New Commonwealth Act Introduces Pilot “Trusted Traders Programme” To Fast Track Customs Clearance
Tuesday 7 July 2015 @ 11.11 a.m. | Trade & Commerce
On June 25th, the Customs Amendment (Australian Trusted Trader Programme) Act 2015 was assented as Act 73 of 2015. The substantive provisions of the Act commenced on July 1st. The Act establishes the legislative framework for a trade facilitation measure called the “Australian Trusted Trader Programme” (the ATTP). The programme allows self-nominated entities to enter into agreements with the Comptroller-General of Customs that allows them to benefit from “streamlined customs procedures” and a “reduced regulatory burden”. According to Mr McCormack’s second reading speech in the House of Representatives:
“The programme will be an important element of a compliance continuum that will provide a better understanding of the entities moving goods across our borders. This strategy will work to 'shrink the haystack' by removing accredited entities from traditional transaction based border risk assessment. This reform is important for managing the increasing volume of trade growth and ensuring that resources can be diverted away from highly compliant traders to focus on risk and noncompliance.”
Initially the changes will commence in a “pilot phase” for a year, including a “limited number of participants to test and refine processes and the design”.
Programme Relies On Future Statutory Instruments
The Act sets out a general framework for the programme, by amending the Customs Act 1901 (Cth) and the Australian Border Force Act 2015 (Cth) consequentially. The Act provides the Comptroller-General of Customs with the power to make regulations that will outline the rules of the programme.
According to the Bill’s explanatory memorandum, the ATTP has been designed consistently with the World Customs Organization’s SAFE Framework of Standards to Secure and Facilitate Global Trade, which has been adopted by Australia’s major trading partners over the last ten years. Entities wanting to participate in the programme will need to meet qualification criteria, which will be based on the SAFE Framework and may include requirements to meet certain standards in the areas of personnel security, information security, physical security and conveyance security. Entities will also be subject to ongoing monitoring and validation, and the Comptroller-General of Customs may vary, suspend or terminate agreements. Some decisions will be subject to review by the Administrative Appeals Tribunal. The Comptroller-General will also need to maintain a public register listing each trusted trader and other information to be prescribed.
The Bill Digest from the Parliamentary Library noted that there is “significant flexibility for the CGC to establish the programme” and that “little detail about the programme is included in the Bill itself”. The Digest concluded that it was “difficult to evaluate the exact impact” of the Bill without a regulatory impact statement. The Digest also noted that:
“The Explanatory Memorandum to the Bill states that the Bill has ‘no financial impact’. However, in a media release on 12 May 2015 the Minister for Immigration and Border Protection, Peter Dutton stated: ‘A total of $5.6 million has been allocated to start a pilot phase of a Trusted Trader Programme.’”
Support & Reaction
The Bill Digest reported that major interest groups such as the Australian Chamber of Commerce and Industry and the Export Council of Australia have voiced their support of the pilot scheme. The Australian Financial Review reported that the Australian Logistics Council have estimated that “[t]he scheme will save about $1.5 billion for every 1 per cent increase in efficiency”.
At least one logistics company has previously expressed their belief that the Act will have a very significant impact on the industry. In April this year, Stuart Asplet, the Australian head of freight forwarding company Geodis Wilson, told the Australian Financial Review that he was concerned that logistics companies could lose up to 50% of their business as importers and exporters start interacting directly with customs. He told the paper that “if Customs moved forward in the way it had flagged, it would mark the biggest change in Australia’s supply chain industry since the introduction of computer systems in the 1990s.” He believed his company would have to make significant changes to remain relevant and avoid significant job losses.
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Sources:
Customs Amendment (Australian Trusted Trader Programme) Act 2015, Customs Amendment (Australian Trusted Trader Programme) Bill 2015 & supplementary material - available from TimeBase's LawOne Service
