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2019-2020-2021
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
CUSTOMS TARIFF AMENDMENT (REGIONAL COMPREHENSIVE ECONOMIC
PARTNERSHIP AGREEMENT IMPLEMENTATION) BILL 2021
EXPLANATORY MEMORANDUM
(Circulated by authority of the Assistant Minister for Customs, Community Safety and
Multicultural Affairs, the Honourable Jason Wood MP)
CUSTOMS TARIFF AMENDMENT (REGIONAL COMPREHENSIVE ECONOMIC
PARTNERSHIP AGREEMENT IMPLEMENTATION) BILL 2021
OUTLINE
The purpose of the Customs Tariff Amendment (Regional Comprehensive Economic
Partnership Agreement Implementation) Bill 2021 (the Bill) is to amend the Customs Tariff
Act 1995 (the Customs Tariff Act) to implement the Regional Comprehensive Economic
Partnership Agreement (the Agreement). The Bill will achieve this by:
providing a 'Free' rate of customs duty for goods that are RCEP originating goods
(other than goods listed in new Schedule 14), with effect from entry into force of
the Agreement for Australia;
inserting a new Schedule 14 to: (i) specify the phasing rates of customs duty for
certain RCEP originating goods that will incrementally reduce to 'Free' by, at the
latest, the 19th calendar year after the Agreement enters into force for Australia;
(ii) maintain rates of customs duty on certain alcohol, tobacco and petroleum
products equivalent to the rates of excise duty payable on the same good when
locally manufactured; and (iii) maintain rates of customs duty on certain goods
consistent with the negotiated outcomes of the Agreement; and
amending Schedule 4 to maintain customs duty rates for certain RCEP originating
goods in accordance with the applicable concessional items.
The Customs Amendment (Regional Comprehensive Economic Partnership Agreement
Implementation) Bill 2021 (the Customs Amendment Bill) will make complementary
amendments to the Customs Act 1901 (the Customs Act) to introduce new rules of origin for
goods imported into Australia from a Party to the Agreement. The new rules will determine
whether goods are RCEP originating goods and therefore eligible for preferential customs
duty treatment in accordance with the Agreement. These rules will be set out in new
Division 1N of Part VIII of the Customs Act.
FINANCIAL IMPACT STATEMENT
The 2020-21 Mid-Year Economic and Fiscal Outlook estimated that implementing the
Agreement will have no impact on customs duty receipts.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
A Statement of Compatibility with Human rights in respect of the amendments contained in
the Bill is at Attachment A. The Statement assesses the amendments to be compatible with
Australia's human rights obligations.
REGULATION IMPACT STATEMENT
A Regulation Impact Statement for the Agreement, covering the tariff amendments, is
contained in the Explanatory Memorandum for the Customs Amendment Bill.
Page 2 Customs Tariff Amendment (Regional Comprehensive Economic Partnership Agreement
Implementation) Bill 2021
CUSTOMS TARIFF AMENDMENT (REGIONAL COMPREHENSIVE ECONOMIC
PARTNERSHIP AGREEMENT IMPLEMENTATION) BILL 2021
NOTES ON CLAUSES
Clause 1 Short title
1. This clause provides for the 'Customs Tariff Amendment (Regional Comprehensive
Economic Partnership Agreement Implementation) Bill 2021' (the Bill), when enacted, to be
cited as the Customs Tariff Amendment (Regional Comprehensive Economic Partnership
Agreement Implementation) Act 2021.
Clause 2 Commencement
2. This clause sets out, in a table, the date on which provisions of the Bill, when enacted, will
commence.
3. Table item 1 provides for clauses 1 to 3 and anything in the Bill not elsewhere covered by the
table to commence on the day the Bill receives the Royal Assent.
4. Table item 2 provides for Schedule 1 of the Bill to commence at the same time as Schedule 1
to the Customs Amendment (Regional Comprehensive Economic Partnership Agreement
Implementation) Act 2021.
5. In accordance with the commencement provision for the Customs Amendment (Regional
Comprehensive Economic Partnership Agreement Implementation) Act 2021, the Minister
must announce the day on which the Agreement enters into force for Australia by notifiable
instrument. However, the provisions do not commence at all if the Agreement does not enter
into force for Australia.
6. Table item 3 provides for Schedule 2 of the Bill to commence at the later of: (a) immediately
after the commencement of the provisions covered by table item 2; and (b) immediately after
the commencement of the Customs Tariff Amendment (2022 Harmonized System Changes)
Act 2021 (the Harmonized System Tariff Amendment Act).
