Impact Publications : Aircargo_235
AirCArgo AsiA-PACifiC • FEBRUARY-MARCH 2015 • Page 25 GUEST WRITER AnDrEW HUDSon Partner, Gadens Melbourne. E: email@example.com ANNOUNCEMENTS by Customs in February served to confirm what has been promised for some time - Cus- toms is tightening its approach, includ- ing action against service providers in the supply chain such as freight forwarders, licensed Customs brokers and operators of licensed premises. In one sense this is no surprise. These types of actions against service providers have, in part, been the subject of public comment and additional legislation by the Federal Government and Customs since the release of the first results of the Oper- ation Polaris exercise in May 2012. The prosecution action announced in relation to alleged attempts to evade anti-dumping duties is also part of the wider compliance agenda, driven by concerns that some parties have been evading duties put into place to pro- tect local industry against dumping. Such concerns also led to the intro- duction of “anti-circumvention” provi- sions similar to those in place overseas aimed at actions being taken to avoid the effect of the measures. In those provisions, even though the actions do not involve deliberately mis-stating the nature or origin of goods (alleg- edly the case with the prosecution announced by Customs), the provi- sions allow for an investigation into actions taken to “circumvent” the measures and if specific circumvention is found to have arisen, then the ADC can impose additional duties on those exporters. Ironically the ADC announced the results of its first investigation shortly after the Customs announcements and will recommend to the Parliamentary Secretary responsible for dumping to impose additional duties (going back to April 2014) on exports of aluminium extrusions from one exporter. However, although we anticipated these issues would become public knowledge, the announcements have some wider consequences. Customs media releases confirm a tighter rein on the supply chain 1. The language used in the an- nouncements suggests a high level of confidence by Customs that it is cor- rect. However, there is still a presump- tion of innocence and there could be some other explanation behind all these allegations. Perhaps it may be too early to suggest that those affected are part of the “unscrupulous” category of per- sons in the supply chain. Perhaps some less aggressive terminology would have sufficed? It would be interesting if Customs made public announcements if it was found that the affected parties were not, in fact, culpable as suggest- ed. Even though parties are not named there is some level of general suspicion on the parties affected. 2. The announcement on the importer and freight forwarders and dumping issues may have benefitted from identification of the goods in ques- tion, given that there are a wide variety of goods where Customs and the ADC have communicated concerns on steps being taken to try and avoid measures. 3. The announcements on suspen- sions on the licensed service provid- ers will clearly have an impact on others in the same position. However, there is more that could have been stated. Why was the action taken – was it based on isolated incidents or had there been widespread and continuous non-compli- ance? What were the offending actions and relevant provisions? If the aim is to eliminate non-compliance and offending behaviours, then surely there are some lessons that could be communicated here and learned by industry to allow it to respond and improve? Without identi- fying parties or events, good regulation (according to the Government’s own rules) would require some transparency and engagement with industry on its compliance activities. Presumably some sort of outreach would be useful and could be developed and delivered to industry relatively easily. The focus and nature of Customs compliance activi- ties has been less public recently and it would be in the interests of all parties for these issues to be better communi- cated. 4. The alleged “circumvention” activity described above was the failure by the affected parties to “pass on” the existing dumping measures to custom- ers by increasing prices. Presumably, the affected parties elected to “wear” the duties themselves, possibly selling at a loss which defeated the effect of the measures. This is only one of several behaviours proscribed as circumvention leading to significant additional duties and very public disclosure of the parties involved, which is the case in dumping investigations. The short message here is pretty clear on an increased level of compli- ance activity associated with a mindset that there are problems and miscreants to be managed. To the same effect, the ANAO Report on the TCO system which was released recently disclosed that Customs will be more actively engaged in the investigation of the alleged misuse of TCOs to the detriment of local in- dustry and Government revenue, which is another angle where we can expect attention. Industry should be taking as many steps as possible to ensure compliance - by themselves and their clients - and ensuring that they also protect their interests in a proactive and comprehen- sive fashion.