Imported goods under $1,000 to face GST

Goods imported into Australia with a customs value that does not exceed $1,000 are not subject to GST.  New
draft laws propose that from July 1st, GST will be applicable to goods below the threshold. The bill was introduced to parliament on Thursday, Treasurer Scott Morrison told parliament “These changes are about ensuring Australian businesses, particularly small retailers, do not continue to be unfairly disadvantaged by the current GST exemption that applies to imports of low-value goods,”. The agreement means companies located overseas who sell products into Australia online will need to begin charging GST on their products. 

Increase in City Link tolls for transport operators

Container transport operators have advised the toll increases will be passed onto the supply chain, impacting the cost of goods to Victorian consumers. From April 1st, container transporters delivering Victoria’s import and export freight will face up to a 225% increase on toll fees when travelling between the Port of Melbourne and Dandenong. Other increases impact freight moving to and from the north of the Tullamarine Freeway.

Container Volume Increases

The Port of Melbourne has released the Overseas Container Trade Report for December 2016, showing an increase of 11.8% against December 2015.  Several commodities showed increases, including, furniture, beverages, electrical equipment and machinery. Commodities with the most notable declines were paper & newsprints. Container exports were up 3% against December 2015, several commodities in particular showed an increase, including timber, fruit & vegetables and metal manufactures. Commodities among the most notable declines were meat, dairy and beverages

Brexit

Following Brexit, Australia and the UK have established a bilateral trade working group with the purpose of having  fast track free trade negotiations once Britain formally leaves the European Union. The group will meet early this year to commence negotiations.

News Update: Five men have been charged with drug importation following a seizure of 300kg of pure pseudoephedrine, worth $42 million. The pseudoephedrine was hidden in 167 boxes in a shipping container filled with 900 boxes of washing powder.

Between 22 December 2016 and 2 January 2017, there were 33 signification detections of varying illegal items and illicit drugs across a range of border entry points with detections  made in air cargo, sea cargo, mail centre’s and international flight arrivals at airports.

Reminder – ChAFTA Duty Rates Reduced

Australia continues to make progress establishing and improving trade agreements.                  China in particular, continues to be Australia’s largest trading partner. In 2016, more than 85% of Australian export goods (by value) were exported to China.  As of January 1st 2017, duty rates for most tariff categories covered under the China – Australia (ChAFTA) agreement were reduced. The below table indicates some examples of the duty reductions.

Trump Abandons Trans-Pacific Partnership

US President Donald Trump has signed an executive order formally withdrawing the US from the TPP trade deal. The TPP, signed in February 2016,  was the largest trade deal, made up of 12 countries representing around 40% of the global economy and a quarter of world trade.  In making his decision, Trump called out China and Japan for making it “impossible to sell” American products into their country.  “In some cases its impossible. They won’t take your product. But when they do take your product they charge you a lot of tax. I don’t call that free  trade. What we want is fair trade”.  Australian Trade minister, Steve Ciobo said the government was wiling to work with the remaining 10 participating countries to find a way forward for the multilateral deal. Whilst some TPP countries have suggested some sort of deal may be possible without the US, others have stated it would be “meaningless” without the US.

Throughout 2017, ICAL will continue to monitor and keep you informed about changes and negotiations made to existing and pending trade agreements

Wishing you a festive holiday season

Merry Christmas!

With Christmas around the corner, ICAL would like to take this opportunity to wish you a joyous holiday season and a very Happy New Year!

We appreciate your support in 2016 and look forward to continuing to do business together in 2017.

If you require assistance with storing your cargo over the Holiday period, please contact 1300 00 4225 to see how we can assist you.

Festive period opening hours

Our office will be closed on December 26^th and 27^th and will reopen on Wednesday the 28^th of December. We will close again for New Year festivities and will reopen January 3^rd.

Happy Holidays,

From the team at ICAL

On August 31^st this year, Hanjin shipping, the world’s seventh largest shipping line filed for bankruptcy, causing disruptions to the international trade market, as ships, cargo and crews were stranded after being denied access to ports around the globe.

In light of this, we would like to remind our clients about the importance of insuring your cargo, ascertain the cover is adequate for the risks involved and compliance of the insurance conditions is met.

Shipping lines, Airlines and Carriers a like tend to limit their liability for the loss of, or damage to cargo through contractual arrangements; either as standard terms and conditions of trading, or by contracts of carriage. 

ICAL offers a door to door insurance policy, which can be arranged on a shipment by shipment basis. AUD$70 can cover an insured value of up to AUD$25,000 (depending on the commodity, origin and destination).

