For the sake of fair and honest trade, the passage of goods across international borders must be well controlled. For this reason, permission for the commercial movement of goods in and out of South Africa must be granted by SARS customs.
The parties involved in moving goods are:
The trader – The person or business importing or exporting the goods.
The freight agent, courier provider, and clearing agent – A service provider that books and manages international transport, and oversees customs clearance on behalf of the trader. Generally speaking, the same freight agent or courier company provides both services, but they may choose to outsource clearing to a clearing agent. A clearing agent specialises in customs declarations and may declare (clear) shipments on behalf of another entity.
The commercial transporter or carrier – The service provider who owns and/or operates the truck, airplane, ship, or vehicle taking the shipment over borders.
SARS customs requires all three parties to operate within its laws and regulations. To do so, every entity that performs a function in import and export must have the relevant registrations for international transport.
Consult this guide to determine what registrations are required for the role(s) your venture plays in international trade.
Import export license
A registration that allows for unlimited import and export for commercial purposes by the registered entity. This registration belongs to the importer or exporter of record (the entity specified on the commercial invoice), not the party providing freight.
Determine whether you require an import export license registration by clicking here.
An import export license is also required to apply for certificates of origin to import or export under a trade agreement.
An import export license is a lifetime registration that must be updated if any details regarding the registered entity change. This includes the entity’s name, contact details, or a change in directors/members/trustees of a business entity.
Who needs an import export license?
THE TRADER
Yes, a person or business may not import or export for commercial purposes without an import export license.
THE FREIGHT AGENT, COURIER OR CLEARING AGENT
No.
THE COMMERCIAL TRANSPORT OR CARRIAGE PROVIDER
Yes, an import export license is a requirement for registration as a carrier.
Carrier registration
Being a registered carrier allows an entity to submit manifests to SARS customs.
A manifest, customs manifest, or cargo document is a consolidated document detailing the cargo, passengers, and crew of a ship, aircraft, or vehicle, for the use of customs and other border officials. As opposed to a packing list, which details one shipment, a manifest lists all goods loaded onboard the vehicle/vessel. This may include lots of shipments consigned by various traders.
A carrier registration is specific to a mode of transport, i.e. road, sea, or air.
Carrier registration is granted by SARS once-off. It is often referred to as a carrier code.
Who needs a cross border permit?
THE TRADER
Only if exports are leaving South Africa by road on a locally registered vehicle which belong to the trader, or if the trader’s vehicle is collecting an import abroad.
THE FREIGHT AGENT, COURIER OR CLEARING AGENT
No.
THE COMMERCIAL TRANSPORT OR CARRIAGE PROVIDER
Yes, a cross border permit is required for every locally registered vehicle leaving South Africa by road for the sake of a commercial import or export.
Clearing agent (customs broker) registration
A clearing agent, also referred to as a customs broker, may submit an import or export declaration to SARS customs on behalf of another entity that is the importer or exporter on record.
It makes sense for any business that has other registrations for international transport to register as a clearing agent unless they intend to outsource clearing to a specialist.
This registration requires annual renewal.
Who needs a clearing agent registration?
THE TRADER
No.
THE FREIGHT AGENT, COURIER OR CLEARING AGENT
Yes, unless clearing are outsourced.
THE COMMERCIAL TRANSPORT OR CARRIAGE PROVIDER
Clearing services are generally provided by the freight agent, but it may be in the transport provider’s best interest to register as a clearing agent so that it may intervene if a shipment is stuck at a border, or the freight agent is unavailable.
Deferment account
A deferment account provides an easy solution for managing customs duty and VAT payments.
When goods are imported into South Africa, import duties and VAT must generally be paid to SARS in full at the time of import. A deferment account allows these taxes to be paid on an account basis, and the account to be settled monthly via eFiling.
A clearing agent, courier company, or freight provider may use its deferment account to settle customs tax on behalf of a client so that delivery can happen faster. This service, along with the value of the tax paid, is then billed as a disbursement fee.
Deferment accounts are port-specific. For example, a freight agent will need two accounts to clear goods at Durban and Cape Town ports. More information on having and maintaining a deferment account is available here.
Who needs a deferment account?
THE TRADER
No, but it can come in useful for traders who pay import tax on a regular basis.
THE FREIGHT AGENT, COURIER OR CLEARING AGENT
Yes, unless the freight agent wants to arrange for clients to pay their import tax directly to SARS.
