EXPLANATORY STATEMENT
Issued by the Delegate of the Minister for Home Affairs
Customs Act 1901
Notice of Intention to Propose Customs Tariff Alterations (No. 2) 2023
Legislative Authority
The Customs Act 1901 (Customs Act) concerns customs-related functions and is the legislative authority that sets out the customs requirements for the importation and exportation of goods to and from Australia.
The Customs Tariff Act 1995 (Customs Tariff Act) gives effect to Australia’s import trade classification system. It is used to assign rates of customs duty, both general and preferential, to imported goods and enables the collection of these duties.
Background
Subsection 273EA(1) of the Customs Act has effect that, when Parliament is not sitting for a period of at least seven days, the Minister may under section 273EA of the Customs Act publish a notice that within seven sitting days of the House of Representatives after the date of publication of the notice, the Minister will propose in Parliament a Customs Tariff alteration in accordance with particulars in the notice and operating as from such time as in the notice. Subsection 273EA(1) further provides that a notice that does not raise duty may apply retrospectively up to six months before the time of publication.
This mechanism is used for initially effecting alterations to the Customs Tariff Act, particularly when such alterations are required to have effect in a short timeframe that cannot be achieved through a Customs Tariff Amendment Bill. Following the introduction of a Customs Tariff Proposal in the House of Representatives, the alterations contained in the Proposal would be incorporated into the Customs Tariff Act by a Customs Tariff Amendment Bill.
On 26 June 2023, the Prime Minister, Deputy Prime Minister and Minister for Foreign Affairs announced, as part of further assistance to Ukraine, that Australia will extend duty-free access for goods imported from Ukraine for a further 12 months, to support its recovery and trade opportunities.
For that announcement, the Notice of Intention to Propose Customs Tariff Alterations (No. 2) 2023 (Notice) advises of the intention to amend paragraph 18B(1)(b) of the Customs Tariff Act.
The measure is a response to Russia’s continuing illegal invasion of Ukraine, supported by Belarus, and is necessary for the protection of Australia’s essential security interests. Russia’s actions, supported by Belarus, are a gross violation of international law, including the Charter of the United Nations. They violate Ukraine’s sovereignty and territorial integrity and undermine the rules-based international order. Australia is committed to upholding these principles, which are essential to international, regional and domestic stability and security.
This extension will underline Australia’s continuing commitment to supporting Ukraine’s continued participation in international trade and the efforts of Ukraine to uphold its territorial integrity. The proposed measure would be consistent with similar initiatives from the United States, European Union and United Kingdom.
Purpose and effect
The alteration contained in the particulars of the Notice has effect such that the temporary decrease in duties for goods from Ukraine covered by section 18B are in respect of produce or manufacture of Ukraine that are imported into Australia during the period beginning on 4 July 2022 and ending at the end of 3 July 2024. The alteration results in the increase of the duration from 12 months to 24 months. The alteration does not otherwise change the scope of section 18B of the Customs Tariff Act.
Most goods that are the produce or manufacture of Ukraine would continue to be covered by a ‘Free’ rate of duty.
However, this ‘Free’ rate of duty would continue to not apply to goods classified under a tariff classification in Chapter 22, 24, 27, 29, 34 or 38 of Schedule 3 to the Customs Tariff Act for which a ‘DC’ tariff rate is listed. The rate of duty for these goods would instead be calculated as the lower rate of either the ‘DC’ rate in Schedule 3, or any concessional rate applying in Schedule 4. These exceptions continue to maintain the excise‑equivalent customs duty payable for goods such as alcohol, fuel and tobacco.
The rules for determining whether goods are the produce or manufacture of Ukraine would continue to be the same rules applicable to Developing Countries accessing ‘DC’ rates in the Australian System of Trade Preferences. Having clear and transparent rules of origin minimises the risk of transhipment of goods through Ukraine that would otherwise not be entitled to the ‘Free’ rate of duty.
Consultation
The Department of Foreign Affairs and Trade, as the lead agency on this matter, lead the consultations with the Department of the Treasury regarding the implications for customs duty collections over the period. No public consultation was undertaken.
