An interesting article this month on Trade Facilitation and the changing emphasis on the role of your customs broker from service provider to that of primary defence against non-compliance. This highlights the importance of ensuring you have compliance top of mind and the level of trust needed between importers / exporters and their broker.  

Thank you for your ongoing support and feedback.

Best Regards, 

David Cartmer

Head of Sales and Marketing Australia

Trade Facilitation and its Impact on Customs Brokers

Over the past 120 years we have progressed from physical inspection of all goods by the customs authority prior to import, to a system of complete self-assessment where only a very small percentage of goods are physically inspected. However, in this same time the rules relating to duty evasion and prohibited imports have not materially changed. What has changed is that the practical responsibility for trade compliance has shifted from the border authority to the customs broker. This has resulted in greater levels of trade facilitation for importers and exporters, but has put customs brokers in the unexpected position of both service provider and the primary defence against non-compliance with the Customs Act.

  • This is a system that can work, but it requires each of the Australian Border Force (ABF), customs brokers and their clients to appreciate the role being carried out by customs brokers. 

    The role of customs brokers as safeguards against trade non¬-compliance may seem at odds with the traditional role of a customs broker. That role generally involved acting in the best interests of their client and representing their clients' interests in disputes with the border authority. However, the current duality of roles (service provider and de facto trade compliance body) has been developing slowly over time and seems to be gaining momentum. 

    As an example, consider the recently agreed terms of the Trans-Pacific Partnership (TPP). To enjoy preferential duty rates under that agreement the importer must hold a certificate of origin that contains all of the mandatory data fields set out in the agreement. There will be no template document and the system is one of self-certification. That is, the exporter, producer or importer prepares the certificate of origin themselves. 

    Who then is left to assess whether the requirements of the TPP have been met and a lower duty rate can be claimed? It will be the customs broker completing the import declaration. With previous free trade agreements the customs broker merely had to ensure that a certificate of origin in the prescribed form was supplied. In most instances this was provided by an authorised body and was easy to assess. Under the TPP the customs broker may well receive 100 different certificates of origin from 100 different exporters and it will be up to that broker to assess whether the goods qualify for the TPP. 

    If the customs broker gets it wrong, this error of judgement will only be identified following an audit by the border authority. Only a small number of goods will be subject to this treatment. The vast majority of goods will only be subject to review by the customs broker. The customs broker carrying out this responsibility faces the prospect of fines from the ABF and a negligence claim from its client in the case of non¬compliance.

    The Australian Trusted Trader Programme is another example. A goal of this programme is to identify those supply chains that act in a compliant manner and direct Governmental customs compliance activities primarily at the supply chains that have not been risk assessed. There is nothing wrong with this as a goal. However, it needs to be acknowledged what is occurring. Trade compliance is effectively being outsourced. The agreement is that the Government will provide importers and exporters with trade facilitation benefits provided that the ABF can be confident that it does not need to audit the Trusted Trader. 

    For this trade off to occur each party needs to acknowledge and adapt to the change in roles. This means that clients need to acknowledge that customs brokers are not merely performing a procedural role in the clearance of goods. Rather, they are assessing the import for compliance with the Customs Act and are doing so to such a standard that the ABF is prepared to trust this assessment and focus their compliance activities on other importers. In this environment, the client needs to understand that the customs broker may not simply accept their claims at face value and may need to ask for supporting documentation. The customs broker should also remind the client that it owes duties to the Government that may be in conflict with the broker's duties to the client. 

    The ABF needs to appreciate that customs brokers are thrown into the extremely difficult position of being the primary auditor of customs compliance while also having to maintain a commercial relationship with its client (in what is the most competitive of markets). While the ABF can easily question the veracity of what an importer says to them, it is harder for a customs broker to politely require clients to prove the correctness of information provided. Customs brokers cannot put holds on good and inspect them. Customs brokers cannot serve their clients with a notice to produce documents. Customs brokers do not have access to the government intelligence. In short, while the ABF is giving customs brokers the primary role of protecting the borders from revenue evasion and prohibited imports, it needs to be acknowledged that customs brokers do not have the same tools to perform that role as those available to the ABF. The ABF can still expect high standards from customs brokers, but it is unrealistic to expect a customs broker to identify every instance of non¬compliance, or all instances that could be identified by the ABF.

