A Tutorial and Self Assessment Guide on the application and use of Customs Procedures Codes, for external stakeholders involved in the clearance of goods in South Africa, will shortly be uploaded to this site.
Watch this space!
A Tutorial and Self Assessment Guide on the application and use of Customs Procedures Codes, for external stakeholders involved in the clearance of goods in South Africa, will shortly be uploaded to this site.
Watch this space!
Reuters reports that Britain has agreed a deal with six southern African countries including South Africa, the continent’s most developed economy, that will ensure continuity of trade conditions after Brexit, the British High Commission in South Africa said on Wednesday.
Political turmoil in the United Kingdom has generated uncertainty over how, when and even if the country will withdraw from the European Union. Its current exit date is set for Oct. 31.
But while the situation has left the future trade relationship between Britain and the EU in doubt, London has been working to minimise the impact of Brexit on other trading partners.
Britain initialled an Economic Partnership Agreement with the Southern African Customs Union (SACU) – comprising South Africa, Botswana, Lesotho, Namibia, and eSwatini (formerly known as Swaziland) – and Mozambique on Tuesday.
“This trade agreement, once it is signed and takes effect, will allow businesses to keep trading after Brexit without any additional barriers,” Britain’s International Trade Secretary Liz Truss said in a statement.
The agreement is still subject to final checks. But once signed formally, it will mirror the trade conditions the southern African nations currently enjoy with the EU.
Trade between Britain and the six countries was worth 9.7 billion pounds ($12 billion) last year, with machinery and motor vehicles topping British exports to the region. The UK meanwhile imported some 547 million pounds worth of edible fruit and nuts.
Britain has already signed trade continuity agreements with countries accounting for 89 billion pounds of its external trade.
Prime Minister Boris Johnson says Britain must leave the EU on Oct. 31, but parliament has passed a law compelling him to ask Brussels to delay Brexit until 2020 unless he can strike a divorce deal. Johnson says he will not request an extension.
Source: Reporting by Joe Bavier, edited by Gareth Jones, Reuters Business News, 2019.09.11.
The following article featured in BusinessLive (eEdition) on 25 July 2019. It is authored by John Grobler. The article was compiled with the financial support of Journalismfund.eu’s Money Trail grant programme.
Chinese ‘lying money’, or fei qian, is an ancient form of value exchange. But its modern incarnation is blamed for stripping Africa of its resources.
The secret of Chinese commercial success in Africa, as suggested by an 18-month investigation into the drugs-for-abalone and rosewood trade and a major Namibian tax fraud case, is an ancient system that not only allows African countries to be robbed of taxes, but also plays a part in financing the global $270bn-a-year wildlife contraband trade.
Fei qian, or “flying money”, dates back about 1,200 years, to the Tang Dynasty in China. In its simplest modern incarnation, it is a low-cost and trusted method of remitting money, much like the Islamic hawala system. For example, a person who wants to send funds to a recipient in Africa will pay a fei qian broker in China. For a commission, the broker will arrange that a counterpart in Africa pays the recipient, again for a commission. The two fei qian brokers later settle their account through, for example, the transfer of commodities of equivalent value — but also sometimes through less salubrious methods such as transfer mispricing or invoice manipulation.
In practice, the system relies on the systematic underinvoicing of Chinese imports into Africa and a seamless chain of payments system in which accounts are settled through the transfer of high-end — and often illicit — goods such as abalone, rosewood, rhino horn and ivory. In brief: goods are undervalued on their import documentation; they are then sold for cash; and that undeclared cash is subsequently channelled into high-end commodities that are remitted to China to balance the fei qian books.
“The trick behind fei qian is that the money never actually leaves China,” says a former Singaporean finance expert, speaking on condition of anonymity. “It’s just the commodities that get moved around” as part of a longer payment chain among the Chinese diaspora.
Unlike barter trade, fei qian is not a straight swap; it is an exchange in stored value that leaves no paper trail, except in the books of the fei qian operators themselves. What makes the system even more impenetrable, the investigation has found, is that these operators mostly seem to be older, well-established women working in a closed network of mutually trusted contacts.
