EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0912065
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Saipem Pty Ltd applied for a TCO in respect of certain subsea umbilical cable on 09 April 2009.
Instrument
TCO No 0912065 was made on 03 July 2009. It declares that those certain subsea umbilical cable are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0912065 is taken to have come into force on 09 April 2009.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901, as amended, facilitates the application of tariff concessions to certain goods to ensure they are not subject to a higher rate of customs duty than necessary. Enacted by the Parliament of Australia, the Act provides a mechanism through which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) that apply lower rates of duty to specified goods. This process was introduced to address the issue of ensuring that imported goods receive appropriate tariff treatment, particularly in cases where the goods are not being produced in Australia and have no substitutable domestic equivalents. The policy objective is to promote fair trade practices by preventing over-tariffing of goods that could otherwise be competitively priced against domestically produced items. The explanatory statement outlines the procedure for applying for and making such orders, and ensures that the process is transparent and open to public consultation.
Scope and Application
The Tariff Concession Instrument No. 0912065, under the Customs Act 1901, applies to the specific goods, namely certain subsea umbilical cables, and pertains to the application submitted by Saipem Pty Ltd on 09 April 2009. The instrument was issued by the Chief Executive Officer of Customs, who determined that these cables qualify for a tariff concession as no substitutable goods were produced in Australia at the time of the application, thereby meeting the core criteria outlined in the Act. This concession reduces the duty on these goods from the general rate of 5% to free, effective from the date the application was lodged. The geographic scope of this instrument is national, given it operates under the Commonwealth's authority. The instrument does not apply to any goods specified under section 269SJ of the Customs Act, which are ineligible for tariff concessions. Furthermore, the instrument does not disadvantage any person or impose liabilities for actions taken before its effective date, while it potentially benefits importers by allowing them to apply for duty refunds on imports since the commencement date.
Key Provisions
The main operative sections of this legislation, specifically section 269C and section 269P of the Customs Act 1901, establish the criteria for making a Tariff Concession Order (TCO). Section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, they are required under section 269P(3) to make a written order (TCO) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. This specific order, TCO No. 0912065, made on 03 July 2009, declared that certain subsea umbilical cables are goods to which item 50 of Schedule 4 to the Tariff applies, with a general rate of duty of 5% reduced to free under the TCO.
The obligations imposed by this Act on the parties involved, particularly the CEO, include assessing whether a TCO application meets the core criteria and making a written order if satisfied. The CEO must also ensure that the application is not in respect of goods specified in section 269SJ of the Act, which cannot be subject to a TCO. Additionally, the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission. In this instance, the CEO did not receive any submissions, indicating no objections to the TCO.
The consequences for non-compliance with the Act are not explicitly detailed in the provided text, but generally, breaches of customs regulations can lead to significant penalties. Under Australian law, customs-related offences can result in both civil and criminal penalties. Civil penalties can include fines, with the exact amount varying based on the nature and severity of the breach. Criminal penalties can range from fines to imprisonment, depending on the offence. The maximum penalties for serious breaches can be substantial, reflecting the seriousness of the offence and its impact on revenue and compliance with customs regulations.