Customs By-law No. 0817449
Item 22A of Schedule 4 to the Customs Tariff Act 1995
Explanatory Statement
Section 271 of the Customs Act 1901 provides that the Chief Executive Officer of Customs may make by-laws for the purposes of an item of the Customs Tariff that is expressed to apply to goods, or to a class or kind of goods, as prescribed by by-law.
Background
The Eastern Greater Sunrise offshore area straddles Australia's boundary and the Joint Petroleum Development area, which is jointly administered by Australia and Timor-Leste by virtue of the Timor Sea Treaty signed on 20 May 2002 between the two countries.
The Eastern Greater Sunrise offshore area is the area described in Schedule 7 of the Offshore Petroleum Act 2006.
Following extensive negotiations between the Governments of Australia and Timor-Leste, the Unitisation of the Sunrise and Troubadour Fields Agreement (the IUA) was signed on 6 March 2003, with entry into force on 23 February 2007. This agreement allows for the development of the petroleum resources of the Greater Sunrise field, which comprises the Sunrise and Troubadour petroleum reservoirs. In particular, Article 22(3) of the Agreement between the Government of Australia and the Government of the Democratic Republic of Timor-Leste relating to the IUA provides for goods and equipment entering the Eastern Greater Sunrise area for purposes related to petroleum activities to be free of customs duty.
The Customs Tariff Amendment (Greater Sunrise) Act 2004 is the domestic legislation that gives effect to Article 22(3) of the IUA. This Act inserted item 22A into Schedule 4 to the Customs Tariff Act 1995 (the Customs Tariff) and provides for the duty free entry of goods, as prescribed by by-law, for use in petroleum activities in the Eastern Greater Sunrise offshore area. The commencement of this by-law gives effect to Australia’s commitment under Article 22(3) of the IUA.
Instrument
By-law No. 0817449 prescribes the goods (being goods for use in a petroleum activity in the Eastern Greater Sunrise offshore area, in accordance with the definition of “petroleum activity” in the Customs Tariff) for the purposes of item 22A of Schedule 4 to the Customs Tariff. The Eastern Greater Sunrise offshore area has the same meaning as it has in the Offshore Petroleum Act 2006.
It should be noted that this by-law does not cover goods used for personal domestic purposes, and users of the by-law will be ineligible for fuel tax credits on fuel entering the Eastern Greater Sunrise offshore area.
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Consultation
No consultation was undertaken in relation to new By-law No. 0817449 as it is of a minor and machinery nature.
Commencement
Customs By-law No. 0817449 takes effect from 1 August 2008.
Overview
The Customs Tariff Amendment (Greater Sunrise) Act 2004 was enacted to facilitate the development of petroleum resources in the Eastern Greater Sunrise offshore area, which lies within Australia's jurisdiction and the Joint Petroleum Development Area jointly administered with Timor-Leste. This legislation aims to implement the Unitisation of the Sunrise and Troubadour Fields Agreement (the IUA) signed on 6 March 2003, which allows for the duty-free entry of goods and equipment used in petroleum activities in the Eastern Greater Sunrise area. By inserting item 22A into Schedule 4 of the Customs Tariff Act 1995, the Act ensures Australia's commitment under Article 22(3) of the IUA is met. The Customs By-law No. 0817449, which came into effect on 1 August 2008, specifies the goods that can be imported duty-free for use in petroleum activities in this area, while excluding goods for personal domestic purposes and ineligibility for fuel tax credits on fuel entering the area.
Scope and Application
The Customs By-law No. 0817449 applies to goods that are intended for use in petroleum activities within the Eastern Greater Sunrise offshore area, as prescribed by the Customs Tariff Act 1995. This by-law specifically relates to the implementation of the Unitisation of the Sunrise and Troubadour Fields Agreement, which was signed between Australia and Timor-Leste on 6 March 2003. This agreement, and the subsequent Customs Tariff Amendment (Greater Sunrise) Act 2004, allows for the duty-free entry of goods necessary for petroleum activities in the Eastern Greater Sunrise area. It is important to note that this by-law does not cover goods used for personal domestic purposes, and individuals or entities using the by-law will not be eligible for fuel tax credits on fuel entering the area. The by-law is applicable from 1 August 2008 and extends to the entire Commonwealth of Australia, given that the Customs Tariff Act 1995 is a federal statute. This by-law is a minor and machinery instrument and no consultation was undertaken before its implementation.
Key Provisions
The Customs By-law No. 0817449, under item 22A of Schedule 4 to the Customs Tariff Act 1995, specifies the goods that can be imported duty-free for use in petroleum activities in the Eastern Greater Sunrise offshore area (section 271 of the Customs Act 1901). This by-law is a direct result of the Unitisation of the Sunrise and Troubadour Fields Agreement (IUA), signed between Australia and Timor-Leste in 2003, which was enacted into Australian law through the Customs Tariff Amendment (Greater Sunrise) Act 2004. The by-law ensures that goods used for petroleum activities in this specific offshore area are exempt from customs duty, in line with the terms of the IUA.
The by-law imposes certain obligations on entities involved in the import of goods for petroleum activities in the Eastern Greater Sunrise area. It is mandatory for these entities to ensure that the goods being imported are specifically for use in petroleum activities as defined in the Customs Tariff. The by-law excludes goods intended for personal domestic purposes, thus limiting its application strictly to industrial and operational requirements. Additionally, users of this by-law are ineligible for fuel tax credits on fuel entering the area, underscoring the distinction between operational and domestic uses.
Failure to comply with the provisions of this by-law could result in legal repercussions. Although the specific offences and penalties are not detailed in the explanatory statement, breaches of customs by-laws generally attract penalties under the Customs Act 1901. The penalties for non-compliance can include fines and, in severe cases, criminal charges. The maximum penalties can vary, but they often include substantial fines and potential imprisonment for serious breaches. It is imperative for entities involved in the import of goods into the Eastern Greater Sunrise area to adhere strictly to the provisions of this by-law to avoid any legal consequences.