EXPLANATORY STATEMENT

Issued by the Minister for Home Affairs

Customs Act 1901

Customs Legislation Amendment (ASEAN-Australia-New Zealand Free Trade Area Second Protocol Implementation and Other Measures) Regulations 2025

Legislative Authority

The Customs Act 1901 (the Customs Act) concerns customs-related functions. It is the legislative authority that sets out the customs requirements for the importation of goods into, and the exportation of goods from, Australia.

Subsection 270(1) of the Customs Act provides, in part, that the Governor‑General may make regulations, not inconsistent with the Customs Act, prescribing all matters which by the Customs Act are required or permitted to be prescribed, or which are necessary or convenient to be prescribed for giving effect to the Customs Act.

Purpose

The proposed Regulations implement a range of customs obligations arising under the Second Protocol to amend the Agreement establishing the ASEAN-Australia-New Zealand Free Trade Area (the Second Protocol) and the Regional Comprehensive Economic Partnership Agreement (the RCEP Agreement).

Background

On 21 August 2023, the Assistant Minister for Foreign Affairs, the Hon Tim Watts MP, and his counterparts from New Zealand, Brunei Darussalam, Indonesia, Malaysia, and Singapore signed the Second Protocol. The Second Protocol includes, amongst other things, upgrades to the Rules of Origin procedures for claiming preferential rates of customs duty. These rules determine whether goods imported into Australia from another Party to the Agreement are originating goods (referred to as AANZ originating goods) and are thereby eligible for preferential rates of customs duty.

The Agreement establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) is a plurilateral free trade agreement between Australia, Brunei Darussalam, Cambodia, Indonesia, Lao People’s Democratic Republic (PDR), Malaysia, Myanmar, New Zealand, the Philippines, Singapore, Thailand and Viet Nam. AANZFTA was signed by all participating countries on 27 February 2009.

The AANZFTA is a free trade agreement that aims to deliver tariff reduction and greater certainty for service suppliers and investors.

On 1 January 2010, AANZFTA entered into force for Australia. It was subsequently amended by the First Protocol to Amend the AANZFTA (First Protocol). The First Protocol was signed on 26 August 2014 by participating countries. These amendments entered into force for Australia on 1 October 2015. On 13 November 2022, the leaders of ASEAN, Australia and New Zealand announced the substantial conclusions of negotiations to upgrade the AANZFTA First Protocol. The result of the negotiations led to Assistant Minister Tim Watts, with ASEAN and New Zealand Ministers, signing the Second Protocol on 21 August 2023.

The Joint Standing Committee on Treaties handed down its report on the Second Protocol on 13 May 2024. It recommended that Australia take binding treaty action on the Second Protocol.

On 15 November 2020, Senator the Hon Simon Birmingham, former Minister for Trade, Tourism and Investment and his counterparts from Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, Viet Nam, China, Japan,

New Zealand and the Republic of Korea, signed the RCEP Agreement.

The RCEP Agreement is a regional free trade agreement that complements and builds upon Australia’s existing free trade agreements with 14 other Indo-Pacific countries. It is a modern and comprehensive free trade agreement delivering outcomes for Australian businesses in trade in goods, trade in services, investment, economic and technical cooperation, and new rules for electronic commerce, intellectual property, government procurement, competition and small and medium sized enterprises.

The RCEP Agreement entered into force on 1 January 2022.

Impact and effect

The Customs Legislation Amendment (ASEAN-Australia-New Zealand Free Trade Area Second Protocol Implementation and Other Measures) Regulations 2025 (the Regulations) will implement the customs obligations arising from the Customs Amendment (ASEAN-Australia-New Zealand Free Trade Area Second Protocol Implementation and Other Measures) Act 2024 (the AANZFTA Act) which received the Royal Assent on 10 December 2024.

For customs obligations arising under the Second Protocol, the proposed Regulations will implement:

changes to the Rules of Origin which will allow, in addition to the Certificates of Origin issued by issuing bodies, exporters or producers to issue Declarations of Origin where the exporter have been authorised as an ‘approved exporter’
new record keeping obligations on exporters and producers that export goods to a Party to the AANZFTA and who make a claim that the goods exported are originating goods in accordance with the agreement
a new approved exporter scheme to allow approved exporters to complete Declarations of Origin in order to allow importers in other Parties to claim preferential rates of customs duty.
changes to the Rules of Origin to allow for separate value-added work done in the various participating countries of the free trade area on a non-originating good to be added together when determining a goods originating status.

For customs obligations arising under the RCEP Agreement, the proposed Regulations will implement:

a new approved exporter scheme to allow approved exporters to complete Declarations of Origin in order to allow importers in other Parties to claim preferential rates of customs duty.
changes to the existing record keeping obligations on exporter and producers that export goods under the RCEP Agreement to ensure the record-keeping obligations of approved exporters are implemented.

These regulations amend the Customs (International Obligations) Regulation 2015 (the International Obligations Regulation), the Customs (ASEAN-Australia-New Zealand Rules of Origin) Regulations 2009 and the Customs (Regional Comprehensive Economic Partnership Rules of Origin) Regulations 2021 in order to implement these changes.

Consultation

The Department of Foreign Affairs and Trade (DFAT) led Australia’s negotiations for the Agreement in consultation with other government agencies. Australia’s negotiating positions for the Agreement were informed by the views and information provided by stakeholders through both formal and informal mechanisms. DFAT provided stakeholders the opportunity to provide written submissions on the AANZFTA General Review process. These submissions helped inform Australia’s position on the areas to be considered as part of the AANZFTA upgrade.

DFAT undertook regular stakeholder engagement on the Second Protocol once negotiations commenced in 2019. DFAT, in conjunction with other government agencies, consulted widely with industry and other stakeholders in formulating their positions. DFAT held biannual Peak Bodies Consultations which provided an avenue to update peak organisations (including Australian businesses, civil society, First Nations groups and unions) on the status of the DFAT-led international trade negotiations and for peak organisations to ask questions about the government’s trade agenda. DFAT is committed to continuing to review and evaluate AANZFTA’s implementation in Australia including through inviting submissions from and consulting with stakeholders in the course of these processes.

Details of these consultations were set out in the consultation attachment to the National Interest Analysis for the Agreement.

Details and Operation

The Act does not impose any conditions that need to be satisfied before the power to make the Regulations may be exercised. The Regulations are a legislative instrument for the purposes of the Legislation Act 2003 (Legislation Act).

Details of the Regulations are set out in Attachment B.

A Statement of Compatibility with Human Rights has been prepared in accordance with the Human Rights (Parliamentary Scrutiny) Act 2011, and is set out in Attachment C.

Paragraph 54(2)(b) of the Legislation Act has the effect that if a legislative instrument is prescribed by regulation for the purposes of that paragraph, then the instrument is exempt from the operation of sunsetting under Part 4 of the Legislation Act.

Item 1 of the table under section 11 of the Legislation (Exemptions and Other Matters) Regulation 2015 prescribes the following instruments made under the Act as being exempt from sunsetting for the purposes of paragraph 54(2)(b) of the Legislation Act:

an instrument the sole purpose of which, or a primary purpose of which, is to give effect to an international obligation of Australia.

Subjecting these regulations to sunsetting may conflict with Australia’s international obligations and with ongoing intergovernmental arrangements. As such, these regulations are exempt from sunsetting under Part 4 of the Legislation Act.

Division 1 of Part 3 of Chapter 3 of the Legislation Act operates to automatically repeal a legislative instrument that has the sole purpose of amending or repealing another instrument. That Division applies to automatically repeal the Amendment Regulations. As the Amendment Regulations will be automatically repealed, the sunsetting framework under Part 4 of the Legislation Act.

Impact Analysis

An impact analysis (OBPR22-02548) in relation to the regulatory impact of the measures in the Regulations is at Attachment D.

