Federal Register of Legislation - Australian Government

Primary content

Customs (Indonesian Rules of Origin) Regulations 2019

Authoritative Version
Regulations as made
These regulations prescribe matters relating to the new rules that are required or permitted to be prescribed under new Division 1HA of the Customs Act 1901. They also prescribe the rules used to determine whether a good is Indonesian originating, including the methods used to determine the qualifying value content (QVC) of goods (a calculation used in determining whether a good made from originating and non-originating materials is an Indonesian originating good) for the purposes of some of the product-specific rules requirements. The regulations also prescribe the valuation rules for different kinds of goods.
Administered by: Home Affairs
Exempt from sunsetting by the Legislation (Exemptions and Other Matters) Regulation 2015 s11 item 01
Registered 17 Dec 2019
Tabling HistoryDate
Tabled HR04-Feb-2020
Tabled Senate04-Feb-2020

EXPLANATORY STATEMENT

 

Issued by Assistant Minister Customs, Community Safety and Multicultural Affairs Parliamentary Secretary to the Minister for Home Affairs

 

Customs Act 1901

 

Customs (Indonesian Rules of Origin) Regulations 2019

 

The Customs Act 1901 (the Customs Act) concerns customs-related functions and is the legislative authority that sets out the customs requirements for the importation of goods into, and the exportation of goods from, Australia.

 

Subsection 270(1) of the Customs Act provides, in part, that the Governor-General may make regulations not inconsistent with the Act prescribing all matters, which by the Act are required or permitted to be prescribed or as may be necessary or convenient to be prescribed for giving effect to the Act.

 

The Hon Simon Birmingham, Minister for Trade, Tourism and Investment, and the Indonesian Minister for Trade H.E Enggartiasto Lukita, signed the Indonesia‑Australia Comprehensive Economic Partnership Agreement (IA‑CEPA) on 4 March 2019 in Jakarta, Indonesia. IA-CEPA sets out, among other things, comprehensive provisions for trade in goods and services and related customs procedures and rules of origin for claiming preferential rates of customs duty. These rules determine whether goods imported into Australia from the territory of Indonesia are Indonesian originating goods and are thereby eligible for preferential rates of customs duty.

 

The Customs Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Act 2019 (the Implementation Act) amends the Customs Act to, among other things, insert new Division 1HA into Part VIII of the Customs Act to implement the provisions in IA- CEPA dealing with trade in goods and rules of origin.

 

The purpose of the Customs (Indonesian Rules of Origin) Regulations 2019 (the Regulations) is to prescribe matters relating to the new rules that are required or permitted to be prescribed under new Division 1HA.

 

The Regulations prescribe the rules used to determine whether a good is Indonesian originating, including the methods used to determine the qualifying value content (QVC) of goods (a calculation used in determining whether a good made from originating and non‑originating materials is an Indonesian originating good) for the purposes of some of the product-specific rules requirements. The Regulations also prescribe the valuation rules for different kinds of goods.

 

Details of the Regulations are set out in Attachment A. A Statement of Compatibility with Human Rights has been prepared in accordance with the Human Rights (Parliamentary Scrutiny) Act 2011, and is at Attachment B.

 

The Department of Foreign Affairs and Trade, in conjunction with other government agencies including the Department of Industry, Innovation and Science, consulted widely during the negotiation process for IA-CEPA, including on matters now encompassed in the Regulations. This consultation included individual businesses, industry groups representing mining, agriculture and business sectors, state and territory governments, civil groups and representatives of trade unions.

 

Most stakeholders supported the pursuit of a comprehensive trade agreement that would build upon the foundation provided by the Agreement establishing the ASEAN‑Australia‑New Zealand Free Trade Area. There was particular support for reducing barriers for agricultural products and steel, as well as enhancing opportunities for Australian service providers and Australian investors. Concerns were raised regarding transparency, investor‑state dispute settlement, pharmaceuticals, government procurement and the temporary movement of workers.

 

Details of these consultations were set out in the consultation attachment to the National Interest Analysis for the agreement.

