Reminder: Import permits required prior to arrival of goods

With the commencement of the new Biosecurity Act 2015 on 16 June 2016, importers are reminded of the need to obtain any relevant import permits prior to the arrival of goods in Australia.

If you intend to import goods into Australia that require import permits eg fertilizer products, you must comply with the new legislation.

Under the Biosecurity Act 2015, the department cannot issue an import permit for goods that have already landed. In the past, the department has facilitated imports that have landed without a permit by allowing importers to apply for a permit. This will no longer be the case.

For more information, please visit the DAWR website.

AADA increases China-Australia rate US$300/TEU from July 1

Member lines of the Asia Australia Discussion Agreement (AADA) will levy a US$300 per TEU rate increase from July 1 on cargo from mainland China and Hong Kong to ports and points in Australia.

This increase will apply in full on top of existing ongoing market rates and will be subject to accessorial surcharges applicable at the time of shipment.

AADA is a voluntary discussion forum of 16 ocean carriers serving the trade from North and East Asia to destinations in Australia.

Members include ANL Singapore, APL, China Shipping Container Line (HK), Cosco, Evergreen Line, Hamburg Sud, Hanjin Shipping, Hapag-Lloyd, Hyundai Merchant Marine, "K" Line, Maersk Line, MSC, MOL, NYK, OOCL, PIL, Sinotrans Container Lines, TS Lines and Yang Ming.

For more information, please contact 20Cube.

AADA bunker surcharge rises to US$150/TEU, $300/FEU on June 18

Member lines of the Asia Australia Discussion Agreement (AADA) have increased the bunker surcharge US$150 per TEU and US$300 per FEU for dry and refrigerated containers from Japan, Korea, mainland China, Hong Kong and Taiwan to ports in Australia from June 18.

This reflects recent increases in the price of oil at Hong Kong and South Korea, the AADA said. Customers requiring further information concerning the bunker surcharge are to contact the member lines.

"AADA members have adopted voluntary policy guidelines and have reached a non-binding consensus on the above arrangement," the AADA statement said.

Member AADA lines are ANL Singapore, APL, China Shipping Container Line (HK), Cosco, Evergreen Line, Hamburg Sud, Hanjin Shipping, Hapag-Lloyd, Hyundai Merchant Marine, "K" Line, Maersk Line, MSC, MOL, NYK, OOCL, PIL, Sinotrans Container Lines, TS Lines and Yang Ming.

New Biosecurity Legislation in Effect from 16 June 2016

Important changes to Australia’s biosecurity system come into effect on 16 June 2016 with commencement of the Biosecurity Act 2015.

The Biosecurity Act 2015 replaces the Quarantine Act 1908. The Biosecurity Act introduces new requirements that will affect how the Department of Agriculture and Water Resources manages the biosecurity risks associated with goods, people and conveyances entering Australia. We aim to make compliance with the new laws easy for you and your business. 

Are you an importer? Find out more about what is changing for your business.

Update: Australian Trusted Trader Programme

T​he Australian T​rusted Trader​ Programme (ATTP)​ seeks to provide trade facilitation benefits to importers and exporters that demonstrate strong security practices and a history of​ ​compliance.

As previously advised, the ​ATTP is currently undergoing its pilot phase,and​ ​consists of three phases. Stage 1 had four initial Australian exporters participate and stage 2 targeted a further 20 Australian importers and exporters to also participate.​ ​Stage 3 commenced this year​ ​where more importers and exporters with complex supply chains​ ​were​ ​selected.

Service providers, including 20Cube,​ ​will also progress in participation, supporting a target to have between 40 and 50 companies participating in the pilot.​ ​It​ ​is ​​​​​​expected to be fully operational and open to all international supply chain participants from 1 July 2016 onwards.

Some benefits identified for importers and exporters who become​ ​part of the ATT​P will include​:​

• Reduced disruptions to supply chain processes (fewer interceptions at Customs barrier, and priority service)​ ​
• ​Reducing International Supply Chain costs and
• Decreasing stock transit time-frames​ ​Mutual Recognition Arrangements with Australia's key trading partners​ ​Priority consideration of trade advice rulings and applications

The DIBP​ (Customs)​ added that as the pilot develops, more Account Managers will be added to the programme as a single point of contact and to maintain the relationship between DIBP and ATT​P​​ participants​.

We've also learned that the ​Self Assessed Questionnaire (​SAQ​)​ stage takes longer to complete, due to the amount of information required, complexity/diversity of business models and competing priorities, which has resulted in the whole pilot process taking longer than anticipated.

For more information, visit the DIBP website. 

Protect or Perish - The Quandry for Government in a Free-Trade World

The recent announcement that steel producer Arrium was moving into voluntary administration threw up a number of comments that many of its problems arose from the alleged international “dumping” of steel products by Asian exporters.

There is no doubt that a glut of steel production in Asia has created issues for Arrium and for similar local steel producers in the EU and the USA.

However, at the same time that Arrium is experiencing difficulties, the other major Australian steel producer in BlueScope recorded excellent results, which would suggest that foreign competition is not the sole reason for Arrium’s problems.

Still, the media continues to carry regular stories regarding the evils of the foreign supply of goods, jobs and investment allegedly threatening Australian business, ownership and jobs.

This provides a quandry for all levels of government who welcome such foreign involvement and commit to it in free trade agreements (FTA).

It is especially an issue at the federal level in an election year – how to continue to promote the strong free trade agenda while still preserving some level of protection for legitimate local interests which may be “damaged” by that trade.