COMMON ABBREVIATIONS AND ACRONYMS

Abbreviation acronym		Meaning
AANZ		ASEAN, Australia and New Zealand
AANZFTA		Agreement Establishing the ASEAN‑Australia-New Zealand Free Trade Area, as amended and in force for Australia from time to time, but excluding amendments made by the Second Protocol
ABF		Australian Border Force
AANZFTA Act		Customs Amendment (ASEAN-Australia-New Zealand Free Trade Area Second Protocol implementation and Other Measures) Act 2024
ASEAN		Association of Southeast Asian Nations
Customs Act		Customs Act 1901
Customs Tariff Act		Customs Tariff Act 1995
DFAT		Department of Foreign Affairs and Trade
HS		Harmonized Commodity Description and Coding System
Home Affairs		Department of Home Affairs
International Obligation Regulation		Customs (International Obligations Regulation) 2015
Legislation Act		Legislation Act 2003
PSR		Product Specific Rules
RCEP Agreement		Regional Comprehensive Economic Partnership Agreement
Regulations		Customs Legislation Amendment (ASEAN-Australia-New Zealand Free Trade Agreement Second Protocol Implementation and Other Measures) Regulations 2025
RVC		Regional Value Content
Second Protocol		Second Protocol to Amend the Agreement Establishing the ASEAN‑Australia-New Zealand Free Trade Area

Details of the Customs Legislation Amendment (ASEAN-Australia-New Zealand Free Trade Area Second Protocol Implementation and Other Measures) Regulations 2025

Section 1 – Name

This section provides that the title of the instrument is the Customs Legislation Amendment (ASEAN-Australia-New Zealand Free Trade Agreement Second Protocol Implementation and Other Measures) Regulations 2025 (the Regulations).

Section 2 – Commencement

This section sets out, in a table, the date on which each of the provisions contained in the Regulations will commence.

Subsection 2(1) provides that each provision of the Regulations specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table, and that any other statement in column 2 has effect according to its terms.

Table item 1 provides that sections 1 to 4 and anything in the Regulations, not covered elsewhere by the table will commence the day after this instrument is registered.

Table item 2 outlines that Schedule 1 will commence at the same time as Schedule 1 to the Customs Amendment (ASEAN-Australia-New Zealand Free Trade Area Second Protocol Implementation and Other Measures) Act 2024 (AANZFTA Act) commences. Schedule 1 of the AANZFTA Act commences on the later of the day after that Act receives the Royal Assent and the day the Second Protocol done on 21 August 2023 Semarang, Indonesia enters into force for Australia. However, the provisions do not commence at all if the Second Protocol does not enter into force for Australia.

Table item 2 of the AANZFTA Act also provides that the Minister must announce the day on which the Second Protocol enters into force for Australia by a notifiable instrument. The announcement made in the notifiable instrument does not lead to the commencement of Schedule 1, it merely requires the Minister to announce the commencement of the Second Protocol for public awareness. This instrument is not legislative in character. This instrument is declared by the Act to be a notifiable instrument for the purposes of the Legislation Act 2003 (Legislation Act) to ensure it is still required to be made publicly available on the Register. Notifiable instruments are governed by the Legislation Act.

Table item 3 provides that Schedule 2 commences at the same time as Schedule 2 to the AANZFTA Act. Schedule 2 will commence on a single day to be fixed by Proclamation. However, if the provisions do not commence within the period of 6 months beginning on the day the Act receives the Royal Assent, which was on 10 December 2024, they commence on the day after the end of that period.

The note at the foot of the table explains that it relates only to the provisions of the Regulations as originally made and that the table will not be amended to address any later amendments of the Regulations.

Subsection 2(2) provides that any information in column 3 of the table is not part of the Regulations, when enacted. Information may be inserted in this column, or information in it may be edited, in any published version of the Regulations.

Section 3 – Authority

This section sets out the authority under which the Regulations are to be made, which is the Customs Act 1901 (the Customs Act).

Section 4 – Schedules

This section is the formal enabling provision for the Schedule to the Regulations, and provides that each instrument that is specified in a Schedule to the Regulations is amended or repealed as set out in the applicable items in the Schedule concerned, and that any other item in a Schedule to this instrument has effect according to its terms.

The Customs (ASEAN-Australia-New Zealand Rules of Origin) Regulations 2009, the Customs (International Obligations) Regulation 2015 and the Customs (Regional Comprehensive Economic Partnership Rules of Origin) Regulations 2021 are amended by the Regulations.

Schedule 1—ASEAN-Australia-New Zealand Free Trade Area Second Protocol Amendments

Customs (ASEAN-Australia-New Zealand Rules of Origin) Regulations 2009

Item 1 – Regulation 1.1

Regulation 1.1 omits Customs (ASEAN-Australia-New Zealand Rules of Origin) Regulations 2009 and substitutes it with Customs (ASEAN-Australia-New Zealand) Regulations 2009. As the Regulations introduce provisions in relation to the approved exporter scheme, the purpose of this change is to reflect that the amending provisions include other matters that do not directly relate to the Rules of Origin.

Item 2 - Regulation 1.4

This regulation inserts the following definitions for the purposes of the Regulations.

Harmonized System

The term Harmonized System has the meaning given by subsection 153ZKB(1) of the Customs Act.

The Harmonized Commodity Description and Coding System (HS) is a structured nomenclature that organises goods according to the degree of production by four and six digit codes. They numerical codes are commonly used throughout the world to identify products when assessing duties and taxes. The HS is administered by the World Customs Organisation and updated every five years.

Annex 3B of the Second Protocol, the Product-Specific Rules (PSRs), contains the HS codes under the version of the HS that commenced in 2022 (HS 2022), for each product listed. From 1 January 2023, Australia is required to use this updated version of the PSRs which uses the nomenclature of HS 2022.

New paragraph 153ZKB(1)(b) of the Customs Act outlines that if either:

Annex 3B to Chapter 3 of the Second Protocol is amended or replaced to refer to Chapters, headings and subheadings of an updated version of the HS; or
there is a transposition (as mentioned in paragraph 4 of Article 3 of Chapter 3 of the Second Protocol) of Annex 3B to Chapter 3 of the Second Protocol because of an updated version of the Harmonized Commodity Description and Coding System and that transposition is adopted as mentioned in that paragraph;

then the version of the HS used is whichever of those events occurred most recently.

The purpose of inserting this definition is to implement the PSRs using HS 2022 nomenclature in accordance with the Second Protocol. The updated definition has the effect that subsequent versions of the HS are incorporated by reference when either Annex 3B to Chapter 3 is formally amended or as a result of a transposition, which is a process by which a parallel or separate version of the PSRs is developed because of updates to the HS.

Participating Party

The term Participating Party has the same meaning as in Article 6 of Chapter 3 of the Second Protocol.

Article 6 of Chapter 3 of the Second Protocol outlines the relevant rules in relation to cumulative Rules of Origin. Article 6 of the Second Protocol sets up new rules for determining the originating status of goods that allows Parties to opt-out of the ‘full cumulation’ provisions as outlined in paragraph 2 of Article 6. Pursuant to paragraph 5, a party can elect not to be subject to ‘full cumulation’ by notifying the other Parties via the FTA Joint Committee that it does not intend to implement Article 6 paragraph 2 of the Second Protocol. The Parties that implement, or intend to implement the full cumulation provision under Article 6 paragraph 2, are ‘Participating Parties.’ A Party can also withdraw its notification of intention not to implement article 6 paragraph 2 at any time, and become a Participating Party.

Proof of Origin

The term Proof of Origin has the meaning given by subsection 153ZKB(1) of the Customs Act.

The Customs Act determines that Proof of Origin means a certificate, or a declaration, that is in force and complies with the requirements of Rule 1 of Annex 3A to Chapter 3 of the Agreement.

Rule 1 of Chapter 3 to Annex 3A concerns the new document requirement required to be met under the Second Protocol in order to satisfy a requirement for the purpose of determining whether imported goods are to be treated as originating goods under AANZFTA and as such be eligible for preferential tariff treatment. Under Rule 1, any of the following shall be considered as a Proof of Origin:

a Certificate of Origin issued by an Issuing Authority/Body in accordance with this Annex;
a Declaration of Origin by an approved exporter in accordance with paragraph 1(a) of Rule 14; or
a Declaration of Origin by an exporter or producer in accordance with paragraph 1(b) of Rule 14;

based on information available that the good is originating.

The purpose of this amendment is to give effect to Article 15 of Chapter 3 of the Second Protocol for the purpose of Article 2 of that Chapter. Article 2 of Chapter 3 sets out the kind of goods that are to be treated as originating goods for preferential tariff treatment provided other requirements under that Chapter are met. For Article 2, Article 15 of Chapter 3 provides that a claim that goods are eligible for preferential tariff treatment shall be supported by a Proof of Origin, which includes Declarations of Origin in addition to Certificates of Origin. Paragraph 5 of Rule 1 sets out the format of, and the matters to be included in, a Proof or Origin.

