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Wednesday, 12 April 1972
Page: 1020

Senator COTTON (New South WalesMinister for Civil Aviation) - I move:

That the Bill be now read a second time.

This Bill proposes minor amendments to 2 sections of the Customs Tariff, section 8 relating to the free on board price of goods and section 31 relating to overseas freight and insurance in connection with the landed cost of goods. Honourable senators will be well aware that the determination of the correct amount of duty on goods, and hence the effectiveness of tariff protection, depends, in most cases, on the correct rate of duty being applied to the correct value of the goods. Since Values can be manipulated by arrangement between exporter and importer and since attempts at tariff avoidance will always appeal to some types of people, Parliament, in 1965, gave the Minister for Customs and Excise power to determine the free on board price of goods in certain circumstances - in the main, whenever he was satisfied that an importer and exporter had fixed the free on board price with the view of paying no duty or less duty on those goods.

As I said earlier, some types of people will engage in tariff avoidance. Recent investigations have disclosed new arrangements for manipulating free on board prices and these fall outside the scope of the present legislation. For example, if an importer and exporter adopt, as a subterfuge, a system of buying and selling which includes the appointment of a whollyowned subsidiary of the importer to act as the selling agent of the exporter the present provisions of the law can be circumvented. Other variations of tariff avoidance of this nature have also been identified. The purposes of this Bill are, therefore, to ensure the intensions of the existing legislation are not defeated and the tariff protection authorised by this Parliament is not negated by arrangements between interested parties - whether two or more principals and/or agents or other intermediaries are involved or whether the duty avoided is ordinary duty or support duty. I commend the Bill.

Debate (on motion by Senator O'Byrne) adjourned.

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