Overview

The Customs Act 1901, enacted by the Parliament of Australia, introduced a scheme allowing for the creation of Tariff Concession Orders (TCOs) to provide relief from customs duties on certain goods. This scheme addresses the need to alleviate the financial burden on importers by providing lower rates of customs duty for goods specified in a TCO, thereby facilitating the import of goods that are not produced domestically and ensuring that Australian consumers and businesses have access to competitive prices. The policy objective is to support the efficient operation of the Australian economy by promoting fair and reasonable access to imported goods. The instrument, Tariff Concession Instrument No. 0950549, was introduced to grant a concessional tariff rate to Schlumberger Oilfield Australia for certain fracturing blenders, effective from 30 December 2009. The instrument was made by the Chief Executive Officer of Customs after determining that no substitutable goods were produced in Australia at the time the application was lodged. This decision ensures that the tariff rate for these specific goods is set at zero, thereby reducing the cost of importation for these items and potentially benefiting the broader market.

Scope and Application

The Tariff Concession Instrument No. 0950549 applies to specific goods, namely certain fracturing blenders, as designated by Schlumberger Oilfield Australia, and relates to the application of a lower rate of customs duty under the Customs Act 1901. The Act applies to these goods by virtue of a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs (the CEO) on 12 March 2010. The instrument was issued following an application submitted on 30 December 2009, and the TCO is considered to have come into force on the same date. The Act applies to these goods on a national basis, as it is a Commonwealth instrument under the Customs Act 1901. The Act does not apply to goods specified in section 269SJ of the Act, which outlines those goods that cannot be subject to a TCO. Additionally, the Act's application may be extended or restricted through subordinate instruments, although the specific TCO No. 0950549 does not indicate any such extensions or restrictions.

Key Provisions

The main operative sections of the Tariff Concession Instrument No. 0950549, which is made under the Customs Act 1901, pertain to the process by which the Chief Executive Officer of Customs (CEO) can grant tariff concessions on specific goods. Section 269F of the Act allows for an application to the CEO for a Tariff Concession Order (TCO) in respect of particular goods, provided that the goods do not fall under the prohibitions listed in section 269SJ. If the CEO is satisfied that the application does not involve goods that are specified in section 269SJ, they must assess whether the application meets the core criteria as outlined in section 269C. This involves confirming that on the day the application was made, no substitutable goods were produced in Australia in the ordinary course of business, where 'substitutable goods' are defined by section 269D and 'ordinary course of business' by section 269E. Once the CEO determines that the core criteria are met, they are required to issue a written TCO under section 269P(3) of the Act. This order specifies that the goods in question are subject to a particular item in Schedule 4 of the Customs Tariff Act 1995, with the associated duty rate for those goods. In the case of Schlumberger Oilfield Australia's application, the TCO declared that certain fracturing blenders were subject to item 50 of the Tariff, with the duty rate for these goods set at free, rather than the general rate of 5%. The obligations imposed by the Act on the parties or entities it governs include the requirement for the CEO to ensure that any TCO application is not for goods that are prohibited under section 269SJ of the Act. Additionally, the CEO must publish a notice in the Gazette (as per subsection 269K(1)) inviting submissions from any person who may have an objection to the proposed TCO. Although no submissions were received in response to the notice for TCO No. 0950549, the process must still be followed to maintain transparency and due process. The CEO is also responsible for determining whether the core criteria are met and, if so, issuing the TCO. In terms of the potential consequences of breach, the Customs Act 1901 does not explicitly outline offences or penalties for failure to comply with the provisions of the TCO or for submitting a false application. However, any breaches of related customs laws, such as fraudulent claims or misrepresentations, could result in both civil and criminal penalties. Civil penalties may include fines and the recovery of duties and taxes owed, while criminal penalties could include imprisonment, depending on the severity of the offence. The specific penalties would be determined by the relevant courts and would be in accordance with other applicable laws, such as the Crimes Act 1914.