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AANZFTA in force 1 January 2010 – lock in benefits now.

The ASEAN Australia New Zealand Free Trade Agreement does not automatically apply a zero duty rate to all imports. Traders must audit their tariff classifications to check whether any preferential duty rates apply to their goods. And, the goods need to comply with rules of origin.

Traders should follow four steps:

• Ascertain the correct tariff classification of goods in the country of import. To facilitate this, the Agreement now obliges the Customs authorities of all the signatory countries to provide a system of written advance rulings on a number of matters including tariff classification.
  
• Check whether any preferential duty rates apply to goods of that classification. Some goods will be zero rated from the commencement of the FTA. Others may be subject to phasing in or remain unchanged.
  
• Ascertain whether the goods comply with the relevant rules of origin. The exporter must obtain a Certificate of Origin and forward it to the importer.
  
• The importer, or customs broker, must claim the preferential duty rate on each imported shipment and submit the Certificate of Origin to the importing party’s Customs authority at the time of making the import declaration – otherwise, the higher rate will be applied.
  

Email Tanda now for assistance.

Comprehensive Review of Food Labelling Law and Policy

Submissions to the Foods Standards Australia and New Zealand review, which will consider options to reduce the regulatory burden in food labelling without compromising public health and safety, will close on 20 November 2009. Topics include: trans fatty acids and saturated fats; caffeinated energy drinks; front of pack labelling; fortification of foods with vitamins and minerals; and guidelines on special purpose foods. For assistance with your submission please contact Tanda here.

Involved in Korea-Australia trade? Let the FTA dance begin!

Yet another regional trade channel is the subject of Free Trade Agreement negotiations. Korean and Australian officials conducted the first round of the Australia-Korea FTA talks in Canberra in May 2009. As with all such negotiations, the early rounds are dedicated to some general positioning and getting to understand some of the other party’s sensitivities – agriculture, of course, being a predictable one.

But proceedings quickly settle into some detailed bargaining on market access issues. Both of these countries are now well experienced at bilateral (and regional) trade negotiations and should be able to make reasonably rapid progress. The next round of talks is scheduled for Seoul in September.

Our experience shows that it is possible to influence the outcomes of trade negotiations to achieve specific benefits for particular products or sectors. Some products and services inevitably receive preferential market access ahead of others – it’s the nature of trade negotiations. If you want to obtain that competitive advantage, you need to make your case to the negotiators early and often. When the negotiations are reaching the later stages, there is little room to accommodate new requests. It is best to make your requirements known now and to follow up with regular contact with the negotiators to monitor progress.

Both governments are actively seeking submissions from companies that will affected by the FTA. Contact Tanda now for assistance in making your submission.

Exporting to the US? Beware the Lacey Act!

On 1 April 2009 (an inauspicious date!), the US Customs and Border Protection announced what is required for declarants under the Lacey Act which requires a great deal of difficult-to-obtain information on imported plants and plant-derived products. That information has to be declared as part of the import declaration process in the US.

Amongst the affected products are lumber, wood pulp, paper, paperboard, and products containing certain plant materials which may include furniture, tools, umbrellas, sporting goods, printed matter, musical instruments, products manufactured from plant-based resins, and textiles.

The additional information to be reported includes the scientific name of the plant, value of the importation, quantity of the plant and the country in which the plant was harvested. If the plant species from which the product is made varies or is unknown, importers will have to declare the species that may have been used to produce the product. Similarly, if the product is from a plant species that is commonly harvested in more than one country, and the country is unknown, the importer will be required to declare the name of each country in which the plant may have been harvested.

The Lacey Act was amended with the enactment of the 2008 Farm Bill. Amendments to the Act made it unlawful to import, export, transport, sell, receive, acquire, or purchase in interstate or foreign commerce a broader range of plants, with some limited exceptions, taken or traded in violation of the laws of the United States, a U.S. State, or other countries. It also made it unlawful to make or submit any false record, account or label for any false identification of, this broader group of plants covered by the Act. Finally, it introduced the requirement for an import declaration for plants and plant products entering the United States and provides for both civil and criminal penalties for failure to comply. 

CBP met its obligation to develop an electronic means of declaration by adding a whole set of new functionalities to the US ABI (automated broker interface) system.  Strict enforcement of this set of compliance requirements is set to begin on 1 May 2009. The requirements are imposed on the US importer of record, but the information (eg plant species names and origin) will need to come from the foreign supplier. Exporters of affected products to the US will soon feel the burden of yet another level of bureaucracy-driven paperwork!

