Volume 8B - International Trade Centre to GSP Count… · Australian Customs Service Manual Volume 8B Origin Curr1 ent as at 23/5/2005 Division 1: Introduction ... 3.2.2 Factory labour

M A N U A L

O R I G I N

Volume 8B

Australian Customs Service Manual Volume 8B Origin

Current as at 23/5/2005 1

Division 1: Introduction...................................................................................5 Section 1: Coverage of Manual...........................................................................5 Division 2: Legislation .....................................................................................6 Section 1: Origin legislation ...............................................................................6 2.1.1 General outline of legislation...............................................................6 2.1.2 Operation of the legislation.................................................................6 2.1.3 Legislation for related trade arrangements............................................6 Section 2: Rules of origin ..................................................................................8 2.2.1 Concept...........................................................................................8 Section 3: Countries eligible for preference ..........................................................9 2.3.1 Trade agreements .............................................................................9 Section 4: Origin criteria ................................................................................. 11 2.4.1 Classes of goods ............................................................................. 11 2.4.1.1 General ......................................................................................... 11 2.4.1.2 Criteria for preferential trade arrangements other than SAFTA............... 11 2.4.1.3 Criteria for SAFTA ........................................................................... 11 Division 3: Origin (excepting goods from Singapore) ..................................... 12 Section 1: Partly manufactured goods – value-added criteria – overview................ 12 3.1.1 Factory or works cost ...................................................................... 12 3.1.2 The concept of factory cost............................................................... 13 3.1.3 Total factory cost ............................................................................ 13 3.1.3.1 Statutory Provisions ........................................................................ 13 3.1.4 Allowable factory cost ...................................................................... 13 3.1.4.1 Statutory provisions ........................................................................ 13 3.1.4.2 Policy and practice .......................................................................... 13 Section 2: Partly manufactured goods – value-added criteria – key elements.......... 14 3.2.1 Materials........................................................................................ 14 3.2.1.1 General ......................................................................................... 14 1. Statutory provisions ........................................................................ 14 3.2.1.2 Total expenditure on materials.......................................................... 14 1. Statutory provisions ........................................................................ 14 2. Policy and practice .......................................................................... 15 3.2.1.3 Allowable expenditure on materials.................................................... 16 1. Statutory provisions ........................................................................ 16 2. Policy and practice .......................................................................... 20 3.2.2 Factory labour ................................................................................ 22 1 Statutory provisions ........................................................................ 22 2. Policy and practice .......................................................................... 23 3. Regulations .................................................................................... 23 4. Policy and practice .......................................................................... 24 3.2.3 Factory overheads........................................................................... 24 3.2.3.1 Statutory provisions ........................................................................ 24 3.2.3.2 Policy and practice .......................................................................... 25 3.2.3.3 Regulations .................................................................................... 26 3.2.3.4 Policy and practice .......................................................................... 28 3.2.4 Other costs .................................................................................... 28 3.2.4.1 Labels/tickets ................................................................................. 28 3.2.4.2 Inner containers ............................................................................. 29 1. Statutory provisions ........................................................................ 29 2. Policy and practice .......................................................................... 29 3.2.4.3 Scrap and waste material ................................................................. 29 3.2.5 Double counting.............................................................................. 29 1. Statutory provisions ........................................................................ 29 2. Policy and practice .......................................................................... 29 Section 3: Partly manufactured goods – value-added criteria – variations............... 30 3.3.1 Goods not commercially manufactured in Australia .............................. 30 1. Statutory provisions ........................................................................ 30 2. Policy and practice .......................................................................... 30



3.3.2 Tolerance in minimum value-added ................................................... 30 1. Statutory provision.......................................................................... 30 2. Policy and practice .......................................................................... 32 3.3.3 Special provisions allowing variation of minimum value-added............... 33 1. Statutory provisions ........................................................................ 33 2. Policy and practice .......................................................................... 33 Section 4: Partly manufactured goods – other criteria ......................................... 34 3.4.1 Additional requirements ................................................................... 34 3.4.2 Last process of manufacture ............................................................. 34 1. Statutory provisions ........................................................................ 34 2. Policy and practice .......................................................................... 34 3.4.3 Direct shipment .............................................................................. 35 Section 5: Unmanufactured goods .................................................................... 36 3.5.1 Unmanufactured goods criteria ......................................................... 36 1. Statutory provision.......................................................................... 36 2. Policy and practice .......................................................................... 36 3.5.2 Direct shipment .............................................................................. 36 Section 6: Wholly manufactured goods.............................................................. 37 3.6.1 Wholly manufactured goods criteria ................................................... 37 1. Statutory provisions ........................................................................ 37 2. Policy and practice .......................................................................... 37 3.6.2 Materials - unmanufactured raw products ........................................... 37 3.6.3 Determined manufactured raw materials (DMRM) ................................ 37 3.6.4 Direct shipment .............................................................................. 38 Section 7: Direct shipment (Canada) ................................................................ 39 3.7.1 Direct shipment criteria.................................................................... 39 1. Statutory provision.......................................................................... 39 2. Policy and practice .......................................................................... 39 Section 8: Declarations ................................................................................... 40 3.8.1 Procedures..................................................................................... 40 Section 9: Administrative procedures ................................................................ 42 3.9.1 Steps for determining preference entitlement...................................... 42 Section 10: Intermediate goods (New Zealand only) ............................................. 43 3.10.1 Prejudicial situations........................................................................ 43 1. Provisions ...................................................................................... 43 2. Policy and practice .......................................................................... 43 Appendix 3:1 44 Appendix 3:2 54 Appendix 3:3 56 Appendix 3:4 59 Appendix 3:5 60 Appendix 3:6 61 Appendix 3:7 62 Appendix 3:8 69 Division 4: Origin (Singapore) ....................................................................... 90 Section 1: SAFTA – goods claimed to be the produce or manufacture of Singapore .. 90 4.1.1 Goods the produce or manufacture of Singapore.................................. 90 1. Statutory provisions ........................................................................ 90 2. Policy and practice .......................................................................... 90 Section 2: SAFTA – wholly manufactured goods.................................................. 91 4.2.1 Wholly manufactured goods criteria ................................................... 91 1. Statutory provisions ........................................................................ 91 2. Policy and practice .......................................................................... 91 4.2.1.1 Unmanufactured raw products .......................................................... 91 1. Statutory provisions ........................................................................ 91 2. Policy and practice .......................................................................... 92 4.2.1.2 Scrap and waste material ................................................................. 92 1. Statutory provisions ........................................................................ 92 2. Policy and practice .......................................................................... 92 4.2.1.3 Materials wholly manufactured in Singapore or Australia....................... 92



4.2.1.4 Determined manufactured raw materials (DMRM) ................................ 92 Section 3: SAFTA – partly manufactured goods – value-added criteria – overview ... 94 4.3.1 Cost to manufacture........................................................................ 94 1. Statutory provisions ........................................................................ 94 2. Policy and practice .......................................................................... 95 4.3.2 The concept of cost to manufacture ................................................... 96 4.1.3 The concept of principal manufacturer................................................ 96 1. Statutory provisions ........................................................................ 96 2. Policy and practice .......................................................................... 96 4.3.4 Total cost to manufacture................................................................. 97 1. Statutory provisions ........................................................................ 97 4.3.5 Allowable cost to manufacture .......................................................... 97 1. Statutory provisions ........................................................................ 97 2. Policy and practice .......................................................................... 97 4.3.6 Adjustments to expenditure.............................................................. 97 1. Statutory provisions ........................................................................ 97 2. Policy and practice .......................................................................... 98 Section 4: SAFTA – partly manufactured goods – value-added criteria – key elements

.................................................................................................... 99 4.4.1 Materials........................................................................................ 99 4.4.1.1 General ......................................................................................... 99 1. Statutory provisions ........................................................................ 99 4.4.1.2 Total expenditure on materials.......................................................... 99 1. Statutory provisions ........................................................................ 99 2. Policy and practice ........................................................................ 100 4.4.1.3 Allowable expenditure on materials.................................................. 100 1. Statutory provisions ...................................................................... 100 2. Policy and practice ........................................................................ 101 4.4.2 Factory labour .............................................................................. 102 1. Statutory provisions ...................................................................... 102 2. Policy and practice ........................................................................ 102 4.4.3 Factory overheads......................................................................... 104 1. Statutory provisions ...................................................................... 104 2. Policy and practice ........................................................................ 104 4.4.4 Other costs .................................................................................. 105 4.4.4.1 Labels/tickets ............................................................................... 105 4.4.4.2 Inner containers ........................................................................... 105 4.4.5 Double counting............................................................................ 106 1. Statutory provisions ...................................................................... 106 2. Policy and practice ........................................................................ 106 Section 5: SAFTA – partly manufactured goods – value-added criteria – variations 107 4.5.1 Goods not commercially manufactured in Australia ............................ 107 1. Statutory provisions ...................................................................... 107 2. Policy and practice ........................................................................ 107 4.5.2 Tolerance in minimum value-added ................................................. 108 1. Statutory provision........................................................................ 108 2. Policy and practice ........................................................................ 109 Section 6: SAFTA – partly manufactured goods – other criteria........................... 110 4.6.1 Additional requirements ................................................................. 110 4.6.1.1 Consignment requirements and final process of manufacture............... 110 1. Statutory provisions ...................................................................... 110 2. Policy and practice ........................................................................ 110 Section 7: SAFTA – Declarations and Certificates of Origin ................................. 111 4.7.1 Certificate of Origin - requirements.................................................. 111 1. Statutory provision........................................................................ 111 2. Policy and practice ........................................................................ 111 4.7.2 Certificate of Origin – administrative procedures................................ 113 1. Preference codes - general ............................................................. 113 2. Preference codes – rule 2B ............................................................. 113 3. Preference codes – rules 3B or 4B ................................................... 113



4.7.3 Declarations - requirements............................................................ 114 1. Provisions .................................................................................... 114 2. Policy and practice ........................................................................ 114 Section 8: Determined manufactured raw materials (DMRM) .............................. 115 4.8.1 Certificate of Origin - requirements.................................................. 115 1. Statutory provision........................................................................ 115 2. Policy and practice ........................................................................ 115 Section 9: Administrative procedures .............................................................. 116 4.9.1 Steps for determining preference entitlement.................................... 116 Section 10: SAFTA – exports from Australia to Singapore .................................... 117 4.10.1 Declaration by exporter.................................................................. 117 1. Statutory provisions ...................................................................... 117 2. Policy and practice ........................................................................ 118 4.10.2 Record keeping obligations on Australian producers, manufacturers and

exporters ..................................................................................... 118 1. Statutory provisions ...................................................................... 118 2. Policy and practice ........................................................................ 121 4.10.3 Power to require records ................................................................ 121 1. Statutory provisions ...................................................................... 121 2. Policy and practice ........................................................................ 122 4.10.4 Power to ask questions .................................................................. 122 1. Statutory provisions ...................................................................... 122 2. Policy and practice ........................................................................ 123 Appendix 4:1 124 Appendix 4:2 126 Appendix 4:3 127 Appendix 4:4 128 Appendix 4:5 131 Appendix 4:6 133 Appendix 4:7 135 Appendix 4:8 137



Division 1: Introduction

Section 1: Coverage of Manual 1.1.1 This Manual deals only with Origin issues. 1.1.2 Division 2 applies generally to Origin. Division 3 deals with Origin as it relates to

countries other than Singapore. Division 4 deals with Origin relative to Singapore under the Singapore Australia Free Trade Agreement (SAFTA).

1.1.3 Customs Manual Volume 8C deals exclusively with matters relative to the

Australia-United States Free Trade Agreement (AUSFTA). 1.1.4 Customs Manual Volume 8D deals exclusively with matters relative to the

Thailand-Australia Free Trade Agreement (TAFTA).



Division 2: Legislation

Section 1: Origin legislation

2.1.1 General outline of legislation (1) The following legislative provisions give instruction on how to interpret and implement

the rules of origin as they apply to Australia’s trading partners:

□ Combined Australian Customs Tariff Classification and Statistical Nomenclature “Introduction”

− pages 1 and 2 (Application of Rates of Duty)

□ Customs Tariff Act 1995 (the Tariff Act)

− Part 1 - Preliminary: sections 3, 12, 13 and 14

− Part 2 - Duties of Customs: sections 15, 16, and 18

− Schedule 1 (Forum Island, Least Developed and Developing Countries and places)

− Schedule 3 (general and preferential rates for tariff classifications)

− Schedule 4 (general and preferential rates for concessional items)

□ Customs Act 1901 (the Customs Act)

− Section 4 (definition of “unmanufactured raw products”)

− Division 4A of Part VI (sections 126AA to 126AD) – “Exportation of goods to Singapore”

− Division 1A of Part VIII (sections 153A to 153T) – “Rules of origin of preference claim goods” (other than for goods from Singapore)

− Division 4A of Part VI (sections 153U to 153XB) – “Rules of origin of goods claimed to be the produce or manufacture of Singapore”

□ Customs Regulations 1926 (the Regulations)

− Regulations 105A, 105B and 195C − Regulations 107A and 107B.

2.1.2 Operation of the legislation (1) Section 14 of the Tariff Act specifies particular rates of duty to preference countries

and places through designated country or place codes. Where the abovementioned places are not specific e.g., Developing Countries, these are specified in Schedule 1 to the Tariff Act vide section 12 of that Act.

2.1.3 Legislation for related trade arrangements (1) Certain goods the produce or manufacture of Australia’s External Territories

(Christmas, Cocos (Keeling) and Norfolk islands) gain duty-free entry through acts of Parliament other than the Tariff Act. The rules of origin governing access to the duty-free entry provided by these enactments are contained in Division 1A of part VIII of the Customs Act.



(2) The SPARTECA (TCF Provisions) Scheme (SPARTECA TCF) was developed as an

adjunct to SPARTECA. It provides duty free entry for certain textiles, clothing and footwear products manufactured in Forum Island Countries where those products do not meet the value-added requirements for duty free entry under SPARTECA. Duty free entry is provided by item 68 of Schedule 4 to the Tariff Act. The legislative provisions in Division 1A of Part VIII of the Customs Act that apply to goods claimed to be the manufacture of Forum Island Countries under SPARTECA are used to determine the value-added (or local area content) under the Scheme.



Section 2: Rules of origin 2.2.1 Concept

(1) Conditions for entitlement to preferential rates of duty spring, in most cases, from

trade agreements and may be reciprocal or non-reciprocal. Although trade agreements tend to refer to the underlying conditions for preferential rates of duty as the ‘Rules of Origin’, this expression is not specifically found in the legislation, which refers to “goods the produce or manufacture of” a country. The purpose of Divisions 1A and 1B of Part VIII of the Customs Act is to provide the criteria for determining the origin of goods based on “produce or manufacture of” a country.

(2) The principal objective of setting rules of origin in relation to the administration of a

preferential trade agreement is to ensure that the benefits created by the agreement are applied only to those goods which originate, and are traded within, the particular preferential area.

(3) The criteria adopted in this respect take account of the objectives of the trade

agreement, which are normally related to a desire to encourage area development and optimise the use of area resources. The spirit of particular trade agreements, as contained in the aims and objectives of the agreement, will be the basis (subject to the constraints of legal provisions) of administering preference provisions.

(4) Rules of origin are also established for non-preference countries and Australia’s

External Territories (Christmas, Cocos (Keeling) and Norfolk Islands) (see 9.1.3).



Section 3: Countries eligible for preference 2.3.1 Trade agreements

(1) Subsection 3(1) of the Tariff Act defines a preference country as:

• New Zealand; or • Papua New Guinea; or • a Forum Island Country; or • a Least Developed Country; or • a Developing Country; or • Canada; or • Singapore.

(2) Australia’s first trade agreement was negotiated with New Zealand in 1922 and the

New Zealand Preference Act (No. 3 of 1922) was introduced. This trade agreement has been renegotiated many times in the intervening period, the most recent being the 1992 review of the Australia New Zealand Closer Economic Relations Trade Agreement (ANZCERTA).

(3) Australia and New Zealand Customs have jointly produced three ANZCERTA booklets

to assist in developing business and trade relationships between each country. These booklets are available on the Internet at http://www.customs.gov.au and are titled:

• ANZCERTA Rules Governing Entitlement to Preferential Rates of Duty for Trans-Tasman Trade;

• ANZCERTA Trans-Tasman Textile, Clothing & Footwear Rules of Origin Enquiries Protocol on Customs Procedures; and

• ANZCERTA Rules of Origin Determined Manufactured Raw Materials (DMRM).

(4) Canada was first given preferential treatment in 1925 as part of the then existing

British Commonwealth preferential system. Canadian preferential rates of duty were extended under the provisions of the Canada Australia Trade Agreement (CANATA), which entered into force on 12 February 1960. While this agreement does not include rules of origin, Australia continues to offer preferential rates based on the rules of origin that governed the British Commonwealth preference system.

(5) Papua New Guinea gained access to preferential rates of duty in 1926. On

1 February 1977, an Agreement on Trade and Commercial Relations between Australia and Papua New Guinea (PATCRA), which included provisions on rules of origin, entered into force. This agreement has subsequently been superseded by a replacement agreement, known as PATCRA II, which entered into force on 20 September 1991. PATCRA II includes rules of origin, and refers to additional preferential treatment under the South Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA) for Forum Island countries.

(6) Forum Island countries are specified in Part 1 of Schedule 1 to the Tariff Act.

Preferential rates of duty were extended to these countries following the entry into force of SPARTECA on 30 June 1982. Australian and New Zealand Customs and the Forum Secretariat jointly produced a booklet ‘A Reference Handbook for Forum Island Country Exporters’, and Australian and Fiji Customs have jointly produced a booklet ‘Protocol on Customs Procedures for Rules of Origin Under SPARTECA’ to assist in developing business and trade relationships between each country. These booklets are available on the Internet at http://www.customs.gov.au.

http://www.customs.gov.au/




(7) SPARTECA TCF was introduced in March 2001 as an adjunct to SPARTECA following

the demise of the Import Credit Scheme. SPARTECA TCF operates as a Schedule 4 Concession, rather than as a preferential trade arrangement. Provided certain circumstance are met, this Scheme provides duty free entry (under item 68 of Schedule 4 to the Tariff Act) for certain textiles, clothing and footwear products manufactured in Forum Island Countries where those products have a lower level of value-added (or local area content) than required under SPARTECA. The Department of Industry, Tourism and Resources administers the Scheme.

(8) Both the United Nations Conference on Trade and Development (UNCTAD) and the

World Trade Organization (WTO) encourage the provision of special treatment to developing countries, especially those nominated by UNCTAD as ‘least developed countries’ (LDCs).

(9) Many nations, including Australia, offer Generalised System of Preferences (GSP)

Schemes for developing countries under a framework developed by UNCTAD. As GSP Schemes are applied on a non-reciprocal basis, there is no underlying agreement governing conditions of entitlement. Each nation that offers a GSP Scheme is free to specify its own rules of origin.

(10) Australia first extended preferential rates to developing countries unilaterally in 1976

under the Australian System of Tariff Preferences (ASTP). Over time, Australia reduced preferences under the ASTP, in line with UNCTAD’s graduation principles. In 1991, Australia commenced phasing-out preferences for Hong Kong, the Republic of Korea, Singapore and Taiwan. The phasing-out of preferential rates for most other developing countries commenced in 1993 and was extended in 1994. Generally, the full margin of developing country preference is now limited to imports from LDCs and certain South Pacific islands (including Forum Island countries where the goods do not meet the SPARTECA rules of origin).

(11) On 1 July 2003, Australia granted duty free entry to goods originating in LDCs. Duty

free entry for LDCs is conditional on the goods meeting more stringent rules of origin than those devised for the purposes of the 5% margin of preference. These rules are aimed at ensuring that the benefits of duty free entry flow primarily to LDCs rather than to other Developing Countries.

(12) While the LDC rules allow materials from all Developing countries, Forum Island

countries and Australia to count as local content, the level of materials from non-LDC that can count as local content is limited to 25% of the total factory cost of the goods.

(13) The duty free entry of goods originating in Singapore in accordance with the Singapore

Australia Free Trade Agreement (SAFTA), signed in February 2003, commenced on 28 July 2003.



Section 4: Origin criteria 2.4.1 Classes of goods 2.4.1.1 General

(1) There are three different classes of goods that may enter Australia as the produce or manufacture of a particular country viz:

(i) goods wholly the produce of the country (eg unmanufactured raw products);

(ii) goods wholly manufactured in the country from specific materials; and

(iii) goods partly manufactured in the country.

2.4.1.2 Criteria for preferential trade arrangements other than SAFTA (1) The criteria governing entitlement to preference for goods, other than for those goods

originating in Singapore in accordance with SAFTA, are dealt with in Sections 1 to 4, and 8 of Division 10, as outlined below:

(a) Value-Added:

− Criteria (Section 1)

− Elements of the Criteria (Section 2)

− Variations to the Criteria (Section 3)

(b) Other Criteria (including Last Process of Manufacture) (Section 4)

(c) Direct Shipment (for goods the produce or manufacture of Canada) (Section 7)

(2) The rules for unmanufactured and wholly manufactured goods, other than those

originating in Singapore in accordance with SAFTA, are dealt with in Section 5 and Section 6 respectively. Unmanufactured and wholly manufactured goods produced in Canada are subject to the same direct shipment provisions that apply to goods partly manufactured in that country, as set out in Section 7.

(3) Sections 8 to 10 deal with administrative and miscellaneous issues associated with

preferential trade arrangements, other than those for SAFTA.

2.4.1.3 Criteria for SAFTA (1) The criteria governing entitlement to preference for goods originating in Singapore in

accordance with SAFTA, are dealt with in Sections 2 to 6 of Division 11, as outlined below:

(a) Value-Added:

− Criteria (Section 3)

− Elements of the Criteria (Section 4)

− Variations to the Criteria (Section 5)

(b) Other Criteria (including Last Process of Manufacture and Consignment Rules) (Section 6)

(c) Declarations and Certificates of Origin (Section 7). (2) Section 8 deals with Determined manufactured raw Materials (DMRM) while Section 9

deals with administrative and miscellaneous issues associated with SAFTA.



Division 3: Origin (excepting goods from Singapore)

Section 1: Partly manufactured goods – value-added criteria – overview

3.1.1 Factory or works cost

(1) The primary criterion used to ascertain the origin of imported goods is the minimum

value-added requirement. This measure is dealt with in this section under the general heading of factory or works cost. In general, ‘allowable factory cost’ as a percentage of ‘total factory cost’ (defined terms - see section 153B of the Customs Act) provides the decisive test in satisfying this criterion. Minimum percentages of value-added required are set out in Division 1A of Part VIII of the Customs Act as follows:

New Zealand: under subsection 153J(3) - 50%; and

under subsection 153K(1) - in special circumstances the CEO may substitute 48% for 50%

Papua New Guinea & Forum Island: subsection 153L(4) - 50%; and

under subsection 153LA(1) - in special circumstances the CEO may substitute 48% for 50%

Particular Developing Country: under section 153M - 50%

Other Developing Country: under section 153N- 50%

Least Developed Country: under section 153NA - 50%

Canada: under subsections 153P(4) - 25% or 75%, depending on whether the goods are of a kind commercially manufactured in Australia

Non-preference countries: under subsections 153Q(3) - 25% or 75%, (other than External Territories) depending on whether the goods are of a kind

Commercially manufactured in Australia

External Territories: under subsections 153Q(4) - 25% or 50%, depending on whether the goods are of a kind commercially manufactured in Australia

(2) The Customs Act refers in subsection 153A(3) to diagrams and explanatory notes in

Schedule VII of the Customs Act which illustrate the operation of the factory and works cost criterion. These diagrams and notes are reproduced in Appendix 3.3 for easy reference.

(3) Under SPARTECA TCF, the value-added (or local area content) requirement for

textiles, clothing and footwear products manufactured in Forum Island Countries is not less than 35% but less than 50%. Under SPARTECA TCF, local area content is worked out using the same methodology contained in the value-added provisions of Division 1A of Part VIII of the Customs Act.



3.1.2 The concept of factory cost (1) Section 153B of the Customs Act defines ‘allowable factory cost’ and ‘total factory cost’

in terms of materials, labour and overhead. Sections 153D and 153E of the Customs Act deal specifically and definitively with the total expenditure and allowable expenditure respectively in regard to materials.

(2) Allowable labour and overhead costs are defined in sections 153F and 153G of the

Customs Act, respectively, and rely on Regulations to prescribe costs that are to be taken into account. Allowable expenditure is limited to costs so prescribed.

3.1.3 Total factory cost

3.1.3.1 Statutory Provisions (1) Section 153B of the Customs Act defines ‘total factory cost’ for the purposes of

Division 1A of Part VIII of the Customs Act as follows:

total factory cost, in relation to preference claim goods, means the sum of:

(a) the total expenditure of the factory on materials in respect of the goods, worked out under section 153C; and

(b) the allowable expenditure of the factory on labour in respect of the goods, worked out under section 153F; and

(c) the allowable expenditure of the factory on overheads in respect of the goods, worked out under section 153G.

3.1.4 Allowable factory cost

3.1.4.1 Statutory provisions (1) For the purpose of ascertaining whether minimum specified percentages of factory

cost have been met, section 153B of the Customs Act defines that proportion of total factory cost that represents ‘allowable factory cost’ as follows:

allowable factory cost, in relation to preference claim goods and to the factory at which the last process of their manufacture was performed, means the sum of:

(a) the allowable expenditure of the factory on materials in respect of the goods worked out under section 153D; and

(b) the allowable expenditure of the factory on labour in respect of the goods worked out under section 153F; and

(c) the allowable expenditure of the factory on overheads in respect of the goods worked out under section 153G.

3.1.4.2 Policy and practice

(1) Whereas total factory cost includes both allowable and non-allowable costs of

materials, allowable factory cost only includes allowable materials. Labour and overheads are limited to allowable expenditure in each case. Examination of allowable costs of the factory must now turn to each element viz., materials, labour and overhead. This is dealt with in Section 2.



Section 2: Partly manufactured goods – value-added criteria – key elements

3.2.1 Materials

3.2.1.1 General 1. Statutory provisions

(1) Materials are defined in section 153B of the Customs Act as follows:

materials, in relation to preference claim goods, means:

(a) if the goods are unmanufactured raw products—those products; and

(b) if the goods are manufactured goods—all matter or substances used or consumed in the manufacture of the goods (other than that matter or those substances that are treated as overheads); and

(c) in either case—the inner containers in which the goods are packed.

3.2.1.2 Total expenditure on materials 1. Statutory provisions

(1) These are to be found in sections 153C and 153E of the Customs Act and are:

153C Total expenditure of factory on materials

The total expenditure of a factory on materials in respect of preference claim goods is the cost to the manufacturer of the materials in the form they are received at the factory, worked out under section 153E.

153E Calculation of the cost of materials received at a factory

Purpose of section

(1) This section sets out, for the purposes of sections 153C and 153D, the rules for working out the cost of materials in the form they are received at a factory.

General rule

(2) Subject to this section, the cost of materials received at a factory is the amount paid or payable by the manufacturer in respect of the materials in the form they are so received.

Customs and excise duties and certain other taxes to be disregarded

(3) Any part of the cost of materials in the form they are received at a factory that represents:

(a) a customs or excise duty; or

(b) a tax in the nature of a sales tax, a goods and services tax, an anti-dumping duty or a countervailing duty;

imposed on the materials by a country in the qualifying area is to be disregarded.



CEO may require artificial elements of cost to be disregarded

(4) If the CEO is satisfied that preference claim goods consist partly of materials added or attached solely for the purpose of artificially raising the allowable factory cost of the goods, the CEO may, by written notice given to the importer of the preference claim goods, require the part of that cost that is, in the CEO’s opinion, reasonably attributable to those materials, to be disregarded.

CEO may require cost over normal market value to be disregarded

(5) If the CEO is satisfied that the cost to the manufacturer of materials in the form they are received at a factory exceeds, by an amount determined by the CEO, the normal market value of the materials, the CEO may, by written notice given to the importer of preference claim goods in which those materials are incorporated, require the excess to be disregarded.

CEO may determine cost of certain materials received at a factory

(6) If the CEO is satisfied:

(a) that materials in the form they are received at a factory are so received:

(i) free of charge; or

(ii) at a cost that is less than the normal market value of the materials; and

(b) that the receipt of the materials free of charge or at a reduced cost has been arranged, directly or indirectly, by a person who will be the importer of preference claim goods in which those materials are incorporated;

the CEO may, by written notice given to the importer, require that an amount determined by the CEO to be the difference between the cost, if any, paid by the manufacturer and the normal market value be treated as the amount, or a part of the amount, paid by the manufacturer in respect of the materials.

