EXPLANATORY STATEMENT
By-law No. 0618799 (replacing BL 9640079)
Customs Act 1901
Section 271 of the Customs Act 1901 (the Act) provides, in part, that where an item of a Customs Tariff is expressed to apply to goods, or to a class or kind of goods, as prescribed by by-law, the Chief Executive Officer of Customs may make by-laws for the purposes of that item. A Customs Tariff is defined in section 4 of the Act to mean an Act imposing duties of customs, that is the Customs Tariff Act 1995 (the Customs Tariff Act).
Background
On 4 November 2006, the Customs Tariff Amendment (2007 Harmonized System Changes) Act 2006 (the HS 2007 Act) received the Royal Assent. This Act inserts a new subheading, from 1 January 2007, that applies to some of the goods classified to existing subheading 3907.9. Subheading 3907.9 is referred to in existing item 38 of Schedule 4 to the Customs Tariff Act and related By-law No. 9640079.
Item 38 sets out a ‘Free’ rate of duty for goods, as prescribed by by-law, classified to certain subheadings, including subheading 3907.9. For item 38, existing By‑law No. 9640079 prescribes goods classified to subheading 3907.9 and other subheadings that are uncompounded polyamides and polyesters for use in the manufacture of fibres or yarns. The HS 2007 Act inserts new tariff subheading 3907.70.00 and some of the goods classified to existing subheading 3907.9 are reclassified to subheading 3907.70.00, with effect from 1 January 2007.
The HS 2007 Act also amends item 38 to insert a reference to new subheading 3907.70.00 with effect from 1 January 2007.
Instrument
To take into account the changes under the HS 2007 Act, By-law No. 9640079 is revoked from 1 January 2007 by Instrument of Revocation No. 1 (2006) and replaced by new By-law No. 0618799. The new By-law inserts an additional reference to new subheading 3907.70.00 but is otherwise the same substantially as By-law No. 9640107.
Consultation
No consultation was undertaken in relation to By-law No. 0618799 as it is of a minor and machinery nature and does not substantially alter existing arrangements.
Commencement
By-law No. 0618799 takes effect from 1 January 2007.
Overview
The Customs Tariff Amendment (2007 Harmonized System Changes) Act 2006 was enacted to address changes in the Harmonized System (HS) tariff codes, which are used to classify goods for customs purposes. This Act ensures that the Customs Tariff remains consistent with international standards, facilitating smoother trade and compliance with international agreements. The Customs Tariff Amendment (2007 Harmonized System Changes) Act 2006 was passed by the Parliament of Australia and received Royal Assent on 4 November 2006. The policy objective of this Act is to align the Australian customs tariff with the updated HS codes, which were revised to better reflect the global trade landscape. In response to the changes introduced by this Act, By-law No. 0618799 was enacted under the Customs Act 1901, effective from 1 January 2007. This by-law replaces By-law No. 9640079 to accommodate the new tariff subheading 3907.70.00 and ensures that the correct duty rates are applied to goods classified under these subheadings.
Scope and Application
The Customs Tariff Amendment (2007 Harmonized System Changes) Act 2006 mandates that certain goods previously classified under subheading 3907.9 of the Customs Tariff Act 1995 are reclassified under a new subheading 3907.70.00 from 1 January 2007. This change is implemented through the Customs Tariff Amendment (2007 Harmonized System Changes) By-law No. 0618799, which replaces the earlier By-law No. 9640079. This by-law applies to goods, specifically uncompounded polyamides and polyesters used in the manufacture of fibres or yarns, that fall under the new tariff subheading 3907.70.00. The by-law is made under the authority of section 271 of the Customs Act 1901, allowing the Chief Executive Officer of Customs to create regulations for specific items in the Customs Tariff. The by-law applies nationally, affecting all entities and individuals involved in the importation or classification of these goods under Australian customs regulations. There are no stated exclusions or exemptions within this by-law, and it is expected to be extended or restricted through subordinate instruments as necessary to align with further amendments in customs classifications.
Key Provisions
The Customs Act 1901 provides a framework for the regulation of customs duties and the administration of customs and excise in Australia. Under section 271, the Chief Executive Officer of Customs has the authority to make by-laws to apply the provisions of the Customs Tariff, which is defined in section 4 as an Act imposing duties of customs. In this context, By-law No. 0618799 replaces By-law No. 9640079 to address changes introduced by the Customs Tariff Amendment (2007 Harmonized System Changes) Act 2006. This new by-law, effective from 1 January 2007, incorporates a new tariff subheading 3907.70.00, reflecting changes in the classification of certain goods that were previously under subheading 3907.9.
By-law No. 0618799 outlines specific requirements for the classification and duty application on goods previously under subheading 3907.9, now partially reclassified under 3907.70.00. The by-law mandates that goods falling under the new subheading 3907.70.00, which includes uncompounded polyamides and polyesters used in the manufacture of fibres or yarns, will be subject to the 'Free' rate of duty as prescribed in item 38 of Schedule 4 to the Customs Tariff Act. This ensures that the classification and duty regime remains consistent with the updated tariff subheadings and the legislative intent behind the duty exemptions.
The obligations imposed by By-law No. 0618799 on the relevant parties include ensuring accurate classification of goods according to the updated tariff subheadings. Importers, exporters, and other relevant stakeholders must adhere to the new classifications to correctly apply the duty rates prescribed in the Customs Tariff Act. Failure to comply with the by-law's requirements could result in incorrect duty payments, which may lead to administrative penalties or enforcement actions by Customs. It is also crucial that these parties stay informed about the changes and updates to the by-laws to avoid non-compliance.
In terms of consequences, breaches of the provisions in By-law No. 0618799 can result in both civil and criminal penalties. Under the Customs Act 1901, non-compliance with the by-law may lead to penalties for inaccurate declarations or misclassification of goods. The maximum penalties for such breaches can include fines and, in severe cases, imprisonment. For instance, knowingly making a false statement or supplying false information can attract penalties up to five times the value of the duty evaded or an amount of $11,000, whichever is greater, under section 266 of the Customs Act 1901. These penalties underscore the importance of adhering to the by-law's stipulations to avoid legal repercussions.