This nexus, and lack of paper trail, means fei qian is largely invisible. But it occasionally appears as a gaping hole in a country’s balance of payments account with China – as Namibia has discovered in an ongoing import-tax fraud investigation.
Jack Huang, a business associate of President Hage Geingob, and Laurentius Julius, a former Walvis Bay customs official and now a customs clearing agent, are among eight suspects facing 3,215 charges of fraud and money laundering in the Windhoek high court. Continue reading →
Almost the size of Pretoria, this 62,000 hectare private reserve on the border with Kruger National Park has upped its game against poaching.
What was once an operation with a handful anti-poachers patrolling an electric fence and hiding in watch towers has now been turned into a 21st century fortress in the bush.
This is all thanks to a pilot project called “Connected Conservation“, a collaboration between 48 private lodge owners, the tech company Cisco, and Dimension Data, the data solutions company.
While there had been great initiatives to protect the rhino over the years, these were reactive and the number of these animals being killed were increasing at an alarming rate. By combining tech thermal imaging cameras and thumb-print scanners with things like sniffer dogs, the reserve tracks the movement of people before they get close to endangered animals.
Since it began in 2015, the upgrades have brought about a 96% reduction in rhino poaching incursions, as well as reducing illegal incursions into the reserve by 68%. Key to the success has been reducing ranger response time from 30 minutes to 7 minutes.
Source: Business Insider, original article and photo by Caboz, J, 9 May 2018.
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
Oxpeckers’ environmental investigative journalist, Crystal Chow, digs up the dirt on the illicit abalone trade.
Abalone tops the list of the most exquisite seafood in Chinese cuisine, and fresh South African abalone are always the first choice for feasts in Cantonese restaurants, where one fresh abalone alone can cost up to HK$2,000 (about R3,000). In recent years, the overfishing and smuggling of wild abalone has pushed this endemic species of the South African coast towards extinction.
“The South African wild abalone are heavier, and they are better than the farmed Japanese and Australian ones in terms of fresh flavour and texture,” said Chit-yu Lau, general manager of Ah Yat Abalones restaurant in Hong Kong. “Our fresh South African abalone are all imported through legitimate channels. The smuggled ones are usually dried, and are rare in Hong Kong.”
Nonetheless, the illicit abalone trade has been gathering significant attention from conservationists combating wildlife trafficking, who believe the profitable contraband market of abalone is linked to the black market of ivory and rhino horns – both of which are driven by high demand from the Chinese market. To read the full story Click here!
Source: oxpeckers.org, author – Chow. C, June 9, 2017.
The report claimed there was widespread misinvoicing in primary commodities in developing countries, including South Africa.
The Chamber of Mines on Tuesday called on the United Nations Conference on Trade and Development (UNCTAD) to withdraw its report on trade misinvoicing and acknowledge its shortcomings, saying that the prestigious agency had failed to collect its data accurately.
This comes after the Chamber released the third and final report in a series commissioned to examine the July 2016 UNCTAD report that claimed there was widespread misinvoicing in primary commodities in developing countries, including South Africa.
Also read Maya Forestater’s blog post Misinvoicing or misunderstanding? for an incisive explanation regarding the UN’s claims in its recent report Trade Misinvoicing in Primary Commodities in Developing Countries.
The UNCTAD report titled “Trade Misinvoicing in Primary Commodities in Developing Countries: The cases of Chile, Cote d’Ivoire, Nigeria, South Africa and Zambia”, claimed to have found widespread under-invoicing which, it alleged, was designed by commodities producers to evade tax and other entitlements due to the fiscal authorities.
UNCTAD said some commodity dependent developing countries were losing as much as 67 percent of their exports worth billions of dollars to trade misinvoicing.
For South Africa, the report calculated cumulative under-invoicing over the period 2000-2014 to have amounted to U.S.$102.8 billion; which was U.S.$620 million for iron ore, U.S.$24 billion for silver and platinum, and U.S.$78.2 billion for gold.
UNCTAD revised the report in December, though its fundamentals remained unchanged.
