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.