EXPLANATORY STATEMENT
Customs By-law No. 2019608
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 an Act imposing duties of customs, and is therefore a Customs Tariff for the purposes of the Act.
Section 18 of the Customs Tariff Act provides for calculation of concessional duty.
Background
For the purposes of proposed item 57 to Schedule 4 to the Customs Tariff Act, goods, as prescribed by by-law, that are medical products or hygiene products, capable of use in combating the novel coronavirus that causes Coronavirus disease 2019 (COVID‑19), are dutiable at the rate of “Free”. Item 57 is a temporary measure covering imported goods where the time for working out the rate of duty on the goods is in the period beginning on 1 February 2020 and ending at the end of 31 July 2020.
Instrument
By-law 2019608 covers certain medical products and hygiene products imported as part of the response the COVID-19 pandemic. The by-law will reduce to “Free” the rate of duty on prescribed medical products or hygiene products required in the immediate response to the COVID‑19 pandemic. As such, goods listed in this by-law are only those goods that have a duty rate other than “Free” in Schedule 3 of the Customs Tariff Act, or for which there is no other Schedule 4 concession available, including Item 50 Tariff Concession Orders.
Paragraph 2 sets out a list of the medical or hygiene products to which by-law 2019608 applies. Paragraph 2(a) covers a range of Personal Protective Equipment (PPE) capable of limiting the transmission of organisms to humans. Goods covered in this Part include facemasks, gloves, clothes or gowns, goggles, eyeglasses, eye visors or face shields, of any material.
Paragraph 2(b) covers disinfectant preparations of heading 3808 of the Schedule 3 of the Customs Tariff Act, excluding hand sanitisers. The by-law covers disinfectant products able to disinfect surfaces or objects of the novel coronavirus that causes COVID-19, put up in forms or packaging for retail sale.
Paragraph 2(b) does not cover disinfectant products of 3808 capable of disinfecting human skin of the novel coronavirus that causes COVID-19, commonly referred to as hand sanitisers. There is currently significant manufacturing capacity in Australia for hand sanitiser. The exclusion of hand sanitiser reflects this capacity and the fact that Australian businesses have refocussed their operations to increase domestic supply in response to COVID-19.
Paragraph 2(c) covers all soaps of 3401 of Schedule 3 of the Customs Tariff Act.
Paragraph 2(d) covers COVID-19 test kits and reagents used in the procedures to detect the novel coronavirus that causes COVID-19.
Consultation
The following Australian Government Departments were consulted in relation to by-law 2019608.
- Department of Industry, Science, Energy and Resources
- Department of Foreign Affairs and Trade
- Department of Prime Minister and Cabinet
- Department of Health
- Department of Agriculture, Water and the Environment
Commencement
By-law No. 2019608 was signed on 29 April 2020 and is deemed to have taken effect on 1 February 2020.
Overview
The Customs By-law No. 2019608, introduced under the authority of the Customs Act 1901, was enacted to address the urgent need for accessible medical and hygiene products during the COVID-19 pandemic. This by-law was signed on 29 April 2020 and is deemed to have taken effect on 1 February 2020, establishing a temporary measure until the end of 31 July 2020. It was developed in consultation with several Australian government departments, including the Department of Health and the Department of Prime Minister and Cabinet, to ensure a coordinated response to the pandemic. The by-law aims to reduce the duty on specified medical and hygiene products to "Free", facilitating their import and availability for the immediate response to COVID-19. This includes personal protective equipment, disinfectant products, soaps, and COVID-19 test kits and reagents, while excluding hand sanitisers due to existing domestic manufacturing capacity.
Scope and Application
The Customs By-law No. 2019608, enacted under Section 271 of the Customs Act 1901, applies to specific medical products and hygiene products imported during the period beginning 1 February 2020 and ending on 31 July 2020 as part of the response to the COVID-19 pandemic. This legislation sets the duty rate for these prescribed goods to “Free” where they are intended to combat the novel coronavirus that causes COVID-19. The by-law specifically targets goods that would otherwise attract a duty rate under Schedule 3 of the Customs Tariff Act, or for which no other tariff concession is available. This includes Personal Protective Equipment (PPE) such as facemasks, gloves, and protective clothing, disinfectant preparations suitable for surface and object disinfection, and COVID-19 test kits and reagents. Notably, the by-law excludes hand sanitisers, reflecting the significant domestic manufacturing capacity for these products in Australia. The by-law's application is national, extending across all states and territories, and its provisions are supported by consultations with various Australian government departments.
Key Provisions
The primary operative sections of Customs By-law No. 2019608 are grounded in Section 271 of the Customs Act 1901, which empowers the Comptroller-General of Customs to enact by-laws for prescribed items in a Customs Tariff. The Customs Tariff Act 1995, which imposes customs duties, is defined as a Customs Tariff under Section 4 of the Customs Act 1901. Specifically, Section 18 of the Customs Tariff Act 1995 facilitates the calculation of concessional duty. By-law No. 2019608 applies to medical products and hygiene products essential in the response to the COVID-19 pandemic, setting their duty rate to "Free" during the period from 1 February 2020 to 31 July 2020. This is outlined in the proposed item 57 of Schedule 4 to the Customs Tariff Act, which targets imported goods within the specified timeframe.
Under this by-law, certain medical and hygiene products critical to combating COVID-19 are exempt from duty. Paragraph 2(a) covers a range of Personal Protective Equipment (PPE), including facemasks, gloves, clothes or gowns, goggles, eyeglasses, eye visors, and face shields, irrespective of the material. Paragraph 2(b) includes disinfectant preparations, excluding hand sanitisers, suitable for disinfecting surfaces and objects potentially contaminated by the novel coronavirus. Paragraph 2(c) encompasses all soaps as classified in Schedule 3 of the Customs Tariff Act. Lastly, Paragraph 2(d) includes COVID-19 test kits and reagents necessary for detecting the novel coronavirus.
The by-law imposes specific obligations on entities importing the listed goods. Importers must ensure that the products they bring into Australia fall within the categories specified by the by-law to benefit from the duty exemption. This includes verifying that the imported goods are genuinely intended for use in the immediate response to the COVID-19 pandemic. Additionally, importers must adhere to the timeframe stipulated in the by-law, ensuring that the importation occurs between 1 February 2020 and 31 July 2020 to qualify for the duty exemption.
Any breach of the by-law may result in civil and criminal consequences. Although the by-law itself does not explicitly state penalties, the Customs Act 1901 provides a framework under which breaches can be prosecuted. Violations could lead to penalties, including fines, which may be substantial depending on the severity and intent of the breach. Additionally, persistent or egregious violations could result in criminal charges, potentially leading to imprisonment. Importers are thus obligated to comply strictly with the by-law's provisions to avoid these repercussions.