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November 2013

Compliance Update

ContentsMessage from the National Manager Compliance Assurance 2

Commencement of the Customs and AusCheck Legislation Amendment (Organised Crime and Other Measures) Act 2013 3

Joint Australian Customs and Border Protection Service and Department of Agriculture Industry Engagement sessions 5

The National Refunds Centre Results and 2013-14 focus areas 7

Ensuring compliance ahead of the Australian border 11

Snapshot of ACBPS compliance program result for 2012-13 12

General Statistics 1 July 2012 – 30 June 2013 17

Compliance terminology 24

Contacts, comments and contributions 25

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November 2013

Compliance Update

Message from the National Manager Compliance Assurance, Australian Customs and Border Protection Service

I apologise for the delay in publishing this edition of Compliance Update but I wanted to report on the Industry Engagement Sessions, which did not conclude until mid-October 2013.

This edition provides an update on the implementation of the Customs and AusCheck Legislation Amendment (Organised Crime and Other Measures) Act 2013, which received Royal Assent on 28 May 2013, a report on the recent industry engagement sessions, areas of focus for the compliance program in the area of refunds and the usual statistical summary.

I have also provided a snapshot of compliance results for 2012-13 highlighting strike rates for detections, revenue returns and a range of other initiatives and achievements. Pleasingly, there was improvement in most areas of the compliance program.

Anthony Seebach National Manager Compliance Assurance

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November 2013

Compliance Update

Commencement of the Customs and AusCheck Legislation Amendment (Organised Crime and Other Measures) Act 2013

COMMENCEMENT OF CHANGES

The Customs and AusCheck Legislation Amendment (Organised Crime and Other Measures) Act 2013 received Royal Assent on 28 May 2013.

The amendments to the Customs Act strengthen the cargo supply chain against criminal infiltration by:

• Placing statutory obligations on cargo terminal operators (CTOs) and those that load and unload cargo, which are similar to those that the Customs Act imposes on holders of Customs depot and warehouse licences. These obligations include ensuring the physical security of relevant premises and cargo, and fit and proper person checks on management at Custom’s request.

• Creating new offences for using information from the Integrated Cargo System (ICS) to aid a criminal organisation.

• Providing that the CEO of the Australian Customs and Border Protection Service (ACBPS) can consider the suspension, refusal or cancellation of an Aviation or Maritime Security Identification Card when determining whether the person is fit and proper under the Customs Act.

• Aligning aspects of the Customs broker licensing scheme with that of depots and warehouses, including providing the CEO of ACBPS with the power to impose new licence conditions at any time and making it an offence to breach certain licence conditions.

• Adjusting other controls and sanctions in the Customs Act, including increasing penalties for certain offences, improving the utility of the Infringement Notice Scheme (INS) and standardising record keeping requirements.

The table on the following page lists the key measures in this legislation and the corresponding commencement date.

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November 2013

Compliance Update

CONSULTATION ON REGULATIONS

As part of implementing the Organised Crime Act, it is necessary to prescribe certain matters in regulations. The regulations will prescribe matters relevant to CTO record keeping obligations and the new INS. On 3 October 2013, ACBPS released an exposure draft of the CTO Record Keeping Regulation for industry comment.

On 18 October 2013, ACBPS released an exposure draft of the INS regulation. The exposure period for these regulations has concluded. The CTO Record Keeping Regulation has been approved and incorporated aspects of the comments provided by industry. ACBPS is finalising the approval of the INS regulation.

WHAT IS THE TIME FRAME FOR DEPOT, WAREHOUSE AND BROKER LICENCE HOLDERS TO NOTIFY ACBPS ON THE NEW ASIC/MSIC REQUIREMENTS?

All depot, warehouse and broker licence holders are required to notify the ACBPS CEO in writing, within 30 days, where certain events occur. This includes a requirement to notify the ACBPS CEO when certain persons are convicted of certain offences or become bankrupt.

The changes to the Customs Act introduce an additional condition on the holder of a depot, warehouse or broker licence to notify the ACBPS CEO in writing, within 30 days, where the licence holder, or certain persons where the licence holder is a company or partnership, have been refused an ASIC or MSIC or had an ASIC or MSIC suspended or cancelled. Where the suspension, cancellation or refusal of an ASIC or MSIC occurred in the 10 years preceding the commencement of these changes, a licence holder must notify the ACBPS CEO within 90 days of the commencement date.

