CHAFTA PHASING RATES – REDUCTIONS 1 JANUARY 2017
As previously communicated, the China Australia Free Trade Agreement (CHAFTA )is a commitment between the Australian and Chinese governments to reduce duty rates for trade between the two countries to zero. Whilst many commodities’ duty rates were reduced to zero at the time of CHAFTA’s introduction, other rates are ‘phasing down’ on an annual basis. As we approach the new year we again find some products, particularly those in the textiles, clothing and footwear sector, will benefit from a reduction in duty rates on January 1, 2017. Such reductions will only take effect for those Customs import declarations lodged on or after that date. This presents options to potentially consider for importers whose products will be affected by the duty reductions.
The most obvious option would be to delay movement of any affected consignments so that they do not arrive prior to January 1st, 2017. There are however alternate measures which importers may like to consider, such as simply leaving shipments to incur storage until January 1st (when an import declaration can be lodged at the lower rates), provided the duty savings are greater than the storage amount accrued. Alternatively, consignments may be moved “underbond” which is a Customs approved movement from the wharf or delivery terminal into a Customs approved warehouse where they can be stored until clearance on January 1st. Such movements are often more cost effective than simply leaving the freight where it arrives as storage charges can be excessive at the wharf or terminal.
BR International can assist with any option and are happy to accommodate any requests. Prior to making a decision it is recommended that affected importers weigh up costs involved as opposed to duty savings and consider all options.
For further information in relation to tariff headings affected or storage/movement costs which may be incurred we recommend making contact with your customer solutions representative.
Keeping you updated,
BRi Customs Department
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