THE COMMERCIAL TRANSPORT OR CARRIAGE PROVIDER
No, unless the carrier intends to offer clearing services.
EDI (Electronic Data Interchange) registration
SARS defines EDI as “A paperless trading system involving the electronic transfer of data, by established message standards, from one computer application to another.”
To simplify, it is a system that allows users to declare and pre-clear imports and exports, submit manifests, and do cargo reporting online. Traders and service providers must register as EDI users with SARS to make use of this function.
The benefits of using EDI are:
- It cuts communication between you and SARS customs down to a minimum.
- Import and export declarations can be accepted round-the-clock.
- Clearance times are reduced, so your shipments move faster.
- Less manual administration means the chances of errors on your declarations decrease.
- The system is linked to other bodies such as Transnet Port Terminals, Transnet Rail Terminals, airlines, and container depots, so your communications are streamlined.
Traders who do their clearing, freight agents, and clearing agents must also be registered as an EDI user to submit customs clearance documentation electronically when:
- They submit ten (10) or more customs declarations per calendar month, and
- These declarations include ten (10) or more lines.
Who needs to register as an EDI user?
THE TRADER
Only if the trader does their own customs clearing and declares 10 shipment or more per month that include 10 or more lines.
THE FREIGHT AGENT, COURIER OR CLEARING AGENT
Yes.
THE COMMERCIAL TRANSPORT OR CARRIAGE PROVIDER
Yes.
Bonded transport registrations
Bonded transport involves moving goods on which import or excise tax payable to SARS is outstanding, i.e. bonded goods.
Registrations for the sake of transporting bonded goods include the remover of goods in bond registration and transporter (or road haulier) registration. The main difference between these registrations is who owns the bond.
The bond is a security with SARS to the value of the outstanding tax – an insurance policy that the trader’s bank or insurance company will cover the unpaid tax if the trader defaults.
Because not all traders who keep goods in bond are registered for bonded transportation, transport, and carriage providers offer this service at a premium.
Bonded transport registrations require annual renewal. More information on bonded transport can be found here.
Who needs a bonded transport registration?
THE TRADER
Only if the trader moves their own bonded goods using their own vehicle between a port and a bonded facility, or from one bond store to another.
THE FREIGHT AGENT, COURIER OR CLEARING AGENT
Only if the provider intends to offer bonded transport as a service. The bond may belong to the freight agent, even though they are not the owner of the bonded goods or the vehicle. In this case we call it a consignor bond.
THE COMMERCIAL TRANSPORT OR CARRIAGE PROVIDER
Yes, if the carriage provider intends to offer bonded transport as a service. If the carrier uses their own bond, a remover of goods in bond registration is required. If they use the trader’s bond, a transporter (road haulier) registration is required.
Bonded facility/warehouse
Bonded storage
Bonded goods must be kept in a registered customs storage warehouse until it is cleared, the relevant import or excise taxes are paid, or the goods are exported. A customs storage warehouse is often referred to as a bond store or bonded warehouse.
As with bonded transport, the registration requires that there is a guarantee (bond) that will cover losses incurred by SARS if the traders fail to pay the relevant tax.
Traders who keep goods in bond may register their bond store, or make use of a bonded storage facility owned by a service provider.
Freight agents and carriage providers may register and manage a bonded facility (storage warehouse) to offer this service to their clients.
Consolidation and deconsolidation
Freight agents may pack smaller shipments from multiple traders into one container after the goods have been cleared for export. This is called LCL shipping and is less costly than booking a container for each shipment. Combining small shipments this way is called consolidation, and to split an imported consolidated shipment up at the destination port is called deconsolidation.
Consolidation and deconsolidation may only happen in a bonded facility.
Who needs a bonded storage warehouse?
THE TRADER
Only if the traders wants to keep bonded goods at their own premises.
THE FREIGHT AGENT, COURIER OR CLEARING AGENT
Yes, if the provider intends to offer bonded storage or shipment consolidation as a service.
THE COMMERCIAL TRANSPORT OR CARRIAGE PROVIDER
Only if the provider intends to offer bonded storage as a service. Generally speaking, the carrier is only concerned with getting the goods to a customs controlled area at the destination port.
Whether you intend to start an international freight or courier service, manage the customs clearance of your goods, or import and export as a commercial venture, we’re here for you.
Contact our consultants for all the advice and assistance you need, or to obtain the customs registrations required for your venture.