Legislative measure Commencement

New offences for misusing restricted information Already – 29 May 2013

Placing statutory obligations on CTOs and cargo handlers 28 November 2013

ASIC or MSIC consideration in relation to ‘fit and proper’ 28 November 2013

Strengthening the customs broker licensing scheme 28 November 2013

Standardising the record keeping to five years 28 November 2013

Increasing penalties for certain offences and making a number of existing fault based offences, strict liability offences

28 November 2013

New permission regime for section 100 i.e. ‘constructive warehousing’

28 November 2013

Amending section 243T 28 November 2013

New Infringement Notice Scheme (INS)Start of February 2014 – subject to approval of

Regulations

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Compliance Update

Failure to notify the ACBPS CEO within the timeframe is a breach of a condition of a depot, warehouse or broker licence. Failure to meet any condition(s) of a depot, warehouse or broker licence is a very serious breach of the Customs Act and can result in an infringement notice being issued, prosecution in court, further conditions being placed on the licence or the cancellation of the depot, warehouse or broker licence.

Notifications to the ACBPS CEO for depot, warehouse or broker licences can be sent to licensing@customs.gov.au

Please note that notifications for warehouse licences administered by the Australian Taxation Office (ATO) can be sent to EXC-LicensingGroup@ato.gov.au

WHERE CAN YOU GET FURTHER INFORMATION?

Links to industry fact sheets, the legislation and associated explanatory material is available on the ACBPS internet website http://www.customs.gov.au/site/page4271.asp

If you have any queries about the legislation, please direct them to Compliance1@customs.gov.au

Joint Australian Customs and Border Protection Service and Department of Agriculture Industry Engagement Sessions

The ACBPS Compliance Assurance Branch hosted, in collaboration with the Department of Agriculture, the 2013 Industry Engagement Sessions across Australia in five capital cities – Sydney, Melbourne, Adelaide, Perth and Brisbane between 18 September and 17 October 2013. The decision to run joint ACBPS and Department of Agriculture sessions followed feedback from industry participants who attended previous ACBPS Industry Engagement Sessions. That feedback suggested that joint sessions would have a broader appeal and we agreed.

ACBPS recognises the importance of working with industry representatives as this enables us to review the success of our compliance program and to effectively target non-compliance now and into the future. From an ACBPS perspective the main purpose of the sessions was to assist the import and export community in understanding the future of ACBPS’s approach to compliance and our priorities in the years ahead, as well as strengthening our working relationship with industry.

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November 2013

Compliance Update

The ACBPS’s part of the sessions provided a snapshot of current and future compliance activities, recent legislative changes, and highlighted results from 2012-13, including some relevant case studies. It also highlighted changes in the regulatory environment, such as new measures aimed at strengthening the cargo supply chain against criminal infiltration.

In addition, both the ACBPS and Department of Agriculture sessions were each allocated three Continuing Professional Development (CPD) accreditation points under the brokers’ licensing scheme. A copy of the ACBPS slide presentation is on the ACBPS website at http://www.cargosupport.gov.au/documents/IndustryEngagementPowerpoint.pdf

The level of interest in this year’s session was very encouraging, with 387 people attending out of 539 registrations. At the conclusion of each session all participants were invited to complete a questionnaire to provide feedback necessary to enable us to improve future communication between the ACBPS and industry. Thirty per cent (117/387) of attendees returned a completed questionnaire, with the majority of feedback being positive and constructive.

RESPONSES TO QUESTIONS 1, 2, 4 AND 5 ON THE QUESTIONNAIRE

In terms of improving future sessions, we received a range of comments, including for example that we split the sessions by specific industry providers, run sessions twice a year, and provide additional practical examples of compliance issues. These are just some examples of the comments we received and we will consider all feedback and, where appropriate, use that information to improve the content and structure of sessions delivered in 2014 and into the future.

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November 2013

Compliance Update

Refunds 2013-14 focus areas

During 2012-13, there were significant increases in numbers of refunds lodged and rejected.

Refunds lodged and rejected 11-12 12-13

Refunds lodged 83,880 110,919

Refunds rejected 544 665

REFUNDS LODGED

REFUNDS REJECTED

Rejection reasons for the past two financial years are apportioned to the following areas:

Rejected refunds reasons 11-12 12-13

Out of time 31% 44%

No documents received 38% 31%

Other 31% 25%

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November 2013

Compliance Update

REJECTED REFUND REASONS

ARE YOU ABOUT TO LODGE A REFUND OUT OF TIME?

Refunds lodged out of time increased to almost half of all rejections during 2012-13. Regulation 128A of the Customs Regulations 1926 sets out the time limits for lodging refunds.

