Republic of South Africa WT/TPR/S/34
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III. TRADE POLICIES AND PRACTICES BY MEASURE
(1) Overview
1. Since its last Trade Policy Review, in June 1993, South Africa has continued with the
reorientation of its trade policies, away from impor t substitution to outward orientation, albeit with a
focus now on export promotion.  Several White Papers and reform programmes have been drafted;
legislation has been redrafted or amended in ma ny areas, including anti-dumping, countervailing,
safeguard and intellectual property rights with a view to bringing them into line with the WTO
Agreements.  South Africa is reforming its governme nt procurement system with a view to increasing
local-content of the purchases, promoting "previously disadvantaged individuals" and female
participation.
2. Tariffs and "supply-side measures" are the main trade policy instruments in South Africa.
The import surcharge introduced in 1985 for balance-of-payments purposes was eliminated on
1 October 1995.  The number of tariff lines has been reduced and some rates lowered.  However, the
wide variety of duties still leaves questions about the transparency of the tariff.  The tariff comprises
ad valorem , specific, compound, mixed and "formula" duties, as well as their combinations.  Formula
duties based on minimum import prices were designed to combat "disruptive competition";  the dutiesare maintained although South Africa also uses anti-dumping actions.  While a large number of
products that are not manufactured in, and do not have substitutes in, South Africa may be imported
duty free, the maximum rates that apply to imports cannot be defined, mainly because of the formula
duties.  A Tariff Rationalisation Process was formulated in 1996;  it is expected to simplify the tariff
structure substantially.
3. South Africa has tariffied all quantitative restrictions (except on black tea) and it bound about
98% of all tariff lines at the HS eight-digit level at the end of the Uruguay Round;  the simple averagebound rate is 19.8% (final bindings), with maximum ceiling bindings of 399.9% on certain
agricultural products.  However, import controls are maintained on several products, including
agricultural goods.  Unbound tariff lines are mostly on fishery products and preparations thereof, and
oils.  In addition to tariffs, certain goods imported to South Africa are also subject, as are domestic
goods,  to ad valorem  excise duties ranging up to 20%, and to specific excise duties;  a value-added
tax of 14% applies equally to imports and domestic goods and services.  Fuel levies are also collected
on imported oils, and other specific levies are charged on agricultural products.
4. South Africa's trade policy strongly emphasi zes export promotion;  a wide variety of
incentives, including tariff concessions, are available to local producers.  Some of the incentives are
subject to local-content requirements.  Tariff prot ection may also be afforded to local producers on a
selective basis.  However, export subsidies provided under the General Export Incentive Scheme
(GEIS) were scaled down and finally terminated in July 1997.  South Africa has maintained export
controls on agricultural products administered by agricultural boards, and on certain mineral and
industrial products.
(2) Measures Directly Affecting Imports
(i) Registration and documentation
5. Trading activities in South Africa are open to both South Africans and foreigners.  All
operators in internationa l trade (importers and exporters, in particular) must be registered with the
Commissioner for Customs and Excise in order to be allocated a customs code number, which must
be reflected on all documents presented by the operators.  Importers of goods subject to a licence or
permit must also be registered with the Directorate of Import and Export Control in the Department of
Trade and Industry.WT/TPR/S/34 Trade Policies Review
Page 34
6. A licence issued by the relevant local authority is required for all business activities
(including international trade) for the purpose of payment of turnover and payroll levies.  The licence
is indefinitely valid, except for businesses handling foodstuffs and those where people congregate
(e.g. entertainment and amusement places), for which annual renewal of the licence is required.
Licensing fees, which vary among local authorit ies, are payable by both South Africans and
foreigners.  In addition, a business must be registered with:  the Workmen's CompensationCommissioner, for the workmen's compensation insurance scheme;  the Industrial Council and Trade
Union governing the type of business;  the Depa rtment of Manpower, for the unemployment benefit
scheme;  and the Receiver of Revenue, for all tax matters.
1
ii) Customs procedures
(a) Customs clearance
7. In general, within seven days from the date goods are deemed to have been imported into
South Africa, importers must declare their entry to customs on a prescribed form (the bill of entry)
and present the usual commercial documents.2  The description of the goods, including their nature,
tariff heading and item numbers (among others) must be specified on the bill of entry by the importer,
who must also indicate on the bill whether he or she is related to the supplier of the goods.  Given thatall documents are in order, customs clearance is normally completed within two days and the Customs
Office delivers the release order.
8. Within seven days from the granting of a release order, importers must present the order for
the delivery of the goods.  Imported goods are generally removed from customs and excise
warehouses after payment of all duties.  Goods not cleared within 38 days after the date they are
deemed to have been imported into South Africa are removed to the state warehouse;  if the goods are
not cleared within 90 days after removal to the state warehouse they may be sold and the proceedsapplied in discharge of duties and charges incurred by, inter alia , the Customs Office, harbour
authorities and container operators.
9. Subject to the permission of the Controller of Customs and Excise, containers temporarily
imported, human remains, goods deemed not to have commercial value, goods imported under an
international carnet, and goods of a dutiable value not over R 500 need not be cleared throughcustoms.
3
(b) Customs valuation
10. South Africa was a signatory to the Tokyo Round Agreement on Implementation of
Article VII of GATT (Customs Valuation Code);  it has not requested delayed application of the
WTO Agreement on Implementation of Article VII of GATT 1994.
                                                     
1Coopers and Lybrand (1996).
2Imports of goods are randomly checked at customs.  South Africa has plans to computerize the
checking system in order to increase the level of compliance with applicable tariffs and regulations.  Goods aredeemed to have been imported when, in general, they  are landed in, or under the control of, South Africa.
3Section 38 (1)(a) of the Customs and Excise Act.Republic of South Africa WT/TPR/S/34
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11. Under the 1964 Customs and Excise Act, as amended, the value for customs duty purposes of
merchandise imported into South Africa is generally based on the actual f.o.b. transaction price of the
goods.  The use of c.i.f rather than f.o.b. prices is still under consideration.  In the case of suspected
under- or over-valuation, the goods concerned are de tained by customs officers for examination and
investigation.  The importer is made aware of the suspicion and is required to submit acceptable
evidence in respect of the actual price.4  The documents provided by the importer are compared with
those relating to previous imports of similar items.
12. If the transaction value cannot be ascertained in terms of the Act, the Commissioner can
determine a value, subject to appeal by the impor ter to the Courts.  Appeals against a valuation
decision must be made within one year from the date of the determination.  According to the
authorities, no appeals have gone as far as the S upreme Court;  all queries have been handled by the
Valuation Section of the Customs Administration.
(iii) Tariffs, other levies and charges
(a) General features13. South Africa's tariff classification is based on the Harmonized System;  the tariff, as modified
up to end-June 1997, has 7,814 lines at the eight-digit HS level.
5  The National Tariff of South Africa
(the tariff book) consists of eight Schedules, a list of Codes for the representation of names of
countries (trading partners) and texts of bilateral trade agreements.  The tariff is applicable by all
members of the Southern African Customs Union (SACU).
14. The first Schedule (Schedule 1) comprises eight parts.  The first part (Schedule 1, Part 1)
deals with Ordinary Customs Duty, applying to all HS tariff lines.  The second part is subdivided into
two sections:  the first section, (Schedule 1, Part 2, Section A) provides for specific excise duties that
apply to certain imported or locally produced goods specified at the HS four-digit level;  and thesecond section (section B) provides for ad valorem  excise duties on certain imported or locally
produced goods.
6  The third and fourth parts of Schedule 1, dealing with sales duty and surcharges
respectively, no longer apply.  The fifth part contains the "fuel levy".  Parts 6 and 7 are reserved for
possible future use.  The last part of the first schedule (Schedule 1, Part 8) provides for an "ordinary
levy" payable by Central Government Department s and Provincial Administrations.  The ordinary
levy is equivalent to all duties of Schedule 1, Parts 1 and 2 and applies to all products imported by the
Central Government and the Provincial Administ rations, except motor vehicles (HS heading 87.03)
imported by Government officers or employees on return to South Africa (i.e. on transfer) after
having served outside the country;  such motor vehicles are currently subject to the duty under
Schedule 1, Part 1.7
15. The first part of Schedule 2 deals with anti-dumping duties and the second part, with
countervailing duties.  Schedules 3 to 6 cover different types of rebate, refund and/or drawback
                                                     
4South Africa does not make use of preshipment inspection.
5South Africa has been implementing the Harmonized System since 1 January 1988.
6In South Africa's tariff book, duties collected under Schedule 1, Part 2 are called customs duties
(specific/ ad valorem ) when they apply to imports of "goods of the same class or kind".  All duties collected
under Schedule 1, Part 2 are called excise duties in the text, to avoid confusion with ordinary customs duties
which also are,  inter alia , ad valorem  and specific.
7Subject to the accord of the appropriate authorities in the other SACU members, the ordinary levy may
also apply to goods imported for the use by equivalent institutions or organs in these countries.WT/TPR/S/34 Trade Policies Review
Page 36
schemes, including industrial rebates of customs duties, general rebates of customs duties and fuel
levy, and specific drawbacks and refunds of excise duties and fuel levy.  Schedule 7, which formerly
dealt with rebates and refunds of sales duty, no longer applies.  Schedule 8 provides for licence fees
for, inter alia , customs and excise storage warehouse, customs and excise manufacturing warehouse,
special customs and excise warehouse for special purposes, distillation of spirits by agricultural
distillers, container depots, and clearing agents.
16. Goods imported to South Africa may thus be subject to four types of charges:  ordinary
customs duties, excise duties, fuel levy and the value-added tax.  Excise duties levied under
Schedules 1, Parts 2A and B, and the fuel levy collected under Schedule 1, Part 5 are payable on the
value of the goods after including customs duties levied under Schedule 1, Part 1.  The import
surcharge introduced in September 1985 was eliminated on 1 October 1995:  the 5% surcharge onintermediate and capital goods was removed in June 1994;  the 15% surcharge on motor vehicles was
eliminated in September 1994;  and the 40% surcharge on home electronics and luxury products was
abolished in October 1995 (section (xiii)).
17. South Africa uses tariff protection selectively to encourage its industrial development.
Manufacturers not subject to an import tariff can apply to the Board on Tariffs and Trade for theimposition of a protective duty or a tariff increase.  In principle, protection is readily granted to new
industries for a period of time to enable them to become established.  Each application for tariff
protection is considered on the basis of, inter alia , the industry's contribution to the economy, export
potential, local-content, value added in the production process, and the industry's growth and export
potential.  This combined with the use of specific duties and other types of duty comprising reference
prices expressed in rand, explains the frequent changes in South Africa's tariff.
8
(b) Tariff structure
18. South Africa's tariff has various types of customs duties ranging from ad valorem , specific,
mixed, compound and formula duties, to their combinatio ns (Table III.1).  Nearly three-fourths of all
tariff lines at the eight-digit HS level bear ad valorem  duties, of which more than half are duty free;
ad valorem  rates are in 45 bands, with rates ranging from 0 to 57.5%.  However, the ad valorem
components of certain non- ad valorem  duties range up to 72% on articles of apparel and clothing
accessories (HS Chapters 61 and 62), and the ad valorem  equivalents of certain types of duties, such
as formula duties, may be even higher (Box III.1).  Thus, the conversion of the non- ad valorem  duties
into ad valorem  tariff rates would substantially increase the number of tiers and the maximum value.
19. Mixed duties apply to 72 eight-digit HS tariff lines, on goods such as fishery products,
prepared foodstuffs, footwear and certain preparations of agricultural products.  Specific duties,carried by 227 tariff lines, apply to agricultural products (e.g. products of the milling industry, fishing
products, beverages, spirits and vinegar, sugar and sugar confectionery), and petroleum products;
specific duties range up to 660¢/kg. on Gouda and Cheddar cheese.  Formula duties are levied on
28 tariff lines;  the duties are collected on items in HS Chapters such as 20, 24, 39, 85 and 90
(Table III.2).  Compound duties apply to products such as arms and ammunition, and water in sealedcontainers.  Unfortunately, it has not been possible to calculate representative ad valorem  equivalents
for mixed, compound or formula duties.
                                                     
8See Degbelo (1994) for details on the implications of the use of specific duties by developing
countries.Republic of South Africa WT/TPR/S/34
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Box III.1:  Selected aspects of South Africa's tariff structure
Formula duties were designed to combat "disruptive competition" (e.g. dumping, export subsidies,
distress selling in cases of temporary surplus, arbitrary pricing in non-market economies and price
manipulation in intra-group transactions) by maintaining domestic prices above set floors.  For this
purpose, formula duties are automatically adjusted wi th changes in international prices.  The formula
duty generally applies the higher of two rates and is based on the relationship between the f.o.b. import
price and a reference price:  either an ad valorem duty applies, or the amount of customs duty payable
on each unit of the good is calculated as the differen ce between the reference price and the f.o.b. price
net of the otherwise payable ad valorem amount of duty.
Let θ be the ad valorem rate, P m the reference price and P z the f.o.b. import price, the formula-duty
system can be summarized as follows:  if P z ≥ Pm , then the ad valorem rate θ applies;  otherwise, i.e. if
Pm > P z, the amount of duty payable (D c) is calculated using the following formula:
Dc = P m - (1 - θ)Pz.
The ad valorem equivalent rate θ c that yields D c is:
θ c = D c/Pz = (P m - (1 - θ)Pz) / P z = (P m /Pz) + θ - 1.
This expression means that, for a given reference price P m and an ad valorem rate θ, the ad valorem
equivalent, θ c, increases as f.o.b. prices decline.  Since (P m/Pz) is higher than 1, then {(P m/Pz )-1} is
positive and θ is lower than θ c, which may take any value between θ, its lowest level, and infinity.  In
certain cases, a maximum ad valorem rate is provided for the formula duty, i.e.: θ c = (P m/Pz) + θ - 1 ≤
γ , where γ stands for the maximum ad valorem rate of the formula duty.  In such cases, imports at
f.o.b. prices lower or equal to {P m/( γ + 1 - θ)} are subject to the maximum rate γ.
For example, on drained or glacé cherries, the formula duty applies 20% if the import price is at least
215¢/kg., otherwise if the f.o.b. import price is lower than 215¢/kg., the amount of duty payable will
be 215¢/kg. less 80% of the import price.  If the import price is 100¢/kg. for example, the duty payable
will amount to:  Dc = 215¢ - (1 - 0.2)100¢ = 135¢/kg.;  therefore, the ad valorem equivalent rate θ c
will be 135%.  On products such as polypropylene where a maximum ad valorem rate of 36% is set,
the import price corresponding to this maximum is:  230¢/(0.36 + 1 - 0.10) = 182.54¢/kg.  On products
such as tomatoes prepared or preserved otherw ise than by vinegar or acetic acid, no minimum or
maximum ad valorem rate is explicitly specified.  On products, such as disposable hypodermic
syringes of plastics, the ad valorem equivalent ceteris paribus is higher than it should otherwise be, i.e.
if the above-mentioned formula were used.  In fact, on syringes of a capacity of 20ml or more but less
than 30ml, the formula duty applies 24% or 35¢ per unit less 70% of the import price, with a
maximum of 32%.  Since 70% is lower than 76% (i.e. 100%-24%), then the ad valorem equivalent rate
θ c on these goods is higher than it should otherwise be;  this conclusion is straight-forward from the θ
c expression established above.
The maximum rate of tariff can only be specified  for ad valorem and formula duties for which a
maximum ad valorem rate is set.  In the case of specific duties, the ad valorem equivalent depends on
the import price and the exchange rate.  The duty co llection ratio as an estimate of the ad valorem
equivalent (AVE) of a specific duty is downward biased.  The bias lies in tariff concessions and
evasion, a well-known phenomenon in South Africa.  Moreover, the wide variety of goods embodied
in each tariff line raises concerns about the appropriate  price to use.  Fluctuations in exchange rates
reduce the AVE in the case of a depreciation and increase it in the case of an appreciation.  Lower
import prices and/or appreciation of the rand with respect to the currencies of South Africa's major
exporting countries will imply higher AVE and vice ve rsa.  Since, for a given product, import price
may vary from an importer to another, so (inversely) does the AVE.WT/TPR/S/34 Trade Policies Review
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Table III.1
MFN tariff distribution, by type of duty, June 1997
Type of duty Number of lines
(8-digit HS)Examples
(HS chapters)
Ad valorem 5,815 Almost all HS chapters
Specific 218 03, 04, 11, 16, 22
Specific but varies with specified factors 9 22
Mixed 72 03, 20, 64
Compound 6 22, 93
Formula 6 18, 19, 20, 24
Formula with a maximum ad valorem 22 39, 85, 90
Othersa1,666 27, 51, 52, 54, 55, 58, 60, 61, 62, 63
Total lines 7,814
a Other types of duty include ad valorem  rates (alternate or not) with maximum or alternate minimum and maximum specific
duties.
Source: South African authorities;  and WTO Secretariat.
20. South Africa reduced the total number of its tariff lines from 12,600 (at the nine-digit level) in
1993 to 7,814 (at the eight-digit level) in 1997.  The number of lines carrying formula duties has also
been reduced from more than 1,900 in 1993 to 28 eight-digit HS tariff lines in 1997 and the number of
lines bearing specific tariffs, from some 500 to 227 lines.  The percentage of lines carrying zero rateshas been increased from some 20% in 1993 to nearly 44% in 1997.  In consequence, the share of lines
bearing ad valorem  tariffs has substantially increased.  A new reform, the Tariff Rationalisation
Process (TRP) was formulated in 1996 and will end in 1999.
21. Under the TRP, South Africa's tariff is to be further simplified:  the number of lines and tiers,
and tariff peaks are to be reduced.  In general, imports of products that are not manufactured in, anddo not have a "suitable substitute" in, the SACU area are to be duty free.  Formula and specific duties
are to be converted into ad valorem  rates and increases in ordinary customs duties will not be used
where anti-dumping and countervailing actions are justified.  Insignificant specific duties and ad
valorem  rates of up to 3% are generally to be reduced to zero.  In general, ad valorem  rates of customs
duty of 30% on final products, 20% on intermediate goods and 10% on primary products are regardedas levels that are not to be exceeded.
9  In addition, the agriculture sector, which has been afforded
protection through import control, is to be protected "primarily" by means of customs duties.  Rebate
provisions are to be restricted and reductions of customs duties are to be recommended in cases where
tariff relief will not erode the protection.
22. In fiscal year 1996/97, customs and excise revenue represented around 17% of total tax
revenue.  In practice, inefficiencies in the collection of border charges, tariff evasion, rebates of duties
and the complexity of the tariff structure have contributed to a low ratio of duty collection.  A separategovernment department, the South African Revenue Services (SARS), was established in April 1996
to improve revenue collection and administration.  SA RS incorporates the former branches of Inland
Revenue, and Customs and Excise of the Department  of Finance, which were responsible for the
collection of public revenue at the national level.  Legislation to give effect to the framework for
administrative autonneomy for SARS was tabled in Parliament on 19 June 1997.
                                                     
