Customs Regulations (Amendment) 1994 No. 351
EXPLANATORY STATEMENT
STATUTORY RULES 1994 No. 351
Issued by the Authority of the Minister for Small Business, Customs and Construction
Customs Act 1901
Customs Regulations (Amendment)
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 ... for giving effect to this Act or for the conduct of business relating to the Customs, ..."
Part XVA of the Act provides for the duty-free entry of certain goods via a TCO where it is established that the duty-free entry of those goods is not likely to have a significant adverse effect on the market for Australian made substitutable goods. Section 269SJ of the Act provides that the Comptroller must not make a TCO in respect of goods declared by the Regulations to be goods to which a TCO should not extend.
Regulation 185 and Schedule 2 to the Customs Regulations exclude certain goods from the Tariff Concession System (TCS) by listing goods by the tariff heading or subheading of such goods in Column 2 of Schedule 2. Column 3 of the Schedule provides the facility to list goods within the restricted tariff class for which a TCO can be made.
Schedule 2 fists broad classes of consumer items as well as goods which are the subject of the Government's specifically targeted industry assistance plans such as the Passenger Motor Vehicle (PMV) Plan. It does not, however, specifically cover replacement parts for goods which are the subject of the PMV Plan.
In the 1991 Industry Statement the Government indicated that the automotive industry would continue to be excluded from the TCS and more recently in the White Paper, reaffirmed that the broad framework for this sector would remain in place until the outcome of the PMV industry review in 1996.
Subregulation 2.1 amends regulation 185 to specifically provide that in addition to the goods listed in Column 2 of Schedule 2, all goods in respect of which the customs duty specified in Customs Tariff Act 1987 is 15% are goods to which a TCO should not extend (new paragraph 185(a) refers). As the term "PMV replacement parts" potentially covers thousands of individual goods failing to many tariff classifications, it was considered that the use of the current mechanism in Schedule 2 to the Regulations of listing goods by their tariff classification would have been unsuitable to give effect to the desired policy. By simply referring to goods which have a general rate of customs duty of 15% the regulation automatically extends to all the relevant goods as the only goods which have a duty rate of 15% are PMV replacement parts.
The Regulations commence on gazettal.
Overview
The Customs Regulations (Amendment) 1994 No. 351 was enacted to address the gap in the Customs Regulations concerning the exclusion of certain goods from the Tariff Concession System (TCS), specifically targeting replacement parts for goods under the Passenger Motor Vehicle (PMV) Plan. This amendment was made under the authority of the Minister for Small Business, Customs and Construction and was issued in accordance with Section 270 of the Customs Act 1901. The policy objective was to ensure that the exclusion of the automotive industry from the TCS would remain in place until the outcome of the PMV industry review in 1996, as reaffirmed by the Government in the 1991 Industry Statement and the White Paper. The amendment effectively incorporates a new provision in regulation 185 that specifically excludes goods with a customs duty rate of 15%, which in this context, means PMV replacement parts, from the TCS. This approach was adopted to avoid the impracticality of listing thousands of individual goods by their tariff classifications in Schedule 2 of the Regulations. The Regulations took effect upon their gazettal.
Scope and Application
The Customs Regulations (Amendment) 1994 No. 351 applies to the regulation and control of goods entering and exiting Australia under the Customs Act 1901. Specifically, it pertains to the duty-free entry of certain goods via a Tariff Concession Order (TCO) and amends the existing regulations to clarify the exclusion of particular goods from this concession. The amendment targets goods that are subject to a specific customs duty rate of 15%, which, in this context, pertains to replacement parts for passenger motor vehicles. This amendment ensures these items are not eligible for duty-free entry, aligning with the broader policy of targeted industry assistance and protection for the Australian automotive industry. The scope of this regulation extends nationally across Australia, as it is a Commonwealth Act and the regulations are designed to ensure uniformity in the application of customs duties. The regulation operates by amending Schedule 2 of the Customs Regulations to explicitly exclude goods with a 15% customs duty rate from the Tariff Concession System, thus preventing their inclusion in any TCO. The Regulations commence on gazettal, ensuring immediate effect upon publication.
Key Provisions
The Customs Regulations (Amendment) 1994 No. 351 introduces amendments to the Customs Regulations under the Customs Act 1901. Specifically, it modifies Regulation 185 and updates Schedule 2 to exclude certain goods from the Tariff Concession System (TCS). Regulation 185(a) now includes goods that attract a 15% customs duty, which specifically targets passenger motor vehicle (PMV) replacement parts. This amendment ensures that these parts are not eligible for duty-free entry under a Tariff Concession Order (TCO). Schedule 2 lists broad categories of consumer items and other goods that are not subject to the TCS, aligning with government industry assistance plans.
The amendments impose obligations on importers and other parties involved in the import process. Importers must now ensure that any PMV replacement parts they intend to import are not covered by the 15% customs duty rate, as these goods cannot be the subject of a TCO. The Comptroller, who is responsible for issuing TCOs, must adhere to the updated regulations and refrain from making TCOs for goods that are specifically excluded by the new Regulation 185(a). This includes verifying that the goods in question meet the criteria outlined in the amended Schedule 2.
Failure to comply with the provisions of the Customs Regulations, including the new exclusions for PMV replacement parts, can result in significant legal consequences. Importers who attempt to bring in PMV replacement parts under a TCO could face penalties, including fines and potential criminal charges for fraud or misrepresentation. The maximum penalties for such offences are substantial, reflecting the seriousness of circumventing the regulatory framework designed to protect domestic industries. The regulatory amendments aim to maintain the integrity of the TCS and ensure that the government’s industry assistance plans are effectively implemented.