The "Trusted Trader" scheme for importers may not be all it claims

This is a brief word of caution to importers to carefully consider the current claims by various parties that Trusted Trader (TT) will provide the importer with substantial benefits. Consider for example the oft hyped "savings" that are being promoted in the context of these two scenarios:

  1. Duty deferral - your customs broker already gives you this. How many companies pay at 30 or even 60 days? Under TT the funds will be deducted by EFT direct from your bank account every month.
  2. Reduced costs for customs clearance - the ABS position has so far been that it still requires all the data currently included in the import declaration. This means that the data preparation, review and input for each consignment for Customs clearance will take the brokerage as long, and use as many resources as, currently. Further, as actual lodgement will be required only once a month it is probable that costs will actually increase as new software will have to be developed to sweep the system for data already lodged and awaiting transmission and then massage it into the required format to send one report to DIBP. These costs will be passed on.
  3. Establishing acceptable supply chain security will be an issue for many companies with numerous suppliers, especially those with suppliers in Asia, given the documentary problems that often arise with those consignments.

I'm sure that there will be many other matters that come to the fore as the programme is initiated. I see benefits for myself in compliance auditing, as do other Customs consultants with (and sometimes without) the requisite qualifications and experience, but that doesn't mean that TT is for everyone, whether or not they are a large company. Think therefore before you act and don't sign up to anything until you understand what you have committed to.

As always, happy to discuss and assist both industry and the importing community.

Productivity Commission argues that Anti-Dumping Measures may not be good for the economy

The Productivity Commission has released a report today arguing that anti-dumping measures consider only a narrow set of industries, remove the need for innovation, and don’t consider the overall cost to the economy.

"Once the emotive terminology is stripped away, any general distinction between anti-dumping protection and conventional tariff protection is a fine one," The Australian Financial Review quotes the report as saying.

Read the report at


Incoterms 2010 in commodity sales contracts

Incoterms® 2010 are a set of standardised rules recommended for use in international sales contracts to define the responsibilities of sellers (exporters) and buyers (importers) for the delivery of goods. They are published by the International Chamber of Commerce (ICC) and are widely used in international commercial transactions.

Incoterms® provide a common set of rules to clarify responsibilities of sellers and buyers for the delivery of goods and the transfer of risk under sales contracts. They apportion transportation costs and responsibilities such as insurance associated with the delivery of goods between buyers (importers) and sellers (exporters) and reflect modern-day transportation practice

This interesting article by Jay Leary and Louise Bell from Herbert Smith Freehills provides tips to avoid disputes involving incoterms in commodity transactions.


Changes to GST Treatment of Cross Border Transactions

PwC have written a good article on the changes proposed by the new provisions for the GST Things to note from this review:

  1. start date MAY be 1 July 2016;
  2. compulsory reverse charge provisions;
  3. Changes to the calculation of the value of a taxable importation by providing importers with an election to use a 10% uplift factor (unless an alternative amount is included in the regulations to the Act) to the customs value, in lieu of determining the actual value of transport and related coststreatment of cross border transactions.


Trans Pacific Partnership (TPP) signed by Minister Robb

The TPP, which will see the elimination of 98 per cent of tariffs among 12 countries, was formally signed by Trade and Investment Minister Robb on 4 February 2016 in Auckland, New Zealand.

The TPP is being widely promoted as the world’s most significant trade and investment agreement finalised in more than two decades, with member countries accounting for around 40 per cent of global GDP.

Australia’s exports of goods and services to these countries were worth $109 billion last year – a third of Australia’s total exports. Tariffs will be eliminated on US$9 billion of Australia’s dutiable exports to TPP countries, including $4.3 billion worth of agricultural goods with new levels of access for beef, dairy, sugar, rice, grains and wine. A further $2.1 billion of Australia’s dutiable exports will receive significant preferential access through new quotas and tariff reductions.

Lets not forget however that of the 11 other countries that signed the TPP (USA, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru), Australia has already has FTAs with all but Mexico, Peru and Canada, but has a trade agreement with Canada (CANATA) that provides duty free entry to goods in nominated classifications. When reviewed with that information the benefits slip somewhat.

