Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Hansard source

Labor supports the passage of the Customs Amendment (Australian Trusted Trader Programme) Bill 2015. This bill essentially establishes a quality assurance framework for trading entities that operate within the customs framework within Australia. It provides the legislative framework for the establishment of the Trusted Trader Program from 1 July 2015. In June 2005, the World Customs Organization established standards to secure and facilitate global trade, which are known as the WCO SAFE Framework. The SAFE Framework introduced standards that promote supply chain security and trade facilitation at a global level to allow certainty and predictability of trade moving across international borders. The creation of the SAFE Framework was described by the WCO as 'a historic occasion upon which implementation would act as a deterrent to international terrorism, secure revenue collections and promote trade facilitation worldwide'.

The concept of a Trusted Trader Program, or a security and quality assurance framework, has been adopted by all of Australia's major trading partners—including the United States, Canada, New Zealand, Japan, China and the European Union—over the last 10 years. Essentially what we are doing here today is ensuring that our customs framework complements and works in conjunction with other supply chain frameworks throughout the world—in particular, those of our closest trading partners. It is through the WCO SAFE Framework that the promotion of standards that enable a harmonised and integrated approach to supply chain management for all participants is sought. Consistent with the WCO SAFE Framework, the Australian Trusted Trader Program will introduce a differentiated trust based regulatory framework at the border for those entities that meet or exceed international supply chain security and trade compliance standards. Entities meeting those standards will be assessed as 'low risk' and will benefit from reduced regulatory burden and streamlined customs processes. This will alleviate a significant trade burden and enhance the competitiveness of Australia's international businesses.

The previous Labor government, under the former Minister for Home Affairs Jason Clare, released in July 2013 the Australian Customs and Border Protection Service Blueprint for reform 2013-2018. It was in that document that the notion of the Trusted Trader Program was first highlighted. The blueprint said:

Recognising our role supporting economic prosperity and protecting the community, we also support the World Customs Organisation's framework of standards. This framework focuses on cooperation and collaboration between customs administrations and industry in managing the whole-of-trade supply chain.

While the Australian Trusted Trader Program is a trade facilitation initiative based on internationally recognised supply chain security and compliance standards, it contributes to a holistic compliance framework as an important element of the compliance continuum. That provides a better understanding of the entities moving goods across our borders. This strategy will basically work to 'shrink the haystack' by removing trusted entities from traditional transaction based border risk assessment. But I must point out that border risk assessment predominantly relates to administrative processes around the priority of assessment for tariff rulings, the return of customs duties and the like; it does not affect the tests that are ordinarily applied by agencies such as the Australian Federal Police or biosecurity and security tests of any imports coming into Australia.

The program and the agreements that entities within the industry will sign up to have been developed in consultation with industry. In August 2014, Customs established an industry advisory group to provide advice, feedback and input into the design and development of the Trusted Trader Program. Industry groups such as the Australian Federation of Freight Forwarders, the Australian Industry Group and the Australian Peak Shipping Association were involved in that peak body, as well as large firms such as Boeing, Fletcher International Exports, GM Holden Ltd, HP Australia, IBM, Ikea and Qantas. So the approach that is being taken in this bill has the support of industry in Australia who work in the customs framework.

The main amendments in this bill allow for the creation of Trusted Trader agreements. This allows an entity to nominate themselves to participate in the Australian Trusted Trader Program. That will allow the Comptroller-General of Customs to enter into a Trusted Trader agreement with an entity which will provide administrative benefits to that entity if the entity nominates itself to participate in the program and the Comptroller-General of Customs considers that the entity is reasonably likely to satisfy the qualifications set out in the rules, the qualification criteria.

It is at that point that the entity is given provisional agreement, and no privileges extend at that particular point. It is then up to the entity to prove that it meets the minimum qualifications for certification as a trusted trader. Once that has occurred—once those tests have been done and accreditation has been provided—that will then allow the Comptroller-General of Customs to vary the agreement to provide those additional administrative benefits and legislative benefits under part 4, other than division 1, and part 6, other than division 1, of the Customs Act, if he or she is satisfied, as to the validation of the qualifications criteria, that the entity satisfied the qualifications criteria set out in the rules, and to provide that agreements may be subject to conditions prescribed by the rules and terms and conditions specified in the agreement. That will then allow the Comptroller-General to vary, suspend or terminate an agreement unilaterally if he or she reasonably believes that the entity has not complied, or is not complying, with any condition prescribed by the rules or a term or condition specified in the agreement.

