New Year, new website

It’s a New Year and to celebrate the occasion we have updated our website.

It is now mobile friendly so it should render on any of your devices, whether desktop, notebook/laptop, tablet or mobile ‘phone. Some of the links on the Business Links page had either out of date taxonomy or the links were broken, so that page has also been fixed.

Enjoy the new look!

© Lighthouse Agencies Pty Ltd. All rights reserved.

Please vote for us!

Lighthouse Agencies Pty Ltd website has been nominated (by a person or persons unknown, however I sincerely thank you, whoever you are, for your nomination) in the “Local Legend” category at Kochie’s Business Builders – Rescue My Site in a competition to win a web and search marketing package valued at AU$25,000.00. The competition is being run during Season 8 of the Kochie’s Business Builders program aired on Channel 7 on Sunday mornings.

More details can be found at: http://www.rescuemysite.com.au/nominations/lighthouseagencies-com-au

Please check it out and vote for Lighthouse Agencies Pty Ltd (lighthouseagencies.com.au)

© Lighthouse Agencies Pty Ltd. All rights reserved.

Welcome!

Are you importing to, or exporting from, Australia?  Are you thinking about importing or exporting and looking for advice about the procedures and costs? Then you’ve come to the right place.

Our services cover a wide range of import and export related activities (such as customs and quarantine clearances, ocean or air freight, local transport, permit or licence applications, etc.) and we can provide assistance at or up to any point, from the start during your initial planning stages all the way through to final delivery of the goods on arrival. No matter whether your import or export is big or small, Lighthouse Agencies Pty Ltd is here to help.

Information and articles on this site are now in the form of blog posts which enable readers to post comments (for security purposes and to prevent spammers, you will need to register and be approved before you can post). Current articles can be selected by clicking on an underlined date in the calendar on the right.  All the articles that were in the previous website archives have been brought across. To view them, simply scroll down this page and either use the search box, or flick back through the calendar, or select from the list of “Recent Posts”, or select from the dropdown box under “Archives”. If you experience any difficulties with posting a comment, or with any other facet of our website, please Contact Us.

There are a variety of links to web sites related to our area of commerce, under Business Links. This list is by no means comprehensive – our aim is to incorporate links to the main sites that our clients and other visitors to this site might find helpful. We are happy to consider linking requests from service providers and suppliers of information services to the Customs and freight forwarding industries. Please contact the Webmaster (go to our Contact Us page for details) for further information.

The link Resources & Documents will take you to a page where there are documents or other resources our clients may find useful, such as sample Department of Agriculture and Water Resources (“DAWR”) Biosecurity packaging declarations.

© Copyright Lighthouse Agencies Pty Ltd – All rights reserved.

Customs Brokers Recognised As A Valuable Profession

In a previous article, Increased Security Arrangements For Ports And Airports, I pointed to the new Conditions being added to the Licences of individual Customs Brokers.

One of these requirements is that Customs Brokers must undertake a program of Continuing Professional Development (“CPD”) in between their licence renewal dates (licences are renewed every 3 years). The requirement is that a Customs Broker must attain 30 CPD points each year during the triennium that their licence is valid for. Training courses must be submitted to Customs for assessment and approval before the course will be accredited for the purposes of counting towards a Customs Brokers’ CPD points. Once accredited the course is given a “Course Number” and points allocation. However, because of the short lead time given by Customs for the introduction of this new requirement, Customs allowed a grace period to enable various training organisations to set up their training courses and have them accredited by Customs. So, the accumulation of CPD points commenced on 1 April, 2013, and in the period to 31 March, 2014, Customs Brokers only need to acquire 15 CPD points. However, from 1 April, 2014, to 31 March, 2015, they will need to accumulate the full 30 CPD points for that year. Customs recognise that one hour of accredited training will equate to 3 CPD points meaning a Customs Broker must attend a minimum of 10 hours of approved training during each 12 month period. Further, the points are required to be accumulated in 3 specified “streams” of study covering Customs Broker obligations, risks and ethics, professional brokerage skills, and Customs brokerage management. Customs require that Customs Brokers retain a written record of the courses attended and the points achieved for successful completion of each course, and Customs Brokers might be asked at any time by Customs to produce the record(s) of CPD points achievements.

