R522m vessel seizure tests customs forfeiture limits; COIDA ceiling rises

The Minister of Employment and Labour has prescribed updated Compensation Fund assessment thresholds effective 1 March 2026. The maximum earnings ceiling per employee rises from R633 168 to R668 000 per annum. The minimum assessment for employers is set at R1 621, and for domestic employers at R560. The notice also publishes the updated CF-2A Return of Earnings form for the provisional earnings period 1 March 2026 to 28 February 2027. Every employer registered with the Compensation Fund must adjust assessment calculations to reflect the new cap, and employers who detect errors after submitting returns have 60 days from the date assessed to apply for revision.

SARS detained and seized the foreign-flagged tanker MT Essien under section 88(1) of the Customs and Excise Act, alleging deemed importation without customs entry or VAT payment. The vessel, valued at approximately R400 million, was chartered by Astron Energy to carry jet fuel in coastwise trade to Cape Town International Airport. Astron Energy was losing approximately R31 million per month from the detention. The applicants sought urgent interim release of the vessel against a guarantee of approximately R522 million provided by Lombard Insurance.

The court held: Holderness J granted the interim interdict ordering release against the guarantee. The court held: (1) the applicants cleared the prima facie threshold, including on proportionality grounds under section 25 of the Constitution given the disparity between the R400 million vessel value and the R124 million tax liability; (2) the OUTA heightened test does not apply to stock-standard administrative enforcement decisions under the Customs Act — it is confined to polycentric policy decisions; (3) section 89(4) deemed forfeiture is not self-executing where review proceedings have been instituted and remain alive; and (4) the Lombard Insurance guarantee of approximately R522 million provided the fiscus with security equivalent to physical possession of the vessel.

Legal impact: This ruling develops the law in several respects. It establishes that insurance guarantees can constitute adequate substitute security for seized vessels under the Customs Act, provides authority that the OUTA heightened interdict threshold is limited to polycentric policy decisions and does not extend to ordinary customs enforcement, and holds that section 89(4) deemed forfeiture cannot be treated as self-executing while review proceedings are pending. The proportionality analysis under section 25 — where asset value greatly exceeds the underlying tax liability — offers a template for challenging disproportionate customs forfeitures. The pending review on the interpretation of deemed importation provisions for foreign-flagged vessels in coastwise trade will have broader implications for the maritime and energy sectors.