A brief summary of relevant considerations is set out below:

• No such thing as “total” free trade: There are many areas where regulation is permitted in the interests of ‘fair’ trade, such as the WTO agreements on anti-dumping and countervailing.
• Loophole closures: Our trade remedies regime has been subject to significant amendments in the last few years, much of which seems to have been aimed at “closing loopholes” or providing “further protection against unfair competition”.
• Australia’s Tariff Concession order regime: Put simply, the TCO is supposed to allow duty-free entry for goods for which there is no local production of ‘substitutable’ goods.
• Australian Quarantine measures: Our “quarantine” regime is also subject to international pressure. Government maintains that we have a robust and scientifically-based regime yet many of our trade partners see our regime as being unduly restrictive and a “non-tariff barrier” to trade.

In amongst this, there is the task for all Australian political parties to balance legitimate interests which can appear to be in direct competition.

Australian business wants open markets overseas for export of Australian goods and services as well as increased opportunities for outbound and inbound investment. It is hard to reconcile that to a 

politically expedient desire to close off parts of our economy in a way not supported by sound policy. Perhaps the real test of policy in this area is to help those whose lives are affected in the pursuit of trade outcomes of benefit to us all.

A final thought – there is evidence in the US that manufacturing jobs are being reintroduced there, turning back from China and elsewhere in Asia where production has become more expensive and less convenient. Over time there may be a similar turn in the wheel for other economies.

This article has been edited and reproduced with permission of Andrew Hudsons, Parnter of Melbourne office of Gadens. For the full unedited article, please visit the Gaden website

Merger Update: CSCL / COSCO

CSCL and COSCO have merged, following the integration and restructure of China COSCO, COSCO Pacific, China Shipping Container LINES (CSCL) and China Shipping Development. It’s a merger that will create an organisation that will be one of the world’s four largest container shipping lines.

The new entity will have a fleet of 288 container ships, of which 84 are larger than 8,000 TEUs and a total shipping capacity of approximately 1.6 TEUs.

As leaders in China’s shipping industry, COSCON and SCSL have cooperated for many years. The expectation is that the restructure and consolidation will yield a great improvement to the company’s core competitiveness. The merger will also offer employers a more diversified career development path.

For investors, the integration of quality resources and capture of synergies will bring a better return on investment. For customers, the expected shipping capacity and widened scope of the business will optimise the route network and improve the fleet structure. The end-goal for customers is an enhanced ability to deliver high-quality customer services and meet more rigorous services standards. 

While the merger should further consolidate market share among shipping lines, the impact on shippers and consignees in Australia will be less capacity in the trade lane to China. Based on past experience, Australian business can also expect pricing competition to intensify post-merger.

Enhanced Project Bylaw Scheme (EPBS) closure

A recent major announcement from the Australian Government is that the Enhanced Project Bylaw Scheme (EPBS) will be closed. The EPBS provides duty free entry for goods associated with certain large capital projects. 

For very large projects the scheme was often more efficient than using tariff concession orders.  It was no doubt more popular in an environment where TCOs were being narrowly applied.

The popularity of the EPBS is highlighted by the fact that the saving from the closure is projected to be $60 million a year.  In other words, an additional $1.1 billion dollars of imports that will be subject to duty.

Real skill will be required in drafting TCO wording that in the current compliance environment will be  wide enough to cover the variety of items imported for major projects

Container Weight: Who is responsible for VGM?

In January of 2015, the International Maritime Organisation (IMO) amended the Safety of Life at Sea Convention (SOLAS) to require - as a condition for loading a packed container on to a ship for export, that the container has a verified gross mass (VGM).

20Cube provided an update to our clients earlier this month on the issues that shippers must address and the potential consequences for not doing so.

With the legislation due to start from 1 July 2016, there are still some in the industry asking who is ultimately responsible for VGM.

While the immediate answer is that it is the responsibility of the port where the weighing and weight verification should occur (as it is the last stop before shipping), our view is that it is too late in the supply chain and does not align with the purpose of the legislation. Safety is a consideration for road transport as much as it is for sea freight.

The responsibility ultimately lies with the shipper (i.e. the sender of goods), who has the responsibility of obtaining the Verified Container Gross Mass and forwarding this information to relevant parties involved in moving the containers. By definition, the shipper is the legal entity or person indicated on the bill of loading (or sea waybill or its equivalent transport document), not the company that moves goods on their behalf.

Port and ship masters can only plan based on information provided to them, which means that ports do not need to prepare for the IMO/SOLAS changes: their role is to ensure proper stowage based on container weight information provided to them.

For more information about methods for VGM and ongoing dialogue about the legislation,please view our recent update here or contact 20Cube for more information.

Tariff Concession Orders

The Australian Border Force (Customs) acknowledge that the interpretation of Duty Free Tariff Concession Orders (TCO) is an area of concern for importers and brokers.

20Cube advise our clients that care needs to be taken when claiming TCOs. In particular:

Does the NEW / UPDATED model still fit the TCO?

Particular goods may been eligible to claim a TCO previously, but changes in the properties or characteristics of the goods, even small variations, may affect their eligibility.

Applying TCOs which are Sets, Kits and Assemblies

TCOs do not apply to sets, kits, assemblies or systems unless they are specifically referred to in the wording, together with a list of all the items making up the set, kit, assembly or system

Does the wording fit your product exactly?

How does the wording of TCOs, particularly those containing a number of ‘and’ stipulations or specific punctuation, fit your product?

Will my product comply to parameters where units are stipulated in the wording of the TCO?

If doubt exists as to the applicability of a TCO to any goods, 20Cube advise clients that a Tariff Advice be sought, or a NEW TCO on the specific good can be applied for.

For further clarification, please contact one of our Customs Consultants.