By Jaco Fraser and Jaco de Klerk
The latest agricultural permit regulations for exports to the European and UK markets were gazetted (the “Regulations”) on 1 November 2023. There were numerous sensational interpretations that lead to confusion in the agricultural market, specifically relating to the BEE status of an applicant applying for an export permit.
It must be noted that the Regulations are similar to previous years’ regulations and outlines the factors that will be considered in granting an export permit of agricultural and agro-processed products, which includes the BEE status of an applicant.
Although the BEE status of an applicant will be considered in the allocation process for quotas, there are other factors that will also be considered namely:
- Market Share;
- Quota Applied for;
- Number of Applicants; and
- Total quota available for the specific product.
At this juncture, it is worth mentioning that the BEE status of an applicant is not an absolute prerequisite, but rather an additional factor that will be considered in conjunction with the other factors to determine the scope of the export permit. Stated differently, the Regulations do not prescribe that an applicant is required to meet a prerequisite threshold of BEE to be granted an export permit.
Considering the AgriBEE sector codes, the following BEE thresholds to determine an applicant’s BEE status should be taken into account:
- Exempted Micro-Enterprises will automatically achieve a level 4 BEE recognition, where the annual turnover of such enterprise is below R10,000,000.00.
- Qualifying Small Enterprises (“QSE”) will be exempt from the AgriBEE scorecard, where:
- The QSE turnover is between R10,000,000.00 and R50,000,000.00; and
- has between 51% and 100% black ownership, resulting in level 1 or 2 BEE recognition (as the case may be).
- QSEs that are not 51% (or more) black owned and companies with turnovers exceeding R50,000,000.00 must comply with the full AgriBEE scorecard. This means that additional requirements for example; management control, preferential procurement, skills development, and socio-economic development will also be considered to determine the level of BEE recognition.
Although the above parameters may seem daunting, coupled with the sensational articles doing the rounds, it's imperative to recognize that the BEE status does not singularly determine the allocation process, however, it is an important consideration to take in account and applicants are advised to seek legal guidance.
Whether you are a directly affected applicant or seeking clarity on your business's compliance status, our tailored solutions for corporate and BEE structuring are designed to seamlessly align with the AgriBEE Sector Codes.