The program also allows a decision of the Comptroller-General of Customs to refuse to enter into a trusted trader agreement to be a decision that is subject to review by the Administrative Appeals Tribunal. The legislation also allows a decision of the Comptroller-General of Customs to refuse to vary a trusted trader agreement to be a decision subject to review by the AAT. The program also allows a unilateral decision of the Comptroller-General to vary, suspend or terminate a trusted trader agreement to be a decision that is subject to review. It also allows the Comptroller-General to maintain a public register containing information of a kind prescribed by the rules in relation to each trusted trader agreement entered into, and allows the Comptroller-General of Customs to prescribe rules, by legislative instrument, for and in relation to the operation of the program.

In terms of the qualification that an entity must meet to be considered for, or to be certified under, the trusted trader agreement, those qualification criteria will be included in the program rules, and the rules will be a legislative instrument, which will be subject to parliamentary scrutiny and disallowance. The qualification criteria have been developed having regard to international best practice. The criteria set out in annex III of the World Customs Organization SAFE Framework of Standards to Secure and Facilitate Global Trade and the WTO Agreement on Trade Facilitation are all covered by the proposed rules associated with this program. The qualification criteria to be set out in the rules will require that an entity undertakes activities that form part of the international supply chain; has been operating in the international supply chain for a minimum of two years before submitting their nomination; and is a lawful or legally standing association, corporation, partnership, proprietorship, trust or sole trader that has the legal capacity to enter into agreements or contracts, assume obligations, incur and pay debts, prosecute and be prosecuted in its own right and be accountable for illegal activities. The entity must also have an Australian Business Number, and have completed a security risk assessment that is periodically reviewed by the entity and identifies risks specific to their international supply chain activities and identifies measures that the Comptroller-General of Customs considers are adequate to mitigate those risks in respect of integrity.

The entity must also meet the following requirements relating to criminal history of the principal owners or directors of the entity, or any other person within the entity that is critical to the integrity of the international supply chain. The entity must meet certain financial viability requirements and the entity must be able to meet its financial obligations when they fall due. The entity's record-keeping system is scrutinised and the entity must keep records that contain meaningful and useful information demonstrating compliance with Customs-related laws and records must be secured from misuse and unauthorised access. Also, as to the accuracy and timeliness of communications regarding the importation or exportation of goods, the entity must demonstrate that they have adequate procedures in place to ensure that the communications made regarding the import or export of goods are accurate and secure and submitted in accordance with relevant statutory time frames. The entity must also prove supply chain security standards—namely, that the entity has, having regard to the entity's role in the international supply chain, adequate security measures relating to logistical procedures for security, physical security, cargo unit security, personnel security, third party and business partner security—and, finally, that the entity has trade compliance standards as to the entity's compliance with a Customs-related law as defined in section 4B of the Customs Act.

The Trusted Trader Program initially will be piloted by Customs and Border Protection, and the Trusted Trader Program will exist in a pilot phase for the first 12 months of its operation. It is expected that 40 companies who work in this space will be involved in that pilot. There are benefits that will flow to an organisation during the pilot phase, once they have met the initial compliance standards and have been granted trusted trader status by the Comptroller-General and they have had their agreement varied. Those benefits will flow to the particular entity once those processes have been fulfilled.

The processes are: enhanced client services through the provision of a departmental account manager; priority trade services, such as priority processing of advance rulings in relation to tariffs, origin and valuation advice, internal reviews of tariff advice and processing of refunds of Customs duty or a duty drawback; and reduced examinations which, as I mention earlier, are subject to security assessment and do not undermine processes that already take place in respect of the role of the Australian Federal Police and other security agencies.

On the whole, this is a reform that will ensure that Australia's Customs and supply chain government procedures align with world's best practice through the WCO SAFE Framework. It will align our practices to ensure that they are streamlined and will work in concert with the processes of our major trading partners. On that basis, Labor is happy to support this amendment to the Customs legislation.

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