South African Customs Control Bill Parliamentary...

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South African Customs Control Bill Parliamentary

Representation to Scof by Global Maritime Legal

Solutions (Pty) Ltd

Presented by: Mark Goodger, Managing Director of GMLS

28 January 2014


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Extract from a wise African Proverb

“If you want to go quickly,

go alone…

If you want to go far,

GO TOGETHER”


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NO YES

The Question ?


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GMLS RESEARCH REPORT ADDRESSED THE

FOLLOWING


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What are the Concerns?

Trade Facilitation? – WCO Revised Kyoto

Convention & WCO SAFE Framework

SARS Consultation

GMLS Research - UCT

ICC Incoterms ® 2010

“Ports” versus “Terminals”


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SARS LEGAL DEPARTMENT REPLY to GMLS Study–

From Professor Eiselen’s - UNISA Opinion

He disagrees with the JCCI’s views that this policy change will have the

effect that traders will change the terms of their contracts of sale

He also disagrees that the policy change will result in a change in

contract of carriage

He disagrees as to GMLS interpretation of ICC Incoterms ® 2010 Rules

He disagrees that carriers will, as a result of the policy change, no longer

issue a through bill of lading that will allow the goods to move from

Durban to e.g. City Deep

He furthermore strongly criticises the GMLS report that BUSA

commissioned as it bases “its conclusions on generalities and

misleading statements”


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A KEY

PROGRAMME

FOR

THE WCO !!

THE WCO REVISED KYOTO CONVENTION


Important Extract

“³ NOW THEREFORE the Government of the Republic of South Africa,

having considered the Protocol, hereby accedes to the Protocol of

Amendment to the International Convention [on the Simplification and

Harmonization of Customs Procedures] and undertakes faithfully to observe

all its provisions and to carry out the stipulations therein contained and also

declares the acceptance of the General Annex appended to the said

Protocol.²”

RSA acceded to the Protocol of Amendment and the General Annex,

therefore we did not accede to the specific annexes and are not bound to

them.


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Revised Kyoto Convention - SACU

Botswana

Namibia

Lesotho

Borders

Zimbabwe

11 out of 22 in WCO Region


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RKC – Ratification/Amendments

Established on 18/5/1973

26/6/1999 Amended

18/5/2004 - South Africa

3/2/2006 – Entered into force 78 contracting parties

WCO SAFE Framework

Letter of acceptance Pravin Gordhan was

the WCO Chairperson.


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RKC PREAMBLE

Endeavouring to eliminate divergence of Customs Procedures

that hamper International Trade and International Exchanges

Simplify and Harmonise Customs Procedures

Facilitation without compromising Customs control standards

Modernisation Efficiency, Predictability Principles

General Annex

Specific Annex

NB!! It sits with and is registered with the

Secretariat of the United Nations


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Manifest

According to SARS, the Manifest does not contain

information to determine Risk – USA & EU? -

Legislation

Risk Information in a Manifest is based on “hear-

say”? – Not True

Goods do not move across the country – they move

in secure pipelines.

If you only assess risk when the goods arrive, you

have failed – Chapters 3 and 6 of General Annex and

Specific Annex A of the Revised Kyoto Convention


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Customs-to-Customs Cooperation

PILLAR 1

Authorised Supply Chains


International Agreements in New Bills

‘‘international agreement’’ means—

(a) an international trade agreement; or

(b) a convention, treaty or other international agreement irrespective of its

designation, including—

(i) any protocol to such agreement;

(ii) any annex or appendix or other addition to the agreement or any such

protocol;

(iii) any regulation or other measure issued under the agreement or any such

protocol;

(iv) any amendment to the agreement or any such protocol, to any such

annex, appendix or other addition, or to any such regulation or other

measure; and

(v) any other instrument that forms part of the agreement or any such

protocol;


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Not just about having good

processes; it is “a way of

thinking” towards pro-active

rather than reactive management

of the Border

“Martyn Dunne” Chairperson WCO

RISK MANAGEMENT – Chapter 6

WCO SAFE Framework of Standards


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SOUTH AFRICA HAS THE

RIGHT TO A SECURE TRADE

PIPELINE

Transnet ?


NEW WORLD SECURITY

Following the 9/11 terrorist attacks. The WCO recognised that such a major attack on the Trade Supply Chain would have impacts felt beyond the boundaries of the disaster itself and trade would suffer dramatically for a long time after. Customs controls which only covers the point of Importation is now no longer enough ~ thus the need for the WCO SAFE FRAMEWORK OF STANDARDS.


