EXPLANATORY STATEMENT
Issued by authority of the Minister for Home Affairs
Customs Tariff Act 1995
Customs Tariff (Suspension of Preferential Tariff for Certain UK Originating Goods) Notice 2023
The Customs Tariff Act 1995 (Tariff Act) gives effect to Australia’s import trade classification system. It assigns rates of customs duty, both general and preferential, to imported goods and enables the collection of these duties.
Section 16A of the Tariff Act allows the Minister to make a legislative instrument (a notice) to effect a suspension of preferential tariffs for certain UK originating goods in accordance with the Free Trade Agreement between Australia and the United Kingdom of Great Britain and Northern Ireland (Agreement).
The United Kingdom currently has a safeguard in place over certain goods listed in Chapters 72 and 73 of the Harmonized Commodity Description and Coding System, as contained in the International Convention on the Harmonized Commodity Description and Coding System, and implemented in Australia under the Tariff Act) until 30 June 2024.
The Customs Tariff Amendment (Australia-United Kingdom Free Trade Agreement Implementation) Act 2022 (Tariff Implementation Act) inserted new section 16A into the Tariff Act which allows the Minister for Home Affairs to make a legislative instrument (a notice) suspending preferential rates of customs duty on certain United Kingdom originating goods that are steel or iron goods if those goods are imported during the period specified in the notice.
The Customs Tariff (Suspension of Preferential Tariff for Certain UK Originating Goods) Notice 2023 (Notice) is made under section 16A of the Tariff Act and its purpose is to maintain the general rate of customs duty in relation to equivalent goods covered by the United Kingdom’s steel safeguard. The Notice commenced on 31 May 2023 remains in effect while the United Kingdom’s safeguard is in effect (until 30 June 2024). If the United Kingdom subsequently indicates that it will extend the safeguard, the Minister may choose to make another notice that applies to the equivalent products for the same amount of time as the extension of the safeguard.
The Notice specifies safeguard goods covered by the Notice by reference to particular subheadings in Schedule 3 to the Tariff Act, and by reference to goods covered by a particular subheading that matches a particular description.
The Notice was developed in consultation with the Department of Foreign Affairs and Trade (DFAT). No public consultation was undertaken on the Notice specifically because the Notice gives effect to measures included within consultation for the Tariff Implementation Act.
Public consultation and stakeholder engagement for the Tariff Implementation Act commenced on 17 June 2020. Stakeholders were engaged during the four years of preparatory discussions under the bilateral Trade Working Group, established in September 2016. Once negotiations formally commenced, DFAT, in conjunction with other government agencies, consulted widely with industry and other stakeholders. In the 12 months preceding the conclusion of the Agreement, DFAT communicated with over 140 organisations and participated in over 250 meetings.
In the lead-up to negotiations and throughout negotiations, negotiators regularly engaged with representatives of the business sector, academia and civil society organisations to provide them with an opportunity to share their views and expectations. After every negotiating round, online stakeholder consultation events took place, hosted by the Australian British Chamber of Commerce and/or the Australia-UK Chamber of Commerce.
DFAT hosted a number of peak industry body events updating industry on the Agreement’s negotiations, including biannual peak organisation meetings on trade and investment agreement negotiations and implementation as well as with peak bodies such as the Australian Services RoundTable. The Government also convened meetings of the Ministerial Advisory Council to add to transparency around negotiations. Participants in these meetings included representatives from peak industry bodies and civil society. The Agreement was discussed in this forum on 12 August 2020, 25 November 2020 and 26 March 2021.
Details of the Notice are set out in Attachment A.
The Statement of Compatibility with Human Rights has been prepared in accordance with the Human Rights (Parliamentary Scrutiny) Act 2011, and is set out at Attachment B.
The Notice is a legislative instrument for the purposes of the Legislation Act 2003.