Some key points on what ICAL’s door to door insurance policy covers;

 ·         Damages caused by packing/unpacking the container/cargo

·         Any pillage or loss from collections from your overseas supplier right up to delivery in Australia

·         Concealed damage for up to 90 days after arrival

·         No excess on new cargo except machinery

If you would like further information on our insurance policy, or to discuss how it may be of benefit to your business, please contact Mark Coleman or Nicholas Watts on 1300 00 4225 

The above advice is of a general nature only. Policy conditions can be provided on request and need to be read in their entirety to ensure the policy is right for you.

ICAL would like to inform our clients about the Cargo Compliance Verification survey commencing on Monday the 14^th of November. Over a two week period, Quarantine will conduct a survey on imported commercial air cargo consignments. During this time, consignments that would not typically be referred for bio security consideration will be selected for a random verification inspection.

For further information, please see the Industry notice issued by Quarantine.

Increase in Asbestos monitoring procedures

Since 2003, Australia has had a zero tolerance towards the importation of products containing asbestos. However, due to an increasing number of imported products found to contain asbestos, the Australian government, through our Australian Border Force (ABF), are enforcing a much stronger control of this area. Border offences relating to Asbestos attract fines of up to $180,000 or three times the value of the goods, whichever is greater, for individuals; and for a body corporate, the same offence attracts a higher penalty of up to $900,000.

ICAL, as your customs broker, are obliged, under the ABF rules, to advise our clients about the changes made by government to Asbestos monitoring procedures.

When lodging import Customs Clearance Declarations, Customs Brokers must answer Community Protection Questions on behalf of importers. The new question “Do these goods contain asbestos?” is affecting a growing number of products. It is based both on commodity type and the country of origin.

The ABF has instructed Customs brokers to respond ‘Yes’ to the asbestos question if they have not received sufficient documentary evidence from Importers and Suppliers. If the broker answers Yes to this question “Do these goods contain asbestos?” there will be immediate intervention by the ABF and it may lead to delays, tests, and extra documentary requirements.

It’s imperative that Importers take ownership of this issue and immediately seek assurances from suppliers to ensure there is no asbestos in any imported products. It is expected that responses from suppliers will confirm that, if required, supporting documentation or certification will be provided to support the asbestos free assurance statements.

ICAL have created Asbestos Free declaration’s for our clients and their suppliers to complete once they have received assurances from their supply chain. To receive this or if you require further clarification, please contact ICAL and we will be happy to assist.

Industry Update

Container Weight Verification – Effective from July1st, 2016

ICAL International wishes to inform our customers the global requirement for container weights has recently changed. As of July 1st, 2016, the Safety of Life at Sea (SOLAS) requires a verified gross mass (VGM) declaration as a condition for loading a packed container onto a ship.

This amendment requires the Shipper shown on the Bill of Lading to ensure the VGM of a packed container is communicated sufficiently in advance to the ships master. Containers will not be loaded onto the ship without a VGM. This requirement will apply to both FCL containers and individual LCL shipments.

The purpose of the VGM requirement is to obtain correct gross weights of packed containers so vessel and terminal operators can prepare stowage plans prior to loading cargo on ships and prevent the reoccurrence of accidents caused by overweight containers. Penalties for non-compliance on VGM requirements may apply.

What Information is required?

• Verified Gross Mass (VGM) per container (cargo weight, loading material/pallets/skids, dunnage, securing material, tare weight of container)
• Name and Signature of the person authorized by shipper and company details
• Additional information and/or documents, if any required by relevant government authorities.

Methods of Verification

In accordance with the SOLAS amendment, there are two approved methods to declare the VGM;

Method 1 – Weigh the packed container

Method 2 – Weigh all packages, packaging and dunnage material and add the tare weight container

ICAL International – Lognet Best Partner Award 2015

It is with great pleasure to announce that ICAL has won the Lognet Best Partner award for 2015. The Lognet Global Network consists of 353 Logistic companies worldwide with 626 offices throughout 105 countries. This year, company directors Mark Coleman and Andrew Grima attended the annual conference in Ho Chi Minh City, Vietnam. The Lognet World Network enables ICAL to connect to Lognet members globally and expand our service offerings in order to provide our customers comprehensive and competitive logistic solutions in all markets around the world.

Each year, the Lognet member companies nominate a company they believe has offered the best service and support throughout the year. In recent years ICAL’s services have been recognised, achieving 3^rd and 2^nd place and this year out of the 353 companies, ICAL had the honour of being awarded 1^st place.  The award recognizes ICAL’s services in forwarding, customs clearance, transport and accounts.

