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2016
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
CUSTOMS TARIFF AMENDMENT BILL 2016
EXPLANATORY MEMORANDUM
(Circulated by authority of the Assistant Minister for Immigration and Border Protection
the Honourable Alex Hawke MP)
Page 1 Customs Tariff Amendment Bill 2016
CUSTOMS TARIFF AMENDMENT BILL 2016
OUTLINE
The purpose of the Customs Tariff Amendment Bill 2016 (the Bill) is to make a number of
minor amendments to the Customs Tariff Act 1995 (the Tariff Act).
Repealing Schedule 1 of the Tariff Act
Schedule 1 to the Tariff Act lists those countries and places to which special
non-reciprocal rates of customs duty apply. The lists include Forum Island Countries,
countries that are least developed and several categories of developing countries.
Together these lists form Australia's System of Tariff Preference.
Certain goods that originate from countries listed in Schedule 1 are entitled to a
preferential rate of customs duty. For example, frozen sweet corn imported from Albania
would be subject to a preferential rate of customs duty (4 per cent) rather than the general
customs duty rate (5 per cent).
Amendments to these lists are made as required, for example, to update relevant lists
when new countries are formed or to amend lists to reflect new preferential arrangements.
The Bill will repeal Schedule 1 to the Tariff Act and will enable its content to instead be
included, with the same structure, in the Customs Tariff Regulations 2004 (the Customs
Tariff Regulations). This will enable to list of countries and places to be more easily
updated when required.
Repealing section 16A
The Thailand-Australia Free Trade Agreement contains safeguard provisions for certain
tuna products (including canned tuna) and certain pineapple products. The safeguard
provisions would have adjusted the customs duty rate of the relevant good back to the
general customs duty rate once a specified amount of the goods were imported from
Thailand. Activation of the safeguard provisions was at the discretion of the Minister for
Agriculture.
The safeguard provisions, which are provided for in section 16A of the Customs Tariff Act,
expired on 31 December 2008. Section 16A will therefore be repealed by the Bill.
Insertion of additional notes
The Bill will insert new Additional Notes into Chapters 7, 8 and 19 of Schedule 3 to the
Tariff Act. Additional Notes assist with the classification of goods and only have the force
of law for goods imported into Australia.
Recent decisions by the Administrative Appeals Tribunal have caused the Australian
interpretation of the classification of provisional preserved fruits and vegetables and
certain pastas to be misaligned with our international obligations and our major trading
partners. The three new Additional Notes provided for in this Bill will correct the treatment
of these goods.
Closure of the Enhance Project By-law Scheme
The Enhanced Project By-law Scheme (the Scheme) provides concessional tariff
treatment for eligible goods supporting the mining, resource processing, agriculture, food
processing, food packing, manufacturing, gas supply, water supply and power supply
industries.
Page 2 Customs Tariff Amendment Bill 2016
The closure of the Scheme to new applicants was announced in the 2016-17 Budget.
Active determinations continue to be valid until their pre-determined expiry date. The last
active determination will expire by 31 December 2017.
Item 44 of Schedule 4 to the Tariff Act provides for the Scheme. The text of this item will
be amended consistent with the 2016-17 Budget Measure, to place an end date of
31 December 2017 on this item. This is to provide clarity to importers.
FINANCIAL IMPACT STATEMENT
The closure of the Enhance Project By-law Scheme is expected to increase customs duty
collections by $220 million over the forward estimates.
2015-16 2016-17 2017-18 2018-19 2019-20
Revenue ($m) - 60.0 60.0 50.0 50.0
The other amendments in this Bill have no financial impact.
Page 3 Customs Tariff Amendment Bill 2016
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act
2011
CUSTOMS TARIFF AMENDMENT BILL 2016
This Bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011.
Overview of the Bill
The Customs Tariff Amendment Bill 2016 (the Bill) amends the Customs Tariff Act 1995
(the Tariff Act) to:
repeal Schedule 1 to the Tariff Act - Classes of countries and places to which
special rates apply, so that it can be included in the Customs Tariff Regulations
2004;
repeal Section 16A of the Tariff Act, which provides for the safeguard provisions of
the Thailand-Australia Free Trade Agreement which expired on
31 December 2008;
insert additional notes into Chapters 7, 8 and 19 of Schedule 3 to the Tariff Act, to
clarify the classification of certain fruits, vegetables and pastas; and
amend the text of Item 44 of Schedule 4 to the Tariff Act, to provide for an end date
for the Item.