9Government of South Africa (1996c), Tariff Rationalisation Process (TRP).Republic of South Africa WT/TPR/S/34
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Table III.2
Formula and compound duties, 1997
HS
HeadingProduct description Duty
20021090 Other tomatoes prepared or preserved otherwise than by vinegar or acetic acid 110¢/kg. less 80%
18069040 Cornflour, of flour, meal, starch or malt extract, containing less than 40% by mass of
cocoa calculated on a totally defatted basis10% or 55¢/kg. less 90%
19019010 Cornflour 10% or 55¢/kg. less 90%
20060030 Cherries, drained or glace 20% or 215¢/kg. less 80%
24011000 Tobacco, not stemmed or stripped 15% or 860¢/kg. less 85%
24012000 Tobacco, partly or wholly stemmed or stripped 15% or 860¢/kg. less 85%
Formula duties with maximum ad valorem
39011000 Polyethylene having a specific gravity of less than 0,94 10% or 255¢/kg. less 90%
with a maximum of 36%
39012090 Other polyethylene having a specific gravity of 0,94 or more 10% or 255¢/kg. less 90%
with a maximum of 36%
39013010 Ethylene-vinyl acetate copolymers:  of a value for duty purposes not exceeding 220c/kg. 10% or 170¢/kg. less 90%
with a maximum of 36%
39019090 Other polymers of ethylene, in primary forms 10% or 255¢/kg. less 90%
with a maximum of 36%
39021000 Polypropylene 10% or 230¢/kg. less 90%
with a maximum of 36%
39023000 Propylene copolymers 10% or 230¢/kg. less 90%
with a maximum of 36%
39041000 Polyvinyl chloride, not mixed with any other substances: 10% or 230¢/kg. less 90%
with a maximum of 16%
39042110 Other non-plasticised polyvinyl chloride:  liquids and pastes 10% or 200¢/kg. less 90%
with a maximum of 16%
39042190 Other non-plasticised polyvinyl chloride 10% or 225¢/kg. less 90%
with a maximum of 16%
39042210 Other plasticised polyvinyl chloride: liquids or pastes 10% or 200¢/kg. less 90%
with a maximum of 16%
39042290 Other plasticised polyvinyl chloride 10% or 225¢/kg. less 90%
with a maximum of 16%
39043000 Vinyl chloride-vinyl acetate copolymers 10% or 230¢/kg. less 90%
with a maximum of 16%
39044010 Vinyl chloride-vinyl acetate copolymers: liquids and pastes 10% or 230¢/kg. less 90%
with a maximum of 16%
39044020 Vinyl chloride-vinyl acetate copolymers: powders, not mixed with any other substances 10% or 230¢/kg. less 90%
with a maximum of 16%
39044090 Other vinyl chloride copolymers 10% or 225¢/kg. less 90%
with a maximum of 16%
85392145 Other filament lamps of a power of 15 W or more but not exc. 1000 W & for a voltage
exc. 100 V but not exc. 260 V20% or 85¢/No. less 80%
with a maximum of 32%
85392245 Other filament lamps, of a power of 15 W or more and for a voltage not exceeding 100 V 20% or 85¢/No. less 80%
with a maximum of 32%
85392957 Other filament lamps of a power exc. 200 W but not exc. 1000 W & for a voltage exc.
100 V but not exc. 260 V20% or 85¢/No. less 80%
with a maximum of 32%
90183115 Disposable hypodermic syringes of plastics, of a capacity of 2 ml or more but less than
5 ml24% or 13¢/No. less 70%
with a maximum of 32%
Table III.2 (cont'd)WT/TPR/S/34 Trade Policies Review
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HS
HeadingProduct description Duty
90183120 Disposable hypodermic syringes of plastics, of a capacity of 5 ml or more but less than
10 ml24% or 18¢/No. less 70%
with a maximum of 32%
90183125 Disposable hypodermic syringes of plastics, of a capacity of 10 ml or more but less than
20 ml24% or 25¢/No. less 70%
with a maximum of 32%
90183130 Disposable hypodermic syringes of plastics, of a capacity of 20 ml or more but less than
30 ml24% or 35¢/No. less 70%
with a maximum of 32%
Compound duties
93010010 Rifles, carbines and muskets 15% plus 200¢/ No.
93020000 Revolvers and pistols (excluding those of heading No. 93.03 or 93.04) 15% plus 50¢/ No.
93032025 Other sporting, hunting or target-shooting shootguns, including combination
shotgun-rifles15% plus 200¢/ No.
93033025 Other sporting, hunting or target-shooting rifles, of a calibre exceeding 5,6 mm. 15% plus 200¢/ No.
93051010 Barrels for revolvers of pistols of heading No. 93.02 15% plus 50¢/ No.
22029020 Mineral waters and aerated waters: in sealed containers holding 2,5l or less (excluding
those in collapsible plastic tubes and those with a basis of milk)25% plus 1.04¢/ Li.
Source: WTO Secretariat, based on information provided by the South African authorities.
23. South Africa accords at least MFN treatment to all WTO Members.  In the Uruguay Round,
South Africa bound about 98% of all tariff lines at the HS eight-digit level (except petroleum
products, HS 2709-2710) as against nearly 18% before the round (Table III.3).  All bindings(including those of lines to which specific, mixed or formula rates are applied) are at ad valorem  rates.
The simple average bound rate (final bindings) on all the products is 19.8%, with maximum ceiling
rates of up to 399.9% on agricultural food and be verage products (mainly in HS Chapter 22).
Unbound tariff lines are mostly on:  fishery products and preparations thereof (HS Chapters 03, 15,
and 16);  mineral fuels, oils and products of their distillation, bituminous substances, and mineralwaxes;  and arms and ammunition.Republic of South Africa WT/TPR/S/34
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Table III.3
Tariff bindings in South Africa, pre- and post-Uruguay Round
Pre-Uruguay Round Post-Uruguay RoundDescription
Number of
tariff linesaPer cent Number of
tariff linesaPer cent
All productsb
Total 12,691 100.0 12,691 100.0
Bound 2,266 17.9 12,463 98.2
Fully bound 2,222 17.5 12,448 98.1
Partially bound 44 0.3 15 0.1
Unbound 10,425 82.1 228 1.8
All agricultural products (HS 01-24)c
Total 1,051 100.0 1,051 100.0
Bound 285 27.1 916 87.2
Fully bound 260 24.7 915 87.1
Partially bound 25 2.4 1 0.1
Unbound 766 72.9 135 12.8
Industrial products (HS 25-97)a.b
Total 11,640 100.0 11,640 100.0
Bound 1,981 17.0 11,547 99.2
Fully bound 1,962  16.9 11,533 99.1
Partially bound 19 0.2 14 0.1
Unbound 9,659 83.0 93 0.8
a At the HS eight-digit level.b Excluding petroleum products (HS 2709 to 2710).c Definition of "agricultural products" in the WTO Agreement on Agriculture is different.
Source: WTO Secretariat, based on South Africa's Uruguay Round Schedule XVII.
24. South Africa has tariffied quantitative restrictions on agricultural products, excluding black tea;
however, certain products are still subject to import control (section (iv)).  Ceiling bindings on
agricultural products leave considerable margins for discretionary increases in applied tariff rates;  the
simple average bound rates on HS Chapters carrying agricultural products are generally high
(Table AIII.1).  Furthermore, in accordance with Article 5 of the WTO Agreement on Agriculture,
South Africa has reserved the right to invoke the "special safeguard" clause for 429 eight-digit HS
lines in the agriculture sector and on cottonne and cottonne products (HS Chapter 52).  South Africaalso bound "other duties and charges" mainly on agricultural products (Table III.4).
25. For the purpose of the following tariff analysis, specific and compound duties in South Africa's
tariff have been ignored;  ad valorem  duties, even when referred to as minima or maxima in the tariff
book, are used for the calculations.
10  For these reasons, the analysis may, to a certain extent, be
misleading.  An ad valorem  rate considered as a maximum may be the rate actually applied,
particularly in cases where formula duties are concerned, while another considered as a minimum may
not be applied, a higher, formula duty being applied instead.  The ad valorem  equivalents of formula
                                                     
10Thus the analysis is based on 7,580 tariff lines, compared to a total number of 7,814 lines.WT/TPR/S/34 Trade Policies Review
Page 42
duties for which no maxima ad valorem  or specific are specified may range from the minimum ad
valorem  rate set with reference to a minimum import price, to extremely high rates.  In consequence, a
downward bias in the estimates is likely.
Table III.4
Binding of "other duties and charges", post-Uruguay Round
Other duties and charges
HS heading Product description Normal levy Special levy
07133200 Small red (adzuki) beans (phaseolus or vigna angularis) R 9.60/t R 2.40/t
10019000 Wheat and meslin other than durum wheat 585¢/t ...
10030000 Barley - (M and U) 657c/t 7,202¢/t
Barley - purchased for malting purposes 657¢/t 7,202¢/t
Barley - purchased for feed purposes 657¢/t 3,353¢/t
10040000 Oats 657¢/t 3,330¢/t
10050000 Maize (corn) R 3.93/t R 70.06 - R 141.80/t
10070000 Grain sorghum R 5/t R 19.95/t
11071020 Malt not roasted  - of barley 821¢/t 450¢/t
11072020 Malt roasted  - of barley 821¢/t 450¢/t
12010000 Soya beans, whether or not broken R 3.90/t ...
ex12020000 Shelled edible groundnuts R 11.35/t R 10.00/t
Unshelled edible groundnuts R 8.23/t R 7.25/t
Shelled crushing groundnuts R 11.35/t R 1.00/t
Unshelled crushing groundnuts R 8.23/t R 0.73/t
12060000 Sunflower seeds, whether or not broken R 4.40/t ...
12092100 Lucerne (alfalfa) seed R 18.48/70 kg. ...
12129910 Chicory roots R 89.10/t R 44/t
ex24010000 Flue-cured tobacco 3.3¢/kg. 75.9¢/kg.
Burley tobacco 3.3¢/kg. 42.9¢/kg.
Air-cured tobacco 3.3¢/kg. 16.5¢/kg.
Oriental tobacco 3.3¢/kg. 16.5¢/kg.
51010000 Wool, not carded or combed 7.5% of gross selling price 5% of gross selling price
51020000 Fine or coarse animal hair, not carded or combed 11.5¢/kg. Va
52010000 Cotton, not carded or combed 4.4¢/kg. cotton fibre 3.3¢/kg. cotton fibre
... Not available.
a V = 10.5 + 0.05A, where V is the amount of special levy (in cents) to be paid for 1 kg. and A represents the average gross yie ld
per kg. of mohair sold through the Mohair Board;  V is a compound levy.
Source: WTO document, Schedule XVII - South Africa.
26. Subject to the above-mentioned observations, South Africa's simple average MFN import
tariff at end-June 1997 was estimated at 15.1%, with a standard deviation of 17.8% (Table III.5).  The
coefficient of variation is 1.18, indicating substantial relative dispersion of the tariff rates.  The modalrate (the rate occurring most frequently) is 0% and applies to 43.6% of all the tariff lines.  Nearly 92%
of the lines bearing a zero rate are in the manufacturing sector and represent some 40% of lines in the
sector.  In general, products imported duty free to South Africa are inputs or capital goods and
include:  agricultural products such as live animals and certain animal products, cocoa, bulbs, tubers,Republic of South Africa WT/TPR/S/34
Page 43
seeds, fruit and spores of a kind used for sowing;  sulphur, natural graphite and sand, quartz, clay,
chalk, granite, mica, cement clinker, feldspar and fluorspar;  and products that are not manufactured
in, and do not have substitutes in South Africa.  The average tariff is highest in manufacturing, at
15.6%;  averages in agriculture, and mining and quarrying are 5.6% and 1.4%, respectively.  Relative
tariff dispersion is highest in mining and quarrying, followed by agriculture.
Table III.5
Main features of South Africa's tariff, June 1997
Tariff dispersion
Simple average MFN
tariff (%)Range
(%)Standard deviationa
(%)Coefficient of variationa
All tariff lines 15.1 0-72 17.81.18
By sectorb:
Agriculture and fisheries 5.6 0-35 8.9 1.59
Mining 1.4 0-18 3.4 2.47
Industry 15.6 0-72 18.0 1.15
By degree of processing
Primary products 4.9 0-60 8.9 1.80
Semi-processed products 18.6 0-50 15.9 0.85
Finished goods 13.8 0-72 19.6 1.42
a The coefficient of variation is a measure of relative dispersion, defined as the standard deviation divided by the average.
b Based on ISIC classification.
Source: Data provided by the South African authorities;  and calculations by the WTO Secretariat.
27. Nearly 43% of all tariff lines carry rates higher than 10% but lower than or equal to 40%;
some 23% bear rates higher than 30% (Chart III.1).  Rates higher than 35% only apply to industrial
products;  the maximum rate is 35% on agricultural imports and 18% in the mining and quarrying
sector.  Except for the modal rate (0%), the rate of 36% applies to the highest number of lines, some17%, and in the industrial sector.WT/TPR/S/34 Trade Policies Review
Page 44
Chart III.1
MFN tariff distribution by sector (ISIC1 definitions), 1997
Source : Information provided by the South African authorities; and WTO Secretariat calculations.Free >0 to 10% >10 to 20% >20 to 30% >30 to 40% >40 to 50% >50%04008001,2001,6002,0002,4002,8003,200
   Agriculture         Mining   Industry       All products   9.2
3.819.3
65.2
11.1 14.0 9.3 0. 480.2 16.040.2
9.017.1
7.5
1.23.743.6
16.8
7.518.3
1.13.5Number of lines
28. In aggregate, South Africa's tariff appears to display negative escalation from semi- to
fully-processed products, with average rates in the categories declining from 18.6% to 13.8%
(Chart III.2).  Negative tariff escalation is present on goods such as:  foods, from the first-stage ofprocessing to semi-processed products;  and non ferrous metals, petroleum refineries, and non-
electrical machinery, from semi- to fully-processed products.  This result may be misleading in the
sense that it mostly depicts industrial products that are not produced in, and do not have substitutes in,
South Africa, and which have zero or low duties.  Escalation is moderate on, inter alia , industrial
chemicals, where an average rate of 4.1% applies to first-stage processed products and 6.3% tofully-processed goods;  non-metallic mineral products where the average rate applying to first-stage
processed goods is 0% whereas a mean of 5.4% applies to fully-processed products;  and other
manufactured products on which the average tariff rates increase from 3.5% to 8% (Table A III.2).
Escalation is most pronounced on:  textiles, with mean rates rising from 5.8% on raw materials to
41.7% on final items;  leather products, with mean rates rising from zero to 26.3%;  wood products,with mean rates ranging from zero to 15.3%;  pe troleum and coal products on which the mean tariff
rates rise from 3.6% to 17%;  and rubber products, with average rates rising from zero to 17.2%.Republic of South Africa WT/TPR/S/34
Page 45
Agriculture Mining Industry Electricity All products05101520Per centChart III.2
Average tariff by degree of processing (ISIC1 definitions), 1997
Source : Information provided b y the South African authorities; and WTO Secretariat estimates.First stage of processing
Semi-processed
Fully-processed
Total
(c) Tariff preferences
29. Under the SACU agreement, goods grow n, produced or manufactured in the common
customs area are imported, exported or re-exported duty free within the SACU area(Chapter II(5)(ii)(a)).  Under the 1990 trade agre ement with Malawi, all goods grown, produced or
manufactured in Malawi may be imported duty free to South Africa under specified conditions
(Chapter II(5)(iii)).  Under the terms of the 1964 trade agreement with Zimbabwe, South Africa
accords tariff preferences (concessional tariff rates or tariff quotas) to its imports from Zimbabwe;
certain products are imported duty free (Chapter II(5)(iii)).  Non-reciprocal tariff preferences (tariffquotas or low tariff rates not exceeding 3%) are also granted by South Africa to a list of imported
products from Mozambique;  the preferences are subject to the requirement of a minimum of 35%
Mozambican content in the goods concerned (Chapter II(5)(iii)).
30. Preferential tariff treatment is to be granted by South Africa under various trade agreements
to which it is a signatory (Chapter II(5)), including the Trade Protocol of the Southern African
Development Community.
(d) Other duties and charges31. In addition to customs duties levied under Schedule 1, Part 1A, certain products are also
subject to excise duties, levies and value-added tax.WT/TPR/S/34 Trade Policies Review
Page 46
Excise duties
32. South Africa levies both specific and ad valorem  excise duties, on imported and domestic
products.  Specific excise duties are levied on prepared foodstuffs;  beverages and spirits;  tobacco;
mineral products;  and products of the chemical or allied industries.  Duties payable on these products
range from R 0.03817 per litre on distillate fuels, such as gas and diesel oils, to R 0.3 per kg on
preparations based on sorghum flour, put up for making beverages, to R 5 per kg on products of thechemical or allied industries, such as halogenated derivatives of hydrocarbons and mixtures
containing dichlorodifluoromethane and trichlorofluoromethane, and to R 2,550.37 per 100 litres of
absolute alcohol on spirits based on grain products.  Specific excise duties levied on cigarettes
increase with the weight of their tobacco content.  The specific excise duties are generally the same on
goods of the same class or kind, whether domestically produced or imported.  However, specificexcise duties on certain imported beverages such as mineral water, lemonade and flavoured mineral
water are higher than those collected on similar locally produced goods (13.60¢/l on locally produced
non-alcoholic beverages against 14.66¢/l on imports).  Specific excise duties are normally reviewed
once a year during the national budget process.
33. Ad valorem  excise duties are levied on certain manufactured products, whether imported or
domestically produced.  On locally manufactured products, the duty is applied to the full and final
price (before deductions of any discounts other than cash discounts) at which the goods are offered for
sale or consumption in South Africa.  The price excludes the value-added tax and non-rebated excise
duty payable under Schedule 1, Part 2B.   The value for ad valorem  excise duty purposes of imports
includes an uplift of 15% of the transaction value and any non-rebated customs duties (e.g. those
levied under Schedule 1, Part 1).  The same rate applies to similar products irrespective of their origin
(locally produced or imported).  No products are subject to both types of excise duties.
34. The modal rate of ad valorem  excise duty is 15%.  The minimum rate of ad valorem  excise
duty is 6%.  The ad valorem  rates of excise duty on certain categories of tractors, motor vehicles and
chassis are calculated on the basis of a formula, with a maximum of 20% (Table III.6).
Value-added tax
35. A 10% value-added tax (VAT) replaced the former 13% general sales tax on 1 October
1991.
11  The VAT is destination-based and is collected on both imports and domestically produced
goods and services;  the standard rate was increased to 14% on 7 April 1993.  On imports, the VAT is
levied on the duty-paid value (i.e. the customs value plus any non-rebated duties, levies and charges)
plus 10% of the customs value, which according to the authorities, corrects for the use of f.o.b. rather
than c.i.f. prices for customs duty purposes.  The VAT is levied on the open-market value of domesticsupply of goods and services.
12
                                                     
