Commonwealth Numbered Regulations - Explanatory Statements

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CUSTOMS AMENDMENT REGULATIONS 2004 (NO. 3) 2004 NO. 243

Subsection 270(1) 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 by the Act are required or permitted to be prescribed or as may be necessary or convenient to be prescribed for giving effect to the Act or for the conduct of any business relating to the Customs.

The Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001 (the ITM Act) contains amendments to the Act. The amendments in the ITM Act relating to goods for export and the departure of ships and aircraft (the ITM exports amendments) have been proclaimed to commence on 22 September 2004.

The purpose of the amending Regulations is to make new regulations and amend existing regulations as a result of the amendments the ITM Act will make to the Act and to repeal two redundant regulations.

The ITM exports amendments repeal the provisions of the Act that relate to the computer system, known as EXIT, that is currently used to communicate with Custom:; in relation to goods for export, and the departure of ships and aircraft from Australia. Those provisions will be replaced with a requirement that the Chief Executive Officer of Australian Customs Service (the CEO) maintain information systems to enable persons to communicate electronically with Customs. This new system is known as the Integrated Cargo System or the ICS. Under the transitional arrangements contained in the Customs Legislation Amendment Act (No. 2) 2003 (the Amendment Act), the CEO must specify a cut-over time from the current system to the new system. This time is proposed to be 2am in the Australian Capital Territory on 6 October 2004. During the period between the commencement of the ITM exports amendments (ie 22 September 2004) and the cut-over time (ie 2am in the Australian Capital Territory on 6 October 2004) (the transition period) EXIT and the ICS will both operate. The Amendment Act provides that during the transition period the ICS must be used to communicate information to Customs about the exportation of goods and the departure of ships and aircraft where the intended time of exportation or departure is at or after the cut-over time. Communications made during the transition period about exportations and departures intended to occur before the cut-over time must be made using EXIT.

Schedule 1 to the amending Regulations:

•       amends the provision setting out the times during which Customs may receive electronic communications in relation to goods intended for export and the departure of ships and aircraft to allow for the transition from EXIT to ICS;

•       sets out the circumstances in which Customs may refuse to accept or deal with a notification that goods are going to be exported (an export declaration);

•       sets out the form and content of the notification provided by Customs (an export entry advice) after it receives an export entry; and

•       repeals two redundant regulations.

Schedule 2 to the amending Regulations commences at the same time as the proposed cut-over time, 2am in the Australian Capital Territory on 6 October 2004, to reflect that EXIT will no longer be able to be used and to implement Customs' undertaking that during the period between commencement and cut-over people will not commit offences for failing to comply with new obligations. Schedule 2:

•       removes the reference to EXIT in the description of when Customs may receive electronic communications in relation to exports and departures;

•       prescribes the goods that must not be released from a warehouse before the holder of the warehouse licence ascertains that the goods have been reported to Customs and Customs has authorised the goods' exportation from Australia;

•       prescribes the goods that must be reported to Customs if they are proposed to be released from a warehouse or are returned to a warehouse;

•       sets out the particulars that must be given to a person who takes delivery of goods for export at a wharf or airport and the manner in which they must be given;

•       prescribes places at which prescribed goods for export may be consolidated;

•       prescribes the timing in relation to which reports must be given to Customs; and

•       repeals an obsolete form.

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

Regulations 1 to 3 and Schedule 1 to the amending Regulations commence on 22 September 2004, to coincide with the commencement of the ITM export amendments.

Schedule; 2 to the amending Regulations commences at 2am in the Australian Capital Territory on 6 October 2004, ie the proposed cut-over time.

0311800A

ATTACHMENT

DETAILS OF THE CUSTOMS AMENDMENT REGULATIONS 2004 (NO. 3)

Regulation 1 - Name of Regulations

Regulation 1 provides that the amending Regulations are the Customs Amendment Regulations 2004 (No. 3).

Regulation 2 - Commencement

Paragraph 2(a) provides that regulations 1 to 3 and Schedule 1 to the amending Regulations commence on 22 September 2004.

Paragraph 2(b) provides that Schedule 2 to the amending Regulations commence at 2am in the Australian Capital Territory on 6 October 2004.

Regulation 3 - Amendment of Customs Regulations 1926

Regulation 3 provides that Schedules 1 and 2 amend the Customs Regulations 1926 (the Regulations).

