Industry in limbo over dreaded bills

The freight and trade industry is now in that limbo period after its heavyweight representative bodies presented their arguments against the promulgation of the two new customs bills to the standing committee on finance in parliament last week. The industry now awaits the next step from government – either the passing of the bills into law, or further discussion on the controversial contents, with a special focus on the Customs Control Bill. And it’s the second that appears to be the consensus amongst the industry bodies, according to Pat Corbin of the Johannesburg Chamber of Commerce and Industry (JCCI). Although not necessarily the favourite with the SA Association of Freight Forwarders (Saaff) – which is trying to reach a compromise with the SA Revenue Service (Sars) on how forwarders can adapt to the new procedures and comply with the conditions of the bill – the feeling amongst all the bodies is that the time span for discussion has just not been long enough, he told FTW. The primary concern is the loss of the inland ports like City Deep, which has played a vital role in effective SA trade movement for 37 years, under the new Customs Control Bill, Corbin added. As Business Unity SA (Busa) said, this bill results in a radical policy shift. “Ports like City Deep, currently designated as inland ports for customs purposes, will no longer be so designated.” And Busa is not content with Sars’ reasoning for this. It believes that insufficient evidence of customs fraud at inland ports exists to warrant the requirement that all goods must be cleared at the first point of entry. This particularly given the negative impact of this proposal not only on SA inland ports but also those in Southern African Customs Union (Sacu) countries. “Customs fraud and illicit trade are apparently the basis for this shift,” it said. “We agree this scourge must be addressed, but do not believe that proposed policy shift is the only solution to the problem. We cannot risk an intervention which will have a negative impact on trade.” And the new bill will hit foreign exporters to SA who currently consign goods to a specific port, which may be inland, particularly in the case of Gauteng and overborderbound goods. “Goods are transferred directly from ship to train and transported to the inland port where customs procedures are carried out,” Busa said, “with no intervention by the importer until that port of customs clearance. But the new approach will require intervention by importer at the first port of entry. And this is primarily the Port of Durban for the bulk of SA imports, and it will be a move which is likely to lead to further drastic congestion at the port – and has led to fears that congestion surcharges by the lines could be the result. Corbin agreed, and pointed out that Sars was indeed moving contrary to the global trend on inland ports. Busa is adamant that the provisions of Section 18 of the current Customs and Excise Act – allowing for carriers to deliver containers to an inland destination – should be retained. It also recommended that the new act should make provision for a definition of an inland port as a recognised place of entry or exit. Busa also believes that the risks of the radical policy shift of no longer allowing customs clearance at inland ports are so high that further efforts should be made to understand the implications before proceeding with the bill – and urged the finance committee not to approve the bill unless this matter is addressed.