CUSTOMS AND BORDER MANAGEMENT EXTERNAL STANDARD OPERATING PROCEDURE CUSTOMS VALUATION EXPORT VALUE Revision: 0 Page 1 of 6
TABLE OF CONTENTS 1 SCOPE 3 2 PROCEDURE 4 2.1 Determine Export Value 4 2.1.1 Determine point of dispatch 5 2.1.2 Verify if a foreign currency used 5 2.1.3 Establish / verify the date of shipment (Invoice date) 5 2.1.4 Convert foreign currency into SA rand 5 2.1.5 Customs verification of export value 6 3 MEASURES 4 QUALITY RECORDS 6 5 REFERENCES 6 5.1 Legislation 6 5.2 Cross References 6 6 DEFINITIONS AND ACRONYMS 6 7 DOCUMENT MANAGEMENT 6 Revision: 0 Page 2 of 6
1 SCOPE a) This document is for all clients dealing with the calculation of the value for Customs purposes on exported goods. It specifically focuses on the provisions of: i) Section 72; and i) Section 73 of the Customs and Excise Act No. 91 of 1964 (the Act). b) It explains how to interprets the law that relates to the value for exported goods. Revision: 0 Page 3 of 6
2 PROCEDURE 2.1 Determine Export Value Determine point of dispatch Add all cost charges and expenses plus profit up to point of dispatch Invoice Is invoice in foreign currency? Yes Establish the date of shipment No Establish which foreign currency must be converted into SA Rand Obtain the rate of exchange for the applicable date and currency Apply the rate of exchange to the foreign value Round of the Customs value to the nearest Rand Calculate the export value and submit to Customs End Revision: 0 Page 4 of 6
PROCEDURE STEP 2.1.1 Determine point of dispatch a) In terms of Section 72 of the Act, the export value shall be the price of the goods free on board (FOB), at the place of despatch from South Africa. i) If the term of sale on which the goods were sold is not FOB a calculation must be done to determine the FOB value. A) The cost, charges and expenses must be calculated to reflect the value as close as possible to the FOB point of sale; and B) The profit made on the consignment must also be apportioned for inclusion in the value. ii) The amount must not yet be rounded off to the nearest Rand. 2.1.2 Verify if a foreign currency used a) Verify if the sales was concluded in a foreign currency. If the export sales invoice is expressed in a foreign currency, the amount must be converted to South African Rand. i) If the answer is yes proceed to the next procedural step. ii) If the answer is no proceed to paragraph number 2.1.4, procedural step (d) onwards. 2.1.3 Establish / verify the date of shipment (Invoice date) a) The Shipped on board date / transport date is the date to be used to convert the foreign currency. i) If the shipped on board date / transport document date is not verifiable or known at the time of clearance, the original invoice date must be used to convert the foreign currency. ii) No amendment (at time of clearance or at a later date) to the date of the original export invoice will be allowed. 2.1.4 Convert foreign currency into SA rand a) Verify which foreign currency must be converted into SA Rand, for example, French Francs; United States Dollars. b) Obtain the rate of exchange / conversion factor applicable for the date and currency already determined. i) Section 73 of the Act, states that when the value of the price paid or payable for any imported goods is expressed in a foreign currency, it must be converted to South African Rand by using the selling rate at the date of shipment of the goods as determined by the Commissioner, in consultation with the South African Reserve Bank or, if no such rate is determined for such date, the latest rate determined before that date must be used. ii) The selling rate must also be used when converting foreign export values into Rand. A) The rates are published on the South African Revenue Service s website. http://www.sars.gov.za: (I) Customs and Excise; (II) Customs; (III) Frequently access links; (IV) SARS Rate of Exchange; and (V) Get single values. c) Divide the foreign amount as obtained above into the applicable rate of exchange. d) Round of the Customs value to the nearest Rand. i) If the value of any imported goods of a single denomination is in excess of one rand, the Customs value must be calculated to the nearest rand, an amount of 50 cents being regarded as less than one half of one rand; and / or ii) If the Customs value is less than one rand, such value must be calculated as one rand. A) Refer to Section 65(2)(a) of the Act, for imported goods; or B) Refer to Section 72(2)(c) of the Act, for exported goods. Revision: 0 Page 5 of 6
PROCEDURE STEP 2.1.5 Declare export value a) Ensure that all the provisions as stipulated above, are adhere to before submitting the bill of entry to Customs. 3 QUALITY RECORDS NUMBER SAD 500 SAD 501 TITLE Customs Declaration form (Export) Customs Declaration form (Continuation Sheet) 4 REFERENCES 4.1 Legislation TYPE OF REFERENCE REFERENCE Legislation and Rules Customs and Excise Act No. 91 of 1964: Sections 72 and 73 administered by SARS: Other Legislation: Promotion of Administrative Justice Act No. 3 of 2000: Section 3 and 5 Promotion Of Access To Information Act No. 2 of 2000: All International Instruments: None 4.2 Cross References DOCUMENT # DOCUMENT TITLE APPLICABILITY SC-CR-A-07 Export Policy: Customs Valuation Exports All 5 DEFINITIONS AND ACRONYMS Act Customs and Excise Act No. 91 of 1964 Dispatch from The place in South Africa where the goods in question are placed on board a ship or on any vehicle which conveys them from or across the border of South Africa. FOB Free on Board 6 DOCUMENT MANAGEMENT DESIGNATION NAME / DIVISION Business Owner: Chief Officer: Customs and Border Management Policy Owner: Group Executive: Customs Strategy and Policy Author: Y. Els Detail of change from previous Initial release revision: Template number and revision SC-POL-TM-02 - Rev 10 Revision: 0 Page 6 of 6