Notice of Rates of Exchange – 18/02/2020

Overview

The Customs Act 1901, enacted by the Parliament of Australia, provides the framework for the regulation and administration of customs and excise in Australia. One of the Act's functions is to ensure that the value of imported goods is correctly ascertained for the purposes of imposing appropriate duties and taxes. The problem or gap that this particular piece of legislation addresses is the need for consistent and accurate rates of exchange to be used in determining the value of imported goods denominated in foreign currencies. The policy objective is to facilitate the calculation of duty and tax liabilities on imported goods by providing ruling rates of exchange that can be applied to the valuation of such goods. The rates of exchange specified in the notice are to be used for the purposes of Division 2 of Part VIII of the Customs Act 1901, which deals with the valuation of imported goods for duty and tax purposes.

Scope and Application

The Customs Act 1901, as detailed in the gazette notice C2020G00152, provides a mechanism for determining the ruling rates of exchange for various currencies for the purpose of ascertaining the value of imported goods. This notice, issued by Franco Alvarez, a delegate of the Comptroller-General of Customs, is instrumental in ensuring that the valuation of imported goods is based on the most recent and accurate exchange rates. The specified rates are applicable to goods imported into Australia, impacting various entities including importers, customs brokers, and potentially the Australian Taxation Office. The notice applies across the Commonwealth of Australia and covers a wide array of currencies from countries such as Brazil, Canada, China, and many others. This gazette notice does not specify any exclusions, exemptions, or thresholds, but it is implied that the rates are applicable to all imports under the Customs Act 1901. The scope of the notice is further extended through subordinate instruments which may provide additional details or amendments to the rates specified.

Key Provisions

The Customs Act 1901 (Gazette) sets out the ruling rates of exchange for determining the value of imported goods, as specified in Section 161J. These rates, detailed in the attached schedule, apply to various currencies, such as the Brazilian Real, Canadian Dollar, and others, with rates listed for each date from 12 February 2020 to 18 February 2020. These rates are crucial for customs purposes, as they are used to calculate the value of goods entering Australia, which in turn affects the customs duty and GST payable. The Act imposes obligations on importers to ensure that the value of their imported goods is accurately determined using the specified rates of exchange. Importers must provide the requisite information to the Australian Border Force and ensure that their declarations are truthful and complete. This requirement is intended to maintain the integrity of the customs valuation system and to ensure that the correct amount of duty and tax is levied on imported goods. Failure to comply with the provisions of the Customs Act 1901, including providing inaccurate or misleading information regarding the value of imported goods, can result in serious consequences. Under the Act, there are civil and criminal penalties for breaches, which can include fines and imprisonment. The severity of the penalties depends on the nature and extent of the breach. For instance, knowingly providing false or misleading information can lead to fines of up to $22,200 for individuals and $111,000 for corporations, as well as potential imprisonment for up to two years. In cases of serious or repeated breaches, the penalties can be significantly higher.