Chapter 2 Foreign Trade System and Law

2.1 Importing goods into Australia

The Customs Act 1901（Cth）broadly regulates the import and export of goods.

There are no requirement for importers（companies or individuals）to hold an import licence to import goods into Australia. However, depending on the nature of the goods and regardless of value, importers may need to obtain a permit to clear certain imported goods from customs control. The Australian Border Force（ABF）must clear all goods imported into Australia whether they are imported by air, sea or post. All goods imported with a value of more than USD 1,000 must be cleared by submitting a completed import declaration form and paying any duty, goods and services tax（GST）and other taxes and charges that may apply.

2.1.1 Duties and taxes

Customs duty is levied on most goods imported into Australia for domestic consumption. Rates are determined by the tariff classification contained in the Customs Tariff Act 1995（Cth）. In general, customs duty is assessed on an ad valorem basis, meaning the duty is based on the value of the imported goods. It is important to be aware that classification for customs duty purposes is difficult and, therefore, expert advice should be sought. GST also applies to most imported goods at 10 percent of the value of the taxable importation. The import tax is the sum of the customs value, any duty payable, the amount paid or payable to transport the goods to Australia and to insure the goods for that transport, and any Wine Equalisation Tax payable. Currently, GST is not levied on most overseas purchases valued at AUD 1,000 or less. However, it is proposed that this GST-free threshold be abolished from 1 July 2017. This will impact consumers; however, it is also worth noting this implication if your business imports goods into Australia via online purchases as a 10 percent GST charge will be applied to the goods upon importation to Australia.

It is worth noting that a new law applying GST to international sales of services and digital products will apply in Australia from 1 July 2017.

2.1.2 Quarantine

Imported goods will also undergo scrutiny by the Department of Agriculture and Water Resources to ensure control of pest and disease risk to Australia.

Importers are furthermore required to ensure that imported goods are correctly labelled. As an example, imported goods which require a trade description must be marked with the name of the country in which the goods were made or produced, and where required, a true description of the goods.

The Australian Government is authorised to control the import of goods into Australia. This means that the government is authorised to：

a）prohibit the import of goods；

b）restrict import of goods and require permission in order to import.

1）Firearms and weapons

The Government exercises this control in relation to firearms and weapons most of which require permission to be imported into Australia. Further, certain weapons must pass certain specific tests. The amendments in the Customs（Prohibited Imports）Regulations 1956（Cth）introduced in 2015 simplify certain processes for the lawful importation of certain firearms and weapons under specific circumstances. The most significant amendments implemented in 2015 mean that import permission is no longer required for the following goods：

• imported goods for the purposes of transhipment（Regulation 3D）.

• the re-importation of firearms used in lawful shooting or hunting activities overseas by Australian residents（subject to conditions in new Regulation 3E）.

• goods imported by Australian Community members of the Australia-United States Defence Trade Cooperation Treaty（new Regulation 3F）.

The amendments regard adjustable, detachable and folding stocks as part of firearm rather than firearm accessory. This will impact the necessary test.

Anti-personnel sprays and chemicals have been removed from Schedule 3 and are now classified under a new Item 45 of Schedule 13; This allows these goods to be treated consistently with other Schedule 13 weapons, such as the requirement for importers to meet one of the applicable“tests”.

Military vehicles, aircraft and vessels within the categories of battle tanks, armoured combat vehicles, combat aircraft, attack helicopters and warships are now controlled under Item 1A of Schedule 13. This ensures that offensive military vehicles, aircraft and vessels that contain weapons are controlled on import. It also ensures that civilian dual-use parts and components which are unrelated to weapons（such as axles, engine parts, gearboxes, rotors etc.）can be imported without a permit.

“Flipper knives”have been removed from import control under Item 14 of Schedule 13, however, the controls remain on automatic and assisted opening knives（i. e. switchblades and flick knives）. These amendments mean that import of single-handed opening knives, which are often used for outdoor activities such as camping，and which can be opened by gravity, inertia or centrifugal force are now allowed without any restrictions.

Item 41 of Schedule 13 concerning body armour has been amended and now expresses that only body armour or similar goods which are designed for anti-ballistic or anti-fragmentation purposes and subsequently not designed to be worn on the human body are controlled. Goods such as eye and hearing protection, helmets and vests or plate carriers with no anti-ballistic or anti-fragmentation protection are exempt from this restriction.