11GATT (1993).
12The open market value of any goods or services is the consideration in money that the goods and
services would generally fetch if their supply were freely offered and made, in similar circumstances, betweenpersons who are not connected persons, in the Republic of South Africa (Section 3 of the 1991 Value-Added Tax Act).Republic of South Africa WT/TPR/S/34
Page 47
Table III.6
Products subject to ad valorem  excise duties, 1997
Product description Rate (%)
Essential oils (terpeneless or not) 15
Perfumes and toilet waters 15
Beauty and make-up preparations for the care of skin (other than medicaments) 15
Preparations for use on the hair 15
Shaving preparations, personal deodorants, bath preparations, depilatories and other perfumery, cosmetic or toilet
preparations, not elsewhere specified or included15
Prepared room deodorisers whether or not perfumed or having disinfectant properties 15
Articles of apparel, clothing accessories and other articles of furskin 15
Artificial fur and articles thereof 15
Single loudspeakers, mounted in enclosures, other loudspeakers, audio-frequency electric amplifiers and electric sound
amplifier sets15
Turntables (record-desks), record-players, cassette-players and other sound reproducing apparatus, not incorporating a
sound recording device15
Magnetic tape recorders and other sound recording apparatus whether or not incorporating a sound reproducing device 15
Video recording or reproducing apparatus whether or not incorporating a video tuner 15
Prepared unrecorded media for sound or similar recording of other phenomena, other than photographic or
cinematographic goods15
Records, tapes and other recorded media for sound or other similarly recorded phenomena, excluding photographic or
cinematographic goods15
Reception apparatus for radio-telephony, radio-telegraphy or radio-broadcasting, whether or not combined in the same
housing, with sound recording or reproducing apparatus or a clock;  lenses, prisms, mirrors and other optical elements,
of any material, mounted, being parts of, or fittings for, instruments or apparatus, other than such elements of glass not
optically worked15
Sunglasses 15
Refracting telescopes, binocular or monocular, prismatic or not (excluding astronomical instruments) 15
Photographic (excluding cinematographic) cameras, photographic flashlight apparatus and flashbulbs (excluding certain
discharge lamps)15
Cinematographic cameras and projectors, whether or not incorporating sound recording or reproducing apparatus 15
Slide projectors and other image projectors (excluding cinematographic projectors and overhead projectors) 15
Photographic plates and film of any material, excluding paper, paperboard or textile 15
Side-cars, motorcycles (including mopeds) and cycles fitted with an auxiliary motor, with or without side-cars, and with
a cylinder capacity exceeding 800cm315
Wrist-watches, pocket-watches and other watches, and clocks, excluding braille watches, tower, astronomical and
observatory clocks, instrument panel clocks, and clocks of similar types for vehicles aircrafts and vessels15
Revolvers and pistols (excluding target shooting pistols of 5.6 mm calibre), muzzle-loading firearms, other sporting,
hunting or target-shooting shotguns or rifles, and spring, air or gas guns and pistols, excluding those designed to project
missile suitable for the injection of animals.15
Certain categories of motorcycles, cycles and side-cars, with cylinder capacity exceeding 200 cm3 but not exceeding
800 cm37.5
Automatic goods-vending machines, television receivers, video games of a kind used with a television receiver, gamesof skill or chance and related machines and parts thereof, excluding bowling alley equipment10
Printing machines, automatic typewriters and work-processing machines, calculating machines, automatic data
processing machines, facsimile transmission apparatus, certain external modems and parts thereof, and certain photo-
copying apparatus 6
Under Schedule 1(2)(B), certain categories of tractors (HS8701.20), and motor vehicles, and chassis  (HS 8702.00;
8703.00;  8704.00;  and 8706.00)Ca, with a
maximum of
20%
a C is the rate of excise duty  (in percentage) calculated on the basis of the following formula:  C = 35B.10-4 - 50, where B is  the
value for the ad valorem  excise duty purposes.
Source: Information provided by the South African authorities.WT/TPR/S/34 Trade Policies Review
Page 48
36. Exports and the supply of certain goods and services, such as agricultural inputs (e.g. animal
feed, seed, fertilizers, pesticides and animal remedies), certain basic foodstuffs (e.g. brown bread,
maize meal, eggs, milk, fruit and vegetables) and international transport services, are zero-rated for
VAT refund purposes (Section 3(vi)).13  The VAT is not payable on temporary imports and imports
for export-processing.  Interest on loans, superannuation fund interests, residential rents, passenger
transport by road or rail and educational services are exempt from VAT.  Revenue collected fromVAT amounted to about R 32.8 billion in 1996.
Levies
37. A specific fuel levy applies to certain petroleum oils and oils obtained from bituminous
minerals.  The levy is the same whether the goods are domestically produced or imported.  It amounts
to  R 0.766 per litre of leaded petrol;  R 0.704 per litre of unleaded petrol;  and R 0.661 per litre ofdistillate fuels (e.g. gas oil and diesel oil), or mixtures of illuminating or heating kerosene with
lubricity agents.
38. Other specific levies are charged on certain imported and domestically produced agricultural
goods, such as sorghum, oil seeds, lucerne seed, dried fruit, meat, mohair and milk.  They are
collected to promote research on the goods concerned.  These levies comprise two components,which, put together, range from R 0.02 per kg of meat to R 0.342 per kg of mohair (Table III.7).
(e) Duty and tax exemptions and refunds
39. Products exempt from normal customs formalities (such as diplomatic imports), are also
exempt from payment of both customs and excise duties (section (ii)(a)).  Rebates of full or partial
duties are granted under Schedule 3, Part 1 on the importation of raw materials and components used
in the manufacturing process, i.e. goods used in the manufacture of other goods.  Other schedules of
South Africa's tariff also provide for rebates and refunds of import tariffs and the fuel levy on rawmaterials/components used in the manufacturing, proc essing, finishing, equipping or packing of goods
solely for export (section 3(vi)).  Rebates of customs and excise duties and temporary rebates of
customs duties on various categories of products are also available under Schedule 4 (Table III.8).
40. Additional rebate facilities may be selectively granted to any industrialist who demonstrates
that the import tariff on the raw materials and/or components concerned has a substantial effect on hisproduction cost and that he needs the rebate to compete with like imported products.  The Board on
Tariffs and Trade considers applications for tariff protection, exemptions, rebates and refunds, and
related permits.
                                                     
13Capital goods qualify for input tax deductions.Republic of South Africa WT/TPR/S/34
Page 49
Table III.7
Levies on agricultural products, 1997
Products Domestic Imported
Levy Special levy Levy Special levy
Sorghum R 7.98/tonne R 3.97/tonne R 7.98/tonne R 3.97/tonne
Oilseeds:
Shelled edible groundnuts R 5.80/tonne R 12.50/tonne R 1.45/tonne R 3.13/tonne
Unshelled edible groundnuts R 4.20/tonne R 9.06/tonne R 1.05/tonne R 2.27/tonne
Shelled crushing groundnuts R 5.80/tonne R 12.50/tonne R 1.45/tonne R 3.13/tonne
Unshelled crushing groundnuts R 4.20/tonne R 9.06/tonne R 1.05/tonne R 2.27/tonne
Sunflower seed R 5.80/tonne R 1.10/tonne R 1.45/tonne R 0.28/tonne
Soy beans R 5.80/tonne R 9.10/tonne R 1.45/tonne R 1.11/tonne
Lucerne seed R 0.32/tonne R 0.18/tonne R 0.32/kg. No special levy
Dried fruit:
Currants 2.50 ¢/kg. 1.50 ¢/kg. 1.50 ¢/kg. 1.50 ¢/kg.
Raisins 2.50 ¢/kg. 1.50 ¢/kg. 1.50 ¢/kg. 1.50 ¢/kg.
Seedless raisins 2.50 ¢/kg. 1.50 ¢/kg. 1.50 ¢/kg. 1.50 ¢/kg.
Prunes 3.00 ¢/kg. 2.00 ¢/kg. 2.00 ¢/kg. 2.00 ¢/kg.
All other kinds of dried fruit 3.40 ¢/kg. 5.00 ¢/kg. 5.00 ¢/kg. 5.00 ¢/kg.
Deboned meat cuts of beef No levy No levy 1 ¢/kg. 1 ¢/kg.
Meat of animals slaughtered
at abattoirs in South Africa
Beef 209 ¢/carcass 352 ¢/carcass n.a. n.a.
Calf 54 ¢/carcass 74 ¢/carcass n.a. n.a.
Sheep 38 ¢/carcass 34 ¢/carcass  n.a. n.a.
Goat 38 ¢/carcass 34 ¢/carcass n.a. n.a.
Pork 65 ¢/carcass 334 ¢/carcass n.a. n.a.
Meat imported into South Africa or introducedfrom area in South Africa where the Scheme does
not apply
Beef n.a. n.a. 1 ¢/kg 1 ¢/kg
Calf n.a. n.a. 1 ¢/kg 1 ¢/kg
Sheep n.a. n.a. 2 ¢/kg 1 ¢/kg
Goat n.a.  n.a. 2 ¢/kg 1 ¢/kg
Pork n.a. n.a. 0 ¢/kg 2 ¢/kg
Deboned meat cuts of beef n.a. n.a. 1 ¢/kg 1 ¢/kg
Mohair 23.9 ¢/kg. 10.3 ¢/kg. 23.9 ¢/kg. 10.3 ¢/kg.
Milk 0.163 ¢/litre 0.297 ¢/litre 0.163 ¢/litre 0.297 ¢/litre
n.a. Not applicable.
Source: Information provided by the South African authorities.
(e) Duty and tax exemptions and refundsWT/TPR/S/34 Trade Policies Review
Page 50
Table III.8
Products eligible for rebates of customs and excise duties, 1997
Products Schedule
Building material worked monumental building stone and articles thereof, tools and stores, for use by the War
Graves Commission and similar international organizations4, Part 1
Goods for cultural, educational, charitable, welfare or youth organizations or purposes 4, Part 1
Goods for heads of State, diplomatic and other foreign representatives, provided that the government of the
mission or the person who is claiming the rebate facility accords reciprocal treatment to South Africans in
similar positions4, Part 1
Goods imported by immigrants, tourists, returning residents and other passengers, for their personal use and
under specified conditions4, Part 1
Cups, medals and other trophies, awarded abroad to any person, and such articles for presentation;  goods
formerly exported (re-imported goods), provided that specified conditions are met (for instance, a permit forre-importation issued by the Director-General of Agricultural Economics and Marketing is required for the
admission under rebates of re-imported butter, cheese, maize and maize products, sugar, wine, brandy and
spirituous beverages)4, Part 1
Goods, such as wooden cases, empty containers, master models and base oils for lubricating oil, for industrial
or commercial purposes4, Part 1
Goods (excluding corn or grain seed), for purposes of experimenting therewith as the department controlling
or supervising such experimenting may allow by specific permits, food containing soya-bean concentrates,
specially prepared for infants4, Part 1
Goods imported for the relief of distress of persons in cases of famine or other national disaster, under
technical assistance or multilateral international agreements to which South Africa is a party4, Part 1
Printed matters imported by airlines for their own use 4, Part 1
Industrial machinery or appliances, portable or mobile, produced or manufactured in the United Kingdom and
Northern Ireland and imported therefrom (HS subheadings 8478.10.10;  8478.90.10;  8479.40.10;  8479.81.10;
8479.89.63;  and 8479.90.55) 4, Part 1
Parts and materials of plastics of a kind used for the manufacture of design engineering models of factories,
installations and the like4, Part 1
Textiles fabrics woven from six different fibres, for testing dyestuff fastness 4, Part 1
Office furniture and equipment (excluding motor vehicles) for the official use by an organization (excluding a
business enterprise) approved by the Commissioner for Customs and Excise, transferring its administrative
operations to South Africa.4, Part 1
Potatoes, dried leguminous vegetables and fruit, cereals and oil seeds (solely for planting or sowing), rape
seed, sunflower seed, meat, fish, dairy products, plastics, rubber and rubber products, paper, not carded or
combed cotton, worn clothing and other worn items and chemical products.4, Part 2a
Under specified circumstances, lost, destroyed or damaged goods, in respect of which the fuel levy, together
with the customs duty, amounts not less than R 25004, Part 4b
Petrol and distillate fuels for use by the State President, diplomatic and other foreign representatives 6, Part 3c
Distillate fuels used for road and rail transport in agriculture or forestry, for the production of agricultural
goods, or used in forestry, whalers, trawlers and other ocean-going fishing or non-South African vessels.6, Part 1c
a Temporary rebates of customs duties.
b Rebates of the fuel levy.c Refunds of fuel levy.
Source: Information provided by the South African authorities.
(iv) Import prohibitions and licensing
41. South Africa's licensing system provides for the granting of permits to meet the "reasonable
requirements" of merchants and manufacturers. 14  Required for the importation of goods subject to
                                                     
14WTO document G/LIC/N/3/ZAF/1, 23 May 1997.Republic of South Africa WT/TPR/S/34
Page 51
control, the permits must be obtained prior to the da te of shipment;  they are issued without charge by
the Deputy Director of Import and Export Control (Department of Trade and Industry).15  The permits
may prescribe conditions for import, or the use of the goods to be imported.  Such conditions may
include the quantity or value/price and the origin of the goods.  Failure to produce the permit may
result in a fine of up to R 40,000 and/or imprisonment for a period not exceeding ten years.16
42. The list of products subject to import control has been reduced since 1993.  Import controls
are currently maintained in terms of the 1963 Import and Export Control Act, published in
Schedule I(A) of the 1988 Import Control Regulations (as amended), on the following products:  used
goods, waste and scrap;  fresh or frozen fish, crustaceans and molluscs;  dairy products, oats and
maize;  wine, vermouth, fermented beverages, ethyl alcohol vinegar and substitutes;  mineral fuels,
mineral oils and products of their distillation;  radioactive chemical elements and radioactive isotopes;new pneumatic tyres;  gold;  cobalt, cadmium, antimony, manganese, diromium, geranium, vanadium,
gallium, hafnium, indium, rhenium and thallium;  revolvers and pistols, and other firearms and
ammunition and parts;  and ozone depleting substances such as CFCs (Table III.9).
Table III.9
Goods subject to import control, May 1997
Tariff heading Description of goods Official purpose of control
Various All used goods, waste and scrap Health, environmental reasons and in
terms of the Basel Convention
03.01 to 03.07 Fish, fresh or frozen, crustaceans and molluscs Health reasons, no quantitative
restrictions
04.01 to 04.06 Dairy products Automatic licensing
10.04;  10.05 Oats and maize Automatic licensing
22.04;  22.05;  22.06;  Ex22.07;Ex22.08;  22.09Wine, vermouth, fermented beverages, ethyl alcohol
vinegar and substitutesAutomatic licensing
27.07;  27.08;  27.09;  27.10;
27.11;  27.12;  27.13;  27,14;
27.15Mineral fuels, mineral oils and products of their distillation "Strategic reasons"
28.44;  28.45 Radioactive chemical elements and radioactive isotopes Health and environmental reasons
40.07;  40.08 Vulcanized rubber thread and cord, plates and strip Automatic licensing
40.11 New pneumatic tyres Monitoring for quality specification
71.08 Gold and coins Monetary policy
81.05;  81.07;  81.10;  81.11;
81.12Cobalt, cadmium antimony, manganese diromium,
geranium, vanadium, galium, hafniu mindium, rhenium,
and thalliumHealth and environmental reasons
93.03;  93.04;  93.05;  93.06 Revolvers and pistols, other firearms, parts, ammunition
and partsSecurity reasons
Ex9504.30 Gambling machines Quality specifications and public interest
Ex2903.19.10;  2903.30.10;
2903.45.90;  Ex 2903.49.10;
2903.41;  2903.42;  2903.43;2903.44;  2903.45.05;  2903.46;
3824.71.10;  3824.71.90Ozone depleting substances (CFC) Montreal Protocol
Source:  Information provided by the South African authorities;  and WTO document G/LIC/N/3/ZAF/1, 23 May 1997.
                                                     
