Commonwealth Numbered Regulations - Explanatory Statements

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Select Legislative Instrument 2009 No. 320


Issued by the Authority of the Minister for Home Affairs

Customs Act 1901

Customs Amendment Regulations 2009 (No. 7)

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.

Subsection 163(1) of the Act provides in part that refunds, rebates and remissions of duty may be made:

(a)    in respect of goods generally or in respect of the goods included in a class of goods; and

(b)   in such circumstances as are prescribed, being circumstances that relate to goods generally or to the goods included in the class of goods.

The purpose of the amending Regulations is to amend the Customs Regulations 1926 (the Principal Regulations) to allow refunds of customs duty paid on Thai originating goods that are safeguard goods, where the goods are, or had been, imported into Australia on or after 1 January 2009. Safeguard goods are certain goods given special treatment under the Thailand-Australia Free Trade Agreement (the Agreement).

Division 1D of Part VIII of the Act sets out the rules that determine whether goods imported into Australia are Thai originating goods and therefore eligible for preferential or free rates of customs duty. These rules fulfil Australia's obligations under the Agreement. The Agreement also allows for refunds of customs duty to be paid in respect of Thai originating goods imported into Australia where, for example, duty is paid on such goods where no duty, or a lesser amount of duty, should have been paid. This refund circumstance is set out in regulation 126B of the Principal Regulations.

Regulation 126B currently does not extend to Thai originating goods that are safeguard goods. Safeguard goods are prepared tuna, prepared pineapple and pineapple juice and were given special treatment under the Agreement due to their sensitive nature. Once the volume of imports of these goods into Australia exceeds the specified quantities set out in the Agreement for a given year, the goods are no longer free of customs duty but are dutiable at the full rate of customs duty applicable to these products for the remainder of the calendar year.

Safeguard goods were originally excluded from the refund circumstance in regulation 126B as their inclusion could have encouraged importers to avoid paying higher rates of duty on such goods after the specified levels of imports had been reached in a particular calendar year. Importers could have achieved this outcome by paying the general rate of duty at the time of importation, and delaying a refund claim until the following calendar year. Such action could mean that significant volumes of imports would not have counted towards the special safeguards volume triggers for the calendar year in which the goods were actually imported. The result could have delayed or circumvented the imposition of duty on safeguard goods which could have frustrated the implementation of the Agreement as it applies to safeguard goods. This in turn could have exposed the Government to criticism from the Australian tuna and pineapple industries.

However, the Agreement specifies the quantities of safeguard goods that could be imported into Australia free of customs duty for the calendar years of 2005, 2006, 2007 and 2008 only. At this stage, no quantities have been negotiated under the Agreement for the 2009 calendar year or for future years. This means that, since 1 January 2009, all quantities of safeguard goods can be imported into Australia free of customs duty. Therefore, all quantities of safeguard goods imported since that date are also eligible for a refund of customs duty paid on such goods.

The Regulations amend subregulation 126B(2) of the Principal Regulations to limit the exclusion of safeguard goods from the refund circumstance to such goods imported before 1 January 2009. This means that the refund circumstance extends to all safeguard goods imported on or after that date.

No consultation was undertaken specifically in relation to the amendments as they implement Australia's international obligations under the Agreement.

The amending Regulations commence on the day after they are registered on the Federal Register of Legislative Instruments.


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