2）Asbestos

In 2003, the manufacture and use of all types of asbestos and asbestos containing material is banned in Australia nation-wide subject to certain exceptions. This means that the import and export of asbestos is prohibited unless an exception applies. In this regards, it must be noted that some goods manufactured in other countries, even though labelled as asbestos free, may still contain asbestos and will therefore not be permitted for import into Australia except in very limited circumstances. An example of such exception is where traces of asbestos naturally occur in raw material or where permission has been granted by the Minister administering the Work Health and Safety Act 2011, currently the Minister for Employment.

If asbestos is detected in any imported goods, the goods are seized as a prohibited import, and will be forfeited to the Crown for disposal and further, the importers may be subject to penalties and/or prosecution in accordance with the Customs Act 1901（Cth）and the Crimes Act 1914（Cth）.

3）Tobacco and Cigarettes

From 1 December 2012, all tobacco products sold, offered for sale or supplied within Australian must be in plain packaging: Tobacco Plain Packaging Act 2011（TPP Act） .

Usually taxes payable on cigarettes and tobacco are expressed as a duty payable per number of cigarette sticks, per grams of tobacco weight or a tax based on the monetary value of the products. The Australian Government has imposed taxes on Australian-made and a customs duty on imported tobacco products since the passage in 1901 of the Excise Act 1901（Cth）and the Customs Act 1901（Cth）.

Up until 1999, customs duty on cigarettes and tobacco was calculated on the basis of the weight of tobacco products. The Excise Regulations 1925（Cth）specified precisely how manufacturers needed to label, calculate and declare excise duty. These also specified how the weight of tobacco products（and the volume of alcohol and petroleum products）was to be calculated. For cigarettes, this included the weight of filter and paper, but not the weight of the packaging. However, in 1999, after extensive lobbying by health groups, the Australian Government moved away from imposing customs duty on the basis of weight to a system based on the number of cigarettes. The rates of this duty is linked to the Australian Consumer Price Index（CPI）meaning that this customs duty automatically increases in February and August each year in line with the CPI for the six months to the previous December and June. Between 1999 and 2010 there has been no increase in tobacco excise and customs duty on tobacco products apart from adjustments for CPI. The current exercise rate as of September 2016 is AUD 0.61054 per stick or AUD 763.20 per kilogram of tobacco content. These figures are expected to increase by 12.5 percent by September 2017.

Unlike in many other countries which introduced goods and services taxes, in Australia（as requested by health groups）the excise duty on tobacco was not adjusted downward when the 10 percent goods and services tax was introduced. The GST came into force in Australia on tobacco and all other retail services and products excluding grocery items on 1 July 2000.

As with all other taxable products and services in Australia, the GST is calculated by adding 10 percent to the pre-GST price. In this way, the GST makes up one-eleventh or 9.1 percent of the final price of each packet of cigarettes, cigars or smoking tobacco. In 2012, taxes from tobacco in Australia made up about 60 percent of the final price of a typical packet of cigarettes.

4）Goods for consumption

In terms of goods for consumption, Australia adopts a strict policy as regards imports. The Department of Agriculture and Water Resources is responsible for administering two sets of requirements for imported food which are designed to protect Australia against biosecurity risks, under the Biosecurity Act 2015（Cth）and to address food safety, as set out in the Imported Food Control Act 1992（Cth）. In this regard, all imported food must comply with the biosecurity requirements. Commercial importers of food such as fresh fruit and vegetables or food containing milk, egg, meat or other animal products may be required to obtain an import permit prior to importing.

Further, Australia requires a complex approval process before permitting import of bovine products from countries that have reported any indigenous cases of bovine spongiform encephalopathy. Import of all consignments of beef and beef products for human consumption imported into Australia must comply with the biosecurity and bovine spongiform encephalopathy（BSE）food safety requirements. Food Standards Australia New Zealand—a regional food safety agency—conducts an individual country risk assessment and additionally, the Australian Department of Agriculture conducts an independent import risk assessment for each exporting country to address animal quarantine issues. Currently, China is not included on their list of approved countries which are eligible to apply for an import permit and is subsequently not allowed to export bovine products into Australia.

These import restrictions are due to an Australian desire to prevent diseases such as porcine reproductive, respiratory syndrome and post-weaning multi-systemic wasting syndrome. Finally, Poultry Australia prohibits the imports of fresh, frozen, and cooked poultry meat, including turkey due to concerns about infectious bursal disease.

Australia imposes conditions on the import of plants and plant products to effectively manage biosecurity risks that are associated with these types of goods. The conditions outline the commodities that can be imported to Australia and how they can be imported safely. Import conditions apply to both consignments imported for sale or commercial use within Australia and personal consignments including items in baggage accompanying international passengers and mailed items. These restrictions are designed to ensure sustained health of Australia's agricultural and forestry industries. Plant health is critical to the long-term viability of Australia's cropping and forestry industries and helps sustain our animal-based industries.

