Safeguard duties imposed on frozen potato chips

8th August 2014

By: Callie Lombard

  

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On July 25, the South African Revenue Service (Sars) imposed a final (definitive) safeguard on frozen potato chips (or French fries), classifiable under tariff subheading 2004.10.20, through two Government Gazette notices.

The safeguard of 40.92% was imposed from July 25, 2014, to July 4, 2015, to be followed by 20.45% safeguard from July 5, 2015, to July 4, 2016.

The safeguard is applicable to all countries with the exclusion of the following: Afghanistan, Albania, Algeria, American Samoa, Angola, Antigua and Barbuda, Armenia, Azerbaijan, Bangladesh, Belarus, Belize, Benin, Bhutan, Bolivarian Republic Venezuela, Bolivia, Bosnia and Herzegovina, Botswana, Brazil, Bulgaria, Burkina Faso, Burundi, Cambodia, Cameroon, Cape Verde, Central African Republic, Chad, Chile, China, Colombia, Comoros, Congo, Costa Rica, Côte d’Ivoire, Cuba, Djibouti, Dominica, Dominican Republic, Democratic People’s Republic of Korea, Ecuador, Egyptian Arab Republic, El Salvador, Eritrea, Ethiopia, Federal States of Micronesia, Fiji, Gabon, Gambia, Georgia, Ghana, Grenada, Guatemala, Guinea, Guinea-Bissau, Guyana, Haiti, Honduras, India, Indonesia, Iraq, Islamic Republic of Iran, Jamaica, Jordan, Kazakhstan, Kenya, Kiribati, Kosovo, Kyrgyzstan, Lao Peoples Democratic Republic, Latvia, Lebanon, Lesotho, Liberia, Libya, Lithuania, Madagascar, Malawi, Malaysia, Maldives, Mali, Marshall Islands, Mauritania, Mauritius, Mexico, Mongolia, Montenegro, Morocco, Mozambique, Myanmar, Namibia, Nepal, Nicaragua, Niger, Nigeria, Pakistan, Palau, Panama, Papua New Guinea, Paraguay, Peru, Philippines, Republic of Moldova, Romania, Russian Federation, Rwanda, Saint Lucia, Saint Vincent and the Grenadines, Samoa, São Tomé and Principe, Senegal, Serbia, Seychelles, Sierra Leone, Solomon Islands, Somalia, South Sudan, Sri Lanka, State of Palestine (West Bank and Gaza), Sudan, Suriname, Swaziland, Syrian Arab Republic, Tajikistan, Tanzania, Thailand, the Democratic Republic of Congo, the former Yugoslav Republic of Macedonia, Timor-Leste, Togo, Tonga, Tunisia, Turkey, Turkmenistan, Tuvalu, Uganda, Ukraine, Uruguay, Uzbekistan, Vanuatu, Vietnam, Yemen, Zambia and Zimbabwe.

The frozen potato chips trade remedy investigations – the safeguard investigation and the antidumping investigation – have had an interesting history, but all is not yet done – the antidumping investigation still has to be completed.

On November 23, 2012, the International Trade Administration Commission of South Africa (Itac) initiated the safeguard investigation on frozen potato chips, classifiable under tariff subheading 2004.10.90. Then, on March 8, 2013, Itac informed of the termination of a safeguard investigation on frozen potato chips (2004.10.90) and announced the initiation of a safeguard investigation on frozen potato chips (2004.10.90) on the same day.

On June 21, 2013, Itac initiated an antidumping investigation on frozen potato chips (2004.10.90). On July 5, 2013, Sars imposed a provisional safeguard on frozen potato chips (2004.10.90). The reason for the provisional safeguard was published in Itac’s Report No 436, dated June 19, 2013. On July 26, 2013, Itac published an invitation to a public hearing on safeguard investigation on frozen potato chips (2004.10.90). On August 16, 2013, Sars published the amendment of the tariff subheading for frozen potato chips amended from 2004.10.90 to 2004.10.20.

On September 6, 2013, Itac amended the provisional safeguard on frozen potato chips (2004.10.20), with retrospective effect from August 16, 2013, up to and including January 20, 2014. On December 20, 2013, Sars imposed a provisional antidumping duty on frozen potato chips (2004.10.20), to June 20, 2014. The reason was published in Itac Report No 458, dated December 13, 2013. On July 25, 2014, Sars imposed a final safeguard on frozen potato chips (2004.10.20). The reason for this will be in an Itac report, which was not available at the time of writing.

Iron/Steel Tariff Application
Itac has announced a proposed increase in the ‘general’ rate of customs duty on wire of iron or nonalloy steel, plated or coated with zinc, classifiable under tariff subheading 7217.20, from free of duty to 10% ad valorem; barbed wire of iron or steel, twisted hoop or single flat wire, barbed or not, and loosely twisted double wire, of a kind used for fencing, of iron or steel, classifiable under tariff subheading 7313.00, from 5% ad valorem to 15% ad valorem; other grill, netting and fencing, welded at the intersection, plated or coated with zinc, classifiable under tariff subheading 7314.31, from 5% ad valorem to 15% ad valorem; and other cloth, grill, netting and fencing, plated or coated with zinc, classifiable under tariff subheading 7314.41, from 5% ad valorem to 15% ad valorem.

The application was lodged Hendok, which argued that labour, electricity and the domestic price of steel have increased over the last few years, resulting in increased domestic ex-factory cost. This has left the Southern African Customs Union industry vulnerable to imported products, which are being sold at or below the domestic manufactured costs.
Comment is due by August 15.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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