Bills Digest no. 41, 2017–18
PDF version [771KB]
Paul Davidson
Economics Section
16
October 2017
Contents
Purpose of the Bills
Structure of the Bills
Customs Amendment Bill
Tariff Amendment Bill
Background
Committee consideration
Senate Standing Committee for
Selection of Bills
Joint Standing Committee on Treaties
Senate Standing Committee for the
Scrutiny of Bills
Policy position of non-government
parties/independents
Position of major interest groups
Financial implications
Statement of Compatibility with Human
Rights
Parliamentary Joint Committee on
Human Rights
Key issues and provisions
Customs Amendment Bill
Commencement
Schedule 1—Main amendments
Box 1: examples of goods that are
wholly obtained or produced entirely in Singapore or in Singapore and Australia
Box 2: examples of goods that are
produced in Singapore, or in Singapore and Australia, from originating
materials
Box 3: requirements of goods produced
in Singapore, or in Singapore and Australia, from non-originating materials
Box 4: the Harmonized System
Box 5: what does regional value
content mean?
Schedule 2—Other amendments
Tariff Amendment Bill
Commencement
Schedule 1—Main amendments
Schedule 2—Other amendments
Date introduced: 6
September 2017
House: House of
Representatives
Portfolio: Immigration
and Border Protection
Commencement: Various
dates as set out in the body of this Bills Digest
Links: The links to the Bills,
their Explanatory Memoranda and second reading speeches can be found on the
homepage for the Customs
Amendment (Singapore-Australia Free Trade Agreement Amendment Implementation)
Bill 2017, and the Customs
Tariff Amendment (Singapore-Australia Free Trade Agreement Amendment
Implementation) Bill 2017, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent,
they become Acts, which can be found at the Federal Register of Legislation
website.
All hyperlinks in this Bills Digest are correct as
at October 2017.
Purpose of
the Bills
The Customs
Amendment (Singapore-Australia Free Trade Agreement Amendment Implementation)
Bill 2017 (Customs Amendment Bill) and the Customs
Tariff Amendment (Singapore-Australia Free Trade Agreement Amendment
Implementation) Bill 2017 (Tariff Amendment Bill), amend the Customs Act 1901 and Customs
Tariff Act 1995, respectively. The amendments are necessary as a result
of recently agreed changes to the rules of origin in the Singapore‑Australia
Free Trade Agreement (SAFTA).[1]
Structure
of the Bills
Customs Amendment
Bill
The Customs Amendment Bill comprises two Schedules. Schedule
1 to the Customs Amendment Bill has three Parts:
- Part
1 provides for amendments relating to Singaporean originating goods.
- Part
2 provides verification powers relating to Singaporean customs officials.
- Part
3 provides application and saving provisions in relation to the amendments in
Parts 1 and 2.
Schedule 2 of the Customs Amendment Bill provides
for a range of other amendments to the Customs Act.
Tariff Amendment
Bill
The Tariff Amendment Bill comprises two Schedules. Schedule
1 makes amendments to the Customs Tariff Act relating to Singaporean
originating goods. Schedule 2 makes consequential amendments to the Customs
Tariff Act as a result of Schedule 1.
Background
Ratified in 2003, SAFTA[2] is Australia’s second oldest free trade agreement and a key part of Australia’s
economic relationship with Singapore. Australian products have been able to
enter Singapore tariff free since SAFTA entered into force. In June
2015, Australia and Singapore signed a Joint Declaration on the Comprehensive
Strategic Partnership (CSP), intended to strengthen defence ties, and further
trade and economic integration. A third review of SAFTA was part of a
part of a package of initiatives to advance the CSP.[3]
The agreed amendments to SAFTA, arising from this third
review, were announced on 6 May 2016.[4] The text of the amendments to SAFTA, national interest analysis and
regulation impact statement were tabled in Parliament on 20 March 2017.[5]
In particular, the SAFTA amendments relate to:
- the
objectives and general definitions
- trade
in goods
- rules
of origin
- government
procurement
- cross-border
trade in services
- investment
- financial
services
- telecommunications
services
- the
movement of natural persons
- electronic
commerce and
- a
range of final provisions.
The Bills implement the amended agreement as it relates to
trade in goods and rules of origin.