Effect of determination

(7) If the CEO gives a notice to the importer of preference claim goods under subsection (4), (5) or (6) in respect of materials incorporated in those goods, the cost of the materials to the manufacturer must be determined having regard to the terms of that notice.

2. Policy and practice

(1) The calculation of the cost of materials received at a factory in accordance with section

153E of the Customs Act has implications both for total expenditure and allowable expenditure on materials. Section 153C of the Customs Act states that the total expenditure of the factory on materials is calculated by reference to section 153E.

(2) Subsection 153E(2) provides that the cost of materials is the amount paid or payable

by the manufacturer in respect of the materials in the form they are so received. This cost includes all costs of acquisition into the manufacturer’s factory. The emphasis on the form in which the materials are received into the factory is intended to make clear that in determining the origin and cost of particular materials to the manufacturer, it is the origin and cost of materials in that particular form that is important rather than what might be the raw ingredients of the material received into the factory.



(3) The cost of materials will include such items as overseas and internal freight,

insurance, port and clearance charges and any financial accommodation that is a part of the CIF, FOB or other price paid. The use of the words ‘in respect of’ is intended to embrace all acquisition costs including the price paid or payable. Where materials are imported, the relevant price paid will be the actual amount paid in the currency of the country. The rate of exchange, therefore, will be the actual rate applicable to the transaction, even if it is a forward rate. Alternatively, average rates of exchange based on actual rates over a period may be used. Labour costs incurred in the procurement of materials are not to be included as a cost of materials. Such costs are to be included as a labour cost of management of the process of manufacture.

(4) Costs should, in all instances, be actual costs. Standard costs should not be used

except where they are an accurate reflection of a manufacturer’s operations. (5) Subsection 153E(3) specifies particular charges that do not form part of the cost of

materials. As it is common for the goods and services tax liability of an enterprise to be accumulated separately from the company’s ordinary accounts, it is unlikely that this tax will need to be removed from the cost shown in the accounts. Nevertheless, given the variability of company accounting systems, the question must always be addressed and resolved.

(6) Where certain materials have been added to goods merely to raise the allowable

factory cost of those goods, subsection 153E(4) enables the CEO to require the costs associated with those materials to be disregarded.

(7) Where the cost of materials to the manufacturer is excessive, subsection 153E(5)

enables the CEO to require the excess to be disregarded. The determination of the excess is based on the normal market value of the materials. The normal market value will generally be ascertained by recourse to other sellers of like materials in the relevant market. Where materials are, or would be, obtained from overseas sources, official rates of exchange may be applied to ascertain the price that would have been paid or payable in that overseas market.

(8) Where materials are provided to an overseas manufacturer free of charge or at a

reduced cost by the eventual importer of the finished products, subsection 153E(6) allows the CEO to determine an amount to be treated as the amount paid by the overseas manufacturer for those materials. The amount determined by the CEO is based on the difference between the normal market value and the cost incurred. This provision is aimed at non-arms length dealing between a manufacturer and an Australian importer as well as Cut, Make and Trim (CMT) contracts between an importer and a manufacturer in a preference country. The normal market value will be interpreted in a similar manner to subsection 153E(5).

(9) Copies of the forms of the different notices prepared pursuant to section 153E are set

out at Appendix 3.2.

3.2.1.3 Allowable expenditure on materials 1. Statutory provisions

(1) The allowable expenditure of the factory on materials is set out in section 153D of the

Customs Act as follows:



153D Allowable expenditure of factory on materials

General rule for determining allowable expenditure of a factory on materials

(1) Subject to the exceptions set out in this section, the allowable expenditure of a factory on materials in respect of preference claim goods is the cost to the manufacturer of those materials in the form they are received at the factory, worked out under section 153E.

Goods wholly or partly manufactured from materials imported from outside the qualifying area

(2) If:

(a) preference claim goods (other than goods wholly manufactured from unmanufactured raw products) are manufactured, in whole or in part, from particular materials; and

(b) those particular materials, in the form they are received at the factory, are imported from a country outside the qualifying area;

there is no allowable expenditure of the factory on those particular materials.

Goods claimed to be the manufacture of a Least Developed Country—special rule

(2A) If:

(a) goods claimed to be the manufacture of a Least Developed Country contain materials that, in the form they were received by the factory, were manufactured or produced in Developing Countries that are not Least Developed Countries; and

(b) the allowable expenditure of the factory on those materials in aggregate would, but for this subsection, exceed 25% of the total factory cost of the goods;

that allowable expenditure on those materials is taken to be 25% of the total factory cost of the goods.

Inland freight rule

(3) If:

(a) preference claim goods are manufactured, in whole or in part, from particular materials; and

(b) the preference country is Papua New Guinea or a Forum island Country; and

(ba) the goods are claimed to be the manufacture of Papua New Guinea or a Forum Island Country; and

(c) those particular materials:

(i) were imported into the preference country from a country outside the qualifying area; or

(ii) incorporate other materials (contributing materials) imported into the preference country from a country outside the qualifying area;

then, despite subsection (2), the allowable expenditure of the factory on those particular materials includes:

(d) the cartage of those particular materials; or

(e) the part of the cost of those particular materials that is attributable to the cartage of those contributing materials;



from the port or airport in the preference country where those particular materials or contributing materials are first landed to the factory or to the plant where they are processed or first processed.

Goods wholly or partly manufactured from materials imported from outside the qualifying area—intervening manufacture

(4) If:

(a) preference claim goods are manufactured, in whole or in part, from particular materials; and

(b) other materials (contributing materials) have been incorporated in those particular materials; and

(c) those contributing materials were imported into a country in the qualifying area from a country outside the qualifying area; and

(d) after their importation and to achieve that incorporation, those contributing materials have been subjected to a process of manufacture, or a series of processes of manufacture, in the qualifying area without any intervening exportation to a country outside that area;

the allowable expenditure of the factory on those particular materials in the form they are received at the factory does not include any part of the cost of those particular materials to the manufacturer, worked out under section 153E, that is attributable to the cost of those contributing materials in the form in which the contributing materials were received by the person who subjected them to their first manufacturing process in the qualifying area after importation.

Intervening export of contributing materials

(5) If contributing materials within the meaning of subsection (4) are, after their importation into a country in the qualifying area and before their incorporation into the particular materials from which preference claim goods are manufactured, subsequently exported to a country outside that area, then, on their reimportation into a country in the qualifying area, subsection (2) or (4), as the case requires, applies as if that subsequent reimportation were the only importation of those materials.

Goods claimed to be the manufacture of New Zealand - special rule

(6) If:

(a) goods claimed to be the manufacture of New Zealand are manufactured, in whole or in part, from particular materials; and

(b) the allowable expenditure of the factory on those particular materials, after excluding any costs required to be excluded under subsection (4), would be at least 50% of the total expenditure of the factory on those particular materials, worked out in accordance with section 153C;

then, despite subsection (4), the allowable expenditure of the factory on those particular materials is taken to be that total expenditure.”

Goods claimed to be the manufacture of Papua New Guinea or a Forum Island country-special rule



(6A) If:

(a) goods claimed to be the manufacture of Papua New Guinea or a particular Forum Island Country are manufactured, in whole or in part, from particular materials; and

(b) if the qualifying area for that country consisted only of that country and Australia-under subsection (4), the allowable expenditure of the factory on those particular materials, after excluding any costs required to be excluded under subsection (4), would be at least 50% of the total expenditure of the factory on those particular materials worked out in accordance with section 153C:

then despite subsection (4), the allowable expenditure of the factory on those particular materials is taken to be that total expenditure.

Waste or scrap

(7) If:

(a) materials are imported into a country; and

(b) the subjecting of those materials to a process of manufacture gives rise to waste or scrap; and

(c) that waste or scrap is fit only for the recovery of raw materials;

any raw materials that are so recovered in that country are to be treated, for the purposes of this section, as if they were unmanufactured raw products of that country.

Transhipment

(8) If, in the course of their exportation from one country to another country, materials are transhipped, that transhipment is to be disregarded for the purpose of determining, under this section, the country from which the materials were exported.

(2) The qualifying area differs for each preferential arrangement and is defined in section

153B of the Customs Act as follows:

qualifying area, in relation to particular preference claim goods, means:

(a) if the goods are claimed to be the manufacture of New Zealand—New Zealand and Australia; or

(b) if the goods are claimed to be the manufacture of Canada—Canada and Australia; or

(c) if the goods are claimed to be the manufacture of Papua New Guinea—Papua New Guinea, the Forum Island Countries, New Zealand and Australia; or

(d) if the goods are claimed to be the manufacture of a Forum Island Country—the Forum Island Countries, Papua New Guinea, New Zealand and Australia; or

(e) if the goods are claimed to be the manufacture of a particular Developing Country—the Developing Country, Papua New Guinea, the Forum Island Countries, the other Developing Countries and Australia; or

(f) if the goods are claimed to be the manufacture of a Developing Country but not a particular Developing Country—Papua New Guinea, the Forum Island Countries, the Developing Countries and Australia; or

(fa) if goods are claimed to be the manufacture of a Least Developed Country—the Developing Countries, the Forum Island Countries and Australia; or



(g) if the goods are claimed to be the manufacture of a country

that is not a preference country—that country and Australia. (3) Diagrams and explanatory notes illustrating the operation and effect of Division 1A of

Part VIII, and this section in particular, are set out in Schedule VII to the Customs Act (see subsection 153A(3)). A copy of that schedule is reproduced in Appendix 3.3.


(1) The qualifying area that applies to a preference country is an important consideration

when calculating allowable expenditure on materials. The qualifying area may comprise a number of countries. Where materials used or consumed in the manufacture of goods within a preference country were themselves manufactured or produced in countries from within the qualifying area, those materials can be included in the allowable expenditure on materials for the goods, subject to the provisions contained in section 153D. The provisions of the relevant preferential trade arrangement determine the countries that are included within a qualifying area. Some countries are included in the qualifying areas for more than one preferential trade arrangement. Australia is included in the qualifying area for all preferential trade arrangements.

(2) Where a country is covered by more than one preferential trade arrangement, goods

manufactured in that country can be eligible for preference under one arrangement but not under another simply because the arrangements may have differing qualifying areas. For example, goods manufactured in Fiji from Chinese materials may not meet the SPARTECA 50% allowable factory cost requirement under section 153L, because China is not within the SPARTECA qualifying area. The same goods may, however, meet the Developing Country 50% allowable factory cost requirement under section 153N, due to the broader qualifying area under Developing Country arrangements.

(3) Subsection 153D(2) provides for no allowable expenditure where materials are

sourced from outside the qualifying area notwithstanding that such materials may have some qualifying area content incorporated in them, e.g. area content wool in woven fabric or gold in gold chain. Diagram 2 of Appendix 3.3 illustrates this point by denying any allowable expenditure in relation to New Zealand preference where materials are imported from Hong Kong at a cost of $105. The notes to Diagram 2 further elaborate on this treatment.

(4) The emphasis on the form in which the materials are received into the factory is

intended to make clear that in determining the origin and cost of particular materials to the manufacturer, it is the origin and cost of materials in that particular form that is important rather than relating to what might be the raw ingredients of the material received into the factory. It also means that, where a material changed hands after importation, but did not change form, it is still considered to have been imported into the qualifying area rather than locally sourced.

(5) Subsection 153D(2), by exclusion, provides that the cost to the manufacturer of

unmanufactured raw products is allowable expenditure in total, regardless of the origin of those products, provided no other materials are used in the manufacture of the goods. The cost to the manufacturer of unmanufactured raw products is to be ascertained in accordance with section 153E.



(6) The qualifying area for Least Developed Countries includes all Developing Countries.

Subsection 153D(2A), however, limits the amount of expenditure on materials manufactured or produced in Developing Countries (that are not also Least Developed Countries) that can be included in the allowable expenditure on materials for the purpose of determining whether goods are the manufacture of a Least Developed Country. Where that expenditure exceeds 25% of the total factory cost of the goods, only 25% of the expenditure can be included as allowable.

(7) Subsection 153D(3) provides that, where the preference country is Papua New Guinea

or a Forum Island country, and the goods are claimed to be the manufacture of that country, the cost of freight incurred in transporting materials from the port or airport in the country to the factory where the preference claim goods are made is to be regarded as area content of materials.

(8) Subsection 153D(4) deals with materials of mixed origin. In summary, the

circumstances are:

(i) Material A is brought into a preference country from outside the qualifying area; and

(ii) Material A is further manufactured into Material B in the qualifying area and sold to the ‘manufacturer’ (as defined in section 153B).

The allowable expenditure in the sale to the manufacturer is the cost of the Material B calculated in accordance with section 153E, less the cost of Material A to the first processor in the country (also calculated in accordance with section 153E). Diagram 2 of Appendix 3.3 illustrates the operation of this subsection through the transactions involving plants 2, 5 and 7. The methodology is further explained in the notes to Diagram 2. This subsection also embraces contract work.

(9) Notwithstanding the special treatment of unmanufactured raw materials used in the

manufacture of wholly manufactured goods (see Section 10), there is no special treatment as to origin accorded to unmanufactured raw materials processed prior to manufacture in accordance with subsection 153D(4).

(10) Subsection 153D(5) provides that if, after commencement of intervening manufacture

in the qualifying area in accordance with subsection 153D(4), materials are exported outside the qualifying area and are subsequently re-imported, subsection 153D(2) or 153D(4), as appropriate, applies to the re-imported materials.

(11) With respect to subsection 153D(6), it is important to note that this subsection applies

only to goods of New Zealand origin. All of the circumstances of subsection 153D(4) are picked up by the opening words of paragraph (b) of that subsection, which then goes on to provide that if the allowable expenditure is at least 50% of the total expenditure of the factory on those materials, the allowable expenditure is taken to be the total expenditure.

(12) With respect to subsection 153D(6A), it is important to note that this subsection

applies only to goods of Papua New Guinea or a Forum Island Country origin. All of the circumstances of subsection 153D(4) are picked up by the opening words of paragraph (b) of that subsection, which then goes on to provide that if the qualifying area for that country consists only of that country and Australia and if the allowable expenditure is at least 50% of the total expenditure of the factory on those materials, the allowable expenditure is taken to be the total expenditure.



(13) The allowable expenditure is to be calculated in terms of subsection 153D(4), i.e. total

expenditure (Plants 3 and 6 of Diagram 2 of Appendix 3.3) of $45 less expenditure on materials from outside the qualifying area of $20 (Plant 3 of Diagram 2) = $25. In this case allowable expenditure is greater than 50% of total expenditure ($25/$45) and therefore allowable expenditure becomes total expenditure, i.e. $45 through the operation of this subsection.

(14) Subsection 153D(7) applies to materials:

• imported from outside the qualifying area; and

• reduced to waste or scrap as a result of a process of manufacture. (15) Where that waste or scrap is fit only for the recovery of the same original raw material

and is re-processed in the preference country to yield the same, the cost of the recovered raw material is to be treated as an unmanufactured raw product and as if it were materials of the country. Note that this provision applies only to materials that may be re-processed into the same original raw material, e.g. plastic or metal but not, for instance, off-cuts of leather.

(16) Scrap or waste which is generated as an ordinary consequence of manufacture is

usually reflected in standard usage specifications which govern costs of material charged to production. Thus, if three lineal metres of material off a roll are required for a garment but only 2.7 metres will actually be reflected in the garment, production will, nevertheless, be charged with 3 metres of material.

(17) Subsection 153D(8) allows transhipment to be disregarded in determining origin of

material for the purposes of this section. In administering this provision, any source of manufactured materials other than the source where the last process of manufacture occurred, will be disregarded.

(18) This provision is for ‘the purposes of the section’ only and that it does not derogate

from the explicit direct shipment rules which apply to Canada alone vide section 153P. (19) Subsection 153D(8) would relate to a chemical manufactured in country A which is

shipped to country B and stored in bulk tanks before being sold to Australia in smaller lots by a selling agent in country B. Note that if product from other countries is stored in the entrepot tanks, positive identification of the source of the material exported to the preference country for further manufacture may not be possible.

(20) Where raw materials are written-down below cost to reflect current market value by a

manufacturer and sold to another manufacturer for manufacture into preference claim goods, the written-down value (whether allowable or non-allowable) is to be taken into account.

3.2.2 Factory labour

1 Statutory provisions (1) The ‘allowable expenditure of the factory on labour’ is defined in section 153F as:

153F Allowable expenditure by the factory on labour

Calculation of allowable expenditure of factory on labour

(1) Allowable expenditure of a factory on labour in respect of preference claim goods means the sum of the part of each cost prescribed for the purposes of this subsection:

(a) that is incurred by the manufacturer of the goods; and



(b) that relates, directly or indirectly, and wholly or

partly, to the manufacture of the goods; and

(c) that can reasonably be allocated to the manufacture of the goods.

Regulations may specify manner of working out cost

(2) Regulations prescribing a cost for the purposes of subsection (1) may also specify the manner of working out that cost.


(1) Section 153F sets out basic requirements with respect to relevant (allowable) labour

costs. Such costs are prescribed in the Regulations in accordance with the power conferred by subsection 153F(2).

(2) Paragraph 153F(1)(a) imposes an ‘incurred by the manufacturer’ test. ‘Manufacturer’

is defined in section 153B to mean the person undertaking the last process in the manufacture of the goods. The significance of the word ‘incurred’ is that the cost or charge must be paid or payable by the manufacturer and not incurred independently by another party without recompense by the manufacturer. Further, it must be an actual cost and not a standard (budgeted), hypothetical, imputed or opportunity cost.

(3) Paragraph 153F(1)(b) establishes the linkage between cost and manufacture. There

must be a clear connection with production before any such expenditure can be considered allowable. In order for costs incurred by a production facility to be treated as direct costs of processing, those costs must be directly incurred in the production of the exported goods and not merely associated with the production facility as peripheral costs necessary to operate the facility.

(4) Paragraph 153F(1)(c) implies two essential requirements, viz:

• adequate records and information must be available; and

• a reasonable and appropriate method of allocation to production must be available.

3. Regulations

(1) The Regulations define allowable expenditure of the factory on labour as follows:

107A Prescribed costs of factory labour—section 153GF of the Customs Act

For the purposes of subsection 153F(1) of the Customs Act, each of the following costs, to the extent that the cost relates to labour, is prescribed:

(a) the cost of wages and employee benefits;

(b) the cost of supervision and training;

(c) the cost of management of the process of manufacture;

(d) the cost of receipt and storage of materials;

(e) the cost of quality control;

(f) the cost of packing of goods into inner containers;

(g) the cost of handling and storage of goods within the factory.




(1) Manufacturing wages and benefits will include the cost of labour that can be identified

or associated directly or indirectly with goods produced, i.e. production line workers and other factory personnel. Examples are base pay, overtime pay, incentive pay, shift differentials and employee benefits such as vacation pay, public holidays, medical insurance and government required social program contributions.

(2) The cost of wages in paragraph 107A(a) of the Regulations is to be interpreted to

include the cost of interest payments on bank loans to finance wages. For this entitlement to be established, it must be clear from the loan documentation that the purpose of the loan is specifically for the financing of wage payments and that borrowed funds have, in fact, been used for that purpose. Indirect labour, although attributable to factory overhead, is prescribed in this area.

(3) Labour costs incurred in connection with supervision would be limited to the factory

foreman or supervisor. Labour associated with training would encompass in-house training, particularly on-the-job training.

(4) Management of the process of manufacture would include the direct costs of factory

management such as the production manager as well as the factory cost accountant. The question as to whether layers of management beyond the production manager should be included depends on the structure and size of the company and the circumstances of the particular case. It would have to be shown, for instance, that the connection with manufacture is not too remote as envisaged by the exclusion of the general expense of executive services in paragraph 107A(a) of the Regulations.

(5) Indirect costs in the form of labour costs for material purchasers, production planning

and scheduling would also be included in the ‘Management of the Process of Manufacture’ heading. Labour associated with the receipt and storage of materials would relate to personnel employed in the materials store.

(6) Labour incurred in quality control refers to the cost of inspecting and testing the goods

prior to transfer off-line to ascertain whether they meet particular standards or specifications. Packing into inner containers refers to labour costs incurred in that function only. Inner containers are defined in section 153B as including any container into which preference claim goods are packed, other than a shipping or airline container, pallet or similar article. Labour related to other containers must therefore be excluded from allowable costs. Labour costs incurred in handling and storage of the goods within the factory will include the labour costs of personnel employed in the finished goods store. This cost is the only exception to the general rule that allowable costs are limited to those incurred to the point of completion of manufacture.

3.2.3 Factory overheads

3.2.3.1 Statutory provisions (1) The allowable expenditure of the factory on overheads is defined in section 153G as

follows

153G Allowable expenditure of factory on overheads

Calculation of allowable expenditure of factory on overheads

(1) Allowable expenditure of a factory on overheads in respect of preference claim goods means the sum of the part of each cost prescribed for the purposes of this subsection:

(a) that is incurred by the manufacturer of the goods; and



(b) that relates directly, or indirectly, and wholly or

partly, to the manufacture of the goods; and

(c) that can reasonably be allocated to the manufacture of the goods.

Regulations may specify manner of working out cost

(2) Regulations prescribing a cost for the purposes of subsection (1) may also specify the manner of working out that cost.


(1) Section 153G sets out basic requirements with respect to relevant (allowable)

overhead costs. Such costs are prescribed in the Regulations in accordance with the power conferred by subsection 153G(2). This subsection allows for costs to be prescribed and for the manner of calculating such costs to be specified.

(2) Paragraph 153G(1)(a) imposes an ‘incurred by the manufacturer’ test. ‘Manufacturer’

is defined in section 153B to mean the person undertaking the last process in the manufacture of the goods. The significance of the word ‘incurred’ is that the cost or charge must be paid or payable by the manufacturer and not incurred independently by another party without recompense by the manufacturer. Further, it must be an actual cost and not a standard (budgeted), hypothetical, imputed or opportunity cost.

(3) Paragraph 153G(1)(b) establishes the linkage between the cost and manufacture.

That is, there must be a clear connection with production before any such expenditure can be considered allowable.

(4) In any commercial undertaking, overheads will include both production overheads and

‘other’ overheads. Overheads which relate to general administration, finance, marketing, selling and distribution to customers are specifically excluded from prescribed costs by paragraph 107B(2)(a) of the Regulations - see below. The classification of overheads to isolate that portion related to production only, would take the function of the overhead as its distinguishing characteristic (e.g., whether it is a function of production, marketing, selling, finance, or administration).

(5) Thus, the costs of general management as distinct from functional management are

not directly or indirectly related to current production and are therefore excluded from the cost of production. Such costs are typically not attributable to any operation or product and their only association with the production facility may be as peripheral costs necessary to operate the facility.

(6) Paragraph 153G(1)(c) implies two essential requirements, viz:


• a reasonable and appropriate method of allocation to production must be available

(7) An example of paragraph 153G(1)(c) may arise where materials are transported in the

manufacturer’s vehicle and large numbers of substantially different types of materials arrive at the factory in the same consignment. Where all materials are sourced in the qualifying area, it may be easier to treat the cost of freight inwards as an overhead cost, provided it can reasonably be allocated to the goods. Where materials are sourced from countries outside the qualifying area, however, care must be taken to ensure that the cost of transport of such goods between the wharf and the manufacturer’s premises is attributed to the materials to which it relates and does not form part of qualifying overheads (see also 10.2.5).



3.2.3.3 Regulations

(1) The Regulations define allowable expenditure of the factory on overheads as follows:

107B Prescribed costs of factory overheads—section 153G of the Act

(1) For the purposes of subsection 153G(1) of the Customs Act, each of the following costs is prescribed:

(a) the cost of inspection and testing of materials and goods;

(b) the cost of insurance of the following kinds:

(i) insurance of plant, equipment and materials used in the production of the goods;

(ii) insurance of work in progress and finished goods;

(iii) liability insurance;

(iv) accident compensation insurance;

(v) insurance against consequential loss from accident to plant and equipment;

(c) the cost of dies, moulds, tooling and depreciation, maintenance and repair of plant and equipment;

(d) the cost of interest payments for plant and equipment;

(e) the cost of research, development, design and engineering;

(f) the cost of the following items in respect of real property used in the production of the goods:

(i) insurance;

(ii) rent and leasing;

(iii) mortgage interest;

(iv) depreciation on buildings;

(v) maintenance and repair;

(vi) rates and taxes;

(g) the cost of leasing of plant and equipment;

(h) the cost of energy, fuel, water, lighting, lubricants, rags and other materials and supplies not directly incorporated in manufactured goods;

(i) the cost of storage of goods at the factory;

(j) the cost of royalties or licences in respect of patented machines or processes used in the manufacture of the goods or in respect of the right to manufacture the goods;

(k) the cost of subscriptions to standards institutions and industry and research associations;

(l) the cost of the provision of medical care, cleaning services, cleaning materials and equipment, training materials and safety and protective clothing and equipment;

(m) the cost of the disposal of non-recyclable waste;

(n) the cost of subsidisation of a factory cafeteria to the extent not covered by returns;

(o) the cost of factory security;

(p) the cost of computer facilities allocated to the process of manufacture of the goods;

(q) the cost of contracting out part of the manufacturing process within Australia or New Zealand;

(r) the cost of employee transport;

(s) the cost of vehicle expenses;

(t) the cost of any tax in the nature of a fringe benefits tax.



(2) In working out a cost for the purposes of subregulation (1), the

following costs are not included:

(a) any cost or expense relating to the general expense of doing business (including, but not limited to, any cost or expense relating to insurance or to executive, financial, sales, advertising, marketing, accounting or legal services);

(b) the cost of telephone, mail and other means of communication;

(c) the cost of international travel expenses, including fares and accommodation;

(d) the cost of the following items in respect of real property used by persons carrying out administrative functions:

(i) insurance;






(e) the cost of conveying, insuring or shipping the goods after manufacture;

(f) the cost of shipping containers or packing the goods into shipping containers;

(g) the cost of any royalty payment relating to a licensing agreement to distribute or sell the goods;

(h) the manufacturer’s profit and the profit or remuneration of any trader, agent, broker or other person dealing in the goods after manufacture;

(i) any other cost incurred after the completion of manufacture of the goods.

(3) For the purposes of paragraph (1)(c) and (f), the cost of depreciation of plant, equipment or buildings must be worked out in accordance with generally accepted accounting principles, as applied by the manufacturer.”

(4) Despite subregulation (2), if preference claim goods are claimed to be the manufacture of Papua New Guinea or a Forum Island Country the following costs, in addition to the costs prescribed by subregulation (1) are prescribed for subsection 153G(1) of the Act:

(i) 25% of telecommunications costs; and

(ii) the cost of international travel expenses incurred to allow 1 person to travel, in a year, to attend 1 trade fair or to purchase equipment.

(iii) the cost of contracting out part of the manufacturing process within Papua New Guinea or a Forum Island Country.




(1) Subsection 153G(1) of the Customs Act provides that allowable expenditure means

“the sum of the part of each cost prescribed...”. Costs are therefore prescribed in subregulations 107B(1) and 107B(4) subject to the requirements of subsection 153G(1) of the Customs Act. Subregulation 107B(1) is also subject to subregulations 107B(2) and (3). That is to say, subsection 153G(1) narrows the scope of costs prescribed in subregulations 107B(1) and (4) to the relevant part of each cost that is to form allowable expenditure, and subregulation 107B(1) is further narrowed by the exclusions in subregulations 107B(2) and (3). Costs that are not prescribed are not to form part of allowable expenditure.

(2) The isolation of expenses that bear (in whole or in part) a direct or indirect

relationship to manufacture will always require careful analysis. This analysis must address the question of whether the particular cost can be identified directly or indirectly with the function of producing goods (see 10.6.2). The costs of general management are typically not attributable to any operation and their association with the production facility may be as peripheral costs necessary to operate the facility.

(3) Paragraph 107B(2)(a) of the Regulations provides that costs or expenses relating to

the general expense of doing business are not to be included as a prescribed cost. The intention of this paragraph is to exclude general expenses that are not related to the manufacture of particular preference claim goods. In normal circumstances, these expenses would be treated as ‘other’ overheads rather than ‘production’ overheads and would, therefore, not appear in the manufacturing accounts. The costs listed in paragraph 107B(2)(a) illustrate this principle. Other examples are bank charges, donations, corporate expenses, audit expenses, entertainment, printing and stationery and personnel costs including staff advertising.