SCHEDULE 1 - AMENDMENTS COMMENCING ON 22 SEPTEMBER 2004

Item 1 - Subregulation 19(1), table, item 7, column 2

The table in subregulation 19(1) sets out the working days and hours of Customs for performing certain functions. Under section 28 of the Customs Act 1901 (the Act), if a person requests that a Customs officer perform a function outside the hours prescribed for that function, the person must pay to Customs an overtime fee.

Currently, item 7 provides that Customs will receive computer export entries transmitted to the Customs using the EXIT computer system every day and all hours.

Customs is replacing its four existing computer systems that are used by importers and exporters to communicate with Customs (EXIT, COMPILE, the Air Cargo Automation System and the Sea Cargo Automation System) with an electronic system known as the Integrated Cargo System or ICS. The Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001 (the ITM Act) will, in part, amend the Act, to remove the references to the existing computer systems. The amendments will allow or require a person to communicate with Customs electronically and the Chief Executive Officer of Customs will be required to establish and maintain such information systems as are necessary to enable persons to communicate electronically with Customs.

Under the transitional arrangements contained in the Customs Legislation Amendment Act (No. 2) 2003 (the Amendment Act), the CEO must specify a cut-over time. This time will be 2am in the Australian Capital Territory on 6 October 2004. During the period between the commencement of the ITM exports amendments (ie 22 September 2004) and the cut-over time (ie 2am in the Australian Capital Territory on 6 October 2004) (the transition period) EXIT and the ICS will both operate. The Amendment Act provides that during the transition period the ICS must be used to communicate information to Customs about the exportation of goods and the departure of ships and aircraft where the intended time of exportation or departure is at or after the cut-over time. Communications made during the transition period about exportations and departures intended to occur before the cut-over time must be made using EXIT. After 2am in the Australian Capital Territory on 6 October 2004, only the ICS will be able to be used to communicate to Customs in respect of goods for export and the departure of ships and aircraft.

Item 1 replaces column 2 of item 7 in the table in subregulation 19(1) of the Regulations from 22 September 2004 so that it refers to the receipt of all electronic communications to Customs in relation to goods intended for export and the departure of ships and aircraft (including, until the abolition of the EXIT computer system, using that system).

Item 2 - Regulation 31 A

Item 2 repeals regulation 31A.

Regulation 31A provides that for paragraph 68 (1) (i) of the Act, goods mentioned in subregulations 125A (2) to (5) (inclusive) are exempted from section 68. On 6 June 2001, regulation 125A was repealed and substituted. Regulation 31A is no longer relevant.

Item 3 - After regulation 97

Item 3 inserts new regulation 97A into the Regulations.

Item 57 of Schedule 3 to the ITM Act repeals sections 114 and 114A of the Act and replaces them with new sections 113AA, 114 and 114A. Currently under the Act, details relating to the exportation of goods must be reported to Customs before the goods are exported. That report is known as an export entry. New section 113AA provides that an export entry is made by:

•       making in respect of the goods an export declaration other than a declaration that Customs refuses under subsection 114(8) to accept; or

•       using an accredited client export approval number (an ACEAN).

New subsection 114(8) provides that Customs may refuse to accept or deal with an export declaration in circumstances prescribed by the regulations.

New regulation 97A sets out the circumstances in which Customs may refuse to accept or deal with an export declaration. These are:

•       if the intended day of exportation notified in the declaration is more than 6 months after the declaration is communicated to Customs; or

•       any of the information required by an approved form under subsection 114(3) of the Act or approved statement under subsection 114(4) of the Act is not given in the declaration.

Most goods that are exported from Australia must be reported to Customs on an outward manifest as well as being entered. When goods are reported on an outward manifest, Customs acquits those goods against an entry. From experience, Customs has discovered that, generally, the earlier that an entry is made, the more likely the goods will not be exported in accordance with the entry and hence not acquitted.

It is anticipated that the first circumstance will reduce this problem. Further, it is considered that 6 months is sufficiently long enough time to allow an export entry to be made.

The second circumstance will ensure that all of the information required to be provided by an approved form or an approved statement in the export declaration is provided. Approved forms and approved statements are disallowable instruments under section 4A of the Act.

Item 4 - Regulation 98

Item 4 substitutes regulation 98. Regulation 98 specifies, for the purposes of section 114C of the Act, the manner and form of an export entry advice that must be given to a person who sends an export entry to Customs. Item 62 of Schedule 3 to the ITM Act will repeal and replace section 114C of the Act. New section 114C will still require the manner and form of an export entry advice to be prescribed, however it does not relate to all export entries but is limited to goods entered by the making of an export declaration. Further, it allows export declarations to be made electronically, rather than using the EXIT computer system.