Under AANZFTA, a claim that goods are originating goods can only be supported by a Certificate of Origin. A Declaration of Origin differs to a Certificate of Origin in that it may be made by the exporter of goods (self-certification), as opposed to an independently issued Certificate of Origin from an authorised issuing body.

For a Declaration of Origin by an approved exporter, paragraph 1(a) of Rule 14 of Annex 3A of the Second Protocol requires that the document be completed by an approved exporter within the meaning of Rule 15 of Annex 3A of the Second Protocol. For a Declaration of Origin by an exporter or producer that is not an approved exporter, paragraph 1(a) of Rule 14 requires the document to be completed by the exporter or producer of the goods.

Regardless of who completes a Declaration of Origin, paragraph 2 of Rule 14 provides the format of the document.

Furthermore, irrespective of whether a Certificate of Origin is completed, Rule 9 of Annex 3A requires that a Proof of Origin shall specify the relevant origin conferring criteria. That is, the criteria that is satisfied to qualify the good as AANZ originating goods.

Item 3 – At the end of regulation 4.1

New subregulation 4.1(4) outlines that for the purposes of working out the value of particular non-originating material used in the production of goods where the last process of production occurs in a Participating Party, the following may be deducted:

the value of any production undertaken on the non-originating materials in any other Participating Party;
the amount of the value added to the non-originating materials in any other Participating Party.

This subregulation reflects updates to the cumulative rules of origin in the Second Protocol which now allows for separate value added work done in the various participating countries of the free trade area on a non-originating good to be added together so as to confer originating status. Ultimately, updates to the cumulative rules of origin is intended to increase the number of goods that can qualify for preferential tariff rates under AANZFTA.

This method of determining a good’s originating status is commonly referred to as full cumulation. Full cumulation allows cumulating origin-counting processing to be added across participating countries even when the initial input is not originating in that country.

Article 6 of the Second Protocol sets up a new scheme that allows Parties to opt-out of the full cumulation provisions. Pursuant to paragraph 5, a Party can elect not to be subject to full cumulation by notifying the other Parties via the FTA Joint Committee that it does not intend to implement Article 6 paragraph 2 of the Second Protocol. The Parties that implement, or intend to implement Article 6 paragraph 2, are ‘Participating Parties.’ A Party can also withdraw its notification of intention not to implement Article 6 paragraph 2 at any time and become a Participating Party.

In order for a good to qualify as being from a Participating Party the Regional Value Content (RVC) must be calculated in accordance with the formulas outlined in Article 5 of Chapter 3 of the Second Protocol, one of which is referred to as the indirect/build-down formula, and implemented in Part 3 of the Customs (ASEAN-Australia-New Zealand Rules of Origin) Regulations 2009. The RVC provides the percentage of a product’s value that originates from within the Participating Parties of the Second Protocol.

Assume, for example, that both Malaysia and Thailand are Participating Parties in the full cumulation scheme. For the purposes of this example, the RVC under the indirect/build-down method is worked out using the formula outlined in Rule 3.2 of Customs (ASEAN-Australia-New Zealand Rules of Origin) Regulations 2009, which is:

Customs value refers to the monetary value of goods as assessed by the ABF for the purpose of calculating duties and value of non-originating materials means the value, worked out under Part 8 of the Customs Act, of the non-originating materials used in the production of the goods. For the purposes of this example, assume the RVC is 60% which means that the total value of the non-originating inputs must not be more than 40% of the final value of the goods.

For example, Malaysia imports $40 worth of lightbulbs from India. In Malaysia, the lightbulbs are then used to manufacturer headlight components and are now worth $50. At this stage, the value of non-originating inputs is currently 80% of the final value of the goods and therefore does not qualify under the rules of origin requirements for the preferential tariff rate for export.

However, now the headlight components are exported to Thailand where these components are used to manufacture electric scooters which are worth $100. Under full cumulation, the value added in Malaysia, although part of a non-originating good, can be used for the purposes of determining the originating status of the final product. The separate manufacturing work done in both Malaysia (value add of $10) and Thailand (value add of $50) can be combined to calculate the originating content value which is $60. Thus, the value of non-originating inputs is $40 or 40% of the final value.

Using the formula for calculating RVC as explained above, the example RVC can be expressed using the below equation:

As the RVC is 60%, it is now eligible for the preferential tariff rate when imported into Australia. In the absence of full cumulation, the $10 of work undertaken in Malaysia would be ‘lost’ and the goods would not be originating as insufficient value was added in Thailand.

Item 4 – After Part 4 insert Part 5 – Record keeping obligations and Part 6 – Approved exporters

This inserts new Part 5, which is titled ‘Record keeping obligations’ and Part 6, which is titled ‘Approved exporters’.

Part 5 – Record keeping obligations

New Part 5 contains new regulations 5.1 and 5.2. The purpose of these provisions is to impose new record-keeping obligations on Australian exporters and producers that are similarly prescribed across other Free Trade Agreements. These obligations are incorporated under Rule 25 of Annex 3A of the Second Protocol.

Part 5 of the Regulations specifies the records that must be kept for goods exported from Australia to a Party and where the goods are claimed to be originating goods, in accordance with Chapter 3 of the Agreement, for the purpose of obtaining preferential tariff treatment in the Party.

Under new subsection 126AKDB(1) of the Customs Act, the regulations may prescribe record keeping obligations that apply in relation to goods that:

are exported to a Party; and
are claimed to be originating good, in accordance with Chapter 3 of the Agreement, for the purpose of obtaining a preferential tariff in the Party.

Regulation 5.1 – Exportation of goods to a Party – record keeping by exporter who is not the producer of the goods

Subregulation 5.1(1) outlines that, for the purposes of subsection 126AKDB(1) of the Customs Act, an exporter of goods mentioned in that subsection, who is not also the producer of the goods, must keep the following records:

records of the purchase of the goods by the exporter;
records of the purchase of the goods by the person to whom the goods are exported;
evidence that payment has been made for the goods;
evidence of the classification of the goods under the Harmonized System;
if the goods include any accessories, spare parts, tools or instructional or other information materials that were purchased by the exporter:
1. records of the purchase of the accessories, spare parts, tools or instructional or other information materials; and
2. evidence of the value of the accessories, spare parts, tools or instructional or other information materials;
if the goods include any accessories, spare parts, tools or instructional or other information materials that were produced by the exporter:

records of the purchase of all materials that were purchased for use or consumption in the production of the accessories, spare parts, tools or instructional or other information materials; and
evidence of the value of the materials so purchased; and
records of the production of the accessories, spare parts, tools or instructional or other information materials;

if the goods are packaged for retail sale in packaging material or a container that was purchased by the exporter:

records of the purchase of the packaging material or container; and
evidence of the value of the packaging material or container;

if the goods are packaged for retail sale in packaging material or a container that was produced by the exporter:

records of the purchase of all materials that were purchased for use or consumption in the production of the packaging material or container; and
evidence of the value of the materials so purchased; and
records of the production of the packaging material or container;

a copy of the Proof of Origin for the goods;
any other documents in support of the goods being originating goods in accordance with Chapter 3 of the Agreement (including documents from the producer or supplier of the goods).

For the records referred to in Regulation 5.1 of the Regulations, subregulation 5.1(2) provides that the records must be kept for at least five years starting on the date the Proof of Origin for the goods is issued.

Subregulation 5.1(3) of the Regulations sets out the manner in which a record is to be kept. The exporter may keep the records at any place (whether or not in Australia), and must ensure that:

the records are kept in a form that would enable a determination of whether the goods are originating goods in accordance with Chapter 3 of the Agreement; and
if the records are not in English--the records are kept in a place and form that would enable an English translation to be readily made; and
if the records are kept by mechanical or electronic means--the records are readily convertible into a hard copy in English.

