The CBFCA has been advised that there appears to be a problem within the Integrated Cargo System (ICS) in its recognition of free rates of duty applicable to a variety of tariff classifications under free trade agreements applicable to Malaysia, Korea, Japan and China. These appear to be applicable in relation to phasing dates and rates. The extent of the problem is unknown and as yet to be commented upon by the Department of Immigration and Border Protection (DIBP) which has been made aware of the apparent issues (however as advised it appears to have its genesis in the last round of phasing rates).

An example of the issue is tariff classification 2009.31.90, which was run as a test classification when the issue was identified in a member’s software. The ICS message response was that there is no applicable free trade agreement rate, which would have meant that a 5% duty applied. As members will be aware if goods if goods covered under a free trade agreement are not shown in the appropriate Schedule (s) to a specific FTA with an alternate duty rate then a free rate of duty applies.

Software service providers such as WiseTech Global are now aware of the problem and have been in contact with DIBP seeking early attention to the problem and an appropriate system rectification. WiseTech Global has advised that it proposes to run tests against other classifications and phased rates to ensure the validity and correctness of those phased rates. Until the problem is fixed members would be advised to ensure that import declarations are checked to ensure that FTA rates are correctly applied.

The DIBP has not responded as to the software provider’s commentary however this appears to be another lack of appropriate DIBP process integrity as members will be aware of the issues that occurred with the HS System changes on 1 January 2017 as well as a recent issues with the Australian Harmonised Export Commodity Classifications changes around the same time. Industry has not just an expectation, but a clear right, that the information provided by the regulator is timely and more importantly correct .

Members should note these issues accordingly and the CBFCA thanks member Sue Danks for bringing these issues to the CBFCA’s attention .