Welcome to Customs Connect – your electronic newsletter that will provide you with the latest news and information on Customs Modernisation and related matters. We hope you enjoy the read and that you will find the information helpful.
- Improving the accuracy of payment referencing by introducing a unique payment reference number (or “PRN”) that needs to be specified when making payment. System-generated PRNs for all account submissions and payments made at Excise offices have been introduced. Payments can no longer be made before obtaining a system-generated PRN.
- Implementation of front-end system enhancements at Excise offices to capture Excise duty paid (ZDP), duty rebated (ZGR) and ordinary levy duty (ZOL) transactions, in addition to administrative transactions (state warehouse rent, extra-special attendance, departmental declarations and penalties/interest/forfeiture payments (DA68/DA73/DA490/DA70).)
- Implementation of Excise Financial Account Numbers (FAN) and an Excise beneficiary (SARS-EXC) for payment at banks.
In July this year the Electronic Data Interchange (EDI) channel for submission of ZDP/ZGR and ZOL entries was shut down in readiness for the switchover to the new Customs back-end system, called Interfront. Functionality was then made available on eFiling for Excise clients to submit their local manufacturing declarations electronically.
In the next phase, which is earmarked for October 2013, eFiling functionality will be made available for the submission of ALL Excise accounts.
Other changes which are due to be implemented in the second phase include:
- New Adobe electronic screens for the various accounts when eFiling is made available for submission of all Excise accounts. These will be partly pre-populated and partly editable. All billing transactions will be done on a CEB01 screen (eg. for specific transactional ZDP/ZGR declarations – mainly ship chandlers and duty free shops), while account submissions will be on an EXD01 return (the first two pages will be generic and the rest will be applicable to that client’s warehouses). It must be noted that the EXD01 account represent the summary pages of the current DA159/160/260 accounts, with the following important changes:
- No separate periodical, consolidated ZDP/ZGR/ZOL declaration will be required;
- Products will need to be reported as specific (individual) tariff items – no more grouping of certain tariff item types;
- Clients will need to declare price paid or payable (customs value) per specific tariff item, as well as the relevant statistical quantity code; and
- The status of the eFiling Excise account will change to an actual declaration.
- Also on eFiling, once clients have submitted their accounts they can make eFiling payment immediately or choose to pay later (within the prescribed time frames). They will also be able to make consolidated payments on eFiling. At the moment, clients have to pay separately for each transaction, which gets its own unique PRN. After Phase 2, they will be able to make one consolidated payment on eFiling for all transactions.
- There will be a new dashboard and enquiry function introduced for queries at Excise offices and on eFiling. This will enable clients to establish the status of their accounts.
- Clients will be able to open their own eAccount on eFiling to manage payments and/or credit allocations between accounts.
All of these changes are aimed at creating a more efficient and timeous submission and payment process. They will also move account management away from Excise officers to clients, allowing officers to focus more attention on exception management of accounts and auditing of non-compliant licensees and registrants.
- Internationally standardised data requirements for export, transit and import;
- Interconnected systems to enable the electronic exchange of data between Customs administrations as early as possible in the international movement of goods;
- Mutual recognition and co-ordination protocols between administrations to eliminate unnecessary duplication of controls in international supply chains; and
- Rules governing the exchange of information between Customs administrations, including rules on data protection.
Over the past year, advances have been made in the area of IT connectivity and customs data exchange with our neighbouring countries, specifically Swaziland and Mozambique, as well as the India, Brazil and South Africa trading bloc (IBSA). The aim of these ongoing initiatives is to transmit export and transit declaration information between the respective countries. This work in Africa and the rest of the world is informed by the WCO’s model known as Globally Networked Customs (GNC).
- Enable advance Customs risk management;
- Enable the matching of the country of departure’s export data with the destination country’s import or transit declaration data through the use of a common key – a unique identifier otherwise known as the Unique Consignment Reference (UCR) or alternatively the Movement Reference Number (MRN); and
- Support the seamless movement of legitimate cargoes across borders.
The aim is to achieve a level of matching of South African import declarations with the country of departure’s export clearance, to mitigate risk and facilitate speedier cross-border clearance and release of goods. This is a reciprocal process, whereby South Africa’s export clearance must likewise be matched with a corresponding import clearance on the other side of the border.
While GNC is currently structured for information exchanges between customs administrations only, the WCO has taken on board representations from various international trade bodies to consider future trader involvement.
SARS is also in discussion with the Zimbabwean customs authority to establish formal customs-to-customs data exchange through IT connectivity.