15In the case of certain products, applications are al so considered by the Departments of Agriculture,
Health, and Environment Affairs.
16A licence is valid for the calendar year during which it is issued, but may be used for customs
clearance of goods shipped before 31 December of that year.  The validity of the licence cannot be extended.WT/TPR/S/34 Trade Policies Review
Page 52
43. The 1983 Agricultural Pests Act (Act No. 36) provides for importation, by means of a permit
or following publication in a Government Gazette, of controlled goods, inter alia , plants and plant
products, pathogens, insects, exotic animals, growth mediums, infectious things, honey, beeswax or
used apiary equipment.  The importation of these goods may also be subject to specific phytosanitary
conditions as indicated on the permit or as published in the Government Gazette.  The 1947
Fertilizers, Farmfeed, Agricultural Remedies and Stock Remedies Act (Act No. 36) provides for a listof agricultural products subject to import control for health, sanitary and phytosanitary reasons
(section (ix)(b)).  Import controls are also applied in sectors such as medicines, mainly for reasons of
compliance with approved standards.  South Africa prohibits imports of certain used goods, waste and
hazardous materials.  Pesticides such as aldri n, dieldrin, mercury compounds and certain mixtures of
isomers are banned from import while imports of others (e.g. inorganic arsenic compounds,chlordane, DDT) are severely restricted.
44. With the exception of a limited range of products from Malawi and Zimbabwe, goods grown,
produced or manufactured in the other SACU memb er countries (Botswana, Lesotho, Namibia and
Swaziland), and in Malawi and Zimbabwe are not subject to import control.  South Africa does not
maintain any import quotas.  However, tariff quotas apply to a list of imported goods fromMozambique to which South Africa grants preferential tariff treatment (Chapter II(5)(iii)).
(v) Trade sanctions
45. According to the authorities, South Africa applies no trade sanctions, either nationally or
internationally, except those endorsed by the United Nations Security Council, the Organization of
African Unity (OAU) or the Southern African Development Community (SADC).
(vi) Safeguard, anti-dumping and countervailing measures
46. Chapter 6 of the Customs and Excise Act, and Section 4 of the Board on Tariffs and Trade
(BTT) Act provide the legal basis for anti-dumping, countervailing and safeguard measures in
South Africa.  These provisions were amended in 1992.  In 1996, two bills were published to amend
the provisions dealing with safeguard measures and to provide for promulgation of regulations
relating to anti-dumping, countervailing and safeguard investigations.  These interim amendment bills
were passed into legislation by Parliament in 1997.  In April 1996, South Africa undertook, in theWTO Committees on Anti-Dumping Practices and on Subsidies and Countervailing Measures, to
amend its legislation on these matters with a view to ensuring its compliance with the requirements of
the WTO Agreements.  At the request of the Minister  of Trade and Industry, the BTT investigated the
restructuring of the anti-dumping and countervailing system.
17  The recommendations of the BTT
following its investigation were to be published in  the second half of 1997, together with the proposed
draft legislation.
47. Anti-dumping, countervailing or safeguard actions are initiated by the Board on Tariffs and
Trade (BTT) at the request of a domestic industry.  After investigation, the BTT makes
recommendations to the Minister of Trade and Industry (MTI).  The Minister of Finance may, by
notice in the Gazette and in accordance with a request of the MTI, impose, withdraw or reduce anti-dumping, countervailing or safeguard duties with or without retrospective effect.
                                                     
17Government of South Africa (1996d).Republic of South Africa WT/TPR/S/34
Page 53
(a) Safeguard measures
48. In South Africa, and by extension in SACU , safeguard actions are taken in the case of
"disruptive competition".  Under the Board on Tariffs and Trade Act, as amended in 1997, "disruptive
competition" is "the export of goods to the Republic or the common customs area of the Southern
African Customs Union in such increased quantities, absolute or relative to domestic production in the
Republic or the common customs area of the So uthern African Customs Union and under such
conditions as to cause or threaten to cause serious injury to the domestic industry in the Republic or
the common customs area of the Southern African Customs Union which produces like or directly
competitive products".18  The 1997 amendments to the BTT Act were to bring the definition of
"disruptive competition" fully into line with the WTO Agreement on Safeguards.  The 1997
amendments to the Customs and Excise Act provide a legal mechanism for the institution ofprovisional safeguard measures.
19
49. As of end-June 1997, South Africa had never imposed a safeguard duty.  However, itemsunder HS Chapters 27, 39 and 40 were notified by  South Africa under Article 11.1 of the WTO
Agreement on Safeguards.
20  In accordance with the phasing-out/removal timetable provided by
South Africa in this regard, import control on products, such as new tyres, would have been removedsince 1996 (Table III.10).  However, import control still applies to a large number of these products
(Table III.9).
50. South Africa does not maintain any pre-existing GATT Article XIX (safeguard) measures
described in Article 10 of the WTO Agreement on Safeguards;  actions taken by means of formula
duties on items under HS Chapters 15, 29, 64, 70, 73 and 85 have been removed.
21  South Africa
retains the right to use the transitional safeguard mechanism of Article 6 of the WTO Agreement on
Textiles and Clothing.  The list of products integrated into GATT by South Africa during Phase Iincluded acrylic filament tow, metallized yarn, textile fabrics coated with gum, linoleum, bolting
cloth, panty hose and tights, socks, belts, vests for women, girdles and ski suits.
22  Phase II
integration, notified in October 1997, includes a range of tops and yarns (including wool, viscose and
some artificials), certain fabrics, a number of made-up items including travel goods and handbags, and
clothing, principally wool or artificial fibres, includin g coats, jackets, suits, dresses, skirts, hosiery and
some underwear.23  As at the end of May 1997, South Africa had not invoked the special safeguard
right it retained with respect to a large range of agricultural products (section (iii)(b)).24
                                                     
18Board on Tariffs and Trade Act, 1992 (as amended).
19The amendments also provide for the application of provisional measures in respect of safeguard
duties in a similar manner as is currently provided for in respect of anti-dumping and countervailing duties.
20WTO documents G/SG/N/3/ZAF, 25 April 1995 and G/SG/N/5/ZAF, 18 June 1996.
21WTO document G/SG/N/2/ZAF, 27 March 1995;  and GATT (1993) provide the list of items that
were subject to safeguard measures.
22WTO documents G/TMB/N/114, 10 August 1995;   and G/TMB/N/197/Rev.1, 26 November 1996.
23WTO document G/TMB/N/307, 24 November 1997.
24South Africa does not have any legislative or administrative provisions for "special safeguards" as set
out in Article 5 of the WTO Agreement on Agriculture.WT/TPR/S/34 Trade Policies Review
Page 54
Table III.10
Products subject to a safeguard action (import licence), 18 June 1996
Tariff
headingProduct description Phasing-out/
Removal date
27.07 Oils and other products of the distillation of high temperature coal tar;  similar products in which
the mass of aromatic constituents exceeds that of non-aromatic constituentsEnd of 1998b
27.08 Pitch and pitch coke, obtained from coal tar or from other mineral tars End of 1998b
27.09 Petroleum oils and oils obtained from bituminous mineral crude End of 1998b
27.10 Petroleum oils and oils obtained from bituminous minerals, other than crude End of 1998b
27.11 Petroleum gases and other gaseous hydrocarbons End of 1998b
27.12 Petroleum jelly;  paraffin wax;  microcrystalline;  petroleum wax;  slack wax;  ozokerite;  lignite
wax;  peat wax;  other mineral waxes;  and similar products obtained by synthesis or by other
processes, whether or not colouredEnd of 1998b
27.13 Petroleum coke, petroleum bitumen and other residues of petroleum oils or of oils obtained from
bituminous mineralsEnd of 1998b
27.14 Bitumen and asphalt, natural;  bituminous or oil shale and tar sands;  asphalities and asphaltic
rocksEnd of 1998b
27.15 Bituminous mixtures based on natural asphalt, on natural bitumen, on petroleum bitumen, on
mineral tar or on mineral tar pitch( for example, bituminous mastics, cutbacks)End of 1998b
39.20.20 Polymers of propylene End of 1996b
39.21.90 Other plates, sheets, foil and strip, of plastic:  other End of 1996b
 40.11 New pneumatic tyres, of rubber:  refer to industrial rebates of customs duties - 317.02 motor
vehicles (general)31.7.96a
40.11.10 - Of a kind used on motor cars (including station wagons and racing cars) ...
40.11.20 - Of a kind used on buses or lorries ...
40.11.30 - Of a kind used on aircraft 31.7.96a
40.11.40 - Of a kind used on motorcycles 31.7.96a
40.11.90 Other ...
40.13 Inner tubes of rubber 31.7.96a
40.13.10 Of a kind used on motor cars (including station wagons and racing cars), buses and lorries ...
40.13.20 Of a kind used on bicycles 31.7.96a
40.13.90 Other ...
... The removal of import control was under consideration as at 18 June 1996.
a To be removed by the date specified.
b To be phased-out or brought into conformity with the WTO Agreement on Safeguards by the date specified.
Source: WTO documents G/SG/N/3/ZAF, 25 April 1995 and G/SG/N/5/ZAF, 18 June 1996.
(b) Anti-dumping and countervailing measures
51. Under the BTT Act, dumping occurs when the price of a good exported to South Africa or the
SACU area (the export price) is less than the "normal price", defined as the comparable price actually
paid or payable in the ordinary course of trade for like goods intended for consumption in the
exporting country or countries of origin.25  In the absence of the price as so defined, the normal price
will be the highest comparable price at which similar goods are actually exported to any third countryin the ordinary course of trade, or the constructed cost of production of goods in the country of origin
                                                     
25The export price is defined as the price actually paid or payable for goods sold for export net of all
taxes, discounts and rebates actually granted and directly re lated to the sale under consideration.  In the absence
of an export price or where it is unreliable, the export price is constructed by the BTT.Republic of South Africa WT/TPR/S/34
Page 55
plus a "reasonable" addition for selling costs and profit.26  An export or a proposed export of goods to
South Africa or the SACU area is deemed to be subs idized if the authority of the exporting country or
any other country provides any form of financial aid or other assistance in respect of those goods,
including assistance in respect of production, manufacture, transport or export.27
52. The procedures for anti-dumping and countervailing actions are essentially the same;  theycomprise a merit assessment, a preliminary-determin ation stage, which could result in a provisional
payment, and a final-determination stage, which could result in a definitive duty.  On request of a
domestic industry and after a positive finding in the preliminary investigation, the BTT recommends
the imposition of a provisional anti-dumping or countervailing duty or any other action it deems
necessary.
28  The provisional action is valid for six months from the date of its imposition;  this period
may be extended by a further three months.  If no definitive anti-dumping or countervailing duty isimposed before the expiry of this period, the provisional payment is refunded.  The difference
between a provisional duty paid in excess of any anti-dumping or countervailing duty retrospectively
imposed is refunded;  the difference is not collected if the provisional duty is lower than the duty
retrospectively imposed.
53. Time periods for the merit assessment, the preliminary determination and rendering the
definitive decision have not been legislated.  However, the target time period for the merit assessment
is 30 days and for the preliminary determination 120 days from the formal initiation of the
investigation.  The target period for rendering the definitive decision is 120 days from the end of the
merit assessment.
54. Normally, within twelve months after the imposition of the definitive anti-dumping or
countervailing duty, the BTT may review the action taken, on request of any interested party.  The
BTT may also, on its own initiative,  review an anti-dumping or countervailing duty at any time.
Decisions relating to actions taken or to be taken at each stage of investigation are published in the
Government Gazette and the interested parties, including the governments of the exporting countries
are notified.  Anti-dumping and countervailing actions are taken for a period of five years after which
they lapse unless reviewed and renewed.
55. As at 31 December 1996, South Africa had 35 definitive anti-dumping duties in force
(Table III.11).
29  Anti-dumping actions have been used mainly on chemical and mineral products,
paper, and clothing.  No countervailing actions have so far been taken.
                                                     
26Allowance is made for differences in conditions, terms of sales and taxation, and for other differences
affecting price comparability.
27Board on Tariffs and Trade Act, 1992 (as amended).
28WTO documents G/ADP/N/1/ZAF/1 and G/SCM/N/1/ZAF/1, 8 December 1995.
29About 53 anti-dumping investigations have formally been initiated since 1992.WT/TPR/S/34 Trade Policies Review
Page 56
Table III.11
Anti-dumping duty actions, as at 31 December 1996
Product Country/customs
territoryInitiationa
dateResultbBasis of determinationc
Domestic clothes dryers Australia 18 Oct. 1996 (R) D HM
Titanium dioxide 2 July 1993 D CV
N-1,3
dimethylbutyl-N-paraphelenediamineBelgium 28 July 1995 D HM
Suspension PVC Brazil 15 Mar. 1996 P HM
Uncoated woodfree paper 12 July 1996 U
Copper tubing Bulgaria 6 Sep. 1996 U n.a.
Calcium propionate acetate Canada 9 Oct. 1992 D ...
Aluminium hollow-ware China, P.R. 15 Sep. 1995 D TM (Zimbabwe)
Indigo blue discharge material 14 June 1996 D Ghana
PVC pilchers 15 Mar. 1996 D TM
PTFE thread sealing tape 12 Jan. 1996 D TM (Italy)
Towels and face cloths 28 Feb. 1992 D TM
Men's, women's, boys' and girls'
underwear18 Oct. 1996 (R) D TM (Mauritius)
T-shirts, singlets, vests of cotton 11 Oct. 1991 D TM (Mauritius)
Hoes not exceeding 320 mm 25 Oct. 1991 D TM
Acetaminophenol 31 Oct. 1992 D TM
Spades, rakes, forks, picks 26 March 1993 D TM
Aluminium hollow-ware Egypt 27 Oct. 1995 P HM
PVC film and sheet France 9 Sep. 1994 D HM
Suspension PVC 15 Mar. 1996 P HM
Circuit breakers 31 May 1996 U n.a.
N-1,3
dimethylbutyl-N-paraphelenediamineGermany 28 July 1995 Rej. HM
Suspension PVC 15 Mar. 1996 Rej. HM
Carbonless copy paper 5 Mar. 1993 D HM
Indigo blue discharge material Hong Kong 14 June 1996 D TM (Ghana)
Aluminium hollow-ware 15 Sep. 1995 D TM (Zimbabwe)
PTFE thread sealing tape 12 Jan. 1996 D TM (Italy)
Acetaminophenol 31 Oct. 1992 D TM
Spades, rakes, forks, picks 26 Mar. 1993 D TM
Cast aluminium, seats and tables Hungary 15 Apr. 1989 D ...
Garden picks India 14 July 1995 D HM
Hydrogen peroxide 22 Sep. 1995 P HM
Agriculture hoe heads 22 Mar. 1996 Rej. HM
Porcelain line insulators 31 May 1996 Rej. CV
Amoxycillin and ampicillin 18 Oct. 1996 U CV
Acetaminophenol 31 Oct 1992 D ...
Uncoated woodfree paper Indonesia 12 July 1996 U n.a.
Caustic soda Iran 15 Mar. 1996 Rej. n.a.
Circuit breakers Italy 31 May 1996 P HM
Table III.11 (cont'd)Republic of South Africa WT/TPR/S/34
Page 57
Product Country/customs
territoryInitiationa
dateResultbBasis of determinationc
Hydrogen peroxide 24 Mar. 1995 D HM
Ceramic tiles 25 Oct. 1996 U n.a.
Circuit breakers Japan 31 May 1996 P HM/CV
PVC film and sheet Chinese Taipei 9 Sep. 1994 D HM
Hydrogen peroxide 24 Mar. 1995 D HM
PTFE thread sealing tape 8 Mar. 1996 Rej. HM
Calcium propionate Netherlands 7 June 1996
(R)DH M
Calcium acetate 26 July 1996
(R)D ...
Uncoated woodfree paper Poland 12 July 1996 U n.a.
Acrylic fibre Portugal 5 July 1996 U n.a.
Caustic soda Saudi Arabia 15 Mar. 1996 Rej. n.a.
Acetaminophenol Singapore 31 Oct. 1992 D TM (India) Transhipment
Flat glass 15 Janv. 1993 D HM
N-1,3
dimethylbutyl-N-paraphelenediamineSpain 28 July 1995 Rej. HM
Circuit breakers 31 May 1996 U n.a.
Circuit breakers Switzerland 31 May 1996 U n.a.
Uncoated woodfree paper Sweden 12 July 1996 U n.a.
Flat glass Thailand 15 Jan. 1993 D HM
Copper tubing United Kingdom 6 Sep. 1996 U n.a.
Carbonless copy paper 5 Mar. 1993 D HM
Suspension PVC United States 15 Mar. 1996 P HM
Caustic soda 15 Mar. 1996 Rej. n.a.
Aldicarb 24 May 1996 P HM
Roller bearings 21 Aug. 1992 D HM
Polyethylene battery separator material 8 Nov. 1996 U n.a.
Calcium propionate, acetate 9 Oct. 1992 D HM
Copper tubing Yugoslavia 6 Sep. 1996 U n.a.
Aluminium hollow-ware Zimbabwe 15 Sep. 1995 P HM
... Not available.
n.a. Not applicable.a The symbol (R) is used if an investigation is opened in the context of an existing anti-dumping measure, or after an allegatio n of
a breach of an undertaking.
b D - final duty;  P - provisional duty;  U - Preliminary determination stage;  Rej. - rejection or no duty or case withdrawn.c HM Home market price.
TM Third country market price.CV Constructed value.G Prices charged in Ghana.
Source: WTO document G/ADP/N/22/ZAF/Rev.1, 16 April 1997.WT/TPR/S/34 Trade Policies Review
Page 58
(vii) Rules of origin
56. In accordance with Section 46 of the Customs and Excise Act, a good is regarded as having
been produced or manufactured in any particular territory if at least 25% of its production cost is
represented by materials produced and labour performed in that territory, and if the last process in its
production or manufacture has taken place in that territory.  The Commissioner for Customs and
Excise may, from time to time, at the request of the BTT, add other criteria or increase the prescribedpercentage in regard to specific imported goods, or goods from a particular territory.  The percentage
may also be changed under bilateral agreements with foreign countries.
57. Under the SADC Trade Protocol, preferential tr eatment is to be granted to an imported good,
consigned directly from a member State to a consignee in another member State, if the good is:
(a) wholly produced in a member State;  or
(b) produced in the member States and the c.i.f. value of any non-SADC materials (or
materials from undetermined origin) used does not exceed 60% of the total cost of the
materials used in the production;  or
(c) produced in the member States from any non-SADC materials (or materials from
undetermined origin) in such manner that the value-added resulting from the processof production accounts for at least 35% of the ex-factory cost of the goods; or
(d) produced in such manner that there is a change in the tariff heading of a product
arising from a processing carried out on the non-originating materials.
30
58. These rules of origin apply throughout the SA CU area.  Under the bilateral trade agreement
between South Africa and Malawi, goods are regarded as originating in South Africa if at least the last
process of their manufacture has been performed in South Africa (Chapter II(5)(iii) notes origin
criteria applying to goods produced or manufactured in Malawi).  Under the preferential tariffarrangement between South Africa and Mozambique, goods are regarded as of Mozambican origin if
at least 35% of their production cost is represented by materials produced and labour performed in
Mozambique.  Various origin criteria, including specified levels of local-content, apply to goods
imported under the bilateral trade agreement be tween South Africa and Southern Rhodesia (now
Zimbabwe).
(viii) Local-content schemes
59. Local-content requirements are an element in several incentive schemes in force in South
Africa, mainly in the manufacturing sector.31  For example, rebates of import duties granted under the
Revised Phase VI Motor Industry Development Programme are linked to local-content
(Chapter IV(4)(i)).  Exporters of capital goods and services qualify for credit facilities by using aminimum of 70% South African products and servi ces (section 3(vii)).  The financial assistance
provided by the Government under the General Export Incentive Scheme (GEIS), which was
terminated in July 1997, was proportional to the level of local-content;  a minimum of 35%
South African content was required (section 3(v)).
                                                     
