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Complying with Customs and Border Protection

The Customs and AusCheck Legislation Amendment (Organised Crime and Other Measures) Bill 2013

The Minister for Home Affairs, the Hon Jason Clare MP, introduced the Customs and AusCheck Legislation Amendment (Organised Crime and Other Measures) Bill 2013 into Parliament on Wednesday 20 March 2013. The legislation was passed by Parliament on Thursday 16 May 2013 and is awaiting Royal Assent.

The legislation amends the Customs Act 1901 (Customs Act) and the AusCheck Act 2007 to mitigate vulnerabilities at Australia’s borders. The Bill forms the latest part of a package of measures to deter and prevent infiltration by serious and organised crime into Australia’s seaports, airports and cargo supply chain.

The measures

The amendments to the Customs Act seek to strengthen the cargo supply chain against criminal infiltration by:

Placing statutory obligations on cargo terminal operators (CTOs) and those that load and unload cargo, which are similar to those that the Customs Act imposes on holders of depot and warehouse licences. These obligations include mandatory reporting of unlawful activity, ensuring the physical security of relevant premises and cargo, and fit and proper person checks on management at Customs and Border Protection’s request. Non-compliance will attract criminal or administrative sanctions.
Creating new offences for using information from the Integrated Cargo System (ICS) to aid a criminal organisation.
Providing that the Chief Executive Officer (CEO) of Customs and Border Protection can consider the refusal or cancellation of an ASIC or MSIC when determining whether the person is fit and proper under the Customs Act.
Aligning aspects of the customs broker licensing scheme with that of depots and warehouses, including providing the CEO of Customs and Border Protection with the power to impose new licence conditions at any time and making it an offence to breach certain licence conditions.
Adjusting other controls and sanctions in the Custom Act, including increasing penalties for certain strict liability offences and the offences in section 234, and improving the utility of the infringement notice scheme by for example increasing the relevant penalties.

The amendments to the Auscheck Act will:

Give Auscheck the capacity to suspend a person’s Aviation or Maritime Security Identification Card (ASIC or MSIC), or the processing of an application for an ASIC or MSIC, if the person is charged with a serious offence, such as an offence involving conduct that poses a national security or organised crime risk. This proposal would build on the existing ability to suspend a person’s ASIC or MSIC where the holder is convicted of an aviation- or maritime-security-relevant offence but has not yet been sentenced.
Require ASIC and MSIC holders and applicants to notify AusCheck or their issuing body if they have been charged with a serious offence. There will be penalties for failure to notify AusCheck. Law enforcement agencies would also be able to notify AusCheck when they charge the holder of, or applicant for, an ASIC or MSIC with a serious offence.

Commencement of the amendments

The new offences for unlawfully using and disclosing information held by Customs commence the day after the Act receives Royal Assent. The remaining Customs Act amendments will commence on Proclamation.

More information

Links to industry specific fact sheets, the legislation and Explanatory Memorandum, industry communication strategy and other explanatory material providing more detailed information about the changes will be available on this site over the coming months.

Australian Customs and Border Protection Notice No. 2013/12 announced the introduction of the Bill into Parliament. The notice described the measures in the legislation and what industry consultation had been undertaken prior to introduction.

You can find the legislation and Explanatory memorandum on the Australian Parliament House website

If you any queries about the legislation, please direct them to Compliance1@customs.gov.au.

Customs Amendment (Export Controls and Other Measures) Act 2011

Industry advice on changes to the Infringement Notice Scheme Guidelines

On 28 November 2011 the Customs Amendment (Export Controls and Other Measures) Act 2011 (the Act) came into effect.

The Act’s primary focus is to strengthen controls over export cargo, enhancing Customs and Border Protection’s ability to respond to specific security concerns and to detect and respond to high-risk export cargo.

The amended INS Guidelines (2010) now incorporate the new offences.

As with previous introductions of new offences with associated penalties under the INS, a six-month ‘administrative moratorium’ will be in place until 31 May 2012.

Consequently, there will be no infringement notice action in relation to breaches of offences against 77R(1), 77Y(4), 82C(1) or 112D(2), until 1 June 2012.

It should be noted however that as 77R(1) and 77Y(4) are existing offences, prosecution action may result from breaches despite the moratorium period being in effect.

New Strict Liability offences under the INS

Subsections 82C(1): requires that the holder of a warehouse licence must not breach a licence condition(s).
Subsection 112D(2): it is an offence if a person refuses or fails to comply with a written direction in relation to goods for export.

Existing offences now included as Strict Liability offences under the INS

Subsection 77R(1): the holder of a depot licence must not breach a condition of their licence
Subsection 77Y(4): it is an offence if a person refuses or fails to comply with a written direction given in relation to goods in a licenced depot.

Applicable Penalties

The applicable penalty for the new strict liability offences under the INS is 10 penalty units ($1100.00).