7. Schedule 2 of the Bill will update the tariff classification codes to which goods in new
Schedule 14 are classified. That is, from the tariff classification codes of the 2017 version of
the Harmonized Commodity Description and Coding System (the Harmonized System) to the
tariff classification codes of the 2022 version of that System.
8. However, Schedule 2 of the Bill does not commence if the Harmonized System Tariff
Amendment Act implementing the 2022 version of the Harmonized System is not enacted.
Clause 3 Schedules
9. This clause enables the Schedules of the Bill, when enacted, to amend or repeal provisions of
legislation specified in that Schedule in accordance with the applicable items. The Customs
Tariff Act 1995 (the Customs Tariff Act) is being amended by the Bill.
Page 3 Customs Tariff Amendment (Regional Comprehensive Economic Partnership Agreement
Implementation) Bill 2021
Schedule 1-Amendments
Customs Tariff Act 1995
Introductory Comments
10. On 15 November 2020, the Hon. Simon Birmingham, former Minister for Trade, Tourism
and Investment, and his counterparts from Brunei Darussalam, Cambodia, Indonesia, Lao
People's Democratic Republic, Malaysia, Myanmar, Philippines, Singapore, Thailand,
Viet Nam, China, Japan, New Zealand and Republic of Korea signed the Regional
Comprehensive Economic Partnership Agreement (the Agreement).
11. The Agreement includes rules of origin to determine whether goods imported into Australia
are originating goods (referred to as 'RCEP originating goods'). Such goods are subject to
preferential rates of customs duty under the amendments to the Customs Tariff Act proposed
by the Bill. These rules of origin are inserted by the Customs Amendment (Regional
Comprehensive Economic Partnership Agreement Implementation) Bill 2021 and are
contained in new Division 1N of Part VIII of the Customs Act 1901 (the Customs Act).
12. The Bill sets out customs duty rates for RCEP originating goods in accordance with the
Agreement. For goods classified to the tariff subheadings listed in new Schedule 14 inserted
by the Bill, the customs duty rate would accord with Article 2.4 of Chapter 2 of the
Agreement. For goods classified to tariff subheadings not listed in new Schedule 14,
a preferential customs duty rate of 'Free' will apply in accordance with Annex 3A to
Chapter 3 of the Agreement.
Item 1 Subsection 3(1) (at the end of the definition of rate column)
13. This item amends the definition of 'rate column' in subsection 3(1) of the Customs Tariff Act
to include a reference to the third column of the table in new Schedule 14.
14. New Schedule 14 will set out the rates of customs duty for RCEP originating goods classified
to tariff subheadings listed in that Schedule.
Item 2 Subsection 9(1)
15. This item amends subsection 9(1) of the Customs Tariff Act to insert a reference to new
Schedule 14.
16. This amendment allows ad valorem rates of custom duty that apply to RCEP originating
goods to be specified in the "rate column" in new Schedule 14 of the Customs Tariff Act.
Items 3 to 5
17. Section 11 of the Customs Tariff Act sets out the rules for determining when a phasing rate of
customs duty has effect. The amendments made by these items provide for phasing rates of
customs duty for RCEP originating goods.
Page 4 Customs Tariff Amendment (Regional Comprehensive Economic Partnership Agreement
Implementation) Bill 2021
18. Item 3 inserts new paragraph 11(1)(bj) into the Customs Tariff Act to include a reference to a
rate of customs duty set out in the third column of an item in the table in new Schedule 14 of
the Customs Tariff Act that applies to the goods.
19. Item 4 inserts new paragraph 11(1)(n) into the Customs Tariff Act to include a reference to
the third column of an item in the table in new Schedule 14 that applies to RCEP originating
goods.
20. Item 5 inserts new paragraph 11(2)(bj) into the Customs Tariff Act to include a reference to a
rate of customs duty set out in the third column of an item in the table in new Schedule 14 of
the Customs Tariff Act that applies to RCEP originating goods.
Item 6 After section 13K
21. This item inserts new section 13L into the Customs Tariff Act, which sets out when goods are
RCEP originating goods for the purposes of the Customs Tariff Act.
22. Goods are RCEP originating goods if, and only if, they are RCEP originating goods under
Division 1N of Part VIII of the Customs Act. New Division 1N, inserted by the Customs
Amendment (Regional Comprehensive Economic Partnership Agreement Implementation)
Bill 2021, sets out the new rules of origin for determining whether goods are RCEP
originating goods.