 

The Regulations are a legislative instrument for the purposes of the Legislation Act 2003.

 

The Regulations commence at the same time as Schedule 2 to the Implementation Act, which will be the later of the day after that Act receives the Royal Assent and the day IA-CEPA enters into force for Australia.

 

 

 OPC64138 - A

ATTACHMENT A

 

Details of the Customs (Indonesian Rules of Origin) Regulations 2019

 

Section 1 – Name

 

This section provides that the title of the Regulations is the Customs (Indonesian Rules of Origin) Regulations 2019 (the Regulations).

 

Section 2 – Commencement

 

This section sets out, in a table, the date on which each of the provisions contained in the Regulations commences.

 

Table item 1 provides for the whole instrument to commence at the same time as Schedule 2 to the Customs Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Act 2019 (the Implementation Act) commences.

 

Section 3 – Authority

 

This section sets out the authority under which the Regulations are made, which is the Customs Act 1901 (the Customs Act).

 

Section 4 – Definitions

 

This section sets out the definitions for the purpose of the Regulations:

 

‘Act’ means the Customs Act;

 

‘Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994’ means the Agreement of that name set out in Annex 1A of the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April 1994.

 

The following words and expressions have the meanings given by section 153ZLK of the Customs Act:

 

‘Agreement’;

‘Australian originating goods’;

‘Certificate of Origin’;

‘Declaration of Origin’;

‘Harmonized System’;

‘non-originating materials’;

‘originating materials’;

‘production’;

‘territory of Australia’; and

‘territory of Indonesia’.


 

Part 2 – Tariff change requirement

 

Section 5 – Change in tariff classification requirement for non-originating materials

 

Annex 4‑C of the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA‑CEPA), amongst other matters, sets out the product specific rules of origin and chapter specific origin rules, and related requirements that may need to be satisfied in order for goods to be eligible for preferential tariff treatment. Regulations may be required to specify or provide for related requirements.

 

One of the requirements under Annex 4-C that may apply to goods is the change in tariff classification requirement. Where a requirement that applies in relation to 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 (subsection 153ZLN(3) refers).

 

For the purposes of subsection 153ZLN(3), section 5 of the Regulations provides that a non-originating material used in the production of goods that does not satisfy a particular change in tariff classification is taken to satisfy the change in tariff classification if:

 

(a)    it was produced entirely in the territory of Indonesia, or entirely in the territory of Indonesia and the territory of Australia, from other non-originating materials; and

(b)   each of those other non-originating materials satisfies the change in tariff classification, including by one or more applications of this section.

 

Section 5 applies where the non‑originating materials that are used to directly produce the final good do not satisfy the change in tariff classification.

 

In practice, in producing a final good, a producer may use goods that are produced in Indonesia or Australia, or both. The components of these goods may be produced by yet another producer in that or the other Party or may have been imported by another importer. It is possible that one of more of the non-originating materials from which the final good is produced do not meet the applicable change in tariff classification requirement in Annex 4-C to IA-CEPA (thus failing to meet the requirements to be met for a good to be an Indonesian originating good produced from non-originating materials in subsection 153ZLN(1) of the Customs Act).  This may mean that the final good is non‑originating. 

 

However, section 5 allows the examination of each constituent component of each non‑originating material that has not met the change in tariff classification requirement in Annex 4-C, to determine whether components used in the production satisfy the change in tariff classification requirement that applies to the final good. If each component was produced entirely in Indonesia, or entirely in Indonesia and Australia, and satisfies the change in tariff classification requirement, then the non-originating material will be taken to have met the change in tariff classification requirement and the final good will be an Indonesian originating good (subject to satisfying all other requirements of Division 1HA of the Customs Act).

 

Example: The following diagram relates to the production of a final good, made from non‑originating materials, that occurred entirely in Indonesia and Australia. The diagram and the accompanying text illustrate the application of section 5.

 

In this example, it is assumed that non-originating materials 1, 3 and 5 satisfy the change in tariff classification requirement that applies to the final good.  It is also assumed that non‑originating materials 2 and 4 do not satisfy the requirement.

