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CUSTOMS AMENDMENT REGULATIONS 2002 (NO. 3) 2002 NO. 138

STATUTORY RULES 2002 No. 138

Issued by the Authority of the Minister for Justice and Customs

Customs Act 1901

Customs Amendment Regulations 2002 (No. 3)

Section 270 of the Customs Act 1901 (the Act) provides in part that the Governor-General may make regulations not inconsistent with the Act prescribing all matters which are required or permitted to be prescribed for giving effect to the Act.

The Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001 (the ITM Act) amends the Act to:

•       change the classes of goods that do not have to be entered for export so that the same requirements apply to goods exported by post as apply to goods exported by other means (new paragraph 113(2)(b) of the Act refers). An export entry is the formal notification that is given to Customs by an owner of goods of their intention to export goods. However, the regulations may prescribe that certain goods be entered for export even though they fall within the terms of paragraph 113(2)(b) which would otherwise exempt them from this requirement (item 56 in Part 3 of Schedule 3 to the ITM Act refers); and

•       introduce new document retention obligations that will require owners of all goods exported from Australia and persons who cause goods to be exported from Australia to keep certain commercial documents, such as invoices and contracts of sale (new subsections 240(1A) and (1B) of the Act refer). Under its post-transaction auditing powers, Customs may require these documents to be produced to verify compliance with Customs-related laws. However, the regulations can prescribe classes of documents that do not have to be retained in accordance with section 240 (items 17 and 18 in Part 6 of Schedule 1 to the ITM Act refer).

A separate minute to the Executive Council is proposing that item 56 in Part 3 of Schedule 3 and items 17 and 18 in Part 6 of Schedule 1 to the ITM Act be proclaimed to commence on 1 July 2002.

The purpose of the amending Regulations is to amend the Customs Regulations 1926 to set out certain classes of goods that do have to be notified to Customs by the owner prior to their exportation and to exempt certain commercial documents relating to exported goods from the new record retention requirements that will be introduced by the Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001.

Items 1 and 2 repeal existing subregulations 97(1) and (2) and replace them with a new subregulation 97(1). New subregulation 97(1) would set out the goods exported by post and other means that have to be entered for export. These goods are goods on which customs duty or excise duty have not been paid and goods on which a drawback of customs duty, excise duty or sales tax is intended to be claimed.

Item 3 prescribes certain commercial documents relating to exported goods that do not have to be kept in accordance with subsections 240(1A) and (1B) of the Act. They are commercial documents relating to goods exported from Australia, if the goods are not required to be entered for export; are not required to be specified in an outward manifest; and are not required to be reported to Customs in a submanifest.

Details of the amending Regulations are set out in the Attachment.

The amending Regulations commence on the commencement of item 56 of Part 3 of Schedule 3 to the Act, which is expected to be 1 July 2002.

ATTACHMENT

CUSTOMS AMENDMENT REGULATIONS 2002 (NO. 3)

Regulation 1 - Name of Regulations

Regulation 1 provides that these Regulations are the Customs Amendment Regulations 2002 (No. 3).

Regulation 2 - Commencement

Regulation 2 provides that the Regulations commence on the commencement of item 56 of Part 3 of Schedule 3 to the Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001 (the ITM Act).

Regulation 3 - Amendment of Customs Regulations 1926

Regulation 3 provides that Schedule 1 amends the Customs Regulations 1926 (the principal Regulations).

SCHEDULE 1 - AMENDMENTS

Item 1 - Subregulation 97(1)

Item 56 of Part 3 of Schedule 3 of the ITM Act repeals paragraphs 113(2)(b) and (c) of the Customs Act 1901 (the Act) and replaces them with new paragraph 113(2)(b).

