The International Trade Administration Commission’s (Itac) plans to increase the use of Broad-Based Black Economic Empowerment (B-BBEE) criteria in import and export permit processes could have unintended consequences for traders, cargo flows and the logistics sector.
In its 2026/27 Annual Performance Plan, published by the Department of Trade, Industry and Competition (DTIC) in March, Itac lists the measure under ‘Priority 1: Delivering Inclusive Growth and Job Creation’. The plan says the regulator will “also seek to grow the share of permit and authorisation processes that take into account relevant codes of practice issued under the B-BBEE Act”.
The measure forms part of Itac’s stated objective to support inclusive growth, small businesses and historically disadvantaged individuals.
However, linking import and export permits to B-BBEE criteria could create unintended consequences for traders and logistics operators, including possible disruption to cargo flows, scope for fronting and additional compliance costs, warns Donald MacKay, founder and CEO of XA Global Trade Advisors.
He cautions that shifting the focus from commercial necessity to compliance ratings could distort access to permit-linked trade benefits. “These are trade policy instruments, which function best when they solve a trade problem,” MacKay told Freight News.
“For example, you would get a permit because you need to get duty relief, and Itac will give you that relief if the product is not available locally,” MacKay says.
“Now, if that relief is granted to you based on your BEE rating rather than the actual need you have in your business, then we’re going to have a pretty bizarre situation where potentially the companies who need this the most can’t access it and the companies who need it the least can access it.”
Linking permit access to B-BBEE criteria could also create scope for abuse, MacKay warns, including fronting-type arrangements where permit benefits are accessed through qualifying entities. He referenced the earlier permit system for US chicken imports, where permit holders could access relief from anti-dumping duties, as an example of how valuable permit-linked benefits could become vulnerable to misuse.
Another layer of bureaucracy
For freight and logistics operators, another compliance layer could become a bottleneck in permit-dependent trade flows.
“Exporters and importers will be negatively impacted. Every time you add a criterion, it is another reason for a rejection. My prediction is that this additional burden will ultimately mean less product will probably flow,” MacKay says.
“If the volumes are roughly the same but they’re just changing who the people are, then the impact on the service providers will be relatively muted. Unless, of course, you now lose the business because somebody that does have the business uses a different service provider.”
Administrative friction could delay shipments and create unexpected costs at ports, MacKay says. “There will be disputes, which means some products will enter without having a permit. If that’s connected to a rebate, that means the duty is going to be paid.”
Unintended consequences
Itac’s Strategic Plan 2025-2029 says its incentive-related and export-support functions are intended to contribute to “export diversification and the development of new and emerging sectors”.
MacKay, however, questions whether permit conditions can achieve this outcome.
“Itac, at best, can remove barriers but it can't actually create diversification – that has to come from the private sector.”
Adding further conditions to permit processes could have the opposite effect, he says. “You are going to have reduced diversification and increased concentration if you put conditions in place like those proposed.”
Freight News approached Itac for comment but had not received a response by the time of publication.
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