EXPLANATORY STATEMENT
Select Legislative Instrument 2010 No. 95
Issued by the Authority of the Minister for Home Affairs
Customs Act 1901
Customs Amendment Regulations 2010 (No. 2)
Section 270 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.
Section 168 of the Act provides that the regulations may make provision for and in relation to allowing drawbacks of duty paid on goods imported into Australia. A drawback is essentially a refund of import duty that is payable on the exportation of previously imported goods where the goods meet certain requirements.
Regulation 129 through to regulation 136B of the Customs Regulations 1926 (the Principal Regulations) set out the circumstances in which goods are eligible for drawback of import duty, the methods of calculating the amount of drawback, and the procedures that must be followed before a drawback is payable.
The purpose of the amending Regulations is to prescribe the method by which a claim for drawback of import duty can be lodged electronically.
Regulation 134 of the Principal Regulations provides that a drawback of import duty in not payable on the exportation of goods unless each of the requirements in the regulation is met. Subregulation 134(4) provides that a claim for drawback must be in an approved form and set out the amount of the claim and such other information as the form requires. In the Customs context, the reference to an approved form in subregulation 134(4) means that a claim for drawback can only presently be made in a documentary form. The Chief Executive Officer of Customs has approved a documentary approved form for this purpose.
The Integrated Cargo System (the ICS) is the computer system by which importers and customs brokers electronically provide information to the Australian Customs and Border Protection Service (Customs and Border Protection). The ICS has been in operation since 2005 and initially did not contain the functionality whereby a claim for drawback could be electronically lodged with Customs and Border Protection. However, recent enhancements to the ICS now allow claims for drawback to be made electronically using the ICS. In the Customs context, electronic communications to Customs and Border Protection are made in the form of an approved statement, as opposed to an approved form.
The amending Regulations amend regulation 134 to insert new subregulation 134(4A), which provides that a claim made electronically for drawback of import duty must include information as required by an approved statement. The Chief Executive Officer of Customs will approve an approved statement for this purpose.
New subregulation 134(4A) also provides that a claim must be transmitted, and signed, in a manner that meets the information technology requirements determined under section 126DA of the Act. Under section 126DA, the Chief Executive Officer of Customs has determined, by legislative instrument, all of the information technology requirements that have to be met by persons who wish to communicate with Customs and Border Protection electronically. This determination will be amended to require that persons who wish to lodge an electronic claim for drawback must use the ICS.
The amending Regulations also make a minor amendment to subregulation 134(4) to state that a claim for drawback made in an approved form is made by document.
Customs and Border Protection has consulted extensively with people likely use the ICS to lodge an electronic claim for drawback. Customs and Border Protection has also placed notices on the Customs website about these arrangements.
The amending Regulations commence on the day after they are registered on the Federal Register of Legislative Instruments.
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Overview
The Customs Amendment Regulations 2010 (No. 2) were enacted to address the procedural gap in the Customs Act 1901 concerning the electronic lodging of claims for drawback of import duty. This was necessary as the existing regulations only allowed for documentary claims, while advancements in technology, particularly the Integrated Cargo System (ICS), necessitated a more efficient and modern method of claim submission. The regulations were issued by the Minister for Home Affairs under the authority granted by section 270 of the Customs Act, which allows for the creation of regulations to give effect to the Act. The policy objective of these amendments was to enhance the efficiency and accessibility of customs processes by enabling electronic claims for import duty drawbacks, thereby facilitating smoother trade operations.
The Customs Amendment Regulations 2010 (No. 2) specifically amend regulation 134 of the Customs Regulations 1926 to incorporate electronic claim submissions for drawback of import duty. By introducing new subregulation 134(4A), the regulations mandate that electronic claims must include information as required by an approved statement, which will be approved by the Chief Executive Officer of Customs. This approach aligns with the existing framework for electronic communications under section 126DA of the Customs Act, ensuring that all electronic claims adhere to the requisite information technology standards. The amendments also clarify that documentary claims are to be submitted in a written format, thereby maintaining a clear distinction between the two methods of claim submission. These changes were designed to streamline the customs process, making it more user-friendly and efficient for stakeholders.
Scope and Application
The Customs Amendment Regulations 2010 (No. 2) apply to all persons and entities engaged in the import and export of goods in Australia, as well as customs brokers and other intermediaries involved in the customs clearance process. The regulations extend to all industries that involve the import and export of goods, and cover the conduct and transactions associated with these activities. The amendments pertain to the electronic lodging of claims for drawback of import duty, which is a refund of import duty payable on the exportation of previously imported goods. The regulations have a national reach as they are made under the Commonwealth Customs Act 1901. The regulations do not exclude any particular entity or industry from their scope, although they do set out certain requirements and procedures that must be followed in order to make a claim for drawback electronically. The regulations may be extended or restricted through subordinate instruments, such as legislative instruments determining information technology requirements for electronic communication with Customs and Border Protection.
Key Provisions
The Customs Amendment Regulations 2010 (No. 2) amend the Customs Regulations 1926 to introduce a new method for electronically lodging claims for drawback of import duty. Regulation 134 is amended by inserting subregulation 134(4A) which specifies that a claim for drawback made electronically must include information as required by an approved statement. This statement will be approved by the Chief Executive Officer of Customs and will detail the necessary information to be included in the electronic claim. Furthermore, the claim must be transmitted and signed in a manner that complies with the information technology requirements established under section 126DA of the Customs Act 1901. These requirements, determined by the Chief Executive Officer of Customs, mandate that electronic communications with Customs and Border Protection must meet specific IT standards, which in this case will necessitate the use of the Integrated Cargo System (ICS) for submitting electronic drawback claims.
Entities and individuals who intend to claim drawback of import duty by electronically lodging a claim must adhere to the newly prescribed requirements. They must ensure that their claims include all information stipulated in the approved statement and that the claims are transmitted in a manner that meets the IT requirements set out by the Chief Executive Officer of Customs. This includes using the ICS for electronic communications, which involves following the procedures and standards outlined by Customs and Border Protection. It is also crucial for claimants to be aware that their electronic claims must be signed in a way that complies with the regulations, ensuring the authenticity and integrity of the claim.
Failure to comply with the requirements for lodging a claim for drawback of import duty electronically may result in penalties or other consequences. While specific penalties are not detailed in the amending Regulations, breaches of customs regulations generally can lead to financial penalties, administrative sanctions, and in severe cases, criminal charges. The exact penalties depend on the nature and severity of the breach but can include fines and imprisonment. Therefore, it is essential for claimants to meticulously adhere to the stipulated procedures and requirements to avoid any adverse legal consequences.
In summary, the Customs Amendment Regulations 2010 (No. 2) introduce significant changes to the process for claiming drawback of import duty by allowing electronic claims to be lodged through the ICS. This amendment requires claimants to include specific information in their claims as per an approved statement and to ensure that their electronic communications comply with established IT requirements. Compliance with these regulations is mandatory to avoid potential penalties and legal repercussions.