(4) No account is to be taken of the origin of the energy, plant, machinery, royalties or

other such costs incurred by the manufacturer in the production of goods when determining whether or not particular goods are the produce or manufacture of a country. For example, the payment by the manufacturer of a royalty to a recipient in a country outside the qualifying area, for a process developed in that country, does not provide grounds for denying inclusion of the cost in allowable expenditure.

(5) Subregulation 107B(3) limits depreciation charges to those that are ascertained in

accordance with generally accepted accounting principles as applied by the manufacturer. These principles will apply whether or not they are applied by the manufacturer.

(6) Allowable expenditure on factory overhead is to include re-work costs on faulty

manufacture whether or not such defects are discovered post sale.

3.2.4 Other costs

3.2.4.1 Labels/tickets

(1) Materials and labour will be expended on these items. Generally, items which are required by law and/or which identify the goods, their origin, characteristics, brand name, fabric codes, care instructions and material composition may be included in allowable expenditure. However, items that are of a promotional nature in relation to particular manufacturers or generic goods should not be treated as allowable expenditure on the grounds that they represent selling or marketing expenses which are specifically excluded by Customs Regulation, paragraph 107B(2)(a).



3.2.4.2 Inner containers 1. Statutory provisions

(1) Inner containers are defined in section 153B as follows:

inner container includes any container into which preference claim goods are packed, other than a shipping or airline container, pallet or other similar article.


(1) Inner containers shall include any item of packaging, container or containers into or

onto which the goods are packed but shall not include shipping containers (including pallets and like articles or air containers that are used by carriers for cargo conveyancing).

(2) Inner containers are not mentioned specifically as an element of allowable factory cost

in the definition of that term in section 153B. Costs associated with inner containers will be represented under the three categories of materials, labour and overhead.

(3) Section 153B includes the cost of inner containers in the definition of ‘materials’ for

the purposes of Division 1A of Part VIII. (4) In prescribing labour costs which represent allowable expenditure in labour under

subsection 153F(2), the Regulations include labour costs incurred in packing goods into inner containers [paragraph 107A(f) of the Regulations].

(5) Overhead costs associated with packing would be considered allowable insofar as they

relate to the labour cost entitlement and are specified in paragraph 107B(1)(i) of the Regulations.

3.2.4.3 Scrap and waste material

(1) As scrap and waste arise essentially in relation to material, this matter has been dealt with earlier in this section [refer 3.2.1.3 (2) – paragraphs 14-16].

3.2.5 Double counting

1. Statutory provisions (1) Division 1A of Part VIII of the Customs Act includes a proscription against any double

counting (section 153S), in the following terms:

153S Rule against double counting

In determining the allowable factory cost or the total factory cost of preference claim goods, a cost incurred, whether directly or indirectly, by the manufacturer of the goods must not be taken into account more than once.


(1) Given the variability of accounting practice, there is considerable scope for double

counting of particular costs. Care will need to be taken, for instance, to ensure that indirect labour costs, which in some circumstances can form part of total payroll costs, are not counted in direct labour as well as manufacturing overhead when costs are determined on a per unit basis.



Section 3: Partly manufactured goods – value-added criteria – variations

3.3.1 Goods not commercially manufactured in Australia

1. Statutory provisions (1) In certain circumstances, alternative minimum value-added thresholds are applicable

where goods are of a kind not commercially manufactured in Australia. Relevant provisions are:

• Canada: subsection 153P(4);

• Non-preference countries: subsection 153Q(3);

• Christmas, Cocos (Keeling) and Norfolk Islands: subsection 153Q(4). (2) Section 153R provides determination powers in relation to such goods as follows:

153R Are goods commercially manufactured in Australia?

CEO may determine that goods are, or are not, commercially manufactured in Australia

(1) For the purposes of sections 153P and 153Q, the CEO may, by Gazette notice, determine that goods of a specified kind are, or are not, commercially manufactured in Australia.


(2) If such a determination is made, this Division has effect accordingly.


(1) The concept behind this provision is that trade should not be impeded where there is

no threat to Australian industry. In such cases, goods may enter at preferential rates with a lower minimum value-added threshold than would otherwise apply.

(2) The absence of Australian manufacture is generally indicated by the presence of a

general duty rate of free or by the existence of a Tariff Concession Order made pursuant to Part XVA of the Customs Act. Reconditioned or reconstructed machines do not gain the benefit of the lower thresholds.

(3) The kinds of goods considered not to be commercially manufactured in Australia are

set out by Gazette notice. An example of the type of notice is set out in Appendix 3.5.

3.3.2 Tolerance in minimum value-added

1. Statutory provision (1) Section 153K provides for a lower value-added content in certain circumstances with

respect to goods originating in New Zealand.

153K Modification of section 153J in special circumstances

When 50% in subsection 153J(3) can be read as 48%




(a) that the allowable factory cost of preference claim

goods in a shipment of such goods that are claimed to be the manufacture of New Zealand is at least 48% but not 50% of the total factory cost of those goods; and

(b) that the allowable factory cost of those goods would be at least 50% of the total factory cost of those goods if an unforeseen circumstance had not occurred; and

(c) that the unforeseen circumstance is unlikely to continue;

the CEO may determine, in writing, that section 153J has effect:

(d) for the purpose of the shipment of goods that is affected by that unforeseen circumstance; and

(e) for the purposes of any subsequent shipment of similar goods that is so affected during a period specified in the determination;

as if the reference in subsection153J(3) to 50% were a reference to 48%.


(2) If the CEO makes a determination then, in relation to all preference claim goods imported into Australia that are covered by that determination, section 153J has effect in accordance with the determination.

CEO may revoke determination

(3) If:

(a) the CEO makes a determination; and

(b) the CEO becomes satisfied that the unforeseen circumstance giving rise to the determination no longer continues;

the CEO may, by written notice, revoke the determination despite the fact that the period referred to in the determination has not ended.

Definition of similar goods

(4) In this section:

similar goods, in relation to goods in a particular shipment, means goods:

(a) that are contained in another shipment that is imported by the same importer; and

(b) that undergo the same process or processes of manufacture as the goods in the first-mentioned shipment.

(2) Section 153LA provides for a lower value-added content in certain circumstances with

respect to goods originating in Papua New Guinea or a Forum Island country.

153LA Modification of section 153L in special circumstances

When 50% in subsection 153L(4) can be read as 48%


(a) that the allowable factory cost of preference claim goods in a shipment of such goods that are claimed to be the manufacture of Papua New Guinea or a Forum Island Country is at least 48% but not 50% of the total factory cost of those goods; and



(b) that the allowable factory cost of those goods

would be at least 50% of the total factory cost of those goods if an unforeseen circumstance had not occurred; and


the CEO may determine, in writing, that section 153L has effect:

(d) for the purpose of the shipment of goods that is affected by that unforeseen circumstance; and

(e) for the purpose of any subsequent shipment of similar goods that is so affected during a period specified in the determination;

as if the reference in subsection 153L(4) to 50% were a reference to 48%.


(2) If the CEO makes a determination, then, in relation to all preference claim goods imported into Australia that are covered by the determination, section 153L has effect in accordance with the determination,


(3) If:

(a) the CEO makes a determination; and

(b) the CEO becomes satisfied that the unforeseen circumstance giving rise to the determination no longer continues;


Definition of similar goods




(b) that undergo the same process or processes of manufacture as the goods in the first-mentioned shipment.


(1) Allowable labour and overheads would generally be based on a 12 month period

coinciding with the annual reporting period of the manufacturer. For this reason, such costs are unlikely to be affected by this provision, which relates to short-term aberrations.

(2) The provision will, however, apply directly to materials in circumstances where a

short-term variation is experienced through, for example, exchange rate fluctuations. Where this variation directly affects the cost of production of each individual unit produced, it will come within the ambit of this provision. In ordinary circumstances, the short-term would not be expected to exceed three months.

(3) Where use of this provision is contemplated, application should be made to the

Director Valuation and Origin, 5 Constitution Avenue, Canberra ACT 2601, well before the goods are to be entered for home consumption, so that sufficient time is allowed to consider the application and, where appropriate, to make a determination. The application should include all material required to support the claim.



(4) The form of the determination contemplated by section 153K is set out in

Appendix 3.4.

3.3.3 Special provisions allowing variation of minimum value-added

1. Statutory provisions

(1) Special provisions exist to permit a lower minimum value-added threshold where the

CEO has made a determination. This is commonly referred to as ‘derogation’. These provisions are set out in the following paragraphs:

• New Zealand: paragraph 153J(3)(b);

• Papua, New Guinea or a Forum Island country: paragraph 153L(4)(b).

2. Policy and practice (1) No derogation requests have been received in respect of goods produced in New

Zealand. Several requests have been received from Forum Island countries, the most recent being the request by the Government of Samoa in relation to wiring harnesses for passenger motor vehicles. In response to this request, a decision was made to reduce the minimum value-added threshold for these goods to 40% from 24 December 2003 to 23 June 2005.

(2) In 1995 relevant Ministers agreed to implement a policy framework for the

consideration of derogation requests under SPARTECA. This policy was published in Appendix 8 to the booklet, SPARTECA – A Reference Handbook for Forum Island Country Exporters, which is available on the Internet at http://www.customs.gov.au.

(3) A sample form of determination is set out in Appendix 3.6.




Section 4: Partly manufactured goods – other criteria

3.4.1 Additional requirements

(1) Aside from minimum value-added thresholds, there are other conditions that must be

met before goods are considered to be the produce or manufacture of a particular country. These are:

• last process of manufacture;

• direct shipment.

3.4.2 Last process of manufacture

1. Statutory provisions (1) The following provisions require that the last process in the manufacture of preference

claim goods be performed in the preference country concerned:

• New Zealand: 153J(2)(a)

• Papua New Guinea/Forum Island: 153L(2)(a)

• particular Developing Country: 153M(a)

• Developing Country but not a particular Developing Country: 153N(a)

• Canada: 153P(3)(a)

• non-preference country including Australian External Territories: 153Q (4).

2. Policy and practice (1) All work undertaken in respect to the goods prior to that undertaken by the

manufacturer (as defined in section 153B of the Customs Act) of preference claim goods at the factory (as defined in section 153B) will represent materials in that (final) process. Manufacture requires the creation of an article essentially different from the component parts or materials that go into such manufacture. Further, the manufacturer of the preference claim goods must perform the final process in the manufacture of those goods.

(2) What is ‘manufacture’ in any particular case must be determined on a case-by-case

basis with due regard being paid to the nature of the goods concerned and the processes to which they have been subjected.

(3) Processes such as repairing, overhauling or re-furbishing do not constitute

manufacture as they are restoration processes (see Regal Holdings Ltd and Chief Executive Officer of Customs (1997) 46 ALD 373).

(4) In keeping with the above, minor processing operations such as pressing, labelling,

ticketing, packaging, preparation for sale and quality control inspections are not considered to be processes of manufacture in their own right.

(5) Generally, minor processing operations are considered to be part of overall

manufacture, provided there is a single continuous line of production at the factory from primary materials to finished goods ready for sale.



3.4.3 Direct shipment (1) Direct shipment is a requirement for goods the produce or manufacture of Canada. As

this provision relates to all goods, whether unmanufactured, partly or wholly manufactured, it is dealt with separately in Section 7 of this Division.



Section 5: Unmanufactured goods 3.5.1 Unmanufactured goods criteria

1. Statutory provision

(1) Section 153H provides as follows:

153H Unmanufactured goods

Goods claimed to be the produce of a country are the produce of that country if they are its unmanufactured raw products.

(2) Section 4 provides as follows:

unmanufactured raw products means natural or primary products that have not been subjected to an industrial process, other than an ordinary process of primary production, and, without limiting the generality of the foregoing, includes:

(a) animals;

(b) bones, hides, skins and other parts of animals obtained by killing, including such hides and skins that have been sun-dried;

(c) greasy wool;

(d) plants and parts of plants, including raw cotton, bark, fruit, nuts, grain, seeds in their natural state and unwrought logs;

(e) minerals in their natural state and ores; and crude petroleum.


(1) Goods claimed to be covered by this provision must not have been subjected to any

process of manufacture (however minor) which would remove them from their raw state. For instance, in the case of peanuts, the process of shelling would place such goods outside this provision.

(2) However, where the process is limited to cleaning, grading and the like to maintain the

state of the product for international trade, such products will continue to be regarded as raw, unmanufactured products.

(3) Goods covered by section 153H are declared to be the produce of the country

concerned. They are not, therefore, subject to conditions of entitlement applicable to partly manufactured goods, such as last process of manufacture and minimum value-added.

3.5.2 Direct shipment (1) Direct shipment is a requirement for unmanufactured raw products of Canada. As this

provision relates to all goods, whether unmanufactured, partly or wholly manufactured, it is dealt with separately in Section 7 of this Division.



Section 6: Wholly manufactured goods 3.6.1 Wholly manufactured goods criteria


(1) Provisions relating to goods that are wholly manufactured in a preference country are

set out in the following subsections:

• New Zealand: 153J(1);

• Papua New Guinea: 153L(1);

• Canada: 153P(2);

• non-preference country (including External Territories): 153Q(1).

2. Policy and practice (1) Wholly manufactured provisions apply in respect of goods produced in New Zealand,

Papua New Guinea, Canada and non-preference countries (including Australia’s External Territories of Christmas, Cocos (Keeling) and Norfolk Islands). They do not apply to goods produced in Least Developed Countries, Developing Countries or Forum Island countries (other than Papua New Guinea).

(2) All provisions require wholly manufactured goods to be made from materials falling

into one or more of three basic classes, as follows:

• unmanufactured raw products;

• materials wholly manufactured in the relevant country or Australia;

• materials imported into the relevant country from a country other than Australia that are determined by the CEO to be the manufactured raw materials of the relevant country.

(3) Australia recognises that small quantities of imported manufactured materials may be

used to produce otherwise wholly manufactured goods. Generally, the wholly manufactured provisions are, therefore, administered with a tolerance of 3%. This administrative policy has been agreed between the Governments of Australia and New Zealand.

3.6.2 Materials - unmanufactured raw products (1) Contrary to the provisions for unmanufactured raw products imported into Australia

without further manufacture, dealt with in Section 5, there is no limitation placed on the origin of unmanufactured raw products used as materials in wholly manufactured goods imported into Australia. Goods will be the manufacture of the country concerned notwithstanding that they may be made from unmanufactured raw products from outside the qualifying area.

3.6.3 Determined manufactured raw materials (DMRM) (1) Where goods would be wholly manufactured in a relevant country but for materials

that are not available from within Australia or the exporting country, the CEO may determine those materials to be the produce or manufacture of the exporting country.



(2) For the purposes of this provision, joint procedures for the handling of DMRM requests

have been developed between Australia and New Zealand. These procedures have been published in the booklet, ANZCERTA - Rules of Origin – Determined Manufactured Raw Materials (DMRM), which is available on the Internet at http://www.customs.gov.au (then go to “import/export”, then “rules of origin”, then open the PDF file titled “Australia–New Zealand ‘Determined manufactured Raw Materials’”.

(3) While there is no formal agreement between Australia and other countries on the

operation of DMRM, Australia adopts procedures similar to those agreed to with New Zealand. This includes consideration of the general duty rate applicable to imports of the material into Australia, eligibility for a duty concession and the publication of a Gazette notice that allows Australian manufacturers of the material for which a DMRM is sought 21 days in which to object to the granting of a DMRM.

(4) In this process, consideration is limited to the extent to which the material for which a

DMRM is sought can be made locally. No consideration is given to the extent to which local firms can manufacture the complete goods to be made using that material.

(5) A list of DMRM, effective at 31 May 2004, is at Appendix 3.8. An up-to-date listing

can be obtained by addressing an e-mail to [email protected].

3.6.4 Direct shipment (1) Direct shipment is a requirement for wholly manufactured products of Canada. As this

provision also relates to unmanufactured and partly manufactured goods, it is dealt with separately in Section 7 of this Division.


mailto:[email protected]



Section 7: Direct shipment (Canada) 3.7.1 Direct shipment criteria


(1) Direct shipment rules apply for Canada through subsection 153P(1). This provision

provides:

153P Manufactured goods originating in Canada

General rule

(1) Despite section 153H and subsections (2) and (3), goods claimed to be the produce or manufacture of Canada are not the produce or manufacture of that country unless:

(a) they have been shipped to Australia from Canada; and

(b) either:

(i) they have not been transhipped; or

(ii) the CEO is satisfied that, when they were shipped from Canada, their intended destination was Australia.


(1) This direct shipment provision is to ensure that the benefits of the preference go to

the seller in the exporting country. This may not be so if goods enter the commerce of another country before importation into Australia. Thus, transhipment is only permissible where, in the words of the Customs Act, the CEO was satisfied that the intended destination was Australia.

(2) This provision recognises geographical barriers to direct shipment, e.g. landlocked

countries, provided the intended destination was Australia. However, it does not allow for situations where the goods are shipped to and stored in another country before the ultimate destination of the goods is known, or where goods are shipped to another country for further processing (for example, packaging), prior to being shipped to Australia.



Section 8: Declarations 3.8.1 Procedures

(1) Declarations made by the overseas manufacturer of goods imported into Australia may

be used to support a preference claim, provided:

(a) the declaration clearly identifies the goods to which it applies; and

(b) the declaration specifies the particular provisions in Division 1A of Part VIII of the Customs Act that the goods meet; and

(c) there is no reason to doubt the veracity or reliability of the declaration. (2) Customs may seel further evidence of preference entitlement for any specific reason

or a simple intuitive selection, irrespective of the existence of a declaration. Where there is insufficient evidence to establish that preference applies, the general rate of duty is payable.

(3) Where a customs entry states that a preference rate of duty applies, this will be taken

to indicate that the owner of the goods possesses evidence that the stated facts are correct. The criteria for eligibility for preference rates of duty are set out in Division 1A of Part VIII of the Customs Act.

(4) If Customs finds that preference is inapplicable or that there is insufficient evidence to

justify the claim for preferential rates of duty, there will be a liability for the payment of any Customs duty that has been short paid. In these circumstances, there may also be a liability for an administrative penalty under section 243T of the Customs Act.

(5) If, after the time of entry, evidence becomes available to the owner that the goods are

ineligible for preferential rates of duty, the owner should, as soon as practicable after becoming aware of the error, voluntarily tender to Customs any short paid Customs duty. This action may protect the owner from potential penalty under section 243T of the Customs Act if Customs audit action has not commenced.

(6) Declarations which state that the preference criteria of Division 1A of Part VIII of the

Customs Act have been met will be recognised by Customs only if signed by the overseas manufacturer. In the case of the People’s Republic of China, the term “overseas manufacturer” includes:

• the China Chamber of International Commerce;

• the China Council for the Promotion of International Trade;

• the Shanghai Import and Export Commodity Inspection Bureau;

• the Guang Dong Import and Export Commodity Inspection Bureau;

• the Yunnan Native Produce Import and Export Corporation; and

• all provincial inspection bureaux. (7) For goods manufactured in Hong Kong or the People’s Republic of China (and exported

through Hong Kong), declarations or certificates may be signed by representatives of the following organisations in Hong Kong:

• the Hong Kong Trade Department;

• the Hong Kong General Chamber of Commerce;

• the Federation of Hong Kong Industry;

• the Chinese General Chamber of Commerce; or

• the Indian Chamber of Commerce (Hong Kong).



(8) There is no prescribed form for a declaration by the manufacturer. It should,

however, describe the goods and refer to the particular provision in Division 1A of Part VIII of the Customs Act that the goods meet. Also, the name of the person signing the certificate or declaration, together with their position and the company or entity represented, should be clearly stated. The declaration may be on the commercial documents or form a separate document. Examples of acceptable declarations are set out in Appendix 3.7.

(9) It should be noted that where shipments to Australia are arranged by freight

forwarders (such as occurs with New Zealand trade), the requirement remains that declarations held by the importer must be signed by the overseas manufacturer.

(10) Where a duty short payment results from incorrectly claimed preferential duty rates,

an administrative penalty will not be imposed if, at the time of entry of the goods, the owner had either:

• a declaration from the overseas manufacturer that stated that a particular preference criterion of Division 1A of Part VIII of the Customs Act had been met; or

• evidence of the relevant factory processes and costs of the overseas manufacturer that indicated that the goods in question were eligible for preferential rates of duty.

(11) The protection from penalty would not apply, however, where:

• other information available to the owner indicated that the statement on the declaration from the manufacturer was incorrect or unreliable;

• the party signing the declaration was not the ‘overseas manufacturer’ - for instance, Customs would give no weight to a declaration that is from a supplier who was not the manufacturer of the goods; or

• the declaration could not be clearly related to the goods in question.



Section 9: Administrative procedures 3.9.1 Steps for determining preference entitlement

(1) Where preference entitlement is called into question, the following steps will be taken

to address the issue:

(a) New Zealand, Canada and Developing Countries

(i) Identify the goods on which preference has been claimed.

(ii) Identify the manufacturer producing the goods on which preference has been claimed.

(iii) Research and establish grounds for further action.

(iv) If warranted, forward a questionnaire to the manufacturer to gather data from which entitlement may be determined. A copy of the questionnaire is at Appendix 3.1.

(v) Examine the data and consider further action.

(vi) If sufficient information is available within a reasonable period of time, it may be possible to resolve the matter from the information put forward by the overseas manufacturer. Only where this is not possible will the matter become the subject of inquiries by Customs personnel in the country concerned. The object of these inquiries will be to ascertain and verify all relevant data from which assessment of entitlement may be made.

(b) Fiji

(i) Ministers representing the Governments of Australian and Fiji have signed The Protocol on Customs Procedures for Rules of Origin Under SPARTECA. Under the Protocol, Customs has trained a team of Fijian officials to monitor and to advise on compliance under SPARTECA.

(ii) All questions regarding preference from Fiji under SPARTECA are to be referred to Central Office.



Section 10: Intermediate goods (New Zealand only) 3.10.1 Prejudicial situations

1. Provisions

(1) Article 14 of ANZCERTA contains provisions for handling prejudicial situations arising

from unequal treatment of intermediate goods by Member States. Article 14 states:

1. A prejudicial situation arises in connection with intermediate goods, which are goods such as raw materials and components which are wrought into, attached to, or otherwise incorporated in the production or manufacture of other goods, when

(a) the policies of either Member State or the application by one or both Member States of assistance or other measures enables producers or manufacturers of goods in the territory of one Member State to obtain intermediate goods at lower prices or on other more favourable terms and conditions than are available to the producers or manufacturers of like goods in the territory of the other Member State; and

(b) the extent of advantage referred to in the preceding sub-paragraph in relation to the total cost for the production or manufacture and the sale of the relevant final goods is such that it gives rise to a trend in trade which frustrates or threatens to frustrate the achievement of equal opportunities for producers or manufacturers in both Member States.


(1) This provision provides a formal framework for Australia and New Zealand to handle

unfair competition brought about by government policies, assistance or other measures.

(2) Article 14.1 forms the basis for Customs’ inquiries. Other provisions in Article 14,

dealing with procedures and solutions for the removal of the prejudicial situation, are the responsibility of the Department of Foreign Affairs & Trade (DFAT) and the Department of Industry, Tourism and Resources (ITR).

(3) The provisions of Article 14 are not embodied in Australian legislation. (4) Further details on intermediate goods, including application and inquiry procedures,

are available from the Manager Origin, Customs House, 5 Constitution Avenue, Canberra City, ACT 2601, telephone number 02 6275 6551.



Appendix 3:1 AUSTRALIAN CUSTOMS SERVICE

PREFERENTIAL RATES OF DUTY

ORIGIN INFORMATION REQUIREMENTS

A. FOREWORD 1. The purpose of this document is to gather relevant data on the particular goods

specified to enable the Australian Customs Service (Customs) to ascertain whether particular goods are the produce or manufacture of a country and thus are entitled to entry at preferential rates of duty (preference). Customs may, at its option, wish to visit manufacturers and verify any data provided.

2. Entitlement to preference is determined in accordance with Division 1A of Part VIII of the Customs Act and Customs Regulations 107A and 107B.

3. This document captures the essence of these requirements but should not be seen as a definitive statement.

4. Generally, goods qualify for preference if a specified percentage (generally 50%) of the total factory cost in producing those goods constitutes allowable expenditure in relation to the particular ‘qualifying area’.

5. Qualifying areas for the different preference countries are as follows:

Preference Country Qualifying Area Canada Canada and Australia

Developing Countries All developing countries, Papua New Guinea, Forum Island countries and Australia

Forum Island country Forum Island countries, Papua New Guinea, New Zealand and Australia

New Zealand New Zealand and Australia

Papua New Guinea Papua New Guinea, Forum Island countries, New Zealand and Australia

Singapore Singapore and Australia. 6. Definitions of terms used in this document are set out in Schedule V. B. CONFIDENTIALITY OF DATA PROVIDED 1. Please mark confidential documents appropriately. C. GENERAL INFORMATION REQUIRED 1. Business Profile

(a) What is the full name, address, telephone number and facsimile number of your business?

(b) Is this business associated with the Australian importer or any supplier of materials?

(c) If so, what are the associations?



(Appendix 3.1…continued)

(d) If there is an association, what effect does this have on dealings between the parties, e.g., price discounting, purchasing at a premium, rebates, refunds, commissions, etc.

(e) Who is the company officer Customs should communicate with?

2. Details of Manufacture

(a) Describe the finished goods including model/type or style and specifications.

(b) Describe the materials used in manufacture.

(c) Describe the manufacturing processes for the finished goods D. FINANCIAL INFORMATION REQUIRED 1. Form of Presentation

(a) For preference to apply, allowable factory cost must be equal to or greater than a specified percentage of total factory cost.

(b) The form at Schedule IV has been designed to summarise all relevant data and show the allowable proportion for each unit/model/style produced.

2. Financial Period

(a) Costs should be provided based on the most recently completed accounting period of the manufacturer. The relevant period should be indicated on each completed copy of Schedule IV.

(b) Where any of these costs have changed since the most recently completed accounting period, please show separately which costs have changed and provide reasons for any changes.

(c) Actual costs are required in all instances.

3. Materials

(a) The cost of materials at any level in the manufacturing cycle will always include all directly attributable costs of acquisition into the purchaser’s store. All material costs chargeable to finished goods on which preference is claimed will form part of total factory cost.

(b) The allowable part of the total cost of materials is to be determined in accordance with Schedule I.

(c) Please provide the following information concerning the purchase of material:

(i) Who are the suppliers and what is the country of last process of manufacture for those materials? Please list the goods, names, addresses, telephone numbers and facsimile number of suppliers.

Information should be grouped under the following headings:

(1) Materials manufactured in the qualifying area from materials which have also been manufactured in that area:

(2) Materials manufactured outside the qualifying area; and

(3) Materials manufactured within the qualifying area which incorporate materials manufactured outside the qualifying area (materials of mixed origin).

(ii) Is the supply of any of the above materials restricted (e.g., are they subject to royalties, patents, is there a sole supplier, etc.)?

(iii) If royalties are payable, what is the basis for the royalty, to whom is it payable and when is it payable?




(iv) What is the cost of into store acquisition of materials and what are components of this cost?

(v) Representative invoices or documentation showing the cost of each of these components.

(d) If the materials are manufactured in the qualifying area from ‘contributing’ materials (in respect of which the last process of manufacture was performed outside the qualifying area), please advise:

(i) cost of materials used in the manufacture of the finished goods; and

(ii) cost of ‘contributing’ materials

(e) If the costs in (d) above are not available to you from the supplier, please arrange for the supplier to advise Customs direct.

4. Factory Labour and Overheads

(a) These costs are not allowable expenditure unless they are prescribed in the Schedule III (Overheads).

(b) Allowable expenditure in terms of the Regulations forms part of both allowable factory cost and total factory cost.

(c) Prescribed costs set out in Schedule II and Schedule III are subject to three main criteria before the sum of the part of each such cost may form part of allowable expenditure viz., (i) they must be incurred by the manufacturer of the goods;

(ii) they must relate, directly or indirectly, and wholly or partly, to the manufacture of the goods; and

(iii) they must be able to be reasonably allocated to the manufacture of the goods.

(d) With respect to factory overheads in Schedule III, Regulation 107B(2) and Regulation 107B(3) serve to further narrow down the scope of such costs which are prescribed in Regulation 107B(1).