The WCO SAFE Framework of Standards

Customs

Administrations

globally were

charged with Supply

Chain Security

Responsibilities

after the Terrorist

attacks in 9/11


2 Important Paragraphs from SAFE

1.3.3. Cargo declaration The carrier or his/her agent should submit an advance electronic cargo declaration to the Customs at export and/or at import. For maritime containerized shipments, the advance electronic cargo declaration should be lodged prior to the goods/container being loaded onto the vessel. For all other modes and shipments, it should be lodged prior to arrival of the means of transport at the Customs office at export and/or import. For security purposes, Customs should not require more than the details listed in Annex II. The advance cargo declaration may have to be followed by a supplementary cargo declaration as stipulated by national law.

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SARS Presentation Slide 39 – Inland Terminals

Article 1.3.2 of the SAFE framework of standards dealing with “Import Goods declaration” supports advance clearance:

The importer or his/her agent should submit an advance electronic import Goods declaration to the Customs at import prior to arrival of the means of transport at the first Customs office or, for maritime

container shipments, prior to loading. For security purposes, Customs should not require more than the details listed in the Annex. Where the import Goods declaration was an incomplete or simplified

declaration, it may have to be followed up by a supplementary declaration for other purposes such as duty calculation or the collection of trade statistics at a later stage as stipulated by national law. The

Authorized Supply Chain (see 1.4.2) provides the possibility to integrate the export and import information flows into one single declaration for export and import purposes, which is being shared

between the Customs administrations concerned.

The SAFE framework of standards requires that a customs clearance is submitted 3 days in advance of arrival at port of entry in order to facilitate port planning and congestion. SARS supports this

proposal since 70% of importers currently make advance customs clearance. Carriers also support this position.

SARS proposes amendments to the CCB to provide for mandatory advance customs clearance and conditional release for goods consigned to inland terminals

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GMLS CREDIBILITY

GMLS was appointed by Trade Chambers to conduct the Research

Study through the University of Cape Town.

Accredited WCO SAFE Framework of Standards studies

GMLS is appointed Customs Subject Matter Experts for Lectures at

various South African Universities on Customs & Excise at PGDip and

Masters Degree level (UKZN, UCT, NWU)

Associated Member of the International Network of Customs Universities

(INCU)

Currently the only International Chamber of Commerce (ICC) Master

Trainer in South Africa

Accredited TETA Center of Excellence – SCM

FIATA Higher Diploma – Supply Chain Management

WCO Accredited Tutor


GMLS CREDIBILITY


GMLS CREDIBILITY


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ICC AGREEMENTS,

TOOLS, ARBITRATION & INSTRUMENTS

GMLS Master Trainer ICC Products


Incoterms® 2010 Rules and Guide

DAT & DAP (New and introduced by Professor Jan Ramberg – GMLS 2010)

supports increase of Inland Trade destinations

Changes and use mainly CIF? – Incorrect SARS assumption?

Carrier documentation and no accountability under South African law?

Clearance is currently not a “two-step process”

CIF versus DDP – no consultation

Clearance will take place in Durban !!! Once

The main objection is the uncertainty of interruption or termination of the contract

of carriage

- The Guide to Incoterms® 2010 clearly states that precautions need to be taken

against the risk of export and import prohibitions;

- Obtaining all assistance to clear Customs

- Adhere to global security measures and the changing role of Customs-


DAT (DELIVERED AT TERMINAL)

This is for ANY MODE OF TRANSPORT

Goods are delivered when the Seller unloads the goods and places them at the Buyer’s disposal at the NAMED TERMINAL

The Seller pays for the Transport

The Seller is responsible for Export clearance where applicable

The Buyer is responsible for Import clearance where applicable

Delivery


ICC Guide to Incoterms® 2010 Professor Jan Ramberg insert

Take precaution against the risk of Export and Import prohibitions

Obtaining assistance to clear Customs

Security measures and the Changing Role of Customs

Rules A2 – B2, A10 – B10

Resolution of the Customs Cooperation Council

“It follows from what has been stated that the meaning of “Duty

Paid” and “Clearance of goods” for import and export has

changed. The traditional check-point at the Border of the

country of importation has developed into a global system of

advanced control which = Revised Kyoto Convention – Special

Annex A”


