Senate

Explanatory Memorandum

(Circulated by authority of the Minister for Justice and Customs, Senator the Hon Christopher Martin Ellison)

ATTACHMENT A - To Schedule 1

Detailed description of Option 1

Option 1 - Amend legislation to underpin risk managed, flexible cargo management processes and systems

These changes would introduce the following key reforms to support the desired objective.

(a) Recognition of low risk import and export transactions and an importers or exporters capability to comply with regulations.

This reform would:

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allow importers who have well established compliance records in relation to import regulations to:

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take possession of their cargo on the basis of meeting minimum information requirements (a Request for Cargo Release);

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provide trade data returns to Customs on a periodic basis; and

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pay Customs duty (and proposed GST) liability periodically.

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provide exporters who have well established compliance records in relation to export regulations with:

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streamlined procedures for obtaining export clearance; and

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the capability to provide trade data returns to Customs on a periodic basis.

Authorisation to take advantage of these arrangements would depend on the importer or exporter making an application and being considered against criteria designed to assess the applicants compliance record. Indicative criteria would include items such as:

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business systems which satisfy generally accepted auditing standards;

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willingness to be subjected to a review;

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no convictions under the Customs Act 1901 in the preceding 5 years;

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past compliance record (whole of government);

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high level assurance provided through an unqualified audit opinion on the effectiveness of control procedures in relation to Customs responsibilities; and

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demonstrated ability to transfer data in a timely and accurate manner as prescribed by legislation.

(b) Improved cargo reporting mechanisms to ensure that:

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information about all cargo will be made available to Customs in an electronic form, prior to arrival in the case of imports or departure in the case of exports, allowing Customs to undertake the necessary profiling and screening for high risk cargo;

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cargo information is sourced from the party best equipped to provide the information; and

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where appropriate, clients can lodge a combined report to notify the arrival of cargo and import entry information.

(c) Provision of more open access to Customs computer systems for reporting the inward and outward movement of cargo, import entries/returns/declarations, export clearances and trade data returns.

(d) Allow for early identification of surplus (potentially high risk cargo) and shortlanded cargo

(e) Reformed Entry Requirement

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to simplify the import and export of transhipment goods; and

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to provide flexible arrangements for other goods.