EXPLANATORY STATEMENT
Select Legislative Instrument 2008 No. 253
Issued by the Authority of the Minister for Home Affairs
Customs Act 1901
Customs Amendment Regulations 2008 (No. 8)
Subsection 270(1) of the Customs Act 1901 (the Act) provides, in part, that the Governor‑General may make regulations not inconsistent with the Act prescribing all matters which by the Act are required or permitted to be prescribed, or as may be necessary or convenient to be prescribed, for giving effect to the Act.
Subsection 163(1) of the Act provides in part that refunds, rebates and remissions of duty may be made:
(a) in respect of goods generally or in respect of the goods included in a class of goods; and
(b) in such circumstances as are prescribed, being circumstances that relate to goods generally or to the goods included in the class of goods.
The purpose of the amending Regulations is to prescribe record keeping obligations on producers and exporters of goods to Chile and to prescribe new refund circumstances in respect of goods imported into Australia from Chile, in order to fulfil Australia's obligations under the Australia-Chile Free Trade Agreement (the Agreement). The Agreement was signed on 30 July 2008 and is expected to come into force in early 2009.
The Customs Amendment (Australia-Chile Free Trade Agreement Implementation) Act 2008 (the FTA Act) amends the Act to fulfil Australia's obligations under Chapter 4 of the Agreement, which deals with rules of origin. These rules determine whether goods imported into Australia are Chilean originating goods and are thereby eligible for preferential rates of customs duty.
The FTA Act also contains provisions that apply to exporters and producers of goods exported to Chile, and for which a preferential tariff is to be claimed in Chile. New section 126AKB of the Act provides that the regulations may prescribe record keeping obligations that apply in relation to goods that are exported to Chile and are claimed to be Australian originating goods for the purpose of obtaining a preferential tariff in Chile. These obligations may be imposed on the producer or exporter of such goods.
The record keeping obligations are prescribed in new regulations 105H and 105I of the Customs Regulations 1926 (the Principal Regulations), which specify the types of records that must be kept, the time for which the records must be kept and the manner in which the records must be kept. These obligations are consistent with record keeping obligations under the Principal Regulations that apply to the owners of goods exported from Australia to Singapore, Thailand and New Zealand.
The Agreement also allows for refunds of customs duty to be paid in respect of Chilean originating goods that are imported into Australia. It is possible that an importer may pay customs duty on such goods where no duty, or a lesser amount of duty, should have been paid. It is also possible that goods imported from Chile would be Chilean originating goods except that an importer did not have a valid Certificate of Origin, or a copy of one, at the time the goods were imported. It is intended that an importer would be able to obtain a refund of duty in relation to such goods if the importer holds a Certificate of Origin, or a copy of one, at the time the refund is sought. New refund circumstances have been prescribed in the amending Regulations which will apply to the above circumstances.
Details of the amending Regulations are set out in the Attachment.
No consultation was undertaken specifically in relation to the amendments as they implement Australia's international obligations under the Agreement.
The amending Regulations commence on the commencement of Schedule 1 to the FTA Act.
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ATTACHMENT
DETAILS OF THE CUSTOMS AMENDMENT REGULATIONS 2008 (No. 8)
Regulation 1 - Name of Regulations
This regulation provides that the title of the Regulations is the Customs Amendment Regulations 2008 (No. 8).
Regulation 2 - Commencement
This regulation provides that the Regulations commence on the commencement of Schedule 1 to the Customs Amendment (Australia-Chile Free Trade Agreement Implementation) Act 2008.
Regulation 3 - Amendment of Customs Regulations 1926
This regulation provides that the Schedule 1 amends the Customs Regulations 1926 (the Principal Regulations).
SCHEDULE 1 - AMENDMENT
Item [1] - After Regulation 105G
Item 1 inserts new regulations 105H and 105I into the Principal Regulations, after regulation 105G.
