Record keeping – imported and exported goods

 As an importer or exporter based in South Africa, you are aware that a vast amount of paperwork is required by Customs to keep track of shipments entering and exiting the country. There are also numerous recordkeeping requirements to keep up to date with. Accurate recordkeeping is essential both legally and for the smooth running of your business operations.

This blog serves as a reminder about the importance of meticulous recordkeeping, and provides information about South African recordkeeping requirements, as well as the legal implications thereof.

Why must I keep records?

The information declared on the bill of entry should be substantiated by the records that are kept by the trader/business. South African Customs determines duty liability and keeps trade statistics based on the information on bill of entry. This must therefore be accurate.

In order to confirm that the bill of entry information is, in fact, correct and thus valid and useful, South African Customs may demand the necessary records at any time – whether during an audit, at time of clearance or otherwise. Offenders providing false records may be prosecuted. Those unable to produce full or accurate records may receive administrative penalties.

What records must I keep?

ImporterExporter
• Copies of import bills of entry
• Bills of lading or other transport documents
• Suppliers’ invoices
• Bank-stamped invoices
• Packing lists
• Payment advices
• Shipper’s statement of expenses
• Copy of confirmation of sale/any other contract of procurement and sale
• Importer’s written clearing instruction, if appropriate
• Any certificate, permit or other document authorising the import
• Any other documents related to the goods which may be required by the Customs Controller
• Copies of the export bills of entry
• Bills of lading or other transport documents
• Invoices
• Exporter’s written clearing instructions
• Any certificate, permit or other document authorising the export
• Any other documents related to the goods which may be required by the Customs Controller

These records must be kept:

  • for a minimum of 5 years.

The 5 years start from the date of import or export.

For goods held in a Customs and Excise warehouse, the 5 years starts after the shipment has been cleared and the goods exported or delivered.

For goods held in a rebate store, the 5 years starts after the stocks of the goods that were documented in the bill of entry, for example, have been exhausted.

  • within the borders of South Africa and on the business’ premises, unless the Customs Controller grants permission otherwise.

Alternative methods of storing the required records are allowed. Examples include scanning with secure storage or microfilming. Customs will consider the reproductions made from these methods as original documentation.

 

When must I produce the records?

Records can be requested at any time by a Customs official, even if no request was made when the bill of entry was submitted. The official may make the request orally (in person or telephonically) and follow up with an email. The timeframe in which the records must be produced should be given in the official’s request.

Should there be any reason preventing the production of the requested records within the allotted timeframe, it is the record-keeper’s responsibility to contact the Customs official via email, explaining the situation and asking for an extension. This must be done before expiry of the original timeframe. The Customs official will notify the record-keeper whether permission for additional time is granted or not.

Note: Penalties will not be imposed where extra time is approved and the documentation is received within the new time frame. However, the mere request for an extension does not prevent the levying of penalties.

What are the consequences of non-compliance?

An offender can be

  • charged a fine of up to R40 000, or treble the value of the cargo in question, whichever is greater
  • imprisoned for up to 10 years
  • or both of the above

The relevant cargo is also liable to forfeiture.

In cases where the Customs Commissioner opts not to prosecute the culprit, a Section 91 administrative penalty may be levied instead, which the offender may choose to accept or reject. If accepted, a deposit for a possible penalty is required. There are 3 potential outcomes for the deposit:

  • the full amount of the deposit may be imposed as a penalty
  • the full amount may be liquidated to the offender
  • a partial amount may be liquidated

(Section 101 of the Customs and Excise Act, 1964, provides detailed rules for recordkeeping in imports and exports. Non-compliance or contravention of these rules is dealt with in Section 86(h) of the Act).

Recordkeeping can seem like a dry, tedious and unproductive activity. However, it is of critical importance to maintain accurate and up-to-date records of your imports and exports to prevent any avoidable stress, time wastage and possible financial and reputational loss when the records are requested.

Should you require further information on recordkeeping, contact one of the consultants on 087 550 1038.

References

https://importexportlicense.co.za/wp-content/uploads/2024/01/Legal-Pub-Guide-CE10-Recordkeeping-Imported-and-Exported-Goods.pdf 

https://www.sars.gov.za/wp-content/uploads/Ops/Policies/SC-CO-01-02-Offences-and-Penalties-External-Policy.pdf

https://www.sars.gov.za/wp-content/uploads/Legal/Registers/Legal-LSec-CE-RA-Customs-and-Excise-Rules-1995-as-amended.pdf (pp1170 – 1182)