When all things change, Customs stays the same

The Minister for Immigration and Border Protection, Peter Dutton used his opening address at the Department of Immigration and Border Protection (DIPB) Industry Summit on Monday morning (31 July 2017) to assure those in the private supply chain and their clients that the current work agenda would be maintained under the proposed Home Affairs department.
Along with the Acting Commissioner of the Australian Border Force (ABF), Minister Dutton reiterated that the ABF would continue in its traditional ‘Customs’ role and the ABF, as part of the DIBP, would also continue its vital engagement with industry and development of trade facilitation measures to assist in the legitimate trade in goods and movement in people.
At the time of the announcement of the creation of the new Department of Home Affairs (DHA), the focus of the commentary was on national and border security issues with no comment on the traditional ‘Customs’ role of the ABF or its ongoing engagement with industry and the facilitation of international trade at the border.
Naturally, there were some concerns that the failure to address these important roles could mean that the importance of those roles was being downgraded and that momentum on various initiatives here and overseas could be lost with an increased focus on security and intervention in trade.
Both speakers made the point that the involvement of the ABF with the DHA would allow the ABF to have access to additional information at an earlier stage than is presently the case, which would actually enhance the ability of the ABF to carry out its roles. These outcomes were all consistent with the theme of the industry summit being “Border Innovation: strengthening our nation’s economy, security and society.”
In terms of the work of the DIBP and the ABF in the engagement with industry in relation to the movement of goods, there was reference to recent achievements and future commitments with such initiatives as:

  • The creation of a ‘single window’ for trade such as in Singapore and New Zealand.
  • The expansion of the Australian Trusted Trader Program (ATTP).
  • The recent completion of four Mutual Recognition Agreements (MRA) with other customs services for those in the ATTP.
  • The promise of more MRA with customs services in other trading partners.
  • The development and implementation of Free Trade Agreements (FTA) to improve the use of those current and future FTAs by the adoption of robust Rules of Origin, enhanced border clearance facilitation.
  • The increased use of more advance technology and reporting systems.

There were similar references to commitments in the migration space as relating to the movement of persons.
The comments provide a degree of assurance to industry that the current work agenda would be maintained and developed and that the engagement with industry remained a priority. While the reference to the achievements and initiative represents only a reiteration of those developments currently known to industry, their clear support from the Federal Government filled in a gap in the story that arose with the announcements relating to the DHA.
Industry looks forward to continued engagement on these projects and its ongoing collaborative work with government, whether the DIBP, the ABF or other agencies that have a role at the border.
Andrew Hudson is Partner with Rigby Cooke Lawyers’ Litigation Team, specialising in all areas of trade including international trade conventions, dispute resolution and arbitration, trade financing options, commodity and freight contracts as well as dealing with regulation of the movement of goods at the border by all Government agencies.
He is also a member of many of the consultative bodies established by Government in the trade space, including the National Committee on Trade Facilitation convened by the Department of Immigration and Border Protection and the International Trade Remedies Forum convened by the Anti – Dumping Commission (ADC) as well as associated sub-committees. He is also a member of the board of directors of the Export Council of Australia (ECA) and the Food and Beverage Importers Association (FBIA) and works closely with other industry associations representing those in the supply chain.

Launching operations down under

The Rhenus Group is establishing a national company in Australia, Rhenus Logistics Australia. The logistics specialist signed an agreement to purchase the freight forwarding company known as O’Brien Customs and Forwarding Pty Ltd in order to expand its network in the Asia-Pacific region.
The O’Brien family business handles air and sea freight consignments and provides Customs and warehouse services. It was initially founded as a pure Customs clearance firm by Jan and Shane O’Brien in 1996. O’Brien has been offering its customers air and sea freight transportation in addition to Customs services for seven years. O’Brien has its headquarters in the northern part of Melbourne.
The Rhenus Group is planning to expand the firm’s current operations in future with its network and its services. They include domestic traffic, support for import/export, buyers’ consolidation, as well as warehousing and integrated logistics.
“The takeover of O’Brien and the founding of the national company to be known as Rhenus Logistics Australia enable us to cover the whole of Australia with our services. As a result of the acquisition, we’re gaining experienced employees with local expertise for the global operations of the air & ocean business unit at Rhenus Freight Logistics, too,” said Jan Harnisch, Rhenus, COO Ocean Freight Asia.
The new Rhenus operations on the Australian continent are part of the logistics specialist’s expansion strategy in the Asia-Pacific region. Rhenus is planning to open a number of new business sites this year in this area, including centres in China, Vietnam, Malaysia, Indonesia and the Philippines.
The Rhenus Group is a logistics services provider with global business operations and annual turnover of EUR 4.8 billion. Rhenus has business sites at over 580 locations worldwide and employs more than 28,000 people. The Rhenus business areas – contract logistics, freight logistics, port logistics and public transport – manage complex supply chains and provide value-added services.