New regulation 105H - Exportation of goods to Chile - Record keeping by exporter who is not the producer of the goods
New regulation 105H provides that, for subsection 126AKB(1) of the Customs Act 1901 (the Act), an exporter, who is not also the producer, of goods mentioned in that subsection, must keep the following records:
(a) records of the exporter's purchase of the goods;
(b) records of the purchase of the goods by the person to whom the goods are exported;
(c) evidence that payment has been made for the goods;
(d) evidence of the classification of the goods under the Harmonized System;
(e) if the goods include any accessories, spare parts, tools or instructional or other information resources that were purchased by the exporter - records of the purchase of the accessories, spare parts, tools or instructional or other information resources and evidence of the value of the accessories, spare parts, tools or instructional or other information resources;
(f) if the goods include accessories, spare parts, tools or instructional or other information resources there were produced by the exporter - records of the production of accessories, spare parts, tools or instructional or other information resources, records of the purchase of all materials that were purchased for use or consumption in their production and evidence of the value of the materials;
(g) if the goods are packaged for retail sale in packaging material or a container that was purchased by the exporter - records of the purchase of the packaging material or container and evidence of the value of the packaging material or container;
(h) if the goods are packaged for retail sale in packaging material or a container that was produced by the exporter - records of the production of the packaging material or container, records of the purchase of all materials there were purchased for use or consumption in the production of the packaging material or container and evidence of the value of the materials; and
(i) a copy of the Certificate of Origin in relation to the goods.
The goods mentioned in subsection 126AKB(1) are goods that are exported to Chile and are claimed to be Australian originating goods for the purposes of obtaining a preferential tariff in Chile.
New subregulation 105H(2) provides that the records must be kept for a period of at least 5 years starting on the day the Certificate of Origin in relation to the goods is issued.
New subregulation 105H(3) set out the manner in which a record is to be kept. New subregulation 105H(3) provides that a record may be kept in any place, whether or not in Australia, and the exporter must ensure that:
(a) the record is kept in a form that would enable a determination of whether the goods are Australian originating goods; and
(b) if the record is not in English - the record is kept in a place and form that would enable an English translation to be readily made; and
(c) if the record is kept by mechanical or electronic means - the record is readily convertible into a hard copy in English.
New paragraph 105H(4)(a) provides that for the purposes of new regulation 105H, the term producer has the same meaning as in Division 4E of Part VI of the Act.
New paragraph 105H(4)(b) provides that for the purposes of new regulation 105H, the following words and expressions have the same meaning as in Division 1F of Part VIII of the Act.
(i) Australian originating goods;
(ii) Certificate of Origin; and
(iii) Harmonized System.
New regulation 105I - Exportation of goods to Chile - Record keeping by the producer of the goods
New regulation 105I provides that, for subsection 126AKB(1) of the Act, the producer of goods mentioned in that subsection, whether or not the producer is also the exporter of the goods, must keep the following records:
(a) records of the purchase of the goods;
(b) if the producer is the exporter of the goods - evidence of the classification of the goods under the Harmonized System;
(c) evidence that payment has been made for the goods;
(d) evidence of the value of the goods;
(e) records of the purchase of all materials that were purchased for use or consumption in the production of the goods and evidence of the classification of the materials under the Harmonized System;
(f) evidence of the value of the materials;
(g) records of the production of the goods;
(h) if the goods include accessories, spare parts, tools or instructional or other information resources that were purchased by the producer - records of the purchase of the accessories, spare parts, tools or instructional or other information resources and evidence of the value of the accessories, spare parts, tools or instructional or other information resources;
(i) if the goods include accessories, spare parts, tools or instructional or other information resources that were produced by the producer - records of the production of the accessories, spare parts, tools or instructional or other information resources, records of the purchase of all materials that were purchased for use or consumption in their production and evidence of the value of the materials;
(j) if the goods are packaged for retail sale in packaging material or a container that was purchased by the producer - records of the purchase of the packaging material or container and evidence of the value of the packaging material or container;
(k) if the goods are packaged for retail sale in packaging material or a container that was produced by the producer - records of the production of the packaging material or container, records of the purchase of all materials there were purchased for use or consumption in the production of the packaging material or container and evidence of the value of the materials; and
(l) a copy of the Certificate of Origin in relation to the goods.
