EXPLANATORY STATEMENT
CUSTOMS ACT 1901
CUSTOMS REGULATIONS (AMENDMENT)
STATUTORY RULES 1989 NO, 160
ISSUED BY THE AUTHORITY OF THE MINISTER OF STATE FOR SCIENCE, CUSTOMS AND SMALL BUSINESS
Section 270 of the Customs Act 1901 (the Act) provides in part that “(1) The Governor-General may make regulations not inconsistent with this Act prescribing all matters which by this Act are required or permitted to be prescribed or as may be necessary or convenient to be prescribed for giving effect to this Act ...”
Section 71A of the Act provides the power for the regulations to prescribe certain categories of imported goods which may be delivered into home consumption without entry. Section 114 of the Act provides the power for the regulations to exempt certain goods, which are intended to be exported, from the requirement to be entered.
As a result of the Industries Assistance Commission Report on Transport Containers, the Government decided to remove Customs duty (and sales tax) from shipping containers.
As a consequence of this, it is necessary to extend the categories of containers which may be exempted under the Customs Regulations from being entered for home consumption or for export, in order to meet Australia’s obligations as a contracting party to the Customs Convention and Containers, 1972.
However, some containers will still be required to be entered, to take account of Australia’s need to record trade statistics.
Details of the Regulations are as follows:
Regulation 1: provides for the Regulations to come into operation on 1 July 1989. This date coincides with the insertion of a definition of the term “container” in the Customs Act 1901 (as a result of the commencement of the Customs and Excise Legislation Amendment Act 1989). For further details see Regulation 2 below.
Regulation 2: amends regulation 1A, the interpretation regulation of the Customs Regulations, by omitting the definition of “container”. This definition is now outdated as it refers to the 1956 Customs Convention on Containers, as opposed to the 1972 Customs Convention, and as outlined above, with the insertion of a definition of “container” in the Customs Act 1901 itself, it is not necessary to repeat the same definition in the Customs Regulations.
Regulation 3: amends regulation 42 of the Customs Regulations by: a) omitting from paragraph (1)(e) the reference to the 1956 Customs Convention on Containers, for the reasons outlined above, and b) inserting a new paragraph (1)(f) which widens the category of containers which may be exempted from the requirement to be entered for home consumption.
The background to the insertion of new paragraph 42(1)(f) is as follows: Section 71A of the Act provides officers of Customs with the power to approve the delivery for home consumption of ‘prescribed goods’, without the need for an entry to be made under the Act. Regulation 42 of the Customs Regulations (the Regulations) sets out which goods may receive this exemption; currently, paragraph 42(1)(e) exempts certain Australian manufactured shipping containers, as no customs duty is payable on them. In contrast, other imported shipping containers were dealt with under section 162A of the Act and so delivery of the goods into home consumption without entry was permitted upon the giving of a general security or undertaking for the payment of duty, as duty (and sales tax) was payable if the shipping containers were not exported within the ensuing twelve months.
As a result of the Industries Assistance Commission Report on Transport Containers, the Government decided to remove duty (and sales tax) from shipping containers. Accordingly, it is now no longer possible to deal with containers under section 162A of the Act, as there is no liability for duty and so no general security or undertaking to pay duty is required; all imported containers will need to be entered unless the category of containers which may be exempted from entry under regulation 42 is extended.
Those containers imported for use in, for example, the domestic transport industry will still be required to be the subject of an entry. This is necessary to record trade statistics.
Regulation 4: amends regulation 100 of the Customs Regulations by: a) inserting a new paragraph (1)(e) which widens the category of containers which are exempted from the requirement to be entered for export; and (b) omitting subregulation 100(2) which refers to containers delivered under section 162A of the Act, as for the reasons outlined above, section 162A no longer applies to containers.
The background to the insertion of new paragraph 100(1)(e) is as follows: Section 114 of the Act provides the power to exempt goods from the need to be entered for export, and paragraph 100(1)(d) of the Regulations currently provides an exemption for certain containers which are temporarily exported from Australia. Given that no duty is now payable on containers, those containers which were previously exempted from entry for export under the terms of section 162A would, for similar reasons to those outlined above for Regulation 3, have to have been entered unless regulation 100 was amended to exempt those containers that are intended for use principally in the international carriage of goods. It is still necessary for the purposes of trade statistics to receive entries in respect of
containers which, for example, have been sold by an Australian company to a foreign company, and so an exception to new paragraph 100(1)(e) has been made.