Changes to Customs Import Processing Charges

As part of the 2015-16 Commonwealth Budget, the Government restructured the Import Processing Charges. There are two changes:

  1. Removal of the current price differential between airfreight / post and seafreight;
  2. Making FIDs lodged manually more expensive in terms of fees payable so as to encourage electronic lodgement.

The new charges are as follows:

  1. SACs & N10 with CVAL less than $1,000: NIL
  2. N10 & N20 CVAL $1,000-$10,000: $50 ($90 for manual FIDs);
  3. N10 & N20 CVAL more than $10,000: $152 ($92 for manual FIDs);
  4. N30: $23 ($63 for manual N30)

Fees may have dropped but no reference at all to the ongoing cross subsidisation of SACs by FIDS over $1,000.

Certificates of Origin for ChAFTA

The Chinese authorisation bodies are:

1             AQSIQ: General Administration of Quality Supervision, Inspection and Quarantine (国家质量监督检验检疫总局) where the actual certificates will be issued by provincial Entry-Exit Inspection and Quarantine Bureaus, which are administered by AQSIQ; and

2             the China Council for the Promotion of International Trade.

Details are now also in the FAQ section of DIBP ChAFTA information.

Quarantine Fees - If I request a review of proposed fees in line with National Guidelines but no-one is listening, does that count as consultation?

The following information was received from DAWR on 13 Nov. Still no response from the Minister.

Unfortunately the response (in italics) below fails (again) to address the issue of cross subsidisation. I have emphasised in bold those comments that relate to the topic.

As most of you may be aware, each brokerage has ONE Compliance Agreement with the Department. Under that sit the various schedules, such as NCCC and AEPCOMM, QAP, IFIS etc. How may of the large corporates have multiple such schedules compared to the amount of schedules held by small brokerages and/or importers? And why isn't billing based upon the schedules held rather than  the agreement itself? 

Am I cynical to suggest that the multinationals complain louder? And its therefore easier to take this easy route?

It's fact that SMEs are getting hit by this fee but CAPEC, major multinationals all, get savings. Why? If it is all about compliance then fees should be common rated and apply equally to the express industry / SACs.

I'm interested that DAWR claims below that part of the fees go to the development of training materials. As most brokers would know these were developed by ACCC initially and lately by CBFCA and other RTOs.

It appears that DAWR isn't listening. Next step is to check if the Commonwealth Ombudsman has jurisdiction in these matters. I encourage you to join me in lodging submissions.

"The department has redesigned its charges with a structure of fees and cost recovery levies consistent with the 2015 Australian Cost Recovery Guidelines. Fees, as you rightly point out, recover the costs of services provided directly to an individual or organisation. The fee should be set to reflect the cost of the specific service. Fees will apply for audits and assessments of applications in the case of approved arrangements.

 The department has also implemented cost recovery levies which recover the costs of activities provided to a group of individuals or organisations (eg an industry sector). The levy is set to recover the overall costs of the activity or activities.

 In the case of an approved arrangement the cost recovery levy will recover the costs involved in the development of policies and standards to support compliance agreements, quarantine approved premises and imported food compliance agreements. This includes instructional material, business improvement, risk management, and stakeholder engagement. The cost of providing these activities is not dependant on the size of an individual business within the group of businesses that hold some form of approved arrangement.

 The annual levy of $2900 does not include the costs of cargo examinations. These costs are recovered through inspection fees.

Any business that holds an approved arrangement would also be subject to audit fees in accordance with the audit regime of each arrangement that is held. Audit fees will be charged at $30 per 15 minutes if the service is provided in-office (where a departmental officer is permanently located) or $50 per 15 minutes for service provided out of office. For entities that have number of sites each site is audited at FFS rates.  Therefore entities with multiple arrangements would pay a higher amount for these activities than an entity with only one arrangement/site where the compliance of the entities is the same. If the business wanted to add an additional arrangement it would pay a fee for service for the assessment of the application for the new arrangement (charged at the in or out of office rate as relevant)."