Most refund circumstances allow a refund to be made within four years after the date on which the Customs duty was paid.

Because of the high number of refunds lodged out of time during 2012-13, the ACBPS compliance program will focus on this in 2013-14. Refunds lodged out of time will be subject to increased interventions and possible penalty action.

Customs brokers and importers are reminded that prior to lodging a refund, the original payment date should be verified, to avoid lodging a refund out of time.

NO SUPPORTING DOCUMENTS

Refund lodgement should only occur where the relevant person can also provide the supporting documents within 30 days of lodgement. Due to high numbers of rejections for no documents received, this area of non-compliance is another major focus in 2013-14. Brokers and importers are encouraged to check the status of a refund after lodgement. Refunds with a held status should have supporting documents forwarded by email to nationalrefunds@customs.gov.au within 30 days of lodgement.

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Compliance Update

You can find further information about these requirements in Customs Cargo Advice 2012/19: http://www.cargosupport.gov.au/notices/acca/documents/ACCA2012_19.pdf and in Australian Customs and Border Protection Notice 2013/46, which we issued in September 2013: http://www.customs.gov.au/webdata/resources/files/ACBPSNoticeNo.201346.pdf

For refunds, supporting documents include:

• invoices

• air / sea bills

• order to pay agent form (for refunds nominated to be paid to bank account other than the owner), and

• other supporting evidence to support refund reason code (e.g. illustrative descriptive material, certificates of origin, export details etc.)*

*Please note that copies of import declarations are not required.

The Customs and AusCheck Legislation Amendment (Organised Crime and Other Measures) Act 2013 changes a number of existing fault based offences to strict liability offences. Section 243SB of the Customs Act - Failure to produce documents will change to a strict liability offence.

This offence will soon be added to the offences covered by our Infringement Notice Scheme.

Under Regulation 128AAA, refund applications subject to redline processing require documents to be submitted within 30 days of lodgement. Documents not provided within 30 days of lodgement will be subject to a range of increased interventions and possible penalty action.

You can find more information about the changes to Customs Act offences at: http://www.customs.gov.au/webdata/resources/files/Factsheet-NewOffences.pdf

DOES THE TARIFF CONCESSION ORDER APPLY?

Another area of focus in the refund stream is the misuse of tariff concession orders (TCOs). TCO misuse accounted for majority of ‘other’ refund rejections listed in the table on page 8. The Compliance Program recovered about $1 million of Customs duty from misuse of TCOs and we imposed a number of sanctions.

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November 2013

Compliance Update

WHICH REASON CODE APPLIES?

Refund reason codes are legislated under Regulation 126 of the Customs Regulations 1926. Reason codes specify particular circumstances in which a refund application may be made. Reason codes must be input accurately into the Integrated Cargo System. Detections of incorrect use of reason codes will result in the rejection or adjustment of refund applications.

BROKERS ARE NOW POTENTIALLY LIABLE FOR PENALTY ACTION

Changes to section 243T of the Customs Act, which commence on 28 November 2013, remove the exemption for agents.

In addition to amending the penalty for the offence in section 243T of the Customs Act, the Customs and AusCheck Legislation Amendment (Organised Crime and Other Measures) Act 2013 improves further the utility of the offence by providing that liability will apply in the same way as under section 243U and 243V. The amendments provide that the person who makes, or causes to be made, or omits or causes to be omitted, the statement that is false or misleading in a material particular will commit an offence under this section and not only the owner of the goods.

You can find more information regarding changes to the Customs Act offences at: http://www.customs.gov.au/webdata/resources/files/Factsheet-NewOffences.pdf

HAS THE CUSTOMS DUTY ALREADY BEEN REFUNDED VIA A DRAWBACK CLAIM?

The ACBPS compliance program has also recently investigated the nature and scope of people claiming refunds and duty drawbacks for the same goods. We will follow this work up with an operational response, which may include penalty action.

We remind Customs brokers to check with importers regarding drawback claims prior to lodging refunds – there are a number of examples where the importer lodges a drawback application and does not communicate that fact to their broker resulting in the broker lodging a refund for the same goods. The importer is only entitled to a drawback or a refund on the goods – not both.

