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South African trade: the impact of delays in new legislation taking effect

Malcolm Hartwell
June 08, 2017

Posted in Transport Southern Africa

In 2003, SARS Customs began the colossal task of re-writing the South African Customs legislation. One of the aims of this legislative revision was to give effect to the Revised Kyoto Convention (RKC) and other binding international instruments. SARS also wanted to establish a sound, clear and logical legislative framework that would enhance and cater for the many other legislative instruments that are reliant on customs control for their implementation.

The Customs Control Act, 2014, Customs Duty Act, 2014, and the Customs and Excise Amendment Act, 2014, were published in the Government Gazettes in July 2014. But these Acts will only come into effect on a date yet to be determined by the President. As of May 2017, none of the revised legislation has come into effect. 

As any frequent flyer would attest to, there is nothing efficient or positive about a delay. The most noticeable result of this delay in the implementation of new customs legislation is the discrepancy between current legislative requirements and common practice within the trade industry. This discrepancy extends to the incompatible relationship that exists between the Customs and Excise Act, 1964, its Rules and its Regulations.

These discrepancies have resulted in an influx of appeals as a result of scheduling by SARS allegedly due to non-compliance with the current legislation, scheduling being the imposing of fines due to non-compliance in accordance with a particular schedule. The appeal process is begrudgingly instituted by frustrated participants in the industry. This frustration stems from the fact that the customs regime as it stands has failed to keep up with the change in focus of customs work or with the radical changes to the environment in which international trade is conducted. One such change is the dependency on new and evolving information technology which has become a core element in the practice of trade.

In its current form, South African customs legislation is unable to respond to new risks and does not promote commercial dealings. It is technical and what has become increasingly evident is the uncertainty it creates for traders. This is particularly unfortunate in light of the South African economy’s need for effective and user-friendly trade to promote its growth.

It is impossible to predict when this legislation will come into effect.  Delay is due partly to political wrangling over the border control authority and partly by the need to draft and pass subordinate legislation. The new legislation was rewritten with the aim of supporting international legislative requirements, to keep pace with global trade trends and technological advances, and to ensure Customs procedures are efficient, predictable and transparent for trade. Unfortunately however, much like waiting for rainfall during a drought, hope continues to dissipate while need continues to grow. We can only continue to hope that the Customs and Excise legislative drought is short-lived.

 Inside Africa would like to thank Hannah Taylor, Trainee, for her contribution to this blog post.

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