Committee
consideration
Senate
Standing Committee for Selection of Bills
The Senate Standing Committee for Selection of Bills has deferred
consideration of the Customs Amendment Bill and Tariff Amendment Bill until its
next meeting.[6]
Joint
Standing Committee on Treaties
The Joint Standing Committee on Treaties (JSCOT) inquired
into the amendments to SAFTA and reported in August 2017.[7] The Committee observed that the amended agreement incorporated contemporary
provisions relating to services liberalisation, as well as regulatory
provisions from recent agreements such as the Trans‑Pacific Partnership
Agreement,[8] whilst also making minor updates to existing provisions.[9] The Committee also discussed a number of provisions that attracted the
attention of submitters in relation to:
- access
to the market for legal services and recognition of law degrees
- alcohol
labelling
- investor-state
dispute settlement
- temporary
entry for skilled workers
- government
procurement and
- a
range of other provisions such as investment, financial services, and
telecommunications.[10]
The Committee noted the changes to the rules of origin
requirements. In particular, ‘it will only be necessary to show a change in the
tariff classification of the product in that country’,[11] which is a simpler approach than that which prevails currently. Generally,
producers needed to demonstrate that 50 per cent of the cost of manufacturing
the goods was expended in the other country for it to be considered to
originate from that country.[12] This change should reduce compliance costs for businesses.
The Committee supported the amended agreement and
recommended that binding treaty action be taken.[13] Labor members provided additional comments which criticised the removal of labour
market testing, investor‑state dispute resolution provisions, and a
general lack of independent analysis of the amended agreement.[14]
Senate
Standing Committee for the Scrutiny of Bills
The Scrutiny of Bills Committee expressed concern about proposed
subsection 153XD(6) of the Customs Amendment Bill which provides that
regulations made for the purposes of proposed Division 1BA:
... may make provision in relation to a matter by applying,
adopting or incorporating, with or without modification, any matter contained
in an instrument or other writing as in force or existing from time to time.[15]
The Committee acknowledged that the Explanatory Memorandum
to the Customs Amendment Bill stated that in implementing other free trade
agreements, provisions such as these have ‘enabled the regulations to refer to
the general accounting principles of a country other than Australia for the
purposes of the regional value content calculations’. Nonetheless, the
Committee had concerns ‘where provisions in a bill allow the incorporation of
legislation provisions by reference to other documents because such an approach’:
- raises
the prospect of changes being made to the law in the absence of parliamentary
scrutiny
- can
create uncertainty in the law and
- means
that those obliged to obey the law may have inadequate access to its terms.[16]
The Committee requested further advice as to whether the
type of documents envisaged to be applied, adopted or incorporated will be made
freely available to all persons interested in the law.[17]
The Committee made no comment in relation to the Tariff
Amendment Bill.[18]
Policy
position of non-government parties/independents
The views of the Labor members of the JSCOT inquiry into
the amendments to SAFTA are reflected above. The Australian Greens have
expressed concerns in relation to trade agreements more generally. For example,
during the Senate inquiry into the provisions proposed legislation to implement
the China-Australia Free Trade Agreement, Senator Whish-Wilson’s dissenting
report recommended the legislation not be passed.[19] While noting the proposed legislation related mainly to customs and tariff matters,
he also highlighted a range of broader concerns. These included:
- a
lack of transparent public consultation in the development of trade agreements
- a
‘broken’ treaty-making process with insufficient parliamentary scrutiny
- issues
related to labour market testing
- a
lack of environment standards and
- the
implications of investor-state dispute settlement provisions.[20]
The Australian Greens recommended that the Senate refuse
to pass the enabling legislation for the Korea‑Australia Free Trade
Agreement until investor-state dispute settlement clauses were removed and
independent cost-benefit analysis had been conducted into changes to
intellectual property protections and they ‘had been appropriately assessed by
the Parliament’.[21]
A range of other views regarding trade agreements have been
expressed by Senators. Senator Jacqui Lambie has called on the Australian
Government to ban investor-state dispute settlement clauses in all trade
agreements.[22] When the proposed Trans-Pacific Partnership Agreement was considered by the Senate
Foreign Affairs, Defence and Trade References Committee, Senator Nick Xenophon
raised a number of concerns with the value of Australia’s recent trade
agreements and parliamentary scrutiny of the treaty-making process.[23] Senator David Leyonhjelm has previously strongly advocated a free trade
position and has supported Australia unilaterally removing tariffs to achieve
better outcomes.[24]
Position of
major interest groups
Submissions to the JSCOT inquiry expressed both optimism
and concern about the amended agreement. For example, the Asian Trade Centre
generally welcomed improvements to the SAFTA, particularly those which
reflected the text of the Trans-Pacific Partnership (TPP) Agreement.[25] A similar view was put by the Australian Chamber of Commerce Singapore:
AustCham Singapore welcomes further developments to the
Singapore Australia Free Trade Agreement (SAFTA) and we believe these updates
to be in the Australian national interest, in that they strongly support
Australian businesses operating in Singapore. We recognise Australian products
have been able to enter Singapore tariff‐free since 2003 when the SAFTA
first entered into force, but the update currently before the Parliament
enhances the value of the Agreement to Australian business through the
inclusion of improvements in areas of interest and significant benefit to our
members and the broader Australian business community.[26]
The Law Council of Australia (LCA) noted that ‘Singapore
is a very important legal services market for Australian lawyers’ and was
therefore pleased to see that the amended agreement would lock-in existing
levels of legal services market access into Singapore.[27] It also noted that the amended agreement will increase the number of Australian
law degrees recognised by Singapore, helping to foster people-to-people links.