New subregulation 105I(2) provides that the records must be kept for at least 5 years starting on the day the Certificate of Origin in relation to the goods is issued.
New subregulation 105I(3) sets out the manner in which a record is to be kept. New subregulation 105I(3) provides that a record may be kept in any place, whether or not in Australia, and the producer must ensure that:
(a) the record is kept in a form that would enable a determination of whether the goods are Australian originating goods; and
(b) if the record is not in English - the record is kept in a place and form that would enable an English translation to be readily made; and
(c) if the record is kept by mechanical or electronic means - the record is readily convertible into a hard copy in English.
New paragraph 105I(4)(a) provides that for the purposes of new regulation 105I, the term producer has the same meaning as in Division 4E of Part VI of the Act.
New paragraph 105I(4)(b) provides that for the purposes of new regulation 105I, the following words and expressions have the same meaning as in Division 1F of Part VIII of the Act:
(i) Australian originating goods;
(ii) Certificate of Origin; and
(iii) Harmonized System.
Item [2] - Regulation 126B, heading
Item [2] substitutes the heading of regulation 126B in the Principal Regulations to reflect that 126B prescribes refund, rebate and remission circumstances in relation to Thai originating goods. This amendment is required as new regulation 126C, inserted by item [3] below, prescribes new refund, rebate and remission circumstances in relation to Chilean originating goods.
Item [3] - After regulation 126B
Item [3] inserts new regulation 126C into the Principal Regulations after regulation 126B.
New regulation 126C - Other circumstances under which refunds, rebates and remissions are made - Chilean originating goods
New subregulation 126C(1) provides that for subsection 163(1) of the Act, the following circumstances are prescribed:
(a) duty has been paid on Chilean originating goods;
(b) duty has been paid on goods:
(i) that would have been Chilean originating goods if, at the time the goods were imported, the importer had a Certificate of Origin, or a copy of one; and
(ii) for which the importer has a Certificate of Origin, or a copy of one, at the time of making the application for the refund.
It is possible, at the time that goods are imported, that an importer may pay duty on Chilean originating goods at a higher rate of duty than is imposed on such goods. It is also possible that goods may satisfy all of the requirements under the Act to be Chilean originating goods except for the requirement that the importer has a Certificate of Origin for the goods at the time of importation. In such circumstances, a refund of duty will be payable.
New subregulation 126C(2) provides that a person may not apply for duty to be refunded under paragraph 126(1)(e) in respect of goods mentioned in new subregulation 126C(1) to the extent that an application for refund relates to 1 or more of the factors that determine whether the goods are Chilean originating goods.
Paragraph 126(1)(e) of the Principal Regulations provides that refunds of duty are payable where duty has been paid through manifest error of fact or patent misconception of the law. A refund of duty could be paid under paragraph 126(1)(e) in respect of goods mentioned in new subregulation 126C(1) if it does not relate to the factors that determine whether the goods are Chilean originating goods.
The purpose of new subregulation 126C(2) is to restrict refunds of duty in relation to Chilean originating goods to the extent that the refund relates to any of the factors that determine whether goods are Chilean originating goods to new regulation 126C only.
New subregulation 126C(3) provides that in new regulation 126C:
Certificate of Origin has the meaning given in subsection 153ZJB(1) of the Act;
Chilean originating goods has the meaning given in subsection 153ZJB(1) of the Act.
Item [4] - Paragraph 128(1)(e)
Item [4] omits the reference to subregulation 126(1) in paragraph 128(1)(e) of the Principal Regulations and inserts a reference to subregulations 126(1), 126B(1) and 126C(1).
