On 25 September 2020, the International Trade Administration Commission of South Africa (ITAC) informed of the proposed creation of a rebate provision (Rebate Item) on:
Goods for experimental purposes:
“Arms and ammunition, parts and accessories thereof, classifiable in Chapter 93, for the purposes of testing and experimenting therewith as the National Conventional Arms Control Committee and the Directorate for Conventional Arms Control may allow by specific permit in terms of the National Conventional Arms Control Act, 41 of 2002.”
Provided that:
(i) Goods imported under this rebate item shall be limited to goods imported for testing purposes and shall not be sold or disposed of to any other party or be removed to the area of Botswana, Eswatini, Lesotho or Namibia unless under specific authority of the National Conventional Arms Control Committee and the Directorate for Conventional Arms Control;
And
(ii) Goods not consumed or destroyed during the testing process must be exported within 180 days from the date of the said import permits issued by the National Conventional Arms Control Committee and the Directorate for Conventional Arms Control.”
on which comment is due by 23 October 2020.
The application was lodged by Denel SOC Limited trading as Denel Overberg Test Range (Denel) which reasoned that:
- Denel has been conducting business since the mid-1980s as a testing facility. Historically, Denel imported weapons, weaponry systems, ammunition and other related items to be tested for its international clients under Rebate Item 412.01, in accordance with the required National Conventional Arms Control Committee (NCACC) and ITAC permits obtained;
- Furthermore, Denel has also utilised Rebate Item 412.11 successfully in certain instances. However, in certain instances there have been disputes on whether goods imported by Denel for testing are eligible under Rebate Items 412.01 and 412.11;
- Due to the unique nature of Denel’s business, no adequate provision has been made to address this specific situation and the wording in the current Rebate Items can be interpreted in an ambiguous manner;
- Customs duties payable upon importation of weapons, weaponry systems, ammunition and related items would negatively affect the competitive position and threaten the sustainability of Denel’s business; and
- The duty relief will contribute to the reduction of cost and improve the competitive position of the Southern African Customs Union (SACU) industry testing facility.
Story by: Riaan de Lange