The LCA were concerned however that under SAFTA, Singapore reserves the
right make or retain measures affecting the supply of legal services in
Singapore. This reservation has the effect of restricting applications for
Qualifying Foreign Law Practice licences (QFLP). The LCA stated that currently
the QFLP is not open for application and there is no indication from the
Singaporean Ministry of Law as to when this might change.[28]
The Australian Fair Trade and Investment Network expressed
concern that the TPP Agreement was not an appropriate basis upon which
to amend the SAFTA.[29] This was because ‘much of the content of the TPP was extremely controversial’,
and also because the TPP has not been passed by the Australian Parliament and
as such had not been adequately scrutinised.[30] The submission raised issues with: the investor-state dispute settlement
provisions; the temporary movement of workers and the abolition of labour
market testing; and government procurement. The submission considered that the
amendment process represented a missed opportunity to provide for legally
enforceable commitments in relation to labour rights and the environment.[31]
Financial
implications
The Government considers that implementing each Bill will
have a negligible cost to revenue over the forward estimates.[32]
Statement of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed both
Bills’ compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. The
Government considers that the Bills are compatible.[33]
Parliamentary
Joint Committee on Human Rights
The Joint Committee on Human Rights considered that the
Customs Amendment Bill did not raise human rights concerns.[34] The Committee deferred its consideration of the Tariff Amendment Bill to a
later reporting period.[35]
Key issues
and provisions
Customs Amendment
Bill
Commencement
The amendments in Schedule 1 to the Customs Amendment
Bill commence on the later of:
- the
day this Act receives Royal Assent and
- the
day the Agreement (the Amending Agreement) to amend the Singapore-Australia
Free Trade Agreement and done at Canberra on 13 October 2016 enters into
force for Australia.
However, the provisions do not commence at all if the Amending
Agreement does not enter into force for Australia.
The amendments in Schedule 2 to the Customs Amendment
Bill commence on the third anniversary of the commencement of the amendments in Schedule 1.
Schedule
1—Main amendments
The main amendments proposed by Schedule 1 relate
to the insertion of proposed Division 1BA of Part VIII to the Customs
Act. Proposed Division 1BA inserts new provisions relating to Singaporean
originating goods. Where goods meet the definition of Singaporean
originating goods they will be afforded preferential duty treatment, which
generally means these goods will be duty-free.
In order to be classified as Singaporean originating
goods, the importer needs to have a certificate of origin if Australia
has not waived the requirement for such a certificate (the requirement will be
waived where the customs value of the good does not exceed $1,000).[36] A certificate of origin is one that complies with the requirements of Article
18 of Chapter 3 of the SAFTA.
Proposed Subdivision A provides for a range of
definitions that apply to proposed Division 1BA. Additional Subdivisions provide for a range of ways that goods can be classified as Singaporean
originating goods. The range of ways that goods can be classified is
referred to as the rules of origin.
Proposed Subdivision B provides for the rules
relating to goods wholly obtained or produced entirely in Singapore or in
Singapore and Australia—proposed subsection 153XE(2) provides that goods
are wholly obtained or produced entirely in Singapore or in Singapore and
Australia if, and only if, they meet any of the 11 definitions
provided (Box 1).
Box 1: examples
of goods that are wholly obtained or produced entirely in Singapore or in
Singapore and Australia
The types of goods that are wholly obtained or produced
entirely in Singapore or in Singapore and Australia include:
- plants,
or goods obtained from plants, that are grown, cultivated, harvested, picked
or gathered there
- live
animals, or goods obtained from live animals
- animals
obtained by hunting, trapping, fishing, gathering or capturing in the
territory of Singapore
- goods
obtained from aquaculture in the territory of Singapore
- fish,
shellfish or other marine life taken from the high seas by Singaporean
flagged vessels, as well as goods produced from fish, shellfish or other marine
life on board Singaporean flagged factory ships
- goods
produced exclusively from goods referred to above or from their derivatives.
