EXPLANATORY STATEMENT
Customs By-law No. 2200084
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 item 57 to Schedule 4 to the Customs Tariff Act, goods, as prescribed by by-law, that are goods that are medical products or hygiene products or that are ingredients or containers for medicaments or other goods that if imported would be classified to Chapter 30 of Schedule 3 to the Customs Tariff Act, are dutiable at the rate of ‘Free’.
Instrument
By-law No. 2200084 prescribes goods that are the primary receptacle for medicaments, vaccines and other goods classified to Chapter 30 to the Customs Tariff Act used in the treatment, prevention or to limit the severity of the disease known as COVID‑19. For the purposes of this by‑law “primary receptacle” means the container, whether assembled or not, that directly holds the medicament, vaccine or other goods of Chapter 30 to the Customs Tariff Act. However, primary receptacle does not include an ingestible capsule for enclosing medicaments.
Consultation
The Department the Prime Minister and Cabinet and the Department of the Treasury were consulted on the development of this measure.
Commencement
By-law No. 2200084 commences on 1 July 2022.
Overview
The Customs By-law No. 2200084, introduced under Section 271 of the Customs Act 1901, aims to address the need for a streamlined process in classifying and applying duty rates to specific medical and hygiene products related to the COVID-19 pandemic. Enacted by the Comptroller-General of Customs, the by-law provides a legislative framework to ensure that goods such as medicaments, vaccines, and their containers used in the treatment or prevention of COVID-19 are exempt from customs duty, thus facilitating their timely and cost-effective importation. This legislative measure was developed in consultation with the Department of the Prime Minister and Cabinet and the Department of the Treasury, reflecting a coordinated approach to managing the pandemic's impact on medical supplies. The by-law came into effect on 1 July 2022, underscoring the urgency and importance of the policy objective to ensure the availability of essential medical products during the health crisis.
Scope and Application
The Customs By-law No. 2200084 applies to goods that are designated as primary receptacles for medicaments, vaccines, and other goods classified under Chapter 30 of the Customs Tariff Act, specifically those used in the treatment, prevention, or mitigation of COVID-19. This by-law is pertinent to entities and individuals involved in the importation of such goods, thereby affecting the medical and pharmaceutical industries. The scope of the legislation is national, aligning with the overarching Customs Act 1901, and is applicable across the Commonwealth of Australia. Notably, this by-law exempts ingestible capsules for enclosing medicaments from being considered as primary receptacles. The implementation of this by-law is effective from 1 July 2022 and is subject to further definitions and specifications that may be outlined in subordinate instruments.
Key Provisions
The Customs By-law No. 2200084 specifies the customs duties for goods classified under certain categories of medical and hygiene products, specifically those related to the treatment, prevention, or mitigation of COVID-19. Under Section 18 of the Customs Tariff Act 1995, these goods are to be dutiable at a rate of 'Free', meaning they will not incur any customs duties upon importation (Section 271 of the Customs Act 1901). This by-law applies to goods that are the primary receptacle for medicaments, vaccines, and other goods classified under Chapter 30 of the Customs Tariff Act, which pertains to pharmaceutical products. Notably, this exemption does not extend to ingestible capsules for enclosing medicaments (Customs By-law No. 2200084).
The by-law imposes clear obligations on importers and other relevant parties to ensure that goods prescribed under this by-law are correctly classified and exempt from duty. Importers must ensure that the goods they are bringing into Australia are accurately identified as primary receptacles for the specified medical products and are correctly labelled as such to benefit from the zero-duty rate. The onus is on the importer to provide the necessary documentation and information to the Customs authorities to substantiate the classification and exemption.
Failure to comply with the provisions of the by-law may lead to several consequences. If goods are incorrectly classified, the importer may be liable for the applicable duties and potentially face penalties. The severity of the penalties can vary depending on the nature and extent of the non-compliance, but they can include fines and other legal repercussions. It is essential for all parties involved to adhere strictly to the requirements set out in the by-law to avoid any adverse outcomes.