You can find more information on drawbacks and refunds at http://www.customs.gov.au/site/page5939.asp or alternatively via the National Refunds Centre email nationalrefunds@customs.gov.au

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November 2013

Compliance Update

Ensuring compliance ahead of the Australian border – not just an ACBPS responsibility

To minimise the impact on their clients, there is significant value in overseas suppliers understanding and ensuring compliance with relevant Australian legislative requirements before exporting goods to Australia. To protect Australia we are asking that Australian industry work with their suppliers ahead of the border to manage compliance. In this way suppliers will not have dissatisfied customers who may have had a product seized or cargo delayed through the need to address revenue or other regulatory obligations.

Demonstrated compliance by suppliers, reporters and importers can result in reduced intervention by the ACBPS and lower supply chain costs. Conversely where compliance cannot be demonstrated or maintained, increased interventions resulting in delays and costs may occur.

In recent months, there have been an increasing number of cases where ACBPS has asked Australian industry to engage with their overseas clients to assist with compliance with Australian legislative requirements.

For example, in August 2013, ACBPS detected a significant number of importations, which contained a Convention on International Trade in Endangered Species (CITES) listed good called Hoodia Gordonii.

ACBPS engaged with the Australian handling agent/cargo service provider to contact the non-compliant overseas supplier about Australian legislative requirements in an attempt to stop uplift of goods from the United States. Interventions at the Australian border and sustained outreach activity by both ACBPS and the Australian handling agent resulted in a United States exporter changing the ingredients of goods coming to Australia to remove Hoodia Gordonii.

ACBPS is currently finalising a fact sheet to assist Australian industry when communicating with overseas clients and suppliers about Australia border control requirements. In implementing this type of engagement, we seek to improve border control and deal with potential border risk at the earliest and most cost effective point for all parties.

If you have clients that you consider would benefit from such an approach please contact Compliance1@customs.gov.au

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November 2013

Compliance Update

Snapshot of ACBPS compliance program result for 2012-13

The ACBPS compliance program applies an intelligence-led, risk-based approach to managing a broad range of border risks, including regulated goods, economic (including revenue) and the cargo process.

In a trading environment where participants largely self-regulate, ACBPS ensures compliance through pre and post clearance monitoring and intervention activities that are proportionate to the level of risk. Where ACBPS detects non-compliance, it has a variety of treatment options. These range from education and warnings, administrative action such as suspension and revocation of licences and the application of infringement notices, through to conduct of prosecutions and referral to other agencies.

ACBPS conducts pre-clearance intervention (PCI) activities before the release of the goods from customs control and post-transaction verification (PTV) activities, including audits and checks on entities involved in the supply chain that are responsible for handling and managing goods under customs control, after the release of goods from customs control.

STRIKE RATES

PCI activities

• We assessed approximately 189,000 targeted import/export declarations.

• Almost eight per cent of those we targeted identified a control breach. (Cf 2011-12: 105,000 declarations assessed)

PTV - Audit activities

• We assessed approximately 27,500 targeted import/export declaration lines.

• About 92 per cent of our revenue targeted import audits finalised during 2012-13 resulted in a revenue adjustment of $1,000 or more.

• We assessed approximately 571,000 import/export declaration lines following voluntary disclosures.(Cf 2011-12: approximately 7,000 targeted import/export lines assessed with 84 per cent rev-enue targeted import audits resulting in revenue adjustments over $1,000)

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Compliance Update

PTV – Non Audit activities

• We assessed almost 5,000 import/export declaration lines during PTV Non-Audit activities with a 77 per cent strike rate.

PTV - Cargo Control and Accounting activities

• We conducted approximately 81,000 cargo control and compliance checks:

— We completed 51 per cent of these checks at s77G premises. — We completed 40 per cent of these checks at s79 warehouses. — We completed 9 per cent of these checks at CTO or other premises in section 15 areas.

• About 49 per cent of those checks identified a control breach.(Cf 2011-12: 54,000 checks with a 27 per cent strike rate)

CARGO CONTROL ACTIVITY

The ACBPS compliance program has embarked on several major activities to reduce deficiencies in cargo reporting during the reporting period:• In August 2012, National Manager (NM) Compliance Assurance

sent letters to the top 20 air cargo reporters outlining a proposed “partnership” approach to improve cargo reporting. The initiative is starting to deliver the desired results with some of those reporters reducing significantly the number of deficient reports.

• In April 2013, NM Compliance Assurance revoked ACN 2007/03, which provided special treatment for non-compliance with legislated timeframes for lodging cargo reports.

• In May 2013, the compliance program commenced a body of work to address the “assembly order” cargo reporting issue. The first stage of that work involved writing warning letters to all non-compliant entities to encourage them to review their activities to ensure that they met Customs Act cargo reporting requirements.  The letters have resulted in numerous enquiries from Customs brokers and cargo reporters questioning their current practices and clarifying the correct reporting requirements.  Furthermore, numerous articles have appeared in industry publications. We expected this type of reaction and preliminary results indicate the letters are having the desired effect with improved reporting.

