Appendix B: Biographical details – Taskforce members

Appendix D: Regulatory framework

D1. Introduction

The purpose of this Appendix is to highlight key elements of Australia’s regulatory framework by reference to various stages of the import process for both international mail, and air and sea cargo, being:

• 
  the arrival of mail and cargo into Australia;
  
• 
  border control (security and biosecurity); and
  
• 
  the application of imposts (GST and customs duty).
  

These arrangements are determined by an extensive legislative framework which governs the way in which Australia’s border security, biosecurity and revenue assessment processes operate with respect to international mail, air and sea cargo, and goods brought into the country by international travellers. Relevant instruments that impact upon these processes include, but are not limited to:

• 
  Acts and Regulations
  

• 
  A New Tax System (Goods and Services Tax) Act 1999
  
• 
  A New Tax System (Luxury Car Tax) Act 1999
  
• 
  A New Tax System (Wine Equalisation Tax) Act 1999
  
• 
  Australian Bureau of Statistics Act 1975
  
• 
  Australian Postal Corporation Act 1989
  
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  Australian Postal Corporation Regulations 1996
  
• 
  Australian Postal Corporation (Performance Standards) Regulations 1998
  
• 
  Commerce (Trade Descriptions) Act 1905
  
• 
  Copyright Act 1968
  
• 
  Customs Act 1901
  
• 
  Customs Administration Act 1985
  
• 
  Customs Regulations 1926
  
• 
  Customs (Prohibited Imports) Regulations 1956
  
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  Customs Tariff Act 1995
  
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  Customs Tariff Regulations 2004
  
• 
  Crimes Act 1914
  
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  Financial Transactions Report Act 1988
  
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  Imported Food Control Act 1992
  
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  Import Processing Charges Act 2001
  
• 
  Motor Vehicle Standards Act 1999
  
• 
  Quarantine Act 1908
  
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  Quarantine Service Fees Determination 2005
  
• 
  Therapeutic Goods Act 1989
  
• 
  Trade Marks Act 1995
  
• 
  Wildlife Protection (Regulation of Exports and Imports) Act 1982
  

• 
  Free Trade Agreements
  

• 
  ASEAN-Australia-New Zealand FTA
  
• 
  Australia-Chile FTA
  
• 
  Australia-New Zealand Closer Economic Relations
  
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  Australia-United States FTA
  
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  Singapore-Australia FTA
  
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  Thailand-Australia FTA
  

• 
  International Treaties and other International Cooperative Arrangements
  

• 
  Universal Postal Union (UPU)
  
  • 
    Universal Postal Convention
    
  • 
    General Regulations of the Universal Postal Union
    
  • 
    Postal Payment Services Agreement
    
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  World Customs Organization (WCO) Conventions (1952-2008), including the International Convention on the simplification and harmonization of Customs procedures (Kyoto Convention) as amended (2006)
  
• 
  World Trade Organization (WTO)
  
  • 
    WTO Agreement on Valuation (1969)
    
  • 
    WTO Agreement on Rules of Origin
    

• 
  MoU between the Australian Customs and Border Protection Service, Australian Quarantine and Inspection Service (now known as DAFF Biosecurity) and Australia Post on administrative arrangements at the mail Gateways.
  
• 
  MoU between Australian Customs and Border Protection Service and the Australian Taxation Office in relation to the performance of functions that relate to the joint administration of the Goods and Service Tax (GST), Luxury Car Tax (LCT) and Wine Equalisation Tax (WET). 
  

For the purposes of brevity, it is not intended that this Appendix detail every aspect of this regulatory framework. However, in considering its recommendations the Taskforce intends to assess such changes as may be required to these arrangements.

D2. Arrival of mail and cargo into Australia

Regulatory arrangements with respect to the arrival of goods arriving into Australia relate generically to the reporting requirements, and the movement of mail and cargo. Issues relating to prohibitions and restrictions of goods are dealt with separately below.

