Bills Digest No. 18 2002-03
Import Processing Charges (Amendment and Repeal) Bill
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
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Import Processing Charges (Amendment
and Repeal) Bill 2002 (Bills Digest 18,
19 June 2002
House: House of Representatives
Portfolio: Justice and Customs
The formal provisions
of the Bill commence on Royal Assent. Other provisions have various
commencement dates which will be described in the Main Provisions
section of this Digest.
To ensure that the import processing charges
imposed by the Import Processing Charges Act 1997 will
continue to apply after that Act is repealed.
This Bill contains a number of proposals that
are made as a consequence of amendments included in the Customs
Legislation Amendment Bill (No. 1) 2002.
The Import Processing Charges Act 1997
(the 1997 Charges Act) imposes three charges:
- a cargo report processing charge
- an entry processing charge, and
- a screening charge.
These charges are imposed in accordance with
various sections of the Customs Act 1901 (Customs
In 2001 Parliament passed a package of three
legislative measures, the purpose of which is to modernise the way
in which the Australian Customs Service ( Customs ) manages the
movement of cargo into and out of Australia. The three acts in this
modernisation package are the Customs Legislation Amendment and
Repeal (International Trade Modernisation) Act 2001 (the Trade
Modernisation Act), the Customs Depot Licensing Charges
Amendment Act 2001 and the Import Processing Charges Act
2001. Among many other changes, the legislation repeals the
charges imposed by the 1997 Charges Act and introduces new
compliance measures in relation to the reporting and accounting of
It was intended that the 1997 Charges Act would
be repealed at the same time as the Trade Modernisation Act made
substantial changes to import reporting and entry processes. The
date for the start of the new processes, and the repeal of the old,
was to be fixed by Proclamation. If a date was not proclaimed, then
the changes were to commence automatically on the first day, two
years after the Trade Modernisation Act received Royal Assent. The
Trade Modernisation Act received Royal Assent on 20 July 2001 so
all the provisions must commence by 21 July 2003.
Many of the provisions of the Trade
Modernisation Act depend directly or indirectly on the introduction
of Customs new integrated cargo management system. The two year
proclamation period was intended to allow sufficient time for
Customs to introduce and test its new computer system, and for the
trading community to be ready for the procedural changes. However,
according to the Government, it has recently become apparent that
the trading community may not be ready to use the integrated cargo
system by July 2003.(1) As a result, the Government
proposes, by means of the Customs Legislation Amendment Bill (No.1)
2002, to extend the time that those provisions can be proclaimed
from two years to three, that is, until 21 July 2004.
The report of the Senate Legal and
Constitutional References Committee s inquiry into the outsourcing
of Customs information technology(2) stated that
importers and exporters had expressed concern that they might be
penalised if Customs failed to meet the July 2003 deadline for
implementing its new system.(3) This is because Schedule
3 of the Trade Modernisation Act contains a number of offences that
apply if a person fails to electronically communicate information
required by Customs. Many of these offences attract penalties of 60
penalty units ($6,600), and many of them attract strict liability.
The Committee found that it would be unacceptable for businesses to
be exposed to penalties if Customs failed to meet the deadline, and
recommended that businesses be allowed to use other methods of
communication in the event of a failure.(4)
The Government also proposes amendments to the
Trade Modernisation Act in order to allow the new reporting and
processing requirements to be phased in.(5) According to
press reports, about 5,500 businesses are expected to use Customs
new integrated cargo system which will replace various older
computer systems by July 2003.(6) If this legislation is
passed, Customs existing export systems will continue to run until
November 2003, and importers will not switch to the new system
until March 2004.(7) The extension of time has been
welcomed by a spokesperson for importers and
exporters.(8) Customs is reported as saying that the
extension has been sought to give industry more time to comply with
the new cargo systems, and not because of fears that Customs'
system development would not be finished in time.(9)
This Bill includes consequential provisions
designed to ensure that the 1997 Charges Act will continue to apply
to import reports and entry processing made under the old systems
until importers and exporters can comply with the new processes and
computer systems. According to the Explanatory Memorandum, charges
for importers are higher under the 1997 Charges Act, reflecting the
higher costs to Customs of continuing to operate its older systems.