New regulation 98 reflects these changes. Under subregulation 98(1), if an export declaration is communicated to Customs electronically, the export entry advice for the goods must be given electronically or, if not able to be given electronically, in documentary form.

New subregulation 98(2) sets out the manner in which an export entry advice for goods must be given if the goods have been entered on a documentary export declaration. These four methods are the same as the existing subregulation 98(2).

New subregulation 98(3) sets out the matters that must be contained in an export entry advice. They are the export entry advice number which is used to identify the advice, the identifying reference of the person communicating the export declaration and if the advice is a refusal to provide an authority to export the goods, an ´error' message.

Item 5 - Regulation 194

Item 5 repeals regulation 194. Regulation 194 provides that "if the CEO considers it desirable that the officer occupying any position should carry firearms, he may give directions in writing that the officer occupying that position shall carry firearms, and thereupon, while such directions, remain in force, any officer occupying that position and any officer acting for that officer shall be authorized to carry firearms."

Section 189A of the Act was inserted into the Act in 1999 and amended in 2002. Under that section the CEO may authorise officers of Customs to issue firearms and to use firearms. Regulation 194 is no longer relied upon to authorise Customs officers to carry firearms and hence is no longer needed.

SCHEDULE 2 - AMENDMENTS COMMENCING AT 2AM IN THE AUSTRALIAN CAPITAL TERRITORY ON 6 OCTOBER 2004

Schedule 2 commences at 2am in the Australian Capital Territory on 6 October 2004. This is the time that the CEO will declare under the Amendment Act to be the cutover time and hence it will be the time after which the EXIT computer system cannot be used to communicate with Customs.

A number of matters are prescribed with effect from the cut-over time so that the new obligations do not become operative before that time and hence during this transitional period failure to meet these new obligations will not constitute an offence.

Item 1 - Subregulation 19(1), table, item 7, column 2

Item 1 further amends item 7 of the table in subregulation 19(1) so that it no longer refers to the EXIT computer system from 2am in the Australian Capital Territory on 6 October 2004.

Item 2 - After regulation 95

Item 2 inserts new regulations 95AA and 95AB into the Regulations.

New regulation 95AA

Item 97 of Schedule 3 to the ITM Act repeals and substitutes subsection 99(2) and (3) of the Act. New paragraph 99(3)(c) provides that the holder of a warehouse licence must not permit prescribed goods to be taken from the warehouse for export unless the holder of the licence has ascertained, from information made available by Customs, that the goods have been entered for export and there is an authority to deal with them in force.

New regulation 95AA provides that the goods mentioned in Schedule 1AAA to the Regulations (see item 5 below) are prescribed for the purposes of paragraph 99(3)(c). The goods mentioned in Schedule 1AAA are listed by reference to their classification under the Australian Harmonized Export Commodity Classification which is published by the Australian Bureau of Statistics. The goods are, broadly, alcoholic products, tobacco and tobacco products. These are goods that are subject to high customs duty rates. These requirements are intended to ensure that such goods are being removed from the warehouse for export, and not into the Australian market, without the payment of customs duty. Hence, the amendments in the ITM Act, including new paragraph 99(3)(c), impose additional obligations onto people who handle these goods.

New regulation 95AB

Item 97A of Schedule 3 to the ITM Act inserts new section 102A into the Act. New subsection 102A(1) provides that new section 102A applies to goods that are, or are included in a class of goods that are, prescribed by the regulations. New subregulation 95AB(1) provides that for that purpose, the goods mentioned in Schedule 1AAA to the Regulations (see item 5 below) are prescribed.

New subsection 102A(2), in part, provides that if those goods are to be released from a warehouse for export, the holder of the warehouse licence must give notice to Customs electronically, within the period that begins at the prescribed time and ends at the prescribed time, stating that the goods are to be released.

New subregulation 95AB(2) sets the times that the period begins and ends. The period begins 24 hours before the estimated time of release of the goods and ends immediately before the goods are released. This will ensure the proposed release of prescribed goods is reported to Customs before the goods are released.

New subsection 102A(3) provides that if prescribed goods are released from a warehouse for export and then returned to the warehouse, the holder of the warehouse licence must give notice to Customs within the period prescribed by the regulations.

New subregulation 95AB(3) prescribes that period as 3 hours after the return of the goods.

Item 3 - After regulation 98

Item 3 inserts new regulations 98A, 98B and 98C into the Regulations.