The Chamber of Mines also commissioned Eunomix to compile its own reports which were published in December and February respectively, focusing on UNCTAD’s gold scenarios.
The third report, which was published on Tuesday, deals with the other commodities.
The Chamber said in terms of gold, the UNCTAD study methodology compared reported exports by product and country of destination with the reported imports of the products by those same countries, and did not use other widely available data, including that of Statistics SA and the Reserve Bank.
The Chamber also dismissed all other UNCTAD findings in terms of silver and platinum, and iron ore.
The Chamber said all the factors that UNCTAD did not consider reinforced the point made in the earlier Eunomix reports regarding the lack of rigour and unreliable methodologies used in UNCTAD’s report.
“This is extremely unfortunate given the levels of credence that tend to be given to reports of this UN agency. Accusations of extensive misinvoicing and other illicit financial flows are feeding a growing lack of trust between key stakeholders in the mining industry,” the Chamber said.
“The Chamber of Mines again calls on UNCTAD to withdraw this report and acknowledge its shortcomings.” Source: The Citizen, Business News, 22 Aug, 2017. [Picture: Chamber of Mines]
Police are on high alert looking for a syndicate that uses donkeys to smuggle luxury cars across the Limpopo River into the Zimbabwe.
Thieves tied ropes to the cars which were hitched on to the donkeys to pull the cars across the river.
Some cars are driven through the drier parts of the river. On Tuesday, a Mercedes Benz C220 was intercepted before it disappeared into Zimbabwe.
“Our members were just in time to pounce on them after the donkeys were apparently no longer able to pull it through the sand,” Brigadier Motlafela Mojapelo for the SA Police Service said.
The suspects fled into the bushes towards Zimbabwe side. Most of the cars are being smuggled across the river through the border between South Africa and Zimbabwe, south of Beitbridge border post.
In December, police recovered a Hilux bakkie when thieves attempted to smuggle it through the river. The bakkie was stolen in Durban.
It was semi-submerged in the water when Limpopo police commissioner Lieutenant-General Nneke Ledwaba spotted it from a helicopter while he was leading a high-density operation in Musina and Beitbridge.
The vehicle and donkeys were abandoned in the middle of the river and the suspect fled into Zimbabwe. It is not clear why the thieves do not simply driver the car into Zimbabwe – one reason might be that most modern cars are fitted with a tracking device which uses satellite tracking to locate a vehicle, if stolen. The tracker is only active when the car is running.
Mojapelo said 13 vehicles have been recovered since January this year. Thieves target luxury bakkies, SUV’s, specifically Toyota and Isuzu. Gauteng and KwaZulu-Natal are the two provinces that are mostly affected.
Last week, four vehicles were recovered. A Range Rover worth R900 000 was recovered after police intercepted it at the Beitbridge border post. The vehicle was en route to Malawi. The man was arrested and was found in possession of cash with an estimated amount of R30 000.
Mojapelo said the car had Limpopo registration numbers, but it was still unclear where it was stolen. Source: Pictures – SAPS and article – Iavan Pijoos, News24, 2 August 2017.
Cape Town businessman Arnold Bengis drained South Africa’s seas – and now it is payback time.
A US court has ordered the 81-year-old to pay South Africa $37-million (about R483-million) for catching thousands of tons of rock lobster over 14 years.
The restitution amount replaces a $21-million payment Bengis agreed to make to South Africa in 2004. Because he paid only $1.25-million and placed the rest “out of reach of the US”, Manhattan District Court Judge Lewis Kaplan sentenced him on Wednesday to more than four years’ imprisonment.
Kaplan ordered an immediate arrest warrant for Bengis, now living in Israel. State attorney Kiersten Fletcher said US authorities would try to extradite him.
Said the judge: “There is value to Mr Bengis understanding that.there may be a knock at the door and a pair of handcuffs in his future.”
The Department of Agriculture, Forestry and Fisheries wanted $100-million in restitution but it welcomed Kaplan’s judgment.
“We are fairly satisfied with the $37-million, but we hope [Bengis] won’t appeal it, so the payment will be effected as soon as possible,” said the department’s Thembalethu Vico.