Details
Details of the Notice are set out in Attachment A.
The alterations outlined in the Notice take effect from 4 July 2023.
Other
A Statement of Compatibility with Human Rights has been prepared for this notice and is at Attachment B. The Statement assesses the alteration to be compatible with human rights as it does not raise any human rights issues.
ATTACHMENT A
Details of the Notice of Intention to Propose Customs Tariff Alterations (No. 2) 2023
Schedule 1—Alteration to the Customs Tariff Act 1995 operating start on 4 July 2023
Schedule 1 to the Notice of Intention to Propose Customs Tariff Alterations (No. 2) 2023 (Notice) outlines the alterations to the Customs Tariff Act 1995 (Customs Tariff Act). The alterations operate starting on 4 July 2023.
Customs Tariff Act 1995
Item 1 Paragraph 18B(1)(b)
Section 18B of the Customs Tariff Act concerns the temporary decrease in duties for imported goods from Ukraine. Currently, to be eligible for the decreased rates of duty, goods must be the produce or manufacture of Ukraine and imported into Australia during the period of 12 months beginning on 4 July 2022 and ending on 3 July 2023.
The alteration in item 1 has effect such that the temporary decrease in duties for goods from Ukraine covered by section 18B are in respect of produce or manufacture of Ukraine that are imported into Australia during the period beginning on 4 July 2022 and ending at the end of 3 July 2024. The alteration results in the increase of the duration from 12 months to 24 months. The alteration does not otherwise change the scope of section 18B of the Customs Tariff Act.
ATTACHMENT B
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Notice of Intention to Propose Customs Tariff Alterations (No. 2) 2023
The Notice of Intention to Propose Customs Tariff Alterations (No. 2) 2023 is compatible with the human rights and freedoms recognised or declared in the international instruments listed in the definition of human rights in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview
The Customs Act 1901 (Customs Act) concerns customs-related functions and is the legislative authority that sets out the customs requirements for the importation and exportation of goods to and from Australia.
The Customs Tariff Act 1995 (Customs Tariff Act) gives effect to Australia’s import trade classification system. It is used to assign rates of customs duty, both general and preferential, to imported goods and enables the collection of these duties.
Subsection 273EA(1) of the Customs Act has effect that, when Parliament is not sitting for a period of at least 7 days, the Minister may under section 273EA of the Customs Act publish a notice that within 7 sitting days of the House of Representatives after the date of publication of the notice, the Minister will propose in Parliament a Customs Tariff alteration in accordance with particulars in the notice and operating from such time as is specified in the notice. Subsection 273EA(1) further provides that a notice that does not raise duty may apply retrospectively up to six months before the time of publication.
On 26 June 2023, the Prime Minister, Deputy Prime Minister and Minister for Foreign Affairs announced, as part of further assistance to Ukraine, that Australia will extend duty-free access for goods imported from Ukraine for a further 12 months, to support its recovery and trade opportunities.
For that announcement, the Notice of Intention to Propose Customs Tariff Alterations (No. 2) 2023 (Notice) advises of the intention to amend paragraph 18B(1)(b) of the Customs Tariff Act.
The alteration contained in the particulars of the Notice has effect such that the temporary decrease in duties for goods from Ukraine covered by section 18B are in respect of produce or manufacture of Ukraine that are imported into Australia during the period beginning on 4 July 2022 ending at the end of 3 July 2024. The alteration results in the increase of the duration from 12 months to 24 months. The alteration does not otherwise change the scope of section 18B of the Customs Tariff Act.
The alteration to the Customs Tariff Act has effect on 4 July 2023.
The measure is a response to Russia’s continuing illegal invasion of Ukraine, supported by Belarus. This extension will underline Australia’s continuing commitment to supporting Ukraine’s continued participation in international trade and the efforts of Ukraine to uphold its territorial integrity. The proposed measure would be consistent with similar initiatives from the United States, European Union and United Kingdom.
Human rights implications
The Notice 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.
Clare O’Neil, Minister for Home Affairs