URL: http://www.engineeringnews.co.za
Policy, Law, Economics and Politics - Deepening Democracy through Access to Information This privately-owned website is operated and maintained by Creamer Media
   
Polity
Article by: Eleanor Seggie
Published: 07 May 2010
New customs valuation documents target uniformity
The South African Revenue Service (Sars) aims to achieve greater understanding and uniformity in the customs valuation areas, particularly through the four customs valuation documents it released in March.

The documents are the SC-CR-A-03-Customs Valuation Imports Policy, the SC-CR-A-03-S1-Customs Valuation Imports SOP (standard operating procedure), the SC-CR-A-05-Customs Valuation Imports Method 1 Policy and the SC-CR-A-05-S1-Customs Valuation Imports Method 1 SOP.

Sars spokesperson Adrian Lackay says that the documents set out the policy and operating procedures to be used by customs clients when evaluating or determining the customs value. They discuss the relevant sections of the Customs and Excise Act No 91, of 1964, specifically Section 65, Section 66 and Section 67, which are necessary to determine a value and the accuracy of the declared value of imported goods, and are also based on independent intergovernmental body the World Customs Organisation’s principles.

The documents also cover the legislative amendment and impact of the free-on-board point of valuation of containerised goods and the context of bona fide buying commission, but do not deal with antidumping duties and countervailing duties. A separate document deals with valuation for exportation purposes.

Lackay says that the policies and procedures in the documents will ensure that valuation is more accurately determined and the rejection rate of import declarations and stops, owing to potentially incorrect values, decreases. They will also assist Sars customs officers in the assessment of import declarations and in rooting out serial undervaluators, resulting in greater equity in the market for compliant importers, he adds.

The defined and explained documents also provide a basis that may be used in alternative dispute resolution, or, in a court of law, for disputes regarding declared or determined values for customs purposes, he says.

Customs Penalty System
Meanwhile, the response to the Customs Administrative Monetary Penalty System and the Excise Administrative Monetary Penalty System discussion documents has been slow, and two extensions have been provided, says Lackay. To date, the feedback refers mainly to the legal context and provisions to appeal prior to any payments.

These civil penalty schemes intend to increase compliance with customs and excise legislation through the application of monetary penalties. He says that these comprehensive civil penalty schemes will lead to a significant national overall improvement in the level of client compliance. This will reportedly eliminate the competitive advantage that noncomplying clients currently have over clients that are compliant.

Sars may impose monetary penalties based on the type, frequency and severity of infractions of the law, policy and procedure, and penalties are graduated.

The Customs Administrative Monetary Penalty System penalties range from small amounts to a maximum amount for every infraction. Sars reports that compliance records are always considered when calculating a penalty and penalties increase with subsequent occurrences of the same infraction. Depending on where noncompliance is identified, penalties may be issued either at the point of entry or at the audit review phase.

Sars advises companies to understand their obligations and then assess their level of compliance to avoid penalties from the civil penalty schemes. This means carefully examining all business systems, processes, procedures and reporting requirements to check their compliance. It is recommended that companies develop and implement compliance plans to identify, correct and monitor all transactions on an ongoing basis, says Lackay.

Draft Customs Bills Comments
Comments on the draft Customs Control Bill and the Customs Duty Bill were collected recently. Sars reports that many of the comments claimed that timeframes were too short or unrealistic but, unfortunately, the majority did not propose alter- native timeframes. Lackay says that the issues surrounding timeframes will be further considered.

Comments also called for more robust control and enforcement provisions in an effort to protect local industries. However, concerns have been raised that the increased control mechanisms proposed in the draft Customs Control Bill would increase the cost of trading.

Positive comments were received with regard to the structure of the bills and the plain language drafting approach, although the large number of clauses are a concern, reports Sars.

After questions were raised as to the constitutionality of certain clauses in the two bills, the services of independent counsel were obtained to review contentious clauses, says Lackay. State law advisers will also scrutinise the two bills and ultimately certify if they are in line with the Constitution.

Some comments called for provisions to be provided for in subordinate legislation and Sars will be guided by the views of the State’s law advisers in this regard, he says. The subordinate legislation for the two bills, including the rules, will be drafted in line with modernisation developments, after the bills have been approved by the State’s law advisers. However, Lackay says that preliminary work in this regard has started.