Yield to trade laws on specified items
Noncompliance may result in potentially severe consequences
IN SA, a plethora of laws govern the manufacture, possession, import, export and use of certain specified items. These laws include, but are not limited to, the Non-Proliferation of Weapons of Mass Destruction Act No 87 of 1993 (Non-Proliferation Act); National Conventional Arms Control Act No 41 of 2002 (NCAC Act); Nuclear Energy Act No 46 of 1999 (Nuclear Act); International Trade Administration Commission Act No 71 of 2002 (ITA Act) and the Customs and Excise Act No 91 of 1964 (Customs and Excise Act).
When it comes to import and export controls in particular, the legal regime in SA is quite complex in that one has to deal with several regulatory agencies empowered by various pieces of legislation. It is therefore unsurprising for a company or individual to be in contravention of some of the relevant laws and regulations and be unaware of such breach, sometimes, for some years.
To begin with, an entity must be registered as a customs client with, and thereafter obtain an import licence from, the customs and excise division of the South African Revenue Service (SARS) in order to import or export goods in SA.
The risk of noncompliance and its attendant consequences (such as fines and imprisonment) becomes a real concern mainly in respect of prohibited and restricted or regulated goods. The control over the import and export of certain goods that are restricted or prohibited or second- hand in SA lies with the International Trade Administration Commission (Itac). The International Trade Administration Commission Act gives Itac the authority to control the movement of goods into and out of SA by way of permit.
Import and export control measures or restrictions are applied to enforce health, security and safety and technical standards that arise from domestic laws and international agreements and are limited to those allowable under the relevant World Trade Organisation agreements.
Challenges of compliance become more acute when it comes to controls regarding the nonproliferation of weapons of mass destruction, conventional arms and dual-use goods. Control over or regulation of nuclear, biological and chemical weapons, also referred to as weapons of mass destruction, is globally pursued through international agreements and arrangements relating to nuclear, chemical and biological weapons, their specific means of delivery and dual-use items. SA subscribes to, supports and participates in most of these agreements and arrangements.
SA’s international commitments regarding the control of weapons of mass destruction are implemented domestically through the Non-Proliferation Act. The Non-Proliferation Act, among others, provides for the establishment of a council to control and manage matters relating to the proliferation of such weapons. There are several lists of controlled goods that have been formulated and published by notice in the Government Gazette to give effect to the provisions of the Non-Proliferation Act.
Where conventional arms are concerned, SA is a signatory to and implements the Wassennaar Arrangement on Export Controls for Conventional Arms and Dual Use Goods and Technologies by incorporating it into the National Conventional Arms Control Act . The authority responsible for the control over trade in conventional arms and rendering of foreign military assistance is the National Conventional Arms Control Committee, a statutory body that reports to parliament and consists of cabinet ministers and deputy ministers.
In terms of the act, no person may trade in conventional arms or render foreign military assistance unless that person is registered with the Directorate of Conventional Arms Control and is in possession of a permit authorised by the committee and issued by the directorate. Permits are required for armaments development and manufacturing, marketing, contracting, exporting, importing or transferring (conveyance) of conventional arms, which includes weapons, munitions, vessels (land, sea and air) designed for war, articles of war and related systems, components, technologies, dual-use goods or services.
Applications for registration and permits are processed by the directorate, which refers them to various departments for review and thereafter issues permits as authorised by the committee.
Controlled items include dual-use items and these can present difficulties from a compliance perspective in that the user or possessor may not be aware of the item’s other uses beyond the ordinary everyday uses. Dual-use items are goods, software and technology normally used for civilian purposes but which may have military applications or may contribute to the proliferation of weapons of mass destruction. Dual-use import and export controls affect a spectrum of civil industries such as aerospace, energy, defence and security, lasers and navigation, telecommunications, life sciences, chemical and pharmaceutical, material processing equipment, electronics, semiconductor and computing, medical and automotive.
Triethanolamine is an example of a common dual-use item. In addition to its use as an ingredient in lotions, hair shampoo and dishwashing liquid, it can also be used to produce mustard gas (a chemical warfare agent) which is why it is a controlled item.
Due to the dangers presented by most of the controlled goods from an international trade perspective, var- ious statutes in SA and in other countries specify severe penalties for breaches which can include a fine or imprisonment or both. For example, in the matter between The State v Asher Karni the National Prosecuting Authority’s priority crimes litigation unit managed a South African Police Services investigation into a Cape Town business implicated in the import and export of triggered spark gaps. Triggered spark gaps are dualuse items that can be used to detonate nuclear weapons or to separate missile stages, but which can also be used in lithotripters, medical devices used to break up kidney stones without surgery. This led to the arrest of the business owner in the US. In 2005, he pleaded guilty and was sentenced to a period of imprisonment.
It is incumbent on those at risk of breaching the abovementioned laws (manufacturers, importers and exporters) to ensure they are compliant at all times. Noncompliance in respect of a particular item may breach several statutes at the same time with potentially severe consequences for the individuals and companies concerned (private persons, companies and directors or employees of a company may be liable in some cases). The need to ensure compliance cannot be overemphasised.
Dual-use items are goods, software and technology normally used for civilian purposes but which may have military applications
DUAL-USE ITEMS PROHIBITED These items can present difficulties from a compliance perspective in that the user or possessor may not be aware of the item’s other uses beyond the ordinary everyday uses