E. SUPPORTING MATERIAL 1. Copies of supporting documents used to calculate the total factory cost should be

submitted with this document such as:

(a) Company Organisation Chart showing:

(i) all work areas within the company:

(ii) names of persons working within those areas: and

(iii) the position held, title and duties;

(b) Copy of company wages and salary by person’s name

(c) Internal (management) manufacturing and profit and loss statement

(d) Depreciation schedule for the factory

(e) Explanation of any formulae used, in particular how actual costs of:

(i) Salaries, Wages; and

(ii) Overheads

were derived and an explanation as to how these costs were allocated to the manufacture of the particular goods produced including formulae used and worksheets.




SCHEDULE I

ALLOWABLE EXPENDITURE ON MATERIALS

1. Materials means:

(a) if the goods are unmanufactured raw products - those products; and

(b) if the goods are manufactured goods - all matter or substances used or consumed in the manufacture of the goods (other than that matter or those substances that are treated as overheads); and

(c) in either case - the inner containers in which the goods are packed.

2. Cost of materials (wherever this term is used) includes all into store costs of the factory but does not include certain Customs duties or taxes such as sales tax or GST which are levied in the qualifying area.

3. Allowable expenditure on materials is that part of the cost of materials to the

factory worked out as follows:

(a) If the materials are the raw products of the qualifying area;

the cost of those materials.

(b) If the materials and any materials incorporated therein are wholly manufactured in the qualifying area;

the cost of those materials.

(c) If the last process of manufacture of imported materials is performed outside the qualifying area;

none of the cost of those materials. 4. If the materials (materials of mixed origin) are manufactured in the qualifying area

from imported materials on which the last process of manufacture was performed outside the qualifying area, the allowable expenditure of the factory is:

(a) In the case of all preference countries;

the cost of materials less the cost of the imported materials.

(b) (i) where such materials will be incorporated into goods on which New Zealand preference is claimed; and

(ii) the cost of the imported materials is 50% or less than the cost of the materials that are manufactured;

the cost of the materials.




SCHEDULE II

ALLOWABLE EXPENDITURE OF FACTORY ON LABOUR

1. The allowable expenditure of a factory on labour means the sum of the part of each cost that is prescribed that;

(a) Is incurred by the manufacturer of the goods; and

(b) Relates, directly or indirectly, and wholly or partly, to the manufacture of the goods; and

(c) Can reasonably be allocated to the manufacture of the goods.

2. The following costs to the extent that they relate to labour are prescribed

(a) Cost of wages and employee benefits

(b) Cost of supervision and training

(c) Cost of management of the process of manufacture

(d) Cost of receipt and storage of materials

(e) Cost of quality control

(f) Cost of packing of goods into inner containers

(g) Cost of handling and storage of goods within the factory

3. When submitting the cost of labour please provide the following for each of the prescribed costs listed in above:

(a) Costs of labour to make all goods manufactured by the factory; and

(b) Costs of labour to manufacture the goods subject to inquiry.




SCHEDULE III

ALLOWABLE EXPENDITURE OF FACTORY ON OVERHEADS

1. The allowable expenditure of a factory on overheads means the sum of the part of each cost that is prescribed that:

(a) is incurred by the manufacturer of the goods; and

(b) relates, directly or indirectly, and wholly or partly, to the manufacture of the goods; and

(c) can reasonably be allocated to the manufacture of the goods. 2. Overhead costs are prescribed as follows:

Allowable expenditure of a factory on overheads means the sum of the part of each of the following costs:






(iv) accident compensation insurance;


(c) the cost of:

(i) dies, moulds and tooling;

(ii) depreciation of plant and equipment;

(iii) maintenance and repair of plant and equipment;


(e) the cost of:

(i) research, development and design;

(ii) engineering;

(f) the cost of the following items in respect of real property used in production of the goods:

(i) insurance;







(h) the cost of energy, fuel, water, lighting, lubricants, rags and other materials and supplies not directly incorporated in manufactured goods;

(i) the cost of storage of the finished goods (on which preference is claimed) at the factory;




(j) the cost of royalties or licences in respect of:

(i) patented machines or processes used in the manufacture of the goods; or

(ii) in respect of the right to manufacture the goods;


(l) the cost of provision of medical care cleaning services, cleaning materials and equipment, training materials and safety and protective clothing and equipment;


(n) the cost of subsidisation of a factory cafeteria to the extent not recovered by returns;

(o) the cost of factory security;


(q) the cost of contracting out part of the manufacturing process within Australia or New Zealand.



(t) the cost of any tax in the nature of a fringe benefits tax. 3. For the purposes of 2 (c) and (f), the cost of depreciation of plant, equipment or

buildings must be worked out in accordance with generally accepted accounting principles.

4. Subject to paragraph 5, in working out the allowable cost of overheads in (2) above,

the following costs are not to be included:

(a) any cost or expense relating to the general expense of doing business (including, but not limited to, any cost or expense relating to insurance or to executive, financial, sales, advertising, marketing , accounting or legal services);


(c) the cost of international travel expenses, including fares and accommodation ;

(d) the cost of the following items in respect of real property used by persons carrying out administrative functions;

(i) insurance; (ii) rent and leasing;








(h) the manufacturer’s profit and the profit or remuneration of any trader, agent, broker or other person dealing in the goods after manufacture;

(i) any other cost incurred after the completion of manufacture of the goods.




5. If preference claim goods are the manufacture of Papua New Guinea or a Forum Island Country:

(a) the list of costs in paragraph 2 includes:

(i) 25% of telecommunications costs; and

(ii) the cost of international travel expenses incurred to allow 1 person to travel in a year to attend 1 trade fair or to purchase equipment

(iii) the cost of contracting of contracting out part of the manufacturing process

(b) paragraph 4 does not apply to the costs referred to in subparagraph (a) above.




SCHEDULE IV

SUMMARY OF TOTAL FACTORY COST

NAME of manufacturer of goods exported to Australia: .......................................... ................................................................................................................……………… GOODS exported (include model No., type, etc): ...................................…………….. ...............................................................................................................………………. UNIT to which costs apply (one, dozen, kg, etc): …...............................……………… ..............................................……………………………………………...………………………….. ACCOUNTING Period to which costs apply: ………………….......................................... ..................................................……………………………………………………………………….

1 2 3 4

List all materials or components and quantity allocated for manufacture

Name, Address and Facsimile Number of Supplier of materials

or components

Country of

manufacture of material

or component

Cost of material or

component

Qualifying Non Qualifying

(a) (b) Materials of Mixed Origin TOTAL COSTS OF MATERIALS/COMPONENTS A E FACTORY LABOUR COST (per unit) B FACTORY OVERHEAD COSTS (per unit) C ALLOWABLE FACTORY COST (A+B+C) D TOTAL FACTORY COST (D+E)

F

Calculation of specified percentage of Total Factory cost: D X 100 = %

F 1




SCHEDULE V

DEFINITIONS

(Division 1A of Part VIII of the Customs Act)

‘allowable factory cost’, in relation to preference claim goods and to the factory at which the last process of their manufacture was performed, means the sum of:

(a) the allowable expenditure of the factory on materials in respect of the goods worked out under section 153D; and

(b) the allowable expenditure of the factory on labour in respect of the goods worked out under section 153F; and

(c) the allowable expenditure of the factory on overheads in respect of the goods worked out under section 153G;

‘factory’, in relation to preference claim goods, means:

(a) if the goods are claimed to be the manufacture of a particular preference country-the place in that country where the last process in the manufacture of the goods was performed; and

(b) if the goods are claimed to be the manufacture of a preference country that is a Developing Country but not a particular Developing Country-the place in Papua New Guinea or in a Forum Island country where the last process in the manufacture of the goods was performed;

‘inner container’, includes any container into which preference claim goods are packed, other than a shipping or airline container, pallet or other similar article; ‘manufacturer’, in relation to preference claim goods, means the person undertaking the last process in their manufacture; ‘materials’, in relation to preference claim goods, means:

(a) if the goods are unmanufactured raw products-those products; and (b) if the goods are manufactured goods-all matter or substances used or consumed in

the manufacture of the goods other than that matter or those substances that are treated as overheads); and

(c) in either case-the inner containers in which the goods are packed; ‘preference claim goods’, means goods that are claimed, when they are entered for home consumption, to be the produce or manufacture of a preference country; ‘total factory cost’, in relation to preference claim goods, means the sum of:

(a) the total expenditure of the factory on materials in respect of the goods, worked out under section 153C; and

(b) the allowable expenditure of the factory on labour in respect of the goods, worked out under section 153F; and

(c) the allowable expenditure of the factory on overheads in respect of the goods, worked out under section 153G.



Appendix 3:2

COMMONWEALTH OF AUSTRALIA

Customs Act 1901

NOTICE UNDER SUBSECTION 153E(4) I, (state full name of delegate), delegate of the Chief Executive Officer under subsection 153E(4) of the Customs Act 1901, being satisfied that materials being (describe briefly the materials) in the form they are received into factory incorporate other materials being (describe briefly other materials) solely for the purpose of artificially raising the cost of the first-mentioned materials, hereby notify you, the importer of preference claim goods in which those other materials are incorporated, that, in my opinion, part of the cost being (state which part) is reasonably attributable to those other materials and are to be disregarded. Dated this day of 20 ............................................................................ Delegate of the Chief Executive Officer of Customs To: ....................................................................……….. IMPORTER OF PREFERENCE CLAIM GOODS _________________________________________________________________


Customs Act 1901

NOTICE UNDER SUBSECTION 153E(5) I, (state full name of delegate), delegate of the Chief Executive Officer under subsection 153E(5) of the Customs Act 1901, being satisfied that the cost to the manufacturer of materials being (briefly describe materials) in the form they are received into factory exceeds by (specify amount determined by delegate) the normal market value of the materials, hereby notify you, the importer of preference claim goods in which those materials are incorporated, that the excess amount is to be disregarded. Dated this day of 20 . ............................................................................ Delegate of the Chief Executive Officer of Customs To: ...................................................................……....... IMPORTER OF PREFERENCE CLAIM GOODS





Customs Act 1901

NOTICE UNDER SUBSECTION 153E(6)

I, (state full name of delegate), delegate of the Chief Executive Officer under subsection 153E(6) of the Customs Act 1901, being satisfied that: (a) materials being (describe materials briefly) in the form they are received into factory

are so received (free of charge; or at a cost being (specify cost) that is less than the normal market value of the materials - you have to specify one of these); and

(b) the receipt of the materials (free of charge or at a reduced cost - you have to specify one of these) has been arranged directly or indirectly by you, a person who would be the importer of preference claim goods in which those materials are incorporated

hereby notify you that I have determined the amount of (specify amount) is the normal market value and that amount shall be treated as the amount (or part of the amount) paid by the manufacturer in respect of the materials. Dated this day of 20 . .................................................................. Delegate of the Chief Executive Officer of Customs To: ..................................................................................………………...... (A PROSPECTIVE IMPORTER OF PREFERENCE CLAIM GOODS)



Appendix 3:3 Schedule VII – Diagrams and explanatory notes illustrating operation of Division

1A of Part VIII Section 153A Diagram 1 Decision diagram for working out whether preference claim goods are the produce or manufacture of New Zealand

Yes

No

Yes

No

No

Yes

Yes No

Goods are the produce

of New Zealand

Was the last manufacturing process for the goods carried out

in New Zealand

Goods are the

manufacture of New Zealand

Are the goods an unmanufactured raw product of New Zealand

Are the goods wholly manufactured in New Zealand

from one or more of the products or materials referred to in

153J(1)?

Goods are not the produce

or manufacture

of New Zealand

Does the allowable factory cost of the goods equal or exceed the specified

of the total factory cost of the goods?

Start Here

percentage

(see 153J(2))




Diagram 2 An example of possible inputs into goods last processed in New Zealand and claimed to be the manufacture of that country [An explanation of the calculations to determine whether the goods are properly so claimed appears in the notes to the diagram.]

materials $15 materials $15 materials $15 Aust labour $20 Italian labour $2 Fijian labour $2 Aust o’heads $20 Italian o’heads $2 Fijian o’heads $2 Aust profit/freight etc. $5 Italian profit/freight etc. $1 Fijian profit/freight etc $1

Plant 1 Australia

Plant 2 Italy

Plant 3 Fiji

Plant 4 Hong Kong

Plant 5 New Zealand

Plant 6 Australia

Plant 1 materials $60 Plant 2 materials $20 Plant 3 materials $20 HK labour $30 NZ labour $2 Aust labour $10 HK o’heads $10 NZ o’heads $2 Aust o’heads $5 HK profit/freight etc. $5 NZ profit/freight etc. $1 Aust profit/freight etc $10

Plant 7 New Zealand

This plant is the factory Allowable factory cost $130

Total factory cost $255

Plant 4 materials $105 (Allowable expenditure on materials $nil) Plant 5 materials $25 (Allowable expenditure on materials $5) Plant 6 materials $45 (Allowable expenditure on materials $45) NZ labour $60 NZ o’heads $20 Notes relating to diagram 2 Goods imported into Australia after last process in the factory (i.e. Plant 7) are claimed to be the manufacture of New Zealand. This claim will be correct if the allowable factory cost of these preference claim goods is at least 50% of their total factory cost. To work out both of these factory costs, we must first work out the allowable expenditure of the factory on the three manufactured materials that make up the preference claim goods. We will also need to take into account three other amounts, namely the total expenditure of the factory on materials, and the allowable expenditure of the factory on labour, and on overheads.




Working out allowable expenditure on materials (see section 153D)

• The allowable expenditure of the factory on particular manufactured materials in the form they are received from Plant 4 is nil because the materials are imported from outside the qualifying area (i.e. Hong Kong). (See subsection 153D(2)). This is so even though the manufactured materials themselves incorporate goods originating inside the qualifying area (i.e. Plant 1 in Australia).

• The allowable expenditure of the factory on particular manufactured materials in the form they are received from Plant 5 is not $25 but $5. This is because:

• the cost of contributing materials imported into the qualifying area from outside that area (i.e. Plant 2 in Italy) and subsequently processed is excluded under subsection 153D(4) from the working out of that allowable expenditure; and

• subsection 153D(6) does not apply.

• The allowable expenditure of the factory on particular manufactured materials in the form they are received from Plant 6 is the full cost to the manufacturer of $45. It is true that contributing materials are imported into the qualifying area from outside that area (i.e. Plant 3 in Fiji) and subsequently processed. However, the cost of those contributing materials is not required to be excluded under subsection 153D(4) from the working out of that allowable expenditure because subsection 153D(6) applies.

Working out allowable factory cost (see section 153B) Allowable expenditure of the factory on materials $50 from Plants 4, 5 and 6 (Nil + $5 + $45) PLUS allowable expenditure of the factory on labour $60 PLUS allowable expenditure of the factory on overheads $20

TOTAL $130

Working out total factory cost (see section 153B) Total expenditure of the factory on materials $175 from Plants 4, 5 and 6 (105 + $25 + $45) PLUS allowable expenditure of the factory on labour $60 PLUS allowable expenditure of the factory on overheads $20

TOTAL $255 CONCLUSION: Since allowable factory cost is at least 50% of total factory cost, goods are

the manufacture of New Zealand. (See subsection 153J(2)).



Appendix 3:4

CUSTOMS ACT 1901

DETERMINATION UNDER SECTION 153K(1) MODIFYING SECTION 153J I, (state full name of delegate), delegate of the Chief Executive Officer under section 153K of the Customs Act 1901 (‘the Act’), being satisfied that:

(a) the allowable factory cost of the following preference claim goods namely, (specify the goods) (‘the goods’) is (specify percentage - must be at least 48% but not 50%) of their total factory cost; and

(b) the allowable factory cost of the goods would be at least 50% of their total factory cost if (specify unforeseen circumstance which has occurred) (‘the unforeseen circumstance’) had not occurred; and

(c) the unforeseen circumstance is unlikely to continue. hereby determine pursuant to section 153K(1) of the Act that section 153J of the Act has effect:

(i) for the purpose of the shipment of the goods which is affected by the unforeseen circumstance; and

(ii) for the purposes of any subsequent shipment of similar goods which is so affected during (specify a period),

as if the reference in subsection 153J(3) of the Act to 50% is a reference to 48%. Dated this day of 20 .......................................... Delegate of the Chief Executive Officer of Customs



Appendix 3:5

(Sample Gazette Notice)


Customs Act 1901

NOTICE OF DETERMINATION MADE UNDER SUBSECTION 153R(1) OF THE CUSTOMS ACT 1901

I (state full name of delegate) delegate of the Chief Executive Officer under subsection 153R(1) of the Customs Act 1901 (“the Act”) do hereby determine for the purposes of (specify section 153P and/or section 153Q, as appropriate) of the Act, (name the goods or goods of a specified kind, as appropriate) are (or are not, as appropriate) commercially manufactured in Australia. Dated this day of 20 . ......................................... Delegate of the Chief Executive Officer of Customs



Appendix 3:6

(Gazette Notice)

NOTICE OF DETERMINATION MADE UNDER PARAGRAPH 153J(3)(b) OF THE CUSTOMS ACT 1901

I, (state full name of delegate), delegate of the Chief Executive Officer under paragraph 153J(3)(b) of the Customs Act 1901 (“the Act”), hereby determine for the purposes of subsection 153J(2) of the Act that: (a) the following preference claim goods namely, (specify the goods) (‘the goods’) are

goods for which another percentage of their total factory cost is appropriate; and (b) the specified percentage of the total factory cost for the goods is (specify the

percentage). Dated this day of 20 . ....................................................... Delegate of the Chief Executive Officer of Customs -------------------------------------------------------------------------------------------------

(Gazette Notice)

NOTICE OF DETERMINATION MADE UNDER PARAGRAPH 153L(4)(b) OF THE CUSTOMS ACT 1901

I, (state full name of delegate), delegate of the Chief Executive Officer under paragraph 153L(4)(b) of the Customs Act 1901(“the Act”), hereby determine for the purposes of subsection 153L(2) of the Act that: (a) the following preference claim goods namely, (specify the goods) (‘the goods’) are

goods for which a lesser percentage of their total factory cost is appropriate; and (b) the specified percentage of the total factory cost for the goods is (specify the

percentage). Dated this day of 20 . Delegate of the Chief Executive Officer of Customs



Appendix 3:7

MANUFACTURED GOODS NEW ZEALAND

[Preference Rule Type P50]

“I declare that:

(a) the last process in the manufacture of the goods described below was performed in New Zealand; and

(b) not less than 50 % of their total factory cost is represented by the sum of the allowable expenditure of the factory on materials, labour and overheads and the cost of inner containers of New Zealand or of Australia and New Zealand.”

Description of goods: Item Nos Marks and Quantity Description Number and Numbers of of goods date of packages invoices Signature: Name: Position in manufacturing company: Name of manufacturing company: Date:




MANUFACTURED GOODS DEVELOPING COUNTRIES, FORUM ISLAND COUNTRIES,

PAPUA NEW GUINEA (NOT NEW ZEALAND OR CANADA)

[Preference Rule Type P50]

“I declare that:

(a) the last process in the manufacture of the goods described below was performed in , (preference country); and

(b) not less than 50 % of their total factory cost is represented by the sum of the allowable expenditure of the factory on materials, labour and overheads and the cost of inner containers of , (Name of relevant preference countries and, if applicable, Australia).”

Description of goods: Item Nos Marks and Quantity Description Number and Numbers of of goods date of packages invoices Signature: Name: Position in manufacturing company: Name of manufacturing company: Date:




MANUFACTURED GOODS CANADA

[Preference Rule Type P75 or P25*]

“I declare that:

(a) the last process in the manufacture of the goods described below was performed in Canada;

(b) not less than 75 % of their total factory cost is represented by the sum of the allowable expenditure of the factory on materials, labour and overheads and the cost of inner containers of Canada or of Australia and Canada; and

(c) the goods were shipped to Australia from Canada and either:

(i) they were not transhipped;

or

(ii) when they were shipped from Canada, their intended destination was Australia

Description of goods: Item Nos Marks and Quantity Description Number and Numbers of of goods date of packages invoices Signature: Name: Position in manufacturing company: Name of manufacturing company: Date: [* Preference may be claimed if this figure reads 25 only if the goods are not of a kind commercially manufactured in Australia (for example, if the goods are covered by a Tariff Concession order)]




UNMANUFACTURED RAW PRODUCTS

[Preference Rule Type URP]

“I declare that the goods described below are the un-manufactured raw products of , (preference country).” Description of goods:

Item Nos Marks and Quantity Description Number and Numbers of of goods date of packages invoices Signature: Name: Position in manufacturing company: Name of manufacturing company: Date:




WHOLLY MANUFACTURED GOODS

[Preference Rule Type WMN if the last box is not ticked; Preference Rule Type WMD if the last box is ticked]

“I declare that the goods described below are wholly manufactured in

, (preference country) from one or more of:

un-manufactured raw products;

materials wholly manufactured in one or both of Australia and the preference country; or

materials imported into the preference country that the CEO has determined, by

notice in writing published in the Gazette, to be manufactured raw materials of the country.”

*you can place a tick ( ) in more than one box Description of goods: Item Nos Marks and Quantity Description Number and Numbers of of goods date of packages invoices Signature: Name: Position in manufacturing company: Name of manufacturing company: Date:




MANUFACTURED GOODS FROM A FORUM ISLAND COUNTRY - SPARTECA (TCF PROVISIONS) SCHEME [Preference Rule Type TCF]

"I declare that the goods described below are Qualifying Goods in accordance with the Terms and Conditions of the SPARTECA (TCF Provisions) Scheme, notably: (a) ______________________________________, (name of manufacturer) is registered with the Program Administrator to participate in the SPARTECA (TCF Provisions) Scheme; and (b) the last process in the manufacture of the goods described below was performed in ____________________________________ (preference country); and ____________ % (being a percentage of at least 35% and less than 50%) of the total factory cost of the goods is represented by the sum of the allowable expenditure of the factory on materials, labour and overheads and the cost of inner containers of __________________________________________________________ (names of relevant preference countries and, if applicable, Australia); and ELAC Points from the manufacturer's ELAC register, equivalent to 30% of the total factory cost of the goods, have been applied to the goods in accordance with the Terms and Conditions of the SPARTECA (TCF Provisions) Scheme. ELAC ID numbers associated with those ELAC Points are:

ELAC ID ELAC ID ELAC ID

Description of goods:

Marks and number of packages

Quantity Description of goods Number and date of invoices

Signature : Name : Position in manufacturing company : Name of manufacturing company : Date :




MANUFACTURED GOODS GRANTED LOCAL AREA CONTENT DEROGATION BY THE CEO OF CUSTOMS (FORUM ISLAND COUNTRIES AND NEW ZEALAND) [Preference

Rule Type Px*] “I declare that:

(a) the last process in the manufacture of the goods described below was performed in , (preference country); and

(b) ____________ % (being a percentage of at least the percentage determined by the CEO of Customs and less than 50%) of the total factory cost of the goods is represented by the sum of the allowable expenditure of the factory on materials, labour and overheads and the cost of inner containers of _____________________________ __________________________ (names of relevant preference countries and, if applicable, Australia)”

Description of goods:

Marks and number of packages

Quantity Description of goods Number and date of invoices

Signature : Name : Position in manufacturing company : Name of manufacturing company : Date : *x represents the percentage determined by the CEO of Customs



Appendix 3:8

DETERMINED MANUFACTURED RAW MATERIALS FOR PREFERENCE PURPOSES IN RELATION TO NEW ZEALAND, CANADA AND SINGAPORE

Note: References marked NZ are in respect of New Zealand only

References marked CAN are in respect of Canada only References marked NZ/C are in respect of New Zealand and Canada References marked SNG are in respect of Singapore only

A

CAN Acetphenetidin (Phenacetin)

CAN Acrylic Fibre, for use in carpet yarn 78/04183

NZ Acrylic Knitting Yarn, single 72’s, high bulk, 100% spun, 72/dyed metric count, weighing less than 150 grams per 9000 metres

79/06715

NZ Activated Clay 87/00361

NZ Alcohol, fatty (n. decanol) 79/00934 91/04913

NZ Alcohol, Polyvinyl 93/00492

NZ Alcohols, Mixed or Single, Fatty, C13 or greater 93/00491

NZ Alkyl Xylenes of Mid Range Distillates 93/04191

NZ Allopurinol BP 91/00118

CAN Aluminium Brazing Temper, No 12 ‘O’, as used in the manufacture of vehicle automatic transmission oil coolers

NZ Aluminium Oxide Grain, grit size 16-600 83/02723 94/03298

NZ Aluminium Pigment, leafing type, in powder form (Aluminium Powder GGT)

87/04403

NZ Aminobenzoic Acid, British Pharmacopoeia 1980 addendum 1982 or United States Pharmacopoeia XX grade, no particle greater than 180 micron diameter

85/00229 85/00230 94/03301

NZ Amino Trimethoxy Silane 87/00361

NZ Ammonium Persulphate 79/00915

NZ Amorphous Silica 87/00361

NZ Antioxidants, rubber, being EITHER of the following: (a) amine type; (b) bis phenolic type

95/05424

NZ Ascorbic Acid, British Pharmacopoeia 1980 or United States Pharmaocopoeia XX grade, no particle greater than 180 micron diameter

85/00229 85/00230 94/03301



NZ Atrazine Technical 90/05401

NZ Azinphos Ethyl Technical 79/00934 94/05876

NZ Azinphos Methyl Technical 79/00934 91/04913

B CAN Backing, Carpet, spun bonded, non woven, polypropylene 78/04183

NZ Barium Sulphate, natural 87/04403

NZ Barium Sulphate, precipitated 87/04403

NZ Benzoin 87/04403

NZ Benzyl Chloride 90/06433

NZ Biotin, Food Chemicals Codex Third Edition, no particle greater than 180 micron diameter

85/00229 85/00230 94/03301

NZ Bis (Tri-N-Butyltin) Oxide 87/00361

NZ Blanks, Blade, low alloy, hand, of carbon silicon strip, for hacksaw blades

NZ Blanks, Brass, unfinished, assembled and polished, of a kind used for the manufacture of silver plated ware

94/05870

NZ Blanks, Hacksaw, Bi-metal, 12” x 0.5” x 0.025”, comprising high speed steel (M2 quality) cutting edge, electron beam welded to a spring steel back (EN 47 Quality), supplied in the annealed condition, with radiused ends and punched pin holes

NZ Blanks, Hacksaw Blade, low alloy, hand, of carbon silicon strip

NZ Blanks, Knife, nickel silver or copper alloy, not plated, for use in the manufacture of silver plated cutlery

94/05870

NZ Brass, Blanks, unfinished, assembled and polished, of a kind used for the manufacture of silver plated ware

94/05870

CAN Brazing Temper, Aluminium No 12 ‘O’, as used in the manufacture of vehicle automatic transmission oil coolers

CAN 2-Bromo-1-Chloro-1,2,2-Trifluoroethane 72/04234

NZ Bronze Powder Pigment 87/04403

NZ Brown Iron Oxide Pigment, synthetic 87/04403

NZ Butter, Cocoa 88/02030

NZ Butyl Acrylate Monomer, for use other than in the manufacture of paints and lacquers, sold or prepared for use or sale as household or architectural paints

79/00915



C NZ Calcium Formate

NZ Calcium Lignosulphonate 79/00934 91/04913

NZ Calcium Lignosulphonate (Marasperse N22) 79/00934 91/04913

NZ Calcium Pantothenate, United States Pharmacopoeia XX Grade, no article greater than 180 micron diameter

85/00229 85/00230 94/03301

NZ Calcium Silicate, synthetic (Microcel E) 79/00934 91/04913

NZ Captan Technical 79/00934 91/04913

NZ Carbaryl Technical (1-Naphtyl Methyl Carbamate) 79/00934 91/04913

NZ Carbon Black Pigment 87/04403

CAN Carpet Backing, Jute, woven

CAN Carpet Backing, spun bonded, non woven, polypropylene 78/04183

CAN Carpet Fibre, trevira polyester, type 825, bright pentalobel 94/05567

CAN Carpet Protector, Zepel CSF

NZ Cartridge Cases, centrefire, primed 84/02563

CAN Casein plastic (Erinoid) sheets

NZ Cassettes, unassembled or completely knocked down, being cassettes for ANY of the following: (a) word processor printer; (b) ADP printer (c) typewriter but NOT including cassettes having BOTH of the following; (a) distance between spool centres exceeding 70mm but less than 90mm; (b) distance between ribbon openings (measured in a straight line) exceeding 130mm but less than 160mm.

