The Resurrection of the Compliance Update

Back in July, 2014 I wrote with some dismay of the end of the Customs’ bi-annual Compliance Update.

Well, credit where credit’s due, a new iteration of the old Compliance Update has been reintroduced. Called the Goods Compliance Update it is to be released quarterly and will report on many and varied compliance matters and statistics.

In its inaugural edition, the newly appointed Commander Customs Compliance, Erin Dale, advised:

I understand that in the past useful information and communication products were provided to assist industry to understand areas of compliance focus and to enable increased levels of voluntary compliance. In particular, we received feedback on the usefulness of the former Compliance Update that was published on the Australian Customs and Border Protection Service’s website until June 2014. I am therefore undertaking to provide information on our goods compliance programme through the new Goods Compliance Update.”

In that first edition Customs provided compliance results, information about common areas of non-compliance, links to useful resources and points of contact.

 

Should you need more information on how this report please call contact Rob Crabtree on 0412-050-744 or Brett Greedy 0412-146-615. 

What Price is the Correct Price?

Transfer pricing generally refers to the price of goods provided by one part of any organisation to another. It is typically seen in transactions between firms and their subsidiaries or affiliates in other countries.

In the context of this article, a transfer pricing adjustment is an agreement between related companies of multi-national enterprises to retrospectively adjust original prices of goods sold by one related company to another with the purpose of legally maximising profit and minimising taxation liabilities. In essence, a transfer price adjustment is used to manipulate pricing in order to achieve the return on sales required by taxation departments.

The adjustment may result in either an increase or a decrease in the price of the goods depending on market forces, profitability and returns on sales achieved.

From a Customs perspective this may mean that the Customs value of the imported goods may need to be adjusted after the importation of the goods, either up or down.

Where the values are adjusted down, a potential reason for duty refund may exist. In the alternative, where values are adjusted up, a need to tender short-paid duties may arise. In fact, where the goods affected by the adjustment are free from import duty, the result of which being any adjustment has no impact on government revenue, you still have a compliance problem given the values declared at the time of import are, in fact, now wrong.

Any post import adjustment will therefore require attention, whether or not the government revenue is affected.

Should you need more information on how to take advantage of this Agreement please call contact Rob Crabtree on 0412-050-744 or Brett Greedy 0412-146-615.

 

 

A rose by any other name is still a rose, but what's in a name?

Two recent clients were found at the wrong end of Customs’ Desktop Verification Exercises under s240AA of the Customs Act. Both imported bamboo flooring. Both suffered significant financial hardship through the need to repay import duties incorrectly assessed at the time of import, and the threat of crippling administrative penalties for the indiscretions.

The commercial import documents for both importers described their product, among other things, as “strand woven bamboo”.

The importers’ brokers on each occasion declared the goods as described – as strand woven bamboo. This is despite their respective clients both being importers of wooden flooring.

The unfortunate outcome of this lack of due diligence, duty of care and professional standards was that the imported goods attracted a free rate of import duty, rather than the correct rate of 5% applied to bamboo flooring.

It is unarguable that no more than a cursory understanding of the client’s products, and any more than a superficial examination of all the commercial documents, would have led the broker to realise their error. And to compound the matter this error was repeated hundreds of times over a period of years.

This stands as a stark reminder of the IV Rule of Identification set out by the Administration Appeals Tribunal in Re Tridon Pty Ltd and Collector of Customs where they said ….

“In the identification of goods, knowledge of how those who trade in the goods describe them will usually be relevant, but not necessarily conclusive ...;”

Should you need more information on how to take advantage of this Agreement please call contact Rob Crabtree on 0412-050-744 or Brett Greedy 0412-146-615.

 

 

The all new (Improved?) Customs Border Control

The Minister for Immigration and Border Protection, the Hon. Scott Morrison, in commenting on the recently launched National Border Targeting Centre (NBTC) has said the NBTC will boost national security and law enforcement agencies' capability to generate actionable intelligence to support highly trained officers on the ground to physically detect and stop threats from entering Australia.

Dismantling Customs Compliance Program

The CEO of Australian Customs and Border Protection (Customs) recently announced that as a part of a functional and organisational re-structure planned for Customs that the Compliance Assurance Branch will cease to exist …..

This was not seen as a negative by the bureaucratic protectors of our borders due to the formation of a Strategic Border Command and other various organisational units within that construct. However, along with the bathwater out went the baby, at least as far as the private sector industry is concerned.