Item 7 After subparagraph 16(1)(a)(xi)
23. This item inserts new subparagraph 16(1)(a)(xii) into the Customs Tariff Act.
24. Section 16 of the Customs Tariff Act sets out how duty is to be worked out, including for
goods that are originating goods of particular countries. Paragraph 16(1)(a) specifies that,
where goods are not the produce or manufacture of a Preference Country, or are not
originating goods under a Free Trade Agreement (FTA), the duty must be worked out by
reference to the general rate set out in the third column of the tariff classification in
Schedule 3 to the Customs Tariff Act, under which the goods are classified.
25. The purpose of new subparagraph 16(1)(a)(xii) is to ensure that the general rate of customs
duty set out in Schedule 3 does not apply to RCEP originating goods.
Item 8 At the end of subsection 16(1)
26. Item 8 inserts new paragraph 16(1)(t) into the Customs Tariff Act. New paragraph 16(1)(t)(i)
provides that where RCEP originating goods are classified to a tariff subheading in
Schedule 3 that is specified in column 2 of an item in the table in new Schedule 14, the rate
of customs duty on the goods is to be calculated by reference to the rate of duty set out in
column 3 of the relevant item in Schedule 14.
27. However, where RCEP originating goods are not classified to a tariff subheading listed in
new Schedule 14, new paragraph 16(1)(t)(ii) provides for such goods to be subject to a
customs duty rate of 'Free,' in accordance with Article 2.4 of Chapter 2 of the Agreement and
Annex 3A to Chapter 3 of the Agreement.
Page 5 Customs Tariff Amendment (Regional Comprehensive Economic Partnership Agreement
Implementation) Bill 2021
Item 9 After subsection 16(4AB)
28. This item inserts new subsection 16(4A) and 16(4B) into the Customs Tariff Act.
29. New subsection 16(4A) provides that a reference to year 2, 3, 4, 5, 7, 10, 11, 13, 15, 16, 17,
18, 19 and 20 in new Schedule 14 for RCEP originating goods, is a reference to the first,
second, third, fourth, sixth, ninth, tenth, 12th, 14th, 15th, 16th, 17th, 18th and 19th calendar year,
respectively, after this subsection commences.
30. This subsection commences when the Agreement enters into force for Australia. This accords
with the General Notes under Annex I and the Schedule of Australia under that Annex, and is
relevant to when phasing rates for certain RCEP originating goods come into effect. For
example:
RCEP originating goods
Column 1 Column 2 Column 3
Item Heading or subheading Rate
in Schedule 3
263 3808.59.90 4%
(prescribed goods only) From 1 January of year 3: 3%
From 1 January of year 5: 2%
From 1 January of year 7: Free
31. If the Agreement enters into force after 1 January 2022, the rate of duty will be 4 per cent
from entry into force and will decrease to 3 per cent on 1 January 2024 (as 2024 would be the
second calendar year after entry into force), and will reduce further to 2 per cent on
1 January 2026, and will become 'Free' on 1 January 2028 (as 2028 will be the sixth calendar
year after entry into force). See the notes for item 24 of the Bill with respect to the
consideration of the most favoured nation applied rates of customs duty that applies to goods
listed under new Schedule 14.
32. New subsection 16(4B) provides that if column 2 of an item in the table in new Schedule 14
includes the reference to '(prescribed goods only)', subparagraph (1)(t)(i) will not apply to
those goods unless the goods are also prescribed for the purposes of that item. Where goods
are not prescribed for any of such table item, the relevant goods are subject to a 'Free' rate of
customs duty.
33. New Schedule 14 contain several table items for tariff subheadings that include the reference
to '(prescribed goods only)' where the same tariff heading or subheading is subject to
different preferential rates of customs duty.
34. For example, table items 1542, 1543 and 1544 set out different rates of customs duty for
different prescribed goods classified to subheading 8703.40.19.
Page 6 Customs Tariff Amendment (Regional Comprehensive Economic Partnership Agreement
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RCEP originating goods
Column 1 Column 2 Column 3
Item Heading or subheading Rate
in Schedule 3
1542 8703.40.19 5%
(prescribed goods only) From 1 January of year 11: 4%
From 1 January of year 13: 3%
From 1 January of year 16: 2%
From 1 January of year 18: 1%
From 1 January of year 20: Free
1543 8703.40.19 4%
(prescribed goods only) From 1 January of year 3: 3%
From 1 January of year 5: 2%
From 1 January of year 7: Free
1544 8703.40.19 4%
(prescribed goods only) From 1 January of year 3: 3%
From 1 January of year 5: 2%
From 1 January of year 7: 1%
From 1 January of year 10: Free
35. In these circumstances, a table item only applies where goods are prescribed for that item and
does not apply where goods are prescribed in relation to the same tariff subheading but for
another table item.
