Platinum® explains how this continues to affect business imports
Importing goods from either Russia or Belarus to Australia brings a host of challenges, particularly when those goods are subject to a special 35% import duty. The Department of Home Affairs (DoHA) in 2022 implemented a special 35% import duty on goods originating from both Russia and Belarus as part of its response to geopolitical conflicts. This legislation, while necessary, places a significant financial and logistical burden on importing businesses.
Platinum® explains how this continues to affect individuals
Relocating to Australia from either Russia or Belarus brings a host of challenges, particularly when you transport your own personal goods. If your goods arrive with you (accompanied) at an Australian airport, all good – no issues.
If your goods arrive let’s say by air or sea unaccompanied (without you), then your goods are subject to a special 35% import duty. The Department of Home Affairs (DoHA) in 2022 implemented a special 35% import duty on goods originating from both Russia and Belarus as part of its response to geopolitical conflicts. In my opinion, this legislation has been expanded too far and has captured individuals who are transporting their unaccompanied personal goods to Australia; this places a significant financial burden on individuals.
Understanding the History of the Special 35% Import Duty
On 13 April 2022, the Department of Home Affairs (DoHA) issued a Notice of Intention to Propose Customs Tariff Alterations (NoItPCTA) (No. 4) 2022, made under section 273EA of the Customs Act 1901, to take effect from 25 April 2022.
On 14 October 2022, the DoHA issued another NoItPCTA (No. 7) 2022, made under section 273EA of the Customs Act 1901, to further extend the earlier NoItPCTA No.4 to take affect from 25 October 2022.
NoItPCTA No.7 will expire (at the moment) on 24 October 2025.
The purpose of the above two NoItPCTA’s were to subject imports from both the Russian Federation (Russia) and the Republic of Belarus (Belarus) with a special 35% import duty.
Prior to the two NoItPCTA’s being issued, imports from both Russia and Belarus would have been charged import duty as per the Customs Tariff Act 1995, which could have been zero at the least or say 5% for the majority of other items.
When the NoItPCTA came into force in April 2022, all imports from both Russia and Belarus would be assessed for the standard duty rate, then be applied with the special 35% import duty and then the standard GST.
Practical Issues with the NoItPCTA’s
I have no issue with the Department of Home Affairs issuing the NoItPCTA for commercial imports between Russia, Belarus and Australia.
I do however have an issue that in drafting these NoItPCTA’s that individuals with no fault of their own were captured amongst these NoItPCTA.
The Australian Border Force (ABF) advised that the only goods that would be exempt from the special 35% import duty would be:
- Items 9, 10 and 14 – goods for international organisations, foreign governments and goods for use in the Eastern Greater Sunrise Offshore area
- Item 15 – goods of passengers, members of crews of ships or aircraft, and goods of the forces of certain countries
- Items 16, 17, 18, 19 and 20 – goods exported for repair, exported and re-imported in an unaltered condition, and replaced goods
- Item 25 –goods that are trophies, decorations, medallions, certificates or prizes
I take you to the above item 15 exemption; if a passenger arrives in Australia from either Russia or Belarus, they are not to be charged the special 35% import duty for their accompanied goods. This is common sense.
Unaccompanied Personal Effects (UPE)
What is not common sense is that if an Australian citizen or Australian Permanent Resident transports their unaccompanied personal goods, which they have owned and used for the previous twelve months from Russia or Belarus to Australia, that same individual was and is still required to itemise every single item that they have transported to Australia so that the ABF is satisfied that the special 35% import duty is paid.
If the unaccompanied personal effects are under $1000 AUD in value, the goods still need to pay the standard 5% import duty (in most cases), the special 35% import duty and the 10% GST.
If the unaccompanied personal effects are over $1000 AUD in value, the goods need to pay the standard 5% import duty (in most cases), the special 35% import duty and the 10% GST.
This was and is still dysfunctional.
We have had shipments which contained, hand written letters, home videos, photos, photo frames, clothing, ornaments, glasses, textiles and other household items, and the 150 line packing list needed to be expanded to nominate a value for each item so that the unaccompanied personal items could be assessed for three taxes (import duty, special 35% import duty and 10% import GST).
Reflection – Question 1
Did the Department of Home Affairs intend that the NoItPCTA’s were created to penalise both Australian citizens and Australian Permanent Residents with this intention? I would hope not, but after dealing with the Australian Border Force, they demand that the unaccompanied goods are assessed for the three taxes.
Reflection – Question 2
Did the Department of Home Affairs intend that the NoItPCTA’s were created to penalise both Australian citizens and Australian Permanent Residents when their parent or grandparent passed away in either Russia or Belarus and the subsequent items from their parent’s or grandparent’s house were transported to Australia to be assessed with three taxes? I would hope not, but after dealing with the Australian Border Force, they demand that the goods are assessed for the three taxes.
Importing Scenarios – Russia – Belarus to Australia
Scenario 1
An Australian business imports commercial goods from Russia or Belarus. The goods arrive by air or by sea. The goods are listed as zero duty in the Customs Tariff Act 1995. The goods need to pay the special 35% import duty. The goods will also need to pay the 10% import GST.
Scenario 2
An Australian business imports commercial goods from Russia or Belarus. The goods arrive by air or by sea. The goods are listed as 5% import duty in the Customs Tariff Act 1995. The goods need to pay 5% import duty and the special 35% import duty. The goods will also need to pay the 10% import GST.
Scenario 3
An individual imports goods for their personal use from Russia or Belarus. The goods arrive by air or by sea. The goods are over $1000 AUD, the goods are listed as zero duty in the Customs Tariff Act 1995. The goods need to pay the special 35% import duty. The goods will also need to pay the 10% import GST.
Scenario 4
An individual imports goods for their personal use from Russia or Belarus. The goods arrive by air or by sea. The goods are under $1000 AUD. The goods need to pay the duty as listed in the Customs Tariff Act 1995 and the special 35% import duty. The goods also need to pay the 10% import GST.
Scenario 5
An individual imports goods for their personal use from Russia or Belarus. The goods arrive by air or by sea. The goods are over $1000 AUD. the goods are listed as zero duty in the Customs Tariff Act 1995. The goods will need to pay zero import duty and special 35% import duty. The goods will need to pay the 10% import GST.
Scenario 6
An individual imports goods for their personal use from Russia or Belarus. The goods arrive by air or by sea. The goods are over $1000 AUD. the goods are listed as 5% duty in the Customs Tariff Act 1995. The goods will need to pay 5% duty and special 35% import duty. The goods will need to pay the 10% import GST.
Scenario 7
An individual imports their Unaccompanied Personal Effects (UPE) from Russia or Belarus. The goods have been owned and used for more than twelve (12) months. The individual is either an Australian citizen or an Australian Permanent Resident. The ABF requires values to be given to every item in the shipment. Whether the goods are under $1000 AUD or over $1000 AUD, 5% import duty (in most cases) will need to be paid. The ABF will also require the special 35% import duty to be paid. The goods will also need to pay the 10% import GST.
Scenario 8
An individual imports their deceased parent’s or grandparent’s items from Russia or Belarus. The ABF requires values to be given to every item in the shipment. Whether the goods are under $1000 AUD or over $1000 AUD, 5% import duty (in most cases) will need to be paid. The ABF will also require the special 35% import duty to be paid. The goods will also need to pay the 10% import GST.