Electrical product importers tied up by red tape

Importers of electrical products are experiencing long delays in obtaining letters of authority from the National Regulator for Compulsory Specifications (NCRS), resulting in huge backlogs for companies.

This is according to DA spokesman for trade and industry Geordin Hill-Lewis, who on Tuesday said that this was negatively affecting the economy.

Stefan Sakoschek, regional director of the EU Chamber of Commerce and Industry in SA, agreed that the delays were a major problem as most European electrical firms in SA were struggling to get letters of authority, which are required for the import of each and every consignment of goods.

“There is a big congestion. Sometimes it takes a year or year-and-a-half to get approval. Electrical products, cosmetics, automotive products are mostly affected,” Sakoschek says.

“This can hold up production but also delay the launch of new products on the local market, such as mobile phones, with a resulting loss of revenue.”

The delay in having the goods released from the ports also incurred storage costs amounting to millions of rand.

NCRS CEO Asogan Moodley, who on Tuesday briefed a workshop on industrialisation organised by Parliament’s trade and industry committee about the work of the regulator, would not comment on the complaints, saying he would address the matter in a briefing to the committee next month.

However, Department of Trade and Industry deputy director-general Garth Strachan says the problems within NCRS were “minor” and were being addressed by the department.

He says that the NCRS’s 120-day turnaround time for processing applications for letters of authority was a “gold standard” internationally, especially against other developing countries.

By and large the NCRS was meeting this standard, he says, with most of the complaints coming from importers who were not complying with the law. The major issue facing the economy, Strachan says, was the flood of illegal and substandard imported products into the economy, which harmed local manufacturers and represented “a clear and present danger”.

However, Hill-Lewis said in an interview that he had been inundated by a “huge” number of complaints by frustrated importers whose applications for letters of authority had not been approved for longer than six months.

Importers of electrical goods in particular, he says, complained about not being able to get letters of authority with some such as Yamaha SA, Audiotronic, Tilk Powertools and appliance distributor Haier Group among those that have
complained that they had no stock.

Hill-Lewis says that the NCRS was not complying with the 120-day standard, which often meant that the imported goods were either sitting in the docks or in the ports of origin while waiting for the letters of authority.

“We are getting complaints that the situation has got so bad that stores are sitting without stock to sell. It’s a huge bottleneck in the economy,” Hill-Lewis says.

Carol O’Brien, executive director, American Chamber of Commerce in SA, says: “SA is fast losing its status as the distribution hub for information and communications technology equipment as a result of this red tape, and jobs are being shed in the value chain, and in multinationals, as products are not being released from ports.

“One wonders why the National Regulator for Compulsory Specifications (NRCS) needs to keep waiting products that come from globally accepted computer brands such as HP, Dell and Lenovo. We see this act as a nontariff barrier for importers as we speculate that local suppliers who assemble electrical goods in SA are being boosted by holding back international brands. The country is the loser because we are becoming a dumping ground for old technology.

“Department of Trade and Industry deputy director-general Garth Strachan is wholly incorrect in saying the NRCS waiting period is the gold standard. Why do they provide the automotive sector, a strategic sector, with letters of authorisation within 30 days if 120 days is the gold standard?”

By Linda Ensor

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