EXPLANATORY STATEMENT
Customs By-law No. 1700126
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 Comptroller-General 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. The Customs Tariff Act 1995 (the Customs Tariff Act) is a Customs Tariff for the purposes of the Act. Section 18 of the Customs Tariff Act provides for calculation of concessional duty.
Background
Schedule 4 of the Customs Tariff Act was amended by the Customs Tariff Amendment (Schedule 4) Act 2012. The amendment of item 10 in Schedule 4 provides that goods, as prescribed by by-law, which are owned by the government of a foreign country and for the official use of that government, are dutiable at the rate of ‘Free’.
Consistent with Australia’s obligations under various Status of Forces Agreements and Status of Visiting Forces Agreements, goods for the official use of the foreign governments are imported under item 10 in Schedule 4 of the Customs Tariff Act. This provides for a concessional duty rate of ‘Free’.
Status of Forces Agreements and Status of Visiting Forces Agreements are arrangements between two or more countries that address issues arising out of the presence of one country’s visiting defence forces in the territory of the host country. Australia has a number of such agreements with foreign governments including the United States of America, New Zealand and Papua New Guinea, which allow for visiting defence forces to enter Australian territory.
Instrument
By-law No. 1700126 prescribes goods that are the subject of a Status of Forces Agreement or Status of Visiting Forces Agreement as being goods in respect of which duty is payable at the concessional rate of “Free”.
The importation of goods that are the subject of a Status of Forces Agreement or Status of Visiting Forces Agreement at the concessional duty rate of ‘Free’ is subject to the conditions of item 10. That is, the goods must:
a) be owned by the government of a country other than Australia at the time they are entered for home consumption;
b) must be for the official use of that government; and
c) must not be for the purposes of trade.
Consultation
Consultation on this by-law was undertaken with the Department of Defence and the Attorney General’s Department.
Commencement
By-law No. 1700126 takes effect the day after it is registered.
Delegate of the Comptroller-General of Customs
Overview
The Customs By-law No. 1700126, enacted in 2017, amends the Customs Act 1901 to address a specific gap in the duty obligations for goods imported under Status of Forces Agreements and Status of Visiting Forces Agreements. This by-law was introduced to ensure compliance with Australia’s international commitments under these agreements, which facilitate the movement of visiting defence forces’ goods into Australian territory. The by-law was developed in consultation with key departments, including the Department of Defence and the Attorney General’s Department, to ensure that the legislative changes align with Australia’s obligations and the practical needs of defence operations. By prescribing the conditions under which goods owned by foreign governments for their official use are exempt from duty, the by-law streamlines the importation process while maintaining the integrity of Australia’s customs regulations.
Scope and Application
Customs By-law No. 1700126 applies to goods that are owned by the government of a foreign country and are intended for the official use of that government, as prescribed by the by-law. This applies specifically to goods imported into Australia that fall under a Status of Forces Agreement or a Status of Visiting Forces Agreement with Australia. The by-law is designed to ensure that these goods are subject to a concessional duty rate of "Free", in accordance with Australia's obligations under these international agreements. The by-law applies to the importation of such goods as defined by item 10 in Schedule 4 of the Customs Tariff Act 1995, which was amended by the Customs Tariff Amendment (Schedule 4) Act 2012. The geographic reach of this by-law is national, applying across Australia. The by-law is an extension of the Customs Act 1901, and its application may be further specified or restricted through subordinate instruments, such as regulations or notices issued under the Act.
Key Provisions
The Customs By-law No. 1700126, under the Customs Act 1901, primarily focuses on defining the conditions under which goods, as prescribed by by-law, that are owned by foreign governments and intended for their official use can be imported into Australia at a concessional duty rate of "Free" (sections 271, 4, and 18). This by-law aligns with Australia’s commitments under various Status of Forces Agreements and Status of Visiting Forces Agreements, ensuring that goods imported under these agreements are treated favourably in terms of customs duty (section 18 of the Customs Tariff Act 1995). Specifically, the by-law outlines that these goods must meet three key criteria to qualify for the concessional rate: they must be owned by a foreign government at the time of importation, they must be for the official use of that government, and they must not be intended for trade purposes (Schedule 4 of the Customs Tariff Act 1995).
The obligations imposed by this by-law on parties and entities it governs are clear and specific. Any entity wishing to import goods under the provisions of this by-law must ensure that the goods meet all the stipulated criteria. This involves providing evidence of the foreign government's ownership and the intended official use of the goods, along with a declaration that the importation is not for trade purposes. The onus is on the importer to satisfy the Comptroller-General of Customs that the imported goods comply with the conditions set out in the by-law. This may require detailed documentation and verification to substantiate the claims made regarding the ownership and intended use of the goods.
Failure to comply with the provisions of this by-law can result in serious consequences. The by-law does not explicitly detail specific offences or penalties within its text, but breaches of customs laws generally carry substantial penalties under the Customs Act 1901. These can include fines and potential criminal charges, depending on the severity and intent of the breach. The maximum penalties for non-compliance with customs laws can be severe, reflecting the importance of adhering to the conditions set forth in this by-law to ensure the proper and lawful importation of goods under Status of Forces and Visiting Forces Agreements.