New inclusion of goods subject to the control of Customs

The new legislation also tightens Customs control in relation to goods brought into a prescribed place for export that are ‘no longer for export’.

One of the changes implemented is a requirement for Customs and Border Protection’s permission to be sought before goods (located in a prescribed place for export) that have become ‘no longer for export’ can be moved, altered or interfered with. Goods may become ‘no longer for export’ if, for instance, the relevant Export Declaration is withdrawn or Authority to Deal is cancelled or suspended.

Movement, alteration or interference with these goods may attract INS action under the existing section 33 offences.

• Link to amended Guidelines 2010

• Link to Explanatory Memorandum - Customs Amendment (Export Controls and Other Measures) Act 2011

General compliance

The Australian Government expects industry and the international trading community to comply with Customs-related law in all transactions involving the importation or exportation of goods and services and the movement of ships and aircraft to and from Australia.

As articulated in its Regulatory Philosophy, the Australian Customs and Border Protection Service (Customs and Border Protection) acts on its own behalf, and on behalf of other government stakeholders to regulate the movement of goods and people across our border and to collect customs and other revenue. In line with the Regulatory Philosophy, Customs and Border Protection undertakes checks to verify compliance in an environment that is largely self-regulated, by intervening in transactions proportionately to the perceived levels of risk in a given situation.

We publish a quarterly newsletter, Compliance Update to help you stay up-to-date with recent initiatives, issues, reviews and activities in Compliance with Customs and Border Protection.

The following information provides a general overview of the methodology and procedures used by Customs and Border Protection to determine clients' compliance with various requirements. For more information on the requirements applicable to a particular activity, refer to the appropriate section on this page or contact the Customs Information and Support Centre on 1300 363 263 or email to information@customs.gov.au

Customs and Border Protection uses a compliance improvement strategy to deliver government assistance measures and revenue collection. The aim of the startegy is to maximise voluntary compliance and eliminate future errors. Customs and Border Protection is not required to scrutinise every transaction. It is the client's responsibility to self-assess their transaction before submittting it to Customs and Border Protection.

As an importer or exporter, you are legally responsible for the accuracy of information supplied to Customs and Border Protection, even if you use a broker, freight forwarder or service provider to prepare your documents. For your own protection, ensure you examine and retain all documents supplied to Customs and Border Protection, check them for accuracy, and advise your broker or freight forwarder of any errors.

Choose a topic from the list below for more information about a particular area:

Compliance Update

The Compliance Update is a quarterly newsletter updating industry on recent initiatives, issues, reviews and activities in Compliance with the Australian Customs and Border Protection Service. Compliance Updates are now available on the web page here.

Customs audits

A Customs audit is an evaluation of company practices and records. The audit assists in judging the integrity of information supplied under self-assessment and the level of compliance with legislative requirements.

A likely audit follows these steps:

Customs and Border Protection initially contacs the client to advise they have been seleced for audit
clients and Customs will arrange an entrance interview to discuss the proposed audit
clients are encouraged to examine their transactions prior to audit, as errors reported to Customs and Border Protection voluntarily will be viewed favourably and
clients and Customs and Border Protection conduct an exit interview to discuss the assessment made about the client's level of compliance.

For more information on Customs audits.

Monitoring powers

Monitoring powers allow officers to enter premises to the extent that is necessary to assess:

compliance with Customs-related law
if record keeping, accounting, computing or other operating systems accurately record and generate information to enable compliance or
if information communicated to Customs and Border Protection is correct

People who may be subjected to compliance checks using monitoring powers include cargo reporters, importers, exporters, customs brokers, freight forwarders, depot and warehouse proprietors, financial institutions, information storage facilities, bureau services, owners, and stevedores.

Monitoring powers can only be exercised by an officer authorised by the Chief Executive Officer (CEO) of Customs and Border Protection. The CEO must be satisfied the officer has the necessary ability and experience to exercise monitoring powers. Consent must also be obtained from the occupier of the premises. This may include a person who is apparently in charge of the premises that the officer is seeking entry to. A warrant may be sought if consent is withdrawn, where consent was sought but was not given, or where there may have been an appropriate reason for not seeking consent in the first place.

For more information on monitoring powers

Common errors

There are extemsive information and legislation requirements for import and export transactions. Before undertaking a particular activity, you should familiarize yourself with the information on this page. You can contact the Customs Information and Support Centre if you are unsure about any of the requirements that may apply to you.

Select one of the following topic areas for information on some of the more common reasons for reduced compliance.

Importers

Failure to retain adequate records

All relevant commercial documents must be retained for five years from the date of entry.

