The Customs and Excise Act No. 91 of 1964 (“Act 91 of 1964”) is in the process of being re-written in its entirety.

Once the re-write process is complete, Act 91 of 1964 will be superseded and will be replaced by a Customs Duty Act; a Customs Control Act and an Excise Duty Act.

On 18 April 2011 a second draft of the Customs Control Bill (“Draft Customs Control Bill”) was released for a short round of comment. Comments are due by 16 May 2011.

The Draft Customs Control Bill contains the operational aspects of Customs control over all goods and persons that move into and out of South Africa.

The notable changes that the second draft of the Customs Control Bill introduces are:

• The first draft of the legislation prescribed numerous time limits for the submission of numerous advance notices; arrival reports; outturn reports; departure reports; cargo manifests etc. The Draft Control Bill now provides that such reports and notices must be submitted “within a timeframe as may be prescribed by rule”. This means that the timelines will be prescribed in the rules which have not yet been released for comment.

• The allowable storage period for goods cleared under the warehousing procedure has been increased from 12 months in the first draft to 2 years in the current draft.

• Good imported under the temporary admission procedure e.g. Schedule 4 imports under rebate to be used for a specific purpose and for a specific period must be cleared for re-export and re-exported from the South Africa. The maximum period for storage under the temporary admission procedure will be prescribed by rule. If no period prescribed, the period will be 1 year from date of clearance.

• Goods cleared for export must be exported at least a number of hours as may be prescribed by rule before the vehicle or vessel departs from the terminal.

• All new licenses and registrations will be valid for a period of 3 years from the date of issue.

• New administrative penalties are introduced with respect to:

• Fixed amount penalties
• Prosecution avoidance penalties
• Termination of seizure penalties
• Withdrawal of confiscation penalties
• Missing goods penalties

• Offences are categorized for judicially imposed penalties:
• Category 1 offence e.g. bribery; diversion; concealment
• On conviction  - a fine of up to R 1 million or up to 5 years imprisonment or both
• Category 2 offence e.g. Impersonating a SARS officer; hindering an officer in the performance of his duties
• On conviction a fine of up to R 500 000 or imprisonment for up to 3 years or both

• Liability of registered agents of persons not located in South Africa and persons managing juristic persons if they  knew or reasonable should have known of any acts or omissions contrary to the law and failed to take reasonable steps to prevent; or when becoming aware failed to notify SARS.

• An export clearance declaration must be submitted to SARS, if the goods are to be exported by sea, not later than 48 hours before the goods are delivered to the sea cargo terminal where the goods will be loaded on board the foreign-going vessel in which the goods are to be exported. In the first draft bill the time limit prescribed for compliance with this requirement was 72 hours.

Other notable amendments that remain unchanged from the first draft of the legislation are:

• Goods must be cleared for one of 13 “processes”. Each process has its own Chapter in the Draft Control Bill.
• Import clearance declarations must be submitted within 3 working days of arrival into the Republic.

The South African Revenue Service has advised that the Draft Customs Duty Bill will be released shortly for a second round of comments.