For more on this development, contact us at info@tanda.com.au

Review of Australia’s Anti-Dumping and Countervailing System

Australia’s Productivity Commission is conducting a review of the policy and administrative aspects of Australia’s Anti-Dumping and Countervailing System. Submissions from manufacturers, importers and foreign suppliers who have been affected by dumping or countervailing inquiries are required by 26 June 2009. The Commission will produce a draft report in September, hold public hearings in October and produce a final report in December.

This will be an in-depth review of the economy-wide benefits of the anti-dumping system measured against the administration and compliance costs. It will look at the impact of the system on the overall performance of the Australian economy, on importers and domestic industry and on consumers. In effect, it will open up debate on the relevance of a “public interest” test in assessing dumping applications. This contentious test is part of the anti-dumping procedures in some other countries and is currently the subject of vigorous debate in the WTO Negotiating Group on Rules in the context of the Doha Round negotiations.

All stakeholders in the anti-dumping process – foreign manufacturers and exporters, Australian importers, manufacturers, consumers and their advisers – will be affected by the outcome of this review.

Tanda has extensive experience in the management of anti-dumping investigations, along with expertise in the preparation of submissions to government. Contact us now to discuss the impact of this review on your business and the mechanism for making your interests known to the Commission.

10+2 - Importer Security Filing Is Live!

US importers and their foreign suppliers and service providers face strict new requirements imposed by US Customs & Border Protection (CBP) from 26 January 2009. Known as Importer Security Filing (ISF), or ‘10+2’, the new regulation requires US importers of record to file

10 data elements with CBP 24 hours prior to loading of containerised ocean freight.

The data elements include:

• Transport - location of container stuffing, name and address
  of consolidator and importer of record
• Commercial - name and address of the manufacturer, seller, buyer, ‘ship to’ party and consignee
• Compliance - US tariff classification and country of origin

Some of these data elements were not previously required or were only required after shipment or importation. The data must now be collated from disparate parties in the supply chain and filed with CBP 24 hours before loading. Failure to file in time exposes the US importer to liquidated damages of US$5,000 per ISF and the risk of a ‘do-not-load’ order.

CBP has undertaken to show flexibility in the enforcement of the requirements for 12 months. From 26 January 2010, full compliance will be expected.

US importers are already looking to shift the compliance burden of ISF to their foreign suppliers and service providers as many of the data elements originate off-shore.

Tanda can advise on ISF compliance and, through its fellow members of the Trusted Trade Alliance (www.trusted-trade.net), provide access to a broker-independent, web-based, low-cost ISF filing portal situated in the US. [email]

Australia-Gulf Cooperation Council FTA
Negotiations Kick-Started

The GCC (comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates) is Australia’s tenth largest export market overall (goods and services), worth $6.2 billion in 2006-07. FTA negotiations with the GCC commenced in July 2007 but had wound down by the end of that year. No negotiating rounds were held in 2008.

The parties announced on 9 January 2009 that they have agreed to hold the third round of FTA talks from 24 to 26 February 2009 in Canberra.

For Australian companies which export to or import from any of the GCC countries, this is an opportunity to let the negotiators know the specific outcomes which would deliver the greatest benefits to those companies eg: elimination of tariff or non-tariff barriers affecting particular products, improved quarantine regulations, enhanced investment rules.

Tanda can represent your business interests to ensure positive outcomes from FTA negotiations. [email]

Japan's Authorised Economic Operator Program

The Japanese AEO Program consists of sub-programs for the different categories of operator – importers, exporters, warehouse operators, logistics operators (carriers & forwarders) and customs brokers.

Eligibility for AEO status requires four core elements:

• Appropriate compliance records
• Capability to use the NACCS (Nippon Automated Customs Clearance System) e-system for Customs procedures
• Capability to securely control cargoes and conduct customs procedures properly
• Establishment of a Compliance Program.

For Authorized Importers, the program offers benefits including:

• Reduced examination and inspection
• Pre-arrival lodgement of import declarations and permissions
• Release of cargoes before duty/tax declaration and payment
• Periodic lodgement of duty/tax declarations.

While the program is said to be consistent with the WCO SAFE Framework, it is markedly different from the US C-TPAT, the EU AEO program and the programs launched by other countries in the Asia-Pacific region eg: Malaysia (Customs Golden Client), New Zealand (Secure Exports Scheme) and Singapore (Secure Trade Program). Companies which have applied for AEO certification in any of those jurisdictions will need to take account of Japan’s unique requirements before making application under its program.

Tanda, with its fellow Trusted Trade Alliance (www.trusted-trade.net) members, advises on supply chain security programs around the world and assists clients to navigate the AEO application process in each country. [email]

Coming To Grips With Free Trade Agreements

Despite obvious benefits such as tariff reductions, regulatory harmonisation and efficiency, free trade agreements have not led to Utopia for many importers and exporters because each agreement brings its own complex rules of origin and documentary requirements for preference claims.

