The Australian Trusted Trader Program will create a new framework for the interaction between the Department of Immigration and Border Protection (the Department) and importers and exporters. For those within the Australian Trusted Trader Program, the Department will have the ability to provide flexible outcomes regarding formalities associated with the import and export of goods and payment of duty. This could produce great improvement in supply chain efficiency and costs.
Below we set out what you can be doing now to assess whether the Australian Trusted Trader Program is right for your business and enable your business to become accredited.
WHAT IS THE TRUSTED TRADER PROGRAM?
Under the Australian Trusted Trader Program participants will receive trade facilitation benefits in exchange for demonstrating a high level of trade compliance and supply chain security. The program will adopt a tiered model with the available benefits being linked to the tier of the participant.
Initial qualification will be by completion of a self-assessment questionnaire. This will qualify a participant for an interim tier 1 status. Within 12 months the Department will undertake a physical audit which may lead to tier 2 or tier 3 status. Accreditation at any status will require participants to enter into a Trusted Trader Agreement with the Department which will set out the available benefits and obligations of the participant.
A pilot of the program will commenced in July 2015 with 4 exporters. The pilot will expand to cover 40 importers, exporters and service providers by mid-2016. The program is expected to officially commence in mid-late 2016.
IS THE TRUSTED TRADER PROGRAM RIGHT FOR YOUR BUSINESS?
The Australian Trusted Trader Program is voluntary and there should be no adverse consequences from not taking part in the program. Therefore, businesses will need to identify sufficient benefits of accreditation to justify any additional work involved in becoming accredited and maintaining that accreditation. Given Australia already has a strong reputation for being trade facilitative, many companies will continue to be able to efficiently import and export without becoming accredited.
What are the benefits?
The intended benefits of accreditation in the Trusted Trader
Program are listed below. However, it is important to
remember that the benefits are not set and the program has the
flexibility to provide bespoke benefits for particular
members. If you have a unique customs issue, the Trusted
Trader Program may provide the Department with the flexibility to
produce a tailored solution.
Key benefits include:
- The ability to defer payment of customs duty
- Streamlined reporting of the entry of goods (currently reporting is on a per consignment basis)
- Recognition as a trusted trader under the equivalent programs operating in other countries
- A differentiated compliance approach by the Australian Border Force (less intervention in the supply chain)
- A dedicated relationship manager from the Department
- Head of the queue status for services by the Department
- Recognition in Free Trade Agreements
Not all benefits will be immediately available and not all trusted traders will be entitled to all benefits. For instance, it is expected that streamlined reporting will only be available for those traders that adopt world best supply chain and trade compliance practices.
Cost benefit analysis
The key initial step is to undertake an analysis of the costs involved with accreditation compared to the benefits. There are some companies that generally have very secure supply chains because it is a business imperative (pharmaceutical, food manufacture, high value goods, alcohol/tobacco). Equally, there are companies that have traditionally been subject to high duty rates and will have a greater level of trade compliance resources (automotive, clothing and textiles, plastics). These companies may find that very few changes are required to qualify for the Trusted Trader Program.
In addition, multinationals may find that they are already adopting global polices based on foreign Trusted Trader/AEO Programs that position them well to qualify for the Australian program.
HOW WE CAN HELP
Trusted Trader Accreditation involves overlapping legal, customs and logistics issues. You cannot adequately advise on this area without a deep understanding of international supply chains and customs compliance. Our dedicated Customs and Global Trade practice group is uniquely positioned to help you:
- Assess the benefits of the Australian Trusted Trader Program for your company
- Identify strengths and weaknesses in your supply chain security
- Audit your level of trade compliance and manage disclosure of any non-compliance
- Facilitate involvement in the pilot program
- Assist with the expression of interest and completion of the self-assessment questionnaire
- Lead meetings with the Trusted Trader Branch and attend on-site Trusted Trader audits
- Identify changes to current supplier and service agreements that will help provide the Trusted Trader Branch with confidence regarding the security of your entire supply chain
- Identify existing practices and policies that will support a claim for Trusted Trader Accreditation and audit compliance
- Draft internal trade compliance and supply chain security policies and manuals
- Negotiate and review proposed Trusted Trader agreements.
- Negotiate the granting of bespoke benefits.
- Provide staff training on the requirements of the Trusted Trader program to help ensure accreditation is maintained.
While the Trusted Trader Program may not start in full until mid-2016, accreditation requires two years of past trade compliance. Therefore, future applicants need to act now to ensure eligibility for the program in 2016-17.
WHY HUNT & HUNT
Our Customs and Global Trade team collectively has more than 20 years' experience in customs and international trade issues. Most recently we have been taking part in Trusted Trader discussion panels alongside the head of the Trusted Trader Branch and representatives from the Department of Agriculture. Further, in conjunction with the industry association Freight & Trade Alliance, we have contributed to the development of the Trusted Trader Program and taken part in the Industry Advisory Group that assisted Customs in developing the program.
Unlike many customs consultants whose primary experience is in lowering duty costs and obtaining refunds, we specialise in customs compliance. Our team has experience in conducting international trade compliance audits of some of Australia's largest importers. We also have significant experience in responding to external Customs audits. Importantly, we can identify the areas that will be of greatest concern to the Trusted Trader Branch when reviewing your application to be a Trusted Trader.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