96/12599

NZ Castor Oil, hydrogenated 87/04403

NZ Celite 209 (Diatomatious Earth) 79/00934 91/04913

CAN Cellulose Acetate Propionate Sheet

NZ Centrefire Cartridge Cases, primed 84/02563

NZ Centrefire Projectiles 84/02563

NZ Chinese Gum Resin



NZ Chlorophyll, oil soluble, coppered, containing between 14.6% and 15.8% W/W Copper Phaeophytin

85/00229 85/00230 94/03301

NZ Chlorosulphonic Acid (also known as Chlorosulphuric Acid) 93/02389

NZ Chlorpyrifos Technical 90/03392

NZ Choline Bitartrate, Food Chemicals Codex Third Edition, no particle greater than 180 micron diameter

85/00229 85/00230 94/03301

NZ Chromium Oxide Green Pigment 87/04403

NZ Cigarette Lighter Parts, disposable

NZ/C Citric Acid 90/06433

NZ Clay, Activated 87/00361

NZ Clopyralid Technical 93/03179

NZ Clethodium 03/09315

NZ Cloth, Japara Oiled Cotton 77/03366 94/03053

NZ Cocoa Butter 88/02030

NZ Cocoa Licor 88/02030

NZ Cocoa Paste, not defatted 88/02030

NZ Coconut Oil, crude 85/05967

NZ Coconut Methyl Ester, fractionated 93/12828

NZ Copper Powder 87/04403

NZ Copper Nickel Alloy Strip, annealed, in sizes: 0.46mm thick by 131mm wide; 0.56mm thick by 131mm wide; 0.61mm thick by 131mm wide; 0.71mm thick by 131mm wide

83/02096 94/03299

NZ Cotton Cloth, Oiled, Japara 77/03366 94/03053

NZ Cotton Yarn, 100%, 45/1 EEC, grey marl top dyed, being yarns other than wool carpet yarns or yarns put up for retail sale

92/05672

CAN Crude Iodine

CAN Cullet, glass

NZ Cultured Pearls, jewellery standard 89/03701

NZ Cyanocobalamin, British Pharmacopoeia 1980 grade, diluted to 0.1% with Mannitol, hydrolysed gelatin or vegetable gum, no particle greater than 180 micron diameter

85/00229 85/00230 94/03301



NZ Cyanocobalamin, British Pharmacopoeia 1980 grade, diluted to 1% with Mannitol, hydrolysed gelatin or vegetable gum, no particle greater than 180 micron diameter

85/00229 85/00230 94/03301

D NZ d-Alpha Tocopherol 67%, meeting the following specification-

contains not less than 670mg of d-Alpha Tocopherol per gram 85/00229 85/00230 94/03301

NZ d-Alpha-Tocopherol Acetate 80%, meeting the following specification-contains from 80% W/W to 86% W/W of d-Alpha-Tocopherol Acetate

85/00229 85/00230 94/03301

NZ d1-Alpha-Tocopherol Acetate, British Pharmacopoeia 1980 or United States Pharmaocopoeia XX grade

85/00229 85/00230 94/03301

NZ DDT Technical 79/00934 91/04913

NZ Diamonds, cut, commercial grade and colour, for production of jewellery

89/03701

NZ Diatomatious Earth (Celite 209) 79/00934 91/04913

NZ Diazinon Technical 79/00934 91/04913

NZ Dibutyltin Diacetate 87/00361

NZ Dibutyltin Dilaurate 87/00361

NZ Di ethanolamine 93/12828

NZ Diethylene Glycol Monoethyl Ether 93/04191

NZ Di-iodomethyl-p-Tolysulfone 87/00361

NZ Di-Methionine, Food Chemicals Codex Third Edition, no particle being greater than 180 micron in diameter

85/00229 85/00230 94/03301

NZ Dimethylaminopropylamine 90/06433

NZ Dinocap Technical 79/00934 91/04913

NZ Diphenyl Oxide Alkyl Sulphonate Sodium Salt (Dowfax 2A1) 79/00915

CAN Discs, rough, for ophthalmic lens 72/05184

NZ Disposable Cigarette Lighter Parts

NZ Dodine Technical 79/00934 91/04913

NZ Dowfax 2A1 (Sodium Salt of Diphenyl Oxide Alkyl Sulphonate) 79/00915



NZ Down-proof Fabric, as used in the manufacture of sleeping bags, sleeping bags with inserts as a set and down blankets

76/01187

NZ Dyestuffs, for dyeing Triacetate Yarn 75/04769 94/03448

CAN Dyestuffs, Synthetic Organic, other than pigment dyestuffs 70/01198

E NZ Emeralds, cut 89/03701

NZ Endosulfan Technical 79/00934 91/04913

NZ Engines, vertical shaft, reciprocating, four-stroke 04/02662

CAN Erinoid (Casein Plastic) sheets

NZ Ethyl and Methyl Triacetoxy Silane Mixture 87/00361

NZ 2 Ethyl Hexyl Acrylate Monomer, for use other than in the manufacture of paints and lacquers, sold or prepared for use or sale as household or architectural paints

79/00915

NZ Ethylene Diamine Tetra Acetic Acid Sodium Salt 90/06433

NZ Ethylene-Methacrylic Acid Copolymers or their salts 95/01217

NZ Ethylene-Methacrylic Acid Isobutyl Acrylate Terpolymers their salts

95/01217

F NZ Fabric, down-proof, as used in the manufacture of sleeping bags,

sleeping bags with inserts as a set and down blankets 76/01187

NZ Fabric, impression, woven man made fibre, provided with selvedges (woven, gummed or otherwise made) on both edges, designed for use in the manufacture of inked ribbons used with typewriters, word processors and ADP printers, having ALL of the following: (a) width 3mm or greater but NOT exceeding 300mm; (b) grammage 40 g/m2 or greater but NOT exceeding 75 g/m2; (c) length 320 metres or greater but NOT exceeding 980 metres.

97/00442

NZ Fabric, non-woven, spunbonded, composed of 100% high density polyethylene fibres, having ALL of the following: (a) thickness NOT less than 80 micron and NOT exceeding 340 micron; (b) weight NOT less than 50gsm and NOT greater than 115 g/m2; (c) tensile strength NOT less than 100 N/2.54 cm machine direction (MD) and NOT less than 126 N/2.54 cm cross direction (XD); (d) elongation NOT less than 15% machine direction (MD) and NOT less than 17% cross direction (XD)

95/01219



NZ Fabric, non-woven, spunbonded, composed of 100% high density polyethylene fibres, having ALL of the following: (a) thickness NOT less than 80 micron and NOT exceeding 340 micron; (b) weight NOT less than 50 g/m2 and NOT greater than 115 g/m2; (c) tensile strength NOT less than 100 N/2.54cm machine direction (MD) and NOT less than 126 N/2.54cm cross direction (XD); (d) elongation NOT less than 14% machine direction (MD) and NOT less than 17% cross direction (XD); (e) thermal coating one side only

96/01319

NZ Fabric, polyester satin woven, not printed, weighing less than 125 g/m2, for use in the manufacture of clothing of Chapter 62, other than lining or pocketing

92/02424

NZ Fabric, silk, pure 78/06127

NZ Fabric, specially prepared or coated, for use in the manufacture of emery cloth

83/02723 94/03298

NZ Fatty Alcohols, mixed or single, greater than C13 93/00491

NZ Fatty Alcohol (n. decanol) 79/00934 91/04913

NZ Feedstock, long residue 76/02726

NZ Fenarimol Technical 03/12325

NZ Fenitrothion Technical 79/00934 91/04913

CAN Fibre, Acrylic for use in carpet yarn 78/04183

CAN Fibre, Carpet, trevira polyester, type 825, bright pentalobel 94/05567

CAN Fibre, Polyester Staple, deep dye, in 8 and 16 denier per filament 78/04184

NZ Fibreglass, woven, impregnated with phenolic resin 94/05868

NZ Flumetsulam Technical 92/04786

NZ Fluroxypyr Technical as the methyl heptyl ester 94/00899

NZ Forks and Spoons, nickel silver, unfinished not polished or plated, but not including unfinished forks or spoons of the souvenir or commemorative types, for use in the manufacture of silver plated cutlery

94/05870

G NZ Galvanised Staple Wire 89/00118

NZ Gamma-aminopropyl Triethoxysilane 87/00361



NZ Garlic Powder Extract, odourless, (Oxoamiduin) meeting all of the following: (a) light yellowish-white, almost odourless powder with a slightly sweet taste (b) loss of drying less than 7% W/W at 105oC for 4 hours (c) soluble in water, almost insoluble in pure methanol and ethanol

85/00229 85/00230 94/03301

NZ Gelatin, BP, alkaline extracted, ossein, 150 bloom with not more than 15 PPM sulphur dioxide, not more than 15 PPM iron and colour of 43%, mass does not exceed 8 using Lovibond No. 3 colour Comparitor with Gardner Disc

85/00229 85/00230 94/03301

NZ Gelatin, BP, ossein acid, blended alkali extracted, Pigskin, 150 bloom with not more than 40 PPM sulphur dioxide, not more than 15 PPM iron and colour of 45% mass does not exceed 8 using Lovibond No.3 Colour Comparitor with Gardner Disc

85/00229 85/00230 94/03301

NZ Ginseng Root Powder, the dried root of Panax Ginseng 85/00229 85/00230 94/03301

NZ Ginseng, Siberian Extract, 5:1 meeting all the following: (a) fine buff-coloured, hygroscopic powder (b) loss on drying not more than 10% W/W at 1050C for two hours

85/00229 85/00230 94/03301

Glass:

CAN Cullet;

CAN Discs, rough, for ophthalmic lenses; 72/05184

CAN Knob tops, moulded for lock sets

NZ Glass Stones, imitation (minimum 24% Lead Oxide by weight) 84/00313

NZ Gum Resin, Chinese

NZ Golf club ferrules, but not including plain black acetate ferrules 95/11042

NZ Golf club grips 95/11042

NZ Golf club shafts of steel, aluminium, carbon (graphite) or titanium without attachments of any kind

95/11042

H NZ Hacksaw Blanks, bi-metal, 12” x 0.5” x 0.025” comprising high

speed steel (M2 quality) cutting edge electron beam welded to a spring steel back (EN 47 Quality), supplied in the annealed condition with radiused ends and punched pin holes

NZ Hacksaw Blade Blanks, low alloy, hand, of carbon silicon strip

NZ Haloxyfop Technical 92/04786

NZ Heads, metal, for golf club irons, but not including putter heads 95/11041

NZ Heads, metal, for golf club woods 95/11042

NZ Hexadecanol 93/00491



NZ Hexamethyl Di-Siloxane 87/00361

NZ Hexoxypropylamine 93/04191

NZ Hydroxyalkyl Amide 96/10129

NZ Hydroxy Ethyl Cellulose 93/00492

I NZ Imitation Glass Stones, (minimum 24% Lead Oxide by weight) 84/00313

C/NZ Incoloy 800 Strip, (Nickel Iron Alloy) 72/08602

NZ Incoloy 825 Strip, (Nickel Iron Alloy) 72/08602

CAN Incoloy 840 Strip, (Nickel Iron Alloy), in any of the following sizes: (a) thickness 0.38mm or greater, but not exceeding 0.76mm (b) width 1.27mm or greater, but not exceeding 50.8mm

NZ Inositol, Food Chemicals Codex Third Edition Grade, with no particle having a diameter greater than 180 micron

85/00229 85/00230 94/03301

CAN Iodine, Crude

NZ/C Iron Nickel Alloy Strip, (Incoloy 800) 72/08602

NZ Iron Nickel Alloy Strip, (Incoloy 825) 72/08602

CAN Iron Nickel Alloy Strip, Incoloy 840 Strip, in any of the following sizes: (a) thickness 0.38mm or greater, but not exceeding 0.76mm (b) width 1.27mm or greater, but not exceeding 50.8mm

NZ Iron Oxide Pigment, synthetic brown

NZ Iron Oxide Pigment, synthetic red 87/04403

NZ Iron Oxide Pigment, synthetic yellow 87/04403

J NZ Japara Cloth, Oiled Cotton 77/03366

94/03053

CAN Jute Carpet Backing, woven

K NZ Knife Blanks, nickel silver or copper alloy, not plated, for use in

the manufacture of silver plated cutlery 94/05870

NZ Knitting Yarn, Acrylic, high bulk, single 72’s, 100% spun, dyed on cone, 72 dyed metric count weighing less than 150 grams per 9000 metres

79/06715



NZ Knitting Yarn, Polyester, single 30’s, 100% spun 30/ECC - raw white on cone, weighing more than 150 grams per 9000 metres

79/06715

NZ Knitting Yarn, Polyester, single 50’s, 100% spun 50/1 ECC - raw white on cone, weighing less than 150 grams per 9000 metres

79/06715

CAN Knob Tops, moulded for lock sets

CAN Kraft Paper, Saturating unsized, substance of 175 g/m2or more, designed for use in the manufacture of decorative laminates

L NZ Lambskins, Spanish Entrifino or Merino, dyed or undyed, of a type

used in the manufacture of apparel, having all of the following characteristics: (a) double faced; (b) tanned by a full chrome tanning process; (c) sueded pelt; (d) polished wool; (e) weight 650 gsm (+ or – 5%); (f) size–Entrifino NOT exceeding .61 m2 (+ or – 5%), - Merino NOT exceeding .46 m2 (+ or – 5%).

98/04842

SNG Lauryl Myristyl Alcohol 04/02199

NZ Lauryldimethylamine 90/06433

NZ Lecithin, Food Chemicals Codex Third Edition Grade with all of the added specifications: (a) acetone insoluble matter-not less than 60% W/W (b) hexane insoluble matter-not less than 0.05% (c) water content not more 0.75% W/W

85/00229 85/00230 94/03301

NZ Lindane Technical 79/00934 94/05876

NZ Linear Alkylbenzene (CAS Number 68442-69-3) [3817.00.11] 94/08494

NZ Linear Alkylbenzene (CAS Number 68442-69-3) [3817.00.19] 94/08494

NZ Long Residue Feedstock 72/02726

M NZ Maleic Anhydride 87/03240

NZ Marasperse CBOS-3 (Sodium Lignosulphonate) 79/00934 91/04913

NZ Marasperse N22, (Calcium Lignosulphonate) 79/00934 91/04913

NZ Matting Agent XG125, (Ciba Geigy powder coating) 87/04403

NZ Methacrylic Acid, for use other than in the manufacture of paints and lacquers, sold or prepared for use or sale as household or architectural paints

79/00915



NZ Methazole Technical 92/02688

NZ Methyl Acrylate Monomer, for use other than in the manufacture of paints and lacquers, sold or prepared for use or sale as household or architectural paints

79/00915

NZ Methyl and Ethyl Triacetoxy Silane Mixture 87/00361

NZ Methyl Ethyl Ketoxime (Methyl Tris) Silane 87/00361

CAN Methyl Methacrylate

NZ Methyl Methacrylate Monomer, for use other than in the manufacture of paints and lacquers, sold or prepared for use or sale as household or architectural paints

79/00915

NZ Methyl Tris (Methyl Ethyl Ketoxime) Silane 87/00361

NZ Metosulam Technical 93/05796

NZ Microcel E, (Synthetic Calcium Silicate) 79/00934 91/04913

NZ Mixed or Single Fatty Alcohols, C13 or greater 93/00491

NZ Mixture of Ethyl and Methyl Triacetoxy Silane 87/00361

NZ Monoethanolamine 93/03179

NZ Morwet D425 90/05401

NZ Morwet EFW 90/05401

N NZ 1-Naphtyl Methyl Carbamate (Carbaryl Technical) 79/00934

91/04913

NZ n. Decanol (Fatty Alcohol) 79/00934 91/04913

NZ Nickel Copper Alloy Strip, annealed, in sizes: 0.46mm thick by 131mm wide 0.56mm thick by 131mm wide 0.61mm thick by 131mm wide 0.71mm thick by 131mm wide

83/02096 94/03299

NZ/C Nickel Iron Alloy Strip, (Incoloy 800) 72/08602

NZ Nickel Iron Alloy Strip, (Incoloy 825) 72/08602

CAN Nickel Iron Alloy Strip, Incoloy 840 Strip, in any of the following sizes: (a) thickness 0.38mm or greater, but not exceeding 0.76mm (b) width 1.27mm or greater, but not exceeding 50.8mm

NZ Nickel Titanate Yellow Pigment 87/04403



NZ Nicotinamide, British Pharmacopoeia 1980 or United States Pharmacopoeia XX Grade, no particle greater than 180 micron diameter

85/00229 85/00230 94/03301

NZ Normal Butyl Methacrylate 93/02386

NZ Nylon 6 Yarn, polyamide, continuous filament, untextured, yarn count NOT exceeding 167 decitex BUT excluding all synthetic and artificial monofilament yarn

97/11048

NZ Nylon 6.6 Polymer 78/05034

NZ Nylon 6.6 Yarn, polyamide continuous filament, untextured, yarn count NOT exceeding 167 decitex BUT excluding all synthetic and artificial monofilament yarn

97/11048

CAN Nylon Yarn, 10 denier, 7 filament

NZ Nylon Yarn, high tenacity made from antistatic polymer 93/06625

NZ Nylon Yarn, high tenacity, 22 Decitex or finer 93/06625

O NZ Octadecanol 93/00491

NZ Oiled Cotton Cloth, Japara 77/03366 94/03053

NZ Oil, Wheat Germ, British Pharmaceutical Codex 1954 Grade 85/00229 85/00230 94/03301

NZ Oleyl Amine, primary 87/03240

NZ Oxoamiduin, (odourless garlic powder extract), meeting all of the following: (a) light yellowish - white, almost odourless powder with a slightly sweet taste (b) loss of drying less than 7% W/W at 105oC for 4 hours (c) soluble in water, almost insoluble in pure methanol and ethanol

85/00229 85/00230 94/03301

P NZ Palm Kernel Methyl Ester, fractionated 93/12828

CAN Paper and Paperboard, having a grammage exceeding 22 g/m2, printed with a decorative pattern, not impregnated or coated, designed for use in the manufacture of decorative laminates

CAN Paper, Release, designed for use in the manufacture of decorative laminates

CAN Paper, Saturating Kraft, unsized, substance of 175 g/m2 or more, designed for use in the manufacture of decorative laminates

CAN Paper, Tissue, suitable for the manufacture of carbon paper



NZ Parts, for disposable cigarette lighters

NZ Pearls, cultured, jewellery standard 89/03701

NZ Pegasol R150 93/02386

NZ Pentaerythritol

NZ Petroleum Hydrocarbon Resins, having a softening point NOT greater than 145oC by the ball and ring method

95/05424

NZ Petroleum Solvent, White Aliphatic 95/05424

CAN Phenacetin (Acetphenetidin)

NZ Picloram Technical 93/04191

NZ Pigments, Aluminium, leafing type, in powder form (Aluminium Powder GGT) Bronze powder Blue 29 Carbon black Chromium oxide green Iron oxide, brown, synthetic Iron oxide, red, synthetic Iron oxide, yellow, synthetic Nickel titanate yellow Red 122 Violet 15 Violet 19 Violet 23 Yellow 110

87/04403

NZ Polyamide Yarn, Nylon 6, continuous filament, untextured, yarn count NOT exceeding 167 decitex BUT excluding all synthetic and artificial monofilament yarn

97/11048

NZ Polyamide Yarn, Nylon 6.6, continuous filament, untextured, yarn count NOT exceeding 167 decitex BUT excluding all synthetic and artificial monofilament yarn

97/11048

NZ Polyamide Yarn, tactel 91/09074

NZ Polybutylene Resin 91/09897

NZ Poly Cotton Yarn, 45/1 EEC, grey marl top dyed, being yarns other than wool carpet yarns or yarns put up for retail sale

92/05672

NZ Poly/cotton Yarn, 65/35 single 45/1 ECC, dyed on cone, other than wool carpet yarns or yarns put up for retail sale

93/09462

NZ Polydimethyl Siloxane Fluid, having a viscosity of not more than 5 centistokes at 20oC and an average of 4 dimethyl siloxane units

87/00361

NZ Polydimethyl Siloxane Hydrolysate 87/00361

CAN Polyester Carpet Fibre, Trevira, type 825, bright pentalobel 94/05567

NZ Polyester Knitting Yarn, single 30’s, spun 30/ECC, 100% spun raw white on cone weighing more than 150 grams per 9000 metres

79/06715



NZ Polyester Knitting Yarn, single 50’s, spun 100% spun 50/1 ECC raw white on cone, weighing less than 150 grams per 9000 metres

79/06715

NZ Polyester Polymer 78/05034

NZ Polyester Resin, solid saturated carboxylated in powder or granular form

87/04403

NZ Polyester Satin Fabric, woven, not printed, weighing less than 125 g/m2, for use than in the manufacture of clothing of Chapter 62, other than lining or pocketing

92/02424

CAN Polyester Staple Fibre, deep dye, in 8 and 16 denier per filament 78/04184

NZ Polyester Yarn, high tenacity, made up of filaments each of which is less than 1 denier per filament

93/06625

NZ Polymethyl Methacrylate, in granular form 84/05113

NZ Polyolefin Wax, micronised 87/04403

CAN Polypropylene Carpet Backing, spun bonded, non woven

NZ Polypropylene Homopolymer Film, biaxially oriented, having ALL of the following properties: (a) maximum elongation at break NOT exceeding 180% machine direction as measured by ASTM D882; (b) corona treated one side to a minimum of 36 dynes as measured by ASTM D2578; (c) co efficient of friction of NOT less than 0.4 measured by ASTM D1894; (d) width NOT less than 740mm but NOT exceeding 1500mm; (e) thickness gauges NOT less than 25 micron but NOT exceeding 50 micron; but NOT including film which is: (i) pigmented or coloured; (ii) voided; (iii) printed; (iv) coated; (v) metallised or metalliseable; (vi) heat sealable; (vii) containing slip additives; (viii) containing anti static additives

95/05424



NZ Polypropylene Homopolymer Film, biaxially oriented, having ALL of the following properties: (a) maximum elongation at break NOT exceeding 180% machine direction as measured by ASTM D882; (b) corona treated one side to a minimum of 36 dynes as measured by ASTM D2578; (c) co efficient of friction of NOT less than 0.4 measured by ASTM D1894; (d) width NOT less than 740mm but NOT exceeding 1500mm; (e) thickness gauges NOT less than 25 micron but NOT exceeding 50 micron; but NOT including film which is: (i) voided; (ii) printed; (iii) coated; (iv) metallised or metalliseable; (v) heat sealable; (vi) containing slip additives; (vii) containing anti static additives

95/11286

NZ Polypropylene Wax, micronised 87/04403

NZ Polypropylene Yarn, 100%, single, non-continuous, twisted, NM 50 dyed waxed on cones, MA150TC quality, for use other than in the further manufacture of yarns other than: (a) wool carpet yarns (b) yarns of fibrillated polypropylene classified under 5402.49.00 or 5402.59.00 (c) yarns put up for retail sale

93/03183

NZ Polyurethane Spandex Yarn 85/05601

NZ Polyvinyl Alcohol 93/00492

NZ Powder Coating Matting Agent XG125, Ciba Geigy 87/04403

NZ Precious Stones, other than diamonds, sapphires, opals, jade and greenstone

89/03701

NZ Precious or Semi-Precious Stones, synthetic or reconstructed 89/03701

NZ Projectiles, centrefire 84/02563

CAN Protector, Carpet, Zepel CSF

NZ Pure Silk Fabric 78/06127

NZ Pyridoxine Hydrochloride, British Pharmacopoeia 1980 or United States Pharmacopoeia XX Grade, no particle greater than 180 micron diameter

85/00229 85/00230 94/03301

R NZ Rails, rolled structural steel (S1021), with tongue and groove rail

ends 83/04876 94/05867

NZ Reconstructed or synthetic precious or semi precious stones 89/03701

NZ Red Iron Oxide, Pigment, synthetic 87/04403



CAN Release Paper, designed for use in the manufacture of decorative laminates

NZ Resin, Polybutylene 91/09897

NZ Resin, Polyester, solid saturated carboxylated in powder or granular form

87/04403

NZ Resins, Petroleum Hydrocarbon having a softening point NOT greater than 1450C by the ball and ring method

95/05424

NZ Riboflavin, British Pharmacopoeia 1980 or United States Pharmacopoeia XX Grade, no particle greater than 180 micron diameter

85/00229 85/00230 94/03301

CAN Rim Steel, carbon bar stock, in widths of 10, 9.4375 and 9 inches 79/03794

NZ Rod, stainless steel, hot rolled, in coil form, for use by continuous hot or cold drawing operations, other than in the manufacture of stainless steel bars, rods or wire, in cut lengths, having a diameter of 9mm or greater

NZ Rod, stainless steel, hot rolled, in coil form, having a diameter of 9mm or less

NZ Rod, stainless steel, hot rolled, in coiled form, having a diameter of less than 24mm

93/00493

NZ Royal Jelly, lyophilized, in starch 85/00229 85/00230 94/03301

NZ Rubber, Synthetic, Thermoplastic, being a block copolymer of styrene-isoprene-styrene

95/05424

NZ Rubies, cut 89/03701

NZ Rutin, United States National Formulary XI Grade, no particle greater than180 micron diameter

85/00229 85/00230 94/03301

S NZ Sapphires, cut 89/03701

NZ Satin Fabric, Polyester, woven, not printed, weighing less than 125 g/m2, for use than in the manufacture of clothing of Chapter 62, other than lining or pocketing

92/02424

CAN Saturating Kraft Paper, unsized, substance of 175 g/m2 or more, designed for use in the manufacture of decorative laminates

NZ Semi Precious, or Precious Stones, synthetic or reconstructed 89/03701

NZ Shellsol AB 93/02386

NZ Silica, amorphous 87/00361

NZ Silcasil ‘S’ (Silicone Dioxide flow agent) 79/00934 91/04913



NZ Silicon Carbide, Grain, grit size 16-1200 83/02723 94/03298

NZ Silicone Dioxide Flow Agent, (Silcasil ‘S’) 79/00934 91/04913

NZ Silk Fabric, pure 78/06127

NZ Simazine Technical 90/05401

NZ Single or Mixed Fatty Alcohols, C13 or greater 93/00491

CAN Sodium Bromide

NZ Sodium Lignosulphonate, (Marasperse CBOS-3) 79/00934 91/04913

NZ Sodium Meta Bisulphide 79/00915

NZ Sodium Methylate, 30% Solution 93/12828

NZ Sodium Monochloro Acetate 90/06433

NZ Sodium Salt of Diphenyl Oxide Alkyl Sulphonate (Dowfax 2A1) 79/00915

NZ Sodium Salt of Ethylene Diamine Tetra Acetic Acid 90/06433

NZ Sodium Sulphite 87/03240

NZ Solvent, Petroleum, White Aliphatic 95/05424

NZ Sorbitan Mono Oleate, British Pharmacopoeia 1980 Grade 85/00229 85/00230 94/03301

NZ Soya Methyl Ester 93/12828

CAN Spandex Yarn, 20 denier

NZ Spandex Yarn, polyurethane 85/05601

NZ Spinosad Technical 98/05673

NZ Spoons and Forks, nickel silver, unfinished not polished or plated, but not including unfinished forks or spoons of the souvenir or commemorative types, for use in the manufacture of silver plated cutlery

94/05870

NZ Stainless Steel Rod, hot rolled, in coil form, for use by continuous hot or cold drawing operations, other than in the manufacture of stainless steel bars, rods or wire, in cut lengths, having a diameter of 9mm or greater

NZ Stainless Steel Rod, hot rolled, in coil form, having a diameter of 9mm or less

NZ Stainless Steel Rod, hot rolled, in coiled form, having a diameter of less than 24mm

93/00493

CAN Stainless Steel Strip, three ply laminated, consisting of two outer layers of stainless steel enclosing a centre of carbon steel



NZ Staple Wire, galvanised 89/00118

NZ Staple Wire, stainless steel 89/00118

NZ Staves, straight rough oak, Quercus species, either sawn or riven but not otherwise processed, machined or bent

83/07272 94/03300

CAN Steel Bands, Plates, Sheets, Strips, not tempered, ground or further manufactured than cut to shape, without identical edges, as used in the manufacture of band or circular saws

