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Trade Practices Amendment (Country of Origin Representations) Bill 1998
Schedule 1 Amendment of the Trade Practices Act 1974 relating to country of origin representations

Part 1 Insertion of new Division

1  After Division 1 of Part V

Insert:

Division 1AA Country of origin representations

Subdivision A General

65AA   Overview

                   This Division provides that certain country of origin representations made about goods do not contravene section 52 (which deals with misleading or deceptive conduct) or paragraph 53(eb) (which deals with false or misleading representations as to place of origin).

65AB   General test for country of origin representations

                   If:

                     (a)  a corporation makes a representation as to the country of origin of goods; and

                     (b)  the goods have been substantially transformed in that country; and

                     (c)  50% or more of the cost of producing or manufacturing the goods (as the case may be) is attributable to production or manufacturing processes that occurred in that country; and

                     (d)  the representation is not a representation to which section 65AC (product of/produce of representations) or section 65AD (prescribed logo representations) applies;

the corporation does not contravene section 52 or paragraph 53(eb) by reason only of making the representation.

65AC   Test for representations that goods are product of/produce of a country

                   If:

                     (a)  a corporation makes a representation that goods are the produce of a particular country (whether the representation uses the words “product of”, “produce of” or any other grammatical variation of the word “produce”); and

                     (b)  the country was the country of origin of each significant ingredient or significant component of the goods; and

                     (c)  all, or virtually all, processes involved in the production or manufacture happened in that country;

the corporation does not contravene section 52 or paragraph 53(eb) by reason only of making the representation.

65AD   Test for representations made by means of prescribed logo

             (1)  If:

                     (a)  a corporation makes a representation as to the country of origin of goods by means of a logo specified in regulations made under subsection (2); and

                     (b)  the goods have been substantially transformed in the country represented by the logo as the country of origin of the goods; and

                     (c)  the prescribed percentage of the cost of producing or manufacturing the goods (as the case may be) is attributable to production or manufacturing processes that occurred in that country;

the corporation does not contravene section 52 or paragraph 53(eb) by reason only of making the representation.

             (2)  The regulations may, in relation to a specified logo, prescribe a percentage in the range of 51% to 100% as the percentage applicable to goods for the purposes of paragraph (1)(c).

65AE   Substantial transformation of goods

             (1)  For the purposes of this Division, goods are substantially transformed in a country if they undergo a fundamental change in that country in form, appearance or nature such that the goods existing after the change are new and different goods from those existing before the change.

             (2)  Without limiting subsection (1), the regulations may prescribe changes (whether in relation to particular classes of goods or otherwise) that are not fundamental changes for the purposes of subsection (1), and may include examples (in relation to particular classes of goods or otherwise) of changes which are fundamental changes for the purposes of subsection (1).

65AF   Method of working out costs of production or manufacture

                   For the purposes of this Division, the cost of producing or manufacturing goods is to be worked out under Subdivision B.

Subdivision B Cost of production or manufacture of goods

65AG   Definitions

                   In this Subdivision:

inner container includes any container into which goods are packed, other than a shipping or airline container, pallet or other similar article.

materials , in relation to goods, means:

                     (a)  if the goods are unmanufactured raw products—those products; and

                     (b)  if the goods are manufactured goods—all matter or substances used or consumed in the manufacture of the goods (other than matter or substances that are treated as overheads); and

                     (c)  in either case—the inner containers in which the goods are packed.

65AH   Cost of producing or manufacturing goods

                   The cost of producing or manufacturing goods means the sum of:

                     (a)  the expenditure on materials in respect of the goods, worked out under section 65AJ; and

                     (b)  the expenditure on labour in respect of the goods, worked out under section 65AK; and

                     (c)  the expenditure on overheads in respect of the goods, worked out under section 65AL.

65AJ   Expenditure on materials

Calculation of expenditure on materials

             (1)  Expenditure on materials in respect of goods means the cost of materials:

                     (a)  incurred by the producer or manufacturer of the goods (as the case may be); and

                     (b)  that are used in the production or manufacture of the goods; and

                     (c)  that has not been prescribed under paragraph (2)(a).

