DUTY CALLS

Bore steel pipes tariff
On 4 December 2015 the
South African Revenue
Service (Sars) announced
an increase in the ‘general’
or Most Favoured Nation
(MFN) rate of customs duty,
from 10% to 15% ad valorem
(statistical unit kilogram
or kg), on certain large
bore steel pipes, classifiable
under tariff headings
73.03, 73.05 and 73.06. The
preferential rates of customs
duty for the European Union
(EU), the European Free
Trade Association (EFTA)
and the Southern African
Development Community
(SADC) remain at a rate of
customs duty of ‘free’. The
application took 224 days
or nearly seven and a half
months to complete.
Tariff subheadings in
question are: 7303.00
‘Tubes, pipes and hollow
profiles of cast iron’; 7305.11
‘Longitudinally submerged
arc welded”; 7305.12 ‘Other,
longitudinally welded’;
7305.19 ‘Other’; 7305.20
‘Casing of a kind used
in drilling for oil or gas’;
7305.31.10 ‘High-pressure
hydro-electric conduits,
of steel with an internal
cross-sectional dimension
exceeding 400 mm and a
wall thickness exceeding
10.5 mm’; 7305.31.90 ‘Other’;
7305.39.10 ‘High-pressure
hydro-electric conduits
of steel with an internal
cross-sectional dimension
exceeding 400 mm and a
wall thickness exceeding
10.5 mm’; 7305.39.90 ‘Other’;
7305.90.10 ‘High-pressure
hydro-electric conduits
of steel with an internal
cross-sectional dimension
exceeding 400 mm and a wall
thickness exceeding
10.5 mm’; 7305.90.90
‘Other’; 7306.19 ‘Other’;
7306.29 ‘Other’;
7306.30.30 ‘With a wall
thickness exceeding
2 mm, galvanised’;
7306.30.40 ‘With a wall
thickness exceeding
2 mm, not galvanised’.
The International Trade
Administration Commission
of South Africa (Itac) initiated
the investigation on 24 April
2015. The application was
lodged by Hall Longmore
Pty (Ltd) who reasoned that
they had recently invested
a substantial amount in
upgrading their Electric
Resistance Welded (ERW)
mill to ensure that the
Southern African Customs
Union (Sacu) market could be
serviced at the right quality.
This investment contributed
to retaining Sacu jobs.
However, the Sacu industry
cannot be sustainable in the
face of low-priced imports of
welded steel pipes classifiable
under tariff headings 7305
and 7306. However, there
are close substitutes that
compete directly with these
products, which include
ductile and seamless pipes
which are classifiable
under tariff subheadings
7303.00, 7304.19, 7304.23
and 7304.29. Therefore,
these substitutes must be
considered for an increase in
the ‘general’ rate of customs
duties. In addition the Sacu
market share has declined
even though Hall Longmore
(Pty) Ltd is the only
manufacturer of ERW steel
pipe range in Sacu.
WCO HS Decisions
On 4 December 2015 the
World Customs Organisation
(WCO) published its
classification decisions taken
at the last session of the
Harmonised System (HS)
Committee from
16-25 September 2015.
There are 15 classification
rulings dealing with, amongst
others, powdered alcohol, twopiece
garments, child carriers
and baby carriers, audio/video
floor stands and hop balls, as
well as 26 new classification
opinions and three sets of
amendments to the HS
Explanatory Notes.