Items 10 to 12
36. Schedule 4 to the Customs Tariff Act lists items where a concessional rate of customs duty is
provided for particular goods and section 18 sets out how concessional rates of customs duty
are calculated. In particular, subsection 18(1) provides for a concessional rate of customs
duty to apply only where the rate is less than that, which would otherwise apply under
Schedules 3 and the Schedules that provide for preferential rates for originating goods under
an agreement to which Australia is a party.
37. Item 10 inserts new paragraph 18(1)(k) into the Customs Tariff Act. This paragraph will
specify that a concessional item in Schedule 4 only applies to goods if the duty is lower than
the duty payable under new Schedule 14. This provision is consistent with the similar
provision for other Schedules to the Customs Tariff Act for other FTAs.
38. Paragraph 18(2)(a) provides that, if the goods are not the produce or manufacture of a
preference country, or a country to which a FTA applies, the duty must be worked out by
reference to the general rate set out in the third column of an item in Schedule 4 that applies
to the goods.
39. Item 11 inserts new subparagraph 18(2)(a)(xii) into the Customs Tariff Act which provides
that the general rate of customs duty set out in Schedule 4 will not apply to RCEP originating
goods.
Page 7 Customs Tariff Amendment (Regional Comprehensive Economic Partnership Agreement
Implementation) Bill 2021
40. Item 12 inserts new paragraph 18(2)(t) into the Customs Tariff Act to set out how customs
duty is calculated for goods that are RCEP originating goods and that are subject to a
concessional item in Schedule 4 of that Act. This new paragraph provides that, if the goods
are RCEP originating goods and 'RCEP' is specified in the third column of an item in
Schedule 4, the amount of duty is calculated by reference to that customs duty rate. If there is
no such rate specified, the rate of customs duty is 'Free'.
Item 13 Paragraph 19AAC(1)(b)
41. Section 19 of the Customs Tariff Act provides for the automatic indexation of certain excise
equivalent customs duty rates in line with movements in the Consumer Price Index (CPI) in
February and August of each year. The goods to which automatic indexation applies are
certain alcohol and fuel products.
42. For this purpose, section 19AAC of the Customs Tariff Act includes a table that specifies the
fuel products subject to biannual indexation under section 19 of the Customs Tariff Act.
43. This item amends paragraph 19AAC(1)(b) of the Customs Tariff Act to insert a reference to
new Schedule 14 so that indexation under section 19 applies to the rates of excise equivalent
customs duty for those fuel products that are RCEP originating goods.
Item 14 Paragraph 19AA(b)
44. Section 19AA of the Customs Tariff Act includes a table, which sets out the alcohol products
subject to biannual indexation for the purposes of section 19 of the Customs Tariff Act.
45. This item amends paragraph 19AA(b) of the Customs Tariff Act to insert a reference to new
Schedule 14 so that the indexation provisions in section 19 of the Customs Tariff Act apply to
the rates of excise equivalent customs duty for those alcohol products that are RCEP
originating goods.
Item 15 Paragraph 19AC(b)
46. Section 19AB of the Customs Tariff Act provides for the automatic indexation of certain
excise equivalent rates of duty in line with movements in the full-time adult average weekly
ordinary time earnings (AWOTE), in March and September of each year. The goods to which
this automatic indexation applies are tobacco products.
47. For this purpose, section 19AC of the Customs Tariff Act contains a table that sets out the
tobacco products subject to biannual indexation under section 19AB of the Customs Tariff
Act.
48. This item amends paragraph 19AC(b) of the Customs Tariff Act to insert a reference to new
Schedule 14 so that the indexation provisions in section 19AB apply to the rates of excise
equivalent customs duty for those tobacco products that are RCEP originating goods.
Page 8 Customs Tariff Amendment (Regional Comprehensive Economic Partnership Agreement
Implementation) Bill 2021
Item 16 Paragraph 19ACA(1)(b)
49. Section 19ACA of the Customs Tariff Act provides for a list of tobacco products that are not
covered by section 19AC of the Customs Tariff Act, specifically tobacco products where the
amount of customs duty is determined by the weight of the product or the weight of the
tobacco content in the product.
50. For goods classified to a subheading listed in section 19ACA, the rate of customs duty is
amended biannually on the same day as the tobacco products listed in section 19AC. The
applicable rate is determined with reference to the indexed rate associated with tariff
subheading 2402.20.20 adjusted by the relevant annual weight conversion factor provided for
in subsection 19ACA(2).
51. This item amends paragraph 19ACA(1)(b) of the Customs Tariff Act to insert a reference to
new Schedule 14 so that the indexation provisions in section 19AB of that Act apply to the
rates of excise equivalent customs duty for those tobacco products that are RCEP originating
goods.