 

 

 

The final good is produced from non‑originating materials 1 and 2 that were produced entirely in Indonesia and Australia.

 

The transformation of non-originating materials 1 and 2 into the final good must satisfy the change in tariff classification requirement for the final good that is specified in Annex 4-C to IA-CEPA.  

 

The transformation of material 1 satisfies the relevant change in tariff classification requirement. 

 

However, the transformation of material 2 into the final good is not sufficient to satisfy the change in tariff classification requirement for the final good that is specified in Annex 4-C.  In accordance with subsection 153ZLN(3), paragraphs 5(a) and (b) allow that if the non‑originating materials from which material 2 was produced (materials 3 and 4) each satisfy the change in tariff requirement in Annex 4-C, then material 2 will be taken to satisfy that requirement. With regard to materials 3 and 4, it is not the transformation into material 2 that is being examined, rather it is the transformation into the final good that will determine whether the relevant change in tariff requirement in Annex 4‑C has been satisfied.

 

The transformation of non-originating material 3 into the final good satisfies the relevant change in tariff classification requirement.  However, the transformation of non-originating material 4 into the final good does not satisfy the relevant change in tariff classification.  In accordance with paragraph 5(b), the change in tariff classification rule can be applied to non‑originating material 5, which is used to produce material 4. Consistent with the above, it is the transformation of material 5 into the final good that will be examined. In this example the transformation of material 5 into the final good satisfies the relevant change in tariff classification requirement.

 

As a result of the application of the change in tariff classification requirement to the non‑originating materials used at each step in the production of the final good, material 2 is taken to satisfy the change in tariff classification requirement that applies to the final good.

 

In conclusion:

·         material 1 has met the change in tariff classification requirement in Annex 4-C that applies to the final good, and

·         material 2 is taken to satisfy the change in tariff classification requirement in Annex 4-C by operation of section 5, through the satisfaction of the change in tariff classification requirement by materials 3 and 5. 

 

The final good is thus produced from non-originating materials that have met the change in tariff classification requirement, and meets the requirement at paragraph 153ZLN(1)(c) of the Customs Act.  If the final good also meets the remaining requirements under subsection 153ZLN(1) and any others in Division 1HA of the Customs Act that apply, it is an Indonesian originating good. 

 

Part 3 – Qualifying value content requirement

 

Section 6 – Direct/build-up method

 

Subsection 153ZLN(6) of the Customs Act provides that, if a requirement that applies in relation to the goods is that the goods must have a qualifying value content (QVC) of not less than a particular percentage worked out in a particular way:

 

(a)    the QVC of the goods is to be worked out in accordance with IA‑CEPA; or

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

 

For the purpose of subsection 153ZLN(6), section 6 of the Regulations prescribes the ‘direct/build-up method’ under which the QVC of goods is calculated.

 

If it is a requirement in column 4 of the table in Annex 4-C that relevant goods are required to meet a QVC of not less than a particular percentage worked out in a particular way, then the QVC shall be calculated using either the method in section 6 or the method in section 7 of the Regulations.

 

Subsection 6(1) provides that the QVC of goods under the direct/build-up method is worked out using the formula:

 

IA-CEPA material cost + Labour costs + Overhead costs + Profit + Other costs   x   100

Customs value

 

where:

 

‘customs value’ means the customs value of the goods worked out under Division 2 of Part VIII of the Customs Act;

 

‘IA-CEPA material cost’ means the value, worked out under Part 4 of these Regulations, of the originating materials that are acquired by the producer, or produced by the producer, and are used by the producer in the production of the goods;

 

‘labour costs’ means the wages, remuneration and other employee benefits associated with the production of the goods;

 

‘other costs’ means the costs incurred in placing the goods in a ship or other means of transport for export including transport costs, storage and warehousing costs, port handling fees, brokerage fees and service charges;

 

‘overhead costs’ has the meaning given by Article 4.5 of Chapter 4 of IA-CEPA;

 

‘profit’ has the meaning given by Article 4.5 of Chapter 4 of IA-CEPA.

