Direct consignment rules in Free Trade Agreements
A US manufactured viscous liquid solvent being imported into Australia was ruled ineligible under the 'direct consignment' criterion of the FTA between Australia and the US (AUSFTA).
Under this rule, products transported through a country other than the US or Australia and which undergo any process of production in that country (other than unloading, reloading, any operation to preserve them in good condition or any operation that is necessary for them to be transported to Australia) are ineligible for the concession.
The product was bulk-shipped from the US to an intermediate country, being the Asian hub for the US manufacturer. There, it was pumped from the bulk vessel into a holding tank at the port before then being pumped from the holding tank into 170 litre drums when the Australian client placed small orders on the US manufacturer.
We successfully argued that the drumming operation at the Asian hub was necessary for the product to be transported to Australia so the product retained its US origin status. This entitled the client to a $500,000 refund of customs duty.
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Rules of origin in Free Trade Agreements
Spectacles produced in a south-east Asian country from lenses manufactured in that country with 'non-originating' frames sourced from country Z did not comply with the 'rules of origin' criteria under the FTA 'rules of origin' between Australia and the south-east Asian country so were ineligible for a customs duty concession.
However, we confirmed that the spectacles met the 'rules of origin' criteria under the FTA between Australia and the ten ASEAN countries so the client was entitled to use this alternative FTA in order to reduce the 5% customs duty on spectacles imported into Australia to 0%.
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TCO eligibility
Imported synthetic beads were ruled ineligible for a Tariff Concession Order which had been drafted with tolerances which the industry did not generally use in specifying these types of products. Working with the client, we produced evidence that the beads matched the tolerances and the client claimed a customs duty refund in excess of $400,000.
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Representation in reviewing administrative decisions
We lodged a TCO application for specialised equipment that a large mining company was importing for one of its projects on the basis that substitutable goods were not produced in Australia in the ordinary course of business.
An Australian company lodged an objection to this application claiming it did produce such equipment and our application was rejected.
However, we appealed the decision and through representation and the lodging of a number of submissions, we provided sufficient facts indicating that the claim by the Australian objector could not be substantiated. Subsequently, the decision to reject our application was reversed.
Once the TCO was made, our client was entitled to a refund of $2.2 million in customs duty it had paid in the interim to clear the goods for home consumption.
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