Item 17 Schedule 4 (table item 17A, column headed "Rate of duty")
52. Table item 17A of Schedule 4 to the Customs Tariff Act provides for a concessional rate of
customs duty for goods produced in Australia that have been exported and returned to
Australia in an unaltered condition containing one or more components defined as 'tradex
components', 'drawback components' or 'excise components' within the meaning of the table
item on which taxes or charges to the Commonwealth are owing.
53. For goods that satisfy these criteria, the rate of concessional customs duty is determined to be
the amount that would apply to each tradex component, drawback component and excise
component if imported separately. For excise components, duty that is determined by
reference to a percentage of the value of the good is to be disregarded.
54. This item amends the rate column of table item 17A of Schedule 4 to the Customs Tariff Act
to insert a reference to 'RCEP' so that the concessional rate of customs duty applies to RCEP
originating goods that satisfy the eligibility criteria.
Item 18 Schedule 4 (table item 20, column headed "Description of goods",
paragraph (d))
55. Table item 20 of Schedule 4 to the Customs Tariff Act provides a concessional rate of
customs duty for goods prescribed by by-law being goods exported for repair or renovation
that are not new or upgraded versions of the exported goods, for which the duty on the good
applied under a specified Schedule of the Customs Tariff Act is worked out by reference to a
percentage of the value of the goods.
56. For goods that satisfy these criteria, a concessional rate of customs duty of 'Free' applies to
the value of the good that was exported and the applicable percentage set out in a specified
Schedule of the Customs Tariff Act applies to the value of the repair or renovation.
Page 9 Customs Tariff Amendment (Regional Comprehensive Economic Partnership Agreement
Implementation) Bill 2021
57. This item amends paragraph (d) of the description column of table item 20 of Schedule 4 to
the Customs Tariff Act to insert a reference to Schedule 14 so that the concessional rate of
customs duty applies to RCEP originating goods that satisfy the eligibility criteria.
Item 19 Schedule 4 (table item 20, column headed "Rate of duty")
58. This item amends the rate column of table item 20 of Schedule 4 to the Customs Tariff Act to
insert a reference to "RCEP" so that the concessional rate of customs duty applies to RCEP
originating goods that satisfy the eligibility criteria.
Item 20 Schedule 4 (table item 22, column headed "Rate of duty")
59. Table item 22 of Schedule 4 to the Customs Tariff Act provides a concessional rate of
customs duty for goods prescribed by by-law being containers used to import goods that will
be exported without being put to any other use.
60. For goods that satisfy these criteria, a concessional rate of customs duty of 'Free' applies.
Table item 22 further provides that the goods imported on or in such containers are subject to
the rate of customs duty that would apply to the goods if they had been imported separately.
61. This item amends the rate column of table item 22 of Schedule 4 to the Customs Tariff Act to
insert references to "RCEP" so that the concessional rate of customs duty applies to RCEP
originating goods that satisfy the eligibility criteria.
Item 21 Schedule 4 (table item 45, column headed "Rate of duty")
62. Table item 45 of Schedule 4 to the Customs Tariff Act provides a concessional rate of
customs duty for goods prescribed by by-law, being original components of a completed
machine or equipment that would be classified to a single tariff classification in Chapters 84
to 87 inclusive, or Chapters 89 to 90 inclusive, ordered and shipped from a single overseas
supplier at the same time that arrive in Australia on two or more vessels or aircraft.
63. Table item 45 does not apply to goods to which table item 44 of Schedule 4 to the Customs
Tariff Act applies.
64. For goods that satisfy these criteria the rate of customs duty that would apply to the
completed machine or equipment applies.
65. This item amends the rate column of table item 45 of Schedule 4 to the Customs Tariff Act to
insert a reference to "RCEP" so that the concessional rate of customs duty applies to RCEP
originating goods that satisfy the eligibility criteria.
Item 22 Schedule 4 (table item 50, column headed "Rate of duty")
66. Table item 50 of Schedule 4 to the Customs Tariff Act provides a concessional rate of
customs duty for goods that are subject to a Tariff Concession Order (TCO). A TCO made by
the Comptroller-General of Customs under Part XVA of the Customs Act grants a
concessional rate of customs duty for the goods meeting the description set out in the TCO.
Page 10 Customs Tariff Amendment (Regional Comprehensive Economic Partnership Agreement
Implementation) Bill 2021
67. For goods subject to a TCO the concessional rate of customs duty that applies is determined
by the tariff classification of the goods.
68. This item amends the rate column of table item 50 of Schedule 4 to the Customs Tariff Act to
insert references to "RCEP" so that the concessional rate of customs duty applies to RCEP
originating goods that are described in a TCO.