In the lead up to the commencement date of the new CPD requirements for Customs Brokers, Customs publicly acknowledged (in Australian Customs and Border Protection Service Notice 2012/37) that Customs Brokers are considered as practitioners in “a distinct and valuable profession.” Customs Brokers are now viewed by Government in a similar light as other professions such as the accounting and legal professions. It has taken many years to reach this point, and it is gratifying that the efforts of the industry as a whole have contributed to this recognition of how professional the industry has become. Just as importantly, the efforts of those in the industry that have tirelessly worked towards this recognition must be applauded. No longer are Customs Brokers considered a collective of blue-collar types simply processing bits of paper and organising cargo deliveries. It is to be hoped that this new recognition of the status of a Customs Broker becomes more widely known throughout the community so we can attract more high calibre young people prepared to undertake the training to become Customs Brokers. It is also hoped that this recognition will lead to importers and exporters placing more value on their Customs Brokers services and reward them accordingly.

The outcome of this new scheme is that the Government and private sectors with whom Customs Brokers deal can be confident the Customs Broker is suitably qualified and experienced to undertake the work required of them.

© Lighthouse Agencies Pty Ltd. All rights reserved.

Increased Security Arrangements For Ports And Airports – INCREASED SCRUTINY FOR ALL INVOLVED IN THE HANDLING OF IMPORTS AND EXPORTS

Many people will already be aware of the Federal Government’s desire to eliminate organised crime influences on the Australian waterfront.

Some of the first steps have already been seen with the Australian Customs and Border Protection Service (“Customs”) already modifying their computer systems to further restrict access to cargo information so that only those with a direct interest in that cargo (e.g., the shipping line or freight forwarder, the Customs broker, and the container or cargo terminal operator) can access any detailed information.

The next tier of the Government’s plan imposed additional conditions on the licences of cargo terminal operators (there are 3 classes of licence within this category – one for depots, one for warehouses, and one for duty-free stores) and on the licences for Customs brokers.  These new conditions became effective on 1 July, 2012, and industry was advised prior to the renewal cut-off date that they would receive their new licences with the new conditions as soon as possible after 1 July.  At the time of writing, the author is yet to receive his new licence and understands this is the case for the rest of the Customs broking industry practitioners.  One wonders how long it will be until we all receive our new licence document…

For the benefit of readers, there is a copy of the new “Additional Conditions”, ratified by Customs on 29 June, 2012, available here.  Whilst the Government’s desire to weed out criminal activities is to be applauded and the additional conditions appear fair at first glance, a little thought gives the realisation that the Government are perhaps guilty of a “knee-jerk” reaction and have very hastily cobbled together these conditions with little thought about how the goals are to be achieved, or the impact on industry or Customs themselves.  The conditions have been put together with no industry input as to the likely effects on any of the participants in the international trade arena.

Condition 1 is aimed squarely at the holders of corporate Customs broker’s licences.  No problem so far, until you read part 1 of the General Notes on the second page.  What it means is that everyone that works for a Customs broker is liable to be checked, from the Managing Director right down to the office clerk that goes to Customs, or other locations to submit Customs related documents, as part of their job function.  Given the size of some organisations, how much of Customs resources are going to be swallowed up by doing integrity checks?  And if the company’s management structure is such that one of the persons referred to in paragraph (b) of part 1 (i.e., a person with authority to direct another person with an authority as stated in paragraph (a)) resides overseas, nor are they an Australian resident.  How long, or how far, will Customs stretch to check each person?  The Government have been putting Customs under pressure for years to cut costs, so are they now going to give Customs sufficient resources for them to be able to fulfil this task?

Condition 2 has the effect of altering the way that Customs brokers now must deal with any amendments to information provided to Customs.  Up until now, Customs brokers have been able to use their discretion as to whether a matter required only the submission of an amendment to a document or if it required an approach directly to someone in Customs.  This was a recognition by Customs that Customs brokers sometimes receive additional information from their clients after the initial submission of documents, and that Customs placed faith on the integrity of brokers to rectify documents according to the information that had come to light.  Customs brokers have always understood their position of trust given to them by Customs, and in the majority have acted with complete professionalism.  The Customs Act has always held the “big stick” over Customs brokers by means of Customs being able to suspend or revoke a broker’s licence where the broker is found to have acted in contravention of his charter.

The effect of this new Additional Condition is to further place a strict requirement on Customs brokers to submit directly to the CEO of Customs all the details of any additional information that has caused the original documents to be incorrect, or, as the Condition puts it, to be “false, misleading or incomplete.”  In regard to such submissions, refer to General Note 2 on the second page of the Additional Conditions.  Instead of being able to deal with a matter that might be considered minor (e.g., a client produces an additional invoice for an import shipment that changes the value of a duty free import by AU$100.00, meaning that an extra $10.00 of GST is payable, so the broker simply lodges an amendment, payment is made, and the matter is over and done with) the condition implies brokers are now required to send an e-mail with the information to Customs.  Really?  Seriously?  Does the Government realise the implication of this requirement, and how much potential it has to bog down the system?