Regulation 5.2 - Exportation of goods to a Party—record keeping by the producer of the goods

Subregulation 5.2(1) outlines that, for the purposes of subsection 126AKDB(1) of the Customs Act, a producer of goods mentioned in that subsection, whether or not the producer is the exporter of the goods, must keep the following records:

records of the purchase of the goods;
if the producer is the exporter of the goods—evidence of the classification of the goods under the Harmonized System;
evidence that payment has been made for the goods;
evidence of the value of the goods;
records of the purchase of all materials that were purchased for use or consumption in the production of the goods and evidence of the classification of the materials under the Harmonized System;
evidence of the value of those materials;
records of the production of the goods;
if the goods include any accessories, spare parts, tools or instructional or other information materials that were purchased by the producer:
1. records of the purchase of the accessories, spare parts, tools or instructional or other information materials; and
2. evidence of the value of the accessories, spare parts, tools or instructional or other information materials;
if the goods include any accessories, spare parts, tools or instructional or other information materials that were produced by the producer:

records of the purchase of all materials that were purchased for use or consumption in the production of the accessories, spare parts, tools or instructional or other information materials; and
evidence of the value of the materials so purchased; and
records of the production of the accessories, spare parts, tools or instructional or other information materials;

if the goods are packaged for retail sale in packaging material or a container that was purchased by the producer:

records of the purchase of the packaging material or container; and
evidence of the value of the packaging material or container;

if the goods are packaged for retail sale in packaging material or a container that was produced by the producer:

records of the purchase of all materials that were purchased for use or consumption in the production of the packaging material or container; and
evidence of the value of the materials so purchased; and
records of the production of the packaging material or container;

a copy of the Proof of Origin for the goods.

For the records referred to in subregulation 5.2(1) of the Regulations, subregulation 5.2(2) of the Regulations provides that the records must be kept for at least five years starting on the date the Proof of Origin for the goods is issued.

Subregulation 5.2(3) of the Regulations sets out the manner in which a record is to be kept. The producer may keep the records at any place (whether or not in Australia), and must ensure that:

the records are kept in a form that would enable a determination of whether the goods are originating goods in accordance with Chapter 3 of the Agreement; and
if the records are not in English--the records are kept in a place and form that would enable an English translation to be readily made; and
if the records are kept by mechanical or electronic means--the records are readily convertible into a hard copy in English.

Part 6 - Approved Exporters

Subsection 126AKDE(2) of the Customs Act contains a head of power, as inserted by the AANZFTA Act, to administer the approved exporter scheme including by prescribing various matters in regulations.

Subsection 126AKDE(3) of the Customs Act provides that the Comptroller-General of Customs may make provision for the following matters:

the making of applications to the Comptroller General of Customs by entities for approval as approved exporters and the withdrawal of those applications;
the eligibility criteria that an entity must meet in order for the Comptroller General to approve the entity as an approved exporter;
the matters that the Comptroller General must consider in deciding whether to approve an entity as an approved exporter;
the making of decisions by the Comptroller General of Customs in relation to the applications;
the conditions that an approval of an entity as an approved exporter is subject to;
the variation, suspension or termination of an approval of an entity as an approved exporter;
the giving of notice of decisions made by the Comptroller General of Customs ;
the review of decisions made by the Comptroller General of Customs.

Rule 15 of Annex 3A of the AANZFTA Second Protocol establishes the scheme to allow approved exporters to issue Declarations of Origin. The Second Protocol allows, in addition to the Certificates of Origin issued by issuing bodies, exporters or producers to issue Proof of Origin through self-issued Declarations of Origin where the exporter has been authorised as an ‘approved exporter.’

In general, this means that there is less oversight over the making of a Declaration of Origin, however, many of Australia’s existing free trade agreements allow for a form of self-declaration without any additional administrative burdens. This would bring about greater convenience to businesses by saving time and eliminating the need to obtain a Certificate of origin.

The approved exporter scheme implemented in the Second Protocol provides additional safeguards to the use of Declarations of Origin by ensuring that exporters using Declarations of Origin comply with standards implemented under that agreement. The duration of the approved exporter schemes are time limited, up to 30 years in the case of Cambodia, Laos PDR and Myanmar.

Prescribing matters relating to the approved exporter scheme in subordinate regulations ensures flexibility and adaptability. The regulatory frameworks for the approved exporter scheme have been designed to balance stability and transparency, allow reasonable flexibility to take into account the dynamic international trade environment and ensure the continued relevance of the scheme to participants. This approach also allows the Department to more quickly update the scheme as international trade dynamics change or as compliance requirements evolve. By prescribing details of the scheme in the regulations, the Department can implement and revise procedures efficiently, making it easier for exporter to understand and comply with the requirements.

The implementation of the scheme will be subject to ongoing evaluation by the Department. As the program evolves, further opportunities to reduce the regulatory burden associated with customs procedures at the border may be identified. Prescribing these in the regulations rather than the primary legislation will provide the flexibility that is required to enable the scheme to develop.

As the regulations are a legislative instruments, they will be subject to parliamentary scrutiny and disallowance.

Regulation 6.1 Application for approval as approved exporter

Subregulation 6.1(1) provides that an exporter may apply to the Comptroller-General of Customs for approval as an approved exporter. Subregulation 6.1(2) outlines that an application may be made by either by document or electronically.

These provisions are modelled after section 176B of the Customs Act to ensure consistency with other legislative models such as the Australia Trusted Trader scheme. The application is a self-assessment questionnaire which contains questions addressing the qualification criteria set out in these Regulations. It also will contain general information questions to allow the Comptroller-General of Customs to gather sufficient information to form a comprehensive view of the entity and identify any risks in its international supply chain.

Subregulation (3) provides that a documentary application must:

be communicated to the Comptroller General of Customs; and
be in an approved form; and
contain the information required by the approved form; and
be signed in a manner indicated by the approved form.

Subregulation (4) provides that an electronic application must communicate such information as is set out in an approved statement.

Subregulation (5) allows applicants to withdraw their application at any time.

Regulation 6.2 Eligibility Criteria

Regulation 6.2 implements Rule 15.1 of Chapter 3 of Annex 3A to the Second Protocol and requires prospective approved exporters to satisfy the following eligibility criteria:

a trusted trader agreement with the entity is in force under section 176A of the Act;
the Comptroller General is satisfied that the entity knows and understands the rules of origin as set out in Annex 3A to Chapter 3 of the Agreement;
the Comptroller General is satisfied that, if the entity were to complete a Declaration of Origin for goods exported to a Party, the entity would be able to obtain from the producer of the goods a declaration:
1. claiming that the goods are originating goods in accordance with Chapter 3 of the Agreement; and
2. stating that the producer is willing to cooperate with any verification process in accordance with Rules 19 and 20 Annex 3A to Chapter 3 of the Agreement and is able to meet the requirements of that Annex.

By limiting the eligibility criteria to entities already subject to an Australian Trusted Trader agreement, the Department can ensure those participants in the approved exporter scheme are able to demonstrate use of secure supply chains and a high level of trade compliance.

Regulation 6.3 Comptroller-General of Customs to decide application

Subregulation 6.3(1) enables the Comptroller General of Customs, in writing, to approve an entity as an approved exporter if:

the entity makes an application in accordance with under regulation 6.1; and
the Comptroller General is satisfied that the entity meets the eligibility criteria under regulation 6.2.

Subregulation 6.3(2) outlines that the Comptroller-General of Customs must consider the following matters in deciding whether to approve an entity as an approved exporter:

whether a trusted trader agreement between the entity and the Comptroller General has been varied, suspended or terminated under section 178A of the Act;
whether the Comptroller General of Customs is considering varying, suspending or terminating a trusted trader agreement between the entity and the Comptroller General.

Subregulation (3) provides that subregulation (2) does not limit the matters the Comptroller-General may consider in deciding whether to approve an entity as an approved exporter.

When considering the risks posed by the entity becoming an approved exporter, factors such as whether the Comptroller-General of Customs has or is considering varying, suspending or terminating a trusted trade agreement is relevant and may act as mitigating factors against any risks considered by the Comptroller-General of Customs. For example, when considering the extent and degree of any non-compliance, the Comptroller-General of Customs may consider matters such as whether the non-compliance was an isolated incident or an ongoing pattern of systemic non-compliance, the materiality of the non-compliance (which may be determined by having regard to the seriousness of the consequences of the non-compliance) and the frequency of non-compliance having regard to the entity's volume of trade.

Subregulation (4) provides that an approval under subregulation 6.3(1) must also specify the entity’s approved exporter code. This code is a unique reference number of the approved exporter and must be indicated on Proof of Origin documents under the Second Protocol.

Subregulation (5) provides that the Comptroller-General must give a copy of an approval under subregulation (1) to the entity.

Subregulation (6) provides that an approval under subregulation (1) must specify the period for which it is in force.

Subregulation (7) provides that if an entity makes an application for approval as an approved exporter and the application is in accordance with under regulation 6.1, the Comptroller General of Customs may, in writing, refuse to approve the entity as an approved exporter.

Subregulation (8) provides that if the Comptroller-General does refuse an application under subregulation (7), the Comptroller General must notify the entity of the refusal and of the reasons for the refusal.

