Customs By-law No. 0900069
Item 41H of Schedule 4 to the Customs Tariff Act 1995
Explanatory Statement
Section 273EA of the Customs Act 1901 (the Customs Act), provides that the Minister for Home Affairs, or his delegate, may sign and publish a notice in the Commonwealth Gazette to propose alterations to the Customs Tariff Act 1995 (the Tariff Act).
Customs Notice (No. 1) 2009 was published in Commonwealth Gazette GN 2 of 21 January 2009. The Notice proposes a new item 41H in Schedule 4 to the Tariff Act.
Proposed alterations to the Customs Tariff made by a notice under Section 273EA are subsequently incorporated in the Tarff Act by a Customs Tariff Amendment Bill. Section 273D of the Customs Act preserves any by-law made for a proposed item when that item is incorporated in the Tarff Act.
Section 271 of the Customs Act provides, in part, that the Chief Executive Officer of Customs may make by-laws for the purposes of a proposed 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
Proposed new item 41H provides duty free entry for goods for use in the testing, quality control, manufacturing evaluation or engineering development of motor vehicles designed or engineered, or to be designed or engineered in Australia, by motor vehicle producers registered under the Automotive Competitiveness and Investment Scheme, as set out in the ACIS Administration Act 1999 (ACIS), but are to be manufactured overseas. The item also applies to components for use in such motor vehicles. The goods to which proposed new item 41H applies are required to be prescribed by by-law.
Instrument
Customs By-law No. 0900069 prescribes goods for the purposes of item 41H. These goods are motor vehicles, including prototype vehicles, and components for such vehicles, providing that the vehicles are designed or engineered, or are to be designed or engineered in Australia, by motor vehicle producers registered under the Automotive Competitiveness and Investment Scheme, and are to be manufactured overseas. The by-law also includes components for such vehicles and testing equipment.
The by-law requires that a security (for example, in the form of cash or documentary undertaking) that goods imported under item 41H will be re-exported, destroyed or disposed of in a manner approved by the Collector, within a period of twelve months, or such further period as may be allowed by the Collector.
Customs By-law No. 0900069 is available for use by all importers, provided that the goods meet the terms of the item and by-law.
Consultation
No consultation was undertaken in relation to new By-law No. 0900069 as it is of a minor and machinery nature.
Commencement
Customs By-law No. 0900069 takes effect from 1 January 2009.
Overview
The Customs By-law No. 0900069, enacted in 2009, was introduced to provide a regulatory framework for the duty-free entry of goods intended for use in the testing, quality control, manufacturing evaluation, or engineering development of motor vehicles designed or engineered in Australia but manufactured overseas. This by-law was established under the authority granted by the Customs Act 1901, specifically Section 271, which empowers the Chief Executive Officer of Customs to make by-laws for proposed items of the Customs Tariff. The policy objective of this by-law is to support Australian motor vehicle producers registered under the Automotive Competitiveness and Investment Scheme by facilitating the importation of necessary components and testing equipment without incurring customs duties, provided that these goods are either re-exported, destroyed, or disposed of in a manner approved by the Collector within a specified timeframe.
Scope and Application
Customs By-law No. 0900069, prescribed under Item 41H of Schedule 4 to the Customs Tariff Act 1995, applies to motor vehicles and their components designed or engineered in Australia by producers registered under the Automotive Competitiveness and Investment Scheme (ACIS) and intended for manufacture overseas. The by-law facilitates the duty-free entry of these goods for purposes such as testing, quality control, manufacturing evaluation, and engineering development. This by-law is available to all importers who comply with its stipulations, including the requirement to provide security that the imported goods will be re-exported, destroyed, or disposed of in an approved manner within a specified period. The by-law does not specify exclusions or exemptions, but its application is contingent on the goods meeting the criteria outlined in the Customs Tariff Amendment Bill and Customs By-law No. 0900069. Given that no consultation was deemed necessary due to the by-law's minor and technical nature, it came into effect on 1 January 2009.
Key Provisions
The Customs By-law No. 0900069 (the By-law) prescribes goods for the purposes of the new item 41H in Schedule 4 of the Customs Tariff Act 1995 (the Tariff Act) as proposed in Customs Notice (No. 1) 2009, which was published in Commonwealth Gazette GN 2 of 21 January 2009. This new item, as incorporated in the Tariff Act, provides duty-free entry for goods used in the testing, quality control, manufacturing evaluation, or engineering development of motor vehicles designed or engineered in Australia but intended for overseas manufacture. The By-law specifies that these goods include motor vehicles (including prototypes), their components, and testing equipment.
The By-law imposes several obligations on parties that wish to utilise the duty-free provisions of item 41H. Firstly, the goods must be prescribed by the by-law, which means they must meet the criteria of being designed or engineered in Australia by motor vehicle producers registered under the Automotive Competitiveness and Investment Scheme (ACIS) and intended for overseas manufacture. Secondly, importers must provide a security, such as cash or a documentary undertaking, ensuring that the imported goods will be re-exported, destroyed, or disposed of in a manner approved by the Collector within twelve months or an extended period allowed by the Collector. This security requirement is intended to prevent the diversion of goods for non-qualifying purposes.
Failure to comply with the requirements set forth in the By-law can result in various civil and criminal consequences. While the specific penalties are not detailed in the explanatory statement, breaches of customs laws generally can lead to significant fines, seizure of goods, and potential criminal charges. The Customs Act 1901 provides for penalties, including fines of up to $22,000 per offence for individuals and up to $110,000 for corporations, alongside potential imprisonment terms. The By-law, effective from 1 January 2009, thus serves as a critical regulatory tool for ensuring compliance with the customs duties and obligations related to the specified motor vehicle goods.