Regulations may prescribe materials that are not allowable

             (2)  The regulations may prescribe, for the purposes of subsection (1):

                     (a)  the cost of a particular material, or a part of such a cost, that is not allowable in respect of goods, or classes of goods; and

                     (b)  the manner of working out the cost of a material, or part of the cost.

65AK   Expenditure on labour

Calculation of expenditure on labour

             (1)  Expenditure on labour in respect of goods means the sum of each labour cost:

                     (a)  that is incurred by the producer or manufacturer of the goods (as the case may be); and

                     (b)  that relates to the production or manufacture of the goods; and

                     (c)  that can reasonably be allocated to the production or manufacture of the goods; and

                     (d)  that has not been prescribed under paragraph (2)(a).

Regulations may prescribe labour costs that are not allowable

             (2)  The regulations may prescribe, for the purposes of subsection (1):

                     (a)  a particular labour cost, or a part of a labour cost, that is not allowable in respect of goods, or classes of goods; and

                     (b)  the manner of working out a labour cost, or part of the cost.

65AL   Expenditure on overheads

Calculation of expenditure on overheads

             (1)  Expenditure on overheads in respect of goods means the sum of each overhead cost:

                     (a)  that is incurred by the producer or manufacturer of the goods (as the case may be); and

                     (b)  that relates to the production or manufacture of the goods; and

                     (c)  that can reasonably be allocated to the production or manufacture of the goods; and

                     (d)  that has not been prescribed under paragraph (2)(a).

Regulations may prescribe overhead costs that are not allowable

             (2)  The regulations may prescribe, for the purposes of subsection (1):

                     (a)  a particular overhead cost, or a part of an overhead cost, that is not allowable in respect of goods, or classes of goods; and

                     (b)  the manner of working out an overhead cost, or part of the cost.

65AM   Regulations may prescribe rules for determining the local percentage costs of production or manufacture

             (1)  Subject to subsection (2), the regulations may prescribe rules for determining the percentage of the total cost of production or manufacture of goods attributable to production or manufacturing processes that occurred in a particular country.

Note:          Section 65AH deals with the cost of production or manufacture of goods.

             (2)  Rules prescribed under subsection (1) must not discriminate (whether favourably or unfavourably) between countries or classes of countries.

Subdivision C Evidentiary matters

65AN   Proceedings arising under section 52 and paragraph 53(eb)

             (1)  If:

                     (a)  proceedings are brought against a person in respect of section 52 or paragraph 53(eb); and

                     (b)  the person seeks to rely on a provision of this Division, or of a regulation made under this Division, in the proceedings;

the person bears an evidential burden in relation to the matters set out in the provision on which the person seeks to rely.

             (2)  In this section:

evidential burden , in relation to a matter, means the burden of adducing or pointing to evidence that suggests a reasonable possibility that the matter exists or does not exist.



 

Part 2 Consequential amendments

2  Subsection 5(1)

Omit “Parts IV, IVA and V”, substitute “Part IV, Part IVA and Part V (other than Division 1AA)”.

3  Subsection 6(3)

Omit “and 1A”, substitute “, 1A and 1AA”.

4  Subsection 6(4)

Omit “Division 1 of Part V (other than sections 53A, 55 and 61)”, substitute “Division 1 (other than sections 53A, 55 and 61) and Division 1AA of Part V”.

5  At the end of section 52

Add:

Note:          For rules relating to representations as to the country of origin of goods, see Division 1AA (sections 65AA to 65AN).

6  At the end of section 53

Add:

Note:          For rules relating to representations as to the country of origin of goods, see Division 1AA (sections 65AA to 65AN).

7  Paragraph 75AS(b)

Omit “or 1A”, substitute “, 1A or 1AA”.

8  Subsection 86(2)

Omit “or 1A”, substitute “, 1A or 1AA”.

9  Paragraph 86A(1)(b)

Omit “or 1A”, substitute “, 1A or 1AA”.

10  Paragraph 86A(4)(b)

Omit “or 1A”, substitute “, 1A or 1AA”.

11  Paragraph 86A(5)(b)

Omit “or 1A”, substitute “, 1A or 1AA”.

12  Paragraph 86B(1)(b)

Omit “or 1A”, substitute “, 1A or 1AA”.