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Itac mulling sugar reference price increase

4th October 2013

By: Callie Lombard

  

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On September 20, the International Trade Administration Commission of South Africa (Itac) published a proposed increase in the domestic dollar-based reference price (DBRP) for sugar, classifiable in tariff heading 17.01 of Schedule No 1, Part 1, of the Customs and Excise Act, from $358/t to $764/t through an adjustment of the calculation of the DBRP for sugar by basing it on the domestic cost of production.

Using the requested reference price of $764/t, the variable formula for sugar will trigger an increase in the customs duty if the London No 5 sugar settlement price falls by $20/t below the base price, which is the three-week moving average price for the London No 5 sugar settlement price. Conversely, a reduction in the customs duty will be triggered if the London No 5 sugar settlement price increases by $20/t above the base price.

The application was lodged by the South African Sugar Association (Sasa), which argued that the main motivation for an adjustment of the Southern African Customs Union (Sacu) tariff on imported sugar is the need for a fair level of protection that can be justified on the following bases: Sasa and sustainable socioeconomic development, government policy coherence, imports and the financial sustainability of the industry and the distorted world market and competitiveness.

Sasa also submitted that the industry was a key component of South Africa’s agriculture and national socioeconomic development. However, for the industry to continue in its present form and continue to contribute to government’s development objectives, it requires economic stability and sustainability. It was further submitted that the Sacu tariff for sugar plays a crucial role in this regard, as the industry cannot maintain its contribution to national development in the absence of an effective tariff, given the nature of the distorted global sugar sector.

Comment is due by October 18.

Quota Allocation for Used Overcoats
On September 20, Itac issued a request for comments on the proposed increase in the allocation of the quota for the importation of used overcoats under rebate item 460.11/00.00/01.00 for 2014. The request was submitted by the Association of Importers of Worn Overcoats (AIWO) and is for a 30% increase in the level of the quota for 2014 regarding applications in terms of the provisions under rebate item 460.11/00.00/01.00 of Schedule No 4 of the Act for permits for the partial rebate of the full rate of customs duty less 30% ad valorem on used overcoats.

Interested may comment on the following conditions being added to the guidelines rules and conditions pertaining to permits issued under rebate item 460.11/00.00/01.00 for used overcoats, car-coats, raincoats, anoraks, ski-jackets, duffle coats, mantles, three-quarter coats, greatcoats, hooded caps, trench coats, gabardines, padded waistcoats and parkas (but no clothing articles), classifiable in tariff headings 61.01, 61.02, 62.01, 62.02 and tariff subheading 6309.00.13 in such quantities, at such times and subject to such conditions as Itac may allow by specific permit:

• Containers must arrive for inspection only from Monday to Friday. No arrivals may occur during Saturday, Sunday or public holidays.

• Importers need to provide Itac with proof of salaries being paid to temporary workers.

• The date for issuing permits be changed from February to an earlier period.

The application was lodged by Itac indicated that the AIWO provided the following reasons for its request:

• This increase will make up for the permit loss of 2013 and help importers back into the position they would have been had the normal 10% increase a year been allowed for 2013 and 2014.

• The additional 8% will cater for the harsh economic situation every importer is currently experiencing, such as skyrocketing salaries and overhead costs.

• The increase will also help in sustaining the present work force and prevent job losses.

• An earlier date will assist importers to plan for the winter season in time. The reasons offered for amending the guidelines are to further improve the administration of the rebate item.

Comment is due by October 18.

Footwear Rebate Item
On September 20, Itac informed of the proposed rebate of the full customs duty on other pile fabrics, knitted or crocheted, of man-made fibres, classifiable under tariff subheading 6001.92 of Schedule No 1, Part 1, of the Customs and Excise Act for the manufac- ture of footwear with uppers of textile materials, classifiable in Chapter 64 of Schedule No 1, Part 1, of the Act.

The application was lodged by Fast Fox Footwear, trading as The Little Slippery Company, which argued that there are no local manufacturers of the product in question in the Sacu region and that the company is under threat from imported slippers.

Comment is due by October 18.

Biaxially Orientated Polypropylene Withdrawn
Itac informed on September 20 of the proposed withdrawal of the application for an increase in the rate of customs duty on biaxially orientated polypropylene, classifiable in tariff subheading 3920.20.25 and 3920.20.30 of Schedule No 1, Part 1, of the Act from a rate of customs duty of 10% ad valorem to 20% ad valorem.

The application was lodged by Fima Films, which indicated that, as a result of the change in the management structure, a new strategy which differs from that of the previous management was developed. The new management has considered the application for the proposed increase in the rate of customs duty and decided that it would not be beneficial for the company owing to the negative response received from the downstream industry opposing the application.

Comment is due by October 18.

Tariff Application Correction
On September 6, Itac published a correction notice (the original notice was published on August 23) amending the tariff subheading for heat-exchange units from tariff subheading 8419.40 to 8419.50.

Comments is due by October 4.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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