On 16 January 2014 the Tax Administration Laws Amendment Act, 2013 was published, which was signed by the President on 14 January 2014, and will come into operation on a date determined by the President by proclamation in the Government Gazette. Of interest from a customs and excise perspective is that the proposed amendments relate to Section 4 “General duties and powers of officers”, Section 21A “Provisions for administration of customs controlled areas within industrial development zones and special economic zones” (proposed new heading), Secton 64E and Section 119A. You will recall that Section 4 was the subject of a Constitutional Court judgement released on 14 November 2013. The following appeared in the issue of 20 November 2013, under the headline “General Duties and Powers of Officers – Court Judgement” - On 14 November 2013 the Constitutional Court of South Africa released its judgement that Section 4(4) – (6) (general duties and powers of officers) is unconstitutional, that it will not be applied retrospectively, and suspending the declaration of invalidity for six months to allow Parliament to remedy. The Court determined a warrant requirement when South African Revenue Service (Sars) officials wish to search private residences for purposes of the Customs and Excise Act. The following appeared in the Government Gazette, where [ ] words in bold type in square brackets indicate omissions from existing enactments, and ____ words underlined with a solid line indicate insertions in existing enactments. Section 4 of the Customs and Excise Act, 1964, is hereby amended— (a) by the substitution for subsection (4) of the following subsection: ‘‘(4) (a) An officer may, for the purposes of this Act[— (i) without previous notice, at any time] enter any premises [whatsoever and make such examination and enquiry as he deems necessary] subject to the other provisions of this section. (aA) An officer may enter premises in terms of paragraph (a) only on authority of a warrant issued by a magistrate or judge, provided that in the case of the following categories of premises an officer may enter the premises without a warrant: (i) Premises managed or operated by the State or a public entity within the meaning of the Public Finance Management Act, 1999 (Act No 1 of 1999) as part of a port, airport, railway station or land border post and on which an activity to which this Act applies is carried out or allowed; (ii) premises licensed or registered in terms of this Act; (iii) premises occupied by a person licensed or registered in terms of this Act and used for purposes of the business for which that person is licensed or registered; and (iv) premises entered by an officer with the consent of the owner or person in physical control of the premises after that owner or person was informed that there is no obligation to admit the officer in the absence of a warrant. (aB) An officer may without a warrant enter any premises for which a warrant is required in terms of paragraph (aA) if the officer on reasonable grounds believes— (i) that a warrant will be issued by a magistrate or judge if a warrant is applied for; and (ii) that the delay in obtaining the warrant is likely to defeat the purpose for which the officer seeks to enter the premises. (aC) An officer may for purposes of this Act— (i) after having gained entry to any premises in terms of this subsection, conduct an inspection, examination, enquiry or a search; (ii) while [he] the officer is on the premises or at any other time require from any person the production then and there, or at a time and place fixed by the officer, of any book, document or thing which by this Act is required to be kept or exhibited or which relates to or which [he] the officer has reasonable cause to suspect of relating to matters dealt with in this Act and which is or has been on the premises or in the possession or custody or under the control of any such person or his employee; (iii) at any time and at any place require from any person who has or is believed to have the possession or custody or control of any book, document or thing relating to any matter dealt with in this Act, the production thereof then and there, or at a time and place fixed by the officer; and (iv) examine and make extracts from and copies of any such book or document and may require from any person an explanation of any entry therein and may attach any such book, document or thing as in [his] the opinion of the officer may afford evidence of any matter dealt with in this Act. (b) An officer may take with him or her on to any premises an assistant or a member of the police force[.], provided that only those assistants and members of the police force whose presence, in the reasonable opinion of the officer, is necessary for purposes of conducting the inspection, examination, enquiry or search on the premises may enter the premises. (c) When entering any premises in terms of paragraph (aB), the officer shall comply with the following requirements: (i) The officer may enter the premises only during ordinary business hours unless in the reasonable opinion of the officer entry at any other time is necessary for purposes of this Act; (ii) the officer shall, upon seeking admission to the premises, inform the person in charge of the premises of the purpose of the entry; (iii) if the purpose of the entry is, or if the officer after having gained entry decides, to search the premises for goods, records or any other things in respect of which an offence in terms of this Act is suspected to have been committed or that may be used as evidence for the prosecution of such an offence— (aa) the officer shall hand to the person in charge a written statement signed by the officer stating that a search of the premises is to be conducted unless, in the officer’s reasonable opinion, there are circumstances of urgency which may result in the search being frustrated if its commencement is delayed until such a statement can be prepared; (bb) the officer’s actions shall be confined to such searching, inspection, enquiries and examination as are reasonably necessary for the purpose of the search; (cc) the officer may, either before or after complying with item (aa), take such steps as the officer considers necessary to prevent persons present on the premises from concealing, destroying or tampering with any documents, data or things located on the premises; (dd) the person in charge shall have the right to be present, or to appoint a delegate to be present, during and to observe the search; (ee) the officer shall compile an inventory of all items removed from the premises and shall, prior to leaving the premises, sign the inventory