House of Representatives

Explanatory Memorandum

Circulated By Authority of the Minister For Home Affairs, the Honourable Bob Debus MP

SCHEDULE 1 - GOODS CLAIMED TO BE PRODUCE OR MANUFACTURE OF SINGAPORE

Customs Act 1901

Background

16. The Singapore-Australia Free Trade Agreement (SAFTA) entered into force for Australia on 28 July 2003. The SAFTA provided for Ministerial review of the SAFTA one year after entry into force and biennially thereafter and allows for the SAFTA to be amended to ensure that the SAFTA remains relevant and able to offer additional benefits to business.

17. The first Ministerial Review meeting took place in July 2004. A package of amendments to the SAFTA was agreed to in that first Ministerial Review meeting to incorporate additional measures into the SAFTA. The package of amendments was tabled on 15 March 2005, and re-tabled on 31 May 2005, and was referred to the Joint Standing Committee on Treaties (JSCOT). JSCOT recommended that binding treaty action be taken in respect of the amendments (see Chapter 4 of Report 66 of the Joint Standing Committee on Treaties tabled in the House of Representatives on 17 August 2005).

18. The purpose of Schedule 2 is to implement the amendments to Articles 11 and 12 of Chapter 3 of the SAFTA to incorporate changes to Certificates of Origin (the proposed amendments).

19. Under the SAFTA, an importer of goods from Singapore into Australia requires a Certificate of Origin (issued by the Government of Singapore) and a Declaration (made by the Singaporean exporter) in order to claim a preferential rate of duty for the goods under the SAFTA. Preferential tariff treatment may be claimed by importers in respect of imported goods that are the produce or manufacture of Singapore under the SAFTA.

20. The Certificate of Origin is the certification by the Government of Singapore that particular goods being exported from Singapore are originating goods for the purposes of the SAFTA. A Certificate of Origin is required to contain a full description of the goods to which the Certificate relates, including the relevant code under the Harmonized Commodity Description and Coding System, and if applicable, product number and brand name.

21. The Declaration is by the Singaporean exporter of goods that the goods are originating goods and must contain, among other things, a statement that the goods being exported are identical to goods specified in a valid Certificate of Origin.

Current documentary requirements under SAFTA

22. Under current Articles 11 and 12 of Chapter 3 of the SAFTA, a Certificate of Origin can be used for multiple shipments of goods to which that Certificate relates within two years of its issue, provided that the first shipment occurs within the first year of issue. By contrast, an accompanying Declaration must be made for every shipment of the relevant goods.

23. Further, both the Certificate of Origin and Declaration must have been issued or made and possessed by the importer before the goods to which these documents relate are exported. Both documents must also be produced by the importer to an officer of Customs upon request.

New documentary requirements under SAFTA

24. The proposed amendments would enable a Certificate of Origin to be used for a single shipment (provided it is used within a year of its issue) or for multiple shipments (provided the shipments occur within two years of its issue and the first shipment occurred within the first year).

25. Where a Certificate of Origin is used for a single shipment of goods, a Declaration is not necessary. Where a Certificate of Origin is used for multiple shipments of goods, a Declaration is not necessary for the first shipment but is required for every subsequent shipment. At a practical level, this would mean that a Declaration would not be required by the importer for the first shipment of goods specified in a Certificate of Origin.

26. The proposed amendments would also require both the Certificate of Origin and Declaration, if required, to be issued and possessed by the importer before the goods to which the documents relate are entered for home consumption in the territory of the importing Party, as opposed to before the goods are exported. This provides more time for the Certificate of Origin and the Declaration to be obtained.

27. The Certificate of Origin and the Declaration, where required, must still be produced to an officer of Customs upon request.

Item 1 - Subsection 153VE(1 )

28. This item repeals and substitutes subsection 153VE(1). New subsection 153VE(1) implements the new documentary requirements under the proposed amendments with respect to a claim for preferential tariff treatment for goods imported from Singapore.

29. New subsection 153VE(1) provides that goods claimed to be the produce or manufacture of Singapore (and thereby eligible for preferential tariff treatment under the SAFTA as implemented in the Customs Tariff Act 1995 ) are not the produce or manufacture of Singapore unless:

a)

at the time of entry of the goods, the importer of the goods holds a valid Certificate of Origin relevant to those goods;

b)

if, at the time of entry of the goods, the importer of the goods has previously used that Certificate of Origin in respect of goods of the same kind - at the time of entry of the goods to which the claim relates the importer of those goods also holds a Declaration relevant to those goods; and

c)

if an officer requests production of a copy of any document that the importer of the goods is required to hold under paragraph (a) or (b)-a copy of that document is produced to the officer.

30. Paragraph (a) above maintains the requirement on importers to hold a valid Certificate of Origin relevant to goods on which preferential tariff treatment is claimed. Paragraph (a) makes it clear that the importer must possess the Certificate at the time of entry of the goods. This ensures that the Certificate of Origin must be issued before the goods are entered.

31. Paragraph (b) implements the change in the requirement for a Declaration. It provides that a Declaration is required only where the Certificate of Origin has been previously used in respect of goods of the same kind. Therefore, a Declaration is not required when the Certificate of Origin is being used for the first time in respect of goods to which the Certificate relates.

32. Paragraph (b) also makes it clear that, where required, the importer must hold the Declaration at the time of entry of the goods. This ensures that, where required, the exporter must make, and the importer must possess, the Declaration before the relevant goods are entered.

33. Paragraph (c) maintains the requirement on importers to produce the required Certificate of Origin or Declaration or both upon request.

Use of a Certificate of Origin

34. An importer uses a Certificate of Origin when the importer claims the preferential rate of duty under the SAFTA on goods to which the Certificate relates. In practice, a claim for a preferential rate of duty is made as part of the import declaration when entering the relevant goods for home consumption.

35. Further, a Certificate of Origin may be issued in respect of one particular kind of good or may relate to two or more different kinds of goods. Where a Certificate of Origin relates to two or more different kinds of goods, a Declaration in respect of each kind of good specified in the Certificate will not be required on the first time the Certificate is used for that kind of good.

Item 2 - Application

36. Item 2 makes it clear that new subsection 153VE(1) applies only to goods claimed, on or after the commencement of this item, to be the produce or manufacture of Singapore.