Commonwealth Numbered Regulations - Explanatory Statements

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Issued by the Authority of the Minister for Small Business and Consumer Affairs

Customs Act 1901

Customs Regulations (Amendment)

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 by the Act are required or permitted to be prescribed for giving effect to the Act.

Sections 269F and 269M of the Act (relevant extracts of which are set out below) permit organisations to be prescribed for the purposes of the Tariff Concessions scheme in Part XVA of the Act. Until now, no such organisations had been prescribed. These amendments to the Customs Regulations ("the Regulations") prescribe eight organisations. These are the seven State and Territory Industrial Supplies Offices ("ISOs") and the central liaison company for these ISOs, ISONET Limited.

The relevant background to the amendments is that in 1995 a review of the Tariff Concession and Policy By-Law Systems was undertaken by the Department of Industry, Science and Tourism and the Australian Customs Service ("Customs") and as a result of this review ("the Review") a report entitled "Evaluation of the Tariff Concession System, 1995" was published. Subsequently, amendments were made to the Act in 1996 to reform these systems.

The reforms which were introduced were aimed at ensuring that tariff assistance provided to Australian manufacturers is not undermined by the duty free importation of goods for which there are substitutable goods manufactured in Australia, while preserving the ability to assist project developers and specific industry initiatives with concessions where policy objectives so indicate.

Importers are now required to research the existence of Australian manufacturers prior to submitting an application for a Tariff Concession Order ("a TCO"). Subsection 269F(3) of the Act provides, in part, that : "...a TCO application must contain: ... (d) particulars of all inquiries made by the applicant (including inquiries made of prescribed organisations) to assist in establishing that there were reasonable grounds for believing that, on the day on which the application was lodged, there were no producers in Australia of substitutable goods."

In addition, the Chief Executive Officer of Customs ("the CEO") may also seek advice from a prescribed organisation. Subsection 269M(6) of the Act provides as follows: "At any time during the period of 150 days starting on the gazettal day, the CEO may, for the purpose of dealing with a TCO application, and despite section 16 of the Customs Administration Act 1985, give a copy of all, or of a part, of the application to a prescribed organisation with a view to obtaining the advice of the organisation in relation to the question whether there are producers in Australia of substitutable goods."

The Review found that a certain proportion of importers order overseas because they are unaware of what is made in Australia, and industry discussions and submissions consistently indicated that it is difficult for TCO applicants to identify local manufacturers. The Review stated that a "system which provides concessions on imports should be designed to help generate information about market opportunities" and that a "possible role has been identified for the state ISOs and/or ISONET (the central liaison company) - or other industry associations - in providing information on local manufacturers to applicants and to Customs".

As a result of this recommendation, and subsequent discussions which have taken place with the relevant organisations, the eight organisations set out in new regulation 179A have been prescribed. These ISOs are State and Territory Government authorities that are designed to promote business in their respective States or Territories. They provide such services as locating producers of goods that are required by someone who, for instance, may wish to start up a business in the State or Territory. ISONET Limited is the national office that provides the interface between Commonwealth Government Departments and the ISO Network, which is made up of the various ISOs throughout Australia.

The Commonwealth Government views the role of ISONET Limited and the ISO Network as assisting industry to undertake the necessary research to establish whether a supplier of substitutable goods exists, with the potential to divert possible importers to an Australian manufacturer, as appropriate.

Details of the Regulations are as follows:

Regulation 1 provides that the Customs Regulations ("the Regulations") are amended as set out in these regulations.

Regulation 2 provides for the insertion of new regulation 179A which prescribes the eight organisations for the purposes for sections 269F and 269M of the Act. These are the NSW Industrial Supplies Office Ltd, Industrial Supplies Office (Victoria) Ltd, Industrial Supplies Office (Queensland) Ltd, South Australian Industrial Supplies Office Ltd, Industrial Supplies Office of Tasmania, Northern Territory Industrial Supplies Office and ISONET Limited.

These Regulations commenced on gazettal.

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