German logistics group to enter Australian market

German logistics specialist the Rhenus Group signed an agreement to purchase Australian freight forwarding company O’Brien Customs and Forwarding Pty Ltd on 16 June, as part of its expansion strategy in the Asia-Pacific region.
The Melbourne-headquartered O’Brien family business handles air and sea freight consignments and provides customs and warehouse services. It was initially founded as a customs clearance firm in 1996 and has been offering air and sea freight transportation in addition to customs services for seven years.
The Rhenus Group is planning to expand the firm’s current operations in future with its network and its services, including domestic traffic, support for imports/exports, buyers’ consolidation as well as warehouse and integrated logistics solutions.
“The takeover of O’Brien and the founding of the national company to be known as Rhenus Logistics Australia enable us to cover the whole of Australia with our services,” said Jan Harnisch, COO, Ocean Freight – Asia, Rhenus. “As a result of the acquisition, we’re gaining experienced employees with local expertise for the global operations of the Air & Ocean business unit at Rhenus Freight Logistics too.”
 
Image source: Wikipedia

Bolloré Logistics becomes Australian Trusted Trader

Bolloré Logistics Australia has become the first international transport and logistics company in the country to be officially accredited as an Australian Trusted Trader under the Australian Economic Operator (AEO) programme developed by the Australian Border Force (ABF).
To obtain the Trusted Trader accreditation companies must undergo an extensive audit process to satisfy the AEO that they set and maintain a high level of international supply chain and customs compliance.
“Being certified an Australian Trusted Trader further supports and facilitates the handling of clients’ international supply and expedites the flow of legitimate trade from all sites in Australia,” says Michael Pinnock, National Customs Manager at Bolloré Logistics Australia.
The certification is applicable to all five Bolloré sites in Australia – Brisbane, Darwin, Melbourne, Perth and Sydney.
Certified companies have access to benefits such as reduced cargo inspections at the border, improved cargo lead time, duty deferral, streamlined reporting and priority trade services.

DB Schenker wins freight forwarding and customs clearance contract

DB Schenker has announced that it has been awarded a contract to provide international freight forwarding and customs clearance services to Chevron Australia.
The three-year contract covers freight logistics movements as well as customs clearance requirements for Chevron’s interests in Western Australia.
To support the contract, DB Schenker will utilise its global network of oil and gas offices. The operations team in Perth will be supported by the DB Schenker iTeams software solution that allows for full visibility and tracking through all stages of the logistics cycle.
“We are proud to continue our relationship with Chevron. With our dedicated people around the world we have a strong record of operating safely and efficiently even on the most remote sites,” said Frank Vogel, Director Projects/Oil & Gas, AU/NZ. “The contract will support our goal to become the market leader in the industry by 2020.”

Freight association to advise UK Government on Brexit

On Wednesday 30 March UK Prime Minister Theresa May invoked Article 50 to begin negotiations for Britain’s exit from the European Union. The British International Freight Association (BIFA) – the trade body representing the UK’s freight forwarding companies – responded with a statement noting that speculation on the outcome of the move cannot yet be made, and the Association will aid the government in traversing the path ahead for trade.
“In the run up to the UK’s eventual exit we will be working with Government to try and ensure that the movement of the UK’s visible import and export trade does not become overburdened by over complicated trade procedures,” said Robert Keen, Director General, BIFA.
“Clearly there are significant areas of concern for our members, which are responsible for much of the physical movement of that trade, over the eventual outcome, including the physical infrastructure, trade arrangements and Customs practices that will be reviewed as part of the Brexit negotiations,” he added.
“I have already gone on the record to warn about the huge number of pundits offering solutions when nobody really knows what is likely to happen in reality.
“BIFA’s focus now will be presenting the views of our members to the various government departments that we deal with, as well as working with organisations such as the Confederation of British Industry and International Chamber of Commerce to make sure that all parties negotiating the post-Brexit landscape are fully aware of the potential challenges for which they will need to find solutions.”

