ACBP Review of Border Fees, Charges and Taxes

On 17 September 2014 the Australian Customs and Border Protection Service (ACBP) issued its Industry Consultation Paper on the Joint Review of Border Fees, Charges and Taxes. The Consultation Paper set out certain goals and objectives for both industry and the regulator on the Review and the CBFCA provided a Commentary (see attached) on the joint Review in October 2014 with the key principle that,

“those who communicate with the ACBP in relation to international trade logistics and supply chain management for compliance and/or fiscal purposes need to have those identified and agreed costs to service requirements, in relation to regulatory needs, met by that respective service (user) or their respective clients.”

On 14 November 2014 in preparation for the Industry Consultation Session, on 17 November 2014 the ACBP released a set of Position Papers relating to certain ACBP propositions as to High Value Goods (see attached), Low Value Goods (see attached) and Broker, Depot and Warehouse Licensing (see attached). As referenced at the time, the purpose of these Position Papers was to:

present a “range of border-related fees, charges and taxes for stakeholder consultation. The Position Papers did not constitute a position of Government policy positions and options proposed in these Papers may or may not be progressed by Government including in part or as a whole. Considerations that will be taken into account in further developing options include how they interact with Australia’s rights and obligations under international agreements and treaties, any related Commonwealth legislation and other Australian Government policies and agendas.”

At the meeting on 17 November, the Papers were addressed, however in relation to the meeting, there was no guiding commentary as to how the ACBP levy of $330 million would be addressed in terms of the Department of Finance Australian Government Cost Recovery Guidelines (CRG) July 2014 which relate to current and future cost recovered activities.

In essence, the Industry Consultation Session was not about considering:
·         efficacy of the actual amounts recovered
·         services delivered
·         performance indicators on delivery
·         efficiency and effectiveness of cost to service
·         cost recovery models
or in fact, any key cost recovery principles other then the Propositions.

On the basis of this lack of  direction and guidance as to acceptance or otherwise of industry's position on cost recovery, the CBFCA on 20 November 2014 in correspondence with the ACBP stated:
“The CBFCA is mindful as to the requirements for the ACBP as to the Department of Finance. Australian Government Cost Recovery Guidelines (CRG) July 2014 on existing and future cost recovered activities. Notwithstanding the position put by the ACBP as to its cost recovery arrangements, the CBFCA perceives that the CRG is the guiding principle as to efficient, effective, transparent, and accountable stakeholder engagement through all stages of cost recovery activities.

It is these first principles that, in the opinion of the CBFCA underpin, any and all, of the discussions or work to the Industry Consultation Session and the Draft Position Papers tabled to the CBFCA at the meeting. This first round of discussions highlighted, for the ongoing attention of both the ACBP and stakeholders, issues that would require significant additional work to enable objective assessment to be made as to the manner and form of any cost recovery arrangements or proposed changes.

The CBFCA has in other places noted the significant level of objective information provided to industry (under any appropriate confidentiality agreement) to enable stakeholders to actively participate in cost recovery discussions. In particular, the CBFCA notes the work of the Department of Agriculture (DoA) Import Industry Finance Consultative Committee with its constructive and highly effective dialogue between the DoA and stakeholders in cost recovery work. It commends this approach to the ACBP in the work it is undertaking on its Review of Border Fees, Charges and Taxes.

While there was agreement in principle to certain Propositions put to the meeting, the CBFCA, as you will have noted, provided commentary as to those Propositions in that without substantive and transparent data to enable stakeholders to understand deliverables, to service, to cost or models for the recovery provided stakeholders are in no position to be able to provide any objective commentary as to cost, to service, to delivery and efficiency.

The CBFCA is willing to commit to, and work with, the ACBP on these outcomes under any confidentiality arrangements as required. To the CBFCA, this first round of discussions can only be regarded as exploratory and scenario testing. If the issue is to work towards a desired final position by February 2015 then significant work still appears to be done.

Where we are at this moment, on these issues does not in the opinion of the CBFCA, meet the CRG principles.”

What was apparent in relation to cost recover on import declarations, the $330 million recovered on the import declaration would continue, notwithstanding any particular position by industry, as to cost to service put and service deliverables or cross subsidisation.

The CBFCA could not, on the basis of the paucity of information provided as to any change whether it be for High Value Goods, Low Value Goods and in particular, changes to customs broker licensing changes, agree any change as put forward in the propositions.

The CBFCA will continue to work towards a more equitable and transparent cost recovery arrangement based upon CGR principles not withstanding other entities acceptance of the process.