Duty Free

  • Duty Free

    Australia has entered into a number of Duty Free Trade Agreements with various countries. These agreements provide for the preferential rates of duty,for goods traded between these countries and Australia. Every trade agreement sets out particular the rules, that determine, what goods are eligible for duty free or preferential duty free rates.

    The Free Trade Agreements specify how to decide, on the origin of the goods and have the agreed rules to determine on what goods are eligible for free or preferential entry under Australia’s trade agreements and other duty free preference schemes.

    Rules of Origin

    ARE the rules to determine the origin of goods and they apply to all the free trade agreements and preference schemes in order to distinguish. “The eligible ‘originating goods’,from the ineligible goods.”

    There are various types of Origin rules used in the different agreements and for different types of goods.

    The most common rules are described briefly below:

    1. Wholly Obtained

    This basic rule is common to all agreements. If a product is a naturally occurring product of the country, or is made entirely in that country out of materials from that country, the good is considered originating in that country.

    1. Change in Tariff Classification

    This rule refers to the Harmonized Commodity Coding and Classification System (HS) used in the Customs Tariff Act. The HS system categories all goods and assigns them a code so that goods can be consistently identified internationally.
    This rule requires that the HS classification of the final good imported from the preference country is different from the HS classifications of the materials, imported into that country, that were used to make the good.

    1. Regional Value Content

    This rule requires that a threshold amount of the final value of the good is attributable to production costs within the country.  They can be calculated in various ways and these are specified in each agreement that uses them. This is a form of Value-Added rule and is sometimes known by that term.

    1. Process Rule

    This rule requires the final good to have undertaken a particular manufacturing or processing operation in the preference country.

    1. Final process of manufacture

    This rule requires goods to have undergone their final process of manufacture in the preference country prior to importation into Australia.

    1. Consignment

    These provisions allow for the transport, and certain minimal procedures, of final goods through other countries on their way to Australia so that the final process of manufacture rule is not breached.

    1. De minimis

    This rule allows for a specific amount of foreign/non-originating material to not meet the relevant ROO. The relevant amount is set out in the relevant legislative provisions for each Agreement.

    The objective of all the different types of origin rules is to properly limit preferential rates of duty to goods which either wholly originate from the preference country, or which have undergone substantially transformation in that country.

    WORLDWIDE more than just Freight Forwarding