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Thursday, 19 October 2017
Page: 8058


Senator McGRATH (QueenslandAssistant Minister to the Prime Minister) (13:52): by leave—I move government amendments (1) to (5) on sheet JC460 to the Customs Amendment (Singapore-Australia Free Trade Agreement Amendment Implementation) Bill 2017 together:

(1) Schedule 1, item 3, page 5 (after line 6), after the definition of enterprise in subsection 153XD(1), insert:

Harmonized Commodity Description and Coding System means the Harmonized Commodity Description and Coding System that is established by or under the Convention.

(2) Schedule 1, item 3, page 5 (lines 7 to 9), omit the definition of Harmonized System in subsection 153XD(1), substitute:

Harmonized System means:

(a) the Harmonized Commodity Description and Coding System as in force immediately before 1 January 2017; or

(b) if the table in Annex 2 to the Agreement is amended or replaced to refer to Chapters, headings and subheadings of a later version of the Harmonized Commodity Description and Coding System—the later version of the Harmonized Commodity Description and Coding System.

(3) Schedule 1, item 3, page 7 (lines 6 to 10), omit subsection 153XD(2).

(4) Schedule 1, item 3, page 9 (line 26) to page 12 (line 2), omit section 153XG, substitute:

153XG Goods produced in Singapore, or in Singapore and Australia, from non -originating materials

(1) Goods are Singaporean originating goods if:

(a) they are classified to a Chapter, heading or subheading of the Harmonized System that is specified in the first column of the table in Annex 2 to the Agreement; and

(b) they are produced entirely in the territory of Singapore, or entirely in the territory of Singapore and the territory of Australia, from non-originating materials only or from non-originating materials and originating materials; and

(c) either:

(i) each requirement that is specified in the third column of that table to apply in relation to the goods is satisfied; or

(ii) without limiting subparagraph (i), if the regulations specify one or more alternative requirements that apply in relation to the goods—those alternative requirements are satisfied; and

(d) either:

(i) the importer of the goods has, at the time the goods are imported, a certification of origin, or a copy of one, for the goods; or

(ii) Australia has waived the requirement for a certification of origin for the goods.

(2) Without limiting subparagraph (1) (c) (i), a requirement may be specified in the third column of the table in Annex 2 to the Agreement by using an abbreviation that is defined for the purposes of that column.

Change in tariff classification

(3) If a requirement that applies in relation to the goods is that all non-originating materials used in the production of the goods must have undergone a particular change in tariff classification, the regulations may prescribe when a non-originating material used in the production of the goods is taken to satisfy the change in tariff classification.

(4) If:

(a) a requirement that applies in relation to the goods is that all non-originating materials used in the production of the goods must have undergone a particular change in tariff classification; and

(b) one or more of the non-originating materials used in the production of the goods do not satisfy the change in tariff classification;

then the requirement is taken to be satisfied if the total value of the non-originating materials covered by paragraph (b) does not exceed 10% of the customs value of the goods.

(5) If:

(a) a requirement that applies in relation to the goods is that all non-originating materials used in the production of the goods must have undergone a particular change in tariff classification; and

(b) the goods are classified to any of Chapters 50 to 63 of the Harmonized System; and

(c) one or more of the non-originating materials used in the production of the goods do not satisfy the change in tariff classification;

then the requirement is taken to be satisfied if the total weight of the non-originating materials covered by paragraph (c) does not exceed 10% of the total weight of the goods.

Regional value content

(6) If a requirement that applies in relation to the goods is that the goods must have a regional value content of not less than a particular percentage worked out in a particular way:

(a) the regional value content of the goods is to be worked out in accordance with the Agreement; or

(b) if the regulations prescribe how to work out the regional value content of the goods—the regional value content of the goods is to be worked out in accordance with the regulations.

(7) If:

(a) a requirement that applies in relation to the goods is that the goods must have a regional value content of not less than a particular percentage worked out in a particular way; and

(b) the goods are imported into Australia with accessories, spare parts, tools or instructional or other information materials; and

(c) the accessories, spare parts, tools or instructional or other information materials are classified with, delivered with and not invoiced separately from the goods; and

(d) the types, quantities and value of the accessories, spare parts, tools or instructional or other information materials are customary for the goods;

then the regulations must require the value of the accessories, spare parts, tools or instructional or other information materials to be taken into account as originating materials or non-originating materials, as the case may be, for the purposes of working out the regional value content of the goods.

Note: The value of the accessories, spare parts, tools or instructional or other information materials is to be worked out in accordance with the regulations: see subsection 153XD(3).

(8) For the purposes of subsection (7), disregard section 153XI in working out whether the accessories, spare parts, tools or instructional or other information materials are originating materials or non-originating materials.

(5) Schedule 1, item 3, page 12 (lines 12 and 13), omit "the goods are required to have a regional value content of at least a particular percentage under a particular method", substitute "a requirement that applies in relation to the goods is that the goods must have a regional value content of not less than a particular percentage worked out in a particular way".

I table the supplementary explanatory memorandum relating to the amendments. These amendments insert a new definition of Harmonized Commodity Description and Coding System. Australia and Singapore are currently operating with different versions of the system—Australia on the 2017 version of the system and Singapore on the 2012 version. This new definition is required to expressly recognise the version of this system currently operating in Singapore. Without addressing this inconsistency, the amending agreement would not be able to enter into force. This new definition is drafted in a way that will allow for the update when Singapore moves to the 2017 version of the system, which will be sometime in 2018, and for any future versions that are adopted. That this inconsistency would prevent the amending agreement from entering into force was not apparent until work commenced on the required subordinate regulation. These government amendments, which allow for the recognition of the 2012 version of the system operating in Singapore, will allow the amending agreement to enter into force before the end of the year. The new definition of 'harmonised system' will be adopted across future frameworks implementing free trade agreements and in the Customs Act 1901 to ensure the systems setting out the tariff classification on which the agreements are negotiated are accurately reflected.

A further government amendment to allow for the incorporation of the product-specific rules by reference to the text of the amending agreement is also proposed. This will streamline the required subordinate regulation and also allow for future revisions of the product-specific rules to be included without amending the regulation. Without these government amendments, the amending agreement will not be able to enter into force by the end of the year. This would prevent Australian businesses from receiving the many benefits that flow from the amending agreement.