 

Subsection 6(2) provides that QVC must be expressed as a percentage.

 

The following is an example using the direct/build-up method to calculate the QVC for canned coffee where the sum of IA‑CEPA material costs, labour costs, overhead costs, profits and other costs for each can of coffee is $6.50. The customs value of each can of coffee is $10.00. Using the relevant method, the QVC is calculated as follows:

 

QVC = $6.50 (sum of costs as outlined above) x   100

                         $10.00 (customs value)

 

Therefore, the QVC for the canned coffee is 65 per cent (since the direct/build up method has established that 65 per cent of the good originates from within the area of the Parties).

 

Section 7 – Indirect/build-down method

 

For the purpose of subsection 153ZLN(6), section 7 of the Regulations prescribes the ‘indirect/build-down method’ under which the QVC of goods is calculated.

 

If it is a requirement in column 4 of the table in Annex 4-C that relevant goods are required to meet a QVC of not less than a particular percentage worked out in a particular way, then the QVC shall be calculated using either the method in section 6 or the method in section 7 of the Regulations.

 

Subsection 7(1) provides that the QVC of goods under the indirect/build-down method is worked out using the formula:

 

Customs value – Value of non-originating materials x 100

                        Customs value

 

where:

 

‘customs value’ means the customs value of the goods worked out under Division 2 of Part VIII of the Customs Act;

 

‘value of non-originating materials’ means the value, worked out under Part 4 of these Regulations, of the non-originating materials that are acquired by the producer and are used by the producer in the production of the goods, other than non-originating materials produced by the producer.

 

Subsection 7(2) provides that QVC must be expressed as a percentage.

 

The following is an example using the build-down method to calculate the QVC for canned coffee that is made from originating and imported ingredients and packaged in a steel can. The customs value of each can of coffee is $10.00 (including the costs of international shipment – calculated as set out under Part 4 – Determination of Value) and the value of the non‑originating materials (including packaging) is $3.50. Using the relevant method, the QVC is calculated as follows:

 

QVC = $10.00 (Customs value) – $3.50 (Value of the non-originating material)   x   100

                                                    $10.00 (Customs value)

 

Therefore, the QVC for the canned coffee is 65 per cent (since the build down method has established that 35 per cent of the good originates from outside the area of the Parties).

 

Part 4 – Determination of value

 

Section 8 – Value of goods that are originating materials or non-originating materials

 

Subsection 153ZLK(2) of the Customs Act provides that the value of goods for the purposes of the new Division 1HA is to be worked out in accordance with the regulations, and the regulations may prescribe different valuation rules for different kinds of goods.

 

For the purposes of subsection 153ZLK(2) and section 153ZLN, section 8 of the Regulations explains how to work out the value of originating materials and non-originating materials used in the production of goods.

 

Subsection 8(2) provides that the value of the materials is as follows:

 

(a)    for non‑originating materials imported into the territory of Indonesia by the producer of the goods—the value of the materials worked out in accordance with the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994;

(b)   for originating materials acquired, or produced, by the producer of the goods—the value of the materials worked out in accordance with the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 on the assumption that those materials had been imported into the territory of Indonesia by the producer of the goods;

(c)    for non‑originating materials acquired by the producer of the goods—the earliest ascertained price paid for the materials by that producer.

 

Paragraphs 8(2)(a) and (b) incorporate the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (the GATT), in order that certain calculations and definitions of value may be made according to the relevant provisions in the GATT.  The GATT is not a disallowable legislative instrument and as such, in accordance with paragraph 14(1)(b) of the Legislation Act 2003 is applied, adopted or incorporated as in force or existing at the time when the Regulations commence.  This means that should the relevant provisions of the GATT be updated, amendment to the Regulations will be necessary to ensure that the updates are incorporated.

 

The GATT is available to be viewed for free on the World Trade Organization website https://www.wto.org/index.htm

 

Subsection 8(3) sets out additional amounts (including freight, insurance, duties, etc.) that are to be deducted when working out the value of non-originating materials under subsection 8(2).