Imports incorrectly entered

All imported goods must be entered in accordance with the approved form, classified correctly and any surplus goods reported. Items not ordered, samples and promotional merchandise must also be entered.
If merchandise is received but not included in the Customs entry, an amending entry should be made immediately. Voluntary payments of additional duty will not be penalised. In a self-assessment environment, importers could be subject to penalties if errors are detected during an audit.
If duty has been paid on merchandise which is not received, you may be eligible to apply for a refund of duty.
Customs and Border Protection provides a tariff advice service for importers who are in doubt as to the correct classification or concession. Applications accompanied by supporting evidence should be lodged with Customs and Border Protection. You may apply for a tariff concession on imported goods that do not compete in the market place with goods of Australian manufacture.

Customs value does not include all associated costs

All costs associated with the goods are legally required to be considered when determining the Customs value. These may include costs relating to advertising, assists, commissions, credits, escalation charges, indirect payments, rebates, research and development or royalties.
Customs and Border Protection provides a valuation advice service for importers. Applications accompanied by supporting evidence should be lodged with Customs and Border Protection.

Origin incorrectly identified

Confirmation of country of origin is required in order to claim preferential rates of duty.

Failure to disclose related transactions

The value of goods can be influenced by related party transactions. An adjustment for the value may be needed.

Incomplete information passed to broker or consultant

Errors may occur if all relevant information is not passed on to the person selected to assist in clearing your goods.

Incorrect GST exemption

Ensure the correct GST exemption has been claimed or that the correct amount of GST has been paid.

Incorrectly quoting Wine Equalisation Tax (WET) or Luxury Car Tax (LCT)

Importers may quote for WET and LCT if they have an ABN and they have valid quoting grounds.

Misuse of an ABN

If an importer has an ABN it should be linked to a current Customs owner code and used on all import entries for that entity.

Trade mark infringements

Trade mark laws provide for the registration of trade marks and the proprietors and users of those trade marks.

Exporters

A number of changes to the way export cargo is managed by Customs and Border Protection were implemented on 1 July 2002.

New reporting requirements for exports

The new threshold for the reporting of an export is $2000 per consignment.
All goods that require a permit, regardless of the value of the goods, must be reported to Customs and Border Protection using an export declaration.
All export goods are subject to Customs control when they are received at the place of export - for example wharf, airport or depot.
For cargo that is exempt from the requirement to be entered, it is a mandatory requirement to report three fields.

Alignment of export declaration thresholds

The threshold for when an export declaration is required is $2000 per consignment.
The threshold applies to a consignment as a whole rather than to each line or type of goods within the consignment.

Goods that require a permit

All goods requiring a permit must be reported to Customs and Border Protection using an export declaration, irrespective of the value of the goods.
It is no longer legal to use an exempt cargo line to report goods that require a permit.
If you require a Restricted Goods Permit (RGP) for the exportation of personal firearms, you are also required to make an export declaration for those goods.

Exempt cargo line reporting

Customs and Border Protection requires the mandatory reporting of the exporter name, the country of destination and a goods description for each line of cargo that is exempt from the requirement to be entered.

Export examination powers

Authorised officers may enter premises and examine goods intended for export and related documents, prior to the goods becoming subject to Customs control.
This power may only be used with the written consent of the occupier of the premises.

Failure to retain adequate records

All relevant commercial documents must be retained for five years from the date of export.

Exports incorrectly entered

Most goods intended for export must be notified on an export declaration. The exceptions are listed earlier in this booklet. They must be correctly classified in accordance with the Australian Harmonised Export Commodity Classification (AHECC) and be accurately described.

Inaccurate data declared

It is important that all data contained in an export declaration is correct, including the Free On Board (FOB) value, quantities exported, origin of the goods and export destination.

Ensuring ongoing eligibility for concessions

If new products are to be exported you need to ensure that they are also eligible for the claimed concession.

ABN

If an exporter has an ABN it should be used on an export declaration. This will assist in the verification process when determining the eligibility of the supply as being exempt from GST.

For more information about exporter responsibilities when completing export declarations see Exporter obligations and reporting requirements.

Movement of goods under Customs control

Owners of imported goods can defer their duty liability by storing their goods in a Customs and Border Protection licensed warehouse. These goods are called Under Bond Goods and remain under Customs control until such time as the owner is ready to enter them for home consumption and pay the duty, or export them. They can be dealt with only in the manner authorized by Customs and Border Protection.

Customs and Border Protection can give permission for the movement of such goods between approved premises. The permission holder is then responsible for the safe custody of the goods until they are received at the approved destination. An amount equal to the duty would be payable by the permission holder if any of the goods are later missing.

The receiving warehouse should verify that the goods received are those on the movement documentation. Customs and Border Protection must be notified within seven days if there is any discrepancy between the goods received and the movement documentation.

The receiving warehouse should ensure they have received sufficient information from the sending warehouse including such details as the import transaction, value of the goods on a Nature 20 entry for warehousing and the Transport and Insurance Unit Value, to allow entry of the goods ex-warehouse.