• The Customs and AusCheck Legislation Amendment (Organised Crime and Other Measures) Act 2013 also implements a range of measures, including increased penalties, which should encourage greater compliance with cargo reporting requirements.

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Compliance Update

ECONOMIC RISK ACTIVITY

We have ramped up efforts to ensure competition occurs on a level playing field and this will continue in 2013-14.  With a renewed focus on economic risk, better market intelligence and improving analytical capabilities, we can and are doing more to ensure compliance with the rules of trade so that competition occurs on a level playing field and the benefits of competition flow through to Australian investors, businesses, workers and consumers.

Recently, we executed search warrants across Victoria, New South Wales and Queensland in relation to the suspected evasion of dumping duty applicable to imports of aluminium road wheels (mag wheels) from China.  In October 2012, we also executed warrants in New South Wales and Victoria across 17 premises to address potential circumvention of dumping duties in relation to aluminium extrusions.  It is alleged that to avoid the payment of dumping duties the goods were imported into Australia via a third country to hide their true origin.  Officers seized a range of items as part of those activities. Investigations are ongoing.

ACBPS and the Anti-Dumping Commission are closely monitoring a number of other industries and goods, apart from aluminium road wheels, where there is potential to circumvent dumping and countervailing duties.

ACBPS and the Anti-Dumping Commission have recently established the Anti-Circumvention Unit.  The partnership recognises the significant benefits that close collaboration will bring in delivering and embedding a comprehensive anti-circumvention framework in relation to trade remedies.

Revenue

• Our detections resulted in a net revenue effect of $153 million comprising:

— $192 million in GST/Duty/WET/LCT understatements, and

— approximately $39 million in GST/Duty/WET/LCT overstatements.

• This is an increase of $108 million net when compared with the 2011-12 financial year.  Even if we removed three significant 2012-13 outliers (two understatements of $82 million and $23 million and one overstatement of $36 million), there is an increase of $38 million net when compared with the 2011-12 financial year.This increase can be attributed to a range of factors including our tougher stance on non-compliant behaviour, placing a positive obligation on licensed Customs brokers to report false and misleading statements, an increase in voluntary disclosures and better targeting.

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Compliance Update

PROHIBITED, RESTRICTED AND REGULATED GOODS

The ACBPS compliance program continues to target the importation and exportation of a wide range of prohibited, restricted and regulated goods including objectionable material (such as child pornography) and goods that present a significant threat to human health and safety, amongst others.

We take the importation of such goods seriously but we do not rely on prosecutions alone to ensure better compliance outcomes.

For example, in the context of asbestos, we work proactively with a range of federal, state and territory agencies to address concerns about the importation of contaminated goods, and our multi-layered approach includes education campaigns, outreach activities and refining our targeting activity to account for high-risk countries of origin and suppliers. We continue to work closely with a range of high-risk industry sectors to ensure that goods are asbestos free before exportation to Australia.

Our compliance activity has had a significant and positive impact on the importation of contaminated goods in some industry sectors such as mining and energy. Recent risk assessment activities have resulted in the Service turning its attention to other sectors including the automobile industry.

This work has resulted in detections at the border of asbestos in imported vehicle spare parts, which subsequently led to recalls of passenger vehicles from China that were already in the Australian market.

INFRINGEMENT NOTICE SCHEME

• The compliance program issued:

— 471 infringement notices (compared to 269 issued in 2011-12)

— 98 delegate warning letters (compared to 101 in 2011-12), and

— 363 non-delegate warning letters (compared to 291 in 2011-12).

• 67 per cent of infringement notices were for breaches of sections 33 (2), (3) and (6) of the Customs Act; move, alter or interfering with goods under Customs control.

OTHER NOTEWORTHY ACHIEVEMENTS

Addressing criminality on the waterfront

The Customs and AusCheck Legislation Amendment (Organised Crime and Other Measures) Act 2013 received Royal Assent on 28 May 2013, with most measures commencing on 28 November 2013.

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Compliance Update

The legislation introduces significant reform to the cargo control framework designed to strengthen the cargo supply chain against criminal infiltration.

In addition to the legislation ACBPS has implemented a number of initiatives to further strengthen the cargo supply chain against criminal infiltration such as toughening depot, warehouse and broker licence conditions – these new conditions came into effect as of 1 July 2012 (Australian Customs and Border Protection Notices 2012/29, 2012/35 and 2012/37 refer).

