EXPLANATORY STATEMENT
Select Legislative Instrument 2011 No. 229
Issued by the Authority of the Minister for Home Affairs
Customs Act 1901
Customs Amendment Regulations 2011 (No. 4)
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 or for the conduct of any other business relating to the Customs.
The purpose of the amending Regulations is to amend the Customs Regulations 1926 (the Principal Regulations) to update references to tariff headings and subheadings and the classification of goods as a result of amendments to the Customs Tariff Act 1995 (the Customs Tariff Act).
The amending Regulations also amend subregulation 31AA(2) to substitute a note in relation to the definition of “writing” as a result of amendments to the Acts Interpretation Act 1901 made by the Acts Interpretation Amendment Act 2011.
The Customs Tariff Amendment (2012 Harmonized System Changes) Act 2011 (the HS2012 Act) received the Royal Assent on 26 July 2011 with a commencement date of 1 January 2012. This Act contains amendments to the Customs Tariff Act which implement changes resulting from the fourth review of the Harmonized Commodity Description and Coding System, commonly referred to as the Harmonized System. The Harmonized System forms the basis of the Australian Customs Tariff. There are approximately 800 amendments to the Customs Tariff Act which will have effect on and from 1 January 2012.
The Principal Regulations contain several references to tariff headings and subheadings in the Customs Tariff Act. As a consequence of the amendments to some of these headings and subheadings, and the resulting reclassification of some goods, the Principal Regulations have been amended to update these references and classifications, also with effect from 1 January 2012. These amendments are of a technical nature only, and involve no change in policy.
Associated amendments have also been made to the Customs Tariff Regulations 2004 resulting from the fourth review of the Harmonized System.
The amending Regulations commence as follows:
(a) regulations 1 to 3 and Schedule 1 commence on the commencement of Schedule 1 to the HS2012 Act. Schedule 1 to the amending Regulations set out the majority of the changes that are the consequence of the amendments in the HS2012 Act and therefore commence at the same time as that Act, which is 1 January 2012;
(b) regulation 4 and Schedule 2 commence immediately after the commencement of Schedule 2 to the Customs Amendment Regulations 2011 (No. 2). The amendments set out in Schedule 2 of the amending Regulations are also the consequence of the amendments in the HS2012. They are, however, also associated with amendments to the taxation treatment of alternative fuels. Schedule 2 to the Customs Amendment Regulations 2011 (No. 2) sets out amendments to subheadings related to the alternative fuels changes and these changes need to commence before the changes in Schedule 2 to the amending Regulations commence. This also occurs on 1 January 2012; and
(c) regulation 5 and Schedule 3 commence on the commencement of Schedule 1 to the Acts Interpretation Amendment Act 2011. The amendments set out in Schedule 3 relate the definition of “writing” as a result of amendments to the Acts Interpretation Act 1901 made by the Acts Interpretation Amendment Act 2011. Schedule 3 therefore commence at the same time as that amendment Act. This is expected to be 27 December 2011.
No consultation was undertaken in relation to the amending Regulations as they are minor and machinery in nature and do not substantially alter existing arrangements.
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Overview
The Customs Amendment Regulations 2011 (No. 4) were enacted to update the Customs Regulations 1926 in line with amendments to the Customs Tariff Act 1995 and the Customs Tariff Amendment (2012 Harmonized System Changes) Act 2011. This legislative update was necessary to reflect the changes resulting from the fourth review of the Harmonized Commodity Description and Coding System, commonly referred to as the Harmonized System, which forms the basis of the Australian Customs Tariff. The Regulations, issued under the authority of the Minister for Home Affairs, aim to ensure the Customs Regulations 1926 accurately reflect the updated tariff headings and subheadings, and the reclassification of goods, without altering existing policy. The changes are largely technical, and as such, no consultation was deemed necessary. The Regulations are designed to maintain the integrity and effectiveness of the customs system in line with international standards.
Scope and Application
The Customs Amendment Regulations 2011 (No. 4) are made pursuant to subsection 270(1) of the Customs Act 1901, which allows for the creation of regulations to prescribe matters required or permitted by the Act, or necessary for its operation. These Regulations amend the Customs Regulations 1926 to update references to tariff headings and subheadings, as well as the classification of goods, due to changes in the Customs Tariff Act 1995 as implemented by the Customs Tariff Amendment (2012 Harmonized System Changes) Act 2011. Additionally, the Regulations modify the definition of "writing" as per the Acts Interpretation Amendment Act 2011. The Regulations are technical in nature and do not alter policy, merely updating existing provisions to reflect legislative changes. The amendments have a Commonwealth reach, applying to all entities and individuals involved in customs and classification processes across Australia. The Regulations commence on various dates, aligning with the commencement of other related legislative changes, namely 1 January 2012, except for changes related to the definition of "writing" which commence on 27 December 2011. No consultation was conducted as the amendments were deemed minor and administrative in nature.
Key Provisions
The Customs Amendment Regulations 2011 (No. 4) primarily serve to update the Customs Regulations 1926 (referred to as the Principal Regulations) to reflect changes in the Customs Tariff Act 1995. These changes stem from the Customs Tariff Amendment (2012 Harmonized System Changes) Act 2011, which was designed to implement updates to the Australian Customs Tariff resulting from the fourth review of the Harmonized System. The Harmonized System is a standardised nomenclature for the classification of goods, which is critical for customs purposes. The operative sections of these Regulations, particularly regulations 1 to 3 and Schedule 1, and regulation 4 with Schedule 2, are instrumental in updating references to tariff headings and subheadings, and the classification of goods (regulations 1 to 3 and Schedule 1). These changes are set to take effect on 1 January 2012, aligning with the commencement of Schedule 1 to the Customs Tariff Amendment (2012 Harmonized System Changes) Act 2011. Additionally, regulation 5 and Schedule 3 address amendments to the definition of "writing" due to changes in the Acts Interpretation Act 1901 made by the Acts Interpretation Amendment Act 2011, with these changes taking effect on 27 December 2011.
The Customs Amendment Regulations 2011 (No. 4) impose specific obligations on the parties governed by them. Primarily, these Regulations require the updating of references to tariff headings and subheadings in the Principal Regulations to reflect changes in the Customs Tariff Act 1995. This includes reclassifying certain goods to match the new tariff headings and subheadings, ensuring that the Principal Regulations remain consistent with the current Customs Tariff. Furthermore, the Regulations mandate that the definition of "writing" in the Principal Regulations be updated to align with the amendments in the Acts Interpretation Act 1901. These obligations are critical for maintaining the accuracy and relevance of the customs regulations, facilitating the smooth operation of customs processes and ensuring compliance with the updated tariff classifications.
Breaches of the Customs Amendment Regulations 2011 (No. 4) can lead to significant consequences, both civil and criminal. While the Explanatory Statement does not detail specific penalties, breaches of customs regulations generally can result in substantial fines and, in severe cases, criminal charges. The Customs Act 1901 provides for penalties for non-compliance, which can include fines of up to $22,200 for individuals and significantly higher amounts for corporations, along with potential imprisonment. The precise penalties depend on the nature and severity of the breach, with more egregious violations leading to harsher penalties. These provisions underscore the importance of adhering to the updated regulations to avoid legal repercussions.