Tarrif heading dispute leads to fat demurrage charge

Ensuring speedy delivery of goods into Africa is often about expediency rather than following the rules – particularly when it comes to customs issues. It’s a dilemma that many operators face on a daily basis – and was brought into sharp relief by an email that landed in FTW’s inbox last week. “I need clarity and help please,” said Nic Schwartz of Ramacom International. A regular exporter of cotton products to the likes of Mozambique, Zambia and Zimbabwe, the company recently had a load worth close to a million rand impounded by Mozambique customs for what they claimed was the wrong customs code. The SADC certificate had however been stamped and passed by South African Customs and Ramacom had exported the identical product in 2012 using the same tariff heading. For the sake of expediency Schwartz changed the tariff heading to conform with Mozambique customs’ requirements. Neither tariff heading attracted any duty since the products are locally manufactured. “I was not comfortable doing this since it seems illegal to change documents to suit a corrupt customs official – yet it was the only alternative to avoid the customer paying duties,” he told FTW. Shepstone & Wylie partner Quintus van der Merwe confirmed that in terms of the SADC Agreement between member states – which include Mozambique – all members adhere to the Harmonised System. The tariff heading/code for Mozambique should therefore be the same as South Africa (at least the first four digits). “Whether an item attracts duty or not is irrelevant when determining the correct tariff code. A customs officer in Mozambique or South Africa would be entitled to insist that the correct tariff heading be used,” he said. While Van der Merwe reserved comment on the accuracy of this particular code, he commented: “Nic appears to be on the ball and he seems to be quite clear that that is the correct tariff heading and that the Mozambique authorities suggested the wrong heading.” Simply agreeing to change the SADC certificate could however open him up to other penalties. “The mere fact that the certificate is stamped by Sars does not mean that Sars agrees with the tariff heading. If in doubt he needs to follow up for a tariff determination to ensure that he has the correct tariff heading (although he seems confident about this),” said Van der Merwe. “The danger in agreeing to do something which he suspects may be wrong is that the Sars authorities ultimately might hold him accountable if he incorrectly amends his export declaration. Although there are no duty ramifications, this could nevertheless give rise to certain penalties.” There are clearly no easy answers – and no-one said trading in Africa was a smooth ride. “Perhaps the take-home message should be that paperwork is everything ,” said Schwartz.