A1 • General obligations of Seller

A2 • Licenses, authorisations security clearances and other

formalities

A3 • Contracts of carriage and insurance

A4 • Delivery

A5 • Transfer of Risk

A6 • Allocation of costs

A7 • Notices to the Buyer

A8 • Delivery document

A9 • Checking-packaging-marking

A10 • Assistance with information and related costs

B1 • General obligations of Buyer

B2 • Licenses, authorisations security clearances and other

formalities

B3 • Contracts of carriage and insurance

B4 • Taking delivery

B5 • Transfer of Risk

B6 • Allocation of costs

B7 • Notices to the Seller

B8 • Proof of delivery

B9 • Checking-packaging-marking

B10 • Assistance with information and related costs

SELLER & BUYER OBLIGATIONS


Points raised with SARS by Business? The Other Carriers ??

Groupage operators and Container Freight stations in South Africa

A specific niche industry providing the freight forwarders, customs

brokers, importers and exporters with LCL (less than container load)

services

Services

Transporting LCL shipments between South Africa and the world

(inbound and outbound)

Packing and unpacking consolidation containers (a multitude of

shippers, importers cargo in one container)

Transhipment of LCL cargo (cargo ex neighbouring countries for exports,

cargo from overseas for t/s or road transport to other African countries)

Bonded transport between customs licenced CFS

Container operators and customs licenced depots


Concerns resulting from New Bill

Groupage containers manifested to inland ports (mainly Johannesburg) will randomly stop

at the coast due to single shipments in the container missing the required declarations

The above will create uncertainty and inconsistency for ALL shipments as to transport

mode and transit time to the inland terminal

As a conclusion importers will decide to terminate all shipments at the coast resulting in

congestion and higher transport cost

Job losses in Gauteng as groupage operators will not operate import or export

departments in Gauteng anymore

Job losses at the inland CFS as all work will be handled at coast

Import and export movements of LCL will completely move to road and instead of

consolidated movements the number of vehicles for smaller loads will drastically increase

Risk

The risk of fraud, pilferage, hijacking of LCL shipments in groupage containers is close to

zero as high value cargo moves in FCL or by airfreight. Physical Location of shipments in a

groupage container are unknown.


Contract of Carriage Clause

5.3 Delivery to Customs or Port Authorities – Where any law or

regulation applicable at the port of Discharge or Place of Delivery provides

that delivery of the Goods to the Merchant shall or may be effected by the

Customs or Port authorities at the Port of Discharge or Place of Delivery,

notwithstanding anything to the contrary herein, delivery of the Goods by

the Carrier to such Customs or Port authorities shall be deemed to be lawful

delivery of the Goods by the Carrier to the Merchant and the Carrier shall

not be liable for any loss of or damage to the Goods which occurs for any

reason whatsoever after delivery of the Goods by the Carrier to the

Customs or Port authorities.


A Wise African Proverb…

If you beat the Drum…

Don’t use an Axe…


The Solution?

Declare Sooner – In accordance to RKC Specific Annex A

Declare at or before Point of Departure (3 (7) of SAFE)

ISPS Code (b1 – 630 – 37) ~ action before container loaded on board the

vessel

Sealing ISO 17712 & UCR WCO Guidelines

Seal verification at discharge points

Security Seals and UCR

Proper AEO Programme

Focus on SARS capacity building

Joint Governmental and Private Sector Consultation (Customs-to-

Business Pillar 2)

Retain Section 18 – current Statutory Rights

Phase-in slowly…


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The Focus for South Africa

Full Compliance with Global

International Instruments


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WORRIED OR NOT?

Trans-Kalahari

Corridor Lesotho

Maputo

Corridor


CRITICAL CROSS-BORDER FLOW POINT

Export Goods

Declaration Cargo

Declaration

Advance Loading Manifest Import

Goods Declaration

3 Days

3 Days

Import Goods

Declaration

Seal

Container

Status

Messages

Port - Durban

Radio Frequency

GPS, UCR & Seal

Program

Export

Country

Border

Inland Port/Termin

al

Import

Country

Border


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Introduction from a wise African Proverb

“In the moment of crisis, the

wise build bridges and the

foolish build dams…”


For further information on this and other Training Courses offered by GMLS, please contact us on:-

Website: www.gmls.co.sa

Email: [email protected]

Office Mobile: +27 82 852 3626

Tel: +27 44 695 2251 or 695 2187

Fax: +27 86 504 3070 or +27 44 695 2873

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http://www.gmld.co.za/

mailto:[email protected]

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