Archive for January 2019

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Biosecurity Import Levy - FTA formal submission

Who does this notice affect?

Importers, customs brokers, freight forwarders, shipping lines and port operators

 

 

Biosecurity Import Levy

 

As members will recall, Freight & Trade Alliance (FTA) representatives participated in the Biosecurity Imports Levy Industry Workshops in Canberra on 28 November 2018 and 8 January 2019 and again in Sydney on 10 January 2019 - further details are available HERE

The Department of Agriculture and Water Resources have since commissioned Pegasus Economics as consultants to support the department and industry in preparation for a follow-up meeting in Melbourne on 4 February 2019.

In line with our formal submission to the Hon David Littleproud, Minister for Agriculture and Water Resources on 17 January 2019, FTA provided the following feedback to Pegasus.

 

FTA formal submission 

 

We note that the Australian government announced the introduction of the Biosecurity Import Levy in the 2018-19 Budget with an expectation to raise $325M over 3 years from a proposed commencement date of 1 July 2019. The associated modelling announced in the budget referred to collection of $10.02 per twenty-foot equivalent (TEU) and $1 per tonne for non-containerised cargo with stevedores and port operators to be the collection agents.

FTA has been involved in consultations facilitated by Department of Agriculture and Water Resources (the department) since this announcement and offer the following feedback.

Utilisation of funds generated by the levy

Industry is already paying significant cost recovery fees to the department on import transactions.
This is underpinned with a transparent process aligned to the Australian Government Cost Recovery Guidelines whereby industry has input into the design and use of funds. It remains unclear why the new levy did not follow this approach which would ensure that funds are directly used in building a stronger biosecurity system, including measures to streamline activities and reduce costs at the border.

Of additional concern, it remains unanswered whether the levy will directly contribute towards the support and management of BMSB and other emerging biosecurity threats. As we now understand it, the Biosecurity Import Levy is not a cost recovery initiative, it is a tax going direct into the federal government’s consolidated revenue.

Sharing the load of the financial burden

This is where there has been significant confusion.

The department has advised that the levy will be used to protect our environment, agricultural and tourism sectors from biosecurity risks. In response, a legitimate argument put forward from some members is that based on this need, the required additional revenue should be collected from Australian tax payers.

Assuming that industry is to pay the levy, it has been questioned why the financial burden is not being shared with air and sea passengers as well as air cargo and mail operators.

We understand that it would have been unattractive for government to impose a new tax on the public and tourists or revisit the controversial concept of a “parcel tax” against online internet purchases.

In summary, the common perception is that sea cargo was the obvious soft target for the new tax.

Changes to date on the proposed levy

To the credit of the department, they have clearly heard our concerns about their original proposal of imposing the levy on stevedores. As we have witnessed in terms of the stevedore Infrastructure Surcharge, an already high and unregulated charge is inflated as it passes down the supply chain with road / rail transport operators and other intermediaries adding fees to recover associated cash flow and administrative costs. 

Revised modelling now proposes that shipping lines are responsible for paying the levy. This is a significantly improved outcome by removing the imposition from stevedores and the transport sector. The revised model maintains a $10 per TEU tax but has added an extra level of complexity by charging shipping lines on the weight of import vessels and makes an adjustment to the proposed tax imposition on bulk and break-bulk cargo.

The financial imposition, particularly on bulk commodities, is enormous and seems far removed from the commensurate biosecurity risk with a significant financial impact on such goods as minerals, LPG and fuel imports.

Potential for further reform

We note that shipping lines and their representative body continue to strongly object to the revised model.

Having said that, the reality is that once shipping lines get their systems in place, they will in fact be a beneficiary of the revised arrangements.

The way that things are shaping up, shipping lines will most likely collect money up front from importers and freight forwarders and remit periodically to the department. This will generate positive cash flow plus the likelihood of an administrative fee to manage the complexity of the model that requires a calculation based on the weight of the import vessel, TEU fees, and bulk commodity weights.

Should shipping lines pass on this levy and any associated administrative mark-up in the form of a new fee, an additional increase in the form of GST and the cascading effect once this passes down the supply chain will add significant costs to importers.

The overwhelming response that FTA has received from a membership of major importers is that if a tax is to be paid, two changes are essential,

1.a move away from a vessel weight charge to a flat per TEU / import weight charge to provide predictability in landed costs; and

2.payment of the levy direct to the government at a net rate through existing reporting mechanisms.