Human rights implication
The Bill does not have any human rights implications.
Conclusion
The Bill is compatible with human rights.
ASSISTANT MINISTER FOR IMMIGRATION AND BORDER PROTECTION,
THE HONOURABLE ALEX HAWKE MP
Page 4 Customs Tariff Amendment Bill 2016
CUSTOMS TARIFF AMENDMENT BILL 2015
NOTES ON CLAUSES
Clause 1 - Short title
1. This clause provides for the Bill, when enacted, to be cited as the Customs Tariff
Amendment Act 2016.
Clause 2 - Commencement
2. Subclause (1) provides that each provision of this Act specified in column 1 of the
table in that subclause commences, or is taken to have commenced, on the day or at
the time specified in column 2 of the table. This subclause also provides that any
other statement in column 2 of the table has effect according to its terms.
3. Item 1 of the table provides that sections 1 to 3 and anything in this Act not
elsewhere covered by the table will commence on the day on which the Act receives
the Royal Assent.
4. Item 2 of the table provides that Schedule 1 either commences on a single date to be
fixed by Proclamation or if the provisions do not commence within the period of six
months beginning on the day after this Act receives the Royal Assent, they
commence on the day after the end of that period.
5. Subclause (2) provides that column 3 of the table contains additional information that
is not part of the Act.
Clause 3 - Schedules
6. This clause is the formal enabling provision for the Schedule to the Bill, providing
that each Act specified in a Schedule is amended in accordance with the applicable
items of the Schedule. In this Bill, the Customs Tariff Act 1995 (the Tariff Act) is
being amended.
7. The clause also provides that the other items of the Schedule have effect according
to their terms. This is a standard enabling clause for transitional, savings and
application items in amending legislation.
Page 5 Customs Tariff Amendment Bill 2016
SCHEDULE 1 - AMENDMENTS
Customs Tariff Act 1995
Items 1 to 5 and 8 to 10
8. Items 1 to 5 and 8 to 10 are to clarify existing references within the Tariff Act.
9. Items 1 and 3 to 5 and 8 to 10 replace references to 'Schedule 1' with 'to the
regulations' in sections 3, 12, 14, 16 and 18 of the Tariff Act. These amendments
complement the repeal of Schedule 1 to the Tariff Act and will allow its content to
instead be included in the Customs Tariff Regulations. Item 11 refers.
10. Item 2 clarifies the reference to 'column 1' in Section 12(a) to insert 'of the table'.
This amendment is consistent with the current wording in Sections 12(b) to (e).
Item 6 - Paragraph 16(1)(l)
11. Paragraph 16(1)(l) provides for the calculation of duty for Thai originating goods,
subject to the safeguard provisions of Section 16A of the Tariff Act.
12. Item 6 removes the qualification on the definition of Thai originating goods contained
in Paragraph 16(1)(l). This amendment reflects the repeal of Section 16A. Item 7
refers.
Item 7 - Section 16A
13. Section 16A provides for the safeguard provisions of the Thailand-Australia Free
Trade Agreement (TAFTA). Consistent with TAFTA, these provisions expired on
31 December 2008.
14. Item 7 repeals this section.
Item 11 - Schedule 1
15. Schedule 1 to the Tariff Act provides for classes of countries and places for which
special rates apply. The countries and places listed in the Parts 1 to 5 of Schedule 1
are entitled to preferential rates of customs duty for certain goods.
16. Item 11 repeals Schedule 1. The amendments in Items 1 to 5 and 8 to 10 will enable
its content to be included in the Customs Tariff Regulations, and will enable these
countries and places to be more easily updated when required.
Item 12 - Schedule 3 (Chapter 7, at the end of the Notes)
17. Chapter 7 of Schedule 3 to the Tariff Act provides for the classification of edible
vegetables and certain roots and tubers. The Notes to this Chapter assist with the
classification of certain goods.