Importers and exporters must make the effort to understand bilateral agreements relevant to their trading operations to ensure that they maximise the benefits from reductions in tariff and non-tariff barriers as well as modifications in customs procedures.

In the interests of competitiveness, firms should also keep a watching brief on the other bilateral and regional agreements which might benefit rival suppliers in other countries.

See Tanda's opinion article in Asia Today International Magazine(Asia 2007 edition).

Priorities For Regional FTAs

Do you face problems with tariff or non-tariff barriers, technical barriers to trade, behind-the-border issues or other competition or market access issues in the Asia-Pacific region?

Tanda lobbies ministries and other government agencies responsible for formulating trade policy, negotiating FTAs and regulating, facilitating and securing trade in the region.

Amendments to the Harmonized System (HS) Convention accepted by the World Customs Organization (WCO) in June 2004 came into force on 1 January 2007.

This is the third major revision of the HS Convention since it was approved by the Customs Co-operation Council (the WCO's predecessor) in 1983.  It includes 354 sets of amendments.  The principal sources of the recent changes include:  

• Technological progress 
• Changes in trade patterns 
• Clarification of texts to ensure uniform application 
• Adaptation of the nomenclature to reflect trade practice
• Amendments related to social and environmental fields

Traders should review the tariff classification applying to their goods to ensure compliance with the amendments.

Companies Caught Out By Anti-Dumping Laws

Anti-dumping mechanisms are employed widely today and the use of marginal costing to gain access to new markets can expose the products to substantial anti-dumping duties.

Understand how anti-dumping actions can help or hinder your business. [email]

Customs Valuation Methods Not Compliant With WTO

Despite recent accession to the WTO by countries such as China and Vietnam, the transaction value method of valuing goods for Customs purposes is not uniformly applied across the Asia-Pacific region. Non-WTO-compliant methods such as 'reference', 'minimum' or 'published' prices are still practised by Customs administrations in many key ports.

Let Tanda argue your case for WTO-compliant Customs valuation. [email]

Export Controls On High-Tech Dual Use Products

An increased global focus on terrorism and international trade is sharply increasing the impact of export control laws on business. Penalties for breaching relevant legislation are high. Are you exposed? Read more about Export Controls.

Contact Tanda now for advice on the controls applying to your markets. [email]

Planning For Pandemics

Growing concern about the spread and impact of H5N1 Avian Influenza (Bird Flu) on global trade is warranted. Does your organisation have a business continuity plan in place that covers:

• Alternative supply strategies in the event of disruption of normal supply by a pandemic
• Managing relations with government regulators
• Staff communication, movement and quarantine

Contact Tanda to discuss how prudent planning can minimise your risk. [email]

Country Of Origin Labelling For Foods In Australia

Country of origin and related labelling requirements in respect of food are imposed in Australia by the Trade Practices Act 1974, the Imported Food Control Act 1992 and the State and Territory Fair Trading Acts and Food Acts.

Country of origin labelling provides consumers with information on the countries in which their food is grown, produced, manufactured or packaged.

As of December 2007, all packaged food must be labelled with a statement on the package that clearly identifies where the food was made or produced.

From December 2006, unpackaged fresh and processed pork products had to be labelled with their country of origin.

From 8 June 2006, all unpackaged fresh and processed fruit, vegetables, nuts and seafood had to carry labels that clearly stated which country they came from, including Australia.

In March 2006, Food Standards Australia New Zealand (FSANZ) announced a new country of origin labelling standard for processed and unprocessed food. (The new standard did not apply in New Zealand.)

Contact Tanda for advice on the detail of these recent changes to labelling requirements and the appropriate action to ensure compliance. [email]

Fumigation Standards For Imports

Since 1 January 2006, all pallets and other timber materials used in container packing and imported into Australia that are not compliant with international fumigation standard ISPM 15 have been required to be treated on arrival or be re-exported or destroyed.

Each of these alternatives is undertaken at the importer's expense. They are avoidable, however, and trading and cash flow will not be affected if proper pre-shipment planning and systems are in place. Opportunities also exist for expedited shipments.

Contact Tanda now for planning advice and implementation guidance. [email]

Supply Chain Security

Since 9/11, trade regulators around the world have become increasingly concerned to ensure that traders can guarantee the security of the international supply chain. Initial national programs such as the United States’ Customs-Trade Partnership Against Terrorism (C-TPAT) are now being supplanted by regional (APEC) and global (WCO) frameworks to secure and facilitate trade.

These frameworks require additional investment by operators in the supply chain in order to qualify as 'low risk' operators and become entitled to a range of benefits.

Tanda can advise on the actions required for a company to become an 'Authorised Economic Operator' and the benefits which can flow from that authorisation. [email]

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