Since the levy was first announced, FTA and many other industry representatives have pointed to the Full Import Declaration (FID), used for customs payment and clearance purposes, as the preferred and only logical methodology. We also understand that the bulk fuel importers have suggested a simple increase in excise as a preferred model to send more revenue to government rather administering a new tax.

The department continues to resist our proposal saying that the FID does not meet the necessary legislative framework to collect the tax.

When you read the header of the FID receipt, it shows the words “Duty, Taxes & Charges”. Furthermore, the FID is currently used to collect an existing AQIS Processing Charge, Customs’ Declaration Processing Charge, Total Customs Duty, Total Excise Equivalent Goods Charge, Total Dumping Duty, Total Countervailing Duty, Goods & Services Tax, Luxury Car Tax and the Wine Equalisation Tax.

 

 

 

It remains unclear why this cannot be used to collect the Biosecurity Import levy which we now understand is just another tax.
 
While there would be a clear need to further engage with industry to streamline the model, it would seem like a relatively simple enhancement to the Integrated Cargo Systems (ICS) to do a calculation on bulk commodity weights and TEU to produce another tax line on the FID.
 
As you have no doubt been briefed following the departmental hosted forum on 10 January 2019, shipping lines, ports, freight forwarders, customs brokers and importers all declared their support for strong biosecurity measures.
 
Importantly, all were unanimous for the government to start from scratch outlining the need for genuine industry engagement on the revenue collection design and process modelling.
In summary, FTA recommends that the Minister considers:

1.moving the Biosecurity Import Levy from a tax and to a cost recovery levy in line with the Australian Government Cost Recovery Guidelines; and

2.re-engaging with industry on appropriate use and methodology of the levy collection.

 

 

 

 

 

 
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BMSB UPDATE 45 - WA Biosecurity Alert

 

 

JOIN THE ALLIANCE

 

 

Who does this notice affect?

Residents of the North Fremantle area / growers and gardeners 

Importers, freight forwarders and customs brokers affected by the increased intervention during the Brown Marmorated Stink Bug (BMSB) risk season - shipped between 1 September 2018 and 30 April 2019 inclusive.

 

 

BMSB UPDATE 45 - WA Biosecurity Alert 

Freight & Trade Alliance (FTA) has received a request from the WA Department of Primary Industries and Regional Development to share the following Biosecurity Alert:

We are asking businesses and residents in North Fremantle to help with surveillance for Brown marmorated stink bug (BMSB), following detection of a single live BMSB in a trap at Fremantle Port. This serious pest is not established in Australia, and efforts need to be taken to ensure there are no further BMSB in the area, to prevent potential spread.

The trap is one of 14 that are part of BMSB surveillance activities being undertaken by the Federal Department of Agriculture and Water Resources (DAWR). The WA Department of Primary Industries and Regional Development (DPIRD) is working closely with DAWR to put in place swift and effective response measures.

The affected goods were fumigated and DPIRD has commenced a 12 week trapping program to determine whether the pest has spread. A total of 49 traps have been deployed with no further detections to date. A residual treatment has also been applied to a 100 metre buffer zone which includes buildings and vegetation ... read more.

 

 

 

 
 
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Case Update - Tariff Classification of Cider Products and the impact of 'additives'

 

Please find attached an article that may be of interest to you regarding a case that our firm (Becroft, Robertson and Gross) was involved in with the judgment handed down yesterday.

 

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Illegal Logging E-Update #27 - First infringement notice issued, new and revised CSGs, Redline, international news

Importer issued with the first illegal logging infringement notice

In November 2018, a Queensland-based importer was served with the first infringement notice issued under Australia's illegal logging laws. The notice was issued for ongoing non-compliance with the laws' due diligence requirements and resulted in the business being penalised $12,600.

The issuance of the infringement notice reflects the Department's implementation of a full compliance model for the illegal logging laws, with the "soft start-compliance period" ending in January 2018.

In administering the illegal logging laws, we continue to audit importers and processors to assess their compliance with the laws' requirements. We have now audited over 600 businesses and provided a range of advice on whether their due diligence systems meet the laws' requirements. More compliance audits are scheduled for 2019.

Further information about the department's compliance model can be found on our Illegal Logging Compliance and Enforcement webpage. This details our approach for managing compliance with Australia's illegal logging laws and describes where our compliance monitoring and enforcement activities are being focused.

