Sars’ compliance programme in perspective

With reference to that article ‘Customs stops burn big holes in importer’s pockets’ (FTW August 17, 2012), Quintus van der Merwe makes farreaching assertions regarding the role of Sars Customs in trade facilitation. Chief among these was a claim that recent activities by Customs relating to clothing and textile imports departed from a trade facilitation role in favour of pursuing compliance. The Sars compliance programme is guided by the principles and prescripts of the revised Kyoto convention mentioned by Van der Merwe. Sars would like to correct the perception that Sars Customs would subjectively target compliant shipments for no apparent reason. Sars Customs aims to provide a service that promotes legal trade, while restricting illegal trade. Trade is facilitated through the provision of a Customs service, which expedites legal trade through reducing compliance barriers to facilitate the movement of goods in a far more efficient manner than before, while preventing the movement of illegal goods. Effective risk management and strategies that seek to offer qualifying traders faster and cheaper means to get their goods into the global markets while ensuring an appropriate enforcement response to illicit traders are the key to balancing trade facilitation with border security. The Sars Strategic Plan 2010-2013 expands further on this. Therefore the assertion that Customs’ recent actions ‘clash somewhat dramatically with customs’ undertaking to facilitate trade’ is ill informed and misleading. The two concepts are not mutually exclusive but coexist to contribute to government’s aim of growing the economy, and the creation of opportunities for decent employment. Those who have kept themselves abreast of Customs modernisation developments in South Africa will be fully conversant with the immense trade facilitation benefits already realised since the start of the roll-out of new systems, policies and processes at all ports in July 2010. As detailed in the Sars Compliance Programme (available on the Sars website), we are particularly mindful of Sars’ role in protecting the local economy and local employment, which further highlights the need to focus on the clothing and textile industry. The industry is threatened by non-compliance related to valuation, as well as country of origin and tariff misclassification which open doors for the dumping of goods and undercutting of prices that render the domestic industry and players uncompetitive. Government, labour and industry have joined forces to work together to manage compliance risks in the industry and have developed a comprehensive reference pricing database as a mechanism to identify undervaluation of imports for certain products. It must be borne in mind that the reference price is the absolute minimum price of the smallest article and excludes the cost of labour, trimmings and other associated overheads. Therefore, any ‘stops’ by Customs are considered and informed interventions generated by an objective, automated risk profiling tool. Any ‘honest businessmen who are simply trying to get ahead in business’ and find themselves at the receiving end of a Customs enforcement intervention on textile and clothing imports would have declared import values under the absolute minimum price. The suggestion that foreign suppliers have no interest in the ‘problems’ of the importer in providing supporting documents flies in face of the dictates of international supply chain security programmes already in practice around the world. Frankly, the statement is indicative of an attitude to compliance behaviour which ignores the benefits that partnerships with supply chain stakeholders have in facilitating trade to strengthen South Africa’s economy. INSERT ‘We are particularly mindful of Sars’ role in protecting the local economy and local employment, which further highlights the need to focus on the clothing and textile industry.’ Rae Cruikshank, Sars group executive: customs trade operations.