|
Sources: Customs Amendment (Singapore-Australia Free Trade
Agreement Amendment Implementation) Bill 2017, proposed section 153XE; Agreement
to Amend the Singapore-Australia Free Trade Agreement, done in Canberra
13 October 2016, [2017] ATNIF 9, Articles 18 and 21 of Chapter 3.
Proposed Subdivision C provides for the rules
relating to goods produced in Singapore, or in Singapore and Australia, from
originating materials—proposed subsection 153XD(1) provides a definition
of originating materials which means:
- Singaporean
originating goods that are used in the production of
other goods[37] or
- Australian
originating goods that are used in the production of
other goods[38] or
- recovered
goods from either Australia or Singapore that are used in the production of, and incorporated into, remanufactured goods[39] or
- indirect
materials.[40]
Box 2 provides some examples of goods that are produced in
Singapore, or in Singapore and Australia, from originating materials.
Proposed Subdivision D provides for the rules
relating to goods produced in Singapore, or in Singapore and Australia, from non-originating
materials.[41] Non-originating materials would include any goods which ‘have
been sourced from outside Singapore or Australia and that are used in the
production of other goods’.[42] It would also include goods from either Singapore or Australia which do not
satisfy the rules of origin requirements above. The requirements relating to
goods produced in Singapore, or in Singapore and Australia, from non‑originating
materials are explained further in Box 3. Since the Customs Amendment
Bill has not become an Act, there is currently no legislative authority for the
creation of the regulations, and hence the regulations do not yet exist.
However, the regulations will mirror the obligations in Annex 2 of Chapter 3 of
the SAFTA in relation to a change in tariff classification and regional
value content (see below).
Box 2: examples
of goods that are produced in Singapore, or in Singapore and Australia, from
originating materials
The types of goods that are produced in Singapore, or in
Singapore and Australia, from originating materials include:
- goods
which are classified as Singaporean originating goods (see Box
1 above) and are used in the production of other goods—for example, if plants
were grown in Singapore they would be Singaporean originating goods and if those plants were then processed and manufactured into a basket, such
a basket would be produced from originating materials
- goods
which are classified as Australian originating goods (which are
those determined in accordance with the laws of Singapore which implement the
Agreement), and are used in the production of other goods. Since both
countries have agreed to the same list of ‘wholly obtained or produced
goods’, the same example above would apply. That is, Australian grown plants
which were then used in the production of a basket would be a
basket that was produced from originating materials
- goods
which are recovered goods, which are goods that have resulted
from the disassembly of used goods, and that have been cleaned, inspected,
tested or processed as necessary for improvement to sound working condition.
An example could include individual car parts which have undergone the
necessary treatment to ensure that they are in sound working condition. The recovered
goods must then be used in the production of, and
incorporated into, remanufactured goods. The individual car
parts must then be used in the manufacture of, for example, another vehicle,
in order to be classified as being comprised of originating materials
- goods
which are indirect materials include goods or energy used in
the production, testing or inspection of goods, but not physically
incorporated in the goods. An example would be the electricity used in the
production of a motor vehicle. It also includes goods or energy used in the
maintenance or operation of equipment or buildings associated with the
production of goods. An example would be the upkeep of a production facility.
Further examples are listed in proposed subsection 153XD(1).
|
Sources: Customs Amendment (Singapore-Australia Free Trade
Agreement Amendment Implementation) Bill 2017, proposed subsection 153XD(1), proposed section 153XF; Agreement
to Amend the Singapore-Australia Free Trade Agreement, done in Canberra
13 October 2016, [2017] ATNIF 9, Articles 3, 18, and 21 of Chapter 3.
Box 3: requirements
of goods produced in Singapore, or in Singapore and Australia, from non-originating
materials
In order to be classified as a Singaporean
originating good where the goods were produced in Singapore, or in
Singapore and Australia, from non-originating materials, the
goods need to:
- be
classified in column 1 of the table in Part 2 of Schedule 1 to the
regulations made for the purposes of this Subdivision and
- be
produced entirely in Singapore or in Singapore and Australia, from non-originating
materials only or from non-originating materials and originating
materials and
- satisfy
each requirement under the regulations and
- have
a certificate of origin (see above).
|
Sources: Customs Amendment (Singapore-Australia Free Trade
Agreement Amendment Implementation) Bill 2017, proposed subsection 153XG(1); Agreement
to Amend the Singapore-Australia Free Trade Agreement, done in Canberra
13 October 2016, [2017] ATNIF 9, Articles 18, 21, and Annex 2 of
Chapter 3.