CAN Steel Plates, Bands, Sheets, Strips, not tempered, ground or further manufactured than cut to shape, without identical edges, as used in the manufacture of band or circular saws

CAN Steel, Rim, carbon bar stock, in widths of 10, 9.4375 and 9 inches 79/03794

NZ Steel Rod, stainless hot rolled, in coil form, for use by continuous hot or cold drawing operations, other than in the manufacture of stainless steel bars, rods or wire, in cut lengths, having a diameter of 9mm or greater

NZ Steel Rod, stainless, hot rolled, in coil form, having a diameter of 9mm or less

NZ Steel Rod, stainless, hot rolled, in coiled form, having a diameter of less than 24mm

93/00493

CAN Steel Sheets, Strips, Plates, Bands, not tempered, ground or further manufactured than cut to shape, without identical edges, as used in the manufacture of band or circular saws

NZ Steel Strips, hot rolled, black, annealed, high speed (M2 quality) in the as sheared condition, 12.625” x 0.515” x 0.025”, suitable for producing all finished hacksaw blades 12” x 0.5” x 0.025”

NZ Steel strips, hot rolled, black annealed, high speed (M2 quality) in the as sheared condition, suitable for producing all sizes of hacksaw blades

94/05866

CAN Steel Strip, Stainless, three ply laminated, consisting of two outer layers of stainless steel enclosing a centre of carbon steel

CAN Steel Tubing, cold drawn, seamless, as used in the manufacture of diamond drill rods

NZ Stones, glass, imitation, minimum 24% Lead Oxide by weight 84/00313

NZ Stones, precious, other than diamonds, sapphires, opals jade and greenstone

89/03701

NZ Stones, precious or semi precious, synthetic or reconstructed 89/03701

NZ Strip, Nickel Copper Alloy, annealed , in sizes: 0.46mm thick by 131mm wide 0.56mm thick by 131mm wide 0.61mm thick by 131mm wide 0.71mm thick by 131mm wide

83/02096 94/03299

NZ/C Strip, Nickel Iron Alloy, (Incoloy 800) 72/08602



NZ Strip, Nickel Iron Alloy, (Incoloy 825) 72/08602

CAN Strip, Nickel Iron Alloy, Incoloy 840 Strip, in any of the following sizes: (a) thickness 0.38mm or greater, but not exceeding 0.76mm (b) width 1.27mm or greater, but not exceeding 50.8mm

CAN Strips, Plates, Bands, Sheets, Steel, not tempered, ground or further manufactured than cut to shape, without identical edges, as used in the manufacture of band or circular saws

NZ Strips Steel, hot rolled, black, annealed, high speed (M2 quality) in the as sheared condition, 12.625” x 0.515” x 0.025”, suitable for producing all finished hacksaw blades 12” x 0.5” x 0.025”

94/05866

NZ Strips Steel, hot rolled, black annealed, high speed (M2 quality) in the as sheared condition, suitable for producing all sizes of hacksaw blades

94/05866

CAN Strip, Stainless Steel, three ply laminated, consisting of two outer layers of stainless steel enclosing a centre of carbon steel

NZ Sulphamethoxazole BP 91/02603

NZ Synthetic Brown Iron Oxide Pigment 87/04403

NZ Synthetic Calcium Silicate (Microcel E) 79/00934 91/04913

NZ Synthetic Or Reconstructed Precious Or Semi Precious Stones

89/03701

NZ Synthetic Red Iron Oxide Pigment 87/04403

NZ Synthetic Rubber, Thermoplastic, being a block copolymer of styrene-isoprene-styrene

95/05424

NZ Synthetic Yellow Iron Oxide Pigment 87/04403

T NZ Tactel Polyamide Yarn 91/09074

CAN Terephthalic Acid 69/03358

CAN Theobromine

NZ Thermoplastic Synthetic Rubber, being a block copolymer of styrene-isoprene-styrene

95/05424

NZ Thiamine Hydrochloride, British Pharmacopoeia 1980 Grade. No particle greater then 180 micron diameter

85/00229 85/00230 94/03301

NZ Thiamine Mononitrate, United States Pharmacopoeia XX Grade, no particle greater than 180 micron diameter

85/00229 85/00230 94/03301

NZ Toluene 95/05424



CAN Tissue Paper, suitable for the manufacture of carbon paper

CAN Trevira Polyester Carpet Fibre, type 825, bright petalobel 94/05567

NZ Triacetate Yarns, 64, 84 and 110 decitex 75/04769 94/03448

CAN Tri Cresyl Phosphate, in the gel form 94/05567

NZ Triclopyr Technical 93/04191

NZ Triglycidyl Isocyanurate 87/04403

NZ Tri-isopropanolamine 93/03179

NZ Trimethoprim BP 91/02603

NZ Tri-N-Butyltin (Bis) Oxide 87/00361

CAN Tubing, Steel, cold drawn, seamless, as used in the manufacture of diamond drill rods

V NZ Vinyl Acetate 93/00492

NZ Vinyl-Tris-Ethyl-Methyl Ketoximino Silane 87/00361

NZ Vinyl Versatate 93/00492

W NZ Wax, polyolefin, micronised 87/04403

NZ Wax, polypropylene, micronised 87/04403

NZ Wheat Germ Oil, British Pharmaceutical Codex 1954 Grade 85/00229 85/00230 94/03301

NZ White Aliphatic Petroleum Solvent 95/05424

NZ Woven Fibreglass, impregnated with phenolic resin 94/05868

Y NZ Yarn

NZ Acrylic Knitting, single 72’s, high bulk 100% spun, 72/dyed metric count weighing less than 150 grams per 9000 metres

79/06715

NZ Cotton, 100%, 45/1 EEC, grey marl top dyed, being yarns other than wool carpet yarns or yarns put up for retail sale

92/05672

NZ Nylon 6, polyamide, continuous filament, untextured, yarn count NOT exceeding 167 decitex BUT excluding all synthetic and artificial monofilament yarn

97/11048



NZ Nylon 6.6, polyamide continuous filament, untextured, yarn count NOT exceeding 167 decitex BUT excluding all synthetic and artificial monofilament yarn

97/11048

CAN Nylon, 10 denier, 7 filament

NZ Nylon, high tenacity, 22 Decitex or finer 93/06625

NZ Nylon, high tenacity made from antistatic polymer 93/16625

NZ Polycotton, 45/1 EEC, grey marl top dyed, being yarns other than wool carpet yarns or yarns put up for retail sale

90/05672

NZ Poly/cotton, 65/35, single 45/1 ECC, dyed on cone, other than wool carpet yarns or yarns put up for retail sale

93/09462

NZ Polyester Knitting, single 30’s, 100% spun 30/ECC - raw white on cone weighing more than 150 grams per 9000 metres

79/06715

NZ Polyester Knitting, single 50’s, 100% spun 50/1 ECC - raw white on cone, weighing less than 150 grams per 9000 metres

79/06715

NZ Polyester, high tenacity, made up of filaments each of which is less than 1 denier per filament

93/06625

NZ Polypropylene, 100%, single, non-continuous, twisted, NM50 dyed waxed on cones, MA150TC quality, for use other than in the further manufacture of yarns, other than: (a) wool carpet yarns (b) yarns of fibrillated polypropylene classified under 5402.49.00 or 5402.59.00 (c) yarns put up for retail sale

93/03183

NZ Polyester high tenacity, made up of filaments each of which is less than 1 denier per filament

93/06625

CAN Spandex, 20 denier

NZ Spandex, Polyurethane 85/05601

NZ Tactel Polyamide 91/09074

NZ Triacetate, 64, 84 and 110 decitex 75/04769 94/03448

NZ Yellow Iron Oxide Pigment, synthetic 87/04403

NZ Yellow Nickel Titanate Pigment 87/04403

Z CAN Zepel CSF Carpet Protector



Division 4: Origin (Singapore)

Section 1: SAFTA – goods claimed to be the produce or manufacture of Singapore

4.1.1 Goods the produce or manufacture of Singapore


(1) Subdivision B of Division 1B of Part VIII of the Customs Act contains provisions

relating to goods claimed to be the produce or manufacture of Singapore, as follows:

153V Goods claimed to be the produce or manufacture of Singapore

Goods claimed to be the produce of Singapore

(1) Goods claimed to be the produce of Singapore are the produce of that country if they are wholly obtained goods produced in Singapore.

Goods claimed to be the manufacture of Singapore

(2) Goods claimed to be the manufacture of Singapore are the manufacture of that country if:

(a) they are wholly manufactured in Singapore; or

(b) they are partly manufactured in Singapore.

(3) This section is subject to sections 153VE and 153VF.

2. Policy and practice (1) This provision explains which type of goods can be regarded as being the ‘produce’ or

‘manufacture’ of Singapore. Those types of goods are those which are:

• wholly obtained goods produced in Singapore; or

• goods which are either wholly or partly manufactured in Singapore.

(2) Section 153V also states that the above types of goods are only the ‘produce’ or

‘manufacture’ of Singapore if those goods comply with the requirements of section 153VE and section 153VF.

(3) Section 153VE of the Customs Act addresses the requirement of certificates of origin

(see 11.7.1) while section 153VF addresses consignment requirements for goods the produce or manufacture of Singapore (see 11.6.1.1).



Section 2: SAFTA – wholly manufactured goods 4.2.1 Wholly manufactured goods criteria 1. Statutory provisions

(1) Section 153VA contains the provisions by which goods can be declared to be wholly manufactured in Singapore. This provision states:

153VA Goods wholly manufactured in Singapore

Goods are wholly manufactured in Singapore if they are manufactured in that country from one or more of the following:

(a) unmanufactured raw products;

(b) waste and scrap produced in Singapore or Australia;

(c) materials wholly manufactured within Singapore or Australia;

(d) materials imported into Singapore that the CEO has determined, by Gazette notice, to be manufactured raw materials of Singapore.


(1) This provision allows for four (4) categories of goods which can be considered as being

wholly manufactured in Singapore, namely:

• unmanufactured raw products (see 11.2.1.1);

• materials or scrap produced in Singapore or Australia (see 11.2.1.2);

• materials wholly manufactured within Singapore or Australia (see 11.2.1.3);

• materials imported into the relevant country from a country other than Australia that are determined by the CEO to be the manufactured raw materials of the relevant country (see 11.2.1.4).

4.2.1.1 Unmanufactured raw products 1. Statutory provisions

(1) The first category of goods considered to be wholly manufactured in Singapore is

‘unmanufactured raw materials’. (2) Section 153U defines ‘unmanufactured raw products’ as:

unmanufactured raw products means:

(a) natural or primary products that have not been subjected to an industrial process, other than an ordinary process of primary production, and includes:

(i) animals and products obtained from animals, including greasy wool; and

(ii) plants and products obtained from plants; and

(iii) minerals in their natural state and ores; and

(iv) crude petroleum; or

(b) raw materials recovered in Singapore or in Australia from waste or scrap.




(1) Goods claimed to be ‘unmanufactured raw products’ must not have been subjected to

any process of manufacture (however minor) which would remove them from their raw state. For instance, in the case of peanuts, the process of shelling would place such goods outside this provision.

(2) However, where the process is limited to cleaning, grading and the like to maintain the

state of the product for international trade, such products will continue to be regarded as raw, unmanufactured products.

(3) Goods covered by section 153U entered under the provisions of SAFTA are declared to

be the produce of Singapore. (4) Unmanufactured raw products are not, therefore, subject to conditions of entitlement

applicable to partly manufactured goods, such as last process of manufacture and minimum value-added.

4.2.1.2 Scrap and waste material


(1) The second category of goods considered to be wholly manufactured in Singapore is

‘waste and scrap produced in Singapore or Australia’. (2) Section 153UA defines waste and scrap as:

waste and scrap means only waste and scrap that:

(a) have been derived from manufacturing operations or consumption; and

(b) are fit only for the recovery of raw materials.


(1) Scrap and waste essentially arise from manufacturing operations. (2) Where that waste or scrap is fit only for the recovery of the same original raw material

and is re-processed in Singapore to yield the same material, the cost of the recovered raw material is to be treated as an unmanufactured raw product and as if it were material of Singapore. Note that this provision applies only to materials that may be re-processed into the same original raw material, e.g. plastic or metal but not, for instance, off-cuts of leather.

4.2.1.3 Materials wholly manufactured in Singapore or Australia

(1) The third category of goods considered to be wholly manufactured in Singapore are ‘materials wholly manufactured within Singapore or Australia’.

(2) Material is defined in section 153UA as:

material means any matter or substance purchased by the principal manufacturer of the goods and used or consumed in the processing of the goods, other than any matter or substance that is treated as an overhead.

4.2.1.4 Determined manufactured raw materials (DMRM)

(1) The fourth category of goods considered to be wholly manufactured in Singapore are ‘materials imported into Singapore that the CEO has determined, by Gazette notice, to be manufactured raw materials of Singapore’.



(2) Further details regarding DMRMs, together with the application process, are provided

at 11.2.1.4.



Section 3: SAFTA – partly manufactured goods – value-added criteria – overview

4.3.1 Cost to manufacture


(1) The Singapore-Australia Free Trade Agreement (SAFTA) includes two rules of origin for

partly manufactured goods. The primary criterion used to ascertain the origin of imported goods in both cases is a minimum value-added requirement, using a cost to manufacture concept, as follows:

153VB Goods partly manufactured in Singapore

General rule

(1) Goods are partly manufactured in Singapore if:

(a) in relation to any goods—subsection (2) applies to the goods; or

(b) in relation to any goods that are not specified in Annex 2C of SAFTA—subsection (5) applies to the goods.

Any goods

(2) This subsection applies to the goods if:

(a) the last process of manufacture was performed in Singapore by, or on behalf of, the principal manufacturer; and

(b) the allowable cost to manufacture the goods is not less than:

(i) if the goods are specified in Annex 2D of SAFTA—30% of the total cost to manufacture the goods; or

(ii) in any other case—50% of the total cost to manufacture the goods.

Costs not included in allowable cost to manufacture—any goods

(3) For the purposes of subsection (2), the allowable cost to manufacture the goods does not include the following:

(a) the cost of any material purchased by the principal manufacturer and subsequently processed outside Singapore or Australia;

(b) the cost of processing (including the cost of labour and overheads) any materials referred to in paragraph (a) that is performed, whether in Singapore or Australia or elsewhere, up until the processed material is returned to Singapore.

Minimal operations or quality control inspections

(4) For the purposes of subsection (2), if minimal operations or quality control inspections are conducted by, or on behalf of, the principal manufacturer in Singapore, as part of a process of manufacturing the goods, the cost of those minimal operations or quality control inspections may be included in the calculation of:

(a) the total expenditure on materials; and

(b) the allowable expenditure on materials, labour and overheads;



to the extent that they relate to the cost of materials, labour or overheads, as the case requires.

Goods other than those specified in Annex 2C

(5) This subsection applies to the goods if:

(a) one or more processes of manufacture was or were performed on the goods in Singapore by, or on behalf of, the principal manufacturer; and

(b) one or more processes was or were performed on the goods in Singapore by, or on behalf of, the principal manufacturer immediately prior to export of the goods to Australia; and

(c) the principal manufacturer in Singapore incurred all the costs associated with any process performed on the goods outside Singapore or Australia; and

(d) the allowable cost to manufacture the goods is not less than:

(i) if the goods are specified in Annex 2D of SAFTA—30% of the total cost to manufacture the goods; or

(ii) in any other case—50% of the total cost to manufacture the goods.

Costs not included in allowable cost to manufacture—other goods

(6) For the purposes of subsection (5), the allowable cost to manufacture the goods does not include the cost of processing (including the cost of labour or overheads) any material outside Singapore or Australia.

(2) In determining whether goods are the produce or manufacture of Singapore, the

following definitions in section 153UA will need to be considered:

manufacture means the creation of an article essentially different from the matters or substances that go into such manufacture and does not include the following activities (whether performed alone or in combination with each other):

(a) restoration or renovation processes such as repairing, reconditioning, overhauling or refurbishing;

(b) minimal operations;

(c) quality control inspections.

minimal operations means pressing, labelling, ticketing, packaging and preparation for sale, or any similar process, whether conducted alone or in combination with each other.


(1) The first rule for partly manufactured goods [subsection 153VB(2) of the Customs Act]

applies to all goods. The second rule [subsection 153VB(5)] does not apply to goods specified in Annex 2C to SAFTA, which covers a range of textiles, clothing and footwear, jewellery and automotive products. Annex 2C is reproduced at Appendix 4.1.

(2) The first rule requires that the last process in the manufacture of the goods take place

in Singapore. Under this rule, where overseas processing has taken place, the allowable cost to manufacture excludes both the costs associated with overseas processing and the costs incurred within Singapore prior to overseas processing.



(3) The second rule [subsection 153VB(5) of the Customs Act] allows some process in the

manufacture of the goods to be undertaken in a place other than Singapore provided that one or more processes of manufacture, including the final process of manufacture, takes place in Singapore. Under this rule, while the allowable cost to manufacture excludes the costs associated with overseas processing, it includes the costs incurred within Singapore prior to overseas processing, provided the processing of the goods remains in the control of the principal manufacturer at all times.

(4) Both rules have alternative minimum value-added provisions. The first alternative in

each case is a 30% provision. The second alternative is a 50% provision. (5) The 30% provision applies to goods specified in Annex 2D to SAFTA, which covers

certain electrical and electronic products, as well as any goods covered by a Tariff Concession Order. Annex 2D is reproduced at Appendix 4.2. The 50% provision applies to all other goods.

4.3.2 The concept of cost to manufacture (1) Subdivisions C (Sections 153W to 153WC) and D (Sections 153X to 153XB) of Division

1B to Part VIII of the Customs Act provide general rules governing the calculation of the ‘allowable cost to manufacture’ and the ‘total cost to manufacture’. Elements of these costs comprise materials, labour, overheads and, in the case of the total cost to manufacture, overseas processing costs.

(2) Subsections 153VB(3), (4) and (6) (reproduced above) provide additional conditions in

relation to the allowable cost to manufacture, specific to either the first or second partly manufactured rule.

4.1.3 The concept of principal manufacturer

1. Statutory provisions (1) Principal Manufacturer is defined in section 153UA as follows:

principal manufacturer, in relation to goods, means the person in Singapore who performs, or has had performed on its behalf, the last process of manufacture of the goods.


(1) It is the expenditure of, and the processes performed by or on behalf of, the principal

manufacturer that are of primary concern when assessing whether goods are partly manufactured in Singapore for the purposes of SAFTA. The principal manufacturer must be a person in Singapore. That person must either manufacture the goods, or have the goods manufactured on his behalf.

(2) The concept of principal manufacturer was introduced to ensure that all costs

associated with the manufacture of goods in Singapore would be taken into account, even where manufacturing processes are outsourced to other persons in Singapore.



4.3.4 Total cost to manufacture

1. Statutory provisions (1) Section 153X of the Customs Act defines ‘total cost to manufacture’ for the purposes

of Division 1B of Part VIII of the Customs Act as follows:

The total cost to manufacture goods is the sum of:

(a) the total expenditure by the principal manufacturer on materials in respect of the goods; and

(b) the allowable expenditure by the principal manufacturer on labour in respect of the goods; and

(c) the allowable expenditure by the principal manufacturer on overheads in respect of the goods; and

(d) the total expenditure (if any) by the principal manufacturer on overseas processing costs in respect of the goods.

4.3.5 Allowable cost to manufacture

1. Statutory provisions (1) Section 153W of the Customs Act defines ‘allowable cost to manufacture’ as follows:

The allowable cost to manufacture goods is the sum of:

(a) the allowable expenditure by the principal manufacturer on materials in respect of the goods; and

(b) the allowable expenditure by the principal manufacturer on labour in respect of the goods; and

(c) the allowable expenditure by the principal manufacturer on overheads in respect of the goods.


(1) The same allowable labour and overhead costs are included in both the total and

allowable costs to manufacture. However, the total cost to manufacture also includes all expenditure on materials, as well as the cost of overseas processing. The allowable cost to manufacture includes only allowable expenditure on materials, and takes no account of the cost of overseas processing.

(2) Each element of the total and allowable costs to manufacture, viz. materials, labour,

overheads and overseas processing, is dealt with in Section 9.16.

4.3.6 Adjustments to expenditure

1. Statutory provisions (1) Section 153UC of the Customs Act provides:

153UC CEO may determine cost of certain input, material etc.

If the CEO is satisfied that any input, material, labour, overhead or overseas process was provided:

(a) free of charge; or

(b) at a price that is inconsistent with the normal market value of that input, material, labour, overhead or overseas process;



the CEO may require, in writing, that an amount determined by the CEO to be the normal market value of that input, material, labour, overhead or overseas process be treated, for the purposes of this Division, as the amount paid by the manufacturer for the input, material, labour, overhead or overseas process.

2. Policy and practice (1) Where any element of the cost to manufacture is provided free of charge or at a price

that is inconsistent with that element’s normal market value, section 153UC of the Customs Act allows the CEO of Customs to determine that a particular value is to be treated as the normal market value of those elements.

(2) This provision is included to provide a mechanism for determining appropriate levels of

expenditure where prices have been manipulated, or are significantly different from normal market values for other reasons. For example, parts may be supplied free of charge to a Singapore manufacturer for assembly into finished products. In this situation, a value would need to be assigned to the parts to ensure that the goods are substantially transformed in Singapore, in keeping with the spirit of SAFTA.

(3) The normal market value will generally be ascertained by recourse to other sellers of

like materials in the relevant market. Where materials are, or would be, obtained from overseas sources, official rates of exchange may be applied to ascertain the price that would have been paid or payable in that overseas market.

(4) Copies of the forms of the different notices prepared pursuant to section 153UC are

set out at Appendix 4.3.



Section 4: SAFTA – partly manufactured goods – value-added criteria – key elements

4.4.1 Materials 4.4.1.1 General 1. Statutory provisions

(1) Materials and inputs are defined in section 153UA of the Customs Act as follows:

material means any matter or substance purchased by the principal manufacturer of the goods and used or consumed in the processing of the goods, other than any matter or substance that is treated as an overhead.

input means any matter or substance used or consumed in the manufacture or production of a material, other than a matter or substance that is treated as an overhead.

4.4.1.2 Total expenditure on materials 1. Statutory provisions

(1) These are to be found in section 153XA of the Customs Act as follows:

153XA Total expenditure by principal manufacturer on materials

General rule

(1) The total expenditure by the principal manufacturer on materials in respect of goods is the amount incurred, directly or indirectly, by the principal manufacturer for all materials.

What is included in total expenditure on materials

(2) The total expenditure by the principal manufacturer on materials in respect of goods includes:

(a) freight, insurance, shipping and packing costs and all other costs, incurred directly or indirectly by the principal manufacturer, in transporting the materials to the first place in Singapore or Australia at which a process is performed on those materials by or on behalf of the principal manufacturer; and

(b) customs brokerage fees, incurred directly or indirectly by the principal manufacturer, on the materials paid in Singapore or Australia or both.

What is not included in total expenditure on materials

(3) The total expenditure by the principal manufacturer on materials in respect of goods does not include:

(a) a customs or excise duty; or

(b) a tax in the nature of a sales tax, a goods and services tax, an anti-dumping duty or a countervailing duty;

imposed on the materials by or under a law of Singapore or Australia.




(1) Subsection 153XA(1) provides that the cost of materials is the amount incurred,

directly or indirectly, by the principal manufacturer for all materials used in the manufacture or production of the goods. Therefore materials used in the production of other goods cannot be applied.


insurance, port and clearance charges and any financial accommodation that is a part of the CIF, FOB or other price paid. The use of the words ‘in respect of’ is intended to embrace all acquisition costs including the price paid or payable for the materials. Where materials are imported, the relevant price paid will be the actual amount paid in the currency of the country into which the materials have been imported. The rate of exchange, therefore, will be the actual rate applicable to the transaction, which may be a forward rate. Alternatively, average rates of exchange based on actual rates over a period may be used. Labour cost of material purchasers is not to be included as a cost of materials. This is to be included as a labour cost of management of the process of manufacture.


except where they are an accurate reflection of a manufacturer’s operations. (4) Subsection 153XA(3) specifies particular charges that do not form part of the cost of

materials. As it is common for the goods and services tax liability of an enterprise to be accumulated separately from the company’s ordinary accounts, it is unlikely that this tax will need to be removed from the cost shown in the accounts. Nevertheless, given the variability of company accounting systems, the question must always be addressed and resolved.

4.4.1.3 Allowable expenditure on materials 1. Statutory provisions

(1) The allowable expenditure by the principal manufacturer on materials is set out in section 153WA of the Customs Act as follows:

153WA Allowable expenditure by principal manufacturer on materials

General rule

(1) The allowable expenditure by the principal manufacturer on materials in respect of goods is the amount incurred, directly or indirectly, by the principal manufacturer for all materials, in the form purchased by the principal manufacturer, that were manufactured or produced in Singapore or Australia.

Particular matters included in allowable expenditure on materials

(2) The allowable expenditure by the principal manufacturer on materials in respect of goods includes:

(a) freight, insurance, shipping and packing costs and all other costs, incurred directly or indirectly by the principal manufacturer, in transporting the materials to the first place in Singapore or Australia at which a process is performed on those materials by or on behalf of the principal manufacturer; and

(b) customs brokerage fees, incurred directly or indirectly by the principal manufacturer on the materials paid in Singapore or Australia or both.



What is not included in allowable expenditure on materials

(3) The allowable expenditure by the principal manufacturer on materials in respect of goods does not include the following:

(a) a customs or excise duty imposed on the materials by or under a law of Singapore or Australia;

(b) a tax in the nature of a sales tax, a goods and services tax, an anti-dumping duty or a countervailing duty, imposed on the materials by or under a law of Singapore or Australia;

(c) the cost of any input that, in the form it was received by the manufacturer or producer of the materials, was not manufactured or produced in Singapore or Australia.

Total cost of inputs may be included in allowable expenditure on materials

(4) Despite paragraph (3)(c), the total cost of those inputs that would, because of that paragraph, not have been included in the allowable expenditure on a material by the principal manufacturer may be included in that allowable expenditure if the total cost does not exceed 50% of the total expenditure by the principal manufacturer on that material.

(5) Subsection (4) does not apply in relation to materials that are provided for processing in a country other than Singapore or Australia.


(1) Section 153WA covers those expenditures by the principal manufacturer on materials

which are allowed to be included in the cost to manufacture preference claim goods. (2) Subsection 153WA(1), in defining “allowable expenditure by the principal

manufacturer on materials”, restricts allowable expenditure to that actually incurred by the principal manufacturer for all materials, in the form purchased by that manufacturer, that were manufactured or produced in Singapore or Australia.


insurance, port and clearance charges and any financial accommodation that is a part of the CIF, FOB or other price paid, in transporting those materials to the first place in Singapore at which a process is performed on those materials by the principal manufacturer. The allowable expenditure also includes costs such as customs brokerage fees which might have been paid for importation of the goods into Singapore or Australia.


except where they are an accurate reflection of a manufacturer’s operations. (5) Subsection 153XA(3) specifies particular charges that do not form part of the cost of

materials. These include customs or excise duties, sales taxes, goods and services taxes and other taxes imposed under a law of Singapore or Australia. As it is common for the goods and services tax liability of an enterprise to be accumulated separately from the company’s ordinary accounts, it is unlikely that this tax will need to be removed from the cost shown in the accounts. Nevertheless, given the variability of company accounting systems, the question must always be addressed and resolved.



(6) Where materials used or consumed in the manufacture of goods within Singapore or

Australia were themselves manufactured or produced in either of those countries, those materials can be included in the allowable expenditure on materials for the goods, subject to the provisions contained in paragraph 153WA(3)(c) and subsection 153WA(4).

(7) The emphasis on the form in which the materials are received into the factory is

intended to make clear that in determining the origin and cost of particular materials to the principal manufacturer, it is the origin and cost of materials in that particular form that is important rather than relating to what might be the raw ingredients of the material received into the factory. It also means that, where a material changed hands after importation, but did not change form, it is still considered to have been imported into the qualifying area rather than having been locally sourced.

(8) Notwithstanding the special treatment accorded to unmanufactured raw materials

used in the manufacture of wholly manufactured goods, there is no special treatment as to origin accorded to unmanufactured raw materials processed prior to manufacture in accordance with section 153VA.

