Trusted Trader and National Committee on Trade Facilitation – where are we at? (NNF 2016/042)

The Trusted Trader Industry Action Group (TTIAG) meeting of 13 April 2016 saw some interesting and varied positions by the Department of Immigration and Border Protection (DIBP) on the Australian Trusted Trader (TT) concept.

Some of the key issues were:

• Aspects and discussions on assembly orders, as they relate to cargo reporting, have been moved out of the TT discussions and into the DIBP Compliance Advisory Group (CAG) (on which the CBFCA is a member), which reports to the National Committee on Trade Facilitation (NCTF) (under the First Assistant Secretary, Trade Customs and Industry Policy Division) which is responsible for policy, process determination and implementation.
• As to the requirements for service providers to become actively involved in becoming an Australian TT on the basis of their client working on that process, it should be noted that the DIBP has advised (and contrary to the position being espoused to service providers and traders by consultants and others trying to work within this space) that all service providers do not have to become a TT. So in the case where a licensed customs broker’s client wishes to become part of the TT and they are nominated as the clients’ customs brokerage, at this time, there is no requirement for them to undertake any application process (unless they wish to do so) for their client. The CBFCA pointed out to the DIBP that this was not the in the original TT concept, and the DIBP agreed that this was a change in direction/practice. It is clear now that licensed customs brokerages, when a client wishes to participate in the TT, are not necessarily required to undergo such an application process at the same time as their client who may wish to make an application to test the business efficiency and benefits of the TT. It is, however, clear that in order to complement the position of clients who may participate in the TT, that discussions with you as the service provider need to be undertaken as early as possible.

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• Discussions in relation to Streamlined Reporting and review of options and models tested the knowledge level of those who are not service providers and it was clearly apparent at the meeting that few had little, if any, understanding of the methodology or process for cargo report, entry and release. It is only those industry associations who understand these aspects who have the capability to comment on the proposals. The CBFCA led that discussion. One of the key elements in relation to Streamline Reporting is the issue relating to cost recovery, in particular those costs which are recovered through the DIBP Import Processing Charge (IPC). With any change in numbers or outflow of import declarations into the TT, then there will be a differing level of import declaration numbers over which the IPC would be able to be spread thus resulting in changes to the IPC for those importers who are not in the TT. The DIBP has advised unequivocally that there will be no cross subsidisation between the TT program and the traditional import clearance process. However, regulation now provides the opportunity for a variation in charges for the TT process (appropriately based upon the level of direct and indirect costs which relate to that process) as against the IPC for import declarations. While the DIBP may make comment that there will be no cross subsidisation, it should be noted that through the IPC there is already cross subsidisation to processes related to low value consignments, so perhaps the DIBP position of no cross subsidisation or variation to the IPC should be viewed in that light. The Working Group on Streamlined Reporting will reconvene at the end of April 2016 to review further work from the DIBP on the outcomes of its discussions with industry on the referenced models

• As has been clearly articulated and understood by the CBFCA (with a whole government inclusion in the TT), it is not the DIBP customs and security requirement which has created issues; it is clearly the biosecurity requirements of the Department of Agriculture and Water Resources (DAWR) being integrated into the TT which has caused, and will continue to cause, significant difficulties in implementation.

So, in summary:

• be mindful as to the needs of your clients who may wish to participate in the TT,
• ensure that they are briefed that when approached by the DIBP TT team and that you, as the service provider, are in attendance to provide balance to the “business benefits and cost saving” put forward by the DIBP and,
• when your clients are approached by consultants and others advising that unless they are in the TT program they will suffer significant disadvantages, that you, as their true service provider, be part of that discussion process also.

Significant work still needs to be done on the TT so keep abreast of what is being put forward by the regulators and your Association.

National Committee on Trade Facilitation

The NCTF, of which the CBFCA is a member, had its third meeting on 13 April 2016 and were provided with a variety of reports, in particular, the TTIAG outcomes, as well as some of the determination of Terms of Reference (ToR) for NCTF Working Groups. ToR for the NCTF itself, which had been discussed over the previous two (2) meetings, were tabled for acceptance. At this meeting there remained differences in opinion as to the ToR and how the NCTF would meet the requirements of the World Trade Organisation (WTO) Agreement on Trade Facilitation (ATF) Article 23.2 National Facilitation Bodies. This aspect has yet to be finalised, and while there is no requirement at law under the ATF to have a NCTF in place until that Convention is ratified by the requisite number of WTO members (at the moment 83 out of the requisite 104), it would be hoped that Australia, for its own international trade facilitation and economic betterment, could have an NCTF in place before it became a legislative requirement.

So, the NCTF also remains a work in progress.

Addressed at the NCTF meeting were:

• Single window: As to determining or defining exactly what a single window is and when, where and why it was required. While it was acknowledged that the DIBP Integrated Cargo System (ICS) is used as the single interface for industry to connect with regulatory agencies as to the clearance of goods, a whole of government response in relation to a variety of requirements in terms of permits and clearance were still being analysed. A trial in relation to permit application through the ICS in relation to CITES was being trialled to determine feasibility of permit application.
• Industry portal: The DIBP acknowledged that the access by industry to information on the current DIBP Website was less than optimal and work had been undertaken to address ways and means to finesse and facilitate information on the DIBP on the website to make it user-friendly and more operative orientated.
• Regulatory and Legislative Reform Working Groups: In ToRs of the respective Working Groups, it had been noted that there was a crossover between the work undertaken in either or both of these groups which would be more appropriately addressed within the newly created CAG and steps then would be taken to integrate regulatory arrangements into the CAG’s work programme.
  
   

So in a manner similar to the TTIAG, the NCTF remains a little adrift as to its focus and direction. The CBFCA observed that several members of the NCTF, as regards representation, overlap other representatives and it is not clear as to whether those parties are present to deliver on behalf of industry or their interests. However, it is clear that those industry associations which represent their members being service providers in international trade logistics and supply chain management have a different focus as to facilitation and trade improvement options. This will be an issue that the DIBP will have to manage where certain parties have split personalities on representing themselves, their clients, or in the capacity of a lobbyist.

Some interesting and fractious days ahead for the NCTF.