One requirement that the regulations may prescribe is that
each non-originating good used in the production of
other goods is required to satisfy a prescribed change in tariff
classification.[43] This requirement is to ensure that sufficient transformation has occurred such
that the production of the other goods can now be classified as Singaporean
originating goods, and therefore receive concessional duty treatment
(generally, duty-free). It also ensures that goods are correctly classified. The
use of a particular non-originating good—for example, live cattle
exports from Brazil—would be classified differently under the Harmonized System
(Box 4)[44] compared with the production of beef in Singapore which used those Brazilian
cattle.[45] The product-specific rules of origin in this example require that all meat
products have undergone a change in tariff classification at the Chapter level.[46] Since the live cattle would be classified under Chapter 1 and the beef would be
classified under Chapter 2, a sufficient change in tariff classification
would have occurred in this instance. Assuming that the other requirements in Box
3 were satisfied, that would mean that such beef would be classified as a Singaporean
originating good and therefore subject to concessional duty treatment.
Box 4: the
Harmonized System
The Explanatory Memorandum to the Bills provides the
following description of the Harmonized System:
The Harmonized System (HS) is the worldwide classification
system that has been adopted by all countries that are members of the World
Customs Organization. In Australia, the HS has been adopted in the Customs
Tariff Act. The HS organises goods according to the degree of manufacture,
and assigns classification numbers to all goods. It is arranged into 96
chapters with each chapter being divided into headings, subheadings, and
tariff classifications. Under the HS, the chapter, heading (4 digits), and
subheading numbers (6 digits) for all goods are adopted by countries using
the HS. The Australian Customs Tariff uses an additional two digits for
national classification to create 8 digit tariff items.
|
Source: Explanatory
Memorandum, Customs Amendment (Singapore-Australia Free Trade Agreement
Amendment Implementation) Bill 2017, p. 7.
Exceptions to the change in tariff classification rule are
contained in proposed subsections 153XG(4)–(5), which implement the de
minimis rule in Article 10 of Chapter 3 of the Amended Agreement:[47]
- Where non-originating materials do not satisfy the change
in tariff classification rule, that rule does not apply in the event that the
total value of those non-originating goods does not exceed 10 per
cent of the customs value[48] of the goods.
- Where non-originating materials do not satisfy the change
in tariff classification rule, and the goods produced are
classified to any of Chapters 50 to 63 of the Harmonized System—then the
requirement to satisfy the change in tariff classification is taken to be
satisfied if the total weight of those non-originating materials does not exceed 10 per cent of the total weight of the goods.[49]
Another requirement that the regulations may prescribe in
relation to non-originating goods used in the production of other goods, is that the other goods are required to have a prescribed
percentage of regional value content (RVC), and prescribe a particular method
by which the RVC is calculated.[50] The RVC requirement is to ensure that sufficient value has been added in the production of other goods such that they can now be classified as Singaporean
originating goods, and therefore receive concessional duty treatment
(generally, duty‑free). RVC is explained in more detail in Box 5.
Box 5: what
does regional value content mean?
Regional value content (RVC) means the amount of the total
value of the good, expressed as a percentage. There are two methods for
calculating the RVC: the build-down method and the build-up method.
The build-down method is based on the value of
non-originating materials:
The build-up method is based on the value of originating
materials:
where:
- ‘RVC’
is the regional value content of a good, expressed as a percentage
- ‘VNM’
is the value of non-originating materials, including materials of
undetermined origin, used in the production of the good
- ‘VOM’
is the value of originating materials used in the production of the good in
the territory of one or both of the Parties.
|
Sources: Customs Amendment (Singapore-Australia Free Trade
Agreement Amendment Implementation) Bill 2017, proposed subsections 153XG(6)–(9); Agreement
to Amend the Singapore-Australia Free Trade Agreement, done in Canberra
13 October 2016, [2017] ATNIF 9, Article 5 of Chapter 3.
For the purposes of calculating the RVC, goods which are
imported with accessories, spare parts, tools or instructional or other
information materials are to be included, in accordance with the regulations.[51] Packaging materials and containers are generally disregarded for the purposes
of ascertaining whether the goods in question are from non-originating
materials and amount to being Singaporean originating goods.[52] Goods are not Singaporean originating goods if they are
transported through the territory of a non-Party and the goods undergo any
operation in the territory of a non-Party (other than to satisfy Australian
requirements or in order to preserve the goods in good condition for transport
to Australia).[53]
The amendments proposed by Part 2 relate to
Australian exporters seeking concessional duty treatment for Australian
exported goods to Singapore. Item 4 inserts proposed section 126AAA to the Customs Act which provides for a definition of Singaporean
customs official and items 7, 8, 10 and 11 make consequential
amendments as a result of the introduction of this definition. Items 5, 6,
and 9 make consequential amendments as a result of the introduction of the
definition of Australian originating goods in proposed
subsection 153XD(1). These amendments are necessary to change the
permissible scope of the regulations which may be made under sections 126AA and
126AB.
