Goods that arrive at a South African port but are destined for another country, or for a different customs point inside the country, are often moved under customs control without duty being paid at the port of entry. The arrangement depends on the goods actually reaching their destination, or leaving the country, as declared. When that does not happen, SARS looks for someone to pay the duties and VAT that were deferred, and clearing agents are frequently the party in its sights.
Why clearing agents are exposed
The clearing agent usually prepares and submits the declaration, and in doing so takes on obligations of its own. The practical risk is that the agent does not control the truck, the driver or the border crossing. If the goods are diverted, fall off the radar or are delivered into the local market, the paperwork is the only thing standing between the agent and a liability for the full duties and VAT.
What the case law is telling us
Courts have been reluctant to accept that an agent can escape liability simply because it did not personally move the goods. Where the agent cannot show that the goods were properly exported or delivered as declared, the consequences have been serious. The message is consistent: the burden of proving that goods left the country or reached their authorised destination sits with the party who declared them. (Add the relevant case citations here before publishing.)
Reducing the risk
Obtain and keep proof of exit or delivery for every consignment, and do so promptly. Waiting until SARS asks is often too late.
Check the credentials and track record of the transporters you use, and put the obligations in writing, including who is responsible for border documentation.
Do not rely solely on your client’s assurance that the goods have left. Insist on independently verifiable proof.
Reflect the risk in your contracts. Indemnities, security and clear allocation of responsibility between agent, client and transporter matter far more once a dispute has started than before.
Review your open transit consignments regularly, so that missing proof is identified early, while the trail is still warm.
This article is general information only and does not constitute legal advice. The law may have changed since publication, and reading this article does not create an attorney-client relationship. Please consult an attorney about your specific circumstances.
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