30The Protocol also provides for the possibility of SADC regional cumulation of origin (SADC), 1996.
31WTO document G/TRIMS/N/1/ZAF/1, 8 May 1995.Republic of South Africa WT/TPR/S/34
Page 59
60. A minimum local-content of 50% is required for obtaining type approval for
customer-premises telecommunication equipment, such  as private automatic branch exchanges, key
telephone systems and standard (basic) telephone instruments;  the local-content requirement is based
on value added to the product during the manufacturing process.32  Coffee or tea packers, blenders
and/or roasters have to purchase set quantities of locally produced coffee or tea at predetermined
prices before import permits can be issued for the importation of the balance of domestic demand.Furthermore, price preferences based on local-content are taken into account when comparing tenders
(section (xi)).
(ix) Standards and other technical requirements
(a) Standardization, testing and certification61. Administered by the Department of Trade an d Industry (DTI), the Standards Act (Act No. 36
of 1993) replaced the 1982 Act and confirmed the South African Bureau of Standards (SABS),
established in 1945, as the national institution for the promotion and maintenance of standardization
and quality.  The principal activities of SABS include the preparation of specifications, codes of
practice and standard methods, the setting up of test and inspection facilities, and the administration of
product and system certification schemes, such as th e SABS mark, for which it charges fees that vary
according to, inter alia , the product and tests involved.
62. SABS develops standards at the request of inte rested groups.  In this connection, SABS forms
a committee in which parties with an interest in the standard are represented.  Once finalized and
commented on by the public, standards are published in the Government Gazette as national
standards.  The use of SABS standards is voluntary, although in some cases where public health and
safety are a concern, the Minister of Trade and Industry has declared their use obligatory.  The Bureau
annually publishes a bulletin listing suppliers whose quality management systems comply with theSABS-ISO 9000 requirement.
33
63. In South Africa, a voluntary standard become s compulsory once referenced;  any Department
may reference and make compulsory any standard.  Compulsory standards apply equally to products
from all origins.  Section 23 of the Standards Act gives SABS the authority to ensure that products
that are subject to compulsory South African spec ifications comply with these requirements.  By
mid-March 1997, South Africa had 3,500 standards, of which 54 were declared compulsory by the
Minister of Trade and Industry.34  The public telecommunications company, Telkom, is charged with
setting standards and granting the approval for telephone equipment.
                                                     
32WTO document G/TRIMS/N/1/ZAF/1, 8 May 1995.
33ISO 9000 is a standard for quality systems developed by the International Organization for
Standardization (ISO).
34The number of standards declared compulsory by the Minister of Trade and Industry (standards
dealing with commodities not dealt with under specific Acts) was 43 in 1993.  The Department of Health alsohas compulsory standards relating to medical equipment, GATT (1993).WT/TPR/S/34 Trade Policies Review
Page 60
64. South Africa is an active participant in the development of international standards and the
setting of its standards generally follows international norms.35  South Africa has accepted the Code of
Good Practice of the WTO Technical Barriers to Trade (TBT) Agreement.36  South Africa is a
signatory to the Metre Convention and subscribes to the Bureau international des poids et mesures ;
the National Metrology Laboratory maintains South Africa's primary measuring units.  SABS is a
founding member of the International Organization for Standardization (ISO) and has adoptedISO 9000 since 1987.
37  SABS is a member of the International Electrotechnical Commission (IEC).
65. The South African National Accreditation System (SANAS) was established in August 1996
as the organ of accreditation of certification bodies.38  For the present, SANAS has only one
operational division, the calibration and testing division.  SANAS has mutual recognition agreements
with the European Accreditation of Laboratories Co-operation (EAL) in respect of calibration andtesting facilities, and with the Chinese National Laboratory Accreditation (CNLA) in respect of
calibration facilities.
39  SANAS has been assessed by the Na tional Association Testing Authority of
Australia (NATAA) for future mutual recogni tion agreements with NATAA and the Testing
Laboratory Registration Council (TELARC) in respect of calibration and testing facilities.  In the
absence of a mutual recognition agreement, it is the responsibility of the supplier to prove thecompatibility of its products with South African standards.  SANAS is a participant in the
International Laboratory Accreditation Co-opera tion (ILAC) and the International Accreditation
Forum (IAF).  SANAS maintains a list of accredited civil engineering test facilities whose technical
competence meets South African standards
40;  it has not so far accredited foreign test facilities.
(b) Health, sanitary and phytosanitary regulations
66. Several Acts regulate trade and/or production or manufacture of agricultural commodities and
goods destined for human or animal consumption.41  According to the authorities, South Africa's
                                                     
35According to the authorities, about 34% of standards relating to electrical components are
internationally compatible.
36WTO document G/TBT/CS/N/4, 22 May 1995.
37As at 31 December 1995, of the 127,389 ISO 9000 certificates granted in the world, South Africa
held 1,454, i.e. about 93% of the 1,558 ISO 9000 certificates held by the whole African continent, Jeune Afrique
No. 1889, 19-25 March 1997.  SABS is also developing an infrastructure for ISO 14001 (a voluntary standardfor environmental systems auditing and certifying).
38Section 3 of the 1993 Standards Act still provides  the authority of SABS in relation to the
accreditation of laboratories and quality practitioners.
39The mutual recognition agreement with the EU also applies to electrical and electronic systems and
components.
40SANAS is to be equipped to accredit environmental auditors.
41Including the 1990 Agricultural Products Standards Act, the 1993 Standards Act, the 1983
Agricultural Pests Act, the 1984 Animal Diseases Act (currently under review), the 1992 Abattoir Hygiène Act,the 1976 Plant Improvement Act, the 1947 Fertilizers, Farm  Feeds, Agricultural Remedies and Stock Remedies
Act, the 1977 Livestock Improvement Act, the 1972 Foodstuffs, Cosmetics and Disinfectants Act, the 1997Genetically Modified Organisms Act and the 1989 Liquor Products Act.Republic of South Africa WT/TPR/S/34
Page 61
regulations in these areas follow international guidelines, including the International Office of
Epizootics, Codex Alimentarius  and the International Plant Protection Convention.
67. All imports of live animals (including exotic animals) and animal products, plants, pathogen,
insects, growth medium, any infectious thing, honey, beeswax and beeswax used as apiary equipment,
and genetically manipulated organisms, are subject to import permits issued by the Directorates of
Animal Health, Veterinary Public Health, Plant a nd Quality Control of the National Department of
Agriculture;  such imports are under continuous review due to changes in disease status.  A list of
other agricultural products subject to import control, determined by the Minister of Agriculture,
includes  seeds for planting purposes;  fresh and dried fruit, vegetables, flowers and foliage;  bark,
cork, rattan, bamboo, timber and fibres for manufacturing;  vegetable gum and resins;  dried herbs,
spices, seed and nuts for human and animal consumption and manufacturing;  organisms for research,bio-control agents, infected plant material for laboratory analysis;  leaf tobacco, tobacco stalks and
dust;  and fresh water fish for aquariums and fresh water crayfish for research.
68. The use of natural and artificial sweeteners, colorants and other additives in foodstuffs is
regulated;  for example, the sale of foodstuffs containing more than prescribed levels of aflatoxin and
other fungus-induced toxins, and the sale of cereals in which, inter alia , the datura seed content
exceeds certain specified limits are prohibited.
42  The importation of live animals susceptible to "mad
cow" disease (e.g. cattle in particular, buffalo, certain game species, camelids, sheep and goats) from
all countries infected with Bovine Spongiform Encephalopathy (BSE) has been suspended since
22 March 1996.  In this connection, the importation of beef (HS heading 02.02) from the
United Kingdom has been banned since 22 March 1996.  France, Netherlands, Portugal, Republic of
Ireland and Switzerland are classified by South Africa as BSE low-risk countries.  However,
importation of semen from BSE infected countries is still allowed if it is accompanied by a healthcertificate  issued in accordance with international guidelines.  South Africa and other countries have
harmonized their import requirements for certain diseases;  for example, South Africa has mutual
acceptance of pathogen-reduction programmes for diseases, such as Salmonella enteritidis, with the
other members of SADC.
69. Food products are routinely analysed in specialized laboratories in Durban, Pretoria and
Stellenbosch to determine their composition, microbiological contamination and pesticide residue
levels.  A cost-related fee of R 60 (per import permit) was approved in April 1997 for issuing import
permits by the Directorate of Veterinary Public Health.  Fees payable for inspections range from R 35
per 30 minutes to R 104 per hour or portion thereof;  and fees payable for testing range from R 12 to
R 122 per test or sample.
(c) Marking, labelling and packaging
70. The 1990 Agricultural Products Standards Act provides the legal basis for packaging and
marking of agricultural products and agriculture-related products (including imported goods) for local
sale and for export.  The country of origin must be identified on imported products.  Marks and labels
                                                     
42The permissible levels of aflatoxin B1 are set at:  0.05mg. per kg. of unmixed farm feed (feed as such)
and farm feed mixtures for cattle (excluding lactating cows and calves), sheep and goats (excluding lambs under
four months);  0.02mg. per kg. of farm feed mixtures for pigs, poultry, dogs, cats, horses and ostriches;0.01mg. per kg. of farm feed mixtures for unweaned piglets and chicks under laying age;  and zero for farm feedmixtures for trout.  The permissible level of ergot in unmixed farm feed is set at 1g. per kg. while the level ofdatura seed in farm feed is set at zero.WT/TPR/S/34 Trade Policies Review
Page 62
are to provide consumers with accurate and relevant information for their personal choice of products:
for example, full-fat yoghurt is differentiated from low-fat yoghurt;  class A (tender) meat is
contrasted with class B or C (less tender);  pure orange juice contains a minimum of 90% juice,
orange nectar contains a minimum of 50%, oran ge drink contains a minimum of 6% and orange
flavoured drink less than 6%;  and real vinegar is differentiated from imitation vinegar (acetic acid).
The quality of potatoes in a sealed bag or the contents of a tin are indicated by a mark or label.
71. South Africa has a compulsory standard specification relating to the manufacture, production,
processing or treatment of canned meat products (Standards Act of 1993).  The importation of meat in
non-containerized format (break bulk) is banned for veterinary public health reasons.  In terms of the
Agricultural Product Standards Act and the Liquor Products Act, quality standards have been set for
certain animal products, deciduous fruit, subtropical crops and flowers, cereals and vegetables, andliquor products;  certain agricultural products destined for export must be graded, packed and marked
in a prescribed manner (Table III.12).  Special labelling requirements apply to products, such as
drugs, wine, mouthwashes, foodstuffs, cosmetic s, and textile goods containing sheep's wool.
Packaging made from natural materials and fibres must be accompanied by an official certificate
stating that the material has been fumigated.
43  The Directorate of Plant and Quality Control, or
assignees appointed by him, carries out inspections at the points of sale, manufacture, packing or
export to ensure that the standards and requirements are maintained.
Table III.12
Agricultural products for which quality standards apply, 1997
Product description Quality standardsa
Animal products
Dairy products L & E
Eggs L & E
Fat spreads L
Hides and skins L
Imitation dairy products L
Meat (carcasses) L & E
Poultry meat L & E
Processed products
Apricot and peach kernels E
Canned fruit L & E
Canned mushrooms L & E
Canned vegetables L & E
Dehydrated vegetables L
Dried fruit L & E
Frozen fruit and vegetables L & E
Fruit juices L
Honey L
Other canned food L & E
Rooibos tea L & E
Vinegar L
Table III.12 (cont'd)
                                                     
43GATT (1993).Republic of South Africa WT/TPR/S/34
Page 63
Product description Quality standardsa
Deciduous fruit
Apples L & E
Apricots E
Cherries E
Grapes L & E
Peaches and nectarines L & E
Pears L & E
Plums and prunes L & E
Subtropical crops and flowers
Avocados L & E
Chinkerinchees E
Citrus fruit L & E
Flowers (excluding chinkerinchees E
Green bananas L
Kiwifruit E
Litchis E
Mangoes E
Melons and watermelons E
Pineapples E
Proteas E
Strawberries E
Subtropical fruit E
Cereals and vegetables
Buckwheat E
Dry beans L & E
Feed products E
Grain sorghum E
Grass seeds E
Groundnuts E
Leguminous seeds E
Lesser known types of maize E
Maize E
Maize products L & E
Oilseeds E
Onions L & E
Potatoes L & E
Tobacco E
Tomatoes L
Vegetables (other than potatoes and onions) E
Wheat E
Wheaten products L
Liquor products
All liquor products (excluding beer and sorghum beer) L & E
Table III.12 (cont'd)
a L & E indicate local and export quality standards, respectively.
Source: Information provided by the South African authorities.
(x) State trading
72. A system of control for the movement, pricing, quality standards, selling and supply of a
major portion of farm production, was introduced under the 1968 Marketing Act (Act No. 59) with aWT/TPR/S/34 Trade Policies Review
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view to securing price stability and narrowing the gap between producer and consumer prices in
South Africa.44  The system has been under review since 1994.  The number of control boards
involved in the marketing of agricultural commod ities in South Africa has been reduced from 21 in
1993 to 14 in 1997.
73. The 1968 Marketing Act was revoked on 31 December 1996.  The 1996 Marketing of
Agricultural Products Act (Act No. 47) which came into operation on 1 January 1997, provides for theabolition of the control boards within two years maximum from 6 January 1997 (Chapter IV(2)(ii)).
74. The Armaments Corporation of South Africa (ARMSCOR) is in charge of the purchase of
weapons and associated equipment for South Africa's security forces.
45
(xi) Government procurement
75. South Africa is not a member of the WTO Plurilateral Agreement on GovernmentProcurement;  however, it is taking part in current discussions within the WTO on transparency in
government procurement.
76. In South Africa, government procurement is regulated and channelled via the State Tender
Board established under the 1968 State Tender Board Act (Act No. 86).  The Act also provides for
Regional Tender Boards, which were renamed Provincial Tender Boards following the 1994 politicalchanges in South Africa.
46  The Provincial Boards are independent of the State Board and responsible
for provincial government procurement, but they ge nerally follow the same preference systems as the
State Tender Board.  Parastatals funded by the Government generally follow the government policy
on procurement;  parastatals such as Eskom and Transnet have no preference system while Telkom
grants preferences based on local-content.
77. A review of the procurement procedures, which currently favour better and larger established
entrepreneurs is under way;  interim strategies were formulated for the State Tender Board in 1996.The general review of the procurement system aims to produce directives and procedures to
accommodate the Reconstruction and Development Programme (RDP) objectives.
47  The requirement
for a security (e.g. guarantee by a banking institution, cash, negotiable government stock and security
bond) on all contracts was waived, except in special circumstances, such as high risk projects;  tender
                                                     
44Article 87 of the Act allows the prohibition of imports and exports of specified agricultural products,
except on the authority of a permit issued by the Director  General of Agriculture or the control board concerned
or by any person authorized by the board.
45Coopers and Lybrand (1996).
46The Board consists of not less than sixteen and not more than twenty members appointed by the
Minister of Finance;  at least half of the members are officers or employees of the Ministry of Finance.  The
Chairman and the Vice-chairman are designated by the Minister from among the members.  The ProvincialTender Boards consist of between ten and fourteen members appointed by the relevant provincial minister.
47Government of South Africa (1996e).Republic of South Africa WT/TPR/S/34
Page 65
documentation was simplified, and advertisement of tenders was reformulated, with English as the
official language.48  Tender Advice Centres have been established throughout the country to provide
communication and assistance to tenderers.  The 30-day period within which payment to suppliers
was to be made has been enforced as the maximum time for payment.  An independent ombudsperson
is to be appointed in order to provide an interim mechanism for quick and effective intervention on
complaints from businesses.
78. In South Africa, the type of tender appropriate for a purchase or supply is considered by the
State Tender Board on a case-by-case basis.  A large share of public purchases are reportedly made
through competitive tendering.49  Invitations to tender may be limited to known and potential
tenderers found to be suitable for specific supplies or services.  Up to an estimated value of R 3,000
per case, procurement of supplies or services is allowed without calling for tenders or price quotationsbut by making use of suppliers listed on already established data bases.  In addition, purchasing on the
basis of price quotations from suppliers registered on data bases is allowed for procurement of up to
an estimated value of R 20,000 per case;  higher am ounts of procurement must be advertised in the
Government Tender Bulletin.
50  In urgent and emergency cases, supplies and/or services up to an
estimated value of R 50,000 may be procured without inviting competitive tenders.  When theestimated value is between R 50,000 and R 150,000, supplies in urgent and emergency situations must
be procured to the best advantage.  Price quotations are required under such circumstances.  Under
normal circumstances, for contracts up to an estimated value of R 750,000, government departments
may themselves invite tenders for the procurement.  All tenders exceeding the estimated value of
R 750,000 are invited by the State Tender Board.  A non-refundable fee of R 50 is charged,
irrespective of the type of tender, the amount of procurement and the origin of the applicant.
Contracts are not awarded directly to foreign suppliers;  the latter are required to use localrepresentatives to tender for government procurement.
79. Price preferences are taken into account for tender comparison purposes:  the preferences are
deducted from the tender price after the tenders have been evaluated and brought to a comparative
basis;  where prices are not firm, "implied contract price adjustments" are made.  Price preferences,
aimed at promoting local manufacture (import replacement and manufacturing quality), are based on,inter alia , the level of local-content, the use of the SABS mark, and the use of locally manufactured
electronic systems and components.  Regional preferences based on the "industrial development
point" at which the tenderer was located were abolished on 30 June 1993.
80. The percentage preference is up to 10% if local-content is more than 80%;  up to 10% for the
use of locally manufactured electronic systems and components plus a minimum of 5% for localdesign provided that the two together do not exceed 10%;  and 2.5% for the use of products that carry
the SABS mark.
51  Additional preferences may be granted where a locally manufactured product is in
competition with an imported good, provided that the percentage of the additional preferences
together with the percentage of existing customs duties on the imported article does not exceed 20%.
                                                     
