The Minister of Trade, Industry and Competition (Minister), in consultation with the Competition Commission (Commission), has issued Draft Block Exemption for the Promotion of Exports (Regulations) and is inviting stakeholders to submit their comments by 2 September 2025.
The Regulations are intended to allow for competitors, customers and suppliers involved in the export of South African goods and services to collaborate and ‘mitigate the economic impact of the increased tariffs and to contribute to the resilience of and growth of South African exports’.
Scope of the exemption
The Regulations exempt specific categories of agreements and practices from the application of sections 4 and 5(1) of the Competition Act, including the per se prohibitions on:
- fixing a purchase or selling price or trading conditions (section 4(1)(b)(i)); and
- dividing markets by allocating customers, suppliers, territories or specific types of goods or services (excluding end customers or end consumers) (Section 4(1)(b)(ii)).
Categories of exempted conduct
The Regulations propose that market participants be enabled to coordinate on seven types of agreements and/ or practices, relating solely to the export market. More specifically, exemption may be sought for coordination: Â Â
- aimed at achieving economies of scale and efficiencies in the export markets with the objective of improving competitiveness of South African export products;
- on sharing or offsetting the landed costs faced in the export markets;
- on joint financing and development of infrastructure required for exports, including both export infrastructure in South Africa, transit points and the export destination;
- on funding and sharing export related market information including information on import regulations and product regulations in the export markets;
- on sharing shipment costs, storage, inspection rooms, freight, insurance and other logistics in the export markets;
- on the collective marketing of South African goods as a brand in the export market; or
- coordination on joint negotiation of protocols of export programmes and compliance with quality specifications or standards of goods in the export markets.
The Regulations require that historically disadvantaged firms and that small, micro or medium-sized businesses be afforded an opportunity to opt-in to any agreements and/ or practices concluded, including the negations of such agreements and/ or practices.
Exclusions
The Regulations specifically exclude the following conduct:
- market allocation of goods and services to end customers or consumers;
- collusive tendering for goods and services intended for sale to end customers or consumers;
- resale price maintenance for goods and services sold to end customers or consumers; and
- any merger transaction
Application and approval process
Firms seeking to rely on the exemption must submit a written request to the Commission for confirmation that the proposed conduct falls within the scope of the Regulations. The Commission, may:
- approve the exemption (with or without safeguards); or
- decline the request if it falls outside the scope of the Regulations.
The Commission is required to issue a decision within 30 business days, extendable by an additional 30 business days. If no decision is issued within the prescribed period, the agreement or practice is deemed approved.
The Commission also retains the right to revoke any exemption granted on specific grounds outlined in the Regulations. The Regulations also introduce monitoring mechanisms imposing specific requirements on participants to keep accurate written records and minutes of meetings held.
Duration of the Regulations
It is proposed that the Regulations will remain in force for a period of five years, and can be extended by the Minister in consultation with the Commission, and taking into account tariffs in the export markets. Upon withdrawal of the Regulations, firms will be afforded a reasonable period to wind down any ongoing arrangements.
Conclusion
South African companies wishing to take advantage of this draft Block Exemption should submit their comments in order to ensure that it is sufficiently broad to allow conduct and practices that would support their export activities.
However, even once it comes into effect, South African companies will need to be careful that they fall within the scope of the exemption and report, as required, to the Commission.
Moreover, it is essential that South African companies also check that their conduct, agreements or business practices do not contravene other applicable anti-trust laws in the countries to which they are exporting.
