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Tuesday, 16 November 1993
Page: 2896


Mr LINDSAY (Parliamentary Secretary to the Minister for Industry, Technology and Regional Development) (5.02 p.m.) —I move:

  That the bill be now read a second time.

This bill is an omnibus measure proposing amendments to the Customs Act 1901, the Customs Legislation (Tariff Concessions and Anti-Dumping) Amendment Act 1992 and the Customs Legislation (Anti-Dumping Amendments) Act 1992. The main proposals contained in the bill relate to:

  (1) amendments to the Customs Act 1901 to refine the rules of origin as a consequence of the 1992 closer economic relations review;

  (2) amendments to the Customs Act 1901 to substitute a new definition of a `place outside Australia' to ensure tighter customs control over people and goods moving between Australia and area A of the zone of cooperation in the area known as the `Timor Gap';

  (3) amendments to the Customs Act 1901 to clarify that the undeclared possessions of ship's crew are forfeited to the Crown; and

  (4) amendments to the Customs Act 1901, the Customs Legislation (Tariff Concessions and Anti-Dumping) Amendment Act 1992 and the Customs Legislation (Anti-Dumping Amendments) Act 1992 to effect certain minor technical changes.

  I will now briefly outline the proposed changes:

(1) Rules of Origin

  The proposed amendments to the rules of origin effected by Clause 10 of the bill are a response to the government's agreement to the outcome of the 1992 review of the Australia-New Zealand closer economic relations trade agreement, ANZCERTA. The proposed amendments also extend the administrative and technical aspects of that agreement to other preference arrangements.

  Rules of origin are those rules which previously appeared in section 151 of the Customs Act 1901, to determine whether particular goods imported into Australia are eligible for entry at preferential rates of duty. Clause 10 of the bill inserts a new division 1A of part VIII into the act to provide a better defined and more predictable basis for calculating the origin of goods. The concept of `factory or works' cost of goods as calculated in accordance with rules set out in Gazette notices issued by the comptroller, has been replaced by specific provisions contained in the act, that is, new sections 153C to 153G. Furthermore, the bill includes diagrams and explanatory notes in a new schedule inserted in the act as a means of illustrating the operation of the rules of origin in their application to New Zealand.

  In relation to New Zealand, it should be noted that there is some modification of the rules of origin in certain circumstances. New section 153K of the act implements the agreement between Australia and New Zealand to allow a two per cent margin of tolerance in meeting the usual 50 per cent area content requirement, where an unforeseen circumstance—such as an adverse movement in exchange rates—would otherwise result in a shipment failing to qualify for preference. The amendment is intended to assist manufacturers in such unforeseen circumstances, whilst ensuring that the preferential trade benefits of ANZCERTA are not diverted away from Australian and New Zealand manufacturers.

  Other amendments peculiar to New Zealand modify the treatment of materials of mixed origin to allow the area content of such materials to contribute to the area content of the final product in circumstances where otherwise they would not. The amendments will make the rules of origin more objective in their application and should overcome weaknesses in the previous provisions which had enabled some claimants for preference to circumvent the spirit of the rules.

(2) Timor Gap

  The amendments contained in clause 5 of the bill are a response to concerns that the customs barrier controls—reporting of cargo, passengers and crew—do not presently cover the movement of persons and goods to and from area A of the zone of cooperation, being that area in the Timor Sea in respect of which Australia and Indonesia have agreed to cooperate in the exploration for and exploitation of any petroleum resources. The proposed amendments to the current definition of `place outside Australia' therefore extend customs barrier controls over movements to and from area A of the zone of cooperation.

(3) Undeclared Possessions of Ship's Crew

  From an operational point of view, it is desirable for customs officers to have the ability to require information as to the possessions of ship's crew and for there to be a sanction for not fully declaring those possessions which represents a real deterrent to non-compliance. If there is no penalty for non-compliance, there is no incentive for crew members to ensure they fully report their belongings to customs and that could encourage crew to secrete prohibited or dutiable goods with the intention of smuggling the goods ashore at some later time during the ship's stay in port.

  Clause 6 of the bill proposes an amendment to section 64AA of the Customs Act to specifically include a report of the possessions of the ship's crew in the ship's arrival report and create a statutory requirement for full disclosure of all crew belongings. If such belongings are not declared and are subsequently found secreted in a crew member's cabin, they can be regarded as forfeited goods under paragraph 229(1)(e) of the act.

  In addition to the amendments outlined above, the bill proposes a number of minor technical amendments which essentially correct cross-references between provisions and citation errors. These amendments are explained in greater detail in the explanatory memorandum.

Financial Impact Statement

  The proposed amendments in this bill have no direct financial implications. I commend the bill to the House and present the explanatory memorandum to the bill.

  Debate (on motion by Mr Tuckey) adjourned.