4.4.2 Factory labour

1. Statutory provisions (1) The ‘allowable expenditure by principal manufacturer on labour’ is defined in section

153WB as follows:

153WB Allowable expenditure by principal manufacturer on labour

The allowable expenditure by the principal manufacturer on labour, in respect of goods, is the sum of those parts, of the costs relating to the goods that are costs referred to in section (i) of Annex 2B of SAFTA, that:

(a) are incurred, directly or indirectly, by the principal manufacturer; and

(b) relate, directly or indirectly, and wholly or partly, to the processing of the goods in Singapore; and

(c) can reasonably be allocated to the processing of the goods in Singapore.


(1) Section 153WB sets out the requirements with respect to relevant (allowable) labour

costs. This section makes reference to Section (i) of Annex 2B to SAFTA and that reference in effect includes that Annex of SAFTA into Australian legislation. Annex 2B is reproduced at Appendix 4.4.

(2) Therefore, section 153WB can be read as including all those factors regarding labour

costs which are contained in Section (i) of Annex 2B to SAFTA. The significance in that section is that it is restrictive and the listed costs are the only costs allowed under the provision.

(3) Paragraph 153WB(a) imposes an ‘incurred by the principal manufacturer’ test.

‘Principal manufacturer’ is defined in section 153UA to mean “the person in Singapore who performs, or has performed on its behalf, the last process of manufacture of the goods”. The significance of the word ‘incurred’ is that the cost or charge must be paid or payable by the principal manufacturer and not incurred independently by another party without recompense by the manufacturer. Further, it must be an actual cost and not a standard (budgeted), hypothetical, imputed or opportunity cost.



(4) Manufacturing wages and employee benefits in paragraph (a) of Section (i) will include

the cost of labour that can be identified or associated directly or indirectly with goods produced, i.e. production line workers and other factory personnel. Examples are base pay, overtime pay, incentive pay, shift differentials and employee benefits such as vacation pay, public holidays, medical insurance and government required social program contributions.

(5) The cost of wages and employee benefits can include the cost of interest payments on

bank loans to finance wages. For this entitlement to be established, it must be clear from the loan documentation that the purpose of the loan is specifically for the financing of wage payments and that borrowed funds have, in fact, been used for that purpose. Indirect labour, although attributable to factory overhead, is prescribed in this area.

(6) Labour costs incurred in connection with supervision would be limited to the factory

foreman or supervisor. Labour associated with training would encompass in-house training, particularly on-the-job training.

(7) It should be noted that the labour costs claimed to be incurred must be actually

incurred, either directly or indirectly, by the principal manufacturer, must relate to the processing of the goods in Singapore and can reasonably be allocated to the processing of the goods in Singapore.

(8) Management of the process of manufacture would include the direct costs of factory

management such as the production manager as well as the factory cost accountant. The question as to whether layers of management beyond the production manager should be included depends on the structure and size of the company and the circumstances of the particular case. It would have to be shown, for instance, that the connection with manufacture is not too remote as envisaged by the exclusion of the general expense of executive services in paragraph (a) of Section (i) of Annex 2B to SAFTA.

(9) Indirect costs in the form of labour costs for material purchasers, production planning

and scheduling would also be included as ‘cost of management of the process of manufacture’. Labour associated with the receipt and storage of materials would relate to personnel employed in the materials store.

(10) Labour incurred in quality control means the cost of inspecting and testing the goods

prior to transfer off-line to ascertain whether they meet particular standards or specifications. Packing into inner containers refers to labour costs incurred in that function only. Inner containers, while not defined, would include any container into which preference claim goods are packed, other than a shipping or airline container, pallet or similar article. Labour related to other containers would therefore be excluded from allowable costs. Labour costs incurred in handling and storage of the goods within the factory will include the labour costs of personnel employed in the finished goods store. This cost is the only exception to the general rule that allowable costs are limited to those incurred to the point of completion of manufacture.

(11) Paragraph 153WB(b) establishes the linkage between the cost and manufacture. That

is, there must be a clear connection with production before any such expenditure can be considered allowable. In order for costs incurred by a principal manufacturer to be treated as direct costs of processing, those costs must be directly incurred in the production of the exported goods and not merely associated with the production facility as peripheral costs necessary to operate the facility.



4.4.3 Factory overheads

1. Statutory provisions (1) The allowable expenditure of the factory on overheads is defined in section 15WC as

follows:

153WC Allowable expenditure by principal manufacturer on overheads

The allowable expenditure by the principal manufacturer on overheads, in respect of goods, is the sum of those parts, of the costs relating to the goods that are costs referred to in section (ii) of Annex 2B of SAFTA, that:

(a) are incurred, directly or indirectly, by the principal manufacturer; and

(b) relate, directly or indirectly, and wholly or partly, to the processing of the goods in Singapore; and

(c) can reasonably be allocated to the processing of the goods in Singapore.


(1) Section 153WC sets out the requirements with respect to relevant (allowable) labour

costs. This section makes reference to Section (ii) of Annex 2B to SAFTA and that reference in effect includes that Annex of SAFTA into Australian legislation. Annex 2B is reproduced at Appendix 4.4.

(2) Therefore, section 153WC can be read as including all those overheads which are

contained in Section (ii) of Annex 2B to SAFTA. The significance in that section is that it is restrictive and the listed overheads are the only overheads allowed under the provision.

(3) Paragraph 153WC(a) imposes an ‘incurred by the principal manufacturer’ test.

‘Principal manufacturer’ is defined in section 153UA to mean “the person in Singapore who performs, or has performed on its behalf, the last process of manufacture of the goods”. The significance of the word ‘incurred’ is that the cost or charge must be paid or payable by the principal manufacturer and not incurred independently by another party without recompense by the manufacturer. Further, it must be an actual cost and not a standard (budgeted), hypothetical, imputed or opportunity cost.

(4) In any commercial undertaking, overheads will include both production overheads and

‘other’ overheads. Overheads which relate to general administration, finance, marketing, selling and distribution to customers are specifically excluded from prescribed costs by paragraph (2) of Section (ii) of Annex 2B to SAFTA (see Appendix 4.4). The classification of overheads to isolate that portion related to production only, would take the function of the overhead as its distinguishing characteristic (e.g., whether it is a function of production, marketing, selling, finance, or administration). The costs listed in paragraph 2(a) of Annex 2B illustrate this principle. Other examples are bank charges, donations, corporate expenses, audit expenses, entertainment, printing and stationery and personal costs including staff advertising.

(5) As the costs of general management, as distinct from functional management, are not

directly or indirectly related to current production they are therefore excluded from the cost of production. Such costs are typically not attributable to any operation or product and their only association with the production facility may be as peripheral costs necessary to operate the facility.



(6) Paragraph 153WC(c) implies two essential requirements, viz:


• a reasonable and appropriate method of allocation to production must be available

(7) An example of paragraph 153WC(c) may arise where materials are transported in the

manufacturer’s vehicle and large numbers of substantially different types of materials arrive at the factory in the same consignment. Where all materials are sourced in the qualifying area, it may be easier to treat the cost of freight inwards as an overhead cost, provided it can reasonably be allocated to the goods. Where materials are sourced from countries outside the qualifying area, however, care must be taken to ensure that the cost of transport of such goods between the wharf and the manufacturer’s premises is attributed to the materials to which it relates and does not form part of qualifying overheads (see also 11.4.5).

(8) In calculating overheads no account is to be taken of the source of the energy, plant,

machinery, royalty or other such costs incurred by the manufacturer in the production of goods when determining whether or not particular goods are the produce or manufacture of a country. For example, the payment by the principal manufacturer of a royalty to a recipient in a country outside the qualifying area for a process developed in that country, does not provide grounds for denying inclusion of the cost in allowable expenditure.

(9) Paragraph (3) of Section (ii) of Annex 2B to SAFTA limits depreciation charges to

those that are ascertained in accordance with generally accepted accounting principles as applied by the principal manufacturer. These principles will apply whether or not they are applied by the principal manufacturer.

(10) Allowable expenditure on factory overhead is to include re-work costs on faulty

manufacture whether or not such defects are discovered post sale.

4.4.4 Other costs

4.4.4.1 Labels/tickets

(1) Materials and labour will be expended on these items. Generally, items which are required by law and/or which identify the goods, their origin, characteristics, brand name, fabric codes, care instructions and material composition may be included in allowable expenditure. However, items that are of a promotional nature in relation to particular manufacturers or generic goods should not be treated as allowable expenditure on the grounds that they represent selling or marketing expenses which are specifically excluded by paragraph (3) of Section (ii) of Annex 2B to SAFTA.

4.4.4.2 Inner containers

(1) Subparagraph (f) of Section (i) of Annex 2B to SAFTA states that the cost, to the extent that the cost relates to labour, of packing goods into inner containers is allowable expenditure under SAFTA.

(2) While there are no specific statutory provisions regarding Inner Containers in

Division 1B Part VIII of the Customs Act, it is expected that the practices adopted under Division 1A are equally applicable in regards to SAFTA.

(3) Inner containers include any item of packaging, container or containers into or onto

which the goods are packed but shall not include shipping containers (including pallets and like articles or air containers that are used by carriers for cargo conveyancing).



(4) Costs associated with inner containers will be represented under the three categories

of materials, labour and overhead.

4.4.5 Double counting

1. Statutory provisions (1) Section 153UB is a proscription against any double counting and states:

153UB Rule against double counting

In determining:

(a) the allowable cost to manufacture; or

(b) the total cost to manufacture:

goods claimed to be the produce or manufacture of preference claim goods, a cost incurred, whether directly or indirectly, by the manufacturer of the goods must not be taken into account more than once.


(1) Given the variability of accounting practice, there is considerable scope for double

counting of particular costs. Care would need to be taken for instance to ensure that indirect labour costs, which, in some circumstances, can form part of total Payroll costs, are not counted in Direct Labour as well as Manufacturing Overhead when costs are determined on a per unit basis.



Section 5: SAFTA – partly manufactured goods – value-added criteria – variations

4.5.1 Goods not commercially manufactured in Australia

1. Statutory provisions (1) Section 153VA provides determination powers in relation to goods which are not

manufactured in Australia or Singapore, as follows:



(e) …… ;

(f) …… ;

(g) …… ;

(h) materials imported into Singapore that the CEO has determined, by Gazette notice, to be manufactured raw materials of Singapore.


(1) Where goods would be wholly manufactured in Singapore but for materials that are

not available from within Australia or Singapore, the CEO may determine those materials to be the produce or manufacture of Singapore.

(2) The absence of Australian manufacture is generally indicated by the general rate of

duty being free or by the existence of a Tariff Concession Order made pursuant to Part XVA of the Customs Act. Reconditioned or reconstructed machines do not gain the benefit of the lower thresholds.

(3) While there is no formal agreement between Australia and Singapore on the operation

of DMRM, Australia has adopted procedures similar to those agreed to between Australia and New Zealand. This includes consideration of the general duty rate applicable to imports of the material into Australia, eligibility for a duty concession and the publication of a Gazette notice that allows Australian manufacturers of the material for which a DMRM is sought 21 days in which to object to the granting of a DMRM.

(4) The kinds of goods considered not to be commercially manufactured in Australia or

Singapore are set out by Gazette notice. An example of the type of notice is set out in Appendix 4.5.








4.5.2 Tolerance in minimum value-added

1. Statutory provision (1) Section 153VC provides for a lower value-added content in certain circumstances with

respect to goods originating in Singapore.

153VC Reduction of the required percentage of allowable cost to manufacture in unforseen circumstances

When 30% in subsection 153VB(2) or 153VB(5) can be read as 28%


(a) that the allowable cost to manufacture goods that are claimed to be the manufacture of Singapore, in a shipment of such goods, is at least 28% but not 30%, of the total cost to manufacture those goods; and

(b) that the allowable cost to manufacture those goods would be at least 30% of the total cost to manufacture those goods if an unforseen circumstance had not occurred; and


the CEO may determine, in writing, that subsection 153VB(2) or 153VB(3) has effect:

(d) for the purposes of the shipment of goods that is affected by that unforeseen circumstance; and


as if the reference in subsection153VB(2) or 153VB(3) to 30% were a reference to 28%.

When 50% in subsection 153VB(2) or 153VB(3) can be read as 48%


(a) that the allowable cost to manufacture goods that are claimed to be the manufacture of Singapore, in a shipment of such goods, is at least 48% but not 50%, of the total cost to manufacture those goods; and

(b) that the allowable cost to manufacture those goods would be at least 50% of the total cost to manufacture those goods if an unforseen circumstance had not occurred; and


the CEO may determine, in writing, that subsection 153VB(2) or 153VB(3) has effect:

(d) for the purposes of the shipment of goods that is affected by that unforeseen circumstance; and


as if the reference in subsection153VB(2) or 153VB(3) to 50% were a reference to 48%.




(3) If the CEO makes a determination under this section then, in relation to all goods imported into Australia that are covered by that determination, section 153VB has effect in accordance with the determination.


(4) If:

(a) the CEO has made a determination under this section; and

(b) the CEO becomes satisfied that the unforseen circumstance giving rise to the determination no longer continues;


Similar goods




(b) that are covered by the same Certificate of Origin.

2. Policy and practice (1) Allowable labour and overheads would generally be based on a 12 month period

coinciding with the annual reporting period of the manufacturer. For this reason, such costs are unlikely to be affected by this provision, which relates to short-term aberrations.

(2) The provision will, however, apply directly to materials in circumstances where a

short-term variation is experienced through, for example, extreme exchange rate fluctuations. Where this variation directly affects the cost of production of each individual unit produced, it will come within the ambit of this provision. In ordinary circumstances, the short-term would not be expected to exceed three months.

(3) Where use of this provision is contemplated, application should be made to the

Director Valuation and Origin, 5 Constitution Avenue, Canberra ACT 2601, well before the goods are to be entered for home consumption, so that sufficient time is allowed to consider the application and, where appropriate, to make a determination. The application should include all material required to support the claim.

(4) The form of the determination contemplated by section 153VC is set out in

Appendix 4.6.



Section 6: SAFTA – partly manufactured goods – other criteria

4.6.1 Additional requirements

(1) Aside from minimum value-added thresholds, there are other conditions that must be

met before goods are considered to be the produce or manufacture of Singapore and eligible for duty-free entry under SAFTA. These are:

• consignment requirements.

• processes of manufacture, including manufacture, minimal operations and quality control inspections;

4.6.1.1 Consignment requirements and final process of manufacture


(1) Specific consignment rules for goods claiming preference under SAFTA are applied

through section 153VF. This provision provides:

153VF Consignment requirements

Goods claimed to be the produce or manufacture of Singapore are not the produce or manufacture of Singapore unless:

(a) they have been transported directly to Australia from Singapore; or

(b) they have been transported through a country or place other than Singapore or Australia but:

(i) did not undergo operations in that country or place other than packing, packaging, unloading, reloading or operations to preserve them in a good condition; and

(ii) were not traded or used in that country or place; or

(c) they have been transported from a country or place other than Singapore where minimal operations were performed immediately after importation from Singapore and immediately before their exportation to Australia.


(1) This provision has a twofold effect in that it specifies a requirement:

• regarding transportation to Australia of goods claiming duty-free entry under SAFTA; and

• for a final process in the manufacture of goods to be undertaken in Singapore by restricting processes which can be undertaken in a place other than Singapore this issue

(2) The consignment requirements specifically state that unless goods are transported

directly to Australia from Singapore, or have been transported through another country or place where only minor operations might have been performed, then those goods can not be claimed to be the manufacture of Singapore.



Section 7: SAFTA – Declarations and Certificates of Origin

4.7.1 Certificate of Origin - requirements


(1) Section 153VE provides as follows:

153VE Certificate of Origin requirements

Certificate of origin

(1) Goods claimed to be the produce or manufacture of Singapore are not the produce or manufacture of Singapore, unless:

(a) the importer of the goods holds a valid Certificate of Origin and a declaration relevant to the goods at the time of entry of the goods; and

(b) if an officer requests production of a copy of the certificate of origin and the declaration, both copies are produced to the officer.


Declaration


declaration means a declaration made, by the exporter of the goods in question from Singapore, in accordance with Article 11.6 of Chapter 3 of SAFTA.

(2) Article 11 of Part 3 of SAFTA, titled “Certification of Origin”, is at Appendix 4.7.

2. Policy and practice (1) All goods claimed to be the produce or manufacture of Singapore, for the purpose of

SAFTA, require a valid Certificate of Origin which must be completed before the goods are exported. The importer must possess this document before claiming duty-free entry and must produce it to Customs if and when requested.

(2) The Certificate of Origin must be issued by an authorised body. Currently, the only

authorised body is Singapore Customs. (3) The Certificate of Origin must specify the particular rule of origin applicable to the

goods. The rule specified in the Certificate of Origin must reflect the numbering system explained in 11.7.2 below.

(4) The Certificate of Origin must relate to the goods claiming preference and must be

signed by the exporter, manufacturer or producer. A Certificate of Origin will be valid for two years from the date of issue, provided it is first used within the first year of issue.

(5) There is no prescribed form for a Certificate of Origin. It should, however, be readily

identified as a “Preferential Certificate of Origin” and contain at least the following information:



(1) Certificate of Origin number issued by Customs Singapore

(2) name and address of the exporter;

(3) name and address of the consignee;

(4) departure date of the vessel or aircraft for Australia;

(5) name of the vessel or flight number of the aircraft;

(6) port of discharge of the goods;

(7) country of final destination;

(8) a dated and signed declaration by the exporter;

(9) marks and numbers on the packages containing the goods;

(10) number and kind of packages and description of the goods:

(11) quantity (and unit) of goods;

(12) abbreviation of the Rule of origin relied upon; and.

(13) certification by Customs Singapore.

(6) This information listed above is stated in Annex 2A (“Certificate of Origin

Requirements”) to SAFTA as being the minimum data requirement when applying for a Certificate of Origin. This annex is reproduced at Appendix 4.8.

(7) A sample “Preferential Certificate of Origin is also at Appendix 4.8. (8) If Customs finds that preference is inapplicable or that there is insufficient evidence to

justify the claim for preferential rates of duty, there will be a liability for the payment of any Customs duty that has been short paid. In these circumstances, there may also be a liability for an administrative penalty under section 243T of the Customs Act.

(9) If, after the time of entry, evidence becomes available to the owner that the goods are

ineligible for preferential rates of duty, the owner should, as soon as practicable after becoming aware of the error, voluntarily tender to Customs any short paid Customs duty. This action may protect the owner from potential penalty under section 243T of the Customs Act if Customs audit action has not commenced.

(10) Where a duty short payment results from incorrectly claimed preferential duty rates,

an administrative penalty will not be imposed if, at the time of entry of the goods, the owner had either:

• a Certificate of Origin or Declaration from the overseas manufacturer which stated that the preference criteria of Division 1B of the Customs Act had been met; or

• evidence of the relevant factory costs of the overseas manufacturer which indicated that the goods in question were eligible for preferential rates of duty.

(11) The protection from penalty would not apply, however, where:

• other information available to the owner indicated that the statement on the Declaration or Certificate of Origin from the manufacturer was incorrect;

• the party signing the Declaration/ Certificate of Origin was not the ‘overseas manufacturer’ - for instance, Customs would give no weight to a Declaration/ Certificate of Origin that is from a supplier who was not the manufacturer of the goods; or

• the Declaration/ Certificate of Origin could not be clearly related to the goods in question.



4.7.2 Certificate of Origin – administrative procedures

1. Preference codes - general (1) When claiming duty-free entry for goods that are the produce or manufacture of

Singapore under Division 1B, the preference code “P” will need to be input in the preference indicator field of the import entry. The Certificate of Origin number and the appropriate abbreviation for the rule of origin relied upon, as specified in the Certificate of Origin, should also be input on the goods description line of the entry, together with the description of the goods. The abbreviations to be used are:

RULE COVERAGE ABB. 1 Wholly obtained goods WO 2A Wholly manufactured goods that do not incorporate DMRM WMN 2B Wholly manufactured goods that incorporate DMRM WMD 3A Partly manufactured goods of Section (i) of Annex 2D, no accumulation P30A 3B Partly manufactured goods of Section (ii) of Annex 2D, no accumulation P30B 3C Other partly manufactured, goods, no accumulation P50 4A Partly manufactured goods of Section (i) of Annex 2D, accumulation A30A 4B Partly manufactured goods of Section (ii) of Annex 2D, accumulation A30B 4C Other partly manufactured goods, accumulation A50

(2) When claiming duty-free entry for goods that are the produce or manufacture of

Singapore under Division 1B, the preference code “P” will need to be input in the preference indicator field of the import entry. The Certificate of Origin number and the appropriate abbreviation for the rule of origin relied upon, as specified in the Certificate of Origin, should also be input on the goods description line of the entry, together with the description of the goods. The abbreviations to be used are:

2. Preference codes – rule 2B

(1) For rule 2B to be used, a DMRM must be granted by the customs administrations of

Singapore and Australia. The Singapore manufacturer seeking DMRM for materials for use or consumption in goods to be exported to Australia must apply to Singapore Customs. Applications accepted for processing by Singapore Customs will be referred to the Australian Customs Service (Customs). The issue of DMRMs is further addressed in Section 8.

(2) Applications received by Customs will be processed in accordance with procedures

similar to those adopted for DMRM under the Australia New Zealand Closer Economic Relations Trade Agreement (ANZCERTA). Those procedures are set out in a booklet titled “ANZCERTA Rules of Origin – Determined Manufactured Raw Materials (DMRM)”, which is available on the Customs website at www.customs.gov.au.

(3) Singapore DMRM will be published in Tariff Concession Gazettes. They will also be

listed in Appendix 3.8 of Australian Customs Manual Volume 8 – Valuation and Origin. The Manual and a copy of the Gazettes are available on the Customs website.

3. Preference codes – rules 3B or 4B

(1) Where rule 3B or 4B is used, the TCO number nominated in the Certificate of Origin

should also be specified on the goods description line of the import entry. Before claiming preference in this instance, the importer or broker will need to ensure that the TCO nominated in the Certificate of Origin applies to the goods and is still current. If the nominated TCO does not apply to the goods or is no longer current, duty-free entry cannot be claimed on the basis of the Certificate of Origin provided. Unless the importer possesses another Certificate of Origin that is valid for those goods, the goods will be ineligible for duty-free entry.




4.7.3 Declarations - requirements

1. Provisions

(1) Article 12 of Part 3 of SAFTA, “Claim for Preferential Tariff Treatment”, states that,

amongst other requirements covered above, the importer of goods must have “has a valid Certificate of Origin and a Declaration relevant to those goods in its possession when claiming preferential tariff treatment”.


(1) A separate Declaration must be completed by the exporter in Singapore for each

shipment to confirm that the goods contained in that shipment are the produce or manufacture of Singapore and are covered by a specific Certificate of Origin.

(2) There is no prescribed Declaration form for use by exporters, but such a document

must contain the following:

(a) a reference to the exporter’s invoice for the goods;

(b) a statement that the goods are identical to goods specified in a valid Certificate of Origin nominated in the Declaration;

(c) a statement that the goods are originating goods that comply with the rule specified in the nominated Certificate of Origin; and

(d) the signature, name and designation of the exporter’s representative, and the date the Declaration is signed.



Section 8: Determined manufactured raw materials (DMRM)

4.8.1 Certificate of Origin - requirements


(1) Section 153VA provides as follows:



(i) ……;

(j) ……;

(k) ……;

(l) materials imported into Singapore that the CEO has determined, by Gazette notice, to be manufactured raw materials of Singapore.


(1) Where goods would be wholly manufactured in Singapore but for materials that are

not available from within Australia or Singapore, the CEO may determine those materials to be the produce or manufacture of Singapore.

(2) No joint proceedings have been established in respect of the handling of DMRM

requests under SAFTA. However, for the purposes of this provision, the joint procedures developed for the handling of DMRM requests between Australia and New Zealand will be adopted for requests seeking determination of DMRMs under SAFTA. The procedures under ANZCERTA have been published in the booklet, Rules of Origin – Determined Manufactured Raw Materials (DMRM), which is available on the Internet at http://www.customs.gov.au (then go to “import/export”, then “rules of origin”, then open the PDF file titled “Australia–New Zealand ‘Determined manufactured Raw Materials’”.

(3) Procedures in considering a DMRM application will include consideration of the general

duty rate applicable to imports of the material into Australia, eligibility for a duty concession and the publication of a Gazette notice that allows Australian manufacturers of the material for which a DMRM is sought 21 days in which to object to the granting of a DMRM.









Section 9: Administrative procedures 4.9.1 Steps for determining preference entitlement

(1) Where preference entitlement is called into question, the following steps, in

accordance with Article 14 of Part 3 of SAFTA (“Origin Verifications”), will be taken to address the issue by Australian and/or Singapore Customs:

(i) Identify the goods on which preference has been claimed.

(ii) Identify the manufacturer producing the goods on which preference has been claimed.

(iii) Institute measures to establish the validity of the Certificate of Origin, Declaration or confirmation.

(iv) Issue written questionnaires to be completed by the exporter within a period of 30 days.

(v) Request the supply of records relating to the production, manufacture or export of the goods.

(vi) Visit the factory or premises of the producer, principal manufacturer, or exporter or any other party in Singapore associated with the production, manufacture, import or export, of the goods or of the materials or inputs used therein.



Section 10: SAFTA – exports from Australia to Singapore

4.10.1 Declaration by exporter


(1) The head of power requiring Australian exporters to provide a declaration when

exporting goods to Singapore for which preference is claimed is section 126AA of the Customs Act which states:

126AA Declaration concerning exports to Singapore

The regulations may prescribe the requirements on exporters relating to the making of declarations concerning the export of goods to Singapore for which preferential tariff is to be claimed.

(2) The Customs Regulations prescribe the requirements referred to in Section 126AA as

follows:

105A Exports to Singapore—declaration by exporter

(1) For section 126AA of the Act, this regulation sets out requirements on an exporter relating to the making of declarations concerning the export of goods to Singapore for which preferential tariff is to be claimed.

(2) If the exporter is not the producer or manufacturer of the goods, the exporter must, before making the declaration mentioned in subregulation (3):

(a) if the exporter was the applicant for the Certificate of Origin ― give a copy of the Certificate of Origin to the producer or manufacturer; and

(b) whether or not the exporter was the applicant for the Certificate of Origin ― obtain from the producer or manufacturer a written confirmation;

(i) specifying evidence of the sale of the goods to the exporter; and

(ii) specifying the Certificate of Origin in relation to the goods; and

(iii) stating that the goods are identical to goods that are specified in that Certificate of Origin ; and

(iv) stating that the goods comply with the rule specified in that Certificate of Origin; and

(v) specifying the name, designation and signature of the producer’s or manufacturer’s representative.

(3) The exporter must make a declaration, in writing, before the export of the goods:

(a) stating that the goods are the produce or manufacture of Australia, in accordance with SAFTA; and

(b) specifying the exporter’s invoice in relation to the goods; and

(c) specifying the Certificate of Origin in relation to the goods; and

(d) stating that the goods are identical to goods that are specified in that Certificate of Origin; and



(e) stating that the goods comply with the rule specified in

that Certificate of Origin; and

(f) specifying the name, designation and signature of the exporter’s representative; and

(g) specifying the date on which the declaration was signed by the exporter’s representative.

(4) In this regulation:

Certificate of Origin has the meaning given by section 153UA of the Act.

SAFTA has the meaning given by section 153UA of the Act.

2. Policy and practice (1) While Division 1B of Part VIII of the Customs Act specifies criteria that goods imported

into Australia need to meet to qualify for duty-free importation under SAFTA, the above provisions, together with sections 126AB, 126AC and 126AC of the Customs Act, and regulations 105B and 105C, place requirements on Australian exporters, producers and manufacturers exporting goods to Singapore when claiming preferential entry under SAFTA.

(2) Section 126AA of the Customs Act simply states that requirements may be placed on

Australian exporters claiming preferential tariff rates on goods they export to Singapore. Those requirements have been put in place by Regulation 105A.

(3) The basis for Regulation 105A is Article 11 of Part 3 of SAFTA (Certification of Origin).

Annex 2A of SAFTA (Certificate of Origin Requirements), which is reproduced at Appendix 4.8, outlines the procedure for applying for a Certificate of Origin and to which organisations such application may be lodged. The requirements espoused by Article 11 of Part 3 of SAFTA apply equally to Australian importers claiming preference on goods the manufacture or produce of Singapore.

