A bunch of challenges awaits grape exporters

The South African Association of Freight Forwarders has yet to get comment from SA Revenue Services regarding its complaints over timelines in the new Customs Control Act. In terms of the new legislation, all cargo leaving South Africa must be available in an export stack at least 12 hours before the stack closes. A customs declaration for an export consignment must also be submitted to customs at least two hours before the cargo is delivered to the stack. These are just some of the changes in the new draft requirements that are currently out for public comment and that will bring about serious changes with far-reaching and significant, if not potentially catastrophic, economic impact if accepted in their current format. “We have imparted the severity of the situation to Customs and how it will negatively impact trade,” said Clifford Evans of Ceva Logistics and a member of the Saaff working group currently commenting on the new legislation. “Grapes for instance are packed in the middle of the night with containers being sealed and sent off as they are closed. They arrive at the stack at 3am in the morning very often on the weekend,” said one exporter FTW spoke to. “This leaves no time at all to pass the export customs declaration before the container reaches the stack as is required in terms of the new draft Customs legislation, unless the customs declaration is drafted and submitted outside official business hours.” Another exporter said the way that fruit was currently packed and exported would have to change completely to comply with the new customs laws. “It is going to mess up the market completely as our fruit is going to get to market late and that is something we can ill afford,” he said. “Over and above that we are significantly increasing the administrative burden on exporters. It is going to have a massive cost impact on the fruit industry as this is a huge added cost to the existing systems and the supply chain. It will make South Africa as an export concern even less competitive in the international markets and is likely to lead to further downward trends in exports, which the South African economy can ill afford.” Speaking at an Exporters’ Club Western Cape function recently, Saaff’s Jean Pool said currently cargo owners of perishable goods were permitted to clear their export shipments after they had been exported, with existing concessions allowing for the passing of an entry after the actual export. “This will now change. The new act stipulates that the goods must be packed into a container that has to be sealed before the export customs declaration for that particular container can be passed. And this customs declaration must at the same time be passed with customs at least two hours before it reaches the stack, and at least twelve hours before the stack closes.” he said. “I wonder how on earth all these exacting requirements are going to be coordinated within the trade to avoid falling foul of the new customs legislation and thereby incurring exorbitant customs penalties which will simply drive up the export costs further? In the short term, this will undoubtedly benefit Sars’ capacity for generating even more revenue, but at what ultimate cost to our struggling South African economy?” The fruit industry packs fruit in the dead of night and often up to 60 containers are sent piecemeal, and over a sevenday period, to the stack before the bill of lading covering all the cargo, and a single customs declaration, is issued. Now a bill of lading and a separate export customs declaration will have to be produced for each container – and before it reaches the stack – which has the potential of raising the cost of these logistical manoeuvres sixty times. “Besides everything else it is just physically impossible to do that unless we just tell every table grape exporter right now that they can’t send grapes out of the country any more,” said a source. Evans said they were holding out that Sars would see reason in the timelines given and accept the commentary from industry. “We have found them extremely reasonable to date in terms of accepting our commentary and even making the changes necessary to the rules and regulations guiding our new laws,” he said. CAPTION Clifford Evans and Jean Pool explain the new customs legislation at the recent Exporters Club Western Cape function. Photo: Halden Krog