 

Section 9 – Value of accessories, spare parts, tools or instructional or other information materials

 

Subsection 153ZLN(7) of the Customs Act provides that, if:

 

(a)    a requirement that applies in relation to the goods is that the goods must have a QVC 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 not invoiced separately from the goods; and

(d)   the accessories, spare parts, tools or instructional or other information materials are included in the price of the goods; and

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

the regulations must provide for the value of the accessories, spare parts, tools or instructional or other information materials to be taken into account for the purposes of working out the QVC of the goods (whether the accessories, spare parts, tools or instructional or other information materials are originating materials or non‑originating materials).

 

For the purpose of subsection 153ZLN(7), section 9 of the Regulation provides that, if the above paragraphs of subsection 153ZLN(7) are satisfied in relation to the goods:

 

(a)    the value of the accessories, spare parts, tools or instructional or other information materials must be taken into account for the purposes of working out the QVC of the goods under Part 3 of the Regulations; and

(b)   if the accessories, spare parts, tools or instructional or other information materials are originating materials—for the purposes of sections 6 and 8 of the Regulations, those accessories, spare parts, tools or instructional or other information materials are taken to be originating materials used in the production of the goods; and

(c)    if the accessories, spare parts, tools or instructional or other information materials are non-originating materials—for the purposes of sections 7 and 8 of the Regulations, those accessories, spare parts, tools or instructional or other information materials are taken to be non-originating materials used in the production of the goods.

 

Section 10 – Value of packaging material and container

 

Section 153ZLO of the Customs Act deals with packaging materials and containers.

 

Subsection 153ZLO(1) provides that, if:

(a)    goods are packaged for retail sale in packaging material or a container; and

(b)   the packaging material or container is classified with the goods in accordance with Rule 5 of the Interpretation Rules;

then the packaging material or container is to be disregarded for the purposes of Subdivision D of new Division 1HA of the Customs Act.

 

However, if a requirement that applies in relation to the goods is that the goods must have a QVC of not less than a particular percentage worked out in a particular way, subsection 153ZLO(2) provides that the regulations must provide for the value of the packaging material or container to be taken into account for the purposes of working out the QVC of the goods (whether the packaging material or container is an originating material or non-originating material).

 

Section 10 of the Regulations provides that, if paragraphs 153ZLO(1)(a) and (b) are satisfied in relation to goods and the goods must have a QVC of not less than a particular percentage worked out in a particular way:

 

(a)    the value of the packaging material or container in which the goods are packaged must be taken into account for the purposes of working out the QVC of the goods under Part 3 of the Regulations; and

(b)   if that packaging material or container is a originating material—for the purposes of sections 6 and 8 of the Regulations, that packaging material or container is taken to be a originating material used in the production of the goods; and

(c)    if that packaging material or container is a non-originating material—for the purposes of sections 7 and 8, that packaging material or container is taken to be a non-originating material used in the production of the goods.

 

Part 5 – Record keeping obligations

 

Under new subsection 126ALF(1) of the Customs Act, the regulations may prescribe record keeping obligations that apply in relation to goods that:

(a)    are exported to the territory of Indonesia; and

(b)   are claimed to be Australian originating goods for the purpose of obtaining a preferential tariff in the territory of Indonesia.

 

Under new subsection 126ALF(2) of the Customs Act, regulations for the purposes of subsection 126ALF(1) may impose such obligations on an exporter of goods.

 

Part 5 of the Regulations specifies the records that must be kept for goods exported to Indonesia and are claimed to be Australian originating goods for the purpose of obtaining a preferential tariff treatment in accordance with IA-CEPA.