International cooperation

In September 2012, we signed a trade data sharing agreement with United States Immigration and Customs Enforcement (ICE), which allows the two agencies to work together to combat a range of trade related offences. We are also progressing trade data sharing arrangements with countries such as India and China.

Compliance expansion measure

As part of the 2012-13 Mid-Year Economic and Fiscal Outlook, the Government approved a proposal to fund increased compliance activity across the forward estimates to address economic risk including revenue leakage. This measure will provide additional staff dedicated to compliance activity.

It will enable the systematic targeted review of tariff concession orders on imported goods to help ensure they are still valid and appropriate. It will also increase ACBPS’s capacity to pursue prosecution and penalty action in cases of serious fraud.

Introduction of a Customs broker continuing development program

ACBPS introduced a mandatory Continuing Professional Development scheme for licensed Customs brokers from 1 July 2012. Details of the requirements and arrangements are set out in Australian Customs and Border Protection Notices 2012/37 and 2013/09.

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Compliance Update

General Statistics

RISK PROGRAM

Pre-clearance Intervention (PCI)

Description 2012–13 2013–14 (as at 30 September)

Documents Profiled 189,362 35,403

PCI regulated goods detections

Regulated goods type 2012–13 2013–14 (as at 30 September)

Consumer safety 338 68

Environmental goods 948 14

Firearms, weapons & strategic goods 314 101

IP / trade marks 153 25

Other regulated goods 930 308

Prohibited or restricted goods – Absolutely 123 13

Precursors and Other Drugs 541 135

PCI revenue results

Description 2012–13 2013–14 (as at 30 September)

Overstated

Actual Duty $1,605,209 $42,827

GST $866,166 $785,727

LCT $3,617 $5,291

WET $22,900 $ -

Understated

Actual Duty $3,054,931 $337,632

GST $32,082,178 $2,176,778

LCT $1,274,820 $108,984

WET $12,203 $1,091

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Post Transaction Verification (PTV) imports

All PTV revenue results

Description 2012–13 2013–14 (as at 30 September)

Overstated

Actual Duty $87,017 $116

GST $36,352,086 $6,256

Understated

Actual Duty $10,674,778 $3,147,174

GST $89,827,495 $1,758,382

Cargo Control and Accounting

Description 2012–13 2013–14 (as at 30 September)

Lines of cargo checked at licensed premises

81,384 240,860

Cargo control breaches identified 39,576 4,829

Error rate 48.6% 2.0%

The Infringement Notice Scheme

IN – Infringement Notice, DWL - Delegate Warning Letter, NDWL - Non-Delegate Warning Letter

False and misleading statement related offences

Offence Description2012–13 2013–14

(as at 30 September)

IN DWL NDWL IN DWL NDWL

243T(1)

False or misleading statements resulting in a loss of duty

88 25 30 30 0 8

243U(1)

False or misleading statements not resulting in a loss of duty

31 4 114 9 0 5

243V(1)

False or misleading statements in a cargo report or outturn report

2 1 11 1 0 4

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Compliance Update

Movement of goods related offences

Offence Description2012–13 2013–14

(as at 30 September)

IN DWL NDWL IN DWL NDWL

33(2), (3) & (6)

Moving altering or interfering with goods subject to Customs control without authority

317 46 66 95 4 9

36(2), (6) & (7)

Failure to keep goods safely or failure to account for goods

6 3 3 4 0 1

Cargo reporting and arrival related offences

Offence Description2012–13 2013–14

(as at 30 September)

IN DWL NDWL IN DWL NDWL

64(13)

Failure to meet reporting requirements for the impending arrival of a ship or aircraft

4 0 20 0 1 1

64AA(10)

Failure to meet reporting requirements for the arrival of a ship or aircraft

1 2 15 0 0 0

64AB(10)

Failure to meet reporting requirements for the report of cargo

11 0 1 0 0 0

64ABAA(9)

Failure to meet reporting requirements for outturn reports

1 13 38 0 0 16

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Compliance Update

Compliance Monitoring Program (CMP)

Compliance Assurance Branch has a dedicated analyst reviewing the CMP data with a view of informing our risk program.