The national Preferred Trader policies, processes and structures have been finalised, along with the publishing of a curriculum and a guide. SARS has also provided training to prospective Preferred Traders so that they are able to meet the requirements of the programme. So far, 186 client representatives have passed the new accreditation test to assess whether clients have sufficient knowledge of Customs requirements, policies and procedures.
“The Preferred Trader Programme takes us closer to a segmentation model that places reliance on achieving high compliance levels among South African traders. As we successfully complete the second phase of competency tests and verifications, I must acknowledge the willingness and continuous cooperation we have experienced from some of our largest traders and certain industry bodies.” Mohamed said.
For traders gaining accreditation, it will reward the hard work undertaken to validate and ensure the quality of their systems and record keeping, to correct errors and train their Customs team members to maintain the highest standards of compliance. For many companies it also represents the first part of a long-term journey to partner with SARS to gain full Authorised Economic Operator status (AEO), as per the WCO standards. Local traders are looking forward to benefiting from South Africa’s ambition to establish AEO Mutual Recognition with leading trading partners, such as SACU, SADC, BRICS, USA and the EU. Mutual Recognition will enable South African AEO’s to gain expedited clearance on their exports in the receiving country.
SARS has also supported the extension of the Preferred Trader Programme to the Southern African Customs Union (SACU) countries by helping to develop a set of policies, processes and standard operating procedures.
“In conjunction with the World Customs Organisation and supported by SIDA (Swedish International Development Cooperation Agency), the SARS programme is being extended into SACU as the WCO’s equivalent regional Authorised Economic Operator (AEO) compliance programme for SACU countries. This will have regional benefits for our traders in the future and we encourage all clients to apply to join the programme,” Mohamed said.
An Excise Preferred Trader accreditation policy and audit programme for domestic excise manufacturers is currently being developed. Draft policies, standard operating procedures and templates are in place. There have been consultations with trade stakeholders and visits to our Excise offices in preparation for a pilot prior to implementation. This will take SARS closer to an integrated compliance model.
The Customs Bills, after having undergone an extensive consultation process, were recently submitted to Parliament. One of the major aims of the Bills is to create a balance between customs control and trade facilitation. As part of the overall policy review to achieve this aim, SARS reviewed its current policy of allowing goods to move on the basis of a manifest to inland terminals such as City Deep.
Currently, the Customs and Excise Act, 1964, allows container operators to move containers in bond from a port of entry (e.g. the port of Durban) to an inland container terminal (e.g. City Deep) without submitting a customs clearance declaration. The containers are moved on the basis of a manifest. No security is required and liability for the removal rests with the container operator. After the arrival of the goods at the inland container terminal, the importer will clear the goods for another permissible customs procedure or for home use and pay the duties.
This current position does not provide SARS with adequate information to determine any possible safety, security, fiscal and economic risk in relation to these goods before they are transported inland. No value is declared on the manifest and only a general description of the goods is provided. This lack of information on a manifest therefore does not promote the application of efficient and effective customs controls and risk management at the port of entry, potentially allowing high risk goods to move inland.
To address this deficiency, clearance at the first port of entry envisaged in the Customs Control Bill will require a declaration of the true value of the goods and duties and taxes that are to be paid. In addition the origin of the goods, as well as a clear description of the goods as per the Harmonised Commodity and Coding System (HS Code), will have to be declared. The HS Code will indicate whether the goods pose a fiscal or economic risk or a safety and security risk to society.
The inclusion of the origin, HS code and true value on the declaration would thus facilitate electronic data processing which contributes to effective risk management and customs control. A further benefit of a declaration is that the person who submits the declaration subscribes to the correctness of the information. This person will be in South Africa and action can be taken against such person if necessary.
Notwithstanding wide consultation on this matter there still remains a misunderstanding about the implementation of this policy.
Just to clarify, SARS will not mandate inspection of all goods at the port of entry and has no intention to increase inspections beyond available capacity in the port of Durban. Only high risk goods (which are a small percentage of imports) will be physically inspected in Durban, while medium to low risk goods (which represent the vast majority of imports) will continue to flow to inland terminals such as City Deep where they will be inspected.
SARS is aware of the benefits of inland terminals and is not averse to the retention and establishment of such terminals. The issue is the use of the manifest that does not contain sufficient information on which basis the goods are risk assessed. The effect of the change is that goods will still be able to move from Durban to City Deep without payment of duties and taxes. At City Deep the goods can be cleared for home use or a customs procedure at a later time. City deep will therefore not be closed.
This policy change will also have no impact on exports from City Deep.
Disclaimer: Customs Connect is not meant to delve into the precise technical and legal detail associated with Customs. It should, therefore, not be used as a legal reference.
Should you require any additional information, you may:
- Contact the SARS Call Centre on 0800 00 7277, or
- Visit the Customs Modernisation webpage.