(4) While there is no prescribed or approved form of presenting a Certificate of Origin for

goods exported from Australia, an example form is provided at Appendix 4.8. (5) Exports from Australia to Singapore not containing the required Certificate of Origin

would not be granted preferential tariff rates on importation into Singapore. 4.10.2 Record keeping obligations on Australian producers,

manufacturers and exporters

1. Statutory provisions (1) The head of power placing obligations on Australian producers, manufacturers and

exporters exporting goods to Singapore which claim preferential tariff rates in Singapore is section 126AB of the Customs Act which states:

126AB Record keeping obligations

Regulations may prescribe record keeping obligations

(1) The regulations may prescribe record keeping obligations that apply in relation to goods that:

(a) are exported to Singapore; and

(b) are claimed to be the produce or manufacture of Australia for the purpose or obtaining a preferential tariff in Singapore.



On whom obligations may be imposed

(2) Regulations for the purposes of subsection (1) may impose such obligations on a producer, manufacturer or exporter of goods.

(2) The Customs Regulations prescribe the record keeping obligations on producers and

manufacturers referred to in Section 126AB as follows:

105B Exports to Singapore—record keeping (producer or manufacturer)

(1) For section 126AB of the Act, this regulation:

(a) sets out record keeping obligations that apply in relation to goods that:

(i) are exported to Singapore; and

(ii) are claimed to be the produce or manufacture of Australia for the purpose of obtaining a preferential tariff in Singapore; and

(b) applies to the producer or manufacturer of the goods (whether or not the producer or manufacturer is the exporter of the goods).

(2) The producer or manufacturer must keep the following records:

(a) records of the purchase of the goods;

(b) evidence that payment has been made for the goods;

(c) evidence of the cost of the goods in the form sold to the buyer;

(d) evidence of the value of the goods;

(e) records of the purchase of all materials that were purchased for use or consumption in the production or manufacture of the goods;

(f) evidence that payment has been made for those materials;

(g) evidence of the cost of those materials in the form sold to the producer or manufacturer;

(h) evidence of the value of those materials;

(i) records of the production or manufacture of the goods;

(j) a copy of the Certificate of Origin in relation to the goods;

(k) if the producer or manufacturer has given a confirmation mentioned in paragraph 105A (2) (b) in relation to the goods to an exporter ― a copy of the declaration mentioned in paragraph 105A (3) in relation to the goods.

(3) If the producer or manufacturer is the exporter of the goods, the producer or manufacturer must keep the records required by subregulation (2) for a period of at least 5 years starting on the date of the declaration relating to the goods mentioned in subregulation 105A (3).

(4) If the producer or manufacturer is not the exporter of the goods, the producer or manufacturer must keep the records required by subregulation (2) for a period of at least 5 years starting on the date of the confirmation mentioned in paragraph 105A (2) (b) in relation to the goods.

(5) The producer or manufacturer:

(a) may keep a record under this regulation at any place (whether or not in Australia); and



(b) must ensure that:

(i) the record is kept in a form that would enable a determination of whether the goods are the produce or manufacture of Australia, in accordance with SAFTA; and

(ii) if the record is not in English ― the record is kept in a place and form that would enable an English translation to be readily made; and

(iii) if the record is kept by mechanical or electronic means ― the record is readily convertible into a hard copy in English.



SAFTA has the meaning given by section 153UA of the Act. (3) The Customs Regulations prescribe the record keeping obligations on an exporter,

where that exporter is not a producer or manufacturer, referred to in Section 126AB as follows:

105C Exports to Singapore—record keeping (exporter that is not producer or manufacturer)

(1) For section 126AB of the Act, this regulation:

(a) sets out record keeping obligations that apply in relation to goods that:

(i) are exported to Singapore; and

(ii) are claimed to be the produce or manufacture of Australia for the purpose of obtaining a preferential tariff in Singapore; and

(b) applies to the exporter of the goods that is not the producer or manufacturer of the goods).

(2) The exporter must keep the following records:

(a) records of the purchase of the goods by the exporter, including evidence that payment has been made for the goods;

(b) records of the purchase of the goods by the person to whom the goods are exported, including evidence that payment has been made for the goods;

(c) the confirmation mentioned in paragraph 105A (2) (b) given to the exporter by the producer or manufacturer;

(d) a copy of the declaration mentioned in subregulation 105A 3);

(e) a copy of the Certificate of Origin in relation to the goods.

(3) The exporter must keep the records required by subregulation (2) for a period of at least 5 years starting on the date of the declaration mentioned in subregulation 105A (3) in relation to the goods.

(4) The exporter:

(b) may keep a record under this regulation at any place (whether or not in Australia); and

(c) must ensure that:

(i) the record is kept in a form that would enable a determination of whether the goods are the produce or manufacture of Australia, in accordance with SAFTA; and



(ii) if the record is not in English ― the record is

kept in a place and form that would enable an English translation to be readily made; and

(iii) if the record is kept by mechanical or electronic means ― the record is readily convertible into a hard copy in English.



SAFTA has the meaning given by section 153UA of the Act.

2. Policy and practice (1) Article 11 of Part 3 of SAFTA (Certification of Origin) imposes responsibilities on

producers, manufacturers and exporters in both Australia and Singapore in regard to record keeping when goods are exported from one country to the other and claim preferential tariff.

(2) Those responsibilities, in so much as they apply to Australian producers,

manufacturers and exporters, are reflected in Australian legislation by section 126AB of the Customs Act and Regulation 105B (in respect of the responsibilities of Australian producers and manufacturers) and Regulation 105C (in respect of an Australian exporter who is not a producer or manufacturer).

(3) The records listed in the regulations are required to be retained by Australian

producers, manufacturers and exporters for a period of five (5) years starting at the date the declaration relating to and individual exportation on goods occurs.

(4) The records which are required to be kept specified in Regulation 105B (in respect of

the responsibilities of Australian producers and manufacturers) and Regulation 105C (in respect of an Australian exporter who is not a producer or manufacturer).

4.10.3 Power to require records


(1) Regulation 105B and Regulation 105C, cited above, place certain obligations on

producers, manufacturers and exporters in respect to record keeping. (2) Article 14 of Part 3 of SAFTA permits Australian authorities to verify the eligibility for

preferential tariff treatment in respect of imports into Australia. The power to undertake such verification in part afforded by section 126AC of the Customs Act which states:

126AC Power to require records

Requirements to produce records

(1) An authorised officer may require a person who is subject to record keeping obligations under regulations made for the purposes of section 126AB to produce to the officer such of those records as the officer requires.

Disclosing records to instrumentality or agency of Singapore

(2) An authorised officer may, for the purpose of verifying a claim for a preferential tariff in Singapore, disclose any records so produced to an instrumentality or agency in Singapore.




(1) Subsection 126AC(1) provides that an authorised officer may require a person who is

subject to record keeping obligations under Regulation 105B and Regulation 105 to produce such of those records that are required by Customs.

(2) “Authorised Officer” is defined in section 4 of the Customs Act and the CEO of Customs

has made authorisations for certain officers of Customs to perform the duties required by section 126AC.

(3) Under this power authorised officers may take action to verify the eligibility of goods

for preferential treatment, including requesting the supply of records relating to the production, manufacture or export of the goods.

(4) Subsection 126AC(2) further provides that an authorised officer may disclose any

records produced under subsection 126AC(1) to an instrumentality or agency of Singapore for verifying a claim for preferential tariff in Singapore.

(5) Section 16 of the Customs Administration Act 1985 prohibits the disclosure of

protected information except:

• as authorised by section 16; or

• as required or authorised by any other law; or

• in the course of performing the officer’s duties. (6) Records obtained by an authorised officer under this section would be protected

information within the meaning of section 16 of the Customs Administration Act 1985 and therefore cannot be disclosed to Singapore authorities except as allowed by that section.

(7) Any action undertaken by Australian Customs to verify eligibility for preferential tariff

treatment shall be completed and a written decision made within 90 days of the commencement of such action. Article 14 of part 3 of SAFTA further provides that written advice as to whether goods are eligible for preferential tariff treatment must be provided to all relevant parties within 10 days of the decision being made.

4.10.4 Power to ask questions


(1) In order to verify records kept by producers, manufacturers and exporters, section

126AD of the Customs Act permits authorised officers to ask questions of those same producers, manufacturers and exporters.

(2) Section 126AD of the Customs Act states:

126AD Power to ask questions

Power to ask questions

(1) An authorised officer may require a person who is an exporter, producer or manufacturer of goods that:

(a) are exported to Singapore; and;

(b) are claimed to be the produce or manufacture of Australia for the purpose of obtaining a preferential tariff in Singapore;

to answer questions in order to verify the origin of the goods.



Disclosing answers to instrumentality or agency of Singapore

(2) An authorised officer may, for the purpose of verifying a claim for preferential tariff in Singapore, disclose any answers to such questions to an instrumentality or agency of Singapore.


(1) This section provides that an authorised officer may require an Australian exporter,

producer or manufacturer of goods which are exported to Singapore, and are claimed to be the produce or manufacture of Australia for the purpose of claiming preferential tariff rates, to answer questions in order to verify the origin of the goods.

(2) This power is a necessary adjunct to the power to require records as legislated in

section 126AC of the Customs Act. (3) The disclosure of answers to questions asked by authorised officers is restricted to the

same extent as stated in paragraphs 4-6 in 4.10.3. above.



Appendix 4:1

GOODS PARTLY MANUFACTURED IN SINGAPORE

CLASSIFICATIONS OF GOODS NOT ELIGIBLE FOR ACCUMULATION AS PARTLY MANUFACTURED GOODS (ANNEX 2C TO SAFTA)

3917.22.00 4302 5408 5903 3917.23.00 4302 5501 5905 3917.29.00 4303 5502 5906 3917.21.10 4304 5503 5907 3917.31.10 5004 5504 5908 3917.32.10 5005 5505 5909 3917.33.10 5006 5506 5910 3917.39.10 5007 5507 5911 3926.30.10 5101 5508 6001 3926.90.10 5103 5509 6002 4009.11.10 5104 5510 6003 4009.12.10 5105 5511 6004 4009.21.10 5106 5512 6005 4009.22.10 5107 5513 6006 4009.31.10 5108 5514 6101 4009.32.10 5109 5515 6102 4009.41.10 5110 5516 6103 4009.42.10 5111 5601 6104 4010.31.00 5112 5602 6105 4010.32.00 5113 5603 6106 4010.33.00 5202 5604 6107 4010.34.00 5203 5605 6108 4010.39.00 5204 5606 6109 4011.10.00 5205 5607 6110 4011.20.00 5206 5608 6111 4012.11.00 5207 5609 6112 4012.20.00 5208 5701 6113 4015 5209 5702 6114 4016.91.00 5210 5703 6115 4016.93.00 5211 5704 6116 4016.99.00 5212 5705 6117 4101 5306 5801 6201 4102 5307 5802 6202 4103 5308 5803 6203 4104 5309 5804 6204 4105 5310 5805 6205 4106 5311 5806 6206 4107 5401 5807 6207 4113 5402 5808 6208 4114 5403 5809 6209 4115 5404 5810 6210 4203 5405 5811 6211 4204 5406 5901 6212 4205 5407 5902 6213




6214 7318.15.00 8483.90.00 8707.10.91 6215 7320.10.00 8483.10.91 8708.10.10 6216 7320.20.00 8483.40.90 8708.21.10 6217 7320.90.00 8483.50.90 8708.40.30 6301 7322.11.00 8501.10.00 8708.50.30 6302 7326.19.00 8503.00.00 8708.29.91 6303 7326.90.10 8507.10.10 8708.31.91 6304 8301.20.00 8507.90.10 8708.93.30 6305 8302.10.00 8511.10.00 8708.99.30 6306 8302.30.00 8511.30.00 8708.39.91 6307 8407.33.10 8511.40.10 8708.40.91 6308 8407.34.10 8511.50.10 8708.50.91 6309 8407.90.10 8511.80.00 8708.60.91 6310 8408.20.10 8511.90.00 8708.70.91 6401 8409.91.10 8512.20.00 8708.80.91 6402 8409.99.10 8512.30.00 8708.91.91 6403 8413.30.90 8512.40.00 8708.92.91 6404 8415.20.00 8512.90.10 8708.93.91 6405 8415.90.00 8519.92.00 8708.94.91 6406 8421.23.00 8519.93.00 8708.99.91 6501 8421.31.00 8519.99.00 9021.10.10 6502 8421.99.00 8527.21.00 9021.10.20 6503 8424.89.10 8527.29.00 9021.10.30 6504 8425.42.00 8536.50.93 9021.10.41 6505 8425.49.00 8539.10.90 9021.10.49 6506 8424.90.90 8544.30.00 9026.10.20 6507 8481.10.00 8703.21.19 9026.20.20 6812.90.30 8481.30.00 8703.22.19 9026.80.20 6813.10.10 8481.40.00 8703.23.19 9029.10.20 6813.90.10 8482.10.10 8703.24.19 9029.20.10 7007.11.11 8482.20.10 8703.31.19 9029.90.10 7007.21.11 8482.40.11 8703.32.19 9401.20.00 7009.10.10 8482.91.10 8703.33.19 9401.90.20 7014.00.20 8482.99.10 8703.90.19 9404 7113 8483.20.00 8706.00.10 9613.80.90 7114 8483.30.10 8706.00.91 7116 8483.40.11 8707.10.10 7117 8483.50.11 8707.90.10



Appendix 4:2

GOODS PARTLY MANUFACTURED IN SINGAPORE

TARIFF REFERENCES FOR CERTAIN ELECTRICAL AND ELECTRONIC PRODUCTS (ANNEX 2D TO SAFTA)

(GOODS TO WHICH THE 30% CONTENT RULE APPLIES)

8414.80 8504.23 8516.31 8539.22 8414.90 8504.31 8516.33 8539.29 8419.89 8504.32 8516.40 8539.31 8419.90 8504.33 8518.10 8539.32 8422.30 8504.34 8518.21 8539.39 8422.40 8504.40 8518.22 8539.41 8424.30 8504.50 8518.29 8539.49 8467.21 8504.90 8518.30 8539.90 8467.22 8505.11 8518.40 8540.72 8467.29 8505.19 8518.50 8540.79 8467.91 8506.80 8520.33 8540.89 8467.99 8509.10 8520.90 8543.20 8501.20 8509.20 8523.30 8543.30 8501.31 8509.90 8524.60 8543.90 8501.32 8511.20 8525.10 8544.49 8501.33 8513.10 8525.30 8544.51 8501.34 8514.10 8525.40 8545.20 8501.53 8514.20 8526.10 8546.10 8501.61 8514.30 8526.91 8548.10 8501.62 8514.40 8526.92 9001.10 8502.11 8514.90 8527.19 9006.10 8502.12 8515.11 8527.31 9008.30 8502.13 8515.19 8527.39 9010.90 8502.20 8515.21 8529.10 9017.20 8502.31 8515.31 8529.90 9017.80 8502.39 8515.80 8535.29 9018.11 8502.40 8515.90 8535.40 9031.10 8504.21 8516.21 8536.41 8504.22 8516.29 8536.49



.................................................................. Delegate of the Chief Executive Officer of Customs To: ..................................................................................………………...... IMPORTER

Appendix 4:3


Customs Act 1901

NOTICE UNDER SUBSECTION 153UC I, (state full name of delegate), delegate of the Chief Executive Officer under subsection 153UC of the Customs Act 1901, being satisfied that (inputs/materials/labour/overheads/ overseas processes – whichever is applicable) being (describe briefly) were received (free of charge/at a cost being (specify cost) that is less than the normal market value of the inputs/materials/labour/overheads/overseas processes – whichever is applicable), hereby notify you that I have determined the amount of (specify amount) to be the normal market value and that amount shall be treated as the amount (or part of the amount) paid by the manufacturer in respect of the (inputs/materials/labour/overheads/overseas processes – whichever is applicable). Dated this day of 20



Appendix 4:4

SAFTA

ANNEX 2B OF SAFTA – ALLOWABLE LABOUR COSTS AND OVERHEADS

Section (i): Labour Costs For the purposes of Article 7 (Calculation of Costs – Allowable Expenditure on Labour) of Chapter 3 (Rules of Origin), each of the following costs, to the extent that the cost relates to labour, is allowed:

(a) the cost of wages and employee benefits;

(b) the cost of supervision and training;

(c) the cost of management of the process of manufacture;

(d) the cost of receipt and storage of materials;

(e) the cost of quality control;

(f) the cost of packing of goods into inner containers;

(g) the cost of handling and storage of goods within the place or places in which a process is performed, that is operated by the principal manufacturer in the territory of the exporting Party.

Section (ii): Overheads

1. For the purposes of Article 8 (Calculation of Costs – Allowable Expenditure on Overheads)

of Chapter 3 (Rules of Origin), each of the following costs, to the extent that the cost relates to overheads is allowed:






(iv) accident compensation insurance; and


(c) the cost of dies, moulds, and tooling and the depreciation, maintenance and repair of plant and equipment;


(e) the cost of research, development, design and engineering;

(f) the cost of the following items in respect of real property in the territory of the exporting Party used in the manufacture of the goods:

(i) insurance;

(ii) rent and lease payments;



(v) maintenance and repair; and






(h) the cost of energy, fuel, water, lighting, lubricants, rags and other materials and supplies not directly incorporated in goods manufactured in the territory of the exporting Party;

(i) the cost of storage of goods at the place or places in which a process is performed, that is operated by the principal manufacturer in the territory of the exporting Party;

(j) the cost of royalties or licences in respect of patented machines or processes used in the manufacture of the goods or in respect of the right to manufacture the goods;


(l) the cost of the provision of medical care, cleaning services, cleaning materials and equipment, training materials and safety and protective clothing and equipment;


(n) the cost of subsidisation of a cafeteria in the place or places in which a process is performed, that is operated by the principal manufacturer in the territory of the exporting Party, to the extent not recovered by returns;

(o) the cost of security in the place or places in which a process in is performed, that is operated by the principal manufacturer in the territory of the exporting Party;


(q) the cost of contracting out part of the manufacturing process within Australia or Singapore, including any associated transport or storage costs;



(t) the cost of any tax in the nature of a fringe benefits tax; and

(u) the cost of transporting goods between places in the territory of the exporting Party in which one or more processes are performed by the principal manufacturer.

2. In working out a cost for the purposes of paragraph (1), the following costs are not

included:

(a) any cost or expense relating to the general expense of doing business (including, but not limited to, any cost or expense relating to insurance or to executive, financial, sales, advertising, marketing, accounting or legal services);


(c) the cost of international travel expenses, including fares and accommodation;

(d) the cost of the following items in respect of real property used by persons carrying out administrative functions:

(i) insurance;

(ii) rent and lease payments;



(v) maintenance and repair; and








(h) the profit of the principal manufacturer and the profit or remuneration of any trader, agent, broker or other person dealing in the goods after manufacture;

(i) any other cost incurred after the completion of all processes performed by, or on behalf of, the principal manufacturer; and

(j) the cost of processing goods in the territory of a non-Party.

3. For the purposes of paragraphs (1)(c) and (1)(f), the cost of depreciation of plant, equipment or buildings must be calculated in accordance with Generally Accepted Accounting Principles, as applied by the principal manufacturer.



Appendix 4:5

SAFTA

GAZETTAL OF DMRM APPLICATION UNDER PARAGRAPH 153VA(d)

___________________________________________________

SINGAPORE–AUSTRALIA FREE TRADE AGREEMENT

DETERMINED MANUFACTURED RAW MATERIALS

NOTICE NO. 2004/xx Notice is hereby given that application has been made for approval of goods, described hereunder, to be determined as manufactured raw materials in accordance with paragraph 153VA(d) of the Customs Act 1901.

Any person or company wishing to lodge an objection to Australia supporting this application should do so in writing on or before (day/month/year). Objections should be addressed to Manager Origin, Australian Customs Service, 5 Constitution Avenue, Canberra, ACT 2601, and be supported by information as to the quality, range, supply, etc. of identical goods, or of substitutable goods, produced in Australia.

Application No 04/1

Goods Tariff Classification

(Goods description) 1234.56.78

Any inquiries regarding this Notice should be directed to (name of Officer), Valuation and Origin Section on telephone (02) xxxx.xxxx, by facsimile on (02) xxxx xxxx or by e-mail at [email protected]. _____________________________________________________________________________________________________




SAFTA

GAZETTAL OF DMRM APPROVAL UNDER PARAGRAPH 153VA(d)

___________________________________________________

SINGAPORE–AUSTRALIA FREE TRADE AGREEMENT

DETERMINED MANUFACTURED RAW MATERIALS

NOTICE NO. 2004/xx

I, (full name of delegate), (position or title of Delegate), pursuant to paragraph 153VA(d) of the Customs Act 1901, determine the following materials to be manufactured raw materials of Singapore, with effect from the date specified against those materials:

Materials Tariff Reference Operative Date

(for information only) (Goods description) 1234.56.78 (day/month/year

Dated this day of 2004 (signed)

(Delegate of the Chief Executive Officer of Customs)



Appendix 4:6

CUSTOMS ACT 1901

DETERMINATION UNDER SUBSECTION 153VC(1)

MODIFYING SUBSECTION 153VB(2)

(SO THAT 30% SPECIFIED IN SUBSECTION 153VB(2) OR SUBSECTION 153VB(5) CAN BE READ AS 28%)

I, (state full name of delegate), delegate of the Chief Executive Officer under subsection 153VC(1) of the Customs Act 1901 (‘the Act’), being satisfied that:



(c) the unforeseen circumstance is unlikely to continue. hereby determine pursuant to subsection 153VC(1) of the Act that section 153VC of the Act has effect:



as if the reference in section 153VB of the Act to 30% is a reference to 28%. Dated this day of 20 .......................................... Delegate of the Chief Executive Officer of Customs




CUSTOMS ACT 1901

DETERMINATION UNDER SUBSECTION 153VC(2)

MODIFYING SUBSECTION 153VB(2)

(SO THAT 50% SPECIFIED IN SUBSECTION 153VB(2) OR SUBSECTION 153VB(5) CAN BE READ AS 48%)

I, (state full name of delegate), delegate of the Chief Executive Officer under subsection 153VC(2) of the Customs Act 1901 (‘the Act’), being satisfied that:



(c) the unforeseen circumstance is unlikely to continue. hereby determine pursuant to subsection 153VC(2) of the Act that section 153VC of the Act has effect:



as if the reference in section 153VB of the Act to 50% is a reference to 48%. Dated this day of 20 .......................................... Delegate of the Chief Executive Officer of Customs



Appendix 4:7

SAFTA

ARTICLE 11 OF SAFTA – CERTIFICATION OF ORIGIN

ARTICLE 11

Certification of Origin

1. The exporting Party shall provide the opportunity for a principal manufacturer, a producer or an exporter to apply to an authorised body referred to in Annex 2A (Certificate of Origin Requirements) for a Certificate of Origin.

2. An application for a Certificate of Origin and a Certificate of Origin shall meet the

requirements of Annex 2A (Certificate of Origin Requirements). 3. A Certificate of Origin shall be valid for multiple shipments of the goods described

therein that are exported within two years from the date of issue, provided that the first shipment occurs within the first year of issue and the Certificate of Origin has not been revoked.

4. The exporting Party may revoke a Certificate of Origin by notice in writing. A revoked

Certificate of Origin shall have no force from the date specified in that notice. 5. The exporting Party shall forward a copy of a notice revoking a Certificate of Origin to

the applicant for the Certificate of Origin and to the importing Party, immediately upon the issue of that notice.

6. The exporting Party shall require that an exporter of goods, for which preferential tariff

treatment is claimed, must declare in writing, prior to the export of those goods, that the goods are originating goods. The Declaration shall be completed by a representative of the exporter competent to make the Declaration and must include:

(a) a reference to the exporter’s invoice for the goods;

(b) a statement that the goods are identical to goods specified in a valid Certificate of Origin nominated in the Declaration;


(d) the signature, name and designation of the exporter’s representative, and the date the Declaration is signed.

7. Where the exporter of the goods is not the producer or principal manufacturer of the

goods, the exporting Party shall require that, prior to making a Declaration pursuant to Article 11.6, the exporter must ensure that the producer or principal manufacturer has a copy of the relevant Certificate of Origin and has obtained from that producer or principal manufacturer written confirmation that the goods are originating goods. The confirmation shall be completed by the representative of the producer or principal manufacturer who is competent to make the confirmation, and shall include:

(a) a reference to the evidence of sale of the goods between the producer or

principal manufacturer and the exporter;1

1 Evidence of sale in most cases would refer to an invoice number and not the purchase order number.




(b) a statement that the goods are identical to goods specified in a valid Certificate of Origin nominated in the confirmation;


(d) the signature, name and designation of the principal manufacturer’s representative, and the date the confirmation is signed.



Appendix 4:8

SAFTA

ANNEX 2A: CERTIFICATE OF ORIGIN REQUIREMENTS

1. Authorised Bodies The following bodies, and their successor bodies, are authorised to certify origin for the purposes of Section C (Documentary Evidence) of Chapter 3 (Rules of Origin).

AUSTRALIA SINGAPORE Australian Chamber of Commerce and Industry and affiliated bodies

International Enterprise Singapore (succeeded by Singapore Customs)

Australian Industry Group Any body authorised by the Government of Singapore, subject to the agreement of the Parties Any body authorised by the Government

of Australia, subject to the agreement of the Parties

2. Minimum data requirements – Application for Certificate of Origin The minimum data to be included in an application for a Certificate of Origin are:

1. Exporter (and Producer or Principal Manufacturer) details

The name, address and business number of the Exporter (and of the Producer or Principal Manufacturer if different from the Exporter).

2. First Shipment details (if known)

(a) Consignee name and address (b) Sufficient details to identify the consignment, such

as invoice number and date and Air Way Bill, Sea Way Bill or Bill of Lading

(c) Export Permit/Declaration (d) Port of Discharge

3. Full Description of the Goods

Detailed description of the goods, including the relevant code under the Harmonized Commodity Description and Coding System, and if applicable, product number and brand name.

4. Exporter Declaration Declaration completed by a competent representative of the Exporter that the details provided in items 1 to 3 above are true and correct, signed and dated by that representative and annotated with the representative’s name and designation.




3. Minimum data requirements – Certificate of Origin The minimum data to be included in the Certificate of Origin are:

1. Exporter details The name and address of the Exporter.

2. First Shipment details (if known)

(a) Consignee name and address (e) Sufficient details to identify the consignment, such as

invoice number and date and Air Way Bill, Sea Way Bill or Bill of Lading

(b) Export Permit/Declaration (d) Port of Discharge

3. Full Description of the Goods

Detailed description of the goods, including the relevant code under the Harmonized Commodity Description and Coding System, and if applicable, product number and brand name.

4. Exporter Declaration Declaration completed by a competent representative of the Exporter that the details provided in items 1 to 3 above are true and correct, signed and dated by that representative and annotated with the representative’s name and designation.

5. Certification by Authorised Body

Certification completed by a competent representative of the authorised body that, based on evidence provided by the producer or manufacturer, the goods specified in the Certificate of Origin originate in the exporting Party and comply with the rules of origin, as provided in Section A (Origin Conferment) of Chapter 3 (Rules of Origin) and specified in the Certificate of Origin. The Certificate of Origin must be signed and dated by the competent representative and annotated with the representative’s name and designation.

6. Certificate Number A unique number assigned to the Certificate of Origin by the authorised body




SAFTA

SAMPLE PREFERENTIAL CERTIFICATE OF ORIGIN

1 Exporter (Name & Address)

2 Consignee (Name, Full Address & Country)

REPUBLIC OF SINGAPORE

PREFERENTIAL CERTIFICATE OF ORIGIN

No.

NO UNAUTHORISED ADDITION/ALTERATION MAY BE MADE TO THIS CERTIFICATE

3 Departure Date

4 Vessel Name / Flight No.

5 Port of Discharge

6 Country of Final Destination

7 Country of Origin of Goods

8 DECLARATION BY THE EXPORTER We hereby declare that the details and statements provided in this Certificate are true and correct. Signature: ………………………………………………

Name: …………………………………………………..

Designation: …………………………………………….

Date: ………………………………………..

9 Marks & Numbers

10 No. & Kind of Packages Description of Goods (include brand names if necessary)

11 Quantity & Unit

12 CERTIFICATION BY THE COMPETENT AUTHORITY

We hereby certify that evidence has been produced to satisfy us that the goods specified above originates in the country shown in Box 7.

Documents

Volume 8B - International Trade Centre to GSP Count… · Australian Customs Service Manual Volume 8B Origin Curr1 ent as at 23/5/2005 Division 1: Introduction ... 3.2.2 Factory labour