Exporters ‘robbed’ of tariff-free status

Small food exporters are reeling after an inexplicable clampdown by customs and excise on their goods to Europe. In an apparently nit-picking interpretation of the trade protocol between the European Union and South Africa, customs officials are threatening food exporters with fines of thousands of rands for claiming that their products are produced locally and therefore qualify for European tariff reductions.

Exporters and freight forwarders who spoke to the Mail & Guardian said the clampdown began in Octo­ber when customs officials refused to accept EUR1 certificates for products that had been passing as South African produce for years.

The most puzzling aspect of the about-turn, which may threaten local jobs, is that the punitive, conservative interpretation of trade protocols is usually practised by receiving countries wanting to implement informal protectionism. Exporting countries tends to err on the side of leniency.

The South African Revenue Service did not respond to questions by the time of going to print, and exporters said efforts to get information from customs officials on why their EUR1 certificates were being rejected were met with terse, unhelpful and cryptic responses.

They said customs had not helped them achieve compliance, leading to claims in the industry that officials were chasing some kind of performance target or, worse, that they were fishing for bribes. “This thing has a bad smell to it,” said a Cape Town-based freight forwarder who did not want to be named. “Customs have realised that they can make money out of this.”

The EUR1 certificates work on a disclosure system. An exporter must ensure that the product contains sufficient local content or that it has undergone a sufficiently complex value-adding process to qualify for European tariff reductions. The EUR1 certificate is essentially an affidavit by the exporter that the product does qualify. If customs disagrees, the exporter is slapped with a R5 000 fine for each rejected certificate.

The damage to local exporting businesses goes far beyond the fines. Irene Ivy, owner of spice exporter Cape Herb & Spice, was stunned by the sudden rejection of her EUR1 certificates for spice mixtures that undergo intense local value-adding.

She said, because of contractual obligations, she had to continue her export orders to a large German customer despite having lost her tariff-free status. The German client left her to pay the unbudgeted €60 000 (about R652 000) tariff, meaning she was exporting at a loss.

In an effort to save jobs in her factory, Ivy has decided to take the matter to court, skipping customs’ internal appeal process, which can take up to three months.

The disclosure system, and customs’ apparently obtuse attitude, has made exporters afraid to submit EUR1 certificates, foregoing an important advantage at a time when South African products need all the support they can get to maintain European supermarket shelf space.

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Related stories


Subscribers only

How lottery execs received dubious payments through a private company

The National Lottery Commission is being investigated by the SIU for alleged corruption and maladministration, including suspicious payments made to senior NLC employees between 2016 and 2017

Pandemic hobbles learners’ futures

South African schools have yet to open for the 2021 academic year and experts are sounding the alarm over lost learning time, especially in the crucial grades one and 12

More top stories

Zuma, Zondo play the waiting game

The former president says he will talk once the courts have ruled, but the head of the state capture inquiry appears resigned to letting the clock run out as the commission's deadline nears

Disinformation harms health and democracy

Conspiracy theorists abuse emotive topics to suck the air out of legitimate debate and further their own sinister agendas

Uganda: ‘I have never seen this much tear-gas in an...

Counting was slow across Uganda as a result of the internet shutdown, which affected some of the biometric machines used to validate voter registrations.

No way out for Thales in arms deal case, court...

The arms manufacturer has argued that there was no evidence to show that it was aware of hundreds of indirect payments to Jacob Zuma, but the court was not convinced.

press releases

Loading latest Press Releases…