    If the limitations on a customs broker to ensure customs compliance are accepted, then the ABF needs to take this into account when its own compliance activities identify a breach of the law. Where there is a breach, often the customs broker is just as legally liable as the importer. The ABF elects who to penalise. Not every breach will be the fault of the customs broker. The easiest example is where the client provides false information to the customs broker regarding the goods.

    In these instances, should the customs broker be expected to have a greater ability to detect the provision of false information that the ABF? While it is a self-assessment regime, it is still the ABF that elects to release the goods from customs control based on the information provided. If the ABF could not detect false information without an inspection of the goods, should the customs broker be held to a greater standard?

    If the Government wants to place the bulk of the compliance burden onto customs brokers, then it would help if the ABF provided brokers with tools to help identify non-compliance. For instance, the ABF will have internal resources to help their auditors identify non-compliance. There will be key red-flags that the ABF officers will be trained to look for. Where it does not compromise Government security, these learnings should be shared with customs brokers.

    Lastly, customs brokers need to acknowledge the evolving nature of their role. No longer is it the case that they owe duties only to their clients. On many occasions the ABF has said that customs brokers are in a privileged position. It is only customs brokers that can lodge import declarations for third parties. Additionally, it is only customs brokers that have access to the Integrated Cargo System. This comes at a price. That price includes: 

    • An obligation to inform the ABF if the customs broker becomes aware of false information having been provided to the ABF; 
    • Being strictly liable for the provision of any false information provided to the ABF (even if there was no intent to provide false information); and 
    • Being equally liable as the importer for any underpaid duty. 

    Acknowledging the increased importance of the customs broker in trade compliance means that customs brokers also have to accept that more is expected of them. The ABF will expect a customs broker to take reasonable steps to assure itself that the information provided by its clients is correct. What steps are reasonable will depend on magnitude of the risk and the ease of taking those extra steps. For example, if the importation is of aluminium profiles which could potentially attract dumping duty of 50%, the broker may be expected to take greater steps to verify the information than if the import was of duty free mobile phones. 

    As another example, the steps required by a customs broker before declaring a goods is asbestos free will be different for a consignment of fresh fruit than it will be for a consignment of brake pads.

    Essentially customs brokers need to ensure that they are exercising a level of due diligence that reflects the responsibility imposed on them. This due diligence starts with initially verifying the identity of the client and extends to all aspect of the communication provided to the ABF.

    This due diligence is important not only from the perspective of performing the role expected of customs brokers by the ABF, but also as a means of providing a legal defence where there is a breach of the law. Where false information has been provided to the ABF, the customs broker may be able to rely on the defence of reasonable mistake of fact. However, before a corporate customs broker can rely on this defence, it must be shown that the mistake was not one that could have been avoided by the exercise of due diligence. 

    It is a difficult transition period with expectations and roles evolving. At the same time, industry pricing remains cut throat. Customs brokers are enabling seamless trade and bearing the responsibility of full compliance. This valuable role needs to be recognised by all stake holders if trade facilitation improvements are to continue.

    The above article written by Russell Wiese of Hunt&Hunt Lawyers was first published in the Autumn 2018 edition of Across Borders – we thank Russell and FTA for the permission to republish.

Chain of Responsibility- Heavy Vehicle National Law

The Heavy Vehicle National Law identifies obligations for Operators, Drivers, Consignors and Consignees about the handling of freight containers and the requirements for a compliant Container Weight Declaration (CWD) to be available for all road transport movements of a shipping container.

  • What is the definition of a freight container referenced in the legislation?

    A freight container is defined as a re-usable container that is designed for the transport of goods by one or more modes of transport. The technical definition of a freight container is provided in Australian Standard AS 3711.1:2000 – Classifications, Dimensions and Ratings.  As an example if doors and windows are added to a freight container so it can be used as a site office, it is no longer classified as a shipping container.  When a significantly modified freight container (as described above) is transported, a CWD is not required.