Sydney-based WiseTech Global acquires Italian business

Sydney-based logistics software specialist WiseTech Global has announced the acquisition of Italian software provider ACO Informatica.
According to WiseTech Global, ACO Informatica will remain under the joint-leadership of Managing Director, Raffaele Uria, and General Manager, Bruno Soldati, with the company to be integrated within the WiseTech Global group. It’s the second time in 2017 the company has acquired a European business, after taking over German software company znet group in January.
“We know the ACO team well, both for their innovative customs clearance solutions for Italy and as a WisePartner for CargoWise One,” said Richard White, WiseTech Global CEO. “Now with the team as part of our WiseTech Global family we will work together on delivering more powerful capabilities for customers in the future.”
In addition, ACO will continue to supply products in Italy including U-by-Cargo, Logimatica and Acciseweb along with WiseTech’s powerful global logistics execution platform, CargoWise One.
“At ACO, we have a strong track record of delivering value-adding logistics solutions for our customers,” commented ACO Managing Director, Raffaele Uria. “We are delighted to join the WiseTech Group and together we will focus on providing high productivity customs border clearance and logistics execution software to the Italian and broader European markets.”
Across 125 countries, CargoWise One enables logistics service providers to execute highly complex transactions in areas such as freight forwarding, customs clearance, warehousing, shipping, land transport and cross border compliance and to manage their operations on one database across multiple users, functions, countries, languages and currencies.
Headquartered in Milan, ACO Informatica provides customs and logistics solutions to over 200 customers including DHL, Italsempione, Saima Avandero DSV, SNATT Logistica and Traconf.

WiseTech Global acquires German customs solution provider, znet

WiseTech Global, a logistics software group founded in Sydney with offices in Australia, China, New Zealands, Singapore, South Africa, United Kingdom and the United States, has recently acquired znet group, a provider of customs solutions across Germany.
Founded in 1997 and headquartered in Wiesbaden, znet provides automated customs solutions to over 500 customers including Abbott, Lufthansa Technik AERO Alzey, Nippon Express and UPS.
“WiseTech and znet possess a shared commitment to provision of high productivity logistics execution solutions to the German-speaking and broader European markets.” said WiseTech Global CEO, Richard White. “We welcome the znet team to the WiseTech Global family and will work together to deliver even better solutions for customers.”
znet CEO Werner Tholl added, “At znet, we have a long track-record of innovation, having worked extensively on the development of automated customs system with ATLAS connection and pioneered mobile customs handling in Germany. Now as part of the WiseTech Global group we will be able to accelerate our innovation and provide more powerful and extensive capabilities for customers.”
Remaining under the leadership of CEO and former customs officer Tholl, znet operations will be integrated within the WiseTech group. znet will continue to deliver its zara, zafir and zecur products in Germany and all customers will be able to access WiseTech’s CargoWise One global logistics execution platform.
 

Fraud and non-compliance together spells Fire

We’ve seen the news about electric hover-boards for sale in Australia, putting consumers at risk.

As the importing system stands, Australia lacks the appropriate measures to stop some faulty motorised goods entering the market – if they are below a certain price.

This is a regulatory danger zone. There are three key issues at play:
1. Low cost goods currently pass through the mail system (even shipping and air freight) without scrutiny
2. If imported goods are not duly scrutinised, opportunities exist for importers to avoid necessary safety certificates and documentation
3. Customs lacks measures to check the “low cost” of goods declared, therefore importers can – and do – act fraudulently to under-declare values, avoid tax,duty, compliance checks and scrutiny.

This Christmas we saw a huge surge in hover-boards flooding the market. Hoverboards were flying through the mail centres, shipping yards are air freight terminals across Australia.

