SARS rules for offshore bunkering finalised

Offshore bunkering operations likely to resume

SOUTH AFRICA: The amended of Sections 21, 60 and 120 of the Customs and Excise Act, 1964 (Act 91 of 1964) have been finalised and will come into effect on 30 November 2024, just over a year after the South African Revenue Service (SARS) brought the offshore bunkering operations in Algoa Bay to a close.

After initiating three rounds of public engagements, SARS amended the rules to accommodate a wider range of wider range of fuels on land, as well as the inclusion of a new warehouse type for purposes of “bonded fuel goods”, namely a “land-based bonded fuel goods special storage warehouse” (land-based SOS) and a “sea-based bonded fuel goods special storage warehouse” (sea-based SOS).

The new rules clarifies the customs treatment of on-sea transfers and the receipt of imported fuel which occurs between a foreign-going vessel within South Africa’s waters to a foreign-going vessel which is due to leave the country.

The document provides definitions for what constitutes a sea-based bonded storage warehouse, coasting vessels, bunkering, storage vessel and more.

Following the finalisation of the amended rules, the industry will be eager to see the resumption of offshore bunkering and sources suggest that there are already operators working towards moving vessels into position.

There are still likely to be some challenges ahead as environmentalists continue to oppose the provision of these services based on previous incidents of oil spills that have occurred. Despite this the moratorium on issuing licences has been lifted by the South African Maritime Safety Authority (SAMSA).

Commenting on the situation in January of this year, Sobantu Tilayi, COO of SAMSA, acknowledged that the closure of the sector had resulted in reputational damage for South Africa, but said that the aim would be to rebuild capacity to meet the demand from additional shipping traffic transiting the coast due to the ongoing situation in the Red Sea.

Although pronouncements by the then Acting CEO of SAMSA, Tau Morwe in April this year suggested that the resumption of services were imminent no operators were able to offer services while SARS undertook to amend the rules that had led to the sector’s closure.

It is estimated that the closure of the Algoa Bay bunkering station in September last year impacted directly on at least 50 companies – many of them newly established to meet the needs of the sector.