Part 3 contains the applications and savings
provisions. Item 12 provides that the amendments proposed in Part 1
relating to Singaporean originating goods apply in relation to:
- goods
imported into Australia on or after the commencement of Part 1 and
- goods
imported into Australia before the commencement of Part 1, where the time for
working out the rate of import duty on the goods had not yet occurred.
Item 12 also provides that amendments made in Part
2 relating to Australian exports to Singapore apply in relation to goods
exported to Singapore on or after the commencement of Part 2, irrespective of
when the goods in question were produced.
Item 12 further provides that SAFTA, as in
force immediately prior to the commencement of item 12, continues to apply
on and after that commencement for the purposes of determining if goods are the
produce and manufacture of Singapore under the provisions that currently exist
in Division 1B of Part VIII of the Customs Act.
Schedule
2—Other amendments
As noted above, Schedule 2 is due to commence on
the third anniversary of the commencement of Schedule 1. The amendments
are necessary as a result of the agreed three-year transition, which will
remove Division 1B of Part VIII of the Customs Act. That Division
currently provides the rules for assessing whether Singaporean goods are
eligible to receive concessional duty treatment (which generally is duty-free). Item 9 repeals Division 1B of Part VIII and the remaining items make
minor consequential amendments to Division 4A of Part VI,[54] which relates to Australian exports of goods to Singapore, for which
concessional duty treatment is sought.
Tariff Amendment
Bill
Commencement
The amendments in Schedule 1 to the Tariff
Amendment Bill commence at the same time as the amendments in Schedule 1 to the Customs Amendment Bill.
The amendments in Schedule 2 to the Tariff
Amendment Bill commence on the third anniversary of the commencement of the
amendments in Schedule 1.
Schedule
1—Main amendments
The principal amendment to the Customs Tariff Act is the insertion of proposed Schedule 4A as proposed by item 17. Schedule
4A provides for specific rates of duty which apply to Singaporean
originating goods (as defined in the Customs Amendment Bill above). The
specific rates of duty apply to specific goods, which are classified in Column
2 according to the Harmonized System. For example, table item 1 refers to
subheading 2203.00.61, which under Schedule 3 of the Customs Tariff Act relates to ‘beer made from malt: having an alcoholic strength by volume
exceeding 1.15% vol but not exceeding 3.0% vol’. The rate in Column 3 provides
for the specific rate of duty which applies, which for item 1 is $41.95/L of
alcohol, where the first 1.15 per cent of alcohol is ignored. All of the goods
listed in Schedule 4A provide for excise-equivalent duties. This is to
ensure that those goods are subject to the same taxation treatment as
domestically produced identical goods (which are subject to specified rates of
excise).[55] Items 1–5, 9, and 12–15 make minor consequential amendments which refer
to proposed Schedule 4A. Items 18–21 make minor consequential
amendments to the User’s guide as a result of proposed Schedule 4A.[56]
Items 6–8, and 10–11 make consequential amendments
to the Customs Tariff Act as a result of the proposed definition of Singaporean
originating goods in the Customs Amendment Bill.
Schedule
2—Other amendments
As noted above, Schedule 2 is due to commence on
the third anniversary of the commencement of Schedule 1. The amendments
are necessary as a result of the amendments proposed in Schedule 2 of Part 1 to the Customs Amendment Bill, specifically the repeal of Division 1B of Part
VIII of the Customs Act. To that end, item 1 removes reference to
Division 1B of Part VIII of the Customs Act in the Customs Tariff Act.
Items 2–141 make minor consequential amendments to
the Customs Tariff Act as a result of the insertion of proposed
Schedule 4A and the associated amendments as outlined in Schedule 1 above. Specifically, items 2–4 repeal what would become redundant
provisions, and items 5–141 remove reference to specific rates of duty
that apply to goods from Singapore, which are classified as ‘SG’ for the
purposes of the Customs Tariff Act. The specific references are removed
as a result of the table inserted as proposed Schedule 4A.
Members, Senators and Parliamentary staff can obtain
further information from the Parliamentary Library on (02) 6277 2500.
[1]. Agreement
to Amend the Singapore-Australia Free Trade Agreement, done in Canberra
13 October 2016, [2017] ATNIF 9.
[2]. Singapore-Australia
Free Trade Agreement, done in Singapore 17 February 2003, [2003] ATS 16
(entry into force 28 July 2003).
