Yesterday (27 February 2015) was a big day in Federal Parliament for the Trade and Customs industry yesterday. No, nothing to do with leadership challenges but all to do with action at the border regulating trade and trading regulators.
In response to the outcry following issues with frozen berries from China which now includes border "holds" on food from certain producers and new requirements to identify producers of that food, the Greens and Independent Senator Nick Xenophon had introduced a new Bill proposing to amend food labelling legislation to further require identification of the origin of imported food. The presumption would be that consumers would then be in a better position to make an informed decision on whether to purchase goods depending on the origin of those goods. However as the controversy has increased, the Ministers responsible for such issues in the Federal Government announced that they were undertaking their own review of the laws and would submit a proposal to Cabinet for new laws in March.
The reports regarding what could be proposed suggest some form of "pie chart" to be included on labelling for food identifying the origin of the source of the product (which could include ingredients from more than one country). The reports raise the following preliminary issues.
- Sure that it was not intended but using the term "pie chart" in relation to food labelling could prove to be one of the best "Dad" jokes ever!
- The suggestion is that it would not add to labelling complexity or cost (which would ultimately need to be borne by the consumer). I fear that may not be the case. I am sure that it will add to cost and complexity depending on the type of information required.
- Whether stating the country of origin alone will be enough? After all, China (for example) is a big place and it seems that the issue relates to product from a specific region in China. If that is the case, then presumably the informed consumer should be told of the specific manufacturing or packaging region from which the product originates – and potentially even the facility.
We will watch for the new requirements. However I would add that the allegations that this is all caused by the "China FTA" are just a little over the top. Especially given that the China FTA has yet to start. Readers need to remember that all FTA and other international treaties recognise and preserve rights to set biosecurity standards and Australia aggressively protects those standards. The issues may not lay at the border but rather in "consumer protection land" with the imposition of increased obligations on suppliers and retailers which, no doubt they would welcome as no one accepts health issues as a "cost of business" and an acceptable risk to consumers.
More Anti – Dumping and Subsidies reform
Late in 2014 the Federal Government announced yet more substantive reform to the AD and CV regime, on top of the earlier substantive reform. Apparently unhappy that previous reform was adequate and concerned as to the increasingly adverse effect of unfair overseas practices, the Government proposed further legislation which was introduced yesterday in the form of two Bills whose effects are summarised in the relevant Explanatory Memoranda.
The first set of amendments in the Customs Amendment (Anti Dumping Measures) Bill (No 1) 2015 are reportedly aimed at strengthening anti-dumping measures and affect, among other things, taxpayer submission deadlines, publication requirements on the part of the Commissioner and length of investigations.
The amendments in the Bill include:
- a reduced period of 37 days within which information in response to the initiation of an anti-dumping investigation should be submitted (from 40 days);
- anti-dumping notices will be required to be published electronically;
- stipulations related to lodgement and withdrawal of anti-dumping applications will be consolidated;
- a fee to apply for a review by the Review Panel will be introduced;
- the merits review process of the Review Panel for anti-dumping decisions will be streamlined to improve it;
- clarification that the Minister (in effect its Parliamentary Secretary) is not required to have regard to the lesser duty rule where a country has not submitted a notification of its subsidies at least once in the compliance period, and
- other measures to clarify various aspects of the anti-dumping provisions.
A second Bill to amend the Customs Tariff (Anti-Dumping) Act 1975 has also been introduced. The Customs Tariff (Anti-Dumping) Amendment Bill 2015 includes measures to:
- simplify and modernise provisions dealing with the publication of anti-dumping notices;
- clarify the circumstances in which the minister is not required to have regard to the “lesser duty rule”, and
- clarify that the Minister may grant exemptions with limited retrospective effect.
I am not quite as convinced that these changes are, in fact, required. There are measures in place which already seem to address many of these issues and there may not be quite the evidence supporting the need for further substantial change. Further, the use of the measures has increased significantly. However it is likely that these Bills will receive bipartisan support so overseas exporters, their Australian customers and their service providers will need to be alert to the changes and respond accordingly.
Customs to disappear into the ABF
As readers would be aware, last year the Federal Government announced the intent to "merge" Immigration and Customs into the new "Australian Border Force". Legislation to do so was introduced to Parliament yesterday in the Customs and Other Legislation Amendment (Australian Border Force) Bill 2015 to be found here (ABF Bill).
According to the EM, the purpose of this Bill is to:
- repeal the Customs Administration Act 1985 (Customs Administration Act);
- amend the Customs Act 1901 (the Customs Act) as a consequence of the repeal of the Customs Administration Act;
- amend other Acts associated with the administration of Customs matters;
- amend several other Commonwealth Acts that refer to the Australian Customs and Border Protection Service (ACBPS) and the Chief Executive Officer of Customs (the CEO);
- amend the Migration Act 1958 to enable the Australian Border Force Commissioner (the ABF Commissioner) to exercise certain powers under that Act; and
- make other amendments associated with the standing up of the Australian Border Force (the ABF) in the Department of Immigration and Border Protection (the Department) on 1 July 2015."
Also, according to the EM:
- From 1 July 2015, the Department and the ACBPS will be integrated into a single Department of State, and the ABF, an operational border control and enforcement entity, will be established within the Department. The ABF is to be headed by the ABF Commissioner (a statutory officer holder) and will consist of Immigration and Border Protection workers (IBP workers) who are in the ABF, or whose services are made available to, or who are performing services for, the ABF. The ABF Bill will provide the legislative basis for establishing the office of the ABF Commissioner, who is to have the control of the operations of the ABF.
- This Bill will repeal the Customs Administration Act, thereby abolishing both Customs as a separate statutory authority and the statutory office of the CEO. These changes will take effect from 1 July 2015, the same date that the ABF Bill commences.
- The ABF Bill provides that the person appointed as the ABF Commissioner shall also be the Comptroller-General of Customs and, in that capacity, will have responsibility for the enforcement of customs laws and collection of border-related revenue. The Bill amends the Customs Act to confer on the Comptroller-General of Customs all of the powers and functions that are currently conferred on the CEO.
- The Bill also confers on the Comptroller-General of Customs all of the powers and functions related to customs functions that are currently conferred on the CEO under other Commonwealth Acts.
- The Bill also amends the Customs Act and other Commonwealth Acts to update terminology to reflect the abolition of Customs.
This is a significant set of changes and reflects a "sunset" to Customs in many forms. It also makes massive changes to the legislation affecting industry so we'd best get busy.
I will be addressing these issues in the CBFCA legal forums over the next 2 weeks and. as always I would be delighted to assist in understanding and responding to these changes.