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CUSTOMS (AUSTRALIA--US FREE TRADE AGREEMENT) AMENDMENT REGULATIONS 2006 (NO. 1) (SLI NO 330 OF 2006)
Select Legislative Instrument 2006 No. 330
Issued by the Authority of the Minister for Justice and Customs
Customs Act 1901
Customs (Australia-US Free Trade Agreement) Amendment Regulations 2006 (No. 1)
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 Customs.
The purpose of the amending Regulations is to amend the Customs (Australia-US Free Trade Agreement) Regulations 2004 (the Principal Regulations) to incorporate amendments to Annexes 4‑A and 5-A of the Australia-US Free Trade Agreement (the Agreement). These amendments arise from the changes to the Harmonized Commodity Description and Coding System, commonly referred to as the Harmonized System (HS), that come into effect on 1 January 2007, as a result of the Customs Tariff Amendment (2007 Harmonized System Changes) Act 2006 and the Customs Amendment (2007 Harmonized System Changes) Act 2006.
Division 1C of Part VIII of the Act and the Principal Regulations fulfil Australia’s obligations under Chapters 4 and 5 of the Agreement, which deal with rules of origin. These rules determine whether goods imported into Australia are US originating goods and are thereby eligible for preferential rates of customs duty. In particular, Chapter 4 and Annex 4-A of the Agreement set out the product specific requirements for clothing and textiles according to the tariff classifications of the goods under the HS. Chapter 5 and Annex 5-A to the Agreement set out the product-specific requirements for goods other than clothing and textiles.
Schedule 1 to the Principal Regulations incorporates the product specific requirements set out in Chapter 5 and Annex 5-A of the Agreement and Schedule 2 incorporates the product specific requirements set out in Chapter 4 and Annex 4-A.
The HS has been adopted by signatories to the International Convention on the Harmonized Commodity Description and Coding System (the Convention), including Australia and the United States, as the classification system for traded goods. All goods are classified under the HS with a 6-figure classification and these same classifications have been used in product‑specific requirements set out in Annexes 4-A and 5-A of the Agreement.
The HS is subject to cyclic review, approximately every five years, and the present (third) review has resulted in several hundred changes to the 6‑figure classifications. Signatories to the Convention are currently implementing these changes (the HS 2007 changes). In this regard, Australia and the United States have agreed on amendments to Annexes 4-A and 5-A of the Agreement to incorporate the HS 2007 changes into the product-specific requirements.
The amending Regulations amend Schedules 1 and 2 to reflect the amendments to Annexes 4‑A and 5-A that arise from the HS 2007 changes.
The HS 2007 changes will also require amendments to the preferential tariff schedules in Annex 2‑B of the Agreement. These amendments will be made once Australia and the United States reach agreement on the amendments to be made. The amendments to Schedules 1 and 2 of the Principal Regulations do not rely on the Annex 2-B negotiations.
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 1 January 2007. This is the date on which the HS 2007 changes and the proposed amendments to Annexes 4-A and 5-A of the Agreement enters into force.