Paragraph 113(2)(b) currently sets out which goods consigned through the Post Office do not have to be entered for export and paragraph 113(2)(c) sets out which goods exported by ship and aircraft that do not have to be entered. Each of those provisions allows the regulations to prescribe classes of goods that, although falling within the terms of paragraph 113(2)(b) or (c), still have to be entered. Subregulations 97(1) and (2) prescribe goods for the purposes of paragraphs 113(2)(b) and (c). These subregulations prescribe the same four classes of goods.

After item 56 commences, there will be no distinction between goods consigned through the Post Office and other goods. In particular, goods (other than prescribed goods) included in a consignment, that are consigned by post, by ship or by aircraft and have a FOB (free on board) value not exceeding $2,000 will not have to be entered.

Item 1 and 2 repeal subregulations 97(1) and (2) and replace them with a new regulation for the purposes of new paragraph 113(2)(b). The goods which will be required to be entered will be:

•       dutiable goods on which the duty is unpaid;

•       excisable goods within the meaning of the Excise Act 1901 on which the excise duty is unpaid;

•       goods for which a person intends to claim a drawback of duty, a drawback of excise duty under the Excise Act 1901 or a drawback of sales tax under the Sales Tax Assessment Act 1930.

These are the same classes of goods that have to be entered currently. Currently, there is a fourth class of goods - goods in respect of which sales tax is payable but is unpaid. It is no longer considered that this class is necessary (as sales tax is no longer payable).

Item 2 - Subregulation 97(2)

This item repeals subregulation 97(2) which prescribed goods for the purposes of paragraph 113(2)(c) of the Act. Item 56 of Part 3 to Schedule 3 of the ITM Act will repeal paragraph 113(2)(c).

Section 240 of the Act requires certain people to keep commercial documents. Currently subsection 240(1A) requires a person who is the owner of goods exported from Australia to keep relevant commercial documents, being documents that are necessary to enable a Collector to satisfy himself or herself of the correctness of the particulars shown in the export entry. That is, documents only have to be retained in respect of exported goods that have been entered for export. Section 113 of the Act sets out those goods that have to be entered for export.

As explained above, item 56 of Part 3 of Schedule 3 to the ITM Act will amend section 113, so that in effect, fewer goods will be required to be entered for export. However, in order to maintain a requirement that commercial documents be kept in respect of certain exported goods, item 17 of Part 6 of Schedule 1 to the ITM Act will repeal and replace subsection 240(1A) so that it is not limited to documents relating to goods that have been entered for export. New subsection 240(1A) will provide that a person who is the owner of goods exported from Australia must keep all the relevant commercial documents relating to the goods that:

•       come into the person's possession or control at any time; and

•       are necessary to enable a Collector to satisfy himself or herself as to the correctness of information communicated by, or on behalf of, the person to Customs (whether in documentary or other form);

for the period of 5 years after the time when the goods were exported from Australia.

Hence, if an owner of exported goods communicates information to Customs about those goods, the owner is required to keep any relevant commercial documents relating to those goods for 5 years. This would include, for example, passengers who export personal effects as accompanied baggage and who provide Customs with an outward declaration when they leave Australia. It was not Customs intention to require the owners of `non-commercial exports' to keep commercial documents in respect of those goods.

Further, item 18 of the ITM Act inserts new subsection 240(1B) into the Act which requires persons who causes goods to be exported from Australia and persons who receive goods that are to be exported from Australia, to keep relevant commercial documents. Again it is not Customs intention to require these people to keep commercial documents in respect of `non-commercial exports'.

Hence, it is proposed to rely on paragraph 240(7)(c) of the Act to declare certain kinds of commercial documents to be documents to which section 240 will not apply.

Item 3 prescribes certain commercial documents relating to exported goods that do not have to be kept for the purposes of section 240. They are commercial documents relating to goods exported from Australia, if the goods:

•       are not required to entered for export; and

•       are not required to be specified in an outward manifest; and

•       are not required to be reported to Customs in a submanifest.

Hence, if the goods have to be entered for export or specified in an outward manifest or a submanifest, commercial documents will have to be kept in respect of those goods.