Subregulation (9) provides that an application may be made to the Administrative Review Tribunal for review of a decision to refuse to approve an entity as an approved exporter.

Regulation 6.4 Conditions of Approval

For the purposes of section 126AKDE of the Customs Act, an approval of an entity as an approved exporter is subject to the following conditions:

the entity complies with paragraph 4 of Rule 15 of Annex 3A to Chapter 3 of the Agreement; and
any other conditions specified in the approval by the Comptroller General of Customs.

Paragraph 4 of Rule 15 of Annex 3A establishes the following obligations on the approved exporter:

to allow the competent authority of an exporting Party access to the records referred to in Rule 25 and premises for the purposes of monitoring the use of an authorisation;
to complete Declarations of Origin only for goods for which the approved exporter has been allowed to do so by the competent authority of an exporting Party and for which it has all appropriate documents proving the originating status of the goods concerned at the time of completing the declaration;
to take full responsibility for all Declarations of Origin completed, including any misuse; and
to promptly inform the competent authority of an exporting Party of any changes related to the information referred to in subparagraph (b).

Ongoing satisfaction of the conditions of approval is a key principle of the approved exporter scheme. Ongoing monitoring will be undertaken to ensure an entity that has entered into the scheme continues to satisfy the above obligations on the approved exporter.

Regulation 6.5 Variation, suspension or termination of approval

Subregulation 6.5(1) provides that the Comptroller General of Customs may, in writing, vary, suspend or terminate an entity’s approval as an approved exporter if the Comptroller-General is satisfied that:

the entity no longer meets the eligibility criteria under regulation 6.2; or
the entity has not complied, or is not complying, with any condition of the entity’s approval.

Consideration of the matters in subregulation 6.5(1) enables a holistic assessment of non-compliance. These factors are intended to operate to put any history of any non-compliance into context by considering the elements that may be regarded as mitigating factors and assist in determining the seriousness of any previous non-compliance. For example, when considering the extent and degree of any non-compliance, the Comptroller-General of Customs may consider matters such as whether the non-compliance was an isolated incident or an ongoing pattern of systemic non-compliance, the materiality of the non-compliance (which may be determined by having regard to the seriousness of the consequences of the non-compliance) and the frequency of non-compliance having regard to the entity's volume of trade.

Subregulation (2) provides that, without limiting subregulation (1), a variation of an approval may involve imposing new conditions on the approval or varying or removing existing conditions.

Subregulation (3) provides for the process the Comptroller-General must follow when making a decision under subregulation (1). Before making a decision, the Comptroller-General must, in writing, state the decision it is considering making, state the reasons for the decision and invite the entity to make written submissions to the Comptroller-General within the period specified in the notice.

Subregulation (4) provides that, in deciding to make a decision under subregulation (1), the Comptroller-General must consider any submissions received from the entity within the period specified in the notice.

Subregulation (5) provides that subregulation (4) does not limit the matters the Comptroller-General may consider in deciding whether to make a decision under subregulation (1).

Subregulation (6) provides the Comptroller-General of Customs must give notice of a variation, suspension or termination to the entity. The purpose of this it to be provide entities with certainty of the outcome of the Comptroller-General of Customs decision.

Subregulation (7) outlines the notice must specify the day the variation, suspension or termination takes effect.

Subregulation (8) provides that the Comptroller-General of Customs must give the entity notice in writing of the decision not to vary, suspend or terminate its approval as an approved exporter.

Subregulation (9) outlines an approval has no effect while suspended, but the period for which it remains in force continues to run despite the suspension.

Subregulation (10) provides that the Comptroller-General of Customs may, under subregulation (1), vary or terminate an approval while it is suspended.

Subregulation (11) provides that the Comptroller-General of Customs may, in writing, revoke a suspension under subregulation (1).

Subregulation (12) outlines that the Comptroller-General must give notice of the revocation of the suspension to the entity. The notice must specify the day the revocation takes effect.

Subregulation (13) provides that an application may be made to the Administrative Review Tribunal for review of a decision to vary, suspend or terminate an entity’s approval as an approved exporter.

Customs (International Obligations) Regulation 2015

Item 5 – Section 4 (paragraph (b) of the definition of Certificate Origin)

This item amends section 4 of the International Obligation Regulation to repeal the definition of Certificate of Origin.

The amendments made by item 6 will insert a definition of Proof of Origin into regulation 4 of the International Obligation Regulation. That definition covers Certificate of Origin and Declaration of Origin, both by reference to the meaning as set out in Chapter 3 of the Second Protocol. As a result, the definition of Certificate of Origin under section 4 is no longer required and is repealed.

Item 6 – Section 4

This item inserts a new definition of Proof of Origin into regulation 4 of the International Obligation Regulation.

Paragraph 4(a) – Proof of Origin for AANZ originating goods

Rule 1 to Annex 3A of the Second Protocol outlines the new document requirement to be met under the Second Protocol in order to determine whether the import goods are to be treated as AANZ originating goods covered by that Agreement and therefore be eligible for preferential tariff treatment. Under Rule 1, any of the following shall be considered as a Proof of Origin:

a Certificate of Origin issued by an Issuing Authority/Body in accordance with this Annex;
a Declaration of Origin by an approved exporter in accordance with paragraph 1(a) of Rule 14; or
a Declaration of Origin by an exporter or producer in accordance with paragraph 1(b) of Rule 14;

based on available information that the good is an originating good.

This item implements the new document requirement by defining Proof of Origin to have the same meaning given by subsection 153ZKB(1) of the Customs Act, which is a certificate or declaration that is in force and complies with the requirements of Rule 1 of Annex 3A to Chapter 3 of the Second Protocol.

The purpose of this amendment is to complement the amendments made by items 7 and 8, and together give effect to Article 15 of Chapter 3 of the Second Protocol for the purpose of Article 2 of that Chapter. Article 2 of Chapter 3 outlines the kind of goods that are to be treated as originating goods for preferential tariff treatment provided other requirements under that Chapter are met. Article 15 of Chapter 3 provides that a claim that goods are eligible for preferential treatment shall be supported by a Proof of Origin document which includes a Certificate of Origin and Declaration of Origin (as outlined in Rule 1 of Annex 3A to Chapter 3). These Regulations implement the amended concept of Proof of Origin, incorporating the previous Certificate of Origin within this broader term as well as incorporating the new Declaration of Origin.

Paragraph 5 of Rule 1 sets out the format and the matters to be included in a Proof of Origin.

The amendment made by this item has the effect of incorporating the aforementioned requirements under the Second Protocol, ensuring the document requirements to be met and implemented under amendments made by items 6 to 8 are consistent with the Second Protocol.

Paragraph 4(b) – Proof of Origin for RCEP originating goods

Paragraph 1 of Article 3.16 of Chapter 3 of the RCEP Agreement outlines the document requirement to be met under the RCEP Agreement in order to determine whether the imported goods are to be treated as RCEP originating goods covered by that Agreement and therefore be eligible for preferential tariff treatment. Under paragraph 1, any of the following shall be considered as a Proof of Origin:

a Certificate of Origin issued by an Issuing Authority/Body in accordance with this Annex;
a Declaration of Origin by an approved exporter in accordance with paragraph 1(a) of Rule 14; or
a Declaration of Origin by an exporter or producer in accordance with paragraph 1(b) of Rule 14;

based on available information that the good is originating.

This item implements the new document requirement by defining Proof of Origin to have the same meaning given by subsection 153ZKQB(1) of the Customs Act, which is a certificate or declaration that is in force and complies with the requirements of paragraph 1 of Article 3.16 of Chapter 3 of the RCEP Agreement.

Paragraph 5 of Article 3.16 sets out the format and the matters to be included in a Proof of Origin.

The amendment made by this item has the effect of incorporating the aforementioned requirements under the RCEP Agreement, ensuring the document requirements to be met.

Item 7 – Section 23 (table item 8)

Section 23 of the International Obligation Regulation prescribes circumstances in which a refund, rebate or remission may be made by a Collector. The regulation also contains a table of originating goods, and the circumstances for refunds, rebates and remissions for each good. The table under Section 23 sets out the circumstances for refunds, rebates and remissions for originating goods.

The ‘class of goods’ to which item 8 of that table relates is ‘goods that would have been AANZ originating goods if, at the time the goods were imported, the importer held a Certificate of Origin or a copy of a Certificate of Origin for the goods’.

The circumstances where a refund, rebate or remission may be made by a Collector in relation to this class of goods are:

that duty has been paid on the goods; and
that the importer holds a Certificate of Origin or a copy of a Certificate of Origin for the goods at the time of making the applications for the refund.

