From 1 October 2018 Customs will have a new Act. The changes mainly affect our business customers. Find out what this may mean for your business.
Customs seeks to facilitate secure, low-risk trade with minimum disruption (in time and money) to traders.
In 2016/17 we processed 9.55 million import transactions,8 an increase of 14.5% from the 2015/16 total. There has been significant growth in recent years, mostly due to the increasing number of imports of low-value goods – so likely to be largely due to internet shopping.9 We also processed a total of 4.82 million export transactions, an increase of 40.5% from 2015/16.10
Customs promotes and facilitates secure and efficient trade and travel through formal customs partnerships, input to New Zealand’s Free Trade Agreements, and support for traders to benefit from those agreements. Our services in this area are essential to New Zealand’s economic competitiveness.
Free Trade Agreements
Free Trade Agreements (FTAs) establish rules and procedures to facilitate trade and provide preferential access into trading partners’ markets. Customs leads the negotiation of the customs-related aspects of FTAs. In 2016/17 we took part in negotiations of the Regional Comprehensive Economic Partnership and the Pacific Agreement on Closer Economic Relations (PACER Plus). These negotiations were concluded in 2016/17. We also participated in the upgrade of the New Zealand-China FTA (this work continues in 2017/18). In upgrading this FTA, Customs is focused on achieving significant practical gains through modernised Rules of Origin and Customs Procedures and Cooperation that will provide tangible benefits to traders while supporting recent bilateral customs initiatives, such as the Joint Electronic Verification System and the Mutual Recognition Arrangement, discussed below.
After an FTA is signed, Customs proactively supports exporters to understand and take up the opportunities offered by the agreement. In 2016/17 this included our continued ‘outreach’ programme to educate traders about the benefits available to them through FTAs and how to comply with FTA requirements – so they can claim preferential tariff rates and reduce costs. We also work with our counterparts in the partner countries to address any issues that may arise, and to ensure that trade from New Zealand is facilitated.
Facilitating trade and increasing assurance over exports
As well as the work relating to FTAs, Customs made progress in a number of other areas in 2016/17 to further support the growth of New Zealand’s exports.
Mutual Recognition Arrangements (MRAs) are formal arrangements between customs administrations that recognise each other’s supply chain security programme, and exports from MRA members as low-risk.11 Establishing a more secure and predictable supply chain provides significant trade facilitation benefits and reduced compliance costs for members of these programmes – with fewer border checks, reduced documentation requirements, and increased speed to market, as well as priority in trade recovery situations.
Customs signed an MRA with the Australian Department of Immigration and Border Protection (DIBP) in July 2016. We also negotiated an MRA with the General Administration of China Customs, which was implemented on 1 July 2017.
In 2016/17 we also progressed work towards the development of an innovative and sustainable service model for a Secure Trade Lane between New Zealand and Australia. This would provide a more streamlined and cost-effective customs clearance process for low-risk trans-Tasman trade, while maintaining the security of supply chains. The project encompasses a two-year programme of work by Customs and DIBP to develop and run a proof-of-concept and a small-scale pilot.
The Joint Electronic Verification System (JEVS) that Customs developed with China Customs went live in December 2016. The JEVS provides assurance to China that our exports qualify for tariff preferences under the FTA by enabling data to be exchanged electronically to validate certificates of origin. This streamlines and accelerates clearance procedures with our largest trading partner, helping to ensure that trade is facilitated into China for our exporters with minimal disruption. It also frees up Customs staff (in both New Zealand and China) to focus more attention on other border risks. In July 2017, the JEVS won the Excellence in Regulatory Systems Award at the Institute of Public Administration New Zealand’s Public Sector Excellence Awards in Wellington – the judges praised the JEVS for being “across jurisdictions; technologically innovative; with tangible results”.
Customs established a trade specialist post in Jakarta, Indonesia to support the growth of trade with the ASEAN region. The new post will reduce the risk of a disruption to trade through enhanced relationships with the relevant customs administrations, and providing targeted information to enable importers of New Zealand goods to claim preferential tariff rates under FTAs. The new First Secretary (Customs) commenced in the position on 1 July 2017.
8Import transactions include standard import, simplified import, sight import, periodic import, temporary import, and private import entries, together with import and tranship ECIs (Electronic Cargo Information). However, the import transactions total excludes import mail items.
9Part of the increase from 2013/14, however, is attributable to improvements in the recording of ECI import entries by the fast freight industry.
10Export transactions include export entries, drawback entries, and export ECIs – but exclude export mail items. The increase in the total (from 3.43 million in 2015/16 to 4.82 million in 2016/17) is principally due to an increase in the number of ECI consignments to China and South Korea.
11New Zealand’s supply chain security programme is the Secure Exports Scheme (SES).