Not all live animals and reproductive materials are allowed to be imported into Australia. This is due to the pest or disease risks associated with their importation which may interfere with the biosecurity and Australian agriculture. Currently, only birds and rabbits from New Zealand may be imported into Australia. Cats, dogs and horses are only allowed to be imported from certain approved countries.

The Australian Animal Welfare Standards and Guidelines（Model Codes of Practice）assists in maintaining a nationally consistent animal welfare standards between the Australian states and territories. This model code practice regulates the transport of livestock by road or rail. Regulation commences at the time that animals are first deprived of feed and water prior to loading, and continues to the time that livestock have access to water（with the exception of day-old chicks and poultry sent for processing）at the completion of the journey（destination）. This includes mustering and assembly, handling and waiting periods prior to loading, journey duration, travel conditions, spelling periods as well as unloading and holding time.

These standards apply to all people responsible for the care and management of livestock involved in the transport of livestock, including agents, transport operators, people on farms, at depots, sale yards, feedlots and processing plants. The Standards apply to the major commercial livestock species such as cattle, sheep, pigs, goats, poultry（broilers, layers, turkeys, ducks, geese）, ratites（emus and ostrich）, buffalo, deer, camels, alpacas and horses（including horses used for sport and recreation）.

2.2 International organisations and trade agreements

International trade is a vital component of a robust economy, and the development of a liberal global trading system is an important aspect of the Australian Government's foreign policy agenda. The Australian Government is a participant in, and strong supporter of, the World Trade Organisation（WTO）and regional institutions such as the Asia-Pacific Economic Cooperation（APEC）. The Australian Government also actively pursues free trade agreements and bilateral agreements with its trading partners. Australia is party to free trade agreements with the Association of Southeast Asian Nations, New Zealand, Chile, the United States, Thailand, Singapore, Malaysia, China, Japan and R. O. Korea. Australia has signed the Trans Pacific Partnership Agreement but it has not yet entered into force. The Australian Government is currently in negotiation of the Indonesia-Australia Comprehensive Economic Partnership Agreement, the Australia-India Comprehensive Economic Cooperation Agreement, the Gulf Cooperation Council Free Trade Agreement, the Pacific Agreement on Closer Economic Relations and the Regional Comprehensive Economic Partnership Agreement. Australian and EU officials are also working towards launching negotiations for an Australia-European Union Free Trade Agreement. Australia is also a party to a number of bilateral investment treaties, notably with China, Vietnam, Indonesia and India, setting out the terms of private investment between the countries.

Information on all FTAs and BITs signed by Australia can be found on DFAT or Austrade websites.

2.3 Exporting goods from Australia

There is no need to obtain a licence to export goods from Australia, except for some goods. The export of goods from Australia is controlled by laws and government policies designed to prohibit the export of certain goods either absolutely or conditionally and to maintain an adequate record of Australia's international trade. A total prohibition applies to the export of protected wildlife, some heritage items，selected weapons and other dangerous goods. Goods that are conditionally prohibited from export may not be exported unless all necessary export permits are obtained from the relevant permit issuing agency/agencies. The Export Control Manual Vol. 12 provides the necessary information on Australian export requirements.

An export declaration is a statement made by the exporter（owner of the goods）, or their agent, to the department providing information concerning the goods and the export transaction. The declaration may be lodged through the Integrated Cargo System.

When an export declaration has been lodged with the department, an Export Declaration Number（EDN）is provided. Goods may not be exported, or loaded on a ship or aircraft for export, unless they have been entered for export（some exemptions apply）and the department has given approval to export by means of a cleared status. An Export Declaration may be lodged either electronically through the Integrated Cargo System（ICS）, in person at one of the counters of Customs and Boarder Protection using the Export Declaration（B957 Form）or a courier can be used to lodge an Export Declaration at specified counters when prior approval from Customs and Border Protection has been granted. Amendments to or withdrawal from an already lodged Export Declaration may be faxed, mailed, or presented at one of the offices of Customs and Boarder Protection in a state or territory.

An Australian Harmonised Export Commodity Classification（AHECC）is an eight-digit code used to classify goods for export. The AHECC is maintained by the Australian Bureau of Statistics（ABS）and can be accessed from the Australian Bureau of Statistics website.

2.3.1 Anti-dumping

The Anti-Dumping Commission（ADC）was established by the Australian Government to administer Australia's anti-dumping system. The legislation governing anti-dumping is made up of the following laws: the Customs Act 1901（particularly Parts XVB and XVC）, the Customs Tariff（Anti-Dumping）Act 1975（Dumping Duty Act）, the Customs Administration Act 1985; the Customs Regulations 1926 and Customs Tariff（Anti-Dumping）Regulation 2013.

