Tag Archive | customs

Parliament approves new Border Management Authority

……article 20 June 2020…….

The road to Africa: six new border facilities….

Department of Home Affairs has briefed Parliament on the final plan for the construction of six new modern facilities at South Africa’s border posts, part of a major continental plan to improve cross border trade in the SADC region.  The focus at present is  on issues involving the movement of goods transported by road.  This is in the absence of common rail networks and the lack of development by Transnet in the region.

This month Minister of Home Affairs, Aaron Motsoaledi and Deputy Minister Njabulo Nzuza accompanied by Jackson McKay, the Home Affairs DG,  posted MPs of the Transport Committee on the latest position on development, a process which has until now been limping through both Parliament and the Department of Home Affairs for the last three years primarily due to changes in Cabinet, the difficulty of defining responsibilities between home affairs, treasury, public works,  defence, police and SARS.

Ideas on paper

However, the enthusiasm of the Department of Home Affairs (DHA) for the project remains undiminished, it seems.  Most in business agree to the concept but providing it improves delivery, eases trade and is as far as possible, corruption proof.   In addition, it is acknowledged by most  that fully computerised customs posts are a logical answer but implementing the work so far in this area by both home affairs and treasury needs careful handling, MPs have said

The co-ordination in external affairs of state between some seven SADC countries have added to the gargantuan task, this being now the  ladder to climb.

Officialdom

The Border Management Authority (BMA) Bill was proposed to Parliament in 2015 by the then Home Affairs minister, Malusi Gigaba, and at the time a strong suspicion was harboured by business and industry that the ulterior motives of the Bill’s tabling had much to do with the illness of state capture revelations at the time being exposed.

Many thoughts were expressed around accusations of “empire building” by DHA and the very thought of combining customs collection with immigration, complemented by adding defence and security, led to raised eyebrows amongst opposition MPs and some sections of industry.

It became apparent also that as early as 2013, MOUs were struck up between SAPS, SADNF and DHA, totally without the knowledge of Parliament on the staffing of a combined function to police borders, primarily with an aim of controlling immigration. These queries continued for the period that Gigaba was promoted to Minister of Finance by Zuma.

Hands of the money

Nevertheless, any idea of a further MOU between National Treasury and DHA was totally rejected by treasury officials. Within weeks of the Bill being first tabled in Parliament under the aegis of the Fifth Parliament, Ismail Momoniat of Treasury expressed the Minister of Finance’s view to MPs that any hopes that  DHA had of their new BMA staff  being involved with tax matters and customs dues would be rejected in its entirety.

At that point the Bill was still particularly loose and unacceptable as far as its wording was concerned  but it was still agreed by Parliament that, in a broader sense, trade corridors had to be improved.   Injected into the discussions during 2017 was Jacob Zuma’s eleventh cabinet change in the home affairs portfolio, past minister Ayanda Dlodlo, and as a person totally unaware of trade issue implications and the whole concept bogged down, beset as it was with refugee and immigration matters.

As time passed the task of opening up diplomatic and trade relationships in Africa seemed to become more evident. The project then fell to the now incumbent Minister Aaron Motsoaledi who has started pushing for better trade relationships and has begun forcing through the mechanics of trade mechanics and infrastructure.    With neighbouring relationships now coming to the fore under President Ramaphosa as African Union chair, to some extent SADC issues are looking up but still manacled by  economic collapse in both Zimbabwe and Mozambique.

Wasted years

The core of  ANC thinking, like so many other radical African movements, focuses but little in economic terms on international trade and relationships and  nowhere  in this area has this been more evident than in the total lacking of debate during parliamentary meetings.  No serious consideration of development on the subject of road and rail links in Southern Africa has arisen at all or any real focus on the development of port authority controls and handling facility development for anything other than domestic reasons.  Most SADC countries complain of Durban Port “bottlenecks”.

In the past, such matters were left to a crumbling Transnet and under Jacob Zuma this position deteriorated to its worst ever in the history of South Africa, but now, in 2019, the Bill was re-tabled in the new Parliament of Cyril Ramaphosa and the ever busy Minister Dr Aaron Motsoaledi seems to have rescued to some extent the situation, coupled with efforts by the Ministry of Tran

sport with the Economic Regulation of Transport Bill, aiming at pricing controls  and transport management, which Bill is being processed by the parliamentary transport committee.

