Customs Amendment Regulations 1999 (No. 2) 1999 No. 131
EXPLANATORY STATEMENT
STATUTORY RULES 1999 NO. 131
Issued by the Authority or the Minister for Justice and Customs
Customs Act 1901
Customs Amendment Regulations 1999 (No. 2)
Section 270 of the Customs Act 1901 ("the Customs Act") provides that the General-General may make regulations prescribing matters necessary or convenient for the giving effect to the Customs Act.
Purpose
The purpose of the Regulations is to prescribe those countries to which subsections 269TAC(5D) and (5G) of the Customs Act do not apply.
Background
When conducting a dumping investigation under Part XVB of the Customs Act, the "normal value" of the goods allegedly dumped has to he determined. The various method., of determining the normal value of goods are contained in section 269TAC of the Customs Act.
The Customs (Anti-dumping Amendments) Act 1999 ("the Amending Act") will amend the Customs Act to introduce two new approaches to determining the normal value of goods. These new approaches apply to goods allegedly dumped from countries that are in the process of transition to a market economy.
The first approach applies when it is established that the selling price of those goods is subject to government control (new subsection 269TAC(5D) refers). The second applies when it is established that a raw material input (which accounts for more than 10% of the cost of manufacturing or producing the goods) is supplied by a State owned enterprise (new subsection 269TAC(5G) refers).
New subsection 269TAC(5J) provides that regulations may be made setting out a list of countries to which the approaches in subsections 269TAC(5D) and (5G) do not apply. The regulations can only be made for the purposes of fulfilling Australia's international obligations under an international agreement.
The World Trade Organization ("WTO") Agreement on the implementation of Article 6 of the General Agreement on Tariffs and Trade ("the Agreement") authorises the imposition of antidumping measures only in circumstances where investigations have been conducted in accordance with the provisions of the Agreement.
The Agreement sets out methods of ascertaining the normal value of goods. but does not deal specifically with economics in transition. To meet Australia's obligations under the Agreement, where investigations are conducted in respect of goods allegedly dumped from current WTO countries, the new economics in transition provisions should not be applied to them.
Hence all member countries of the WTO are precluded from the application of the economies in transition provisions in subsections 269TAC(5D) and (5G) of the Customs Act.
The Regulations are explained in detail in the Attachment.
The Regulations will commence on the commencement of item 1 of Schedule 1 to the Amending Act Item 1 inserts new subsections 269TAC(5D), (5G) and (5J) into the Customs Act. Since the Regulations commence at the same time as item 1 the new approaches to determining the normal value of goods will not apply to those WTO countries.
ATTACHMENT
Regulation 1 - Name of regulations
Regulation 1 provides that the proposed Regulations are named the "Customs Amendment Regulations 1999 (No. 2))".
Regulation 2 - Commencement
Regulation 2 provides that the Regulations commence on the commencement of item
1 of Schedule 1 to the Customs (Anti-dumping Amendments) Act 1999.
Regulation 3 - Amendment of Customs Regulations 1926
Regulation 3 provides that Schedule 1 amends the Customs Regulations 1926 ("the Customs Regulations").
Schedule 1 - Amendments
Item 1 of Schedule 1 - After regulation 181
Item t inserts new regulation 182 into the Customs Regulations. New regulation 182 provides that the methods of ascertaining the normal value of goods contained in subsections 269TAC(5D) and (5G) of the Customs Act does not apply to those countries listed in new Schedule 1B (ace item 2 of Schedule 1
Item 2 of Schedule 1 - After Schedule 1A
Item 2 inserts new Schedule 1B into the Customs Regulations. New Schedule 1B lists those countries to which subsections 269TAC(5D) and (5G) do not apply. The countries listed are members of the World Trade Organization.
Overview
The Customs Amendment Regulations 1999 (No. 2) were enacted to address a specific issue arising from the Customs (Anti-dumping Amendments) Act 1999, which introduced new methods for determining the normal value of goods allegedly dumped from countries in transition to a market economy. This was necessitated by Australia's international obligations under the World Trade Organization Agreement on the implementation of Article 6 of the General Agreement on Tariffs and Trade. The Customs Amendment Regulations 1999 (No. 2) were designed to ensure compliance with these obligations by excluding WTO member countries from the new methods of normal value determination outlined in the Customs Act. Enacted by the Minister for Justice and Customs, the policy objective of these regulations was to align Australia's anti-dumping practices with international standards while accommodating the unique economic circumstances of transition economies.
Scope and Application
The Customs Amendment Regulations 1999 (No. 2) are designed to modify the Customs Regulations 1926 by incorporating changes introduced by the Customs (Anti-dumping Amendments) Act 1999. These regulations specifically address the application of new methods for determining the normal value of goods allegedly dumped from countries in the process of transitioning to a market economy, as stipulated in subsections 269TAC(5D) and (5G) of the Customs Act 1901. The primary objective is to ensure that these new approaches do not apply to WTO member countries, thereby aligning Australia’s practices with its international obligations under the World Trade Organization Agreement on the implementation of Article 6 of the General Agreement on Tariffs and Trade. The regulations list WTO member countries in Schedule 1B, thereby exempting them from the new valuation methods. These amendments commence on the same date as item 1 of Schedule 1 to the Amending Act, ensuring that the new provisions do not affect WTO member countries from their inception.
Key Provisions
The Customs Amendment Regulations 1999 (No. 2) primarily aim to implement changes introduced by the Customs (Anti-dumping Amendments) Act 1999, which alters the methods for determining the normal value of goods under the Customs Act 1901 (section 270). Specifically, the regulations address new subsections 269TAC(5D) and (5G) of the Customs Act, which deal with special considerations for goods from countries in transition to a market economy. Regulation 1 formally names the set of regulations as "Customs Amendment Regulations 1999 (No. 2)" and specifies their commencement date, which aligns with the commencement of item 1 of Schedule 1 to the Amending Act. Regulation 2 ensures that the regulations come into effect simultaneously with the new subsections they amend.
The Customs Amendment Regulations 1999 (No. 2) impose specific obligations on entities involved in the importation and anti-dumping investigations of goods. These regulations dictate that the special methods for determining the normal value of goods, as introduced by subsections 269TAC(5D) and (5G), do not apply to certain countries. In particular, Schedule 1B lists World Trade Organization (WTO) member countries that are exempt from these special methods. Importers and investigators must ensure compliance with these regulations by correctly identifying the origin of the goods and applying the appropriate valuation methods. This includes conducting proper investigations to ascertain whether the goods originate from a WTO member country, thereby exempting them from the transitional economy provisions.
The Customs Amendment Regulations 1999 (No. 2) do not explicitly outline specific offences or penalties for non-compliance. However, failure to adhere to the regulations during an anti-dumping investigation could result in significant legal consequences under the Customs Act 1901. Non-compliance might lead to incorrect valuations of goods, potentially affecting the outcome of anti-dumping duties imposed on such goods. While the regulations themselves do not prescribe penalties, breaches of the Customs Act could result in substantial fines and other legal actions, as per the general provisions of the Act. For example, penalties for fraudulent conduct related to customs duties and goods can be severe, including fines up to 10,000 penalty units or imprisonment for up to 10 years, or both, under section 273 of the Customs Act.