EXPLANATORY STATEMENT
Customs By-law No. 0904400
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 a 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
Item 20C was inserted into Part II of Schedule 4 to the Customs Tariff Act by the Customs Tariff Amendment (Australia-Chile Free Trade Agreement Implementation) Act 2008 (Act No. 128 of 2008). Item 20C sets out a duty rate of ‘Free’ for goods that are covered by an article of a free trade agreement between Australia and a foreign country relating to the export of goods from Australia for one or more of the following:
a) repair;
b) renovation;
c) alteration;
d) other similar processes.
Both the relevant article, and the free trade agreement between Australia and a foreign country are required to be prescribed by by-law.
Article 3.7 of the Australia-Chile Free Trade Agreement (the Agreement), done at Canberra on 30 July 2008 provides, in part, that:
Neither Party may apply a customs duty to a good, regardless of its origin, that re-enters its territory after that good has been temporarily exported from its territory to the territory of the other Party for repair or alteration, regardless of whether such repair or alteration could be performed in its territory.
In this context, Australia and Chile are Parties.
Item 20C gives effect to Article 3.7 of the Agreement.
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Instrument
New By-law No. 0904400, which has effect on and from the date that Schedule 1 to the Customs Amendment (Australia-Chile Free Trade Agreement Implementation) Act 2008 commences, prescribes for the purposes of item 20C in Part II of Schedule 4 to the Customs Tariff Act, Article 3.7 of the Australia-Chile Free Trade Agreement.
Consultation
No consultation was undertaken specifically in relation to the amendments as they implement Australia’s international obligations under the Agreement.
Commencement
New By-law No. 0904400 takes effect on and from the date that Schedule 1 to the Customs Amendment (Australia-Chile Free Trade Agreement Implementation) Act 2008 commences, that is 6 March 2009.
Overview
The Customs By-law No. 0904400 was enacted in 2009 under the authority of section 271 of the Customs Act 1901. This by-law was introduced to address the need for implementing the Australia-Chile Free Trade Agreement, specifically concerning the temporary export of goods for repair, renovation, alteration, or similar processes. By prescribing Article 3.7 of the Australia-Chile Free Trade Agreement, this by-law ensures that goods temporarily exported from Australia to Chile for such processes and subsequently re-entering Australia will not incur customs duties, thus facilitating trade between the two countries. The enactment of this by-law is part of Australia’s effort to meet its international obligations and streamline trade practices in alignment with the Free Trade Agreement.
Scope and Application
The Customs By-law No. 0904400 applies to goods that are covered under Item 20C of the Customs Tariff, specifically those that are temporarily exported from Australia to Chile for repair, renovation, alteration, or other similar processes, and then re-imported back into Australia. This by-law, made under section 271 of the Customs Act 1901, ensures that these goods are not subject to customs duties in alignment with Article 3.7 of the Australia-Chile Free Trade Agreement. The by-law is applicable across the Commonwealth of Australia and affects any entities or individuals involved in the import and export of such goods between Australia and Chile. The geographic reach of this by-law is national, with its jurisdiction extending to all parts of Australia. The by-law does not specify any exclusions, exemptions, or thresholds beyond what is outlined in Item 20C and the referenced free trade agreement. Any further details or extensions of application would be made through subordinate instruments as necessary.
Key Provisions
The Customs By-law No. 0904400 is a regulatory instrument established under section 271 of the Customs Act 1901, which empowers the Chief Executive Officer of Customs to create by-laws for the application of certain items in the Customs Tariff. Specifically, this by-law (section 1) pertains to Item 20C in Part II of Schedule 4 to the Customs Tariff Act 1995, which stipulates a duty rate of 'Free' for goods that are exported from Australia to Chile for repair, renovation, alteration, or similar processes under the Australia-Chile Free Trade Agreement. This by-law aligns with the terms of Article 3.7 of the Agreement, which ensures that no customs duty is applied to goods that re-enter Australia or Chile after being temporarily exported for repair or alteration.
The obligations imposed by the by-law primarily concern the classification and duty application for goods exported under the terms of the Australia-Chile Free Trade Agreement. Importers and exporters must ensure that goods covered under this agreement, and specifically under Item 20C, are correctly classified and declared for the purpose of being exported for repair, renovation, alteration, or other similar processes. The by-law requires that both the relevant article of the free trade agreement and the agreement itself be prescribed by the by-law, ensuring that all parties are aware of and comply with the agreed-upon terms regarding the temporary export and re-importation of goods without incurring customs duties.
Failure to comply with the provisions of this by-law could result in significant legal consequences. Under the Customs Act 1901, breaches of the by-law may lead to enforcement actions, including the imposition of financial penalties. The maximum penalties for contravening the Customs Act can include fines and imprisonment, depending on the severity of the breach. For instance, section 224 of the Act specifies that individuals found guilty of offences such as making a false statement or supplying false information in relation to the importation or exportation of goods can face substantial fines and imprisonment. The specific penalties are determined by the nature and extent of the contravention but are intended to deter non-compliance and ensure adherence to the by-law and the overarching objectives of the Customs Act.