Importers Reel Under the Impact of Bonded Warehousing Rules

Importers Reel Under the Impact of Bonded Warehousing Rules

In International Law

By Matthew Magare

The Commissioner Customs and Border Control (the “Commissioner“) through Gazette Notice No. 3530 published on 13 May 2020 (the “Gazette Notice“) set out certain goods that can no longer be held under a customs bonded warehouse. The notice came into effect in October 2020.

Customs bonded warehouses allow for the storage and handling of goods without immediate payment of customs duty. Importers can leverage their cash flow by deferring payment of custom duty until the goods are ready for sale. They also allow importers to store goods temporarily in the bonded warehouse, allowing for efficient stock management.

The Gazette Notice now excludes the following designated goods from storage under bonded warehouses:

  1. Foodstuffs in any form, whether fresh or preserved, including bulk commodities, except for those used as ship stores and in duty-free shops;
  2. Ashes;
  3. Lubricants and batteries including vehicle batteries;
  4. Building and construction materials including stones, sand, paint, pipes, nuts, bolts, nails, tiles, metals, electrical fixtures and parts and tools;
  5. Furniture, carpets, and floor coverings;
  6. Cigarettes and tobacco, except those warehoused by local excise factories or imported by duty-free shops and used as ship stores;
  7. Clothing and textiles (new and used);
  8. Denatured and undenatured spirits of tariff 2207.10.00 and 2207.20.00;
  9. Cameras and phones except those warehoused for duty-free shops;
  10. Used footwear;
  11. Office supplies ready for retail sale including stationery cartridges/ toners for pens and printers;
  12. Toiletries and cosmetic products for retail sale including fragrances, powder, lotions, creams, lipsticks, hair colouring and hair care products except for those warehoused for duty-free shops;
  13. Second-hand motor vehicles;
  14. Spares for motor vehicles (new and used);
  15. Motor vehicle and motorcycle tyres;
  16. Wines, spirits and other alcoholic beverages except those imported for sale in duty-free shops and wines and spirits in bulk imported by licensed manufacturers of wines and spirits; and
  17. Any other goods which may be determined, at the Commissioner’s discretion, to have a likely negative impact on the implementation of Customs laws and any other written laws.

These measures were taken to address revenue losses arising from improper administration of the bonded warehouse facilities.