Subregulation 128(1) of the Principal Regulations prescribes, for the purpose of paragraph 163(1AA)(a) of the Act, how an application for a refund, rebate or remission of duty is to be made. Paragraph 128(1)(e) requires the application to state the circumstance under subregulation 126(1) which applies to the good.
As other circumstances for refunds, rebates and remissions are prescribed in subregulation 126B(1) for Thai originating goods, and are prescribed in new subregulation 126C(1) (inserted by item [3] above) for Chilean originating goods, the operation of paragraph 128(1)(e) has been extended so that an application for a refund, rebate or remission of duty must state the relevant circumstance under subregulation 126(1), 126B(1) or 126C(1) which applies to the goods.
Item [5] - Paragraph 128(1A)(b)
Item [5] omits the reference to subregulation 126(1) in paragraph 128(1A)(b) of the Principal Regulations and inserts a reference to subregulations 126(1), 126B(1) and 126C(1).
Subregulation 128(1A) of the Principal Regulations prescribes, for the purposes of paragraph 163(1AA)(a) of the Act, how an application by computer for a refund, rebate or remission of duty is to be made. Paragraph 128(1A)(b) requires the application by computer to state the circumstance under subregulation 126(1) which applies to the good.
As other circumstances for refunds, rebates and remissions are prescribed in subregulation 126B(1) for Thai originating goods, and are prescribed in new subregulation 126C(1) (inserted by item [3] above) for Chilean originating goods, the operation of paragraph 128(1A)(b) has been extended so that an application by computer for a refund, rebate or remission of duty must state the relevant circumstance under subregulation 126(1), 126B(1) or 126C(1) which applies to the goods.
Item [6] - Subparagraph 128A(4)(a)(v)
Item [6] substitutes subparagraph 128A(4)(a)(v) of the Principal Regulations with new subparagraphs 128A(4)(a)(v) and (vi).
Regulation 128A of the Principal Regulations specifies when an application for a refund of duty may be made in certain circumstances. Subregulation 128A(4) provides, for circumstances in subregulation 126(1) and subsection 126B(1) which are listed in paragraph 128A(4)(a), that the application for a refund of duty may be made within 4 years after the day on which the duty was paid.
New subparagraph 128A(4)(a)(v) replaces the reference to subsection 126B(1) in subparagraph 128A(4)(a)(v) with a reference to subregulation 126B(1). This amendment is a technical amendment to reflect that the reference to subsection 126B(1) should have been a reference to the refund circumstances contained in subregulation 126B(1) of the Principal Regulations.
New subparagraph 128A(4)(a)(vi) includes in subparagraph 128A(4)(a) the new refund circumstances specified in new subregulation 126C(1) (inserted by item [3] above). This amendment means that an application for a refund of duty in relation to a circumstance specified in new subregulation 128C(1) is able to be made within 4 years from the date on which the duty was paid.
Item [7] - Subregulation 128B(6), after definition of allowable factory costs
Item [7] inserts the definition of Chilean originating goods into subregulation 128B(6) of the Principal Regulations and provide that the phrase has the meaning given in subsection 153ZJB(1) of the Act.
Item [8] - After subregulation 128B(9)
Item [8] inserts new subregulations 128B(10) and (11) in the Principal Regulations. New subregulations 128B(10) and (11) set out the amount of refund payable under new subregulation 126C.
New subregulation 126C(10) provides that the amount of a refund, rebate or remission of duty that may be made in the circumstances prescribed in paragraph 126C(1)(a) is the difference between the amount of duty paid on the goods and the amount of duty payable on the goods as Chilean originating goods.
New subregulation 126C(11) provides that the amount of a refund, rebate or remission of duty that may be made in the circumstances prescribed in paragraph 126C(1)(b) is the difference between the amount of duty paid on the goods and the amount of duty payable on the goods if they had been Chilean originating goods at the time of their importation.