Overview
The Customs Regulations (Amendment) Statutory Rules 1989 No. 160, issued under the authority of the Minister of State for Science, Customs and Small Business, were enacted to address the need to adjust the categories of containers exempt from entry under the Customs Act 1901, in light of the removal of customs duty and sales tax on shipping containers. This change followed the recommendations of the Industries Assistance Commission Report on Transport Containers and was necessary to align with Australia's obligations under the Customs Convention on Containers, 1972. While most containers are now exempt from the need to be entered, some containers must still be entered to facilitate the recording of trade statistics. The regulations amend the existing Customs Regulations to widen the categories of containers exempt from entry for home consumption and export, while ensuring that those containers required for trade statistics are still subject to entry requirements.
Scope and Application
The Customs Regulations (Amendment) Statutory Rules 1989 No. 160, issued under the authority of the Minister of State for Science, Customs and Small Business, amends the Customs Regulations to reflect the removal of Customs duty and sales tax from shipping containers. These regulations apply to all imported goods that are subject to the Customs Act 1901, specifically focusing on shipping containers. The amendments are necessary to align with Australia's obligations under the Customs Convention and Containers, 1972, while also accounting for the need to record trade statistics for certain containers. The regulations extend the categories of containers exempt from entry for both home consumption and export, while still requiring entry for containers used in domestic transport and those sold by Australian companies to foreign entities. The changes come into operation on 1 July 1989 and involve updates to the definition of "container," the removal of outdated references to the 1956 Customs Convention on Containers, and the broadening of exemptions under specific regulations to accommodate the new duty-free status of shipping containers.
Key Provisions
The Customs Regulations (Amendment) Statutory Rules 1989 No. 160, issued under the authority of the Minister of State for Science, Customs and Small Business, make several amendments to the Customs Regulations to reflect changes in customs duty on shipping containers. Regulation 1 sets the commencement date of these Regulations as 1 July 1989, aligning with the insertion of a new definition of "container" in the Customs Act 1901. Regulation 2 updates the interpretation regulation by removing the outdated definition of "container," as it is now redundant due to the new definition in the Act. Regulation 3 amends the category of containers exempt from entry for home consumption by expanding paragraph 42(1)(e) and introducing a new paragraph 42(1)(f). This change is in response to the decision to remove customs duty and sales tax on shipping containers, as recommended by the Industries Assistance Commission Report on Transport Containers. However, containers used in the domestic transport industry still need to be entered to record trade statistics. Regulation 4 modifies the exemption for containers intended for export by adding a new paragraph 100(1)(e) and removing subregulation 100(2), which previously referred to containers delivered under section 162A of the Act. This amendment is necessary as the removal of duty on containers means that they no longer fall under section 162A. Nevertheless, entries are still required for containers sold by Australian companies to foreign entities to maintain trade statistics.
The Customs Regulations (Amendment) Statutory Rules 1989 No. 160 impose specific obligations on parties and entities involved with shipping containers. Importers and exporters of shipping containers must ensure that the containers they handle comply with the amended Regulations, particularly regarding which containers are exempt from entry for home consumption or export. This involves careful assessment of the intended use of the containers. For example, containers intended for use in the domestic transport industry must still be entered, while those intended for international carriage of goods may be exempt from entry if they meet the criteria set out in the Regulations. Additionally, these Regulations require importers and exporters to provide accurate and timely information to Customs when required, ensuring compliance with trade statistics and international obligations. The Regulations also mandate that Customs officers are informed of the changes to ensure proper enforcement and compliance.
The Customs Regulations (Amendment) Statutory Rules 1989 No. 160 establish potential penalties and consequences for non-compliance. Failure to adhere to the Regulations' requirements for entering containers, particularly when necessary to record trade statistics, could result in significant administrative and financial penalties. For example, providing false or misleading information to Customs can lead to civil or criminal charges, with potential fines and imprisonment. Under section 286 of the Customs Act 1901, individuals who wilfully make a false statement or representation can face a maximum penalty of two years imprisonment. Additionally, businesses that fail to comply with the Regulations may face financial penalties, including fines, which can be substantial depending on the severity and frequency of the breach. Furthermore, ongoing non-compliance could result in legal actions to enforce compliance or to seek damages for any losses incurred due to the breach.