A guide to customs clearance for Australian businesses

It can be difficult for Australian businesses involved in international trade to stay on top of the complexities of customs regulations, trade agreements and compliance requirements. Understanding the intricacies involved in customs clearance can mean the difference between a seamless process for shipments, or delays and frustrations when something goes wrong.

Vincent Condello is Customs Manager at Avion Australia and has 34 years of industry experience specialising in customs clearance, biosecurity and imported foods, GST, tariff concessions, bylaws and Tradex. He’s well-versed in helping businesses with some of the most common issues facing importers including customs clearance and free trade agreements.

“Customs clearance is a complex and very important part of the end-to-end logistics and supply chain puzzle,” he says. “A good customs broker will ask questions to assist in the correct goods identification.”

To help you better navigate this somewhat confusing legal landscape, here’s a guide outlining the key considerations for businesses involved in importation of goods into the Australian market.

Biosecurity: Safeguarding Australia’s borders

One of the critical aspects of customs clearance in Australia is biosecurity. As an island nation, Australia’s unique ecosystem is particularly vulnerable to the introduction of pests, diseases and invasive species. As such, Vincent says importers must adhere to strict biosecurity measures to prevent the entry of prohibited items, including imported foods.

“As prevention is better than cure, Australian Biosecurity invests in processes and policies to ensure that our agriculture industry is well protected,” he says.

Non-compliance with Australian biosecurity laws can lead to significant penalties for companies including:

• Financial penalties: Companies found in breach of biosecurity laws may be fined, with amounts ranging from several thousand to millions of dollars, depending on the seriousness of the breach.
• Seizure and destruction of goods: If a shipment is found to contain prohibited or restricted items that pose a biosecurity risk, Australian authorities have the power to seize and destroy the goods. The cost of disposal may be borne by the importing company.
• Suspension or revocation of import permits: Companies that repeatedly violate biosecurity laws may have their import permits suspended or revoked. This can significantly impact their ability to engage in international trade, leading to disruptions in supply chains and financial losses.
• Legal proceedings: Serious breaches of biosecurity laws can result in legal proceedings against the importing company, resulting in costly litigation, reputational damage and potentially criminal charges.

Vincent says the experienced team at Avion Australia can guide businesses through the necessary processes to ensure goods comply with Australian regulations.

GST: Navigating the tax landscape

The Goods and Services Tax (GST) is an important consideration for businesses involved in international trade. Importers are generally required to pay GST on imported goods, with a few exemptions and concessions.

Compliance with Australian GST requirements is crucial for several reasons. Firstly, it ensures that businesses fulfill their tax obligations, avoiding potential penalties and legal issues. Non-compliance can result in financial consequences, including fines and interest charges, which can significantly impact a company’s bottom line. Non-compliance can also mean reputational damage, strained relationships with authorities and disruptions to supply chains.

Understanding Australian GST requirements also enables companies to accurately factor in the tax costs when pricing their imported goods. Properly accounting for GST ensures that businesses maintain competitive pricing strategies and avoid unexpected financial burdens.

“Avion customs brokers are kept up to date with the latest amendments to GST. Whether it is GST exemptions or deferrals, we communicate with importers to ensure their GST liability is kept at a legal minimum,” Vincent explains. “GST deferral allows importers to have 30 days free credit with the ATO, provided that their BAS Statements are reported monthly, rather than quarterly, and they are done electronically.”

Tariff concessions: Enhancing competitiveness

International trade agreements play a crucial role in reducing trade barriers and facilitating smoother customs clearance processes. Tariff concessions are an integral part of these agreements, allowing importers to access reduced or eliminated duties on specific goods. It can be challenging to understand the intricacies of tariff concessions and leveraging them to enhance your competitiveness.

Vincent says that Avion’s experts have a deep understanding of trade agreements and can efficiently identify and capitalise on tariff concessions applicable to your goods.

“Avion customs brokers are equipped with a comprehensive software package that allows for automatic electronic tariff updates for duty rates, free trade agreements and tariff concessions,” he says.

“By communicating with the importers to gain a solid understanding of the type of goods being imported and asking the right questions, customs brokers can correctly identify the imported goods and determine if a valid tariff concession can be used for their goods.”

Bylaws and Tradex: Streamlining customs processes

In a bid to further streamline the customs clearance process, Australia has implemented specific measures including bylaws and the Tradex Scheme. Bylaws provide businesses with exemptions from certain customs regulations, enabling a more efficient and cost-effective clearance process.

Tradex is a government-implemented scheme that facilitates and expedites customs clearance for businesses involved in international trade. Designed to boost competitiveness while encouraging local manufacturing and processing activities, Tradex offers significant benefits to eligible businesses.

These include the temporary entry of goods for manufacturing, processing or repair purposes without paying customs duties or taxes. Avion Australia’s team can guide you through the application process for bylaws and Tradex, helping you to optimise your customs clearance procedures.

When it comes to international trade agreements, each free trade agreement has individual criteria and requires certain conditions to qualify. Says Vincent: “This area is often changing, and more and more countries are entering Free Trade Agreements with Australia. Direct shipment policies and individual certificates of origin are required to qualify for the preferential rates of duty. Some countries have a scaling rate of duty over certain years and others are duty-free.

“Avion customs brokers are highly trained and have the ability to ask the correct questions that allow importers to gain the benefit of preferential free trade duty rates.”

By working with a trusted partner, businesses gain access to expert guidance on key considerations such as biosecurity, GST compliance, tariff concessions, bylaws and the Tradex Scheme. Avion’s experienced team ensures that businesses comply with Australian regulations, minimise liabilities, optimise customs procedures and capitalise on available benefits. Partnering with Avion Australia allows businesses to navigate the landscape with confidence, ensuring smooth operations and avoiding penalties, disruptions and reputational damage.

For more information on how Avion Australia can assist your business with customs clearance and tariff concessions please get in touch.