Although Bengis’s activities stopped 17 years ago, damage to the coastal ecosystem was still depriving fishing communities of access to resources, he said.
Former department head of fisheries Horst Kleinschmidt, who testified in the District Court in 2004 about Bengis’s fishing activities, quoted research that suggested free-falling rock lobster stocks “immediately stabilised” after his operation was stopped.
He said yesterday that when officials discovered the extent of Bengis’s plunder “it made nonsense of any scientific inquiry” into environmental factors behind declining fish stocks.
“He hired lots of little fishermen with boats to supply him with contraband fish stocks. The decline is evident in the total allowable catch figures, which the scientists set lower and lower. Once he was caught, we realised he was a major source of that,” he said.
His fleet of trawlers overfished more than 2200t of West Coast rock lobster between 1987 and 2000. The $37-million was the proceeds of just one year, plus interest, said an Ocean and Land Resources Assessment Consultants report.South Africa will be the first foreign government to be compensated under a 117-year-old US law, the Lacey Act, which regulates imports of protected species.
Department lawyer Barnabas Xulu said it took his team six months to prepare for the case and hailed the ruling as “ground-breaking”, but conceded there could still be challenges ahead.
During arguments in court, Kaplan told Bengis’s attorney, Eric Creizman, his client “rearranged” his assets, amounting to $25-million, into a Channel Islands fund so the US government could not reach it. Source: Times Live (2017, July 21)
Vietnamese authorities have seized nearly three tonnes of ivory hidden among boxes of fruit, officials said on Sunday, the latest haul to spotlight the country’s key role in the global wildlife smuggling trade.
Police in the central province of Thanh Hoa found 2.7 tonnes of tusks inside cartons on the back of a truck that was on its way to Hanoi, according to their website.
“This is the largest seizure of smuggled ivory ever in Thanh Hoa province,” the report said.State media said the elephant tusks originated from South Africa.
The truck driver claimed he was unaware of what he was transporting, according to a report in state-controlled Tuoi Tre newspaper.
The global trade in elephant ivory, with rare exceptions, has been outlawed since 1989 after populations of the African giants dropped from millions in the mid-20th century to around 600,000 by the end of the 1980s.
There are now believed to be some 415,000, with 30,000 illegally killed each year. Prices for a kilogramme of ivory can reach as high as US$1,100 (Dh4,040).
Vietnam outlawed the ivory trade in 1992 but the country remains a top market for ivory products prized locally for decorative purposes, or in traditional medicine despite having no proven medicinal qualities.
Weak law enforcement in the communist country has allowed a black market to flourish, and Vietnam is also a busy thoroughfare for tusks trafficked from Africa destined for other parts of Asia, mainly China.
Last October, Vietnam customs authorities discovered about 3.5 tonnes of elephant tusks at Cat Lai port in Ho Chi Minh city, all in crates of wood, including a hefty two-tonne haul packed into a single shipment.
In 2015, 2.2 tonnes of tusks, originating from Mozambique, were discovered and seized northern Hai Phong port.
And last week authorities in Hong Kong seized 7.2 tonnes of ivory, the largest haul in the city for three decades.
While low level couriers are sometimes arrested across Asia very few wildlife trafficking kingpins are brought to justice. Source: The National
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.
The Zimbabwe Herald suggests that Zimbabwe could be losing millions of dollars in unpaid taxes due to rampant smuggling of cigarettes into South Africa, investigations by this paper have revealed.Between 2014 and 2015, local customs officials seized nearly 2 500 cartons worth around $500 000 in taxes, according to the Zimbabwe Revenue Authority.
Figures from the South African side are staggering, showing a wide discrepancy in the value of confiscated contraband between the two neighbouring southern African countries.
The South African Revenue Service told The Herald Business that it had seized R87 million (US$6,2 million) worth of Zimbabwean cigarettes since 2014, or 95 million sticks.
This will likely be worth millions of dollars in evaded tax in Zimbabwe, but the ZIMRA director for legal and corporate services Ms Florence Jambwa said the figures were difficult to determine because smuggling was an underground trade.