Item 23 Schedule 4 (table item 53, at the end of the column headed "Rate of duty")
69. Table item 53 of Schedule 4 to the Customs Tariff Act provides a concessional rate of
customs duty for goods of tariff subheading 3819.00.00 that are exempt from the Product
Stewardship Oil Levy.
70. Table item 53 does not apply to goods to which table item 50 of Schedule 4 to the Customs
Tariff Act applies.
71. For goods that satisfy this criteria the concessional rate of customs duty of 5 per cent applies.
72. The item amends the rate column of table item 53 of Schedule 4 to the Customs Tariff Act to
insert a reference to "RCEP:5%" so that the concessional rate of customs duty applies to
RCEP originating goods.
Item 24 At the end of the Act
73. This item inserts new Schedule 14 into the Customs Tariff Act to provide for
excise-equivalent rates of duty on certain alcohol, tobacco, fuel and petroleum products and
for preferential rates of customs duty and phasing rates of customs duty in accordance with
the Agreement that applies to certain goods.
74. Section 16 of the Customs Tariff Act, as amended by items 7 and 8 of Schedule 1 to the Bill,
provides that the customs duty rate for RCEP originating goods is 'Free' unless a customs
duty rate is specified for those goods in new Schedule 14.
75. Article 2.4 of Chapter 2 of the Agreement provides in part that, except as otherwise provided
in the Agreement, each Party shall reduce or eliminate its customs duties on originating
goods of other Parties in Accordance with its Schedule in Annex I. The Schedule of Australia
under Annex I of the Agreement sets out the tariff commitments, for Australia, under that
Agreement in relation to the reduction of tariffs in stages.
76. Table items 1 to 5, 7 to 24, 26 to 37, 39, 41 to 43, 55 to 59, 61 to 77, 80 to 87, 89, 90, 104
to 107, 111, 113, 128 to 132, 137, 186 to 189, 191 to 194, 201 to 240, 249 to 270, 273, 274,
276 to 286, 289 to 300, 303 to 309, 313, 315, 317 to 321, 323 to 328, 330 to 345, 347 to 349,
351, 354, 356 to 358, 360 to 364, 366 to 383, 385 to 388, 391, 392, 394 to 437,439 to 475,
477 to 505, 507 to 580, 582 to 1124, 1127 to 1148, 1150 to 1152, 1154 to 1160, 1162, 1164
to 1170, 1172, 1174, 1176 to 1197, 1199 to 1231, 1234 to 1262, 1265 to 1276, 1278 to 1280,
1282 to 1288, 1290 to 1295, 1298 to 1316, 1318 to 1326, 1328 to 1331, 1334 to 1336, 1339
to 1355, 1357, 1360, 1361, 1363 to 1372, 1375 to 1379, 1381, 1384 to 1386, 1388 to 1429,
1433, 1436, 1440 to 1443, 1445, 1446, 1448 to 1462, 1465, 1467 to 1469, 1471 to 1505,
1512 to 1590, 1592 to 1597, 1601 to 1607, 1610, 1612, 1613, 1615 to 1617, 1619 to 1627,
1630, 1636 to 1640, 1643 to 1655, 1657, 1658, 1662 to 1664, 1667 to 1672, and 1674 to 1687
Page 11 Customs Tariff Amendment (Regional Comprehensive Economic Partnership Agreement
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in new Schedule 14 reduce the ad valorem component of customs duty on RCEP originating
goods in accordance with the staging categories specified in the Schedule for Australia under
Annex I of the Agreement. By 1 January of the 19th calendar year after the Agreement enters
into force, the ad valorem component of the customs duties on all RCEP originating goods in
these table items will be eliminated.
77. Table items 6, 25, 38, 40, 190, 310 to 312, 314, 316, 322, 329, 346, 350, 355, 352, 353, 359,
365, 384, 389, 390, 393, 438, 476, 506, 581, 1125, 1126, 1149, 1153, 1161, 1163, 1171,
1173, 1175, 1198, 1232, 1233, 1263, 1264, 1277, 1281, 1289, 1296, 1297, 1317, 1327, 1332,
1333, 1337, 1338, 1356, 1358, 1359, 1362, 1373, 1374, 1380, 1382, 1383, 1387, 1430, 1431,
1432, 1434, 1435 1437 to 1439, 1444, 1447, 1463, 1464, 1466, 1470, 1506 to 1511, 1591,
1598 to 1600, 1608, 1609, 1611, 1614, 1618, 1628, 1629, 1631 to 1635, 1641, 1642, 1656,
1659 to 1661, 1665, 1666, 1673, 1688, 1689 and 1690 in new Schedule 14 maintain the
customs duty on RCEP originating goods in accordance with the commitments made in the
Schedule for Australia under Annex I of the Agreement. As such, the customs duties on
RCEP originating goods classified to the tariff subheadings listed in these table items will not
be eliminated.