Dumping occurs where an exporter sells goods（any types of goods）into a country at a price below the price paid for the same goods in the country of export. If dumping occurs in Australia, a member of an Australian industry that produces goods similar to the dumped goods（technically known as“Liked Products”）may lodge a complaint with the Commission. The Commission has considerable discretion in imposing anti-dumping measures depending on whether dumping has taken place and whether such dumping causes material injury to an Australian industry. Many of the goods currently subject to anti-dumping measures are raw materials used in manufacturing, such as metals, plastics and compounds. For example, A4 copy paper from China, Brazil, Indonesia and Thailand; aluminium extrusions from China, Malaysia, Vietnam; aluminium Zinc coated steel from China, Republic of Korea; pineapple from Thailand; tomato products from Italy, have been subject anti dumping investigations by the ADC in 2016—2017.

If there is a finding of dumping, the responsible Minister may impose dumping duty on imported goods to offset the effects of the material injury to industry. Typically, this duty will be calculated as the difference between the price of the relevant goods exported and the price paid for the same goods in the country of export. As an alternative to imposing dumping duty, the responsible Minister may accept from the exporter an undertaking that it will in the future only sell the relevant goods at or above a minimum price（generally being the price paid for the same goods in the country of export.

2.3.2 Restrictions-export control

There are relatively few limitations on exports from Australia and most exported goods or services will be GST-free, provided they are exported within 60 days after the issuance of an invoice or receipt of payment by the exporter. In order to export goods from Australia with a value of AUD 2,000 or more, an exporter or its agent must lodge an export declaration with the Australian Border Force（ABF）. Any goods that require a permit for export must be reported on an export declaration regardless of value. The ABF, through the online Integrated Cargo System, will then issue an Export Declaration Number for the proposed export. Ships or aircraft may not depart from Australia unless the ABF has issued a Certificate of Clearance. The export of certain goods（such as radioactive substances, hazardous waste, certain prescription medicines and biological agents）is restricted. In these cases, the exporter must seek permission to export from the appropriate governmental authority. It is prohibited to export certain other goods, such as protected wildlife, some cultural and heritage items and selected weapons and other dangerous goods. Exporters must also comply with quarantine and inspection requirements for certain exports such as food and other animal or plant products. In certain circumstances, exporters may be required to obtain approval and health certification from the Department of Agriculture and Water Resources. Export control on dual-use goods restrictions apply to“dual-use goods”, which are goods that have a valid commercial application, but may also be used in the development and deployment of military systems or weapons of mass destruction programs. Examples of dual-use goods are certain electronic or telecommunications items and certain biological or chemical material. Exporters of dual-use goods must seek prior approval from the Defence Export Control Office.

2.3.1 Live export

Live export from Australia is regulated by a comprehensive framework administered by the Department of Agriculture and Water Resources. The framework includes the requirement to comply with the Australian Standards for the Export of Livestock（ASEL）. The ASEL covers the sourcing of export livestock, their management in registered premises, loading of livestock onto a vessel, management on board a vessel and standards for land and air transport. Arrangements to ensure that exported animals are well treated during road, sea and air transportation are an important part of duties of the ASEL.

2.3.2 Trade sanctions

Trade sanctions impose restrictions on activities that relate to particular countries, persons, goods and services that are of international concern. Australia implements United Nations Security Council（UNSC）sanctions regimes as well as Australian autonomous sanctions regimes. Australia is obliged to implement UNSC sanctions regimes as a matter of international law. The sanction regimes Australia currently implements in respect of the following countries: Central African Republic, Democratic Republic of Congo, Eritrea, Guinea-Bissau, Iraq, Lebanon, Liberia, Somalia, Sudan, Yemen, Iran, Libya, Myanmar, Russia, Syria, Ukraine and Zimbabwe. The nature and effect of these sanction regimes varies between the sanctioned countries. The Department of Foreign Affairs and Trade maintains a consolidated list of all persons and entities subject to Australian sanctions laws. The Minister for Foreign Affairs may grant a permit authorising an activity that would otherwise contravene an Australian sanction law. Different sanctions regimes impose different criteria which must be satisfied before the Minister or the Minister's delegate may grant such a permit. The Minister may attach conditions to any such sanctions permit. An application for a sanctions permit should generally include complete information about the activity. This includes, for example, the full path for any goods or services that a business and service provider may provide directly or through any intermediaries to the end-user; and the full path for any payment that a business and service provider may receive in return, from the end-user directly or through any intermediaries.