Release of new Republic of Korea Country Specific Guideline

The Department has published the Republic of Korea Country Specific Guideline (CSG) and its associated Quick Reference Guide on its website.

The CSG is intended to assist importers to understand the Republic of Korea's regulatory frameworks and to identify information to demonstrate that the timber in the products they are importing has been legally harvested.

Undertaking a risk assessment using the information set out in a CSG is one way of satisfying the due diligence requirements of the illegal logging laws.

The Republic of Korea is a key supplier of timber products to Australia. In 2017, we imported approximately $159 million worth of products from Korea.

The department continues to work with other key trading partners to develop additional CSGs to assist Australian importers in undertaking an informed risk assessment of the legality of their timber products.

The Korea CSG adds to the existing suite of CSGs, with Canada, Finland, Indonesia, Italy, Malaysia (Peninsular, Sabah, Sarawak), New Zealand, Papua New Guinea and the Solomon Islands already available.

You can view and download a copy of the Republic of Korea CSG and the other CSGs via our Illegal logging resources for importers webpage.

Updated Indonesia Country Specific Guideline now online

In October 2018, the department and the Indonesian Ministry of Environment and Forestry agreed to several revisions to the Indonesia CSG and its associated Quick Reference Guide.

The revisions were intended to improve the overall clarity of the Indonesian CSG and to ensure that it continues to be relevant and up to date (with the original version published in October 2014).

The revised CSG is now available on the department's website, ensuring that Australian importers have the most up to date information available when conducting their due diligence on timber products originating from Indonesia.

The department continues to work to ensure that all CSGs remain up to date and accurate.

New and updated CSGs are published on the department's illegal logging webpages as they are finalised.

You can view and download a copy of the suite of CSGs via our Illegal logging resources for importers webpage.

Redline - report a breach of the laws

The Department provides a confidential mechanism to report suspected breaches of Australia's illegal logging laws.

The Redline service allows callers to report matters that may not be detected, reported, or acted on through other means. It is available for all of the key legislation administered by the department, including illegal logging.

Some of the best people to spot breaches of Australia's illegal logging laws are those who work in the industry every day. If it doesn't add up and looks like a breach of the illegal logging laws, then we encourage you to call the Redline.

Any call to the Redline should contain:

  • information about a person or company operating in Australia or importing goods into Australia
  • details that could help the Department identity a potential beach of legislation
  • information that has made you suspicious that there may have been a breach of the legislation.

You can call Redline on: 1800 803 006

Read more: Redline - report a breach

International News - The last trees of the Amazon - journalism investigation

A team of journalists from five Latin American countries have come together to undertake a detailed investigation into how groups of timber traffickers are managing to steal and process timber from the Amazon.

#MaderaSucia ("dirty timber") is an investigation aimed at analysing the current situation of the Amazonian timber market and discovering the ways in which traffickers launder their illegally obtained products into the global trade chain. The investigation has been led by OjoPúblico and Mongabay Latam in partnership with a team of reporters from Colombia (Semana, El Espectador), Bolivia (El Deber), Mexico (Connectas) and Brazil (InfoAmazonia).

The investigation specifically looks at the trade in illegally-sourced timber in Peru, Bolivia, Brazil, Ecuador, and Colombia. While Australia only directly imports limited amounts of timber from these countries, it is likely timber from the Amazon is still entering the Australian market via processing or manufacturing operations in third countries.

This underlines the importance of working with your supplier and other elements of your supply chain to determine where the timber in your products is coming from. Just knowing who is selling you the product is not enough. If you don't have a good idea of where the timber is originally being sourced from, there is a real risk you could be buying illegal timber.

The investigation also demonstrates the potential for illegally logged timber to be accompanied by fraudulent documents. As highlighted in an earlier E-Update, NepCon has released a useful guide on identifying fake documents. This can be found on our Illegal Logging Resources for Importers webpage.

Read more: https://news.mongabay.com/2018/11/the-last-trees-of-the-amazon/

International News - A different type of Christmas tree in the Philippines

As the Christmas holidays approach, we thought it apt to include the following article.

In the town of Palawan in the Philippines, a 25 foot tall Christmas tree, made from chainsaws confiscated from illegal loggers, has been permanently erected. Made of 86 chainsaws, it represents only a portion of the 1,000 chainsaws confiscated by the Palawan NGO network over recent years.

Read more: http://www.pna.gov.ph/articles/1018892

Our well wishes for the Christmas period and the new year!

