Earning Distinction in SA Inc’s Supply Chain
Earning Distinction in SA Inc’s Supply Chain
There are many South African traders who engage compliantly in legitimate international trade – to the great benefit of our economy. They should not be subjected to the same level of scrutiny and risk enforcement as illicit traders, says DEVLYN NAIDOO.
This repeated scrutiny risks deterring further trade. This is due to the increasing costs, delays, and service unreliability to a trader’s supply chain associated with drawn on detentions. Where it is still necessary to enforce risk management in such cases, the enforcement should be efficient and use the relevant avenues. These include post facto audits, as well as entity and transactional risk differentials aligned with the standards of the World Customs Organization’s (WCO’s) Revised Kyoto Convention (RKC). South Africa acceded to the RKC on 20 April 2004; Standard 6.5 of the convention provides that customs shall adopt a compliance measurement strategy to support risk management, whilst Standard 6.6 provides that customs control systems shall include audit-based controls.
Dr Juanita Maree, CEO of the Southern African Association of Freight Forwarders (SAAFF), often reminds us that supply chains are predicated on service reliability, cost, and time efficiencies. Business needs to be supported by efficient risk management processes. It is therefore admirable to note the progressive purpose and maturity with which South African Revenue Services (SARS) is enhancing efficiencies through frequent inclusive dialogue with all business stakeholders. This is catalysing coordinated interventions with both traditional and new partners to facilitate legitimate trade.
Efficiency, reliability, predictability, and transparency are all key outcomes that emanate from the purpose-driven engagements underpinned by a level of maturity from both business and customs. The registration, licensing, and accreditation division within SARS distinguishes segments of traders through the traditional Authorised Economic Operator Safety and Security (AEO-SS) programme, thereby establishing a cadence indicator for entity risk. Gaining accreditation as an AEO-SS client earns you a distinction within the supply chain of SA Inc – whether you are a cargo owner, importer, exporter, manufacturer, or extended role player within the supply chain. It is a level up from being a licensed client to being an accredited client; this brings with it an array of legislated benefits under rules S64E.14 (a) and S64E.15 (a) of the Customs and Excise Act 91 of 1964, awarded at the discretion of the commissioner for a particular category of clients, or in particular cases.
The South African economy can ill afford the burden of additional costs and delays associated with tedious frontline interventions. Many SMMEs are struggling to keep their doors open due to supply chain disruptions caused by these interventions, so entity risk segmentation is imperative. Furthermore, export growth and the manufacturing sectors are reliant on efficient risk enforcement and management.
Recognising the need for – and significance of – a sustained Customs-Business partnership, the WCO developed a Customs-Business Partnership Guidance. This assists members in developing a process for regular consultation and a robust partnership with business. It is appreciated that – in the absence of international traded goods in a particular territory – there will be little to no need for enforcement or risk management by customs administrations and other government agencies. International trade continues to play a critical role in the development of our country’s economy, especially insofar as it drives manufacturing output, thereby increasing net export throughput. In 2023, net exports contributed negatively to growth in expenditure on GDP in the second quarter.
Through the AEO-SS accreditation programme, SARS Customs is offering traders (importers, exporters, manufacturers, and extended role players in the supply chain) a unique opportunity to be distinguished as trusted traders in the supply chain, along with associated access to a series of legislated benefits provided at the discretion of the Commissioner. This includes significantly reduced documentary and physical inspections, and extends to other government agencies (to the extent of agreements made between SARS and respective agencies). Additionally, the inclusive engagements and adoption of the nine strategic objectives are reminiscent of the customs-to-business partnership guidance shared by the WCO.
In the words of US sociologist Bertice Berry: “When you walk with purpose, you collide with destiny.”
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