Henning Harders February 2019 Newsletter

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Table of Contents

Customs Update 

Brown Marmorated Stink Bug – review into the effectiveness of the measures to manage the risks of BMSB entering Australia.

Members of the Department of Agriculture and Water Resources Cargo Consultative Committee have been invited by the Inspector–General of Biosecurity to make submissions into the effectiveness of the measures put in place to mitigate the introduction of the BMSB pest into Australia. Henning Harders, through our Industry bodies, will be participating in these submissions. Should any Importers wish to make any comments on the effectiveness of the scheme, please contact your Key Account Manager who will arrange for one of our Brokers to contact you to discuss. Your issues will be passed through to our industry bodies for inclusion in the overall submission.

Brown Marmorated Stink Bug – Italian Treatment Providers.

In late 2018, the Department of Agriculture and Water Resources (DAWR) suspended three Italian heat treatment providers after a detection of live bugs in consignments they treated. Following the suspension, all Italian Heat Treatment providers also ceased treating and certifying consignments until they had a meeting with departmental representatives.

This meeting was conducted on 14. January 2019 in which DAWR confirmed that heat treatments could continue to be conducted by all registered providers, except for the three suspended providers. Following on from the meeting DAWR has since audited the suspended providers and has reinstated them with effect from 25. January 2019.

Any consignments treated by the suspended providers prior to the above date will require onshore treatment in Australia on arrival.

The importance of Transport Insurance when General Average is declared.

There have been several instances in recent times where carriers have declared General Average where a fire has occurred on a cargo vessel. These fires have resulted in damage to the vessel as well as cargo. General Average is a principal in Maritime Law where all parties share proportionally in the loss. The calculation of each party’s share in the loss can be time consuming and cumbersome. While damages are being calculated the assessors will require the lodgement of securities before the release of cargo. Therefore, we strongly advise all of our clients to ensure they have their transit insurance in place for all consignments, whether it be single, per shipment policies or a blanket ongoing policy.

Henning Harders can assist you with your insurance needs. Please talk to your Key Account Manager for more information.

Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP-11)

The TPP-11 agreement entered into force for Vietnam on 14. January 2019, joining Australia, Canada, Japan, New Zealand, Mexico and Singapore.  Australian businesses exporting to or considering exporting to Vietnam can now use this agreement to access new markets with reduced tariffs.  Businesses importing goods from Vietnam may now be able to access preferential duty rates on goods not covered by the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA). 

The remaining Parties to the agreement (Brunei Darussalam, Chile, Malaysia and Peru) are yet to ratify the agreement.  More updates will follow as each Party joins.

If you require any further information regarding TPP-11 or any other free trade agreement, please contact your Key Account Manager.

Prosecution for Failure to Comply with Directions issued by the Department of Agriculture and Water Resources

The Department of Agriculture and Water Resources (DAWR) takes an active role in policing the directions they issue for goods subject to biosecurity control. The prosecution in question saw a transport company and its owner prosecuted and fined $100,000 and $20,000 respectively, with the owner also receiving a 12-month suspended jail sentence.

This is a timely reminder that all biosecurity directions should be carried out by the date listed on the direction. If further time is required to carry out the essential activity, please contact your Key Account Manager to request an extension with DAWR. 

Importer issued with the first illegal logging infringement notice

A Queensland-based importer was recently served with the first infringement for ongoing non-compliance with due diligence requirements under Australia’s illegal logging laws.

This notice is the first issued since the end of the “soft-start compliance period” in January 2018, under which the Department of Agriculture and Water Resources was previously operating. The Department will continue to conduct compliance audits in 2019 to ensure importer’s due diligence systems meet the laws’ requirements.

If your business imports timber or timber products including furniture, cardboard or paper products, then you require a due diligence system in place to ensure the goods imported are not produced from illegally logged timber. If you have concerns regarding compliance of your current system, please contact your Key Account Manager for advice.

Australian Border Force partial probe recovers short-paid duties.

An Australian Border Force (ABF) probe has discovered a “complex and systematic process to falsify documents” at a steel importer in Victoria. The activities took place between 2014 and 2017 whereby the importer falsified import invoices to reduce the duties and taxes payable. Under the Customs Act 1901, Customs has a four-year window with which to recover short-paid duties, hence the period applied. While ABF has been able to recover approximately $1.5m in short-paid revenue and issue the importer with infringement notices of approximately $300,000, there are concerns that this sends the wrong message.

Under the Customs Act, ABF in this case could have utilised the measures under S243T(1) to prosecute the importer through the courts. Under this mechanism the Court would have the ability to recover all short-paid duties over a longer period. Due to the fraudulent activity of the importer they would also be able to issue larger penalties consider possible prison sentences as a better means of deterrent. Under the Infringement Notice Scheme there are no criminal convictions provided the infringement notice is paid or revoked.

This case does however show that ABF remain vigilant in the compliance space and will use the powers provided to them under the Infringement Notice Scheme to try and encourage greater compliance in the importing and exporting community.

If you have any questions in relation to this matter, please contact your Key Account Manager.

Vitamins classified as a medicament

Australian Border Force (ABF) has recently lost a case in the Australian Court regarding the classification of vitamins. ABF argued that the goods are identified as a food supplement of heading 2106 whilst the importer argued the goods have a therapeutic or prophylactic benefit and are therefore medicaments of heading 3004.

The Court unanimously ruled that vitamins should be classified as a medicament to 3004 as the goods are not ordinarily recognised as a food, or a food supplement being something added to food. It is currently not known whether ABF will appeal this decision to the High Court.

This ruling has implications for all importers of vitamins that may have received binding rulings from ABF classifying the goods to heading 2106. Importers that have paid duty on vitamins are urged to seek guidance regarding possible refunds of duties paid for the preceding four years.

If you require any assistance regarding the above matter, please contact Henning Harders.


Shipping Update

Chinese New Year

The market this year has uncharacteristically and surprisingly been very different to the preceding years in relation to Chinese New Year (CNY) 

Many carriers who service North East Asia (NEA) may somewhat be “disappointed” in the lack lustre demand, movement and competition for space, as well as opportunity to maximise revenue to the fullest in times of peak periods for high volume trade lanes such as CNY. The primary reason for this “disappointment” can be attributed to the introduction of the HMM & EMC service which took effect from August last year which offers a quicker and faster service to Australia as well as increased teu and tonnage capacity especially ex Shanghai and Shenzhen. Since then almost, if not, all carriers, have more than full vessels for their weekly sailings. The effect of this new service with larger vessels and increased space no doubt has surprised the shipping industry and the effect has been greater than what was anticipated or expected.

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