Refugees under focus  

During the recent passage of the BMA Bill, DG of Home Affairs, Jackson Mackay,  gave it his  best in a presentation on the subject to MPs and one had to admire what has been achieved in such a negative environment.     As a result of this portfolio committee meeting, the concept is now officially approved by Parliament, with MPs now calling for regular updates on the new “one stop border posts”, or OSBs, which will be at Beitbridge, Lebombo, Maseru Bridge, Kopfontein, Ficksburg and Oshoek.

Jackson Mackay’s presentation was supported by the 2017173-page report developed by the Cross-Border Road Transport Agency (C-BRTA) which had provided a bench-marking exercise along the highly trafficked road transport corridors in the west and east Central African regions, all with a view of finding solutions to opening up trade movement to and from South Africa.

Essentially, the “challenges” established, Mackay said, were congestion, delays at borders, and long journey turnaround times, all of which reduced safety and high cost of doing business, such factors impeding inter-regional trade.    Also, trade between the partnering countries stands at only 12% of the economic potential of the region.  Urgent intervention was called for by the report, Mackay said, especially given the fact that cross-border road transport carries over 80% of the total goods that are traded in the region.

Conclusion

The report concluded that the status-quo cannot be left to perpetuate if SADC was to achieve its set socio-economic and developmental objectives without implementing the multilateral cross-border road transport arrangements.  This has now been achieved, MacKay said, in the form of the Border Management Authority, already partially staffed. Essential now is the transformation of  prioritised border posts into “One Stop Border Posts” (OSBs)  to address “the hard and soft infrastructure challenges experienced at commercial border posts along strategic regional corridors”.

DG MacKay said that South Africa currently had an extraordinary number of border points at 72 in all.   Fifty-three of these were on land, eleven airports and eight seaports. Six of these had been officially selected as OSBs and were all road border crossing.The idea is at these crossings transport of goods is no longer stopped twice as previously, once for each country, but only once by the BMA on behalf of both nations. A speedy and consolidated service is to be installed.

Public/private partnerships

MacKay closed with the news that the project had been was registered with National Treasury (NT) as a private-public sector partnership and five consortia had pre-qualified in 2018 tenders to construct the OSBs, Treasury having granted approval to commence the request for proposals.

Budgets are to be submitted to Treasury in the 2020/21 financial year, MacKay said, and that the developers of each port of entry would be appointed by the end of the financial year. The key principle in all planning was “traffic segmentation, where the plans would have separate lanes for cargo, freight, general cars and for vehicles that needed to have goods declared, all only once”.

SA and Zimbabwe had already started preparing an OSB procedure manual for operations on their mutual border, MacKay said, and agreement had been reached with Botswana.  Construction is to start 2022-2024 on all six ports of entry and “the concessionary period” of start-up operations would be in the years 2024-2044, he concluded.

 

 

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Border Management Authority around the corner

SARS role at border posts being clarified ….

In adopting the Border Management Authority (BMA) Bill, Parliament’s Portfolio Committee on Home Affairs agreed with a wording that at all future one-stop border posts, managed and administered by the envisaged agency and reporting to Department of Home Affairs (DHA), were to “facilitate” the collection of customs revenue and fines by SARS staff present.

However, on voting at the time of the meeting, Opposition members would not join in on the adoption of the Bill until the word “facilitate” was more clearly defined and the matter of how SARS would collect and staff a border post was resolved.

Haniff Hoosen, the DA’s Shadow Minister of Economic Development said that whilst they supported the Bill in general and its intentions, they also supported the view of National Treasury that the SARS value chain could not be put at risk until Treasury was satisfied on all points regarding their ability to collect duty on goods and how.

Keeping track

Most customs duty on goods arriving at border controls had already been paid in advance, parliamentarians were told; only 10% being physically collected at SA borders when goods were cleared.

However, with revenue targets very tight under current circumstances both SARS and Treasury have been adamant that it must be a SARS employee who collects any funds at border controls and the same to ensure that advance funds have indeed been paid into the SARS system.

The Bill, which enables the formation of the border authority itself, originally stated that it allowed for the “transfer, assignment and designation of law enforcement functions on the country’s borders and at points of entry to this agency.”

