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CONTENTS
Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer and Copyright Details
Customs Amendment (Warehouses) Bill
1999
Date Introduced: 3 June 1999
House: House of Representatives
Portfolio: Justice and Customs
Commencement: The amendments, other than
items 36, 37, 40 and 41 commence on 29 April 1999, the date the
Minister announced that goods brought into MiB would be exempt from
import processing charges. Items 36, 37, 40 and 41, which are
saving and transitional provisions commence on Royal Assent.
The major
amendments proposed by the Bill:
-
- insert manufacturing in bond (MiB) specific terms and concepts
within the Customs Act 1901 (the Principal Act), and
-
- exempt people operating MiB warehouses from paying warehoused
goods entry fee when the manufactured goods are exported.
The manufacturing in bond (MiB) scheme was
announced by the Government in its "Investing for Growth" industry
statement.(1) Under the scheme certain manufacturers are exempt
from duty on imported goods which are intended for re-export or
used as inputs to exports. Regulations giving effect to the MiB
scheme came into effect on 20 March 1998.
Under the relevant Customs
Regulations(2) persons who hold a warehouse licence and obtain
approval may manufacture in bond, that is, import goods, store
those goods in a licensed warehouse, and use those goods in a
manufacturing process within the confines of the warehouse.
Approval can be granted in relation to any goods where the
Secretary of the Department of Industry, Science and Resources is
satisfied that, having regard to a business plan submitted by the
manufacturer, manufacture under the approval would increase the
manufacturer's exports.
The Australian Customs Service (ACS) requires
that MiB applications should be submitted together with a detailed
business plan and an application for a customs warehouse licence,
where the premises intended for manufacture are not already
licensed.(3)
On the 29th April 1999, the then
Minister for Justice and Customs, Senator Amanda Vanstone,
announced that legislative amendments would be introduced this year
which would allow goods imported into MiB to be free of customs
processing charges until they are moved from the MiB facility.(4)
The amendments proposed by the Bill and the Import Processing
Charges Amendment (Warehouses) Bill 1999 give effect to the
Minister's announcement.
The stated rationale for the exemption is
that:
People who operated MiB warehouses complained
that having to pay both these fees [ie. import processing charge
and warehoused goods entry fee] made their operations uneconomic.
The Government has therefore decided to remove the requirement for
people operating from MiB warehouses to pay the import processing
charge and the warehoused goods entry fee when the goods are
exported.(5)
The General Manger of DHL Worldwide Express, the
only company which has to date sought to manufacture in bond, is
reported as saying that:
Prior to the government exemption, manufacturers
faced a $22.80 customs compliance levy on each individual
consignment of components brought temporarily into Australian
manufacturing in bond facilities prior to re-export in finished
products.(6)
The amendments proposed by the Bills have been
welcomed by industry. The General Manager of DHL Worldwide Express
is reported as saying that:
... the decision opened a significant
opportunity for Australia to market itself as an ideal location for
regional headquarters incorporating warehousing, manufacturing and
distribution facilities for Asian markets.(7)
Amendments to the Customs Act 1901
The amendments proposed by Schedule
1 have two major effects, namely:
-
- provide MiB specific terms and concepts within the Customs
Act 1901 (the Principal Act), and
-
- exempt people operating MiB warehouses from paying the
warehoused goods entry fee when the manufactured goods are
exported.
Items 5 and 6
of Schedule 1 insert new definitions of the terms
'MiB warehouse' and 'MiB warehoused goods' in the Principal Act.
The term 'MiB warehouse' is defined to mean a place that a person
or partnership is allowed under subsection 79(2) to use for housing
goods (see item 20) and subsection 79(5) to use for manufacturing
goods (see item 20). The term 'MiB warehoused goods' is defined to
mean goods received into a MiB warehouse under an entry for MiB
warehousing or permission granted under section 71E (ie. a movement
permission), or goods subjected to an authorised activity under
section 79 to be undertaken in a MiB warehouse (see item 20).
The effect of items 12 and
13 of Schedule 1 is to exempt
people operating MiB warehouses from paying the warehoused goods
entry fee when the manufactured goods are exported.
A new section 79 is substituted
in the Principal Act by item 20 of
Schedule 1. The principal effect of proposed
section 79 is to introduces two new classes of warehouses for which
a licence may be issued, namely, an MiB warehouse and a general
warehouse. Where a licence authorises the housing of goods and
manufacturing to be carried on, it is a MiB warehouse licence
(proposed subsection 79(7)).
A new section 80A is inserted
in the Principal Act by item 22 of
Schedule 1 making it a precondition for the grant
of an MiB licence that an applicant has approval of the Secretary
of the Department of Industry, Science and Resources (the
Secretary) as someone who may manufacture in a MiB warehouse.
Subsection 82(1) of the Principal Act specifies
events which if they occur (ie. there is a change in the membership
of the partnership) a warehouse licence holder must notify the CEO
of the ACS of. Item 23 of Schedule
1 makes it a condition of an MiB licence that a licensee
notify the CEO of their approval by the Secretary as someone who
may manufacture in a MiB warehouse has been revoked.
A new section 82A is inserted
in the Principal Act by item 26 of
Schedule 1 providing that a MiB warehouse licence
is subject to a condition that the licence holder is a person in
respect of whom a section 80A approval operates (see item 22 with
respect to proposed section 80A).
The effect of item 27 of
Schedule 1 is to allow the CEO of the ACS to
refuse to renew a MiB warehouse licence if the holder does not have
the approval under the regulations of the Secretary as someone who
may manufacture in a MiB warehouse.
A new section 98 is substituted
in the Principal Act by item 29 of
Schedule 1. The purpose of proposed section 98 is
to preserve the competitive position of different manufacturers for
domestic consumption by requiring that manufacture in a MiB
warehouse is subject to the same customs duty as manufacture in
another factory which does not have MiB status. Thus, to achieve
this equality, proposed section 98 provides that goods for domestic
consumption made in MiB warehouses must be subject to duty on
imported components in the same way that other domestic
manufacturers of goods must pay duty on their imported components.
In the absence of proposed section 98, MiB manufacturers for the
domestic market would have a competitive advantage over other
domestic suppliers.
-
- 8 December 1997.
- SR No 38 of 1998.
- ACN No 98/21.
- Minister for Justice and Customs, Media Release, 29
April 1999.
- Customs Amendment (Warehouses) Bill
- AAP News, DHL welcomes govt exemption of MiB goods, 5 February
1999.
- Ibid.
Ian Ireland
15 June 1999
Bills Digest Service
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ISSN 1328-8091
© Commonwealth of Australia 1999
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