Import Activity 2012–13 2013–14 (as at 30 September)

No of Lines Checked (a) 6,019 1,374

No of Lines Detected to Have Error/s (b)

1,451 306

Error Rate = b / a 24.1% 22.3%

No of Detections 1,942 398

Cargo Report 2012–13 2013–14 (as at 30 September)

No of Lines Selected 6,019 1,374

No of Cargo Reports Detected to Have Error/s (b)

449 174

No of Cargo Reports Checked (b) n/a n/a

Error Rate = a / b n/a n/a

Total No of Detections 602 207

Export Error Rates 2012–13 2013–14 (as at 30 September)

No of Lines Checked (a) 1,001 354

No of Lines with detection/s (b) 381 141

Error Rate = b / a 38.06% 39.8%

No of Detections 762 245

CMP Import Declarations Data Accuracy Monitoring Activities Outcome

CMP imports - error rate and number of detections made

Import Activity 2012–13 2013–14 (as at 30 September)

No of Lines Checked (a) 6,019 1,374

No of Lines Detected to Have Error/s (b)

1,451 306

Error Rate = b / a 24.1% 22.3%

No of Detections 1,942 398

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CMP imports - detection types

Detection Types2012–13 2013–14

(as at 30 September)

Detections % Detections %

Valuation Date 334 17.20 47 11.81

Tariff Clasification 254 13.08 42 10.55

Related Transaction 192 9.89 40 10.05

Invoice Terms 138 7.11 38 9.55

Loading Port 73 3.76 34 8.54

Gross Weight 180 9.27 25 6.28

Tariff Concession or other Concession

93 4.79 24 6.03

Other 73 3.76 21 5.28

Quantity 56 2.88 19 4.77

Price (Invoice Total) 80 4.12 17 4.27

Origin 68 3.50 16 4.02

Preference 22 1.13 14 3.52

Number of Packages 25 1.29 10 2.51

Incorrect Supplier Identified 120 6.18 9 2.26

Detection Types2012–13 2013–14

(as at 30 September)

Detections % Detections %

Overseas Freight 56 2.88 9 2.26

Incorrect Owner Identified 30 1.54 6 1.51

Currency 37 1.91 4 1.01

Foreign Inland Freight 11 0.57 4 1.01

Other Addition 11 0.57 4 1.01

Goods Description 24 1.24 3 0.75

GST Exemption Code 12 0.62 3 .075

Relevant Transaction 10 0.51 3 0.75

Discounts 4 0.21 3 0.75

Transport and/or Insurance 1 0.05 3 0.75

Overseas Insurance 29 1.49 0 0.00

Packing Costs 3 0.15 0 0.00

Non-declaration of Imported Goods

2 0.10 0 0.00

Outside Packaging 2 0.10 0 0.00

Assists 1 0.05 0 0.00

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Detection Types2012–13 2013–14

(as at 30 September)

Detections % Detections %

Other Deductions 1 0.05 0 0.00

Air Way Bill/Bill of Landing 0 0.00 0 0.00

FTA Concessions 0 0.00 0 0.00

Import Goods not Declared when Required

0 0.00 0 0.00

Incorrect GST Deferral Outcome

0 0.00 0 0.00

Interest 0 0.00 0 0.00

Port of Discharge 0 0.00 0 0.00

Royalties 0 0.00 0 0.00

Stat Code 0 0.00 0 0.00

Valuation Basis Type 0 0.00 0 0.00

VOTI – GST 0 0.00 0 0.00

Total Deductions 1942 100 398 100

CMP – cargo reporting data accuracy monitoring activities

CMP cargo reporting - error rate by lines and number of detections made

Cargo Report Errors 2012–13 2013–14 (as at 30 September)

No of Lines Selected 6,019 1,374

No of Cargo Reports Detected to Have Error/s (b)

449 174

No of Cargo Reports Checked (b) n/a n/a

Error Rate = a / b n/a n/a

Total No of Detections 602 207

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Compliance Update

CMP cargo reporting – detection types

Cargo Reporting Detection Types

2012–13 2013–14 (as at 30 September)

Detections % Detections %

Consignor Incorrect 198 32.89 84 40.58

Cosignee Incorrect 199 33.06 70 33.82

Gross Weight 122 20.27 26 12.56

Origin Port of Loading 24 3.99 10 4.83

Goods Description 28 4.65 8 3.86

Cargo Report Data Inaccuracy (other)

16 2.66 7 3.38

Port of Destination 2 0.33 1 0.48

Bill Number 1 0.17 1 0.48

Declared Value 6 1.00 0 0.00

Container Number 2 0.33 0 0.00

Country of Origin 2 0.33 0 0.00

Currency Code 1 0.17 0 0.00

Discharge Port 1 0.17 0 0.00

Total Detections 602 100 207 100

CMP export data accuracy monitoring

CMP export – error rate and the number of detections made

Export Error Rates 2012–13 2013–14 (as at 30 September)