48The interim strategies can be used as a guiding framework by the provinces.
49USTR (1997).
50Following the reforms, tender invitations, including single and selective tenderings (i.e. with selected
suppliers), are at least to be advertised in the Government Tender Bulletin.
51See GATT (1993) for more details on these price preferences;  most were in force in 1993 and
eligibility criteria for price preferences based on local-content have not changed since then.WT/TPR/S/34 Trade Policies Review
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Further additional preferences are permissible, at the discretion of the Board or the Government, in
respect of goods produced, manufactured or assembled in South Africa.52  The country of origin must
always be stated in the submissions in the case of foreign purchases, particularly of unknown or new
products;  such products are subject to inspection and testing.  Price preferences are generally
cumulative.
81. A system of preference points (special prefer ences) came into effect in August 1996 for
contracts of less than R 2 million.  Awarded to further the Government's policy of promoting the
participation of "previously disadvantaged individuals" (PDIs) and women in government
procurement, the preference points are calculated on the basis of the comparative and not the tendered
price, i.e. after all local preferences and other factors that would influence the price, including implied
contract price adjustments, have been taken into account (Box III.2).53  The tender selected is to be the
one with the highest number of points.  In the case of equality, contracts are to be awarded to the
tenderer who scores the highest points for PDI equity .  In the case of continuing equality, the lowest
tender price is to be given priority.  In the case of joint-ventures and partnerships, only legally
established business entities are to be considered.
Box III.2:  South Africa 's government procurement system:  determination of preferences points
The calculation of the points for the purposes of preferences awarded to further the Government's policy of
promoting the participation of PDIs and women in government procurement is based on the following
formula:
Np = 88 (1 - (P-P m)/Pm);
where:
Np = the number of adjudication points awarded for price (the tendered price);
Pm = the price of the lowest acceptable tender on a comparative basis;  and
P = the comparative price of the tender in question.
It is obvious that, for P = P m, the number of adjudication points is the maximum (88 points).  The higher is
P with respect to P m, the lower is the number of points, i.e. the number of adjudication points Np, is a
declining function of P, the comparative price.
Points awarded for the tendered contract participa tion goal are proportional to the percentage equity
ownership, namely, 10% of the percentage equity ownership of PDI and 2% of the percentage equity
ownership of women.
The maximum points for percentage equity ownership are straightforward;  they correspond to the
maximum 100% equity ownership, i.e. 10 points when the business is wholly owned by PDI and 2 points
when it is wholly owned by South African women.  The total number of tender adjudication points awarded
is the sum of the three components and obviously will not exceed 100.
82. On 1 September 1996, the Cabinet approved the National Industrial Participation Programme
(NIPP) in terms of which, all State and parastatal purchases and leases, with import content equivalent
                                                     
52Government Notice Nÿ R1237, 1 July 1988;  and Government of South Africa (1996f).
53Previously disadvantaged individuals (PDIs) are those who fall into population groups that had no
franchise in national elections prio r to the introduction of the 1983 and 1993 Constitutions.  Female equity
means the value of the shareholding held in the tenderer's business entity by a South African woman.Republic of South Africa WT/TPR/S/34
Page 67
to at least US$10 million, are subject to the Industrial Participation Obligation, a new clause that all
purchasers (government or parastatal) must include in procurement contracts.  Under the clause, the
seller must invest in South Africa at least 30% of the value of the imported content of the purchase
(section (xii)).
83. From 1992 to 1996, government procurement of goods and services was an estimated
R 56 billion (R 44 billion of goods and services, and R 12 billion of capital assets), of which:R 22 billion for the Central Government, R 25.5 billion for Provincial Governments, and R 8.5 billion
for local Governments.  During 1996, the State Tender Board considered 1,968 purchase memoranda
amounting together to some R 8 billion.  Government procurement amounted to about R 9 billion
between 1 January 1996 and 6 March 1997, and represented about 30% of all government expenditure
during the financial year 1995/1996.
(xii) Countertrade
84. The National Industrial Participation Programme resembles countertrade, mainly when the
tenderer/seller is a non-resident;  the similarity is more pronounced and straightforward when the
tender contract is on supply of services.  The NIPP is, in the cases under consideration, a countertrade
contract in the sense that goods and/or services imported under the tender contract are partially offsetby exports of services and, to a certain extent, of  goods, during the period of fulfilment of the
Industrial Participation Obligation.  The Programme provides for the inclusion of an Industrial
Participation (IP) clause in all contracts of state and parastatal purchases and leases with import
content of at least US$10 million.  Under the IP clause, the seller must invest at least 30% of the value
of the imported content of the purchase (the IP Obligation) in any new or incremental business project
in South Africa.  The project submitted by the seller must be of mutual benefit, and economically and
operationally sustainable, even after the discharge period of seven years from the entry into force ofthe contract.  Only 50% of a new obligation can be fulfilled by banked credits;  trading of banked
credits is not allowed, unless within a group.
85. Industrial Participation agreements are between the Government of South Africa and the
supplier,  and not between the purchaser and the supplier.  All IP agreements include a 5%
performance guarantee to discourage sellers from not fulfilling their IP Obligations;  performance isbased on the generation of revenues and the guarantee must be lodged prior to the contract being
awarded.  The supplier must submit biannual reports on progress, and audited annual reports, to the
Secretariat of the National Industrial Participation Programme, in the Department of Trade and
Industry.  On the basis of these reports, the Secretariat submits its quarterly status reports to the IP
Control Committee (the IP decision-making organ) consisting of the DTI, and representatives of theMinistries of Foreign Affairs and Finance.
86. Other forms of countertrade in which the defence industry has been engaged still exist.
54
(xiii) Other measures
87. In May 1995, South Africa disinvoked the import surcharge introduced in 1985 for
balance-of-payments purposes;  the decision took effect from 1 October 1995.55
88. According to the authorities, South Africa has no agreements with foreign governments or
enterprises designed to influence the quantity or value of goods and services exported to South Africa;
                                                     
54GATT (1993).
55WTO Document WT/BOP/N/5, 14 November 1995.WT/TPR/S/34 Trade Policies Review
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furthermore, there are no such agreements between  companies operating in South Africa and foreign
enterprises.  The arrangement between the South African and Swazi sugar industries which had
limited the quantity of sugar (unfinished or interm ediate sugar) produced in Swaziland and sold in
South Africa was terminated in 1995.  Import and export cartels are not prohibited in South Africa
(section (4)(iii)).
(3) Measures Directly Affecting Exports
(i) Registration and documentation
89. Similar registration and documentation requirements apply to both exporters and importers in
South Africa (section (2)(i)).  In addition, in order to be eligible for export incentives, firms must be
registered with the Department of Trade and Industry.
(ii) Export taxes, charges and levies
90. South Africa imposes a 15% export tax on unpolished diamonds.
(iii) Export prohibitions, controls and licensing
91. South Africa prohibits exports of crude or unpr ocessed tiger's-eye (a precious stonnee).  In
accordance with Government Notice N° R2263 of 14 August 1992 on Export Control, certain goods,
including coffee, wattle seed, ores, oils, tiger's-eye, copper, lead, manganese, motor cars and vehicles,and chemical products are subject to export control by means of permits issued by the Sub-Directorate
of Import and Export Control, Department of Trade and Industry.  All applications must be submitted
for recommendation to the government departments acting as controlling authorities before being
handed to the Sub-Directorate.  The permit is non-transferable and valid for a maximum period of
six months.  Table III.13 provides the list of products and government departments involved in the
export control of each product;  the list does not include agricultural products controlled by marketing
boards.Republic of South Africa WT/TPR/S/34
Page 69
Table III.13
Products subject to export control, May 1997
Tariff heading Description of goods Code Lettera
09.01 Coffee, whether or not roasted or decaffeinated;  coffee husks and skins;  coffee
substitutes containing coffee in any proportionH
Ex 12.09 Wattle seed being:
- Acacia mearnsii de Willd (formerly known as Acacia mollissima Willd)
(commonly known as Black Wattle
- Acacia decurrens (Wendl. Willd) (commonly known as Green Wattle)- Acacia dealbata Link (commonly known as Silver Wattle)
- Acacia psycnantha Benth
- Acacia syanophylla LindlW
2530.90.20 Lithium ore M
2530.90.90 Sugulite (also known as lavulite or lazulite):  unworked or simply sawn or roughly
shapedM
2607.00 Lead ores and concentrates H
26.11 Tungsten ores and concentrates H
26.13 Molybdenum ores and concentrates H
Ex 2625.90 Tantalum ores and concentrates H
2710.00.12 Petrol M
2710.00.13 Aviation spirit M
2710.00.14 Aviation kerosene;  power kerosene;  illuminating or heating kerosene M
Ex 2710.00.16 Diesel oil M
2710.00.17 Residual fuel oils M
2711.12 Petroleum gas:  propane M
2711.13 Petroleum gas:  butane M
2903.19.10 Trichloroethane (methyl chloroform) ...
2903.30.10 Bromomethane (Methyl Bromide) ...
2903.41 Trichlorofluoromethane (CFC11) ...
2903.42 Dichlorodifluoromethane (CFC12) ...
2903.43 Trichlorotrifluoroethanes (CFC 113) ...
2903.44 Dichlorotetrafluoroethanes (CFC 114) and chloropentafluoroethane (CFC 115) ...
290345.05 Chlorodifluoromethane (CFC 22) ...
2903.45.90 Other derivatives perhalogenated only with fluorine and chlorine:  other ...
2903.46 Bromochlorodifluoromethane (Halon 1211), bromotrifluoromethane (Halon 1301)
and dibromotetrafluoroethanes (Halon 2402)...
2903.49.10 Derivatives of methane, ethane or propane, halogenated only with fluorine and
chlorine...
Ex 30.02 Human blood and preparations thereof
Medicaments containing other antibiotics being:N
3003.20.90 Invomec inj-cattle (reg. N° G541, Act 36/1947) L
Invomec inj-sheep (reg. N° G782, Act 36/1947) L
Invomec liquid-sheep (reg. N° G590, Act 36/1947) L
Eqvalan paste for horses (reg. N° G667, Act 36/1947) L
3824.71.10 Mixtures containing dichlorodifluoromethane or trichlorofluoromethane (CFC 500) ...
3824.71.90 Other (CFC 502) ...
Ex 44.03 Saw logs of yellowwood (Podocarpus Falcatus, Podoarpus Henkelii, Podocarpus
Latifolius);  stinkwood (Ocotea Bullata) and blackwood (Acacia Melan oxylon)W
Ex 44.07 Sawn yellowwood (Podocarpus Falcatus, Podocarpus Henkelii, Podocarpus
Latifolius);  stinkwood (Ocotea Bullata) and blackwood (Acacia Melan oxylon)
47.07 Waste and scrap of paper or paperboard H
Table III.13 (cont'd)WT/TPR/S/34 Trade Policies Review
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Tariff heading Description of goods Code Lettera
Ex 7103.10.10
Ex 7103.10.20Tiger's-eye including its related varieties and also any articles consisting wholly or partly
of tiger's-eye or its related varieties but excluding properly finished and finally andcompletely polished cabochons, beads, eggs, spheres, tumbled stones and carvings cuttherefrom or otherwise processed or tumbledDefinitions(1) "Cabochon" shall mean a stone of which the top forms:
- a symmetrically curved convex or concave surface;  or
- a flat surface, provided the stone is either round or oval or crescent, heart, cross or
tear shaped;  the base may be convex, concave or flat.
(2) "Bead" shall mean a stone of any shape of a mass not exceeding 50 grammes which
has been drilled in such a way that it can be strung in a necklace.
(3) "Egg" shall mean a symmetrically egg-shaped stone.(4) "Sphere" shall mean a symmetrically sphere-shaped stone.(5) "Tumbled stone" shall mean an uncut, unsawn stone or irregular shape of a mass
not exceeding 50 grammes which has been properly tumbled to such an extent that
it has a pebble-like appearance.
(6) "Carving" shall mean a cabochon, bead, egg, sphere or tumbled stone as defined in
these regulations which has been artistically carved or sculptured.
(7) "Polish" shall mean the process commonly accepted in the lapidary trade whereby
fine abrasives and polishing powders are used to smooth a stone to a perfectmirror-like appearance without applying any lacquer or varnish.M
Ex 7103.10.10
Ex 7103.10.20Sugulite (also known as lavulite or lazulite):  unworked or simply sawn or roughly shaped M
72.04 Ferrous waste and scrap;  remelting scrap ingots or iron or steel H
7403.12 Refined copper:   wirebars H
7403.13 Refined copper:  billets H
7403.21 Copper-zinc base alloys (brass) H
7403.22.90 Copper-tin base alloys (bronze) other H
7403.23 Copper-nickel base alloys (cupro-nickel) or copper-nickel-zinc base alloys (nickel silver) H
7404.00 Copper waste and scrap H
7503.00 Nickel waste and scrap H
7602.00 Aluminium waste and scrap H
7801.10.10 Lead ingots H
7802.00 Lead waste and scrape H
7803.00 Lead bars, rods, profiles and wire H
78.04 Lead plates, sheets, strip and foil;  lead powders and flakes H
7805.00 Lead tubes, pipes and tube or pipe fittings (for example, couplings, elbows, sleeves) H
7806.00 Other articles of lead H
7902.00 Zinc waste and scrap H
8002.00 Tin waste and scrap H
81.01 Tungsten (Wolfram) and articles thereof, including waste and scrap H
81.02 Molybdendum and articles thereof, including waste and scrap H
81.03 Tantalum and articles thereof, including waste and scrap H
8104.20 Magnesium waste and scrap H
81.07 Cadmium and articles thereof, including waste and scrap O
8110.00 Antimony and articles thereof, including waste and scrap O
8111.00 Manganese and articles thereof, including waste and scrap O
Ex 81.12 Beryllium, chromium, germanium, vanadium, gallium, hafnium, indium, niobium
(columbium) and articles of these metals, including waste and scrapO
Ex 8479.89.90
Ex 8479.90.90Automatic pool cleaners and parts thereof H
Table III.13 (cont'd)Republic of South Africa WT/TPR/S/34
Page 71
Tariff heading Description of goods Code Lettera
85242190 Other H
Ex 87.02
Ex 87.03Ex 87.04Motor cars and other motor vehicles principally designed for the transport of persons and
goods but excluding vehicles exported by diplomatic and foreign representatives and new
vehicles exported by local manufacturers or their appointed agentsH
... Not available.
a The code letters indicate the Government Departments that control the exportation of the production in question:
H Department of Trade and Industry.L Department of Agriculture.M Department of Mineral and Energy Affairs.N Department of National Health and Population Development.O Department of Environment Affairs.W Department of Water Affairs and Forestry.
Source: Information provided by the South African authorities.
92. Exports of explosives are controlled under the 1956 Explosives Act and Regulations
(Act No. 26, as amended).  Only the South Afri can Reserve Bank (SARB) and Rand Refined Limited
are authorized to export gold;  all other exports of gold must be approved in advance by the Exchange
Control Department of the SARB.  South African re sidents are permitted to export currency coins and
numismatic items within an overall limit of R 300 per applicant per calendar year but the export of
currency coins in excess of this amount must be approved by the SARB.  Emigrants from
South Africa may export motor vehicles within the overall insured value of R 100,000 as well as
household and personal effects to the value of R 100,000.
93. Agricultural products such as wheat, dried fruit, citrus and deciduous fruit, administered by
control boards, are subject to export control;  th e boards are the sole exporters of the products or
administer single export marketing channels (Chapter IV(2)(ii)).  Exports of oil seeds and oil/cake
have been subject to export permits since 8 August 1996;  single channel export systems were
introduced in April 1994 for groundnuts, and in January 1996 for sunflower seed and soya beans.  The
Sugar Association of South Africa is the sole exporter of sugar.  Exports of wine are subject to an
export certificate under the Liquor Products Act.  Exports of fertile ostriches and hatching eggs are
prohibited.56
94. Under the August 1992 Notice, the following goods are exempt from export permit:  goods
landed for transit;  goods (excluding motor vehicles) exported as household or personal effects for
personal use by a natural person leaving South Africa permanently;  goods exported as bona fide  gifts
at own cost by a natural person in South Africa to a designated natural person living outside the
SACU area;  samples of no commercial value;  and goods imported to South Africa for repair or
maintenance and exported to the original consignor.
(iv) Export quotas and voluntary restraints
95. South Africa was not a signatory to the Multifibre Arrangement (MFA).  Former restraints on
South Africa's exports of iron and steel to the European Union (EU) and the United States, of apples
to the EU, of cottonne textiles and clothing to the United Kingdom, of clothing to France, and offabrics and apparel to Canada have been terminated.  South Africa's exports of sugar to the
United States are subject to a preferential tariff-quota system:  exports falling within South Africa's
quota allocation are free of import duty under the General System of Preferences (GSP).
                                                     
56A 1997 Livestock Improvement Bill contains provisi ons for the declaration of "landraces" (locally
developed and indigenous breeds);  once declared, a la ndrace breed may only be exported with a "Livestock
Improvement permit".WT/TPR/S/34 Trade Policies Review
Page 72
(v) Export subsidies
96. The General Export Incentive Scheme (GEIS) was introduced on 1 April 1990.  Under GEIS,
the Government provided financial assistance to any legal or natural person, duly registered with the
Department of Trade and Industry as being actively engaged in the export of certain categories of
goods.57  The amount of financial assistance to an exporter was calculated on the basis of a formula
and increased with the f.o.b. value of the export, the degree of processing and the level oflocal-content (Box III.3).  In consequence, the GEIS aimed to increase the share of higher value-
added manufactures in South Africa's exports.  GEIS claims took about three months to be processed
and paid.
58
97. Aware that GEIS was inconsistent with GATT and WTO rules, the authorities decided in1994 to phase it out.  Payments under GEIS became taxable on 1 April 1995 and were scaled down.On 1 April 1995, GEIS was revised and products we re reclassified:  "relatively" primary products,
previously classified in the category of material intensive products, were reclassified to category 2,
which category of products became non-eligible.  The second revision of GEIS in 1996 limited the
benefits of GEIS to fully manufactured products (category 4 goods).
59  However, the minimum level
of local-content that provided, ceteris paribus , the maximum subsidy, was reduced from 75% to 60%
in 1995;  the minimum local-content requirement of 35% was maintained.  The GEIS was originally
scheduled to be terminated on 31 December 1997, but in April 1997, the Government announced the
early termination of the scheme as from 11 July 1997.
98. Government expenditure under GEIS amounted to about R 5.88 billion over the period
1993/1994 to 1996/1997, with R 1.33 billion in 1993/1994;  R 1.47 billion in 1994/1995;
R 1.88 billion in 1995/1996;  and R 1.20 billion durin g the first eleven months of the financial year
1996/1997.  The GEIS expenditure budget ed for 1996/1997 was R 1.58 billion.
                                                     