[3]. Department
of Foreign Affairs and Trade, Agreement
to Amend Singapore Australia Free Trade Agreement: Analysis of Regulatory
Impact on Australia, August 2016, p. 1.
[4]. M
Turnbull (Prime Minister), Australia-Singapore
Comprehensive Strategic Partnership announcement: Sydney, transcript, 6
May 2016.
[5]. Australia,
Senate, Journals,
31, 20 March 2017, p. 1057. Available from the Joint Standing Committee on
Treaties webpage.
[6]. Senate
Selection of Bills Committee, Report,
11, 2017, The Senate, Canberra, 13 September 2017, p. 2. Previously, the bills
to implement the China-Australia
Free Trade Agreement and the Japan-Australia
Economic Partnership Agreement have been referred to the Senate Foreign
Affairs, Defence and Trade Legislation Committee for inquiry and report.
[7]. Joint
Standing Committee on Treaties, Singapore
Free Trade Agreement: amendment; defence supplies and services: Japan, Report,
172, August 2017.
[8]. Trans-Pacific
Partnership Agreement between the Government of Australia and the Government of
Australia and the Governments of: Brunei Darussalam, Canada, Chile, Japan,
Malaysia, Mexico, New Zealand, Peru, Singapore, United States of America and
Vietnam and associated side letters, done in Auckland 4 February 2016, [2016]
ATNIF 2.
[9]. Joint
Standing Committee on Treaties, Singapore
Free Trade Agreement: amendment; defence supplies and services: Japan, op.
cit., p. 3.
[10]. Ibid.,
pp. 8–14.
[11]. For
an explanation of tariff classifications and the effects on the regime, see Box
4: the Harmonized System below.
[12]. Customs
Act 1901, section 153VB.
[13]. Joint
Standing Committee on Treaties, Singapore
Free Trade Agreement: amendment; defence supplies and services: Japan,
op. cit., p. 15.
[14]. Ibid.,
pp. 39–41.
[15]. Subsection
of 14(2) Legislation
Act 2003 (Cth) provides ‘Unless the contrary intention appears, the
legislative instrument or notifiable instrument may not make provision in
relation to a matter by applying, adopting or incorporating any matter contained
in an instrument or other writing as in force or existing from time to time’.
In this case, proposed subsection 153XD(6) provides that it would apply
‘[d]espite subsection 14(2) of the Legislation Act.
[16]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 11, 2017, The Senate, 13 September 2017, pp. 7–8.
[17]. Ibid.,
p. 8.
[18]. Ibid.,
p. 9.
[19]. Senate
Standing Committee on Foreign Affairs, Defence and Trade, Customs
Amendment (China-Australia Free Trade Agreement Implementation) Bill 2015
[Provisions] Customs Tariff Amendment (China-Australia Free Trade Agreement
Implementation) Bill 2015 [Provisions], The Senate, Canberra, 6
November 2015, p. 18.
[20]. Ibid.,
p. 17.
[21]. Senate
Standing Committee on Foreign Affairs, Defence and Trade, Korea-Australia
Free Trade Agreement, The Senate, Canberra, 1 October 2014,
pp. 67–68.
[22]. J
Lambie, ‘Notice
of Motion: Trade: Investor-State Dispute Settlement Clauses’, Senate, Debates,
12 October 2016, p. 312.
[23]. Senate
Standing Committee on Foreign Affairs, Defence and Trade, Proposed
Trans-Pacific Partnership Agreement, The Senate, Canberra, 7 February 2017, pp. 46–47.
[24]. D
Leyonhjelm, ‘The
tariff wall that hurts us all’, The Australian Financial Review, 9
January 2015, p. 38.
[25]. Asian
Trade Centre, Submission to the Joint Standing Committee on Treaties, Singapore Free Trade Agreement:
Amendment; Defence Supplies and Services: Japan, p. 1.
[26]. Australian
Chamber of Commerce Singapore, Submission to the Joint Standing Committee on Treaties, Singapore Free Trade Agreement:
Amendment; Defence Supplies and Services: Japan, pp. 1–2.
[27]. Law
Council of Australia, Submission to the Joint Standing Committee on Treaties, Singapore Free Trade Agreement:
Amendment; Defence Supplies and Service: Japan, p. 1.
[28]. Ibid.,
pp. 1–2.
[29]. Australian
Fair Trade and Investment Network, Submission to the Joint Standing Committee on Treaties, Singapore Free Trade Agreement:
Amendment; Defence Supplies and Services: Japan, p. 4.