No of Lines Checked (a) 1,001 354

No of Lines with detection/s (b) 381 141

Error Rate = b / a 38.06% 39.8%

No of Detections 762 245

CMP export – detection type

Export Activity Detection Types

2012–13 2013–14 (as at 30 September)

Detections % Detections %

FOB Value 161 21.13 58 23.67

Gross Weight 169 22.18 41 16.73

Net Quantity 83 10.89 36 14.69

AHECC – Misclassification 69 9.06 29 11.84

Origin 80 10.50 20 8.16

Other Export Date Inaccuracy

34 4.46 16 6.53

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Export Activity Detection Types

2012–13 2013–14 (as at 30 September)

Detections % Detections %

FOB Currency 37 4.86 14 5.71

Consignee Name 15 1.97 10 4.08

Consignee City 30 3.94 8 3.27

FOB Other 8 1.05 5 2.04

FOB Terms 34 4.46 3 1.22

AHECC - Multi–Lines 8 1.05 2 0.82

Port of Loading 3 0.39 2 0.82

First Port of Discharge 1 0.13 1 0.41

AHECC – Other 3 0.39 0 0.00

Country of Destination 5 0.66 0 0.00

Declared Owner 11 1.44 0 0.00

Incorrect Exporter Identified 4 0.52 0 0.00

Number of Packages 7 0.92 0 0.00

Other Permit 0 0.00 0 0.00

Total Deductions 762 100 245 100

Compliance terminology

AWB Air Waybill

CLEAR status (depots)

A cargo status in the ICS that allows cargo to be delivered into home consumption from a depot

CPContinuing Permission – allows a permission owner to move goods between nominated warehouses on a continuing basis

CTO Cargo Terminal Operator (can be Air or Sea)

DCL Deconsolidation or “unpack” at a depot

DWADelivery Without Authority – when underbond goods are delivered into home consumption without being authorised by the Customs Act (s33 Customs Act 1901)

EDI Electronic Data Interchange

FAK Freight of all kinds

FCL Full container load

FCX Full container multiple suppliers

FOB Free On Board

HAWB House Air Waybill

HBOL House Bill of Lading

CLC Less than container load

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Licensed Depot A depot licensed under s77G of the Customs Act 1901

Licensed Warehouse

A warehouse licensed under s79 of the Customs Act 1901

MWA

Movement Without Authority - when underbond goods are moved to another licensed place or CTO – the goods are still under Customs control - without the movement being authorised by the Customs Act (s33 Customs Act 1901)

OBOL Ocean Bill of Lading

STP

Single Transaction Permission – application must be made to Customs and Border Protection to move goods between nominated warehouses on a one-off basis (one movement per application)

UBM Underbond movement

UBMR Underbond movement request

Underbond Movement

A movement of cargo subject to the control of Customs that moves on a permission granted under s71E of the Customs Act 1901

Find us on the internet

If you are looking for more information on compliance-related issues, or want to access previous editions of the Compliance Update, you can now find all the information you need in one convenient location.

From the ACBPS website menu, click on ‘import export’ and then select ’complying with customs and border protection’.

You can also follow this link or type this URL into the address bar on your internet browser http://www.customs.gov.au/site/page4271.asp

Tell us what you think…

Your valuable feedback helps us to provide you with useful and relevant information.

You can contact us with compliance-related feedback and queries by phoning 1300 363 263 or emailing us at customswatch@customs.gov.au

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Customs Watch

Customs Watch is ACBPS’s national information collection program that draws on the knowledge of industry and the community to protect Australia’s borders by reporting suspicious border activities.

Customs Watch members know their local environments. Members range from multi-national corporations to individuals, are based in capital cities, regional centres and remote areas, and operate in environments as different as cargo logistics and caravan parks.

By reporting suspicious activities, Customs Watch members actively help ACBPS protect Australia’s border.

ACBPS encourages you to report suspicious behaviour to Customs Watch toll-free on 1800 06 1800, or by using the online form.

The 1800 06 1800 number is answered by experienced ACBPS officers 24 hours a day, seven days a week. Your information could be the key piece of the puzzle that leads to the seizure of narcotics or other prohibited imports or the identification and treatment of unfair trade practices. You may provide information to ACBPS anonymously.

If you are calling from overseas or using a satellite phone, please call +61 2 6246 1325 (normal call costs will apply).