What you need to know about the new rules for Sars customs and excise client accreditationThe rules under section 64E of the Customs and Excise Act that provided for accredited client status have been repealed in their entirety and replaced by a new set of rules, which became effective on 23 July 2021. Section 64E deals with South African Revenue Service (Sars) client accreditation rules and is of interest to importers and exporters who wish to apply for accredited client status in South Africa. The concept of an accredited client or preferred trader is similar to the authorised economic operator concept found in many other countries. Source: sutthinon sanyakup – 123RF.com The new rules set out what the levels of accredited client status are, the application process, the validity of the person applying, the renewal of accredited client status, criteria for levels of accredited client status, the benefits of the two levels of accredited client status, as well as miscellaneous and transitional matters. The amendments include plans to form an accreditation committee that will consider and decide on matters falling within the Customs and Excise authority, including the consideration and approval or refusal of applications, and the cancellation or suspension of accredited client status, for example. Levels of accredited client statusThe two levels of accredited client status referred to in the new rules are Level 1 - Authorised Economic Operator (Compliance) and Level 2 - Authorised Economic Operator (Security). A person that is registered for customs and excise activities in South Africa may apply for Level 1 or 2 accredited client status. According to the new rules, all customs activities for which an applicant is registered or licenced under the provisions of the Act will be taken into account when assessing applications for both levels of accredited client status. Application processApplication for accredited client status must be made on form DA 186 and can be submitted at any Customs and Excise Office where a client relationship manager is located or emailed to the email address indicated on the Sars website for receipt of such applications. The application for accredited client status must include a customs accreditation self-evaluation questionnaire, a systems questionnaire, an accreditation agreement, an application to make a booking for the competency assessment, and any other supporting documents necessary to proving compliance with the prescribed criteria. Applicants have to establish sufficient knowledge of customs laws and must apply for a competency assessment on a booking form published on the Sars website. The competency assessment must be completed by the applicant personally or by persons in the employ of the applicant, who have been nominated to administer accredited client requirements. The Accreditation Competency Assessment Certificate is issued in the name of the person who took the assessment if a score of at least 70% is achieved during the assessment. The certificate is valid for five years from date of issue. However, the new rules state that if there are any significant changes to customs and excise legislation, the holder of the certificate may be required to take an additional assessment to prove knowledge of such changes. InvestigationsIn order to verify any statements made by applicants, the new rules note that applicants must make available any books, accounts and other documents and any other information (for a period of up to five years) as required by the commissioner. Application approvalAccording to the new rules, approval of applications for accredited client status is subject to the following general conditions:
There might also be specific conditions for the approval of the application, that may be determined by the commissioner. Validity of accredited client statusThe validity takes effect on the date specified and remains valid for a period of five years. The application lapses if it is cancelled by the commissioner or if holders notify the commissioner that they no longer intend to retain the status. Renewal of accredited client statusHolders of accredited client status must apply for renewal no later than 30 calendar days before expiry of the status. BenefitsLevel 1 accredited client status (AEO Compliance)According to the new rules, Level 1 accredited client status holders are entitled to the following benefits:
Level 2 accredited client status (AEO Security)In addition to the Level 1 benefits above, Level 2 benefits include:
Miscellaneous mattersThe rules note that any holder of accredited client status who wishes to benefit from the mutual recognition of accredited client status provided for by international agreements or arrangements, should note that such benefits are to the extent provided for in memoranda of understanding between Sars and such agencies, and provided that consent to share information has been given by the holder. Transitional mattersThe section on transitional matters includes guidance on accredited client status that was applied for and granted before the new requirements. The rules note that an application that had already commenced on the effective date of the new rules, must be finalised in accordance with the repealed rules. Further, accredited client status granted pursuant to such application must be regarded as a Level 1 accredited client status. Any competency certificate issued before the effective date remains valid for purposes of these rules until its expiry date. The new rules will streamline the customs and trade process for trading partners and allow a much more efficient and cost-effective movement of goods across South Africa’s borders. Parties trading with South Africa are encouraged to apply for such status. About the authorVirusha Subban, Partner and head of Indirect Tax, Baker McKenzie Johannesburg |