78. Paragraph 2 of Article 2.4 provides that originating goods of other Parties shall be eligible, at
the time of importation, for the most favoured-nation applied rate of customs duty for those
goods in a Party, where that rate is lower than the rate of customs duty provided in that
Party's Schedule in Annex I.
79. For Australia, the most favoured-nation rate of customs duty is the rate of customs duty that
is set out in Schedule 3 of the Customs Tariff Act. To give effect to Paragraph 2 of
Article 2.4 for goods referred to in new Schedule 14, where the rate of customs set out in the
Schedule in Annex 1 for Australia is higher than the rate in Schedule 3 to the Customs Tariff
that applies to the goods, this lower rate is expressly set out in Schedule 14. Consequently,
for these goods, the threshold rate at which the rate begins to phase down is the lower rate.
80. Article 2.1 of Chapter 2 of the Agreement provides in part that customs duty does not include
duties that are equivalent to an internal tax imposed on the same goods when domestically
produced. Such goods are certain alcohol, tobacco, fuel and petroleum products that are
subject to customs duties at a rate that is equivalent to the excise duty imposed under the
Schedule to the Excise Tariff Act 1921 (the Excise Tariff Act), on those goods when
domestically produced.
81. Table items 44 to 54, 56, 57, 59, 60, 62, 63, 65, 66, 68, 69, 72, 73, 76 to 83, 87, 88, 90, 91
to 104, 106 to 112, 114 to 127, 133 to 136, 138 to 185, 195 to 200, 241 to 248, 271, 272, 275,
276, 287, 288, 301 and 302 in new Schedule 14 impose customs duty on certain alcohol,
tobacco, fuel and petroleum products that are RCEP originating goods at a rate that is
equivalent to the excise duty imposed under the Excise Tariff Act on the same goods when
domestically produced.
82. Table items 56, 57, 59, 62, 63, 65, 66, 68, 69, 72, 73, 76, 77, 80 to 83, 87, 90, 104, 106, 107,
111 and 276 in new Schedule 14 impose both an ad valorem rate, which is incrementally
reduced to 'Free' in accordance with the commitments made in the Schedule for Australia
under Annex I of the Agreement, and a customs duty rate that is equivalent to the excise duty
imposed under the Schedule to the Excise Tariff Act, on those goods when domestically
produced.
Page 12 Customs Tariff Amendment (Regional Comprehensive Economic Partnership Agreement
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Items 25 to 28
83. The User's Guide is located in the preamble of the Customs Tariff Act and provides a general
overview of the operation and organisation of the Customs Tariff Act.
84. These items amend the text of the User's Guide as required, to insert references to new
Schedule 14 for RCEP originating goods so that users can identify provisions relating to these
originating goods.
Item 29 Application provision
85. This item provides that the amendments made by items 1 to 12 and 17 to 24 of Schedule 1 to
the Bill 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 occurred
before the commencement of this Schedule.
86. The amendments contained in Schedule 1 to the Bill will commence at the same time as
Schedule 1 to the Customs Amendment (Regional Comprehensive Economic Partnership
Implementation) Bill 2021.
Item 30 Transitional provisions--indexation
87. This item provides for transitional provisions for alcohol duty rates and fuel duty rates, and
tobacco duty rates subject to indexation under sections 19 and 19AB respectively.
88. Sections 19 and 19AA of the Customs Tariff Act provide that customs rates of duty for
certain alcohol products are adjusted automatically, twice yearly, in line with movements in
the CPI. These adjustments occur in February and August of each year. Sections 19AB
and 19AC of the Customs Tariff Act provides that customs rates of duty for certain tobacco
products, are adjusted automatically twice yearly, in line with movements in the AWOTE.
The adjustments occur in March and September of each year.
89. The Bill has been drafted using rates of customs duty that include those indexed as part of the
CPI and AWOTE increases that occurred on 2 August 2021 and 1 September 2020
respectively, following the release of the June 2021, CPI and May 2020 AWOTE figure.
90. The transitional provisions, if required, will amend the alcohol, fuel and tobacco duty rates
currently on the face of the Bill such that upon commencement of Schedule 1, the customs
duty rates for relevant tariff subheadings in Schedule 14 will be increased by the indexation
amount or the sum of the indexation amounts in the case if multiple indexation events,
without the need for further legislative amendments.