57The assistance was financed through the central budget of the Government.
58See GATT (1993).
59See GATT (1993) for the main provisions of GEIS up to 1993.Republic of South Africa WT/TPR/S/34
Page 73
Box III.3:  The General Export Incentive Scheme (GEIS)
The amount of financial assistance provided to an exporter under GEIS was determined on the basis of the following
formula: Z = U(M±E)P, where:
Z = cash subsidy provided to the exporter;
U = f.o.b. value of the export in rand;
M = manufacturing level factor;
E = exchange rate factor through which M was adjusted for inflation 
and exchange rate fluctuations;  and
P = local-content factor of the export product.
With the purpose of determining M, export products were grouped in four categories according to their degree of
transformation.  Following the 1995 and 1996 revisions, the range of products eligible for the subsidy was reduced;
only fully manufactured products qualified for the GEIS.  The 1993 and 1997 categories of products and corresponding
M-factors were as follows:
Category Manufacturing Level M-factor (%)
1993 1997
1 Primary products n.a. n.a.
2 Beneficiated primary products 7.5 n.a.
3 Material intensive products 12.5 n.a.
4 Manufactured products 25.0 25.0
_____________________
n.a. Not applicable.
(M±E) represented the adjusted manufacturing level factor and E the change (in absolute value) in the real effective
exchange rate of the rand measured against a basket of currencies of eight major trading partners of South Africa, using
1979 as the base.  E was determined in advance by the South African Reserve Bank for six-monthly periods.  The
adjusted manufacturing level factor declined in the case of depreciation ((M-E) applied) and increased in the case of
appreciation ((M+E) applied) of the real effective exchange rate with respect to its 1979 reference level.  Therefore, the
exchange rate factor (E) was used to compensate exporters for the adverse effects of inflation and/or appreciation of the
rand;  in the case of depreciation, the E-factor contributed to relieve pressure on the Government's budget by limiting its
assistance under GEIS.  In March 1997, the E-factor was 13% and corresponded to a depreciation of the real effective
exchange rate of the rand with respect to its reference level.
Following the revisions of the GEIS, the upper boundary of the adjusted manufacturing level factor (M±E) was set at
6% for category 4 products, the incentive having been abolished for the other categories of products.  Therefore, if the
adjusted manufacturing factor were higher than 6%, then the latter would have applied.  With M = 25% and E = 13%,
the calculated level of (M±E) was equal to 12% which was higher than the upper boundary of 6%.  In consequence, the
adjusted manufacturing level factor applied was 6% in March 1997.
The P-factor was determined with reference to a standard  definition of local-content {L = (U-I)/U, where L was the
level of local-content;  U was the f.o.b. value of the export in  rand;  and I was the value of imported inputs used in the
production of the exported good}.  P was set as follows:
P =  0 if L < 0.35;
P = (U-I)/U for 0.35 ≤ L < 0.60;  and
P = 1 for L ≥ 0.60.
Therefore, for the eligible products i.e. "fully manufactured" goods, the GEIS can be summarized as follows:
Z = 0 for L  < 0.35, P = 0;
Z = (U-I)(M±E) for 0.35 ≤ P = L < 0.60;  and
Z = U(M±E) for L ≥ 0.60, P = 1.
The level of assistance increased with the value of exports (the manufacturing level factor was constant, i.e 25%) and
declined with the value of imported inputs (in other words,  Z increased with the level of local-content of the export).WT/TPR/S/34 Trade Policies Review
Page 74
(vi) Duty and tax concessions
99. Rebates, refunds and drawbacks of import duties (full customs duties in general) are available
to all manufacturing industries producing for export.  The concessions are granted on imported inputs,
including raw materials and components used in production of goods solely destined for export.  Full
rebates or refunds of customs duties are also granted on  goods temporarily admitted for processing,
repair, cleaning and reconditioning or for specific purposes (e.g. containers used as packing, goods fordisplay or used at exhibitions and fairs), and on goods imported and then re-exported in the same
condition or state.  Goods for use in the manufacture, processing, finishing, equipping or packing of
products exclusively for export, may be recommended by the Board on Tariffs and Trade for
temporary admission with a rebate of customs duty under Schedule 4, Part 3.  Goods admitted under
rebate or refund must be cleared in terms of a permit issued by the Director-General of Trade andIndustry.  The permit is readily granted, in an endeavour to boost South Africa's export performance.
60
In 1996, exported goods that received rebates or duty drawbacks in their production, represented morethan 20% of the total value of South Africa's exports;  more than 45% of the accepted applications for
rebates and drawbacks directly concerned goods imported for export purposes (Table III.14).
61
Liability for the duty on any goods granted concessions ceases upon presentation of documentary
evidence to the Customs and Excise administration in the Department of Finance that the goods were
exported.
100. The number of applications for drawbacks is relatively low because of delays related to
refunds.  Exports are zero-rated;  therefore, exporters qualify for VAT refunds for all goods and
services incorporated in their exports.
Table III.14
Applications for permits for rebate or drawback of duty, 1996
Type of application Number Supported Rejected Outstanding as at
31.12.96
Motor vehicle assembly (industry) 4 4 0 0
Compensating products obtained abroad from goods
temporarily exported for outward processing54 10
Specified motor vehicles (industry) 47 35 12 0
Rebate of the duty on chemical raw materials for the
manufacture of other chemical products30 29 1 0
Rebate of the duty on meat for preparation 20 19 1 0
Rebate of the duty on polymers and copolymers 1 1 0 0
 Rebate of duty on goods used for export purposes 504 480 5 19
Drawback on duty on goods used for export purposes 65 63 0 2
Exemption of the duty and payment of surcharge on goods
for specified welfare organizations91 83 8 0
Rebate of the duty on medical insignia 2 2 0 0
Heavy vehicles (industry) 13 13 0 0
Motor vehicle parts and accessories (industry) 27 26 1 0
Motor vehicles industry (miscellaneous) 21 21 0  0
Worn clothing and overcoats 202 201 1 0
Woven fabrics of synthetic filament yarn 216 216 0 0
Total 1,248 1,197 30 21
Source:  WTO Secretariat, based on information provided by the South African authorities.
                                                     
60Government of South Africa (1996g).
61Schedule 5, Parts 3 and 4 provide for miscellaneous refunds of customs duties and fuel levy
respectively.Republic of South Africa WT/TPR/S/34
Page 75
(vii) Export finance, promotion and assistance
101. Various types of incentive schemes are available to South African exporters for the
development and promotion of exports, and the development of export markets.  The Export
Marketing and Investment Assistance Schemes (EMIAs) are available to all exporters, but with
special terms for small, medium and micro-enterprises (SMMEs).  Administered by the Department of
Trade and Industry, the schemes consist of four parts:  the Primary Export Market Research Schemepartially compensates exporters (small and medium-sized export undertaking) for costs incurred in
developing new export markets through personal contacts with potential foreign clients;  under the
Outward Selling Trade Mission Scheme, assistance is provided to South African exporters to make
contact with foreign buyers;  the Inward Buying Trade Mission Scheme provides financial assistance
to organizers of inward buying trade missions with a view to establishing contacts betweenprospective buyers and South African exporters;  and the Exhibition Assistance Scheme includes the
Official Group Participation and Individual Participation Schemes that encourage and assist
South African exporters to participate in exhibitions abroad.  Inward and outward investment missions
will be covered by the schemes.
102. The state-owned Industrial Development Corp oration (IDC), working with local banks,
provides credit facilities on extended repayment terms up to ten years with attractive interest rates,
for the promotion of exports of capital goods and services.
62  Aimed at enabling exporters to offer
competitive terms to foreign purchasers, the facilities are subject to a South African local-content
requirement of at least 70% and the availability of export credit insurance cover from the Credit
Guarantee Insurance Corporation (CGIC).63  Under the Life Scheme, the IDC provides low-interest-
rate finance for the promotion of exports.  The scheme is available to industrialists or groups with
assets of more than R 1 million and with projects of which at least 30% of production is directedtowards exports.  The proportion of the loan to which the low interest rate applies depends on the
share of exports in the expected sales.  The low inte rest applies to 100% of the loan if the share is at
least 60%, and to half the loan if the share is at least 30% but less than 60%.
64  The Low Interest Rate
Scheme for the Promotion of Exports, is also avai lable to independent indust rialists or groups with
total assets of approximately R 1 million to R 120 million, for the acquisition of fixed assets
(machinery and equipment) to promote new investment directed at exports.  Large companies with
total assets exceeding R 120 million are partially eligible for the scheme.  This scheme is also
administered by the IDC.
103. Under the Duty Credit Certificate Scheme, th e Department of Trade and Industry offers duty
credit certificates to exporters of certain prescribed textile and clothing products with a view toenhancing their international competitiveness (Chapter IV(4)(ii)).  The South African Primary Steel
Industry promotes exports of secondary steel produc ts by means of financial assistance through the
Fund of the Committee for Secondary Manufacture, and price rebate schemes.  The incentives are
based on the value of the exports.  To be eligible for the Fund, a manufacturer must add at least 25%
value to South African produced primary steel.  The ex tent of price rebates is negotiated between steel
                                                     
62Attractive or low interest rates mean the minimum interest rate stipulated by the Organization for
Economic Cooperation and Development (OECD) for export credits that receive official financing support.  Thedifference between prevailing South African interest ra tes (calculated on the basis of a formula taking into
account the average of the six month interest rates of negotiable certificates of deposits plus statutory taxes andlevies of 0.78% plus a fixed margin of 1.25% for administration fees) and the "attractive" interest rate is
subsidized by the Government.
63Government of South Africa (1996g).
64Government of South Africa (1996g).WT/TPR/S/34 Trade Policies Review
Page 76
primary producers and exporters of secondary products on an individual basis.65  Other incentives are
available for the promotion of exports of a capital nature, to motor vehicle assemblers, and component
manufacturers and exporters (Chapter IV(4)).
(viii) Export credit guarantees and insurance
104. A guarantee facility, the Short-Term Export Finance Guarantee Facility, is available to small,
medium and micro-enterprises (SMMEs), exporters in all sectors.  The facility is aimed ataccelerating the development of SMME exporters by reducing the level of export risk.  Under the
Scheme, pre- and post-shipment export finance guarantees are provided to SMME exporters who are
unable to secure finance from banks.  The guarantees are issued by the Credit Guarantee Insurance
Corporation (CGIC) and reinsured with the Departme nt of Trade and Industry.  To be eligible, SMME
exporters must be privately and independently or cooperatively owned and managed;  they can have
more than one branch, but they must not be part of a larger enterprise.
105. Foreign exchange cover is provided by the South African Reserve Bank through CGIC to
exporters of capital goods.  According to the authorities, the cover is made available at rates higher
than market rates.  Export Credit Reinsurance Schemes are available to South African exporters.  The
schemes consist of reinsurance with the Government for insurance contracts in connection with exporttransactions, and loans or similar facilities for such transactions;  they are available at market rates.
(ix) Other provisions
106. South Africa does not have any export-processing or industrial zones, although goods may be
temporarily admitted, for up to six months, for processing.
107. Export collusion is not prohibited under the Maintenance and Promotion of Competition Act
(Act No. 96 of 1979, as amended).  Boards that ma rket agricultural products exported from South
Africa and the Central Selling Organization, a subsidiary of de Beers, which markets diamonds, canbe viewed as export cartels.
(4) Measures Affecting Production and Trade
(i) Subsidies and other concessions
108. To encourage investment in South African industry, several concessions are provided to
manufacturers by way of deductions and allowances in the determination of taxable income.Table AIII.3 presents a summary of selected incentives available to South African producers.  The
Industrial Development Corporation provides financing facilities (medium to long term low interest
rate loans in general) for the establishment and expansion of economically viable manufacturing
activities undertaken by small, medium and large scale industries in South Africa (section 3(vii)).  It
may also take equity in industrial enterprises and provides buildings for general factory purposes toindustrialists on a lease basis.
109. The World Player Scheme, within the context of the IDC, is available to manufacturers whose
total nominal ad valorem  import tariff protection will decrease by at least 10 percentage points over
the period 1995 to 1999, and to manufacturers whose turnover will materially be affected by a
reduction of at least 10 percentage points of import tariffs on competing productions, even if thetariffs on the goods they are producing are not to fall by the required percentage points.  Applicants in
                                                     
65Government of South Africa (1996g);  and SADC (1997).Republic of South Africa WT/TPR/S/34
Page 77
textile, clothing, footwear and motor vehicle com ponent branches, who meet all the criteria, except
the required decrease in import tariffs on the goods they are producing, do qualify;  however,
manufacturers of motor vehicle components aimed at the export market do not.  The Scheme is aimed
at improving the international competitiveness of elig ible firms and consists of loans at a low interest
rate to the manufacturers concerned.
110. The Job Scheme aims to create new or additional production capacity, which in turn must
result in the creation of additional employment opportunities.  The scheme finances, at a low interest
rate for the full loan period (with a maximum of six years), enterprises for which the cost of creating
one new job opportunity will not exceed R 100,000 and which will create at least ten additional
employment opportunities.
111. Tax holidays (up to a maximum of six years) are awarded to companies incorporated on or
after 1 October 1996 with manufacturing projects as their sole business.  The investment in plant and
machinery of the applicant must exceed R 3 million.  The scheme has three components:  a spatial
component based on location, an industry component , and a human resource component based on the
ratio of human resource remuneration to value added.  For each component, the company concerned is
entitled to the tax holiday status for two consecutive years.  The incentive (tax holiday) also includes aforeign investment location grant of up to US$250,000 for foreign investors (from all foreign sources)
bringing in new industrial equipment.  The tax holiday commences in the first year in which the
company has taxable income and lapses ten years after the project was approved.
112. Dividends declared by companies out of profits derived while they are enjoying tax holiday
status are exempted from the 12.5% Secondary Tax on Companies (STC). 
66  This exemption falls
away six months after the end of the tax holiday period.  Dividends received by the shareholders of
such companies are exempt from income tax in terms of the general exemption provisions of the 1962Income Tax Act.  Cost of capital expenditure incurred for the purpose of scientific research, lease
premiums paid for the right of use of, and an allowance in respect of, plant and machinery, buildings
and improvements are in some instances deductible in the determination of taxable incomes.
Furthermore, deductions are allowed in respect of lease premiums paid for the right of use of land,
motion picture films, patents, designs, trade marks or copyrights used for the production of income inthe carrying on of trade in South Africa.  A deduction is also allowable, at the discretion of the
Commissioner for Inland Revenue, of an amount by which the value of any machinery, plant,
implements, utensils and articles (other than items used in a process of manufacture) used by the
taxpayer for the purposes of his trade, has been dimi nished by reason of wear and tear or depreciation
during the year of assessment.
113. The Small/Medium Manufacturing Development Programme (SMMDP) was launched on
1 October 1996 with a view to encouraging investment in manufacturing by small and medium-sized
enterprises and facilitating a higher degree of la bour absorption.  The SMMDP is available to local
and foreign firms as well as to sole proprietors and partnerships (excluding trusts), investing not more
than R 3 million in land, buildings, plant and equipment.  The programme consists of an establishmentgrant and a profit/output incentive.  The SMMDP pr ovides for a foreign investment grant of value up
to US$50,000.
114. The Government also offers financial assistance to the private sector with a view to
supporting and encouraging training.  Other incentives available to producers include the Standard
Credit Guarantee Scheme, the Work Place Challenge, and the Emerging Entrepreneur Scheme
(Table AIII.3).
                                                     
66The STC is levied at a single rate of 12.5% on dividends declared by Companies.WT/TPR/S/34 Trade Policies Review
Page 78
(ii) Assistance to adjustment, research and development
115. In South Africa, a number of specialized in stitutions provide finance for adjustment and
development, and promote research (Table AIII.3).  The Council for Scientific and Industrial
Research (CSIR) is a multi-disciplinary research, development and implementation organization,
which receives financial assistance from the Government.  Its main goals are to develop, transfer and
apply scientific and technological expertise to strengthen local industry, commerce and the supportiveinfrastructure, as well as to protect the environment.  CSIR identifies scientific and technological
market needs of its clients in the private and public sector, determines future opportunities, and makes
research results available to industry at market prices.  Technifin (Pty) Ltd, a joint-venture between
the Industrial Development Corporation (IDC) and the South African Inventions Development
Corporation (SAIDCOR), a subsidiary of CSIR, fina nces and supports the commercialization of new
technology and products, and provides manageri al inputs for innovation projects with economic
merits.
116. The IDC also administers the Support Programme for Industrial Innovation (SPII) under
which financial support is provided towards the development of new products in all branches of
industry.
67  The assistance is provided on a "rand-for-rand" basis of qualifying costs to a maximum of
R 1 million per project.  From April 1993 to March 1997, financial support of R 6 8.36 million was
approved for 147 SPII projects.  Under the Technology and Human Resources for Industry
Programme (THRIP), the Government and the private sector finance research efforts aimed at
enhancing the competitiveness of South African industry.  In 1995, 78 projects were supported under
THRIP;  total funding amounted to R 17 million of which R 11 million was provided by industrial
companies, including parastatals, and R 6 million by the Government.  About one third of the projects
supported under THRIP were in the mining and quarrying sector.
117. On 1 May 1991, a new incentive scheme for regional industrial development (industrial
decentralization), with an annual budget of R 100 million for new manufacturing industries, replaced
the 1982 Regional Industrial Development Programme (RIDP).68  The general aim of the 1991
programme was to create prosperity and employment opportunities by means of successful propulsive
industries established outside the Gauteng - including the Pretoria-Witwatersrand-Vereeniging (PWV)complex - and the Durban core areas.  The programme consisted of an annual establishment grant, a
profit/output-based incentive, and relocation grants;  it was abolished in October 1996.  Regional
development objectives have been incorporated in new programmes, such as the Tax Holiday and the
SMMDP introduced on 1 October 1996.
118. General incentives, including rail, ocean and air freight concessions and electricity tariff
concessions are also granted to local producers and/or exporters.  The Maputo Development Corridor,
an initiative of the Governments of Mozambique and South Africa with participation and funding
from the private sector, is aimed at exploiting the natural resources and development opportunities
along a corridor delimited between Johannesburg in South Africa and Maputo in Mozambique.
69
                                                     