The 1997 Charges Act provides that a cargo
processing charge is imposed and sets out the amount of that
charge. That charge is only payable in respect of documentary cargo
reports (section 64ABB of the Customs Act). Under amendments
inserted by the Trade Modernisation Act, people reporting cargo
will be required to make electronic cargo reports (new section 64AB
of the Customs Act). The Trade Modernisation Act also introduces a
moratorium period during which documentary reports may continue to
be made. The general moratorium period is for six months. A further
period of up to an additional 18 months, may be granted by the CEO
Since documentary cargo reports can only be made
for a maximum of 2 years after the commencement of the new section
64AB of the Customs Act, the Trade Modernisation Act also repeals
section 64ABB. The effect of this amendment will be that the cargo
reporting processing charge will not be payable by people lodging
documentary cargo reports during the general and further moratorium
periods. An item in the Customs Legislation Amendment Bill (No. 1)
2002 (Item 67 of Schedule 3) provides that the cargo report
processing charge will still be payable during those moratorium
periods. This Bill makes consequential amendments so that the 1997
Charges Act continues to apply during those moratorium periods.
The effect of Clause 5 of this
Bill is to continue the operation of the 1997 Charges Act beyond
the date on which it is repealed by the Trade Modernisation Act.
The continuation will be triggered if not all the import
reporting/entry processes detailed in Parts 2 and 6 of Schedule 3
of the Trade Modernisation Act have commenced and will continue
until all the import reporting/entry process amendments have
Commencement: Immediately after
the commencement of item 62 of Schedule 3 of the Customs
Legislation Amendment Bill (No. 1) 2002. If the amendment proposed
by the Customs Legislation Amendment Bill (No. 1) 2002 is passed,
then the commencement dates for Schedule 4 (which repeals the 1997
Charges Act) and Part 2 of Schedule 3 of the Trade Modernisation
Act (dealing with the importation of goods) can be different.
Clause 6 has the effect of
continuing the operation of the 1997 Charges Act for the purposes
of charging the cargo report processing charge during the
moratorium periods of up to two years after the new integrated
cargo system is implemented. During this time cargo reporters may
continue to submit documentary cargo reports.
Commencement: At the same time
as the commencement of item 1 of Schedule 4 to the Trade
Modernisation Act, that is, when the 1997 Charges Act is
Clause 7 imposes charges for
the purposes of Clauses 5 and 6 of this Bill.
Commencement: On the earlier
- the commencement of Clause 5, and
- the commencement of Clause 6.
Amendment to the Import
Processing Charges Act 2001
Item 1 of Schedule 1 clarifies
that for the purposes of a rolled-up charge in respect of 21 or
more reportable documents, each reportable document requires its
own self-assessed clearance declaration.
Commencement: The later of:
- immediately after the Import Processing Charges Act
2001 commences (that is, on a day fixed by Proclamation or if
not proclaimed, then two years after the International Trade
Modernisation Act receives Royal Assent, ie. 21 July 2003),
- the day on which this Act receives Royal Assent.
- Hon Peter Slipper, Parliamentary Secretary to the Minister for
Finance and Administration, Second Reading Speech , Customs
Legislation Amendment Bill (No. 1) 2002, House of Representatives,
Hansard, 19 June 2002, p. 3777.
- Senate Legal and Constitutional References Committee,
Inquiry into the Outsourcing of the Australian Customs Service
s Information Technology, May 2002. Available online at
- ibid., p. 31.
- ibid., p. 32, Recommendation 2.
- These proposed amendments are included in the Customs
Legislation Amendment Bill (No.1) 2002.
- Emma Connors, New Customs system delayed , Australian
Financial Review, 20 April 2002.
- ibid; Eugene Clark, Customs a leader in bringing e-government
to full fruition , Canberra Times, 8 July 2002.
- Mr Paul Zalai of the Customs Brokers Council of Australia, is
quoted as saying that the extension provides Customs and industry
with a more realistic ability to adequately develop, test and
implement the software and communication changes associated with
the cargo management re-engineering initiatives . Emma Connors, New
Customs system delayed , Australian Financial Review, 20
- Emma Connors, New Customs system delayed , Australian
Financial Review, 20 April 2002.
- Explanatory Memorandum, Import Processing Charges
(Amendment and Repeal) Bill 2002, p. 2.
15 August 2002
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