Page 13 Customs Tariff Amendment (Regional Comprehensive Economic Partnership Agreement
Implementation) Bill 2021
Schedule 2--Contingent amendments
Customs Tariff Act 1995
Items 1 to 22
91. The Customs Tariff Amendment (2022 Harmonized System Changes) Bill 2021, when
enacted will implement the outcomes of the World Customs Organization's sixth review of
the Harmonized System.
92. The Harmonized System is a framework of codes and descriptions used to identify all
tradeable goods. At the international level, the Harmonized System comprises 97 chapters
with associated two-digit codes, which are then each divided into headings (four-digit codes)
and subheadings (five- and six-digit codes). The tariff classification codes used to classify
goods in new Schedule 14 are the codes of the 2017 version of the Harmonized System.
93. Items 1 to 22 amend new Schedule 14 to update the tariff classification codes from the 2017
version of the Harmonized System to the codes of the 2022 version of the Harmonized
System. The purpose of the amendments is to ensure that the preferential rates of customs
duty continue to apply to the RCEP originating goods in accordance with the Agreement and
at the rate as intended by that Agreement.
Page 14 Customs Tariff Amendment (Regional Comprehensive Economic Partnership Agreement
Implementation) Bill 2021
Attachment A
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Customs Tariff Amendment (Regional Comprehensive Economic Partnership
Agreement Implementation) Bill 2021
The Customs Tariff Amendment (Regional Comprehensive Economic Partnership Agreement
Implementation) Bill 2021 (the Bill) is compatible with 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 purpose of the Bill is to amend the Customs Tariff Act 1995 (the Customs Tariff Act) to
give effect to the Regional Comprehensive Economic Partnership Agreement (the
Agreement), signed on 15 November 2020. In particular, the Bill will:
provide a 'Free' rate of customs duty for goods that are RCEP originating goods
(other than goods listed in new Schedule 14), with effect from entry into force of
the Agreement for Australia;
insert a new Schedule 14 to: (i) specify the phasing rates of customs duty for
certain RCEP originating goods that will incrementally reduce to 'Free' by, at the
latest, the 19th calendar year after the Agreement enters into force for Australia;
(ii) maintain rates of customs duty on certain alcohol, tobacco and petroleum
products equivalent to the rates of excise duty payable on the same good when
locally manufactured; and (iii) maintain rates of customs duty on certain goods for
example electric buses; and
amend Schedule 4 to maintain customs duty rates for certain RCEP originating
goods in accordance with the applicable concessional item.
The amendments contained in Schedule 1 to the Bill, give effect to commitments made under
the Agreement and when enacted, will commence at the same time as Schedule 1 to the
Customs Amendment (Regional Comprehensive Economic Partnership Agreement
Implementation) Bill 2021 (the Customs Amendment Bill). That is, the later of the day on
which this Act receives the Royal Assent and the day on which the Agreement, done on
15 November 2020, enters into force for Australia.
The amendments contained in Schedule 2 to the Bill, updates the tariff classification codes of
the Harmonized Commodity Description and Coding System (the Harmonized System) to
which goods under new Schedule 14 are classified. The Customs Tariff Amendment
(2022 Harmonized System Changes) Bill 2021 will, when enacted, amend the Customs Tariff
Act to update the tariff classification codes of the Harmonized System from the 2017 tariff
classification codes to the 2022 tariff classification codes.
Page 15 Customs Tariff Amendment (Regional Comprehensive Economic Partnership Agreement
Implementation) Bill 2021
The tariff classification codes to which goods are classified under Schedule 14 are the codes
of the 2017 version of the Harmonized System. These codes are updated to ensure that
originating goods in accordance with the Agreement continues to be subject to the
preferential rates in accordance with that Agreement and that such rates continue to apply to
the specific goods.
The Customs Amendment Bill will make complementary amendments to the Customs
Act 1901 (the Customs Act) to introduce new rules of origin for goods imported into
Australia from a Party to the Agreement. The new rules will determine whether goods are
RCEP originating goods and therefore eligible for preferential tariff treatment in accordance
with the Agreement. These rules will be set out in new Division 1N of Part VIII of the
Customs Act.
Human rights implications
The Bill does not engage any of the applicable rights or freedoms.
Conclusions
The Bill is compatible with the human rights and freedoms recognised or declared in the
international instruments listed in the definition of human rights in section 3 of the Human
Rights (Parliamentary Scrutiny) Act 2011.
The Hon. Jason Wood, Assistant Minister for Customs, Community Safety and
Multicultural Affairs and Parliamentary Secretary to the Minister for Home Affairs
Page 16 Customs Tariff Amendment (Regional Comprehensive Economic Partnership Agreement
Implementation) Bill 2021