Still doubting that the three cornerstones of customs duty and, for that matter, excise duty are tariff classification, valuation and origin? You will recall that the instalment of this column published on November 14 to 20, 2014, dealt with the core principles of customs duty. These were identified as classification (tariff classification), valuation and origin, in line with research documented in ‘The Core Principles of Customs Duty: A South African Perspective’. Classification traced its roots to 400 BC, classification to 199 BC and origin to around 907 to 911.

If you still have your doubts, then consider this: at the fifty-fifth session of the World Customs Organisation (WCO) Harmonised System Committee (HSC), held at the WCO headquarters, in Brussels, Belgium, from March 11 to 20, it was agreed that technical guidelines on advance rulings for tariff classification, valuation and origin be drafted.

As a matter of interest, the Customs Duty Act, 2014, which has yet to take effect, makes provision for self-determination, determination and redetermination for the three cornerstones in Chapter 6 (tariff classification of goods), Chapter 7 (valuation of goods) and Chapter 8 (origin – I would have expected this to be called ‘origin of goods’, for consistency).

The ‘interpretation’ of the Act provides for ‘advance ruling’, which means an advance tariff ruling, an advance valuation ruling and an advance origin ruling. An advance tariff ruling is a ruling issued by a customs authority on the tariff classification of goods of a specific class or kind in order to settle in advance the tariff classification of goods of that class or kind when cleared by or on behalf of the recipient of the ruling for home use or a customs procedure during the validity period of the ruling.

An advance valuation ruling is a ruling issued by a customs authority on a valuation criterion applicable to the valuation of goods of a specific class or kind in order to settle in advance the application of that valuation criterion in the valuation of goods of that class or kind when cleared by or on behalf of the recipient of the ruling for home use or a customs procedure during the validity period of the ruling. (The ‘interpretation’ does not list the aforementioned advance rulings in alphabetical order, as one would expect.)

An advance origin ruling is a ruling issued by a customs authority on the origin of goods of a specific class or kind in order to settle in advance the origin of goods of that class or kind when cleared by or on behalf of the recipient of the ruling for home use or a customs procedure during the validity period of the ruling.

A recipient, in relation to an advance ruling, is a person to whom an advance ruling has been issued.

Though not yet published for comment, one would expect the rules of the Act to be formulated for advance rulings.

Tariff or Valuation Determination Appeal
On March 27, the South African Revenue Service (Sars) informed of the substitution in Rule 77H.07 of paragraph (b) of the Customs and Excise Act, 1964: “(b) An appeal against any tariff or valua- tion determination (i) by an officer stationed at a branch office may only be considered and decided by an authorised officer within the division responsible for the administration of the tariff and valuation section in head office; (ii) by an authorised officer employed within the division responsible for the administration of the tariff and valuation section may only be considered and decided by the customs national appeal committee.”

HSC Meeting
The HSC meeting of March 11 to 20 was attended by about 125 delegates (WCO member administrations and international organisations) representing 59 contracting parties to the HS Convention.

The meeting took 785 classification decisions, including 751 decisions relating to pharmaceutical (INN) products in connection with the implementation of the World Trade Organisation (WTO) Agreement on Trade in Pharmaceutical Products, adopted nine sets of amendments to the explanatory notes and approved 16 new classification opinions. When deemed approved by the WCO council at the end of next month, these classification decisions (except those in respect of which requests for re-examination will be entered) and amendments to the explanatory notes and Compendium of Classification Opinions will be made available on the WCO website.

The HSC also adopted a draft Article 16 council recommendation relating to certain corrections to the HS 2017 amendments of the Harmonised System Nomenclature. In this draft Article 16 council recommendation, the HSC included certain amendments to Chapter 44 that were requested by the Food and Agriculture Organisation of the United Nations but had been omitted from the HS 2017 amendments and encouraged contracting parties to apply these amendments as of January 1, 2017. The HSC agreed to the correlation tables between the HS 2012 and HS 2017 versions and the correlation tables for the additional amendments to Chapter 44.

The HSC also examined a series of general questions, adopted an update of its terms of reference and also agreed to the draft of technical guidelines on advance rulings for tariff classification, valuation and origin. The HSC also adopted 17 sets of amendments to the explanatory notes consequential to the HS 2017 amendments.

Special Economic Zone
On March 20, Sars informed of the amendment of the rules of Section 21A of the Act for alignment with new special economic zones (SEZ) legislation to be implemented at a later date.

On the same day, Trade and Industry Minister Rob Davies issued SEZ regulations – under Section 41(1) of the Special Economic Zones Act, 2014 – for public comment. The deadline for comments is April 30.

Customs Control Act Workshop
The postponed Sars workshop on chapters 32 to 41 of the Customs Control Act will now be held on April 23. The chapters are contained in Part 2 of Chapter 2 and deals with places of entry and exit, specifically customs control, places of entry and exit and customs controlled areas.

Garlic Sunset Review
The International Trade Administration Commission of South Africa has given notice of the initiation of a sunset review of the antidumping duties on fresh or chilled garlic originating in or imported from the People’s Republic of China. Comment is due by April 27.