 

 

Section 11 – Exportation of goods to Indonesia

 

For the purposes of subsection 126ALF(1), subsection 11(1) of the Regulations provides that an exporter of goods mentioned in subsection 126ALF(1) must keep the following records:

(a)    records of the purchase of the goods by the exporter;

(b)   records of the purchase of the goods by the person to whom the goods are exported;

(c)    evidence that payment has been made for the goods;

(d)   evidence of the classification of the goods under the Harmonized System;

(e)    if the goods include any accessories, spare parts, tools or instructional or other information materials that were purchased by the exporter:

(i)     records of the purchase of the accessories, spare parts, tools or instructional or other information materials; and

(ii)   evidence of the value of the accessories, spare parts, tools or instructional or other information materials;

(f)    if the goods include any accessories, spare parts, tools or instructional or other information materials that were produced by the exporter:

(i)     records of the purchase of all materials that were purchased for use or consumption in the production of the accessories, spare parts, tools or instructional or other information materials; and

(ii)     evidence of the value of the materials so purchased; and

(iii)   records of the production of the accessories, spare parts, tools or instructional or other information materials;

(g)   if the goods are packaged for retail sale in packaging material or a container that was purchased by the exporter:

(i)     records of the purchase of the packaging material or container; and

(ii)   evidence of the value of the packaging material or container;

(h)   if the goods are packaged for retail sale in packaging material or a container that was produced by the exporter:

(i)     records of the purchase of all materials that were purchased for use or consumption in the production of the packaging material or container; and

(ii)   evidence of the value of the materials; and

(iii)   records of the production of the packaging material or container;

(i)      a copy of the Certificate of Origin, or Declaration of Origin, for the goods.

 

For the records referred to in subsection 11(1) of the Regulations, subsection 11(2) provides that the records must be kept for at least five years starting on the day of exportation of the goods.

 

Subsection 11(3) of the Regulations sets out the manner in which a record is to be kept. The exporter may keep the records in any place, whether or not in Australia, and the exporter must ensure that:

(i)     the records are kept in a form that would enable a determination of whether the goods are Australian originating goods; and

(ii)   if the records are not in English—the records are kept in a place and form that would enable an English translation to be readily made; and

(iii)   if the records are kept by mechanical or electronic means—the records are readily convertible into a hard copy in English.


 

ATTACHMENT B

 

 

Statement of Compatibility with Human Rights

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Customs (Indonesian Rules of Origin) Regulations 2019

 

The Customs (Indonesian Rules of Origin) Regulations 2019 is compatible with human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of Disallowable Legislative Instrument

 

The Hon Simon Birmingham, Minister for Trade, Tourism and Investment, and the Indonesian Minister for Trade H.E Enggartiasto Lukita signed the Indonesia‑Australia Comprehensive Economic Partnership Agreement (IA‑CEPA) on 4 March 2019 in Jakarta, Indonesia. IA-CEPA sets out, amongst other things, comprehensive provisions for trade in goods and services, related customs procedures and rules of origin for claiming preferential rates of customs duty.

 

Schedule 2 to the Customs Amendment (Growing Australian Export Opportunities Across the Asia-Pacific) Act 2019 (the Implementation Act) amends the Customs Act 1901 (the Customs Act) to fulfil Australia’s obligations under Chapter 4 of IA‑CEPA which details the agreement’s rules of origin.

 

These new rules determine whether goods imported into Australia from Indonesia are Indonesian originating goods and are thereby eligible for preferential rates of customs duty. Indonesian originating goods are goods from the territory of Indonesian that satisfy the Rules of Origin; the framework of which is contained in new Division 1HA of Part VIII of the Customs Act.

 

Relevant provisions of the Implementation Act that amend the Customs Act commence on the later of the day after the Implementation Act receives the Royal Assent and the day IA‑CEPA enters into force for Australia.

 

The purpose of the Disallowable Legislative Instrument is to prescribe matters for and relating to the new rules that are required to be prescribed under new Division 1HA.

 

In particular, the Instrument:

 

·         prescribes the method used to determine the qualifying value content (a calculation used in determining whether a good is an Indonesian originating good) of goods for the purposes of some of the product-specific requirements set out in Annex 4‑C to IA‑CEPA.  Annex 4‑C is applied by reference in section 153ZLN of new Division 1HA;

·         specifies the valuation rules that may apply to the goods in Annex 4‑C; and

·         prescribes other matters that are required to be prescribed under new Division 1HA, including the particulars of records to be kept in accordance with the Customs Act.