The Department will be closed over the Christmas holiday period, but our illegal logging staff will be back in the office from early January 2019. In the meantime, we would like to wish you a merry Christmas and a prosperous new year.

 

Further information

  • See the department's illegal logging website for information and resources.
  • Read previous e-updates.
  • Email the department's illegal logging policy section or the illegal logging compliance section. The department will respond to you within 10 working days.
  • Call the department during business hours (8.30 am to 5.30 pm) on 1800 657 313, or +61 2 6272 3933 outside Australia.
 
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FTA calls for Independent Review into Biosecurity Measures

Who does this notice affect?

Importers, freight forwarders and customs brokers affected by the increased intervention during the Brown Marmorated Stink Bug (BMSB) risk season - shipped between 1 September 2018 and 30 April 2019 inclusive.

FTA calls for Independent Review into Biosecurity Measures

 

Freight & Trade Alliance (FTA) has submitted a formal request to the Hon David Littleproud, Minister for Agriculture and Water Resources for the Federal Government to immediately commission an independent review on BMSB measures.

FTA has provided details of operational and cost impacts affecting members and further highlighted the importance for a review given that emergency measures may be impacted next season involving more target countries.

FTA continues to drive this ongoing advocacy as the sole industry voice calling for the review - today's FTA media release is available below.

 

Paul Zalai - FTA / APSA

 

MEDIA RELEASE:

 
The Department of Agriculture and Water Resources has implemented widespread emergency measures on imported containers from U.S., Italy, Germany, France and other countries, via chemical fumigation or other approved treatment methods, to combat the Brown Marmorated Stink Bug (BMSB).
 
While essential in safeguarding Australia from a major biosecurity threat, international trade has been adversely impacted by the BMSB measures with major importers reporting significant disruptions to their international supply chain operations, as well as increased costs of importing essential consumer goods. 
 
In extreme instances, total cargo vessels and their loads are being turned away from Australian shores due to detection of the pest. Australia’s peak trade alliance has indicated that millions of dollars are being paid by importers, customs brokers and freight forwarders as a result of the processes associated with the management of the BMSB. 
 
Paul Zalai, director of the Freight & Trade Alliance (FTA) stated that for those that have been fortunate to have their cargo arrive, many have been adversely affected by the onshore delays caused by inadequate offshore treatment, failure in government systems and processes and a local industry inadequately prepared to deal with the growing onshore treatment task “The direct costs to importers imposed by stevedores for storage and in detention fees imposed by shipping lines for the late return of unpacked empty containers are rapidly escalating, adding to the costs associated with failure to meet supply demands.”
 
Some freight forwarders have resorted to desperate and expensive measures by using a combination of sea cargo movements from origin and transhipping cargo at intermediary ports, using airfreight to land goods into Australia. While a legitimate practice, it is anticipated that it will only be a matter of time before cargo arriving by air faces similar biosecurity scrutiny as that by sea with the potential threat of choking major Australian international airports.
 
“The problem is not going to go away. Indications from the department is that by next season (September to April) we will be talking about treatment of goods from high risk continents rather than high risk countries, such is the spread of the pest throughout Europe, Asia and other parts of the world”  Zalai said 
 
The FTA has acknowledged that the associated treatments, processes and systems are extremely complex and there is no simple fix to address current operational deficiencies. FTA has called on the Minister for Agriculture and Water Resources to urgently commission a comprehensive independent review.
 
 

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BMSB UPDATE 43 - containers treated with Sulfuryl Fluoride / Italian treatment providers

Who does this notice affect?

Importers, freight forwarders and customs brokers affected by the increased intervention during the Brown Marmorated Stink Bug (BMSB) risk season - shipped between 1 September 2018 and 30 April 2019 inclusive.

BMSB UPDATE 43 - containers treated with Sulfuryl Fluoride / Italian treatment providers

 

Containers treated with Sulfuryl Fluoride.

 

Freight & Trade Alliance (FTA) has engaged with the Department of Agriculture and Water Resources again today in terms of the management of inspections for containers treated with Sulfuryl Fluoride.

The department is working with the Community and Public Sector Union (CPSU) on identifying measures to safeguard the health and safety of officers.

In the interim, the department is assessing the management of affected containers on a case-by-case basis.

We are hopeful of early resolution to this matter.

