File image courtesy of Australian Customs and Border Protection Service.
Hunt & Hunt lawyers, together with the Freight & Trade Alliance (FTA), has made a joint submission to Customs regarding its proposed changes to the criteria for making tariff concession orders (TCO). TCO enable Australian manufacturers to seek protection from dumped imported goods.
The changes proposed by Customs would make it harder for importers to obtain TCO and easier for local manufacturers to seek revocation of existing TCO.
[A previous update on the proposed change, outlining the nature and likely impact of the change, can be found here.] Essentially, before a TCO can be made, it must be shown that there is no Australian producer of substitutable goods.
The current legislation requires that before goods will be classified as being produced in Australia, at least 25% of the labour costs, factory overhead costs and material must be of Australian origin (25% test). A second test requires that there be a substantial process in the manufacture of the goods undertaken in Australia (Substantial Process Test).
Customs proposes to remove the 25% test as its experience is that if the Substantial Process Test is met, so too will the 25% test.
The Hunt & Hunt/FTA submission outlines:
Experience showing that satisfying the Substantial Process Test does not always result in satisfaction of the 25% test. The view that Customs should exercise caution before deeming that the 25% test is redundant. Methods to make administration of the 25% test less burdensome, such as allowing TCO applicants to nominate whether satisfaction of the 25% test is disputed. Other methods to improve the TCO system.