    What does a CWD look like?

    A standard format for a CWD is not specified in the legislation. It can be in a hard copy or in an electronic form. The critical aspect is it must be able to be produced in its entirety, to an authorised officer, upon request.

    To be compliant a CWD must contain the following information:

    • The correct weight of the container including its contents;
    • The container number and other details necessary to identify the container;
    • The name and address of the responsible Australian entity;
    • The date the declaration was made.

    When is a CWD Required?

    A compliant CWD is required for the movement of all loaded or empty freight containers on a public road by a heavy vehicle.

    Freight containers consigned for import or export by sea:

    Freight containers for transport by sea must also meet the requirements of the Navigation Act 2012, including Marine Order 42 (Verified Gross Mass). Transport documentation created for that purpose, such as a Pre-Receival Advice (PRA), may be used as a complying CWD (or part thereof) so long as it includes all information required to be a compliant CWD, and is available for inspection by an Authorised Officer. A PRA that does not contain all the necessary information could be used in conjunction with another document or documents that contain the missing information.

    At DHL Global Forwarding we see CoR compliance as a pillar of our Safety First endeavours and plan to include regular helpful CoR information in our Customer Newsletters. If you require additional information a good website to visit is the National Heavy Vehicle Regulatorundefined (NHVR).

    The NHVR is the administrator of Heavy Vehicle legislation in all states with the exception of Western Australia and Northern Territory who maintain their own legislative regime. If it is deemed appropriate contact us for further advice.

Ocean Market Trends and Updates

  • Container space utilization is between 80-90% from Asia.
  • General Rate Increases from Asia is anticipated for all carriers.
  • Maersk - General Rate Increase applied from USA origins.
  • Direct to Terminal for empty containers – Impact to cost. 
  • Asia to Australia

    The space situation from Asia is still very tight, especially from Shanghai and Qingdao. Space utilization is around 80-90%. This is very unusual for this time of the year, but it just shows how serious Shipping Lines are about space management. Some Shipping Lines deploy smaller vessels and some introduce blank sailings

    Please be advised that COSCO and other carriers are rolling cargo at their transhipment port in Singapore.

    Early booking are recommended for all origins, this space situation is not expected to improve for at least the next 3-4 months.

    During this period shipping lines will also try to optimize their profitability and will therefor always prioritise higher paying freight. If a container is urgent and must meet a transit time a higher rate will need to be accepted to ensure priority is received.

    North Asia to Australia

    ANL, OOCL, Hapag Lloyd, Hambug Sud and other carriers will implement a GRI (General Rate Increase), effective from 15 May 2018. The GRI amount is still to be published.

    South Asia to Australia

    MSC will implement a GRI (General Rate Increase), effective from 15 May 2018. The GRI amount is still to be published.

    Asia to Australia

    Maersk will implement a GRI (General Rate Increase), effective from 1 May 2018. The GRI amount is still to be published.

    Important to note that these GRI and PSS (Peak Season Surcharge) announcements are the official statements by the shipping lines. Amounts and start dates might vary from shipping line to shipping line. 

    USA to Australia

    Maersk will implement a GRI (General Rate Increase), effective from 1 May 2018. The GRI amount is still to be published.

    Australian Port Changes

    We have been advised that Australian Port Charges are expected to increase for all carriers. The increases and effective dates will vary from carrier to carrier.

    Return of Empty Containers

    Major shipping lines in all Australian Ports have commenced changes to their process for rehiring empty containers. In some cases they will now be rehiring their containers directly into stevedore terminals, rather than designated empty container parks.  Due to the nature of delivery to the terminal (booking requirements, longer delivery time) there are additional fees associated with this delivery.  These fees have been incorporated into the latest rate cards as of 1st April and are applied where applicable. 

Ocean Freight - Online Sailing Schedules

For the latest Import Sailing Schedule or Export LCL Sailing schedule see the following links

Import FCL Sailing Schedule link
North America

Export LCL Sailing Schedule link 
Melbourne / Sydney / Adelaide
Brisbane / Fremantle

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