Trade and customs compliance focus for 2016

Department of Immigration and Border Protection

Working together to improve trade and goods compliance

• Establishment of the Trade and Goods Compliance Advisory

Group

• Development of the Australian Border Force’s Approach to trade

and Goods Compliance

• The March edition of the Goods Compliance Update

Trade and customs compliance focus for 2016

2

Department of Immigration and Border Protection

Our areas of compliance focus for 2016

• Cargo reporting

– timeliness

– deficient information

• Tariff Concession Orders

• Undervaluation through:

– Misuse of Self Assessed Clearance declarations

– Not including production assist costs

– Incorrect declaration of total or unit price

• Ban on importation of asbestos

3

Department of Immigration and Border Protection

Tariff Concession Orders

• In order to claim a TCO the goods must:

– Be classifiable to the tariff classification to which the TCO is

keyed to

– Meet all the requirements and condition of the TCO

• Policy position on TCO interpretation currently being finalised

• Please email goodscompliance@border.gov.au with any

suggestions on how to provide greater clarity

4

Department of Immigration and Border Protection

Incorrect Tariff Classification

5

• Incorrect tariff classification due to reliance on a key word search

to claim a TCO

Department of Immigration and Border Protection

TCOs applicable to chemicals

6

• There have been instances where TCOs were claimed on

chemical products that do meet the requirements of the TCO

- Not in the form stipulated in the TCO

• Need to disclose the exact formulations of chemicals

Department of Immigration and Border Protection

Undervaluation

• Common drivers include:

– Poor communication

– Utilisation of proforma or shipping invoices

– Declaration based on invoice that does not list all costs

relevant to the goods

– Incorrect declaration of date and time of export

7

Department of Immigration and Border Protection

Production assist costs

• Materials, components or other goods

• Materials consumed in production

• Tools, dies, moulds or other machinery or equipment used in

production

• Art work, design work, development work and engineering work

undertaken outside Australia.

• Inputs in the production of the goods

• Overseas transportation and packaging costs

• Foreign customs duties, sales tax or other duties or taxes on

production tooling, work goods or subsidiary goods

• Repairs and modification to the materials, components, subsidiary

goods, tools, dies, moulds and other goods

8

Department of Immigration and Border Protection 9

Production assist costs

• Undervaluation as a result of not

including all costs in the declared

value

• Importer providing goods and

services to the supplier to assist

in the production of the goods

Department of Immigration and Border Protection

Incorrect use of Self Assessed Clearance

declarations

• Only for imports valued at or below $1000

• Duty and taxes payable on alcohol and tobacco

• Focus on the use of SACs for ‘samples’

10

Department of Immigration and Border Protection

Cargo reporting timeliness

11

% of late air cargo reporting: industry average

% of late sea cargo reporting: industry average

Department of Immigration and Border Protection

Deficient reporting

12

Top 10 Deficient Terms Reported on Cargo Reports in 2015

Department of Immigration and Border Protection

Voluntary Disclosures

• Sections 243T (4) and 243U (4) of the Act provide protection

against prosecution and the application of administrative penalty

under the Infringement Notice Scheme

• Email vdi@border.gov.au

13

Department of Immigration and Border Protection

Refunds

• Policy guidance on timely processing of refunds of customs duty

• Not producing documents once requested

• nationalrefunds@border.gov.au

14

Department of Immigration and Border Protection

Common compliance issues

• Trade remedies evasion

• Use of pro forma or shipping invoices

• Luxury car tax exemption

• GST exemption code 417

• Item 34 of Schedule 4 of the Customs Tariff Act 1995 for aircraft

parts, materials of equipment

15

Department of Immigration and Border Protection

Asbestos

• Building products

• Children’s toys

16

Department of Immigration and Border Protection

Compliance Monitoring Programme results

• 5% improvement in import declarations

• 8% improvement in export declarations

• Error rate for cargo reporting has decreased from 8% to 2%

17

Department of Immigration and Border Protection

Australian Trusted Trader Programme

• Next intake to intake a wider selection of industry stakeholders

• Mutual Recognition Agreements

18

Department of Immigration and Border Protection

China and Australia Free Trade Agreement

• Update on:

- Verification

- Minor errors

19

Department of Immigration and Border Protection

Border Watch

• 1800 06 1800

• Online at border.gov.au

20