Customs Amendment Bills introduced into CTH: Harmonized System Changes

The Commonwealth Parliament has introduced the Customs Amendment (2017 Harmonized System Changes) Bill 2016 and the Customs Tariff Amendment (2017 Harmonized System Changes) Bill 2016 (collectively, the amendment bills) into the Legislative Assembly. Both Bills will amend the Customs Act 1901 and the Customs Tariff Act 1995 respectively (collectively, the principal acts) to implement changes resulting from the fifth review of the International Convention on the Harmonized Commodity Description and Coding System.

Background to the Review

Australia is a signatory to the Harmonized System which is administered by the World Customs Organization and is therefore required to implement minor changes from 1 January 2017.

The aims of the International Convention on the Harmonized Commodity Description and Coding System, according to the preamble are:

• Desiring to facilitate international trade;
• Desiring to facilitate the collection, comparison and analysis of statistics, in particular those on international trade;
• Desiring to reduce the expense incurred by re-describing, reclassifying and recoding goods as they move from one classification system to another in the course of international trade and to facilitate the standardization of trade documentation and the transmission of data;
• Considering that changes in technology and the patterns of international trade require extensive modifications to the Convention on Nomenclature for the Classification of Goods in Customs Tariffs, done at Brussels on 15 December 1950;
• Considering also that the degree of detail required for Customs and statistical purposes by Governments and trade interests has increased far beyond that provided by the Nomenclature annexed to the above-mentioned Convention;
• Considering the importance of accurate and comparable data for the purposes of international trade negotiations;
• Considering that the Harmonized System is intended to be used for the purposes of freight tariffs and transport statistics of the various modes of transport;
• Considering that the Harmonized System is intended to be incorporated into commercial commodity description and coding systems to the greatest extent possible;
• Considering that the Harmonized System is intended to promote as close a correlation as possible between import and export trade statistics and production statistics;
• Considering that a close correlation should be maintained between the Harmonized System and the Standard International Trade Classification (SITC) of the United Nations;
• Considering the desirability of meeting the aforementioned needs through a combined tariff/statistical nomenclature, suitable for use by the various interests concerned with international trade;
• Considering the importance of ensuring that the Harmonized System is kept up-to-date in the light of changes in technology or in patterns of international trade;
• Having taken into consideration the work accomplished in this sphere by the Harmonized System Committee set up by the Customs Co-operation Council; and
• Considering that while the above-mentioned Nomenclature Convention has proved an effective instrument in the attainment of some of these objectives, the best way to achieve the desired results in this respect is to conclude a new international Convention.

Amendments in the Bills

Essentially, the amendment bills will amend the principal acts by replacing references to subheadings 3824.90.50 and 3824.90.60 with subheadings 3824.99.30 and 3824.99.40 in the definition of “biofuel blend”. The subheadings are references to the Harmonized System’s system of goods classification based on internationally agreed descriptors for goods. The classifications uniquely identify all traded goods and commodities and are uniform across all countries which implement the Harmonized System.

Other minor amendments will be made to the schedules of the principal acts to maintain the collection of the correct import duties for biofuel blends imported under the China-Australia Free Trade Agreement.

The amendment bills are currently awaiting second reading debate in the House of Representatives.

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Customs Amendment (2017 Harmonized System Changes) Bill 2016, Bill, Explanatory Memorandum and Second Reading Speech as published on LawOne

Customs Tariff Amendment (2017 Harmonized System Changes) Bill 2016, Bill, Explanatory Memorandum and Second Reading Speech as published on LawOne