South Africa, however, says it loses an estimated R40 million (US$2,9 million) to cigarette smuggling each year, on the average, more than half of it Zimbabwe-related.
And this is just from what is on public record. Customs officials from both countries admit the figures could be higher. Both are also greatly incapacitated to detect illegal trades quickly.
“It is difficult to measure the levels of smuggling as this is an underground activity mostly done through undesignated entry points,” said ZIMRA’s Jambwa, by email.
“The value of the potential loss cannot be easily ascertained,” she said, failing to provide an estimate.
Tax analyst Mr Tendai Mavhima said the figures from ZIMRA represent only a small portion of the actual amount of money Zimbabwe is losing to trafficking of cigarettes.
“The disparity in figures (ZIMRA and SARS figures) indicate there are problems in controls on either side, which may result in the revenue and tax losses from both countries being understated,” he said by telephone.
Zimbabwe is the world’s fifth largest producer of tobacco after China, the USA, Brazil and India.
The country produces flue-cured Virginia tobacco, considered to be of extremely high quality and flavour, according to a report on Zimbabwean tobacco companies by local stockbroking firm, IH Securities.
As such, Zimbabwean tobacco ends up in many top cigarette brands across the world, it says.
It is especially popular in China, the largest importer of Zimbabwean tobacco, and in South Africa, the country’s largest trading partner.
In South Africa, Zimbabwean cigarettes are on demand for two key reasons: high quality and affordability.
It costs just $1,50 for 20 sticks in Zimbabwe compared to $3,20 for the same number of sticks in South Africa, according to estimates by regional economic bloc, SADC.
The South African Revenue Service (SARS) said: “Cigarette clientele opt for cheaper cigarettes. The high supply and demand for illicit cigarettes creates the market for it.”
South Africa imposes very high taxes on cigarette imports – about 80 percent meaning many Zimbabwean dealers choose to export illegally.
SADC says illegal dealers supply nearly two thirds of the number of cigarettes smoked by South Africans.
In 2011 alone, at least 4 billion cigarettes smuggled into South Africa originated from Zimbabwe, it says.
The undeclared cigarettes are usually concealed in trucks, buses and other vehicles destined for South Africa by organised cartels, said Florence Jambwa of ZIMRA.
Sometimes the cargo is shipped at undesignated points on the porous border between the two countries. Source: Zimbabwe Herald
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
News 24 reports that the Competition Commission on Wednesday conducted a search and seizure operation at the premises of six cargo shipping companies operating in the Western Cape and KwaZulu Natal (KZN) on suspicion of collusion and rate fixing, the body said in a statement.
“The Commission has reasonable grounds to suspect that Hamburg Sud South Africa, Maersk South Africa, Safmarine, Mediterranean Shipping Company, Pacific International Line South Africa and CMA CGM Shipping Agencies South Africa have engaged in collusive practices,” the Commission said.
The companies’ practices aimed to among other things fix the incremental rates for the shipment of cargo from Asia to South Africa, which was in contravention of the Competition Act.
According to the Commission, the search and seizure operation is conducted as part of an ongoing investigation which was initiated by the Commission based on information from a member of the public.
The companies under investigation transport cargo for import and export purposes across the globe, including South Africa. They use large metal containers as packaging crates and in-transit warehouses to store and transport general cargo such as frozen foods, garments and footwear.
The customers of these companies are mainly clearing and freight forward agents.
“South Africa is a strategic hub for the trade of goods in and out of the Southern African region. Any cartel by shipping liners in this region results in inflated prices for cargo transportation,” said Tembinkosi Bonakele, commissioner of the Competition Commission.
“Cartels of this nature increase the costs of trading in the region and render the region uncompetitive in the world markets. Such cartels have the effect of significantly derailing the economic growth of the region.”
Reuters reported that Maersk and MSC confirmed the raids and said they were cooperating with authorities. The other companies did not respond to Reuters’ requests for immediate comment.
“The fact that the SACC carries out such inspections does not mean that a company has engaged in anti-competitive behaviour,” Maersk said.
EU antitrust regulators in July accepted an offer from Maersk and 13 competitors to change their pricing practices in order to stave off possible fines. Source: News24
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