The industry has lost patience with the National Regulator for Compulsory Specifications (NRCS) over long delays in the issuing of Letters of Authority (LOAs). Without these letters, which provide proof of compliance with SA standards, Customs will not release goods to importers. “We have reached the end of our tether,” said regional director of the EU Chamber of Commerce and Industry in southern Africa, Stefan Sakoschek. “There is nothing more we can do as a private sector association or together with multiple other associations such as the SA Domestic Appliance Association (Sadaa), the Southern Africa Stainless Steel Development Association (Sassda) etc. We have made it abundantly clear that it’s costing the industry millions in demurrage costs and loss of revenue. Short of taking the NRCS to court – which would have to be spearheaded by one of these private sector bodies, all of which are wary of the potential repercussions – we have landed everything in the lap of the EU commission in Brussels. “They will be taking the issue to the highest levels politically claiming that it is creating a non-tariff barrier (NTB) to trade – with catastrophic knock-on effects. The concern is that the situation is putting several local businesses – retailers or industrial users of imported equipment – under serious distress, putting their activities and jobs at risk.” An NTB is defined as a market requirement that makes the importation of products difficult and/or costly. “It’s been an on-going battle,” Sakoschek told FTW. He said the backlog had been reduced between January and May this year, but they were now back to square one. “NRCS acting CEO Edward Mamadise and head of compliance Bongani Khanyile presented their progress to the EU delegation along with various association representatives in Pretoria on October 16 – but in essence, nothing has been done structurally at the organisation since September last year. “An EU delegation from Brussels visited Johannesburg last week, and again discussed the status quo with them. We’re basically facing a non-tariff barrier to trade, which the EU will take up politically with Minister of Trade & Industry, Rob Davies, very shortly.” “It’s extremely frustrating,” said Chris Scott of Customs Services. “If a product needs to be tested it can take six months or longer for an application to be processed.” And according to Scott, there is often uncertainty regarding what requires NRCS approval and what is exempt. “Some items under a tariff heading require an LOA and others don’t but they stop everything at great expense to the client. To prove that the products don’t require NRCS approval you have to submit literature supporting your assertion and it can take weeks to get confirmation that they don’t need LOAs.” It’s a point supported by another industry source who told FTW his LOAs were also taking up to six months and sometimes longer to obtain. “There is also a lot of uncertainty with regard to items like powerbanks imported without chargers. While the inspectors claim they are not regulated by the NRCS as they operate under a certain voltage, the profiling officers at NRCS are adamant that LOAs are required for these products.” The problems at NRCS, according to industry insiders, stem from a combination of issues – among them underfunding – with the Department of Trade and Industry having cut its funding for 2017 by R20m. According to Sakoschek, in September last year the NRCS committed in parliament to the implementation of several interventions that included a risk-based assessment programme to speed up the processing of LOAs, the hiring of new people, getting an IT platform and CRM vehicle for applications, as well as implementing a pre-import verification of conformity to South African standards. Two days later the CEO resigned and he was only replaced by an acting CEO in February this year. Industry sources suggested to FTW that because he was not from trade it had taken a while for him to find his feet, which is possibly why little progress has been made. There is strong support for the assertion by the EU commission that South Africa is not abiding by the trading rules of engagement of the World Trade Organisation and the World Customs Organisation – and that the issue is therefore an NTB. And while industry has been critical, it has also offered practical solutions. “We believe the NRCS should outsource some of its functions to a private sector global conformity assessment body that specialises in compliance and verification,” said Sakoschek. “If you look at the global map, all of the Middle East, most of South East Asia, and closer to home, Zambia have implemented such a system, as have Cote d’Ivoire, Kenya, Botswana and even Zimbabwe. It is a trend today that would prevent the import of substandard products and accelerate the issue of LOAs for legitimate imports because the certification could be done outside of South Africa before the goods arrive. Neither the NRCS nor the SABS are in a position to issue LOAs in 21 days.” The American Chamber of Commerce and Industry has reported some improvement. “We are happy to report that Letters of Authority lead times have definitely improved,” said Amcham executive director Carol O’Brien. “The standard is 120 days which is four months and certificates are being received within the four months on average. “The average for one of our firms in 2017 went from 190 days in January 2017 to 78 days in October 2017. A Customs consultant however believes that importers should also shoulder some of the blame. “Most importers do not do their homework or their customs brokers are taking them for a ride. “The 120-day turnaround time for an LOA to be issued means that the importer/customs broker and everyone involved needs to be on point and start their research months before importation,” said Vincent Zikhali of Vin-Online Global Trade Advisory. • FTW was awaiting comment from the NRCS when this issue went to press on Monday morning.
INSERT with IMAGE There is strong support for the assertion by the EU commission that South Africa is not abiding by the trading rules of engagement. – Stefan Sakoschek
