Archive for May 2019
Vitamins – Classified as a food or medicament – it's off to the High Court
In late 2018 the Full Federal Court ruled that VitaGummies should be classified as a duty free medicament and not as food. The Full Federal Court also held that weight loss gummies that contained garcinia cambogia should also be classified as a medicament.
The decision was important as it widened the scope of goods that could be treated as a duty free medicament rather than a food. This was particularly the case with the garcinia gummy that was classified as a medicament even though it was found to have no therapeutic benefits.
The Comptroller-General has applied to the High Court for leave to appeal the decision. The right to have a matter heard by the High Court is not automatic and the High Court will only hear matters of public importance.
Following a hearing on 17 May 2019 the High Court has agreed to hear the matter. Reasons for the decision to grant leave were not given. However, the amount of customs duty at issue and the difficulties with administering the Full Federal Court decision were raised by Customs.
The appeal will review both the decision regarding the VitaGummies and the garcinia gummies.
It will take time for the hearing to be held and then further time for a judgement to be delivered. We expect that the final outcome will be known in 6-12 months.
Of course, if Customs loses the appeal, it could push for the Customs Tariff Act to be amended so that there is no doubt as to the classification or duty treatment of vitamins. It is highly likely that such a legislative change would only apply to future imports.
Past importers of vitamins and other edible health products should review imports in 2015 that attracted duty and consider whether refund applications should be lodged now on the basis on the Full Federal Court decision. If those importers wait for the outcome of the High Court case, the 4 year refund time limit will have expired.
Future imports are more difficult. Customs clearly disagrees with the Full Federal Court decision and we understand that tariff advices are being issued stating that vitamins should be classified as food. It would appear that the expectation of Customs is that importers continue to pay duty and seek refunds should the decision of the Full Federal Court be upheld.
Conclusion of the 2018-2019 BMSB Risk Season
The Department of Agriculture and Water Resources has published Import Industry Advice Notice 76-2019 - Conclusion of the 2018-2019 Brown marmorated stink bug (BMSB) Risk Season.
It is important to note that goods shipped or vessels departed on or before 30 April 2019 that are still en route to Australia, will remain subject to the BMSB seasonal measures on arrival. ICS community protection profiles will remain active until 16 June 2019. To manage these goods, the department will use the shipped on board date to determine if BMSB measures are applicable.
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Who does this notice affect?
Importers, exporters, customs brokers, shipping lines and freight forwarders
Port of Melbourne proposes new fee
Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) have expressed concern to the Port of Melbourne and Freight Victoria regarding a $15 per TEU increase to wharfage on all full imports intended to fund rail transformation at the Port. The proposal is currently before Freight Victoria and the Hon. Melissa Horne MP for approval, after which time it will be considered by cabinet. The fee will remain for the remainder of the lease period.
At this stage exports are excluded from the cost recovery proposal.
The proposal comes after consultation with rail stakeholders in 2018, where there was a clear call for on-dock rail and open access arrangements.
The proposed model
Under the proposed model, the Port of Melbourne will take back leased land from the stevedores and rail terminal operators, giving it back to them for free under a licence agreement. The thinking is that the stevedores and rail terminal operators will then pass on those savings to rail users, making rail more competitive. The Port will re-capture lost rent revenue via this new charge levied to shippers and port users through the proposed increase in wharfage fees.
To learn more about the proposed model, the full Port of Melbourne presentation is available https://ftalliance.us6.list-manage.com/track/click?u=e9d77c8ae8&id=11406e349c&e=f62c636f6e .
FTA / APSA’s concern with this new model
FTA / APSA support rail and the need for a port rail solution but we also need to ensure that any cost imposed on the supply chain is accompanied by real benefits across the supply chain.
FTA / APSA would like to ensure that:
- stevedores or terminal operators are compelled to pass on the rental savings and lower rail operating costs to users.
- there is transparency on the investment and recovery by Port of Melbourne under the existing regulatory framework to ensure there is no over-recovery (while the reported cost is $300M, $15 x laden import TEU across the remaining 47 years of the lease would deliver a much higher figure).
- cost savings from larger ships calling at the port of Melbourne are passed through to cargo owners.
- cargo owners are represented and involved in monitoring the performance of the proposal.
Some members have also expressed concern that, once again, empty containers, under the custody of the shipping lines, are exempt from the cost recovery process.
Lack of metropolitan rail hubs
This proposal for a port solution also needs to be considered in the context of the broader rail network. Melbourne does not yet have metropolitan rail hubs in operation servicing the key import catchments including the South East, Truganina and Somerton. So, while all importers will be funding the works, few will be direct beneficiaries until there is access to metropolitan port-rail services.
Until this happens, with the upcoming Biosecurity Levy and infrastructure charges continuing to increase, this is yet another example of rising international supply chain costs.
FTA / APSA will continue to work with the Port of Melbourne and Freight Victoria on the details of the proposal.
While we fully support rail investment and appreciate the significance of rail utilisation as a city port, the cost recovery plan needs to be fair and transparent.
We will provide members with further updates as we receive them.
If you have any thoughts in the meantime, please do not hesitate to email me directly at email@example.com
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Report of the 3rd round of negotiations for a Free Trade Agreement between the European Union and Australia.
Officials from the European Commission and Australia met in Canberra recently for the third round of negotiations for an EU-Australia Free Trade Agreement.
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Plant based stock feed BICON permit assessment timeframes
The Department of Agriculture and Water Resources has published Import Industry Advice Notice 61-2019 – Plant based stock feed BICON permit assessment timeframes.
To help avoid unnecessary delays, the Department provides some suggestions for the permit applicants.
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Understanding the Food Control Certificate
The Department of Agriculture and Water Resources has published Imported Food Notice IFN 08-19 – Understanding the Food Control Certificate.
The purpose of this notice is to remind importers of their responsibilities when the department issues them with a Food Control Certificate.
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