 

The Instrument commences at the same time as Schedule 2 to the Implementation Act, which is the later of the day after that Act receives the Royal Assent, and the day IA‑CEPA enters into force for Australia.

 

Human rights implications

 

This Disallowable Legislative Instrument engages the Right to not be subjected to arbitrary or unlawful interference with privacy in Article 17 of the International Covenant on Civil and Political Rights (ICCPR).

To the extent the Instrument facilitates the collection and disclosure of information, the Instrument engages the right to privacy under Article 17 of the ICCPR.  Article 17(1) sets out:

 

No one shall be subjected to arbitrary or unlawful interference with his privacy, family, home or correspondence, nor to unlawful attacks on his honour and reputation.

 

Under Article 4.20 of Chapter 4 and Annex 4‑A of IA‑CEPA, a Certificate of Origin document issued by an Issuing Body of the exporting Party shall support a claim by importers that goods are eligible for preferential tariff treatment in accordance with IA‑CEPA. The key information that must be included in a ‘Certificate of Origin’ document is detailed in Appendix 4-A.1 of Annex 4‑A to IA‑CEPA and may include personal information.

 

Under Article 4.20 of Chapter 4 of IA‑CEPA, a Declaration of Origin completed by the exporter shall support a claim by importers that goods are eligible for preferential tariff treatment in accordance with IA‑CEPA. The key information that must be included in a ‘Declaration of Origin’ document is detailed in Annex 4‑B to IA‑CEPA and may include personal information.

 

The Implementation Act inserts new section 126ALF into the Customs Act to enable regulations to prescribe the information required to be kept in accordance with the record keeping obligations that apply in relation to Australian originating goods exported from Australia to Indonesia, in accordance with IA‑CEPA.

 

The record keeping obligations are prescribed in Part 5 of the Instrument, which amongst other things require records and evidence of the purchase of material, value of material, production of goods, and the Certificate of Origin or Declaration of Origin to be kept for at least five years starting on the date of export from Australia. The records required to be kept accord with Article 4.26 of Chapter 4 of IA‑CEPA. In particular, Part 5, section 11 requires the details about the purchase of the goods by the exporter and the person to whom the goods are exported, which may include the personal information of the exporter and person to whom the goods are exported.

 

Part 5 of the Instrument together with new sections 126ALE, 126ALF, 126ALG and 126ALH of the Customs Act, operate to allow Indonesia to verify the origin of goods exported to Indonesia from Australia that are claimed to be Australian originating goods. This may include the collection and disclosure of personal information, including information set out in a ‘Certificate of Origin’ document or ‘Declaration of Origin’ document, for limited purposes. This information may be disclosed to an Indonesian customs official for the purpose of verifying a claim for a preferential tariff in the territory of Indonesia.

 

Through the amendments to the Customs Act made by the Implementation Act, the collection and disclosure of personal information in relation to goods claiming to be originating goods will be permitted. Further, the collection and disclosure of personal information is authorised under the Privacy Act 1988 and, where applicable, the Australian Border Force Act 2015.  Neither the Implementation Act nor this Instrument alter the existing protections.

 

The verification of the eligibility for preferential treatment is required under IA‑CEPA and the measures in the Instrument are directed at the legitimate purpose of facilitating and supporting Australia’s international obligations under IA‑CEPA. This collection and disclosure of personal information will only be permitted for the limited purpose of verifying a claim made by a person for preferential tariff treatment making it a reasonable and proportionate response to a legitimate purpose. The collection and disclosure of personal information in these circumstances will not constitute an unlawful or arbitrary interference with privacy.

 

Conclusion

 

This Disallowable Legislative Instrument is compatible with human rights because, to the extent that it limits the right to privacy, the limitation is reasonable, necessary and proportionate and does not constitute an unlawful or arbitrary interference with the right to privacy.

 

 

The Hon Jason Wood MP

Assistant Minister for Customs, Community Safety and Multicultural Affairs Parliamentary Secretary to the Minister for Home Affairs