47-year-old (Watanobbi) man and 75-year-old male South African citizen were charged with:
A 39-year-old (Doonside) man was charged with:
A 38-year-old (Roxburgh Park) man was charged with:
The maximum penalty for these offences is life imprisonment.
AFP Commander John Beveridge said the AFP and its partners are committed to protecting the Australian community from the scourge of illicit drugs through targeted detection and disruption.
“The AFP will continue to work with its partner law enforcement agencies to disrupt all forms of drug importation attempts and target those who believe they are above the law,” Commander Beveridge said.
“These arrests send a strong message to criminals who choose to import harmful drugs into our community for their own profits – you will be caught, no matter how creative you believe your concealment method may be.”
ABF Regional Commander Victoria and Tasmania, James Watson, praised ABF officers at the Melbourne Container Examination Facility for the outstanding detection.
“Our officers have the expertise and technology to detect even the most sophisticated concealment. In this instance, our upgraded container x-ray technology has been able to penetrate through several layers of steel, machinery and coal/stones to identify these concealed packages.”
“The success of this operation once again highlights how effectively Australia’s border and law enforcement agencies are working together to stop illicit drugs from entering our community, and how instrumental the ABF is in keeping these dangerous drugs off our streets.”
Three men appeared before Sydney Central Local Court on Monday, 6 February 2017 where they were remanded in custody.
A fourth man appeared before Melbourne Magistrates Court on Wednesday, 8 February 2017 where he was remanded in custody to re-appear on 10 February 2017 for a filing hearing. Source: Border.gov.au
Audit firm KPMG reports that the General Administration of Customs (GAC) will reform the existing customs clearance procedure for imported goods, according to a GAC Circular on Carrying out Pilot Reform of Tax Collection and Administration Procedure issued on 29 October 2016. Under the current procedure, review of the customs declaration is required before goods are released. This reform is designed to further guide import and export enterprises to be self-disciplined and law-abiding, with the principle stated as “honesty and observance of the law brings convenience; dishonesty and irregularity leads to punishment” to improve customs clearance efficiency.
Content of pilot reform includes the following elements:
Independent customs declaration and tax payment – when importing goods, enterprises should submit customs declarations truthfully and accurately in advance, calculate tax payable and surcharges and handle payment-related procedures on their own.
Review of elements relating to tax calculation after release of goods – generally, goods will be released after enterprises complete the customs declarations and tax payment procedures on their own. Afterwards, the customs authority will spot-check and review the valuation, classification and origin of the imported goods of the enterprises. In special cases, the authority will inspect the customs declaration in advance.
Proactive disclosure scheme After release of goods – enterprises are encouraged to report to the authorities in writing if they are aware of any of their own violations against customs regulations. Enterprises which the customs authority believes to be voluntary disclosers of their own irregularities will be less punished or free from punishment. For enterprises which have disclosed their irregularities and paid back taxes proactively, late fees can be reduced or eliminated.
For more details access the KPMG report here! Source: KPMG
The “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
At the invitation of the South African Minister of Environmental Affairs, Secretary General Kunio Mikuriya addressed a “Ministerial Lekgotla” held in Johannesburg, South Africa, on 23 September 2016 as an introduction to the CITES CoP 17 World Wildlife Conference.
During the high-level panel session, Secretary General Mikuriya focused on the role of Customs in facilitating legal trade and intercepting illegal trade in wildlife and on its link to CITES and Sustainable Development Goals.
He highlighted the WCO Declaration on the Illegal Wildlife Trade, which had been adopted in 2014 and aimed at drawing the attention of policy makers to environmental crime and at raising the priority of Customs operations in this area.
He also referred to the INAMA project (started in 2014) for technical and capacity building assistance for Customs on risk management, collaboration with other law enforcement agencies and institution building to enhance integrity. Cooperation with the transport industry was also part of the WCO efforts to improve compliance, as exemplified in the Royal Foundation Task Force Declaration on Transport, adopted earlier this year.
The presence in Johannesburg of high-level delegations also provided an opportunity for the Executive Heads of the International Consortium on Combating Wildlife Crime (ICCWC) to meet in order to further enhance the collaborative work with the CITES Secretariat, INTERPOL, the UNODC, the World Bank and the WCO.
Fianlly, Secretary General Mikuriya also had a series of bilateral meetings with key partners, including with Executive Director Erik Solheim of the United Nations Environment Programme. Source: WCO
According 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.
Also known as “I am looking in your suitcase”, the rather dry “Customs” emoji will be familiar to overseas travellers everywhere. It’s especially handy if you find yourself in need of an emergency customs sign — simply print one of these out at font size 84,000. Alternatively, this emoji can also be used to warn traffic wardens of the dangers of reaching into giant oysters, which is definitely a thing, I imagine. The related “Cavity Search” emoji is due for release in 2017, possibly.
The WCO has just published a newly developed Study Report on Customs Brokers. The Study Report provides a general background and overview of Customs Brokers’ role in the international supply chain together with some suggested policy and organisational considerations on Customs Brokers regime and a model checklist for licensing/regulating brokers.
Additionally, the Report provides a range of cooperation opportunities between Customs and Brokers including the joint capacity building.
Customs administrations, Brokers, and Brokers Associations are encouraged to make maximum use of the Study Report as a reference/guideline, where needed, in establishing and/or maintaining/adjusting Brokers regime, keeping in view their national circumstances and specificities.
The Study Report on Customs Brokers is available via the following link: Click here
An important new instrument was finalised at the 42nd Session of the Technical Committee on Customs Valuation which took place in Brussels from 18 to 22 April 2016 under the Chairmanship of Ms. Yuliya Gulis of the United States.
The instrument contains a case study illustrating a scenario where Customs took into account transfer pricing information in the course of verifying the Customs value.
The WTO Valuation Agreement sets out the methodology for establishing the Customs value, used as the basis for calculating Customs duties. The Agreement foresees that Customs may examine transactions between related parties where they have doubts that the price has been influenced by the relationship.
The Organisation for Economic Cooperation and Development (OECD) has developed Guidelines for establishing the transfer price, that is the price for goods and services sold between controlled or related legal entities, in order to determine business profit taxes where businesses are related.
Over recent years, the similar objectives but different methodologies of transfer pricing and Customs valuation have been noted, and it has been recognised that business documentation developed for transfer pricing purposes may contain useful information for Customs. An earlier instrument of the Technical Committee, Commentary 23.1, confirmed this principle.
The new case study provides an example of Customs making use of transfer pricing information based on the transactional net margin method. On the basis of this information, Customs accepted that the sale price in question had not been influenced by the relationship.
The OECD has provided valuable input to the Technical Committee discussions in the development of the new instrument which provides helpful guidance to both Customs administrations and the business community.
Both the WCO and the OECD advocate closer cooperation between Customs and tax administrations in order to strengthen governments’ ability to identify the correct tax and duties legally due and enhance trade facilitation for the compliant business sector.
WCO Secretary General, Mr. Kunio Mikuriya, has congratulated the Technical Committee on the work achieved : “This new instrument is an important step for the WCO and demonstrates its relevance by providing guidance on the management of Customs valuation in an increasingly complex trade landscape, whilst maintaining consistency and strengthening cooperation with Tax authorities.”
The case study (Case Study 14.1) will be made available in the WCO Valuation Compendium, subject to approval by the WCO Council in July 2016.
Further information on this topic can be found in the WCO Guide to Customs Valuation and Transfer Pricing, available via this link