Undervalued safety footwear focus of SARS-industry discussions but less progress on imports flouting country of origin marking rules

Cape Town, SA - Country of origin marking and reference pricing again dominated the second meeting of the SARS Footwear and Leather Task Team on November 7, which included representatives from SA Revenue Services, SAFLIA, NULAW and SACTWU, and the Foschini Group. The DTI was not represented.

There was some progress on reference pricing, according to SAFLIA’s Jirka Vymetal. 

The task team is concentrating for now on safety footwear for 2 reasons: it is a small percentage of total imports making it an easier exercise to begin with, and also because it requires an approval number from the National Regulator for Compulsory Standards (NRCS), which means it is more straightforward to compare like with like.

SAFLIA proposed (and the unions concurred) a minimum FoB price of US$6.50 (R89 last week) for leather upper safety footwear and that any consignments under that price should be flagged by the SARS system and interrogated. That price  was established as a result of research done by Jannie Kriel, a consultant to SAFLIA who trains Customs officials on dealing with footwear imports.

SARS responded that the volume of safety footwear under that level was very high and suggested a minimum of R80, and that before it was applied, SARS would do an impact study on the effect of stopping all safety footwear under R80.

SARS undertook to report back to the task team.

At the same time, Kriel will investigate reference pricing for other types of safety footwear - specifically gumboots and textile upper footwear.

 

There was no progress on resolving the problem of footwear being imported without country of origin marking, which is a legal requirement.

At the first meeting, Kriel said it was clear there was "widespread" importation of footwear that did not carry the obligatory country of origin marking. He said Customs officials referred those shipments to the National Consumer Commission (NCC), part of the DTI housed in the SABS/NRCS complex in Pretoria.

"It appears the NCC then approaches the responsible importer, and is invariably told that the importer will attach the country of origin marking when it arrives in their warehouses," he said. "That is contrary to the DTI's own rules."

At the first meeting, the DTI undertook to investigate further.

At the second meeting, Kriel said similar imports were ongoing, and the issue was not resolved.

"When Customs stops the consignment based on the fact that the footwear - not just safety shoes - doesn't bear the required label of origin, they refer the matter to the NCC, which invariably instructs Customs to release as the importers will attach the labels at their respective premises. Once the consignment is released and out of Customs control, there is absolutely very little that Customs can do to verify and confirm that this does actually happen as instructed."

` The task team was formed after Vymetal told SARS that footwear issues were not being satisfactorily addressed at the clothing-dominated CTFL Industry Forum, also chaired  by SARS.

` "I feel this task team is the way," he said, "but what is of extreme concern is that it is clear from the comprehensive document that SARS provided that the vast majority of footwear imports are undervalued, and that by their own admission, they just do not have the manpower to manage this."

SARS had not responded to a request for comment at the time of writing.