This item amends table item 8 in section 23 of the International Obligations Regulations to omit the words ‘Certificate of Origin’ and substitute them with ‘Proof of Origin’. In doing so, these amendments enable a refund of duty for goods that would have been AANZ originating good if, at the time the goods were imported, the importer held a Proof of Origin or a copy of a Proof of Origin for the goods where both of the following apply:

the duty has been paid on the goods;
the importer holds a Proof of Origin or a copy of a Proof of Origin for the goods at the time of making the application for the refund.

A Proof of Origin is a document that has the same meaning given by subsection 153ZQB(1) of the Customs Act. That is, a document that is in force and that complies with the requirements under Article 3.16 of Chapter 3 of the Agreement.

Under paragraph 1 of Article 3.16 of Chapter 3, any of the following shall be considered as a Proof of Origin:

a Certificate of Origin issued by an issuing body in accordance with Article 3.17 a (Certificate of Origin);
a Declaration of Origin by an approved exporter in accordance with subparagraph 1(a) of Article 3.18 (Declaration of Origin); or
a Declaration of Origin by an exporter or producer in accordance with subparagraph 1(b) of Article 3.18 (Declaration of Origin), and subject to implementation in accordance with that Article;

based on information available that the good is an originating good.

Item 8 – Section 23 (table item 18)

Section 23 of the International Obligation Regulation outlines circumstances in which a refund, rebate or remission may be made by a Collector. The regulation also contains a table of originating goods, and the circumstances for refunds, rebates and remissions for each good. The table under section 23 sets out the circumstances for refunds, rebates and remissions for originating goods.

The ‘class of goods’ to which item 18 of that table relates is ‘goods that would have been RCEP originating goods if, at the time the goods were imported, the importer held a Proof of Origin (within the meaning of subsection 153ZQB(1) of the Act), or a copy of one, for the goods’.

The circumstances where a refund, rebate or remission may be made by a Collector in relation to this class of goods are:

that duty has been paid on the goods; and
that the importer holds a Proof of Origin (within the meaning of subsection 153ZQB(1) of the Act), or a copy of one, for the goods at the time of making the applications for the refund.

This item amends table item 18 in section 23 of the International Obligation Regulation to omit ‘within the meaning of subsection 153ZQB(1) of the Act’ wherever occurring. The purpose of this item is to provide consistency with the amendments made in item 7 which do not refer to the relevant subsection in the Customs Act as well as ensure that any amendments made to subsection 153ZQB(1) of the Customs Act would not affect the Regulation.

Schedule 2—Approved exporters for Regional Comprehensive Economic Partnership Agreement

Customs (Regional Comprehensive Economic Partnership Rules of Origin) Regulations 2021

Item 1 – Section 1

Section 1 omits Customs (Regional Comprehensive Economic Partnership Rules of Origin) Regulations 2021 and substitutes it with Customs (Regional Comprehensive Economic Partnership Rules of Origin) Regulations 2009. As the Regulations introduce provisions in relation to the approved exporter scheme, the purpose of this change is to reflect that the amending provisions include other matters that do not directly relate to Rules of Origin.

Item 2 – At the end of subsection 11(1)

This item adds new subparagraph (j) to the record keeping obligations found in subsection 11.

Subparagraph (j) provides that for the purposes of subsection 126AQB(1) of the Act, an exporter of goods mentioned in that subsection, who is not also the producer of the goods, must keep the following records:

any other documents in support of the goods being originating goods in accordance with Chapter 3 of the Agreement (including documents from the producer or supplier of the goods).

This item is to ensure paragraph 8 of Article 3.21 of the RCEP Agreement is effectively implemented. Paragraph 8 of Article 3.21 provides that:

An approved exporter shall be prepared to submit at any time, on request of the customs authorities of the importing Party, all appropriate documents proving the originating status of the goods concerned, including statements from the suppliers or producers in accordance with the laws and regulations of the importing Party as well as the fulfilment of the other requirements of this Chapter.

The purpose of this item is to address a potential gap which would arise if there are documents which fall within the scope of paragraph 8 of Article 3.21 but which do not currently fall within the categories of documents an approved exporter is required to keep under the regulations. This item also ensures consistency with the new record-keeping obligations to be inserted under the Customs (ASEAN-Australia-New Zealand Rules of Origin) Regulations 2009.

Item 3 – At the end of the instrument add Part 6 –Approved Exporters

This inserts new Part 6, which is titled ‘Approved exporters’.

Subsection 126AQE(2) of the Customs Act contains a head of power, as inserted by the AANZFTA Act, to administer the approved exporter scheme including by prescribing various matters in regulations.

Subsection 126AQE(3) of the Customs Act provides that the Comptroller-General of Customs may make provision for the following matters:

the making of applications to the Comptroller General of Customs by entities for approval as approved exporters and the withdrawal of those applications;
the eligibility criteria that an entity must meet in order for the Comptroller General to approve the entity as an approved exporter;
the matters that the Comptroller General must consider in deciding whether to approve an entity as an approved exporter;
the making of decisions by the Comptroller General of Customs in relation to the applications;
the conditions that an approval of an entity as an approved exporter is subject to;
the variation, suspension or termination of an approval of an entity as an approved exporter;
the giving of notice of decisions made by the Comptroller General of Customs ;
the review of decisions made by the Comptroller General of Customs.

Article 3.21 of the RCEP Agreement establishes the scheme to allow approved exporters to issue Declarations of Origin. The RCEP Agreement allows, in addition to the Certificates of Origin issued by issuing bodies, exporters or producers to issue Proof of Origin through self-issued Declarations of Origin where the exporter has been authorised as an ‘approved exporter.’

The approved exporter schemes implemented in the RCEP Agreement provide additional safeguards to the use of Declarations of Origin by ensuring that exporters using Declarations of Origin comply with standards implemented under that agreement. The duration of the approved exporter scheme is time limited, up to 30 years in the case of Cambodia, Laos PDR and Myanmar.

Prescribing matters relating to the approved exporter scheme in subordinate regulations ensures flexibility and adaptability. The regulatory frameworks for the approved exporter scheme have been designed to balance stability and transparency, allow reasonable flexibility to take account of the dynamic international trade environment and ensure the continued relevance of the scheme to participants. This approach also allows the Department to more quickly update the scheme as international trade dynamics change or as compliance requirements evolve. By prescribing details of the scheme in the regulations, the Department can implement and revise procedures efficiently, making it easier for exporter to understand and comply with the requirements.

As the regulations are a legislative instruments, they will be subject to parliamentary scrutiny and disallowance.

Section 13 - Application for approval as approved exporter

Subsection 13(1) provides that an exporter may apply to the Comptroller-General of Customs for approval as an approved exporter. Subsection 13(2) outlines that an application may be made by either by document or electronically.

Subsection (3) provides that a documentary application must:

be communicated to the Comptroller General of Customs; and
be in an approved form; and
contain the information required by the approved form; and
be signed in a manner indicated by the approved form.

Subsection (4) provides that an electronic application must communicate such information as is set out in an approved statement.

Subsection (5) allows applicants to withdraw their application at any time.

Section 14 Eligibility Criteria

Section 14 implements Article 3.21 of Chapter 3 of the RCEP Agreement and requires prospective approved exporters to satisfy the following eligibility criteria:

a trusted trader agreement with the entity is in force under section 176A of the Act;
the Comptroller‑General is satisfied that the entity knows and understands the rules of origin as set out in Section B of Chapter 3 of the Agreement;
the Comptroller‑General is satisfied that, if the entity were to complete a Declaration of Origin for goods exported to a Party, the entity would be able to obtain from the producer of the goods a declaration:

claiming that the goods are originating goods in accordance with Chapter 3 of the Agreement; and
stating that the producer is willing to cooperate with any verification process in accordance with Article 3.24 of Chapter 3 of the Agreement and is able to meet the requirements of Section B of that Chapter.

Regulation 15 Comptroller-General of Customs to decide application

Subsection 15(1) enables the Comptroller General of Customs, in writing, to approve an entity as an approved exporter if:

the entity makes an application in accordance with under section 13 of this instrument; and
the Comptroller General of Customs is satisfied that the entity meets the eligibility criteria under section 14 of this instrument.

