TradeLane

Is the Trusted Trader Program (TTP) the beginning of a “new trade era” for the Down Under?

You might be asking “What is it and how is it relevant to me?” The idea is that it is a modernized system developed by both Australian Customs and Border Protection (ACBPS) to enhance the competitiveness of Australian traders by relieving unnecessary administrative and regulatory burdens, whilst still protecting the borders from associated risk.  The process being designed is in accordance with the trade facilitation measures outlined in the World Trade Organization’s Trade Facilitation Agreement, also known as the SAFE Framework.

The TTP will provide some clearance privileges to recognized trusted traders. In simple terms, think of the TTP as a relationship with the ACBPS built on trust and shared responsibility. Sounds like a marriage, right?

Often when I ask importers about their duty liability the response I receive is, “Yes… but its only 5%.”  Well if I had 5% of the 5% for every time I ask…. you get the picture.  Whilst the duty paid on individual importations may not amount to a substantial cost, over time the “only 5%” can add up to significant sums.  If you are still not convinced, consider what’s more challenging: expanding your sales to increase net profit by 5%, or reducing the cost of the imported product through duty mitigation?

I suspect many of you have continued reading, so allow me to introduce a valuable duty mitigation method: the Tariff Concession System. In Australia the Tariff Concession System was designed to help industry become more competitive in the international markets by allowing duty-free importation of certain products that are eligible for a Tariff Concession Order (TCO).  Upon application, a TCO is made in respect of goods if substitutable goods are not produced in Australia, in the ordinary course of business.  In this context, substitutable goods are Australian produced goods which have a use corresponding to a use of the imported goods. A number of goods are excluded from TCO eligibility, such as clothing, foodstuffs and some passenger motor vehicles.