Explanatory Memorandum
(Circulated by authority of the Assistant Minister for Customs, Community Safety and Multicultural Affairs, and Parliamentary Secretary to the Minister for Home Affairs, the Honourable Jason Wood MP)OUTLINE
The purpose of the Customs Amendment (2022 Harmonized System Changes) Bill 2021 (the Bill) is to amend the definition of 'tobacco products' in subsection 4(1) of the Customs Act 1901 (the Customs Act) to include a reference to new subheading 2404.11.00 of Schedule 3 of the Customs Tariff Act 1995 (Customs Tariff Act).
The Customs Act does not permit imported goods that are tobacco products to be entered for warehousing. Furthermore, a warehouse licence under the Customs Act is subject to the condition that no tobacco products will be warehoused in the warehouse.
The importation of tobacco products is prohibited under the regulation 4DA of the Customs (Prohibited Imports) Regulations 1956 unless a permission to import the tobacco products has been granted in writing by the Minister or an authorised person and the permission is produced to the Collector, or the Minister has approved the importation of specified tobacco products by legislative instrument. Tobacco products are also the subject of criminal offences in section 233BABAD of the Customs Act.
The Customs Act section 4 defines 'Tobacco products' as goods classified to specified subheadings in Chapter 24 of Schedule 3 of the Customs Tariff Act, including heading 2403 (excluding subheading 2403.99.10).
To implement the sixth review (the Review) of the Harmonized Commodity Description and Coding System, the Customs Tariff Amendment (2022 Harmonized System Changes) Bill 2021 (the Tariff Bill) amends the Customs Tariff Act to insert new subheadings, descriptions and notes. As part of the Review the World Customs Organisation created a classification, new subheading 2404.11.00, that applies to tobacco products designed for inhalation without combustion, commonly known as e-cigarettes. Trade in this class of goods is increasing and making a specific classification facilitates monitoring this trade and regulating this good if desired. The classification of these goods transfers from subheadings 2403.91.00 and 2403.99.80 and, as a result, the products will no longer be covered by the definition of tobacco products.
The Bill amends the definition of tobacco products to include new subheading 2404.11.00 so that goods classified to the new subheading will be covered by that definition. This will ensure that this category of tobacco products continues to be subject to the same regulatory requirements as existing categories of tobacco products.
FINANCIAL IMPACT STATEMENT
The measure in this Bill has no financial impact.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
A Statement of Compatibility with Human Rights in respect of the amendment contained in the Bill is at Attachment A . The Statement assesses the amendments to be compatible with Australia's human rights obligations.
Notes on Clauses
Clause 1 Short title
1. This clause provides that this Bill, when enacted, will be cited as the Customs Amendment (2022 Harmonized System Changes) Act 2021.
Clause 2 Commencement
2. This clause sets out in a table the date on which provisions of the Bill, when enacted, will commence. This clause also specifies that any information in column 3 of the table is not part of this Act, and that information may be inserted in this column, or information in it may be edited, in any published version of the Act.
3. Item 1 of the table provides that sections 1 to 3 and anything in the Act not elsewhere covered by the table, commence on the day that the Act receives the Royal Assent.
4. Item 2 of the table provides that Schedule 1 commences at the same time as the Customs Tariff Amendment (2022 Harmonized System Changes) Act 2021, which is expressed to commence on 1 January 2022. Where that Act does not commence, the table provides that the provisions in Schedule 1 also do not commence.
Clause 3 Schedules
5. This is the formal enabling provision for the Schedule to the Bill. It provides that legislation that is specified in the Schedule to the Act is amended in accordance with the applicable items of the Schedule. The Customs Act 1901 (Customs Act) is amended.
SCHEDULE 1 - AMENDMENTS
Customs Act 1901
Item 1 Subsection 4(1) (definition of tobacco products )
6. Subsection 4(1) defines 'tobacco products' as goods classified to headings 2401, 2402 and 2403 in Schedule 3 to the Customs Tariff Act 1995 (Schedule 3). Subheadings 2402.90.00 and 2403.99.10 to Schedule 3 are excluded from this definition.
