The export of scrap metal is strictly controlled in South Africa, through the provisions of International Trade Administration Act (‘the Act’). On 10 May 2013 the then Minister of Economic Development issued a trade policy directive (the Directive) in terms of Section 5 of the Act. This directive allowed ITAC to exercise its powers under the Act to regulate the exportation of scrap metal and other related restricted material.
ITAC established a price preference system (PPS) pursuant to which it would not allow the exportation of scrap metal. Unless it had first been offered for sale for local beneficiation and value addition, to the domestic consuming industry. For a period and at a price discount or other formula determined by ITAC. Under this framework, those who, having offered such scrap for sale to domestic players with limited or no uptake, would then be issued with an export permit by ITAC.
The objective of regulating the export of scrap metal and the introduction of an export duty on scrap metal, is to provide foundries and mills with access to higher quality and more affordable scrap metals in the local market. This is crucial when the incentive to export scrap metal (such as in instances where global prices surge upwards) may trigger domestic security of supply challenges.
At great cost to local investment and employment in the foundries and mills and other consuming firms downstream. The measure is to also ensure that mills and foundries become cost-competitive and attract further investment, creating employment, and supporting industrialisation.
In this regard, on 18 September 2023 ITAC learned that Scrapmania (PTY) LTD was illegally exporting 20 containers of scrap metal without a valid ITAC export permit. On 19 September 2023, the case docket was registered against Scrapmania (Pty) Ltd at Swartkops Police Station in Gqeberha, Eastern Cape.
The accused was charged with contravening the provisions of section 54(1)(a) read with sections 1, 6(1)(c), 15, 26, 27, 55 and 56 of the International Trade Act 71 of 2002, as amended and further read with the Government notice R92 published in the Government Gazette 35007 and the provisions of section 54(1)(b) read with sections 1, 6(1)(d), 15, 26, 27, 55 and 56 of the International Trade Act 71 of 2002, as amended and further read with the Government notice R92 published in the Government Gazette 35007.
ITAC asserted to the court and the prosecution that Scrapmania (PTY)LTD had failed to insert container numbers on the prescribed customs documentation, as is required by ITAC export control guidelines.
On 19 August 2024, the accused (Scrapmania (PTY)LTD) pleaded guilty to all charges and was fined an amount of R150 000.00. The matter, against the second accused, one Mr Hurling was withdrawn.
The ITAC enforcement unit, working with the relevant stakeholders including SARS-Customs, SAPS and Department of Justice continue to make in-roads in curbing the illegal importation and exportation of restricted and prohibited goods into and out the Republic of South Africa.
ISSUED BY THE INTERNATIONAL TRADE ADMINISTRATION COMMISSION OF SA