The concept of Customs Licensing – Foreign Registered Entities may seem daunting at first.
In this blog we aim clarify who (and the naming of each) the parties involved in an Agency Agreement (i.e. Foreign Representation) are, the types of licenses, nomination, legal implications and responsibilities, and VAT implications.
First, the concept of an Agency Agreement is different from that of a Customs Clearing Agent.
Agency Agreement and the Parties Involved
Here is a detailed explanation:
- A Customs Clearing Agent is a company who performs, amongst other things, import and export clearance declarations. These are performed on behalf of an importer or exporter. This must not be confused with a Registered Agent (discussed hereafter)
- An Agency Agreement in the context of Customs is where a Local Entity represents a Foreign Entity. The Local Entity is the Registered Agent or Agency
- The Local Entity must register with SARS Customs as a Registered Agent. They represent a Foreign Entity
- The Foreign Entity must register with SARS Customs as a Foreign Registered Entity. They are represented by a Registered Agent.
- A Registered Agent may be any locally registered company or private individual with a South Africa residency. It may include for example an Importer, Exporter, Customs Clearing Agent, Road Transporter, etc.
Therefore, a Customs Clearing Agent may, in addition to being a Licensed Clearing Agent, also be a Registered Agent. These are two separate Licenses / Registrations.
Nomination of a Registered Agent
A Foreign Registered Entity may be represented by multiple Registered Agents. They may also be represented by multiple types of Registered Agents.
Before any Customs business may be transacted between the parties, the Foreign Registered Entity must “Nominate” the Registered Agent. This will allow transactional business between the parties to be legally transacted. This will allow SARS e-Filing System, and the SARS Customs EDI Clearance Declaration System to work effectively.
The licensing and nomination procedures are somewhat complex. One must pursue these in a particular sequence together with the correct documentation to avoid disappointment.
Consult with us for the correct license categories, types, and e-Filing procedures for Foreign Entities.
Types of Customs Licensing – Foreign Registered Entities
There are five SARS Customs types of licenses which one may qualify for in an Agency Agreement.
Types of Licenses:
- Importer
- Exporter
- ROG (Remover of Goods in Bond)
- Carriers for Sea, Air, Road or Own Goods Carrier. This falls into the category of RCG (Reporting and Conveyance of Goods)
- Searchers for a Wreck.
Please visit our RLA (Registration, Licensing and Accreditation) page for more information.
Legal Implications and Responsibilities
Simply put, the local entity, namely the Registered Agent legally puts themselves into the shoes of the Foreign Registered Entity.
The Registered Agent thus assumes all roles, responsibilities, legal liability and compliance of the Foreign Registered Entity.
The Foreign Entity may also be termed, the Foreign Principal by the authorities.
Please be sure to pursue a clearly defined contractual agreement between the parties when entering into any Agency Agreement.
The Registered Agent may thus conclude contractual obligations on behalf of their Foreign Principal with SARS Customs.
These may include for example:
- Submitting (via a Clearing Agent, or as a Clearing Agent), all import or export clearance declarations, refunds and drawbacks
- Setting up Deferment Accounts for the payment of Duties and Taxes with SARS Customs. This includes setting up of a Bond or Bonds for the Deferment Facility
- Setting up a Bond or Bonds as a Remover of Goods in Bond
- Issuing transport documents and reporting for RCG (Reporting and Conveyance of Goods).
VAT Implications
Each company and each scenario are somewhat different from another.
Once is best advised to seek the advice of a properly registered and qualified Tax Practitioner. Someone who specialises in Cross Border VAT issues.
Please Contact us if you require the expertise of a Specialist Cross Border VAT Consultant.
Contact Us
Please Contact us for advice or a quotation for Customs Licensing and Registrations.
We will help you with:
- Understanding the specific solutions required in the context of an Agency Agreement
- Application Process and e-Filing Procedures
- Supporting Documents and Templates
- Overcoming any e-Filing challenges.