7. To implement the outcomes of the sixth review (the Review) of the Harmonized Commodity Description and Coding System, the Customs Tariff Amendment (2022 Harmonized System Changes) Bill 2021 (the Tariff Bill) amends the Customs Tariff Act to insert new subheading 2404.11.00 into Schedule 3 of the Customs Tariff Act. This new subheading provides for the classification of products intended for inhalation without combustion, containing tobacco or reconstituted tobacco. The classification of these goods transfers from subheadings 2403.91.00 and 2403.99.80 and as a result, the products are no longer covered by the definition of tobacco products.
8. The item amends the definition of tobacco product to insert "or subheading 2404.11.00" after the reference to "2403". The inclusion of new subheading 2404.11.00 means that goods classified to that subheading continue to be tobacco products and continue to be subject to the same regulatory requirements as existing categories of tobacco products.
Item 2 Application provisions
9. This item provides that the amendments made by Schedule 1, to the extent that they relate to subsection 82(2) of the Customs Act, apply in relation to:
- (a)
- a warehouse licence granted on or after the commencement of this item; and
- (b)
- a warehouse licence in force immediately before that commencement.
10. Section 82(2) sets out the condition that no tobacco products can be warehoused in a warehouse. This provision will ensure that this condition applies to tobacco products covered by the new subheading.
11. To the extent that the amendments made by Schedule 1 relate to subsection 206(2A) of the Customs Act, this item provides that the amendment applies in relation to goods seized on or after the commencement of this item. Section 206(2A) sets the disposal power for prohibited imports that are tobacco products. This provision will ensure that this disposal power applies to tobacco products covered by the new subheading seized on or after commencement.
12. To the extent that the amendments made by Schedule 1 relate to subsection 233BABAD of the Customs Act, this item provides that the amendment applies in relation to goods imported on or after the commencement of this item. Section 233BABAD contains the criminal offence provision for importing, possessing or conveying tobacco products. This item will ensure that the offence provision applies to tobacco products covered by the new subheading imported on or after commencement.
Attachment A - Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Customs Amendment (2022 Harmonized System Changes) Bill 2021
This Bill is compatible with human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Bill
The purpose of the Customs Amendment (2022 Harmonized System Changes) Bill 2021 (the Bill) is to amend the definition of 'tobacco products' in subsection 4(1) of the Customs Act 1901 (the Customs Act) to include a reference to new subheading 2404.11.00 of Schedule 3 of the Customs Tariff Act 1995 (Customs Tariff Act).
The Customs Act does not permit imported goods that are "tobacco products" to be entered for warehousing. Furthermore, a warehouse licence under the Customs Act is subject to the condition that no tobacco products will be warehoused in the warehouse.
The importation of tobacco products is prohibited under the regulation 4DA of the Customs (Prohibited Imports) Regulations 1956 unless a permission to import the tobacco products has been granted in writing by the Minister or an authorised person and the permission is produced to the Collector, or the Minister has approved the importation of specified tobacco products by legislative instrument. Tobacco products are also the subject of criminal offences in section 233BABAD of the Customs Act.
The Customs Act section 4 defines 'Tobacco products' as goods classified to specified subheadings in Chapter 24 of Schedule 3 of the Customs Tariff Act, including heading 2403 (excluding subheading 2403.99.10).
To implement the sixth review (the Review) of the Harmonized Commodity Description and Coding System, the Customs Tariff Amendment (2022 Harmonized System Changes) Bill 2021 (the Tariff Bill) amends the Customs Tariff Act to insert new subheading 2404.11.00 into Schedule 3 of the Customs Tariff Act. This new subheading provides for the classification of products intended for inhalation without combustion, containing tobacco or reconstituted tobacco. The classification of these goods transfers from subheadings 2403.91.00 and 2403.99.80 and, as a result, the products will no longer be covered by the definition of tobacco products.
The Bill amends the definition of tobacco products to include new subheading 2404.11.00 so that goods classified to the new subheading will be covered by that definition. This will ensure that this category of tobacco products continues to be subject to the same regulatory requirements as existing categories of tobacco products.
Human rights implications
The Bill does not engage any of the applicable rights or freedoms.
Conclusion
The Bill is compatible with the human rights as it does not raise any human right issues.
The Hon. Jason Wood, Assistant Minister for Customs, Community Safety and Multicultural Affairs and Parliamentary Secretary to the Minister for Home Affairs