SUMMARY OF ALTERATIONS

CUSTOMS TARIFF PROPOSAL (No. 1) 2012

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Alterations to the Customs Tariff Act 1995

Schedules 1, 2 and 3

Introduction

The Customs Tariff Proposal mechanism is used to give effect to alterations to the Customs Tariff Act 1995 (the Customs Tariff), particularly when such alterations are required to have effect in a short time frame that cannot be achieved through a Customs Tariff Amendment Bill. Customs Tariff Proposals are used most commonly for introducing new items, for changing rates of duty or for restructuring items in the Schedules to the Customs Tariff.

When the Parliament is sitting, Customs Tariff Proposals are tabled in the House of Representatives, specifying alterations to the Customs Tariff.

When the Parliament is not sitting for a period exceeding 7 days, section 273EA of the Customs Act 1901 (the Customs Act) provides that the Minister may publish a notice in the Commonwealth Gazette, specifying alterations to the Customs Tariff. Section 273EA requires that, when such a notice is published in the Gazette, a Customs Tariff Proposal must be tabled in the House of Representatives, within seven sitting days.

Customs Tariff Proposal (No. 1) 2012 meets that requirement for two Customs Notices published in the Commonwealth Gazette by the Australian Customs and Border Protection Service in December 2011. These Notices extended the South Pacific Regional Trade and Economic Co-operation Agreement (Textile, Clothing and Footwear Provisions) Scheme (the SPARTECA - TCF Scheme) and corrected a minor error in the Customs Tariff. These alterations are incorporated in Schedules 1 and 2 of Customs Tariff Proposal (No. 1) 2012.

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When alterations in a Customs Notice are incorporated in a Customs Tariff Proposal, the commencement provisions of the Proposal reflect those of the Notice. As there is a time lag between the publishing of a Notice and the tabling of a Proposal in the House of Representatives, the commencement provisions of the Proposal are necessarily retrospective.

Following the introduction of a Customs Tariff Proposal in the House of Representatives, the alterations contained in the Proposal are incorporated in a Customs Tariff Amendment Bill that is introduced into and debated by the Parliament.

Schedule 1- Extension of the SPARTECA - TCF Scheme

The SPARTECA - TCF Scheme commenced on 1 March 2001 and provides for the duty-free entry of certain textiles, clothing and footwear from Forum Island Countries covered by the South Pacific Regional Trade and Economic Co-operation Agreement. The Scheme is administered through item 68 in Schedule 4 to the Customs Tariff and was legislated to expire on 31 December 2011.

Schedule 1 of the Proposal contains an alteration to item 68 of Schedule 4 to the Customs Tariff to amend the end-date from 31 December 2011 to 31 December 2014. The extension of the Scheme will help the TCF sectors in the Forum island countries become sustainable over the longer term, and provide a future benefit for people from those countries.

The Australian Customs and Border Protection Service arranged for the publication of Customs Notice (No. 2) 2011 in Special Commonwealth Gazette S348 of 23 December 2011, in accordance with the provisions of section 273EA of the Customs Act. This Notice had a date of effect of 23 December 2011 and amended the previously legislated end-date of 31 December 2011 to 31 December 2014.

This alteration is contained in Schedule 1 of Customs Tariff Proposal (No. 1) 2012.

Schedule 2 - Re-insertion of subheading 5308.10.00 applicable to coir yarn

The Customs Tariff Amendment (2012 Harmonized System Changes) Act 2011 contained approximately 800 amendments (the HS2012 amendments) to the Customs Tariff to incorporate changes that resulted from the fourth review of the Harmonized Commodity Description and Coding System (HS) by the World Customs Organization. These amendments took effect on 1 January 2012.

The HS is an international system of goods classification and is used by nearly all of Australia’s trading partners. One of the HS2012 amendments incorrectly repealed subheading 5308.10.00, applicable to coir yarn. Coir yarn is derived from the husks of coconuts and is commonly used in the manufacture of mats and rope. Without corrective action to re-insert this subheading, Australia’s Customs Tariff would be inconsistent, to that extent, with those of our trading partners.

The Australian Customs and Border Protection Service arranged for the publication of Customs Notice (No. 1) 2011 in the Commonwealth Gazette GN 50 of 21 December 2011, in accordance with the provisions of section 273EA of the Customs Act. This Notice re-inserted subheading 5308.10.00 in the Customs Tariff, with effect from 1 January 2012.

This alteration is contained in Schedule 2 of Customs Tariff Proposal (No. 1) 2012.

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Schedule 3 - Listing of Serbia as a Developing Country

Schedule 1 of the Customs Tariff lists those countries and places that are accorded preferential rates of duty under the Australian System of Tariff Preferences (ASTP). Part 4 of this Schedule lists certain countries that are accorded preferential rates of duty for developing countries.

The listing of Serbia in Part 4 of Schedule 1 will provide it with Developing Country status for the purposes of the ASTP and accord it a reduction in customs duty on a defined range of goods imported into Australia.

The listing of Serbia as a Developing Country is consistent with Australia’s approach to other states which were formerly part of Yugoslavia and that have previously been listed in Part 4 of Schedule 1.

This alteration will take effect on 1 March 2012.

The application provision in the Proposal provides that the listing of Serbia will apply to goods imported from Serbia on or after 1 March 2012 and to goods imported before 1 March 2012, where the time for working out the rate of import duty on the goods had not occurred before that date.