Long road

It was the broad nature of transferring the responsibility customs of collection from SARS to the agency that caused Treasury to block any further progress of the Bill through Parliament, much to the frustration of past Home Affairs Minister, Malusi Gigaba.   It has been two years since the Bill was first published for comment.

DHA have maintained throughout that their objective is to gain tighter control on immigration and improve trading and movement of goods internationally but Treasury has constantly insisted that customs monies and payments fall under their aegis. The relationships between custom duty paid on goods before arrival at a border to Reserve Bank and that which must be paid in passage, or from a bonded warehouse was not a typical DHA task, they said.

Breakthrough

It was eventually agreed by DHA that SARS officials must be taken aboard into the proposed structure and any duties or fines would go direct to SARS and not via the new agency to be created or DHA.

This was considered a major concession on the part of DHA in the light of their 5-year plan to create “one stop” border posts with common warehouses shared by any two countries at control points and run by one single agency. More efficient immigration and better policing at borders with improving passage of goods was their stated aim.

Already one pilot “one stop border post”, or OSBP, has been established by DHA at the main Mozambique border post by mixing SAPS, DHA and SARS functions, as previously reported.

To enable the current Bill, an MOU has been established with SAPS has allowed for the agency to run policing of SA borders in the future but Treasury subsequently baulked at the idea of a similar MOU with SARS regarding collection of customs dues and the ability to levy fines.
Bill adopted

At the last meeting of the relevant committee, Chairperson of the PC Committee on Home Affairs, Lemias Mashile (ANC) noted that in adopting the Bill by majority vote and not by total consensus, this meant the issue could be raised again in the National Council of Provinces when the Bill went for consensus by the NCOP.

Objectives

The Agency’s objectives stated in the Bill include the management of the movement of people crossing South African borders and putting in place “an enabling environment to boost legitimate trade.”

The Agency would also be empowered to co-ordinate activities with other relevant state bodies and will also set up an inter-ministerial committee to handle departmental cross-cutting issues, a border technical committee and an advisory committee, it was said.

Mozambique border

As far as the OSBP established at the Mozambique border was concerned, an original document of intention was signed in September 2007 by both countries. Consensus on all issues was reached between the two covering all the departments affected by cross-border matters.

Parliament was told at the time that the benefit of an OSBP was that goods would be inspected and cleared by the authorities of both countries with only one stop, which would encourage trade. In any country, he explained, there had to be two warehouses established, both bonded and state warehouses.

Bonded and State warehouses

Bonded warehouses which were privately managed and licensed subject to certain conditions, were to allow imported goods to be stored temporarily to defer the payment of customs duties.

Duties and taxes were suspended for an approved period – generally two years but these had to be paid before the goods entered the market or were exported, MPs were told. The licensee bore full responsibility for the duty and taxes payable on the goods.

State warehouses on the other hand, SARS said at the time, were managed by SARS for the safekeeping of uncleared, seized or abandoned goods. They provided a secure environment for the storage of goods in which the State had an interest. Counterfeit and dangerous or hazardous goods were moved to specialised warehouses.

Slow process

MPs noted that it had taken over six years for the Mozambique OSBP to be finalised. SARS said there were many ramifications at international law but added two discussions with Zimbabwe for the same idea had now taken place. It was hoped it would take less time to reach an agreement as lessons had been learnt with the Mozambican experience.

On evasion of and tax, SARS said in answer to a question that losses obviously occurred through customs avoidance and evasion, so it was consequently it was difficult to provide an overall figure on customs duty not being paid, as evasion was evasion. Smuggling of goods such as narcotics, or copper, which could only be quantified based on what had been seized.

The same applied to the Beit Bridge border with Zimbabwe where cigarette smuggling was of serious concern and through Botswana.

In general, it now seems that Home Affairs is to adopt an overall principle of what was referred to as having one set of common warehouses for one-stop declaration, search, VAT payment and vehicle movement with a SARS presence involving one common process for both countries subject to a final wording on the SARS issue before the Bill is submitted for signature.

Previous articles on category subject
Border Authority to get grip on immigration – ParlyReportSA
Mozambique One Stop Border Post almost there – ParlyReportSA

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