and hand a copy thereof to the person in charge: Provided that if it is not possible in the circumstances to compile, sign and hand such inventory to the person in charge before leaving the premises, the officer shall seal the items to be removed and as soon as possible after removal of the items from the premises, compile the inventory in the presence of the person in charge of the premises, if that person requested to be present, and sign and hand a copy of the inventory to that person; (ff) the officer shall compile a schedule of all copies and extracts made in the course of the search and shall, prior to leaving the premises, sign and hand a copy thereof to the person in charge; and (gg) the officer must conduct the search with strict regard for decency and order. (d) A judge or magistrate may issue a warrant referred to in paragraph (aA) only on written application by an officer setting out under oath or affirmation the grounds why it is necessary for an officer to gain access to the relevant premises. (e) If the purpose of the entry is to conduct a search of the premises for goods, records or any other things in respect of which an offence in terms of this Act is suspected to have been committed or that may be used as evidence for the prosecution of such an offence, the magistrate or judge may issue such warrant if it appears from the information on oath that— (i) there are reasonable grounds for suspecting that an offence in terms of this Act has been committed; (ii) a search of the premises is likely to yield such goods, records or other things; and (iii) the search is reasonably necessary for the purposes of this Act.’’; and (b) by the substitution for subsection (6) of the following subsection: ‘‘(6) (a) If an officer, after having declared his or her official capacity and his or her purpose and having demanded admission into any premises and having complied with any applicable requirements of subsection (4), is not immediately admitted, [he] the officer and any person assisting [him] the officer may at any time, but at night only in the presence of a member of the police force, break open any door or window or break through any wall on the premises for the purpose of entry and search. (b) An officer or any person assisting [him] the officer may at any time break up any ground or flooring on any premises for the purpose of a search if the officer in his or her reasonable opinion considers such breaking up to be necessary for the purposes of this Act; and if any room, place, safe, chest, box or package is locked and the keys thereof are not produced on demand, may open such room, place, safe, chest, box or package in any manner.’’. Insertion of section 4D in Act 91 of 1964 The following section is hereby inserted in the Customs and Excise Act, 1964, after section 4C: ‘‘Officers’ powers relating to criminal prosecutions 4D. An officer may— (a) investigate for purposes of a criminal prosecution whether an offence in terms of this Act has been committed; (b) lay criminal charges for the prosecution of any such offence; and (c) provide such assistance as may be required by the prosecuting authority for the prosecution of any such offence.’’. Amendment of section 21A of Act 91 of 1964 (1) Section 21A of the Customs and Excise Act, 1964, is hereby amended— (a) by the substitution for the heading of the following heading: ‘‘Provision for [the] administration of customs controlled areas within industrial development zones and special economic zones’’; and (b) by the insertion after subsection (1) of the following subsection: ‘‘(1A) (a) For the purposes of this subsection, ‘‘Special Economic Zones Act’’ means an Act of Parliament that makes provision for special economic zones. (b) Notwithstanding anything to the contrary in this section or any other provision of this Act, for the purposes of the Special Economic Zones Act, the Commissioner may by rule— (i) after consultation with any person or authority administering any activity in a special economic zone, designate a special economic zone or any part of a special economic zone as a CCA; (ii) regulate the customs and excise administration of the CCA, including but not limited to the control of the movement of goods and persons into, within or from the CCA, goods produced or manufactured or consumed and any other activity therein to which this Act relates; (iii) prescribe requirements in all respects to ensure the security of the CCA; and (iv) provide for any other matter that may be necessary and useful for the effective and efficient administration of a CCA. (c) Except as may be otherwise provided in any Schedule or rule, the provisions of this section regarding a CCA shall apply, with the necessary changes, to a CCA designated in terms of paragraph (b).’’. (2) Subsection (1) comes into operation on the date on which the Act of Parliament referred to in section 21A(1A)(a) of the Customs and Excise Act, 1964 (Act No. 91 of 1964), comes into operation. Amendment of section 64E of Act 91 of 1964, Section 64E of the Customs and Excise Act, 1964, is hereby amended— (a) by the substitution in subsection (1)(b) for the words preceding subparagraph (i) of the following words: ‘‘Every applicant for accredited client status shall apply for a specific level thereof and, in addition to the criteria prescribed for that level by rule or that may be determined by the Commissioner, prove, as may be applicable, the following:’’; (b) by the substitution in subsection (1)(b) for subparagraph (ii) of the following subparagraph: ‘‘(ii) that the accounting records and other documents kept for providing evidence of compliance with customs and excise procedures utilise information prepared in a manner consistent with general accounting principles appropriate to the procedure concerned;’’; (c) by the substitution in subsection (1)(b) for subparagraph (iv) of the following subparagraph: ‘‘(iv) that the person who will administer the accredited client requirements has sufficient knowledge of customs and excise laws and procedures to implement and maintain an efficient and effective accredited client compliance system.’’; and (d) by the addition to subsection (1) of the following paragraph: ‘‘(c) The Commissioner may determine such separate criteria for accredited client status in respect of customs or excise clients as may be prescribed by rule.’’ Continuation of amendments made under section 119A of Act 91 of 1964 Any rule made under section 119A of the Customs and Excise Act, 1964, or any amendment or withdrawal of or insertion in such rule during the period 1 August 2012 up to and including 31 August 2013 shall not lapse by virtue of section 119A(3) of that Act.