Subsection 15(2) outlines that the Comptroller-General must consider the following matters in deciding whether to approve an entity as an approved exporter:

whether a trusted trader agreement between the entity and the Comptroller General of Customs has been varied, suspended or terminated under section 178A of the Act;
whether the Comptroller General is considering varying, suspending or terminating a trusted trader agreement between the entity and the Comptroller General.

Subsection (3) provides that subsection (2) does not limit the matters the Comptroller-General may consider in deciding whether to approve an entity as an approved exporter.

Subsection (4) provides that an approval under subsection 15(1) must also specify the entity’s approved exporter code. This code is a unique reference number of the approved exporter and must be indicated on Proof of Origin documents under the Second Protocol.

Subsection (5) provides that the Comptroller-General must give a copy of an approval under subsection (1) to the entity.

Subsection (6) provides that an approval under subsection (1) must specify the period for which it is in force.

Subsection (7) provides that if an entity makes an application for approval as an approved exporter and the application is in accordance with under section 13, the Comptroller General of Customs may, in writing, refuse to approve the entity as an approved exporter.

Subsection (8) provides that if the Comptroller-General does refuse an application under subsection (7), the Comptroller General must notify the entity of the refusal and of the reasons for the refusal.

Subsection (9) provides than an application may be made to the Administrative Review Tribunal for review of a decision to refuse to approve an entity as an approved exporter.

Section 16 Conditions of Approval

For the purposes of section 126AQE of the Act, an approval of an entity as an approved exporter is subject to the following conditions:

the entity complies with paragraph 3 of Article 3.21 of Chapter 3 of the Agreement; and
any other conditions specified in the approval by the Comptroller General of Customs.

Paragraph 3 of Article 3.21 of Chapter 3 of the RCEP Agreement establishes the following obligations on the approved exporter:

to allow the competent authority of an exporting Party access to the records and premises for the purposes of monitoring the use of an authorisation, in accordance with referred to in Article 3.27 (Record-Keeping Requirement);
to complete Declarations of Origin only for goods for which the approved exporter has been allowed to do so by the competent authority of an exporting Party and for which it has all appropriate documents proving the originating status of the goods concerned at the time of completing the declaration;
to take full responsibility for all Declarations of Origin completed, including any misuse; and
to promptly inform the competent authority of an exporting Party of any changes related to the information referred to in subparagraph (b).

Ongoing satisfaction of the conditions of approval is a key principle of the approved exporter scheme. Ongoing monitoring will be undertaken to ensure an entity that has entered into an approved scheme continues to satisfy the above obligations on the approved exporter.

Section 17 Variation, suspension or termination of approval

Section 17(1) provides that the Comptroller General of Customs may, in writing, vary, suspend or terminate an entity’s approval as an approved exporter if the Comptroller-General is satisfied that:

the entity no longer meets the eligibility criteria under regulation 14 of this instrument; or
the entity has not complied, or is not complying, with any condition of the entity’s approval.

Consideration of the matters in section 17(1) enables a holistic assessment of non-compliance. These factors are intended to operate to put any history of any non-compliance into context by considering the elements that may be regarded as mitigating factors and assist in determining the seriousness of any previous non-compliance. For example, when considering the extent and degree of any non-compliance, the Comptroller-General of Customs may consider matters such as whether the non-compliance was an isolated incident or an ongoing pattern of systemic non-compliance, the materiality of the non-compliance (which may be determined by having regard to the seriousness of the consequences of the non-compliance) and the frequency of non-compliance having regard to the entity's volume of trade.

Subsection (2) provides that, without limiting subsection (1), a variation of an approval may involve imposing new conditions on the approval or varying or removing existing conditions.

Subsection (3) provides for the process the Comptroller-General must follow when making a decision under subsection (1). Before making a decision, the Comptroller-General must, in writing, state the decision it is considering making, state the reasons for the decision and invite the entity to make written submissions to the Comptroller-General within the period specified in the notice.

Subsection (4) provides that, in deciding to make a decision under subsection (1), the Comptroller-General must consider any submissions received from the entity within the period specified in the notice.

Subsection (5) provides that subsection (4) does not limit the matters the Comptroller-General may consider in deciding whether to make a decision under subsection (1).

Subsection (6) provides the Comptroller-General must give notice of a variation, suspension or termination to the entity. The purpose of this it to be provide entities with certainty of the outcome of the Comptroller-General of Customs decision.

Subsection (7) outlines the notice must specify the day the variation, suspension or revocation takes effect (which must not be before the day after the notice is given to the entity).

Subregulation (8) provides that the Comptroller-General of Customs must give the entity notice in writing of the decision not to vary, suspend or terminate its approval as an approved exporter.

Subsection (9) outlines an approval has no effect while suspended, but the period for which it remains in force continues to run despite the suspension.

Subsection (10) provides that the Comptroller-General of Customs may, under subsection (1), vary or revoke an approval while it is suspended.

Subsection (11) provides that the Comptroller-General of Customs may, in writing, revoke a suspension under subsection (1).

Subsection (12) outlines that the Comptroller-General of Customs must give notice of the revocation of the suspension to the entity. The notice must specify the day the revocation takes effect.

Section (13) provides that an application may be made to the Administrative Review Tribunal for review of a decision to vary, suspend or terminate an entity’s approval as an approved exporter.

Part 7 – Application provisions

[Item 18] Amendments made by the Customs Legislation Amendment (ASEAN-Australia- New Zealand Free Trade Area Second Protocol Implementation and Other Measures) Regulations 2025

This item provides that the amendment of subsection 11(1) made by Schedule 2 to the proposed Regulations would apply in relation to goods produced on or after the commencement of that Schedule.

The purpose and effect of this amendment is to clarify when the goods to which these amendments apply.

Statement of Compatibility with Human Rights

Issued by authority of the Minister for Home Affairs

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Customs Legislation Amendment (ASEAN-Australia-New Zealand Free Trade Area Second Protocol Implementation and Other Measures) Regulations 2025

This Disallowable Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Disallowable Legislative Instrument

The purpose of the Customs Legislation Amendment (ASEAN-Australia-New Zealand Free Trade Area Second Protocol Implementation and Other Measures) Regulations 2025 (the Regulations) is to prescribe new rules relating to record keeping, verification, an approved exporter scheme and rules of origin under Part VI and part VIII of the Customs Act 1901 (the Customs Act). These rules implement measures under the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) as amended by the First Protocol to Amend the AANZFTA and the Regional Comprehensive Economic Partnership Agreement (RCEP).

On 21 August 2023, Assistant Foreign Minister, the Hon Tim Watts MP, and ministers from Brunei Darussalam, Indonesia, Malaysia, Singapore and New Zealand signed the Second Protocol to Amend the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (the Second Protocol). The Second Protocol updated AANZFTA, to provide for upgraded documentary requirements for claiming preferential rates of customs duty under the Agreement, new origin verification requirements and an Approved Exporter scheme.

The Customs Amendment (ASEAN-Australia-New Zealand Free Trade Area Second Protocol Implementation and Other Measures) Act 2024 (Customs Implementation Act) amended Divisions 4EAA and 4L of Part VI and Division 1G of Part VIII of the Customs Act to implement the new requirements under the Second Protocol. The Customs Implementation Act also implemented the Approved Exporter scheme provided for under RCEP, which entered into force for Australia on 1 January 2022.

The Customs Legislation Amendment (ASEAN-Australia-New Zealand Free Trade Area Second Protocol Implementation and Other Measures) Regulations 2025 (the Regulations) amends the Customs (ASEAN-Australia-New Zealand Rules of Origin) Regulations 2009, the Customs (International Obligations) Regulation 2015 and the Customs (Regional Comprehensive Economic Partnership Rules of Origin) Regulations 2021 to prescribe matters that are required under the Second Protocol and RCEP for the purposes of Divisions 4EAA and 4L of Part 6 and 1G of Part VIII of the Customs Act. The Regulations will:

update the calculation of regional value content and the refund circumstances applicable to goods under AANZFTA;
provide record keeping obligations for exporters and producers where goods claim preferential customs duty rates under AANZFTA; and
establish conditions for an Approved Exporter scheme for AANZFTA and RCEP.

Schedule 1 of the Regulations commences at the same time as Schedule 1 to the Customs Implementation Act, which is on the later of the day the Customs Implementation Act receives the Royal Assent and the day the Second Protocol enters into force for Australia. Schedule 2 of the Regulations commences at the same time as Schedule 2 to the Customs Implementation Act, which is on a day to be fixed by Proclamation or, if the provisions do not commence within six months of the day that the Customs Implementation Act receives the Royal Assent, the day after the end of that period.