67The SPII replaced the Innovation Support for Electronics (ISE) scheme on 1 April 1993.
68See GATT (1993);  and Rwigema (1995) pp. 579-531.
69SADC (1997).Republic of South Africa WT/TPR/S/34
Page 79
(iii) Competition policy
(a) Legislation
119. Anti-competitive practices in South Africa's economy are regulated by the 1979 Maintenance
and Promotion of Competition Act (Act No. 96).  Amended several times, most recently in 1990, the
Act  provides for the maintenance and promotion of competition, the prevention or control of
restrictive practices, the monitoring of the acquisition of controlling interests in businesses orundertakings, and monopoly situations, and related matters.  Under the Act, an administering agency,
the Competition Board, was established in January 1980, to advise the Government in connection
with competition policy.  The Board consists of:
- the chairman of the Board on Tariffs and Trade (BTT);
- the registrar of financial institutions, mentioned in the Limitation and Disclosure of
Finance Charges Act of 1968;
- the governor of the South African Reserv e Bank, or any person designated by him;
- the chairman of the National Marketing Council;
- a member nominated by the Minister of Finance;
- a member nominated by the Minister of Agriculture;  and- between two and seven members appointed by the State President, for five years
maximum.
120. The Chairman and the Vice-chairman of the Board are appointed by the Minister of Trade and
Industry from among the members.  On its own initiative or at the request of the Minister, the Board
conducts general and specific investigations, and makes recommendations to the Minister on the basis
of an assessment of the competitive situation in the relevant market.
70  The final decisions relating to
the investigations are made by the Minister and published in the Government Gazette.71  Infringers are
liable to a fine of up to R 100,000 or imprisonment for a term not exceeding five years, or both.  Any
person affected by the Minister's decisions has a right to appeal to a special court to be constituted by
the State President.  The decisions of the special court are not subject to appeal or review by any court
of law.
121. The Act does not contain any express prohibitions.  However, the Minister of Trade and
Industry may, acting on the advice of the Board, prohibit restrictive practices, acquisitions, mergers
and monopoly situations (i.e. essentially dominant positions) identified by the Board.  In this
connection, practices, such as resale price maintenance, horizontal price collusion, horizontal
collusion on conditions of supply and market sharing, and collusive tendering have been declared
unlawful.72  Such prohibitions apply to goods and services, including those supplied by the State.
Exempt from the prohibitions are goods or services  sold outside the SACU area and thereby export
cartels, collusion between wholly ow ned subsidiaries of holding companies, specified types of close
corporations, collusive tendering provided that the collusion is disclosed at the time the tender is
submitted, and non-enforceable recommended prices and conditions of supply by associations of
professionals or by individual suppliers.
                                                     
70Formal investigations are, in principle, limited to three months, but the Minister may extend the
period.
71The Board annually reports its activities to the Minister.  The board dealt with 131 cases in 1996
against 160 cases in 1995;  restrictive practices represented about 50% of the total.
72Government Notice No. 801, 2 May 1986.WT/TPR/S/34 Trade Policies Review
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122. The Minister of Trade and Industry may, on the recommendation of the Board, grant
exemptions;  e.g. certain small and medium-sized enterprises have been granted exemptions in order
to compete against larger companies.  Exemptions have also been granted in respect of, inter alia , the
currently regulated liquid fuels industry, the road emulsion industry, certain banking activities relating
to the financing of low cost housing, and certain international transportation and stevedoring
agreements.
(b) Price regulation and controls
123. The Price Control Act (Act No. 25 of 1964) provides for a Price Controller who, inter alia ,
may determine, control or regulate the maximum prices of goods or services at both the
manufacturing and retail level.  In terms of specific Acts of Parliament, the retail price of petroleum
products, such as coal, paraffin, petroleum and diesel are still controlled by the Department of Mineraland Energy Affairs.  The producer price of sugar is  controlled by the Sugar Association under the
Sugar Act (Act No. 9 of 1978) administered by th e Department of Trade and Industry.  The producer
prices of several agricultural products, such as meat, oil seeds, wheat, canned fruit, mohair and
sorghum are under the control of marketing boards.
73  The Cooperative Wine Growers Association
(KWV) sets the minimum producer price of wines.
124. The pricing of services supplied by parastatals operating in various areas, such as
telecommunications and transportation, is subject to Cabinet approval.  Telecommunications fees are
set by Telkom, a parastastal, and approved by the Minister for Posts, Telecommunications and
Broadcasting.  Electricity prices are controlled at the wholesale level by a regulatory body.  The price
of airport services is also regulated, and maximum interest rates, and fees charged by dental
technicians are laid down by law.  According to the authorities, price controls no longer discriminate
against either imports or targeted groups.74
(c) Restructuring of state assets
125. The role and importance of the public sector in South Africa's economy was reduced between
the second half of the 1980s and the early 1990s;  certain major public enterprises were
commercialized or privatized.75  The restructuring of state assets has since slowed;  between 1993 and
March 1997, one state-owned enterprise, the Alum inium Corporation of South Africa (ALUSAF),
was privatized, another, Transkei Airways, was liquidated, and six marketing boards for agricultural
products were abolished although 14 still operate;  Chapter IV(2)(ii) provides details on control
boards in the agricultural sector.76  In March 1997, 30% of Telkom (the state-owned
telecommunications company) and 100% of six radio stations were sold.  In the second half of 1997,
two  public enterprises were earmarked for privatization i.e. 100% of the shares of Sun Air (atransport company) and 100% of the shares of Aventura (hotel and food industry) were scheduled for
privatization by the end of 1997;  49% of the Airports Company is due to be privatized in the first
quarter of 1998.  Several state-owned enterprises still hold monopolies or exercise rights in various
areas of South Africa's economy, including port, airport, post, telecommunications, electricity, water,
transport, and commercial and financial services, manufacturing, and mining and quarrying.
                                                     
73Deposits on returnable soft drink bottles are also controlled under the 1964 Price Control Act.
74In the past, import controls were used to regulate imports.
75GATT (1993).
76ALUSAF was privatized in 1995, Coopers and Lybrand (1996).Republic of South Africa WT/TPR/S/34
Page 81
126. In 1996, the status of a National Framework Agreement (NFA) was defined by the National
Economic Development and Labour C ouncil (NEDLAC) to address matte rs that specifically concern
the Government and labour in the process of restructuring state assets and public enterprises.  As part
of the process of implementing the Reconstr uction and Development Programme (RDP), the
restructuring of state assets and public enterprises is to enhance the efficiency and improve the
competitiveness of parastatals, promote human resource development, widen share ownership and
stimulate entrepreneurship among previously disadvantaged individuals (PDIs).  Under the
agreement, all state-owned enterprises, assets and properties are to be audited.  New and contested
initiatives of restructuring will be implemented in terms of the NFA.  Advisers to assist the
Government in the restructuring process were appointed in September 1996.
127. The implementation of restructuring involves four processes, which may be conducted on a
parallel basis.  During the first process, various state-owned enterprises will be grouped in three
categories (Table III.15).  The first category co mprises state-owned enterprises (SOEs) with an
explicit role in the provision of basic needs.  SOEs , with a public policy or public interest dimension,
which do not provide essential infrastructure services are grouped in the second category.  The third
category comprises SOEs with no public interest and no visible role in the RDP;  loss makingenterprises in this category could be sold or liquidated.  During the second process, specified
guidelines will be applied to the three categories of SOEs:  the restructuring of SOEs in category 1
will only occur once sectoral policy has been substantially developed;  the restructuring of categories
2 and 3 may commence simultaneously with sectoral policy development.  During the third process,
the compliance of SOEs with their mission and the st ructure of the workforce will be reviewed.  In the
fourth process, a case-by-case review of SOEs will be realized with a view to making decision in
respect of, inter alia , ownership and accountability.
128. The restructuring is not to occur to the detrim ent of workers in public enterprises:  a scheme
for an employee share-ownership programme was established in 1996 to enable employees to own
shares within the restructured parastatals.
77  The extent of foreign involvement in restructuring will be
negotiated within the affected enterprises.  Any proceeds from the restructuring process will be
reinvested in assets or used to support the RDP;  the proceeds will not be used to financeconsumption.  In consequence, following the im plementation of the restructuring programme, the
State will still play a role in productive sectors of South Africa's economy.  The National Framework
Agreement will terminate on 27 April 1999 at the earliest.
                                                     
77Government of South Africa (1996h).WT/TPR/S/34 Trade Policies Review
Page 82
Table III.15
State-owned companies (SOCs) to be restructured, June 1997
Company Activity Publicly-owned share
(per cent)Likely restructuring scenario
Category 1a
Eskom Electricity supply Statutory Undetermined
Telkom Telecommunications 70 A further 10% soon
Spoornet Rail transport 100 Strategic equity partner sought
S.A. post office Postal services  100 To be privatised
SABCbBroadcasting 100 Undetermined
Portnet Ports 100 Undetermined
Sarcc Rail commuting 100 Undetermined
Airports company Air transport services 100 49% privatised by 1998
Air traffic and navigational
servicesAir transport control 100 Undetermined
Agricultural boards Agricultural assistance 100 Undetermined
IDC Industrial development 100 Undetermined
Category 2c
Denel Manufacturing 100 Undetermined
Petronet Oil/petrol pipeline 100 Undetermined
Atomic energy board Atomic research 100 Undetermined
Armscor Armament  100 Undetermined
Mossgas Oil exploration 100 Undetermined
SAA Air transport 100 Strategic equity partner sought
Strategic fuel fund Fuel funding 100 Undetermined
Soeker (pty) Ltd Oil exploration 100 Undetermined
Foskor Mining 100 Undetermined
Category 3d
Sun AireAir transport 100 Privatised before end of 1997
AutoneteRoad transport 100 To be privatised
SafcoleForestry 100 Presently restructured
AlexkoreAlluvial diamond mining 100 Undetermined
Transkei airwaysfAir transport 100 Liquidated in December 1996
PxfParcel express 100 Candidate for privatisation
AbakorfAbattoirs 100 To be put up for sale
AventurafHoliday resorts 100 Privatised before end of 1997
a Company with clear public policy.
b Six radio stations of the SABC to the value of R516 million have already been privatized.c Company with public policy dimensions/strategy.d Company with no public policy.e Profitable company.f Unprofitable company.
Source: Information provided by the South African authorities.Republic of South Africa WT/TPR/S/34
Page 83
(iv) Protection of intellectual property rights
129. The Directorate of Patents, Trade Marks, Designs and Copyright (Department of Trade and
Industry) is the administering organ for intellectual property laws in South Africa.  The Directorate is
assisted by an Advisory Committee comprising academics, practitioners and legal advisers in the
private sector.  The Committee, in cooperation with  other relevant government departments, drafts
intellectual property legislation.78
130. The intellectual property legislation of South Africa consists of four main acts:  the 1978
Patents Act (Act No. 57, as amended in 1989), the 1993 Trade Marks Act (Act No. 194), the 1993
Designs Act (Act No. 195) and the 1978 Copyright Act (Act No. 98).  Other South African
intellectual property laws include the 1941 Merchandise Marks Act (Act No. 17), the 1977
Cinematographic Films Act (Act No. 62), the 1967 Performers' Protection Act (Act No. 11) and the1976 Plant Breeders' Rights Act (Act No. 15).  Although geographical indications may be protected
under the 1993 Trade Marks Act, there is no specific  legislation in South Africa dealing with such
protection.
79
131. The 1978 Patents Act covers all fields of technology;  it provides for a patent term of 20 yearsfrom the date of filing the patent application, without extension.  An application for patent is acceptedwithin 18 months.
80  Once accepted, patents are published in the South African Patent Journal and in
general, are immediately open to public inspecti on.  The patent document is issued without any
guarantee of validity;  any person may apply to have the patent revoked if invalidity can be proven.81
Annual renewal fees are payable as from the end of the third year from the date of filing, i.e.17 annual fees in total.  Patentees can, in certain circumstances, apply for restoration if their patents
lapse because of non-payment of a renewal fee.
132. The 1993 Trade Marks Act, which came into operation on 1 May 1995, provides for a
registration system, an opposition procedure - the opposition period is three months - and a term of
protection of ten years, indefinitely renewable for periods of ten years.
82  For trade mark registration
purposes, goods are classified in 34 groups, and servi ces in eight classes;  separate applications must
be filed in each class in which protection is desired.83  Collective mark protection (i.e. registration of
collective marks) is allowed.  Protection is afforded to marks that are well known in South Africa asbeing the mark of a person who is a national of a "convention country", whether or not the trade mark
                                                     
78A fee is collected for the registration of any right in  South Africa.  It is to cover administrative costs
and does not discriminate against foreigners.
79WTO document IP/Q2/ZAF/1, 12 May 1997.  According to Job (1993), the common law of unlawful
competition, the Merchandise Marks Act (Sections 1, 6 and 7) and the 1976 Trade Practices Act (Section 9)
cover the provisions of Article 22 (on Protection of Geographical Indications) of the WTO Agreement on Trade
- Related Aspects of Intellectual Property rights (TRIPS).
80The Registrar of Patents limits the examination of applications to formalities;  he does not examine as
to novelty or merit.
81Amendments to a specification are allowed under specified conditions.
82The 1993 Act repealed the 1963 Trade Marks Act.  Renewal fees are to be paid.
83The marking of goods sold in South Africa by means of both trade marks and other types of
designation and description is protected under the 1941 Merchandise Marks Act.WT/TPR/S/34 Trade Policies Review
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is registered in South Africa.84  Trade marks are advertised in the Patent Journal for opposition to
registration.  A mark may be removed on the ground of non-use for five years;  however,
Section 27(1)(a) of the Act provides for removal of registration at any time in the case of absence of
an intention to use the mark.  Applications for registration of trade-marks increased by more than 60%
between 1992 and 1996 (Table III.16).
Table III.16
Applications for intellectual property rights, 1992-1996
Trade marks Copyright in
cinematographic
filmsPatents Designs
1992 11,422 221 10,127 1,196
1993 12,534 240  9,807 720
1994 14,510 206 10,414 703
1995 17,180 234 11,050 1,305
1996 18,420 194 10,956 1,319
Source:  WTO Secretriat;  and information provided by the South African authorities.
133. The 1993 Designs Act, which came into operation on 1 May 1995, affords protection in
regard to both aesthetic  and functional designs, and provides for a 15-year term in the case of anaesthetic design and ten-year term in the case of a functional design.
85  The registration system and
procedures are similar to those of patents.  The registration of a design confers on the proprietor the
exclusive right to make, import, use or dispose of any article included in the class in which the design
is registered and embodying the registered design or a design not substantially different from the
registered one.
134. Creative works and expressions are protected in terms of the 1978 Copyright Act, the 1977
Cinematographic Films Act and the 1967 Performers' Protection Act.86  Computer programmes are
protected as a sui generis  category of works and data bases are protected as literary works.  A
copyright is conferred on a work if the author is a South African (citizen, domiciled or resident in
South Africa), or a body incorporated under the laws of the Republic of South Africa.87  The term of
copyright protection in South Africa is generally the lifetime of the author plus 50 years;  it may vary
from one category of work to another.  The term of protection available to performers is 20 years,
non-renewable.
135. In the event of infringement of intellectual property rights, proceedings are conducted in the
                                                     
84As at mid-May 1997, South Africa has not updated the list of "convention countries" to include WTO
Members not parties to the Paris Convention;  WTO document IP/Q2/ZAF/1, 12 May 1997.
85Functional designs cover, inter alia , integrated circuit topographies, mask works and series of mask
works.  Spare parts for machines, vehicles or equipmen t are excluded from functional design protection.  The
term of design protection runs from the date of registration or issue, whichever is earlier.  Renewal fees are to bepaid after three years and annually thereafter .
86Copyrights in respect of cinematographic films may be registered;  registration is not compulsory,
neither is it a prerequisite for the subsistence of copyright.  The Performers' Protection Act provides for
protection of the nature of copyright to be conferred to actors, singers and other persons who perform various
types of work in public, or for recording or broadcasting purposes.
87The protection is extended to the nationals of other Berne Convention countries (Convention to which
South Africa is a signatory).Republic of South Africa WT/TPR/S/34
Page 85
High Court, or the Court of the Commissioner of Patents in the case of patents.  Failure by a
defendant to comply with an order of the High Court or the Court of the Commissioner of Patents
amounts to contempt of court, a criminal offence in South Africa.  Appeals may be made to the
Supreme Court of Appeal.
136. Remedies available under South Africa's intellectual property legislation to the owner of a
right include interdiction, delivery of the infringing articles or goods, removal of the offending trademark from the infringing goods, damages to make good the loss actually suffered and/or a
"reasonable" royalty that would have been payable by a licensee for the use of the intellectual
property right in question.  Infringing goods seized and detained have included:  videos and films;
clothing, footwear and fashion accessories;  textiles and fabrics;  towels;  watches;  books and
publications;  bags;  engineering drawings;  and sunglasses.  The importation of infringing goods isnot expressly prohibited by the Patents Acts;  neit her are parallel imports.  However, Sections 20 of
the Designs Act and 23(2)(a) of the Copyright Act do prohibit the importation of infringing goods.
Customs and Excise officers can only take action up on complaints by holders of the property rights.
According to the authorities, powers given, under the Copyright and Trade Marks Acts, to the
Commissioner for Customs and Excise to prevent the importation of goods suspected of infringingintellectual property rights present practical difficulties.
88
137. Aware of the enforcement weakness of its in tellectual property legislation, South Africa
drafted a Counterfeit Goods Bill in 1996.  The Coun terfeit Goods Act is to improve the criminal
provisions and procedures available in cases of counterfeit trade mark goods and pirated copyright
works;  wider powers are to be granted to customs officers and the police services, especially in
relation to seizure.89  South Africa has also drafted an amendment bill, the 1996 Intellectual Property
Laws Amendment Bill, to address its obligations under the WTO Agreement on Trade-RelatedAspects of Intellectual Property Rights (TRIPS).  The legislations will amend the 1978 Patents Act,
the 1993 Trade Marks Act, the 1978 Copyright Act, the 1993 Designs Act, the 1941 Merchandise
Marks Act and the 1967 Performers' Protection Act.
138. South Africa is a member of the World Intell ectual Property Rights Organization (WIPO),
and a signatory to the Paris Convention for the protection of industrial property, to the BerneConvention on Copyright, and to the Budapest Trea ty on the International Recognition of the Deposit
of Micro-organisms.
                                                     
88The difficulties arise from the fact that the Commissioner must be shown that the party requesting
action is in fact the holder of the right.  Furthermore, the Commissioner requires security to be furnished not
only to cover the expected expense incurred by the action and the detention of the infringing goods, but also to
cover any potential liability which he may incur.  In practice, substantial security is usually called for.  In thepast, a shortage of staff has also caused delays.
89See USTR (1996 and 1997);   and Job (1996).