There is currently a rebate of the anti-dumping duties on bone-in chicken from the USA (the first 69 000 tons at least). Given that the anti-dumping duty is R9.40 per kg, this is not an insignificant benefit.

Effective 1 February 2019, the rules governing this rebate have been revised with interesting implications. This means that all applications made for an allocation of quota for the next quarter of imports (April to June 2019), will need to be done under the new guidelines. Here are some important changes to be considered by any companies wishing to apply for an allocation of quota under this rebate:

Changes (or not) to the rebate guidelines

  1. The concept of related parties has been more clearly defined than in the original guidelines. If you are related, you need to disclose the relationship and if you are related, your applications will be viewed as one and quota allocated accordingly.
  2. DAFF still does the quota allocations, which is a problem I had hoped would be solved in the new guidelines. In the draft of these guidelines, ITAC had proposed that Historically Disadvantaged Importers (HDIs) present a business plan to the DTI, who would then determine which of these businesses would likely succeed. This step has not appeared in the new guidelines, leaving us with the very erratic allocation methodology of DAFF (their methodology is a secret but the outcomes are not what would be expected).
  3. ITAC had proposed prohibiting the sale of goods in bond, but this prohibition did not survive to the final draft, which I see as a good thing. Sales in bond and sales on the high-seas are common occurrences and to prohibit them would have made normal trading extremely difficult to do.
  4. ITAC very explicitly stated their ability to withdraw or cancel permit if they believe someone has transgressed the guidelines. This is not new as these powers were always vested in ITAC through the International Trade Administration Act, but having this clearly stated in the guidelines makes this point extremely clear. It may also help to clear up any confusion between SARS and ITAC, where SARS sees for themselves a (sometimes) inappropriately extended oversight role over this rebate.
  5. ITAC and DAFF can request documents from the other party and if these documents are not handed over the applicant can be refused an allocation of quota or can have ITAC refuse to issue their permit. There may be some collateral damage here, but mostly I see this as a good thing. The free flow of information is critical to keeping this quota working as intended and not being abused. It was an absurdity that this information could not easily flow between these parties in the prior version of these guidelines.
  6. I am concerned that at no point in the guidelines is any obligation imposed on DAFF to publish how much quota was allocated to each applicant, along with whose quota was denied. This is critical information if the industry is to self-regulate and if we are to avoid the possibility of corrupt relationships developing between an importer and DAFF. To be clear, I am not suggesting that such relationships exist, but rather that we want to avoid this happening and the current opacity of the allocations creates an incentive for bad behaviour.

If you would like a copy of the revised regulations, please mail us on info@xa.co.za.

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