Human rights implications

This Disallowable Legislative Instrument engages:

the right to a fair and public hearing, including the preservation of the privilege against self-incrimination under Article 14 of the International Covenant on Civil and Political Rights (ICCPR); and
the right to privacy under Article 17 of the ICCPR.

Right to a Fair and Public Hearing

Article 14(1) of the ICCPR provides the right to a fair and public hearing in civil proceedings as one of the guarantees in relation to legal proceedings. The right to a fair hearing provides that all persons are equal before courts and tribunals and guarantees a fair and public hearing before a competent, independent and impartial court or tribunal established by law.

The Customs Implementation Act inserts new sections 126AKDE and 126AQE into the Customs Act, which allow for regulations to be made for the purposes of, among other things, applications for Approved Exporter status, approval, variation, suspension and termination of approval of an Approved Exporter, and the review of decisions made by the Comptroller-General. The Regulations provide that if the Comptroller-General of Customs refuses to approve the entity as an approved exporter, an application may be made to the Administrative Review Tribunal (ART) for the review of that decision. An application can also be made to the ART for the review of a decision to vary, suspend or revoke an entity’s approval as an approved exporter.

In most cases entities applying for approved exporter status will be corporations. However, in instances in which the entity is an individual, the right to equality and non-discrimination will be engaged in relation to a decision of the Comptroller-General of Customs under the approved exporter scheme.

The Regulations promote this right as they provide for external merits review of certain decisions by the Comptroller-General of Customs. This supports the right to a fair hearing, as entities may apply to the ART to seek an independent review of decisions made by the Comptroller-General of Customs to refuse to approve an entity as an approved exporter, or to vary, suspend or revoke an entity’s approval as an approved exporter.

Right to Privacy

Article 17 of the ICCPR states that “No one shall be subjected to arbitrary or unlawful interference with his privacy, family, home or correspondence, not to unlawful attacks on his honour and reputation”. It provides that persons have the right to the protection of the law against such interference or attacks. An interference with privacy will not be arbitrary if it is authorised by law or consistent with the provisions, aims and objectives of the ICCPR and is reasonable in the circumstances. Reasonableness, in this context, incorporates notions of proportionality, appropriateness and necessity. In essence, this will require that limitations:

serve a legitimate objective
adopt a means that is rationally connected to that objective and
the means adopted are not more restrictive than they need to be to achieve that objective.

A number of amendments in the Regulations engage the right to privacy contained in Article 17 of the ICCPR because they require the collection, use and disclosure of commercial and personal information.

Record keeping obligations

Under Chapter 3 of the Second Protocol, a Proof of Origin document provided by the exporter or producer shall support a claim that the goods are eligible for preferential rates of customs duty in accordance with AANZFTA. The information that must be included in these documents, that is a Certificate of Origin or Declaration of Origin, is detailed in Appendix 3A.1 and Appendix 3A.2 to Chapter 3 of the Second Protocol. This information may include personal information.

The Customs Implementation Act inserts new sections 126AKDB and 126AKDC into the Customs Act to enable regulations to be made that prescribe record keeping obligation for goods exported from a Party to AANZFTA that are claimed to be AANZFTA originating in accordance with the Agreement.

The regulations prescribing record keeping obligations are in Part 5 of the Regulations. These require records and evidence of the purchase and value of materials, the production of goods, and the Proof of Origin to be kept for at least 5 years from the date that the Proof of Origin for the goods is issued. The Regulations implement the record keeping requirements of Rule 25 of Annex 3A to Chapter 3 of the Second Protocol.

Part 5 of the Regulations and sections 126AKDB and 126AKDC of the Customs Act operate to allow an authorised officer to verify the origin of goods exported from Australia that are claimed to be AANZFTA originating goods. As a Proof of Origin includes personal information, this engages the right to privacy. Information contained in a Proof of Origin may be disclosed to an AANZ customs official (within the definitions in section 126AKA of the Customs Act) for the purpose of verifying a claim for preferential tariff treatment under AANZFTA.

The limitation of the right to privacy is not arbitrary and is pursuant to law. Amendments to the Customs Act made by the Customs Implementation Act permit the collection and disclosure of personal information in relation to claiming goods to be AANZFTA originating goods. The provisions of the Customs Implementation Act and the Regulations do not alter the existing protections.

The verification of eligibility for preferential tariff treatment is required under AANZFTA and the measures in the Regulations are directed at the legitimate purpose of facilitating and supporting Australia’s international obligations under the agreement. The collection and disclosure of personal information will only be permitted for the limited purposes of verifying a claim made by a person for preferential tariff treatment, making it a reasonable and proportionate response for a legitimate purpose. As such, the collection and disclosure of personal information in these circumstances is not an unlawful or arbitrary interference with privacy.

Nomination

Under Rule 15 of Annex 3A of Chapter 3 the Second Protocol, Parties to the agreement shall authorise and grant the status of an Approved Exporter to exporters that apply in writing or electronically and meet the conditions provided by that party. Approved Exporters are permitted to complete Declarations of Origin in accordance with Rule 14 of Annex 3A of Chapter 3 of the Second Protocol to support claims that goods are originating and are eligible for preferential tariff treatment under the Agreement. The authorisation of Approved Exporters under Article 3.21 of Chapter 3 of RCEP requires that exporters seeking this status apply in writing or electronically and meet conditions provided by the approving Party. Article 3.16 of Chapter 3 provides that a Declaration of Origin by an Approved Exporter is a Proof of Origin, which can be used to support a claim for preferential tariff treatment.

The Customs Implementation Act inserts new sections 126AKDE and 126AQE into the Customs Act to enable regulations to be made in relation to the approval of entities as Approved Exporters. The Regulations provide that the application made to the Comptroller-General of Customs by an entity for approval as an Approved Exporter must contain, in electronic or document form, the information in an approved form, including the entity’s approved exporter code.

An application to become an Approved Exporter will require the entity seeking to obtain this status to disclose information, including personal information, to the Comptroller General of Customs. This information will be limited to information identifying the exporter, such as their legal or trading name and business address, and information required to assess the suitability of an exporter for the approved exporter scheme, such as the exporter’s prior compliance with the scheme. In most cases, entities applying for Approved Exporter status will be corporations. However, in instances in which the entity is an individual, the right to privacy will be engaged in relation to the requirement to provide personal information and consent to its disclosure.

The collection, use and disclosure of this information will be done in accordance with the Privacy Act 1988, including the Australian Privacy Principles. Applications for Approved Exporter status will be supplemented with a privacy notice listing the circumstances in which their personal information can be used, stored and disclosed.

As part of the privacy notice associated with their application, an entity will also be required to consent to their personal information being collected and disclosed either to the other Parties to the respective agreement or through a public register. Information that may be collected and shared may include: the legal name and address of the exporter, their approved exporter authorisation code, the issuance date and expiry date of approval of Approved Exporter status and goods to which the approval relates. Failure to consent to the sharing of information will mean that they do not meet the requirements of the respective agreements. The collection and disclosure of this information will be limited to the information required to grant and maintain Approved Exporter status and to allow Parties to AANZFTA or RCEP to verify compliance with the Approved Exporter scheme to ensure that goods are eligible for preferential rates of customs duty in accordance with the relevant agreement.

To the extent that an entity is an individual and their name is disclosed to Parties to the agreement or through a public register, the right to privacy will be limited. This limitation is not arbitrary and is directed at the legitimate objectives of implementing Australia’s international obligations under AANZFTA and RCEP and facilitating streamlined documentary requirements for claiming preferential tariff treatment under these agreements.

Participation in the Approved Exporter scheme is voluntary and if entities choose not to opt in, other alternative method of certifying eligibility for preferential tariff treatment is available to exporters. Where an application for Approved Exporter status limits the right to privacy, the information that will be required will be limited to that which allows for identification of an entity and verification of the entity’s compliance with AANZFTA, RCEP or the approved exporter schemes under these agreements. As such, the limitation will be reasonably necessary, proportionate and rationally connected to the objective of ensuring that only exporters who have demonstrated their capacity to comply with origin requirements under the agreements are able to self-certify the originating status of their goods.

Conclusion

The Disallowable Legislative Instrument is compatible with human rights because it promotes the right to a fair and public hearing and to the extent that it limits the right to privacy, those limitations are reasonable, necessary and proportionate in achieving a legitimate objective.

The Hon. Tony Burke MP, Minister for Home Affairs

Signing of the Second Protocol to Amend the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area