Supplementary Explanatory Memorandum(Circulated by authority of the Assistant Minister for Immigration and Border Protection, the Honourable Alex Hawke MP)
The Customs Amendment (Singapore-Australia Free Trade Agreement Amendment Implementation) Bill 2017 (the Bill) proposes to amend the Customs Act 1901 (the Customs Act) to give effect to new Chapters in the Singapore-Australia Free Trade Agreement inserted by the Agreement to Amend the Singapore-Australia Free Trade Agreement (collectively referred as the "Amended Agreement").
In particular, the Bill proposes to insert a definition of "Harmonized System", which means the Harmonized Commodity Description and Coding System (as in force from time to time) (the HCDC System) that is established by or under the International Convention on the HCDC System done at Brussels on 14 June 1983, as in force from time to time.
The HCDC System is a structure for classifying goods based on internationally agreed descriptors for goods and related six-digit codes administered by the World Customs Organization (the WCO). This six-digit classification uniquely identifies all traded goods and commodities and is uniform across all countries that have adopted the HCDC System.
The WCO reviews the system every five years to reflect changes in industry practice, technological developments and evolving international trade patterns. While each signatory to the Convention is required to implement and reflect related amendments to the HCDC System in their domestic legislation, simultaneously on the entry into force date, the pace at which the amendments are implemented varies from country to country.
Singapore currently uses the HCDC System of 2012, and their Government has publicly expressed through their Customs Agency's website that they intend to move to the HCDC System of 2017 in 2018.
The policy intention underlying the Amended Agreement is for the HCDC System of 2012 used by Singapore to be recognised, for the purposes of the product-specific rules, in our domestic legislation, which provides for the HCDC System of 2017. Therefore, it is proposed to replace existing definition of "Harmonized System" with a new definition.
The new definition would expressly recognise in the Customs Act the version of the HCDC System currently used by Singapore, and allow subsequent versions of that System to also be recognised. This is because Singapore publicly expressed through their Customs Agency's website that they intend to move to the HCDC System of 2017 in 2018.
In light of the pending changes to be made by Singapore, it is also proposed to incorporate by reference the new Annex 2 of the Amended Agreement, for the purpose of identifying the product-specific rules that apply to goods as set out in that Agreement, instead of prescribing those same rules by way of a regulation.
The incorporation of new Annex 2 to the Amended Agreement, by reference, does not change the intended operation of the product-specific rules. Rather, as that Agreement is relevantly defined in new subsection 153XD(1) to be inserted by the Bill to be the Agreement as amended from time to time, to facilitate for the revised Annex that would be contained in that Agreement when Singapore implements the HCDC System of 2017 to also be incorporated.
None of the amendments proposed would change the intended operation of the amendments proposed in the Bill.
FINANCIAL IMPACT STATEMENT
The amendments proposed do not add or subtract from the financial implications noted in the Explanatory Memorandum for the Bill.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
A Statement of Compatibility with Human Rights has been completed in relation to the amendments proposed to the Bill and assessed the amendments to be compatible with Australia's human rights obligations. A copy of the Statement of Compatibility with Human Rights is at Attachment A .
REGULATION IMPACT STATEMENT
The amendments proposed do not add or subtract from the measures for which the Regulation Impact Statement contained in the Explanatory Memorandum for the Bill is intended to address.