Inbound reporting requirements for cargo (including mail)

Generally, the arrangements governing the reporting of goods entering into Australia are:

Activity	Agency	Legislative Basis or Otherwise
All arrivals of cargo (defined to include mail items) into Australia must be reported to Customs and Border Protection.	ACBPS	See generally Pt IV Division 3 Customs Act 1901.
For the purposes of the Customs Act 1901, cargo includes “mail”.	ACBPS	See section 63A Customs Act 1901– definitions of “cargo” and “mail”.
For cargo arriving by ship or aircraft, reporting requirements may include: an impending arrival report; a cargo report; a cargo list report (for sea cargo); an actual arrival report. Generally these reports are provided electronically through the ICS.	ACBPS	Sections 64, 64AA and 64AB Customs Act 1901; Regs 25-27, 28-29 Customs Regulations 1926.
Air cargo is generally reported at a House Air Waybills (HAWB) level and sea cargo by a bill of lading. These provide details on the contents of individual consignments. However, since 2002 international mail items arriving by aircraft is reported at the Master Air Waybill (MAWB) level based on the data elements available in existing industry documents.	ACBPS	As to the general reporting requirements with respect to cargo, see generally section 64AB Customs Act 1901. It is a Customs and Border Protection Policy Decision generally to only report mail at the MAWB level as mail does not have data available on what it contains.

Dealing and moving cargo and mail upon arrival

The movement of cargo and mail is strictly controlled on entering Australia to ensure clear accountability through border assessment processes. Generally, the arrangements governing the reporting of goods entering into Australia are:

Activity	Agency		Legislative Basis or Otherwise
Generally, it is an offence to move cargo (including mail) that is subject to Customs control.	ACBPS	Section 33 Customs Act 1901
When unloading cargo (including mail) (the Customs and Border Protection terminology is outturn), an outturn report is required to be communicated to Customs and Border Protection at the level at which it was initially reported (MAWB or otherwise).	ACBPS	Sections 64ABAA, 64ABAB of the Customs Act 1901. It is a Customs and Border Protection policy requirement that mail can be outturned at the MAWB level; other cargo arriving by air is generally required to be outturned at the HAWB level.
Subsequent movements of cargo prior to release (including mail) may only be undertaken when permission has been granted by Customs and Border Protection (noting that the movement of individual mail items between mail gateways after deconsolidation is done on a manual underbond movement with Customs and Border Protection approval).	ACBPS		See generally section 71E of the Customs Act 1901.
Generally, declarations are required to be made with respect to cargo other than mail prior to its release. The form of declaration will depend upon the nature of the cargo, and include:
- import and warehouse declarations;	ACBPS		See Pt IV Division 4 Subdivision B Customs Act 1901; reg 43 Customs Regulations 1926.
- self assessed clearance declarations;	ACBPS		See Pt IV Division 4 Subdivision AB Customs Act 1901.
- unaccompanied personal effects statement.	ACBPS		See Pt IV Division 4 Subdivision AA Customs Act 1901.
Goods may only be taken from designated locations (“Customs places”) once an authority to deal with the goods has been provided by Customs and Border Protection.	ACBPS		See, for example, sections 71; 71C (import declarations); 71DE (request for cargo release); 71DJ (warehouse declarations) Customs Act 1901. As to definition of “Customs place”, see section 183UA Customs Act 1901.
Generally, only mail items with a value of above $1000 are required to have an import declaration prior to them being released.	ACBPS		See Pt IV Division 4 Subdivisions AA, AB; reg 41B Customs Regulations 1926.

D3. Border Control (security and biosecurity)

The following section details the high level framework by which Customs and Border Protection Service and DAFF Biosecurity address their obligations in the border control process.

Mail opening

Specific reference is made to mail opening because, in the international mail environment, border processes have been designed having regard to the requirement that, in most circumstances, Australia Post is the only entity authorised to open mail items for inspection by Customs and Border Protection, or DAFF Biosecurity.

Activity	Agency	Legislative Basis or Otherwise
Only authorised examiners (Australia Post employees) may open the mail for inspection.	Australia Post	Sections 90M-90X of the Australian Postal Corporation Act 1989.
Articles reasonably believed to contain drugs (or pre-cursor chemicals) may be opened by a Customs officer.	ACBPS	Section 90T of the Australian Postal Corporation Act 1989.

Inspection of mail and cargo (and related activities)

A suite of legislative and regulatory arrangements govern both the capacity and manner in which Australia’s border agencies may undertake their responsibilities (for example, inspection, seizure, etc), and more generally the nature of the goods and risks which are the primary subjects of their attention.