New regulation 98A

New section 114E of the Act requires a person (the deliverer) who delivers goods for export to a wharf or airport to give information about those goods to the person (the deliveree) taking delivery of the goods.

New subparagraph 114E(1)(a)(i) provides that the deliverer must give the deliveree prescribed particulars in the prescribed manner if the goods have been entered for export and an authority to deal with the goods is in force.

New paragraph 98A(1)(a) provides that the prescribed particular is the relevant export entry advice number or the ACEAN and new paragraph 98A(1)(b) provides that the prescribed manner of giving the prescribed particular is in writing. An export entry advice number is given in respect of goods that have been entered using an export declaration.

New paragraph 114E(1)(b) of the Act requires the deliverer to give the deliveree prescribed particulars in the prescribed manner if the goods are not required to be entered for export.

New subregulation 98A(2) sets out the prescribed particulars and the manner. The following particulars must be given in writing:

•       the Australian Business Number or the number allocated by Customs that identifies the shipping line or airline on which the goods will be exported;

•       if the goods are entered for export - the export entry advice number or the ACEAN (whilst these goods do not have to be entered for export often they are entered);

•       if a submanifest number for the goods has been allocated by Customs - the submanifest number (submanifest numbers are allocated under new subsection 117A(3) of the Act);

•       if the goods are transhipped goods - the number allocated by Customs to those goods (such goods are not imported into Australia nor exported from Australia and hence do not need to be entered for export);

•       if goods have not been entered for export - the code (if any) that would apply to the goods as contained in Customs Manual Volume 12, as in force on 22 September 2004; (these are codes that indicate why the goods do not have to be entered for export);

•       if the goods are described in paragraph 113(2)(a) or 113(2)(b) of the Act and there is no submanifest number for them - a description of the goods;

•       the name of the owner of the goods and the country that is the final destination of the goods (paragraphs 113(2)(a) and 113(2)(b) of the Act set out goods that do not have to be entered for export);

•       if the goods are to be exported in a container and consigned by ship - the number of the container;

•       if the goods are to be consigned by ship but not in a container - the voyage booking reference or the bill of lading reference;

•       if the goods are to be consigned by ship - the international vessel identification number and the number of the voyage on which the goods will be exported;

•       if the goods are to be consigned by air - the number or reference of the air waybill on which the goods are listed and the flight number of the aircraft on which the goods will be exported.

Under new paragraph 114E(1)(c), if the goods have not been entered for export before they are delivered to a wharf or airport, the deliveree must enter them within the prescribed period after the time of the delivery.

New subregulation 98A(3) prescribes that period as 3 hours.

New regulation 98B

New subsection 114F(1A) requires the person who takes delivery of goods for export at a wharf or airport to give to Customs, within the period prescribed by the regulations, notice of the receipt of the goods.

New regulation 98B prescribes that period as 3 hours after receipt of the goods.

New regulation 98C

New section 117AA of the Act restricts the consolidation of prescribed goods for export to places prescribed by the regulations.

New paragraph 98C(1)(a) provides that for new section 117AA a place described in a depot licence granted under section 77G of the Act for the packing of goods that are subject to the control of Customs under section 30 of the Act into receptacles for export is prescribed. New paragraph 98C(1)(b) provides that for that section the goods mentioned in new Schedule 1 AAA to the Regulations (see item 5 below) are prescribed. These are the same goods that are subject to the requirements in sections 99 and 102A of the Act.

New subsection 117AA(2) provides that if prescribed goods are received into the prescribed place for the purpose of being consolidated for export, the person in charge of the place must notify Customs within the prescribed period after the goods were received at the place.

New subregulation 98C(2) prescribes the period as 3 hours.

New subsection 117A(4) provides that if prescribed goods are released from a prescribed place, the person in charge of the place must notify Customs of the release within the prescribed period after the goods were released.

New subregulation 98C(3) prescribes the period as 3 hours.

Item 4 - Schedule 1, Form 39

Item 4 omits Form 39 of Schedule 1 to the Regulations. Form 39 is made for the purposes of regulation 101. Regulation 101 was repealed in 1991.

Item 5 - After Schedule 1

Item 5 inserts new Schedule 1AAA into the Regulations. Schedule 1AAA prescribes the goods that are subject to sections 99, 102A and 117AA of the Act. The goods mentioned in Schedule 1AAA are listed by reference to their classification under the Australian Harmonized Export Commodity Classification which is published by the Australian Bureau of Statistics. The goods are, broadly, alcoholic products, tobacco and tobacco products. These are goods that are subject to high customs duty rates.