Suppliers and importers were declaring low value of goods to avoid tax and, knowing this would mean the goods suffered less scrutiny than more expensive imports, this also encouraged them not to acquire an import permit from www.infrastructure.gov.au.

The importer and supplier know that motor capacity needs to be less than 250 watts to avoid an Australian permit. When motors are imported above this capacity the importer and supplier are acting corruptly.

But Customs authorities simply can’t keep up. There are opportunities to improve the system, but there is no simple solution, only a pointer towards a more positive future when it is proposed that Australia will lower the tax-free threshold.

We don’t need new regulation on electrical goods themselves – we already have that. In Australia any motorized (over 250 watts) vehicle for moving people must obtain an import certificate before importation.

The certificate is widely available and accessible to all importers. The problem is, importers won’t always bother to get it if they can get away without. And they do.

Furthermore, all goods valued at more than $1000 get assessed for duty, tax and import processing fees, so the system works pretty well to ensure large quantities of goods are accurately processed, tick all the boxes for compliance, and even get checked inside the box to ensure that what the sticker says is what is actually imported.

But it is not so with the small imports. And there are more of those than our system can handle.
According to Treasury, more than 100 million items under the $1000 tax free threshold are imported annually, with 98% valued at less than $500 and 88% valued below $100.

There is simply no way authorities can process 100 million items entering the country, ensure that they are what the importer says they are and that they are worth what the importer declares they are worth. Less again to check that they have all the paperwork required. Even if the omission of this process puts citizens at risk.

Today’s masses of importers can play the system. With buy in from suppliers happy to oblige their customers, importers can easily declare goods in low values to avoid scrutiny from Customs authorities. They can then just hope that their parcel isn’t one of the percentage stopped along the way and checked for all relevant documentation, including the motorized vehicle certificate. 

It’s a matter of simply sailing through a too-busy system. In the case of the hover boards, my brokerage has seen hover-boards declared to Customs to be valued at $50-80 and only after further investigation identified the actual price paid as $130USD.

The importer claims ignorance or mistakes. How many times does this go by without correction? It has become the role of the customs broker to identify fraud in this way. 

The importer then goes on to charge the Australian consumer a $500-700 AUD on Gumtree or eBay, and without documentation proving the product even complies with safety standards in the first place. Who is the biggest loser?

The individual and the Australian people as a whole. The fixes are complex, costly and slow. Lower the tax free threshold and the system will ensure more goods are processed for tax and consequently documentation and compliance.

BUT the system will bottleneck further because that means adding a potential 100 million parcels to the workload of the Customs processing team.

Increase the processing teams and the system will handle the volumes better, but it could cost more than the taxes raised on the goods entering in the first place.

Parliamentary discussion available online shows that the government is considering this, and also looking at whether it’s a net loss worth making – raise more taxes, pay more wages and yes, we will actually see a situation where regulation happens to be better scrutinized on our imported goods.

That’s one argument in the affirmative for the proposed lowering of the tax free
threshold next year.

GHB haul in airfreight

A 32-year-old Lebanese national is to face Sydney Central Local Court after he was charged with attempting to import approximately 15 litres of Gammabutyrolactone (GBL), following a Customs and Border Protection and Australian Federal Police (AFP) operation.
 
GBL is a precursor to the drug Gamma-hydroxybutyrate, more commonly known as GHB and is a prohibited import without appropriate authority under the Criminal Code Act 1995.
 
Customs and Border Protection officers detected the substance in an air cargo package which arrived in Sydney on Sunday 8 March from Hong Kong.
 
During an examination of the package, officers found 12 unlabelled white plastic bottles containing a clear liquid. 
Presumptive testing of the clear liquid indicated a positive result for GBL.
 
The matter was referred to the AFP who conducted a search warrant at a residential address in Bankstown where they arrested the man as he awaited receipt of the parcel.
 
The AFP seized the 15 litres of GBL, which has an estimated street value of up to $300,000.
 
The man was charged with attempting to import a commercial quantity of a border controlled substance under Section 307 of the Criminal Code Act 1995.
 
The maximum penalty for this offence is a fine of $825,000 and/or life imprisonment.

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