The Notice commences on the later of, the day after the instrument is registered, and immediately after the commencement of Schedule 1 to the Tariff Implementation Act. Schedule 1 to the Tariff Implementation Act commences at the same time as Schedule 1 to the Customs Amendment (Australia-United Kingdom Free Trade Agreement Implementation) Act 2022 (Customs Implementation Act). Schedule 1 to the Customs Implementation Act commences on the later of, the day after that Act receives the Royal Assent, and the day the Agreement enters into force for Australia.
ATTACHMENT A
Details of the Customs Tariff (Suspension of Preferential Tariff for Certain UK Originating Goods) Notice 2023
Section 1 – Name
This section provides that the title of the instrument is the Customs Tariff (Suspension of Preferential Tariff for Certain UK Originating Goods) Notice 2023 (Notice).
Section 2 – Commencement
This section sets out, in a table, the date on which each of the provisions contained in the amendment Regulations commence.
Table item 1 provides for the whole of the instrument commences on the later of, the day after it is registered on the Federal Register of Legislation, and immediately after the commencement of Schedule 1 to the Customs Tariff Amendment (Australia-United Kingdom Free Trade Agreement Implementation) Act 2022 (Tariff Implementation Act).
Schedule 1 to the Tariff Implementation Act commences at the same time as Schedule 1 to the Customs Amendment (Australia-United Kingdom Free Trade Agreement Implementation) Act 2022 (Customs Implementation Act). Schedule 1 to the Customs Implementation Act commences on the later of, the day after that Act receives the Royal Assent, and the day the Agreement enters into force for Australia.
Section 3 – Authority
This section sets out the authority under which the amendment Notice is made, which is the Customs Tariff Act 1995 (Tariff Act).
Section 4 – Interpretation
This section sets out interpretative provisions that apply to the Notice.
Note 1 to this section indicates a number of terms and expressions which adopt the same meaning in section 3 of the Tariff Act.
Note 2 to this section indicates the expression ‘safeguard goods’ used in this instrument is defined in subsection 16A(5) of the Tariff Act.
The term ‘safeguard goods’ means UK originating goods that are classified to a heading or subheading in Schedule 3 to the Tariff Act that are specified in column 2 of any of items, ranging from items 150 to 238 in Schedule 15 to the Tariff Act. These items correspond to the tariff subheadings identified with an asterisk as being subject to the UK safeguard in the table in Part 2A-2 of Section 2A of Annex 2A to the Free Trade Agreement between Australia and the United Kingdom of Great Britain and Northern Ireland.
The effect of this definition is that preferential tariff treatment is only suspended on goods falling under certain tariff subheadings identified with an asterisk in the table in Part 2A-2 of Section 2A of Annex 2A to the Agreement. The Agreement can in 2023 be viewed, free of charge, in the Australian Treaties Library on the AustLII website (http://www.austlii.edu.au).
Subsection (1) sets out definitions for the following terms for the purposes of the Notice:
- electrical
- tool steel
- relevant composition
- tinplate.
The purpose of subsection 4(1) is ensuring that the types and composition of goods identified by tariff subheadings reflects what is covered by the United Kingdom’s global safeguard. The United Kingdom’s global safeguard is publically available on the United Kingdom’s government website www.gov.uk, which provides for “Trade Tariff: look up commodity codes, duty and VAT rates”.
For example, the definition of “tool steel” is based on the Additional Chapter note for ‘tool steel’ that appears at the end of Chapter 72 of the UK Global Tariff.
Subsection (2) sets out that an expression used in this instrument has the meaning given by, or has a meaning affected by, any relevant Note, Subheading Note, or Additional Note to Chapter 72 of Schedule 3 to the Tariff Act. This Chapter sets out the Principal Tariff for goods which are iron and steel.
For example, phrases used in the instrument such as “the general rate of duty set out in the third column of the tariff classification under which the goods are classified” is the language used in the Tariff Act to refer to the rates of duty in Schedule 3 of that Act. See the defined terms of “general rate”, “heading” and “subheading” in section 3 of the Tariff Act and “tariff classification” in section 6 of that Act.
