Expect more Customs container stops ahead of Soccer World Cup

There’s been a loud complaint about SA Revenue Service’s frequent container stops from an FTW reader, who accused the customs authorities of using reputable importers as a convenient revenue generator. Our complainant told us that one of his clients, who has been importing footwear for 30 years and is considered an accredited importer by Sars, has been consistently having containers stopped in recent months. “They search it,” he said, “you pay for it. And there’s a delay, which has all sorts of implications. “If they never find anything, why do they keep picking on that client? “Could it be because it’s a revenue generator for them – and, if it’s a reputable client, they know they will be paid?” That could be a possibility, but what is certain is that footwear and clothing imports have long been high up on the list of Sars’ suspect products – due to the frequency of under-valuation of container-loads of these goods, and other illegal practices involving them. (See story on page 4). It is also known that the customs authorities have recently sent a notice to clients informing them that imports of sports clothing and footwear would be specially targeted in the run-up to this year’s Soccer World Cup. This, said Sars, as a double check to verify that they are Fifa-authorised products and as the usual check on valuation and the like. Continuing our research of the issue, FTW also contacted the major forwarder, UTi, which we had been told had a similar problem to our complainant – with an unusual number of containers being stopped recently. Dave Liebenberg, the company’s national customs liaison manager, told FTW that they also had some major players in the footwear industry as clients, and that they were having containers continually stopped at SA’s land border posts. A meeting was held with Sars on the subject, and Liebenberg told FTW that the authorities’ reasoning for this was that they had been stopping accredited customers’ containers (amongst others) to give them a verifiable check on importers’ trustworthiness. And, sure enough, soon after this meeting, UTi’s container figures showed that the situation had reverted to the random search frequency. “We checked our records of the stock movement for the affected clients,” Liebenberg said, “and found that Sars had gone back to the normal once-ina- while stoppages.” FTW also contacted Edcon looking for their impressions of the frequency of container stoppages. The group is rated as one of the leading clothing, footwear and textiles (CFT) retailing groups in southern Africa – trading through 10 retail formats, and having over 1 000 stores in SA, Botswana, Namibia, Swaziland and Lesotho. Martin Deal, Edcon’s logistics executive, told us that his group – and the clothing/footwear retail industry in general – had noted more frequent stoppages. “Nothing dramatic,” he said, “but a bit of a general increase across-the-board.” Part of this he attributed to complaints from the embattled local clothing/ footwear manufacturers that they were being increasingly hit with under-valued and other illegal imports flooding the country. This has been a subject of meetings, with the SA manufacturers and retailers talking to the SA Clothing and Textile Workers’ Union (Sactwu) – which had raised the “cheap imports” problem. According to Sactwu, more than 70 000 jobs have been lost in the industry since the beginning of 2003. And they cited competition from cheap goods from China (where export manufacturers enjoy huge export subsidies and other tax benefits) and other vastly under-priced imports as the main reasons for these local job losses. Deal told FTW that the retail industry recognised the problem raised by illegal imports, and was fully supportive of ways of combating them. “And,” he said, “one of the only ways such checks can be done is through stopping more containers for a search. Sars has put a ‘hit team’ on the job, and they are doing just that.” Although it has meant an increased level of stops, the retailers have no objections, Deal added, provided that the number is not allowed to get out of control.