Activity	Agency	Legislative Basis or Otherwise
Border security
Generally all goods (including mail) imported into Australia are subject to Customs and Border Protection control until they have been authorised for release.	ACBPS	See sections 30, 35 of the Customs Act 1901. As to powers of Customs Officers generally, see Pt XII Division 1 Customs Act 1901.
A range of goods are prohibited – either absolutely or subject to certain circumstances – from being imported into Australia and generally will not be released. These include, but are not limited to: - firearms; - asbestos; - objectionable goods; and - drugs and precursors.	ACBPS	See generally Pt IV Division 1 Customs Act 1901; Customs (Prohibited Imports) Regulation 1956.
In addition to these prohibited goods, there are a number of other legislative instruments that may result in goods being prevented from being imported into Australia. Goods that may be subject to such constraints include goods that are not as described; do not meet Australian standards; are pirated or counterfeit goods, cash, and substances subject to the Therapeutic Goods Act 1989.	ACBPS	See, for example: Commerce (Trade Descriptions) Act 1905; Motor Vehicle Standards Act 1989; Therapeutic Goods Act 1989 (for example, sections 14B (application of Customs Act 1901); 42E (which includes an offence with respect to the import of counterfeit therapeutic goods); Trade Marks Act 1995 (see generally Pt 13).
In addition to Australian regulatory instruments, the UPU Convention also has a list of items prohibited from being sent in the mail including but not limited to: narcotics; obscene or immoral articles; counterfeit or pirated articles; explosives, radioactive materials or dangerous goods; live animals; insertion of correspondence into parcels; and coins banknotes and other valuable articles. There are exceptions to some of these and in many cases prohibitions may be far wider depending on the laws of the country.	Australia Post (UPU)	Articles 15 and 16 of the UPU Convention.
Border security fees and charges Border security fees and charges are subject to a range of regulatory instruments that affect their level (and limits).	ACBPS	See generally: Customs Depot Licensing Charges Act 1997; Import Processing Charges Act 2001; Customs Act 1901 (e.g. section 85 – fees for warehouse licence), 183CL (fees for licensing of customs brokers); see also Customs Regulations 1926 (regs 50-51 (warehouse licence); 158 (broker’s licence).
Biosecurity	DAFF - Biosecurity
Goods entering into Australia – whether as cargo or through the international mail stream – are treated uniformly for the purposes of biosecurity.		As to relevant Acts, see generally Quarantine Act 1908, Export Control Act 1982, Imported Food Control Act 1992.
Generally, the scope of quarantine arrangements in Australia are wide, and encompass measure: (a) for, or in relation to - (i) the examination, exclusion, detention, observation, segregation, isolation, protection, treatment and regulation of vessels, installations, human beings, animals, plants or other goods or things; or (ii) the seizure and destruction of animals, plants, or other goods or things; or (iii) the destruction of premises comprising buildings or other structures when treatment of these premises is not practicable; and (b) having as their object the prevention or control of the introduction, establishment or spread of diseases or pests that will or could cause significant damage to human beings, animals, plants, and other aspects of the environment or economic activities.		See generally section 4 of the Quarantine Act 1908. As to relevant provisions, see also: section 18(2) Quarantine Act 1908 (goods subject to quarantine) sections 44C and 44D Quarantine Act 1908 (examination of goods); section 48AA Quarantine Act 1908 (treatment and destruction of goods); section 68 Quarantine Act 1908 (effect of unlawful importation); see also: Pt 5 (Importation of goods); Pt 6A (Import Risk Analysis); and Pt 7 Div 3 (Forfeiture and seizure of animals, plants and other goods) Quarantine Regulations 2000.
Biosecurity fees and charges Biosecurity fees and charges are subject to a range of regulatory instruments that affect their level (and limits).	DAFF Biosecurity	See generally: section 86E Quarantine Act; Quarantine Service Fees Declaration 2005; See also Australian Government’s Cost Recovery Guidelines 2005.

D4. Application of imposts

Under current arrangements, goods imported into Australia are subject to the imposition of customs duty and/or GST unless otherwise relieved of that obligation. Of particular relevance for this report is the relief that is granted with respect low value goods.
Key provisions relating to the manner in which customs duty and/or GST are applied on import, and the relief provided to low value goods, are:

Activity	Agency	Legislative Basis or Otherwise
Liability for duty and/or GST
Goods consigned through the Post Office by one person to another or goods consigned other than through the Post Office with a value not exceeding $1,000 will not be subject to formal entry. In addition a duty rate of Free is applied those goods and in such circumstances the goods are also free of liability for GST.	ACBPS	Entry Entry S68(1)(e),(f) of the Customs Act 1901; Regs 31AB and 31AC of the Customs Regulations 1926. GST and Customs Duty Assessment for Low Value Goods A New Tax System (Goods and Services Tax) Act 1999 s42-5 Customs Tariff Act 1995 – Schedule 4 Items 32A and 32B Customs By-laws 0540003 and 0540004.
Customs inspection and determination of Duty and/or GST
Customs inspects the goods and assesses their declared value. If this value does not exceed $1000 then customs duty and GST is not payable except in relation to certain goods. If the goods are wine, other alcoholic beverages, or tobacco products customs duty, GST and WET is applied at all times regardless of value and is not subject to the threshold – it is not considered in this assessment of imposts. Other prescribed items with a value less than $1000 (e.g. goods that form part of a bulk order) may also be liable to pay customs duty and GST. Are all importations taxable under the GST Legislation? Some goods imported into Australia are not subject to GST. These are: goods that would have been GST-free or input taxed if supplied within Australia, such as basic food, certain medical aids and appliances, cars for use by certain people with disabilities, and precious metals, and goods that qualify for certain customs duty concessions. goods that qualify for certain customs duty concessions.are also non-taxable for GST purposes and include the following items in Schedule 4 to the Customs Tariff Act 1995. Customs will assess the value of the good through the inspection process and assess in order: 1. Customs duty 2. GST / WET. Generally, the overall effect is that ‘the importer’ pays at the same time, at the same place, and in the same manner as for customs duty (if the goods are subject to customs duty).	ACBPS	Customs Act 1901; see Part VIII (The duties), and section/s 68, 69, 70, 71.
		Customs Tariff Act 1995.
		A New Tax System (Goods and Services Tax) Act 1999 Division 7 - 7-1 GST and input tax credits Division 13 - 13-20 How much GST is payable on taxable importations? Division 38 - Subdivision 38-Q - International mail Division 114 - 114-5 Importations without entry for home consumption Payments of amounts of GST where delivery into home consumption is authorised under section 71 of the Customs Act 1901.
		A New Tax System (Wine Equalisation Tax) Act 1999 Division 2 - Overview of the wine tax legislation 2-1 What this Act is about - 2-20 Division 5 - General rules for taxability 5-5 General rules for taxing assessable dealings 5-30 Local entry of imported wine (AD10) Division 23 - Wine tax on customs dealings A New Tax System (Wine Equalisation Tax Imposition - Customs) Act 1999 3 Imposition 4 Rate
		A New Tax System (Goods and Services Tax) Act 1999 Part 2-2 Supplies and Acquisitions GST free supplies Part 3-2- Non-taxable importations 42-5 Non-taxable importations – Schedule 4 of the Customs Tariff Act 1995 42-10 Goods returned to Australia in an unaltered condition.

D5. Other matters

Return of mail

Australia Post has service standards that it is required to meet in relation to in-bound and out-bound international mail. The Australian Postal Corporation Act 1989 provides that “Subject to subsection (3), if, under a convention, Australia is permitted to return a letter or postal article, Australia Post may return the article in accordance with the convention despite its obligations under this Division.” Under the Universal Postal Convention, “Member countries shall ensure that their designated operators redirect postal items if an addressee has changed his address, and return undeliverable items to the sender. The charges and other conditions are laid down in the Regulations.” The UPU Letter Post Regulations detail what happens to undeliverable items, return to country of origin or to sender and period of retention. In general the period of retention should not exceed one month except in special cases where the designated operator of destination considers it necessary to extend it to two months at most.

Australia Post

Article 4 of the UPU Convention; Sections 28C and 29 of the Australian Postal Corporation Act 1989; Pt 2 of the Australian Postal Corporation (Performance Standards) Regulations 1998. Article 5(3) of the UPU Convention Section 28A(2) of the Australian Postal Corporation Act 1989 UPU Letter Post Regulations, Article RL 147.

Collection of statistical information

The ABS draws on the statistical segment of the complete tariff code to measure types of goods that are being imported in the mail and cargo environments, and relies on information provided to it by Customs and Border Protection for a range of statistical products, including balance of payments and merchandise trade. As most goods under the threshold value are not required to be fully declared, those goods are generally not currently counted for statistical purposes (although estimates may be made based on sampling data).

Activity	Agency	Legislative Basis or Otherwise
There is no specific mention of the collection of statistics on international mail in the ABS Act, only a generic section on the functions of the Bureau. (It should be noted, however, that any new proposal for the collection of statistics must be laid before both Houses of Parliament before implementation unless it is on a voluntary basis.)	ABS	See section 6 of the Australian Bureau of Statistics Act 1975.
The World Customs Organization has developed the Harmonized Commodity Description and Coding System, popularly known as the Harmonized System or HS, as a multipurpose goods nomenclature used as the basis for customs tariffs and for the compilation of trade statistics all over the world.	ACBPS	See International Convention on the Simplification and Harmonization of Customs Procedures (as amended) (2006).

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