Section 5 – Suspension of preferential tariffs for certain UK originating goods
General rate of duty
This section specifies the safeguard goods and the period of time for the purposes of paragraphs 16A(1)(a) and 16A(1)(b) of the Tariff Act. Subsection 16A(1) of the Tariff Act has the effect of applying the Schedule 3 general rates of customs duty on safeguard goods, instead of the preferential rates of customs duty identified in paragraph 16(1)(u) of the Tariff Act. Paragraph 16A(1)(b) provides that the Schedule 3 rates apply during the period specified in a notice made by the Minister under this section.
Specified timeframe
Subsection 5(1) of the Notice sets out that the safeguard goods covered by subsection (2) or (3) are specified and the period for which they are specified. The timeframe specified in this Notice, beginning at the commencement of the instrument and ending at the end of 30 June 2024, corresponds with equivalent safeguard duties imposed by the United Kingdom on Australian originating goods.
This timeframe is specified consistent with new subsection 16A(4) of the Tariff Act, which relevantly provides that the Minister must not specify a period commencing before the Notice. The period of time specified in the instrument is limited to times when the importation of products under Chapters 72 or 73 are subject to a global safeguard measure under a law of the United Kingdom. Essentially, this provision prevents a notice from applying retrospectively.
The effect of this is that the suspension on preferential rates of customs duty commences at the same time those rates take effect, which is when the Agreement enters into force. The specified end date aligns with the currently specified end date to the United Kingdom’s safeguard.
Subsection (2) sets out goods which are specified safeguard goods if they are classified to a heading or subheading in Schedule 3 to the Tariff Act and identified by an item in column 2 of the table under subsection (2).
Subsection (3) sets out goods which are specified safeguard goods if they are classified to a heading or subheading in Schedule 3 to the Tariff Act identified by an item in column 2 of the table under subsection (3), and if they also meet the description set out in column 3 of that table.
ATTACHMENT B
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Customs Tariff (Suspension of Preferential Tariff for Certain UK Originating Goods) Notice 2023
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 Customs Tariff Act 1995 (Tariff Act) gives effect to Australia’s import trade classification system. It assigns rates of customs duty, both general and preferential, to imported goods and enables the collection of these duties.
Section 16A allows the Minister to make a legislative instrument (a notice) to effect a suspension of preferential tariffs for certain UK originating goods in accordance with Free Trade Agreement between Australia and the United Kingdom of Great Britain and Northern Ireland (Agreement).
The United Kingdom currently has a safeguard in place over certain goods listed in Chapters 72 and 73 of the Harmonized Commodity Description and Coding System, as contained in the International Convention on the Harmonized Commodity Description and Coding System, and implemented in Australia under the Tariff Act) until 30 June 2024.
The Customs Tariff Amendment (Australia-United Kingdom Free Trade Agreement Implementation) Act 2022 (Tariff Implementation Act) inserted new section 16A into the Tariff Act which allows the Minister for Home Affairs to make a legislative instrument (a notice) suspending preferential rates of customs duty on certain United Kingdom originating goods that are steel or iron goods if those goods are imported during the period specified in the notice.
The Customs Tariff (Suspension of Preferential Tariff for Certain UK Originating Goods) Notice 2023 (Notice) is made under section 16A of the Tariff Act and its purpose is to maintain the general rate of customs duty in relation to equivalent goods covered by the United Kingdom’s steel safeguard. The Notice commenced on 31 May 2023 remains in effect while the United Kingdom’s safeguard is in effect (until 30 June 2024). If the United Kingdom subsequently indicates that it will extend the safeguard, the Minister may choose to make another notice that applies to the equivalent products for the same amount of time as the extension of the safeguard.
The Notice specifies safeguard goods covered by the Notice by reference to particular subheadings in Schedule 3 to the Tariff Act, and by reference to goods covered by a particular subheading that matches a particular description.
The Notice commences immediately after the Agreement enters into force for Australia.
Human rights implications
The Notice is technical in nature and does not engage any of the applicable rights or freedoms.
Conclusion
The Notice is compatible with human rights as it does not raise any human rights issues.
The Hon. Clare O’Neil MP
Minister for Home Affairs