[30]. Ibid.
[31]. Ibid.,
pp. 4–5.
[32]. Explanatory
Memorandum, Customs Amendment (Singapore-Australia Free Trade Agreement
Amendment Implementation) Bill 2017, p. 2; Explanatory
Memorandum, Customs Tariff Amendment (Singapore-Australia Free Trade
Agreement Amendment Implementation) Bill 2017, p. 2.
[33]. The
Statement of Compatibility with Human Rights can be found at page 3 of the Explanatory
Memorandum to the Customs Amendment Bill, and at page 3 of the Explanatory
Memorandum to the Tariff Amendment Bill.
[34]. Parliamentary
Joint Committee on Human Rights, Human
rights scrutiny report, 10, 2017, 12 September 2017, p. 33.
[35]. Ibid.,
p. 83.
[36]. The Agreement
to Amend the Singapore-Australia Free Trade Agreement, op. cit.,
Chapter 3, Article 21 provides that a certificate of origin shall not be
required if the customs value of the importation does not exceed $1,000.
[37]. Production means any one of 17 measures of production as defined: proposed subsection
153XD(1).
[38]. Australian
originating goods means goods that are Australian originating goods
under a law of Singapore that implements the SAFTA: proposed
subsection 153XD(1).
[39]. Recovered
goods are the individual parts that have resulted from disassembly of
used goods and have been cleaned, inspected, tested or processed as necessary
for improvement to sound working condition: proposed subsection 153XD(1). Remanufactured goods are defined in proposed subsection
153XD(1) and relate to machinery and mechanical appliances; electrical
equipment and parts; sound recorders and reproducers and parts; vehicles,
aircraft, vessels, and associated transport equipment; optical, photographic,
cinematographic, measuring, checking, precision, medical or surgical
instruments and apparatus and parts; and medical, surgical, dental or
veterinary furniture, and barbers’ chairs and parts. In addition, the
remanufactured goods must be entirely or partially composed of recovered
goods; and have a similar life expectancy to, and perform the same as
or similar to, new goods as defined above; and have a factory warranty similar
to such new goods: proposed subsection 153XD(1).
[40]. Indirect
materials means goods or energy used in the production, testing or
inspection of goods, but not physically incorporated in the goods; or goods or
energy used in the maintenance or operation of equipment or buildings
associated with the production of goods. The specific goods or energy are
further specified: proposed subsection 153XD(1).
[41]. Non-originating
materials means goods that are not originating materials: proposed subsection 153XD(1).
[42]. Explanatory
Memorandum, Customs Amendment (Singapore-Australia Free Trade Agreement
Amendment Implementation) Bill 2017, p. 12.
[43]. Proposed
subsections 153XG(2)–(5).
[44]. International
Convention on the Harmonized Commodity Description and Coding System,
done in Brussels 14 June 1983, [1988] ATS 30, (entered into force for Australia
and generally 1 January 1988).
[45]. Live
cattle would be classified under Chapter 1 of the Harmonized System, whereas
beef would be classified under Chapter 2.
[46]. Agreement
to Amend the Singapore-Australia Free Trade Agreement, done in Canberra
13 October 2016, [2017] ATNIF 9, Annex 2 of Chapter 3.
[47]. De
minimis means ‘of the least, something that is trivial or minimal’: BA
Gardner, ed., Black’s law dictionary, 9th edn, Thomson Reuters,
St. Paul, Minnesota, 2009, p. 496.
[48]. Customs
value is defined in section 159.
[49]. Agreement
to Amend the Singapore-Australia Free Trade Agreement, done in Canberra
13 October 2016, [2017] ATNIF 9, Article 10 of Chapter 3.
[50]. Proposed
subsections 153XG(6)–(8).
[51]. Proposed
subsection 153XG(7).
[52]. Proposed
section 153XH.
[53]. Proposed
section 153XJ.
[54]. Apart
from item 1 which makes a minor consequential change to repeal a note to
the definition of unmanufactured raw products in subsection 4(1)
of the Customs Act.
[55]. Duties
of excise are levied on domestically produced goods, whereas internationally
produced goods which are imported to Australia are subject to excise-equivalent
customs duties. Excise-equivalent goods are imported alcohol, tobacco and fuel
that, if produced or manufactured in Australia, would be subject to excise
duty. Thus when these types of goods are imported, a rate of duty is levied on
them that is equivalent to the excise liability that would apply if the goods
had been manufactured in Australia.
[56]. The
User’s guide is located at the end of the contents of the Customs Tariff Act and aims to give a general overview of the operation and organisation of the
Act.
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