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NNF 2019/010 - BMSB 2018-19 Seasons Measures Update

NNF 2019/010 - BMSB 2018-19 Seasons Measures Update

As you may be aware based on information provided in past newsflashes, the CBFCA continues meeting with the Department of Agriculture and Water Resources. (DAWR) advocating for internal review of the BMSB policy and process, and ongoing lobby for improvements to limit the impact on members and their clients.

On Thursday 10 January 2019, CBFCA representatives along with other key industry Associations participated in a teleconference with the Department of Agriculture and Water Resources Cargo Consultative Committee (DCCC), to obtain latest update on the 2018-19 BMSB seasons measures, proposed policy changes and discuss proposals by DCCC industry members options for addressing cargo clearance delays and BMSB measures.

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2019/011 - Import Industry Advice Notice 07-2019

This notice relates to:

Recent prosecutions for failing to comply with departmental directions.

This serves as a timely reminder that directions issued by the department must be followed and any failure to meet the these requirements may have significant personal and corporate consequences.

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Biosecurity Import Levy

Freight & Trade Alliance (FTA) continues its advocacy in terms of the Biosecurity Import Levey which appears likely to add to the increasing list of surcharges, cost recovery fees and taxes which collectively contributes to a substantial dollar value to the price of landed goods into Australia.

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Third BMSB vessel directed to leave Australian territory

Third vessel directed to leave Australian territory, MV Thalatta

·On 4 January 2019, the vessel Thalatta and its cargo was directed to leave Australian territory due to unacceptable biosecurity risk posed by Brown marmorated stink bugs (BMSB). This is the third vessel directed to leave Australian territory this BMSB season.

·On 16 December 2018, the Thalatta, a roll-on roll-off vessel, carrying cargo loaded from Germany, Belgium, Spain and South Africa arrived off Fremantle, Australia. The cargo compromised mainly vehicles and some machinery with around 50 percent of the cargo having been treated for BMSB prior to loading. The vessel had carried out a thermal fogging of the cargo holds in Spain.

·Enroute the vessel was subject to heightened vessel surveillance for Brown marmorated stink bug (BMSB) and reported detections of exotic insects (both live and dead), including BMSB.

·The vessel was initially directed to remain at anchorage at a safe distance off Fremantle, Australia. While at anchorage it was directed for thermal py-fogging prior to a Department of Agriculture and Water Resources inspection, at which only a small number of insects were detected, including dead BMSB.

·Subsequently, during a controlled discharge under departmental supervision at Fremantle port, one live BMSB and two other insects (not of biosecurity concern) were detected on the cargo.

·Cargo discharge was ceased and the department directed that all unloaded cargo be reloaded onto the vessel.  There were 83 units that could not be reloaded. This cargo was secured on the wharf and directed for treatment. Following treatment, the cargo was inspected and dead BMSB were found.

·The vessel was directed back to anchorage. Whilst at anchorage, the vessel reported findings of a large number of exotic insects, including BMSB.

·The continued detections of exotic insects, including BMSB, indicates the likelihood of a larger residual population of exotic insects, including BMSB that remain undetected on board the vessel.

·The department considered these findings, along with the risk management plan submitted by the vessel operator, and determined that the vessel and its cargo continues to present an unacceptable level of biosecurity risk.

·The vessel operator has fully cooperated with the department.

 
An Industry Advice Notice (194-2018) published on 24 December 2018, reminds industry of the risk posed by BMSB and to ensure all target high risk goods manufactured in, or shipped from, target risk countries must be treated offshore. Vessel operators should manage contamination risks to ensure goods are not contaminated with BMSB and/or other biosecurity risks.
 

Loading and shipment of break bulk cargo treated by suspended offshore treatment providers


An Industry Advice Notice (195-2018) published on 24 December 2018, outlines the processes for goods that have been treated for BMSB risk by a suspended offshore treatment provider under the Offshore BMSB Treatment Providers Scheme.
 
Due to the high level of biosecurity risk to manage break bulk treated by suspended treatment providers, the department has revised its onshore policy for this cargo. Vessel operators should not load untreated break bulk goods or break bulk goods treated by suspended treatment providers for discharge in Australia. More information about the management of goods shipped prior to the suspension of treatment providers is available in the industry advice notice.
 
The department continues to review any BMSB detections and the risk pathways to adjust import measures as needed. Industry is expected to comply with the BMSB seasonal measures and, where possible, only load compliant cargo and/or ensure cargo is not contaminated with BMSB and other biosecurity risks.

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