Overview

The Customs Act 1901 was enacted to regulate customs and border control matters, and it includes provisions for the establishment of Tariff Concession Orders (TCOs) which provide a lower rate of customs duty for certain goods. The Tariff Concession Instrument No. 1043568, made in 2010, was introduced to address the need for a reduced duty on specific subsea isolation valve stations for oil and gas pipelines, applied for by Esso Australia Resources Pty Ltd. This instrument was enacted by the Chief Executive Officer of Customs in accordance with section 269F of the Customs Act 1901, ensuring the application met the core criteria, specifically that no substitutable goods were produced in Australia. The policy objective of this TCO was to facilitate the import of these specialised goods at a lower duty rate, thereby supporting the operations of the applicant and potentially benefiting the broader industry by making such critical infrastructure more accessible.

Scope and Application

The Tariff Concession Instrument No. 1043568 applies to certain subsea isolation valve stations oil and gas pipelines, specifically those that were the subject of an application by Esso Australia Resources Pty Ltd. This Act operates under the Customs Act 1901 and allows for the concession of customs duty on specified goods. The application of this legislation is restricted to the goods mentioned in the instrument, which have been deemed not to have substitutable alternatives produced in Australia at the time of the application. This instrument is applicable across the Commonwealth of Australia and is administered by the Chief Executive Officer of Customs, who must evaluate the application against criteria set out in the Customs Act 1901 to determine if a Tariff Concession Order can be made. The instrument itself came into effect on the date of the application, 23 September 2010, and does not retroactively affect any rights or impose any liabilities on persons other than the Commonwealth. Any person who believes they are adversely affected by the order has the right to lodge a submission with the CEO, although in this case, no submissions were received.

Key Provisions

The primary operative sections of the Tariff Concession Instrument No. 1043568 under the Customs Act 1901 include sections 269C, 269B, 269D, 269E, 269P, and 269SJ (2). These sections detail the criteria for making a Tariff Concession Order (TCO) and the conditions under which a lower rate of customs duty applies to certain goods. Specifically, section 269C sets out the core criteria that must be met for a TCO to be considered, while section 269SJ specifies goods that cannot be subject to a TCO. If the Chief Executive Officer (CEO) of Customs is satisfied that the application for a TCO meets the core criteria, a written order is made under section 269P(3), declaring the goods to which the concession applies. In this instance, the TCO No. 1043568 specifies that certain subsea isolation valve stations for oil and gas pipelines are subject to a duty rate of free, as opposed to the general rate of 5%. The Act imposes certain obligations and requirements on parties applying for a TCO. Firstly, the applicant must ensure that the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. Additionally, the applicant must demonstrate that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This involves proving that there are no Australian-made goods that can be put to a use corresponding with the goods for which the concession is sought. In this case, Esso Australia Resources Pty Ltd applied for a TCO for subsea isolation valve stations, and the CEO was satisfied that no substitutable goods were produced in Australia. Any breaches of the conditions or requirements of a TCO, such as falsely claiming that no substitutable goods were produced in Australia, could lead to civil or criminal consequences. While the Explanatory Statement does not specify the penalties, under the Customs Act 1901, breaches of customs legislation can result in substantial fines and, in serious cases, imprisonment. The exact penalties would depend on the specific nature and severity of the breach, as well as any relevant case law and statutory provisions. The TCO itself does not impose any liabilities on persons other than the Commonwealth, ensuring that the rights of importers are beneficially affected. Section 269K(1) of the Act requires the CEO to publish a notice in the Gazette inviting any interested parties to submit objections to the making of a TCO if they believe there are reasons why the concession should not be granted. In this instance, the CEO did not receive any submissions in response to the published notice. This procedural requirement ensures transparency and allows stakeholders to voice any concerns regarding the concession. Finally, under section 269S(1), a TCO is taken to have come into force on the day the application for the TCO was lodged, which in this case was 23 September 2010. This means that the TCO No. 1043568 is effective from that date, and importers can apply for a refund of duty on goods imported since that date under paragraph 126(1)(r) of the Regulations.