The COVID-19 outbreak has turned into a global pandemic claiming the lives of more than 35 000 people. Over 700 000 people have been infected since December 2019. In Italy alone, more than 9 000 people have died. The numbers keep getting more frightening with no signs of the outbreak abating.
Countries all over the world are battling to contain the virus and flatten the curve. The major impediment is the supply of medical equipment necessary to combat the outbreak. There is a shortage of critical supplies. Governments have turned to international trade policies with a string of measures to ensure the continued flow of essential supplies.
New Measures introduced by the SA government
The South African government has acted reasonably swiftly with the introduction of import and export control measures. The fact that South Africa is dependent on international trade for access to critical medical equipment makes these provisions important. Below is a list of actions that have been taken.
1. REBATE 412.11- Temporary rebate in critical supplies during the National state of disaster
The International Trade Administration Commission (ITAC) activated rebate item 412.11, which provides a full rebate of customs duties and VAT exemption on essential supplies during the COVID-19 outbreak. ITAC has published the standard operating procedures for businesses importing critical supplies during the national disaster, which you can obtain here.
The rebate wording reads as follows:
Rebate item 412.11/00.00/01.00 of Schedule No. 4, Part 2 of the Customs and Excise Act No. 91 of 1964 (Customs and Excise Act) makes provision for rebate of the full duty on the:
“Importation of goods imported for the relief of distress of persons in cases of famine or other national disaster; under any technical assistance agreement or in terms of an obligation under any multilateral international agreement to which a Republic is a party provided that the importation of any goods under this rebate item shall be subject to a certificate issued by International Trade Administration Commission and to such other conditions as may be agreed upon by the Governments of the Republic, Botswana, Lesotho, Swaziland and Namibia; and goods imported under this item shall not be sold or disposed of to any part who is not entitled to any privileges under the rebate item, or be removed to the area of Botswana, Lesotho, Swaziland or Namibia without the permission of the Commissioner.”
ITAC has identified a list of critical supplies ranging from face masks, ventilators, medication. Please click the link below for a complete list of critical supplies.
If you intend to import medical equipment into South Africa, it is vital to ensure that you obtain all the necessary documents. You will need a rebate permit issued subject to guidelines, rules, and conditions specified by ITAC. Importers have to submit the rebate permit application forms to ITAC. ITAC will process the applications within 24-48 hours of being submitted.
For more information on whether your product falls under the critical list, please contact us directly at firstname.lastname@example.org. This email address is continuously monitored and any requests will receive urgent attention.
XA is working with BUSA to identify additional critical products that require temporary tariff relief due to shortages.
2. Rebate item 621.08 on imports of ethyl alcohol for the manufacture of disinfectant classifiable under heading 38.08
SARS has implemented a rebate of the excise duty of partially denatured or undenatured ethyl alcohol under rebate item 621.08 in Part 1D of Schedule No 6 to the Customs and Excise Act, for the manufacture of disinfectant classifiable in heading 38.08.
This provision will last for the duration of the national disaster. Manufacturers of disinfectants must apply for temporary registration in the form of a letter on an official business letterhead. The SARS commissioner may prescribe by rule the quantities supplied to recipients of partially denatured or undenatured ethyl alcohol registered in terms of the special conditions set out in the gazette.
3. Export control on certain products from South Africa
3.1. Export Controls
Although the South African government has made commendable efforts to ensure a continued supply of medical equipment, other countries have introduced a whole raft of measures to restrict exports of medical equipment. Some of the countries are traditional suppliers to South Africa. India introduced export restrictions on over 20 tariff subheadings. Please click here for a complete list of products banned from India.
The EU introduced export restrictions on protective equipment covering over 20 tariff subheadings. South Africa imports some of these products. Please click here for a complete EU list.
As of 21 March 2020, 46 export restrictions on medical supplies have been introduced by 54 governments since the beginning of the year. Some of these countries include Bulgaria, France, India, Indonesia, Saudi Arabia, the Republic of Korea, Taiwan, Thailand, Turkey, and the United Kingdom.
On top of all that, the US has temporarily exempted a range of Chinese health/medical products from section 301 duties. The US exclusions are reflected in 19 product descriptions, which cover 39 separate exclusion requests. Serbia has turned to China after certain EU members introduced export restrictions to some of its own member states.
The shifting trade patterns have implications on the supply of medical equipment to South Africa. Although China is not the only producer of medical equipment – it is one of the biggest suppliers to South Africa. The fact that Chinese suppliers are critical for many companies around the world imply that any disruption in China will also be felt outside China’s borders.
XA acting as subject matter experts are working with BUSA to assist in identifying items that are in short supply that would be eligible for a temporary rebate. We have already started the process of applying for temporary rebates to allow for duty exemptions. The most critical products are face masks, ventilators, and drugs. However, other essential products may require temporary relief, which we are in the process of identifying. To find out if any of your products are part of COVID-19 medical supplies, please click here.
In light of the export restrictions that are spreading across the globe, we have started a process of mapping export restrictions by South Africa’s trading partners onto our critical supplies list. The process will help identify alternative export markets if the major export countries are blocked.