Overview

The Customs Act 1901 was enacted to provide a framework for the regulation of customs and excise, including the imposition of tariffs and the granting of tariff concessions. The Tariff Concessions Revocation Instrument No. 2/2010 addresses the problem of revoking tariff concession orders when a domestic producer of substitutable goods emerges. This instrument was created to provide flexibility within the scheme to ensure that Australian industry remains competitive and that tariff concessions are only granted when there is no domestic production of the goods in question. The instrument was enacted by the Chief Executive Officer of Customs under the authority granted by sections 269C, 269P, 269SB, and 269SC of the Customs Act 1901, and its policy objective is to ensure that tariff concessions are only granted when there is a genuine need to protect Australian industry from international competition.

Scope and Application

The Customs Act 1901 governs the regulation of imports and exports in Australia and provides mechanisms for the establishment and revocation of Tariff Concession Orders (TCOs), which lower the rate of customs duty on specified goods. Specifically, Part XVA of the Act allows the Chief Executive Officer of Customs (CEO) to create TCOs if, at the time of application, no substitutable goods are being produced in Australia. Should a local producer of substitutable goods emerge after the TCO is established, they can request the CEO to revoke the order. The Tariff Concessions Revocation Instrument No 2/2010 was made in response to such a request from Soma Power Pty Ltd, leading to the revocation of TCO 0916497, which covered wind-powered generators, on the basis that the CEO was satisfied Soma Power Pty Ltd was a producer of substitutable goods and that the TCO would not have been granted if the request had been made on the day the original application was lodged. The CEO must publish a notice in the Gazette as soon as practicable after receiving a revocation request, detailing the request and the particulars of the TCO. The revocation order takes effect on the day the request was lodged, despite certain prohibitions on retrospective legislative instruments.

Key Provisions

The main operative sections of the Tariff Concessions Revocation Instrument 2/2010 (the Instrument) pertain to the revocation of Tariff Concession Order (TCO) 0916497. Section 269SB of the Customs Act 1901 allows for a request to be made to the Chief Executive Officer of Customs (the CEO) by a producer in Australia of substitutable goods, seeking the revocation of a TCO. Under sections 269SC(1) and (3) of the Act, the CEO is required to make an order revoking the TCO if satisfied that the applicant is a producer of substitutable goods and that the TCO would not have been made if the request for revocation had been lodged on the day the original TCO application was made. Pursuant to these provisions, the Instrument revokes TCO 0916497, which pertains to wind-powered generators, due to the CEO's satisfaction that Soma Power Pty Ltd is a producer of substitutable goods and that the TCO would not have been issued. The Instrument imposes certain obligations and requirements on the CEO. Under subsection 269SC(1A) of the Customs Act 1901, the CEO must publish a notice in a Gazette as soon as practicable after receiving a request for the revocation of a TCO. This notice must include a statement that a request has been lodged and the full particulars of the TCO to which the request relates. The CEO must also ensure that the order revoking the TCO comes into force on the day the request for revocation was lodged, as stipulated in subsection 269SC(6) of the Act. Furthermore, the CEO must be satisfied, in accordance with the criteria set out in subsections 269SC(1) and (3), that the applicant is a producer of substitutable goods and that the TCO would not have been made if the revocation request had been lodged on the day the original TCO application was made. The Customs Act 1901 provides for both civil and criminal consequences for non-compliance with its provisions. While the specific offences and penalties are not detailed in the Instrument itself, breaches of the Act may result in civil penalties, including fines, or criminal penalties, including imprisonment, depending on the nature and severity of the breach. The maximum penalties for breaches of the Customs Act 1901 can vary widely, with some offences carrying maximum fines of up to $22,200 for individuals and $111,000 for corporations, while others may carry imprisonment terms ranging from a few months to several years. The precise penalties applicable to a particular breach would depend on the specific provision of the Act that has been contravened and the circumstances of the offence.