Customs Duty Rate Changes – Australian – Japan Economic Partnership Agreement.

Australia has committed to reduce the rate of customs duty on certain Japanese originating goods. As of April 1^st the rate of customs duties on certain goods will be reduced. For more information regarding the duty reduction, please contact our office and our staff will be more than happy to assist with any queries.

Papua New Guinea’s Kina Shortage

Papua New Guinea financials are weakened; in an attempt to maintain the falling exchange rate of the Papua New Guinea kina, the Bank of PNG has been restricting the access to foreign currency. This has lead to a backlog of PNG businesses unable to obtain foreign currency in order to pay Australian exporters. It is advised exporters to PNG be mindful in their dealings in order to avoid being affected.

India-Australia Free Trade Agreement

India and Australia are facing difficulties in concluding years of complex negotiations regarding a Free Trade Agreement (FTA). The Indian market offers great potential for Australian importers and exporters, already the world’s third largest economy, growing by over 7% annually. India has taken over Australia to be the world’s seventh largest agricultural exporter. In previous Indian Free Trade agreements agricultural products tended to be excluded but Australia’s push to have them included in a deal would be a major achievement. As negotiations enter their final stages, other sectors such as engineering, health, education and construction are considered to be of focus in the agreement. Whilst Australia continues to make announcements of extended deadlines for the finalisation; India has announced trade negotiations will be delayed until the conclusion of the Regional Comprehensive Economic Partnership (RCEP) of which both countries are a part. Given there are RCEP negotiations to be held in April and June this year, it is unlikely that a FTA would be signed by mid-2016 as estimated; realistically it will be towards the end of 2016.

China Australia Free Trade Agreement start date – 20 December, 2015

The Free Trade Agreement between Australia and China (ChAFTA) will commence on 20 December, 2015 with the majority of products receiving duty free status from this date as long as a valid Certificate of Origin (CoO) is available.  Importers will need to secure appropriate CoO from their suppliers to take advantage of ChAFTA reduced duty rates from this commencement date.

Importers should be aware not all goods will receive duty free status from the commencement date and for these still dutiable goods, phasing rates of duty will be applied, for these goods a further round of cuts will occur on 1 January 2016, these goods subject to phasing rates of duty will eventually become duty free.  The goods still subject to phasing rates of duty include but are not limited to some paper products, textiles, clothing, footwear, some machinery and various automotive products.  These phasing rates of duty being the reason for the commencement date of 20 December, 2015, so as on 01 January, 2016 a second duty reduction will occur.

Importers of goods that wish to claim the benefit of the ChAFTA, will need to have their suppliers acquire a certificate of origin issued by an authorised body being either one of the following organisations:

AQSIQ (General Administration of Quality Supervision, Inspection and Quarantine) where the actual certificates will be issued by provincial Entry-Exit Inspection and Quarantine Bureaus, which are administered by AQSIQ;

And the China Council for the Promotion of International Trade.

Further, there will be goods already on the water for which no certificate of origin is held. If those goods arrive on or after 20 December the goods can be entered and duty paid, with the importer having 6 months to retrospectively obtain a certificate of origin. Once the certificate is held, a refund can be applied for.

Please see below the link for the CHAFTA, which will connect you to the DFAT website detailing all requirements.

http://dfat.gov.au/trade/agreements/chafta/official-documents/Pages/official-documents.aspx

The key features of the Trans Pacific Partnership (TPP) have now been released.

An importer wanting to claim reduced duty rates offered by the TPP will be required to present a Certificate of Origin to justify this reduction in duty, the Certificate of Origin can be supplied by the manufacturer, exporter or importer.  The Certificate of origin can be on a shipment by shipment basis or an annual document and that can be used for multiple shipments over that 12 month period.  The annual certificate would be appropriate if you are a commodity based trader or importing the same product continuously.

As suspected the major difference with existing FTA’s is origin qualification will be based on TPP regional content which can include content from multiple TPP partner countries.  Under this arrangement for example US origin goods can contain components from Mexico, Canada or any TPP member country and still claim the duty reductions.

Another difference between the US FTA and the TPP is goods under the TPP must remain under Customs control when transhipped or they will lose their preferential treatment where under the US FTA goods can be stored in a third country domestic warehouse and qualify for preferential rates as long as no further manufacturing processes are undertaken.

The next step in the process is member countries will need to pass the legislation through their parliaments.

http://dfat.gov.au/trade/agreements/tpp/news/Pages/tpp-pact-to-drive-jobs-growth-and-innovation-for-australia.aspx