18. Chapter 7 provides different classifications for vegetables that are preserved solely
for transportation and those vegetables which undergo a preservation technique in
order to make a new type of food. Examples of such changes include fermenting
cabbage into sauerkraut or pickling cucumbers into gherkins.
19. As a result of an Administrative Appeals Tribunal decision, Australia's treatment of
some of these goods is no longer in alignment with international classification
practice.
Page 6 Customs Tariff Amendment Bill 2016
20. Item 12 inserts a new Additional Note to clarify the classification of provisional
preserved vegetables to tariff heading 0711. This new Additional Note will ensure
that goods imported into Australia are classified in a consistent manner with
Australia's trading partners and its international obligations.
Item 13 - Schedule 3 (Chapter 8, at the end of the Notes)
21. Chapter 8 of Schedule 3 to the Tariff Act provides for the classification of edible fruit,
nuts and peel of citrus fruit and melons. The Notes to this Chapter assist with the
classification of certain goods.
22. Chapter 8 provides different classifications for fruits that are preserved solely for
transportation and those fruits which undergo a preservation technique in order to
make a new type of food. Examples of such changes include fruits steeped in
alcohol.
23. As a result of an Administrative Appeals Tribunal decision, Australia's treatment of
some of these goods is no longer in alignment with international classification
practice.
24. Item 13 inserts a new Additional Note to clarify the classification of provisional
preserved fruits and nuts to tariff heading 0812. This new Additional Note will ensure
that goods imported into Australia are classified in a consistent manner with
Australia's trading partners and its international obligations.
25. This Additional Note provides the same functionality for fruit, nuts and peel as
Item 12 does for vegetables.
Item 14 - Schedule 3 (Chapter 19, at the end of the Notes)
26. Chapter 19 of Schedule 3 to the Tariff Act provides for the classification of
preparations of cereals, flours, starch, or milk and pastrycooks' products. The Notes
to this Chapter assist with the classification of certain goods.
27. Under tariff heading 1902 in addition to the familiar Italian wheat noodles, the term
'pasta' is intended to cover other goods such as potato gnocchi, noodles of any
country and products made of noodle dough.
28. As a result of an Administrative Appeals Tribunal decision, Australia's treatment of
some of these goods is no longer in alignment with this international classification
practice.
29. Item 14 inserts a new Additional Note to clarify the breath of the term 'pasta' for the
purposes of tariff heading 1902. This new Additional Note will ensure that goods
imported into Australia are classified in a consistent manner with Australia's trading
partners and its international obligations.
Item 15 - Schedule 4 (table item 44)
30. Item 44 of Schedule 4 to the Tariff Act provides for the Enhanced Project By-law
Scheme. Under this item, goods that meet the necessary conditions are afforded a
concessional rate of customs duty.
31. The closure of the Enhanced Project By-law Scheme to new applicants was
announced in the 2016-17 Budget and was effective from 7.30pm on 3 May 2016.
Pre-existing determinations continue to be valid until their pre-determined expiry
date. All determinations will have expired by 31 December 2017.
Page 7 Customs Tariff Amendment Bill 2016
32. Item 15 amends the text to provide that Item 44 only applies in relation to goods
entered for home consumption on or before 31 December 2017.
Items 16 and 17
33. Items 16 and 17 amend references in the User's guide. These amendments reflect
the repeal of Schedule 1 to the Tariff Act. Item 11 refers.
34. Item 16 substitutes the reference to '12 Schedules' with a reference to 'several
Schedules'. Item 17 removes a reference to repealed Schedule 1.
Item 18 - Application provision
35. This item provides that the amendments made by Items 1 to 14 apply in relation to:
(a) goods imported into Australia on or after the commencement of this Schedule;
and
(b) goods imported into Australia before the commencement of this Schedule,
where the time for working out the rate of import duty on the goods had not yet
occurred before the commencement of this Schedule. The item therefore
provides that amendments to the Tariff Act contained in the Bill shall apply to
goods that were imported before commencement but not entered into home
consumption until on or after commencement.
Page 8 Customs Tariff Amendment Bill 2016