Key findings from Australian Border Force’s 2023 Goods Compliance update

The latest release of the Australian Border Force (ABF) Goods Compliance Update sheds light on some of the ABF's focus areas in customs law enforcement and compliance activities. Some key points from the ABF update include:

Customs valuation tops the list of errors reported by importers during the first quarter of FY24

Of the thousands of customs import declaration lines checked by the ABF in FY23, a disturbing 26.8% had errors. The error rate in the first quarter of FY24 worsened to 30.9%. The ABF can apply penalties for errors even where there is no loss of duty, so this is a worrying trend for importers.

The highest error rates were related to the valuation of goods, which can be complex. It is therefore important to seek advice from professionals with solid experience in customs valuation, which can assist with determining the correct interaction of customs valuation with transfer pricing, royalty arrangements, commissions, consignment stock arrangements and other factors that impact customs valuation.

Split consignments, structured ordering and undervaluation

The ABF noted a rise in supplier-initiated split consignments and undervaluation through the misuse of Self-Assessed Clearances. To address this, importers and service providers who become aware of splitting single consignments of AUD1000 or greater into multiple consignments with values less than AUD1000 are advised by the ABF to:

• File a full Import Declaration for aggregate consignments exceeding AUD1000
• Ensure accurate reporting, duty, and tax compliance through collaboration with professional service providers, and
• Verify the accuracy of documents provided by suppliers for import declarations.

In our experience, when owners voluntary disclose inaccurately reported large shipment volumes, it helps protect them from possible penalties imposed by the ABF.

Focus on gold and jewellery reporting

The ABF is intensifying efforts to enforce compliance regarding correctly reporting jewellery, luxury watches, gold, and precious metals. Penalties for breaches, primarily related to undeclared and undervalued goods, have been imposed by the ABF and can be significant. Key reminders to importers include:

• Full import declarations should be lodged and paid before declaring hand-carried goods by incoming passengers
• Ensure gold jewellery and gold are correctly valued using one of the legislated methods of customs valuation, and
• Ensure items are not misclassified as scrap precious metals to evade customs duty and GST, which has been the subject of recent litigation.

The valuation of gold where there is no import sales transaction and the use of relevant concessions for returned stock and repaired items can be complex. We encourage our clients to seek professional advice in these areas to prevent falling foul of the customs legislation and associated penalties.

Need assistance?

Contact our National Customs, International Trade and Excise team for comprehensive support on Customs and International Trade matters.