Thankfully, someone has realised the implications and Customs today published guidance for brokers to clarify this Condition.  Clients of Customs brokers should understand that brokers are obligated under their licence conditions to report any false, misleading or incomplete information to Customs.  Customs today clarified that the threshold for such reporting by brokers is when such information is likely to cause a “material” difference to revenue or security across the border.  Customs go on to say they consider “material” to mean that the original false, misleading or incomplete information has or may result in prohibited, restricted or regulated goods entering the Australian market other than in accordance with Australian law.  Revenue related errors or omissions will be considered to have been communicated to the CEO when the broker submits an amendment to the import declaration and that declaration is then finalised in the Customs system by payment of any additional amounts due.

Whilst many clients of Customs brokers probably already do this, clients should now ensure they provide any piece of information or documentation relevant to a shipment, no matter how insignificant it may seem, to their broker.  Brokers will be asking their clients for more documentation and information than in the past, and it is likely that initially the outcome of this new condition will be delay in some clearances as clients and brokers work out how best to instigate systems to ensure the broker has all the information and documentation required for the shipment at hand.

After so many years of Customs pushing the “self-assessment” regime, it appears the pendulum has swung back the other way a bit.  Again, will the Government provide Customs with sufficient resources to handle the influx of information and to follow up on the submissions from brokers?

Condition 3 of the Additional Conditions is the one that Customs brokers are greatly annoyed at.  Remember, industry was not given any opportunity to provide comment prior to the establishment of these new conditions.  Customs brokers believe this condition should include the word “knowingly” so that it reads “The holder of the broker’s licence must not knowingly allow…”  The point at issue for brokers is that brokers do not know the motives of the person who comes to them to arrange, say, an import clearance.  Brokers do not have access to the intelligence resources available to Customs so, apart from a few key indicators that Customs have shared with industry, brokers have no way of knowing up front if the importer is legitimate, especially if it’s a new importer just starting up business.

It’s highly unlikely that Customs are going to start sharing their intelligence information with brokers, so the condition as it stands places an unfair and onerous burden on brokers.

Customs today published information as to the things they consider are unauthorised activities or purposes.  Basically, it says things such as attempting to access information in the Customs systems about shipments other than ones where the broker is the authorised representative of the importer are unauthorised activities.

Condition 4 serves to enforce what most active brokers do in any case.  Of course, there is now a scramble on to have training courses certified by Customs so that brokers can commence accruing their CPD points.  Interestingly, it may be the catalyst for a reduction in the overall number of licenced individual brokers.  There are quite a few brokers that are only in management roles and no longer actively engage in the day-to-day procedures of a broker.  It is quite possible many of these will not bother to undergo CPD training and will thus not renew their licences in the next round of renewals due in June 2015.

© Lighthouse Agencies Pty Ltd.  All rights reserved.

Integrated Cargo System Current State of Play

In October, 2005, the Australian Customs Service (“Customs”) bludgeoned the import and export community with the introduction of the Integrated Cargo System (“ICS”). Anyone that was importing or exporting at that time will be still licking their wounds over the enormous dramas the introduction of the system caused.

As we approach the February, 2007 cut-off of any of the remaining legacy systems that the ICS replaced (e.g., COMPILE), it is perhaps timely that a quick review of the current state of play is considered. There has been an enormous amount of work carried out since the introduction of the ICS, especially in regard to workarounds to some issues that the ICS just couldn’t deliver on, or was too inflexible to cope with the reality of the import or export process from a commercial perspective. This modification of the system that was alleged by Customs to be the ultimate reporting system available at the time continues to this day, with a number of diagnostic functions that were available to the commercial users of COMPILE not available under the ICS. To be fair, there are some other diagnostic functions in the ICS that weren’t available to the users of COMPILE, and some of these have proven to be very useful in providing transparency of the reporting regime. Nevertheless, there are some annoying inadequacies in the diagnostic functions of the ICS.

By this, I mean that all parties in, for example, the import reporting regime, are able to interrogate and access data that will tell them where problems or delays in electronic clearance are occurring and, therefore, who should be responsible for correcting the error that is causing the delay. However, getting the responsible party to correct their error in a timely fashion is often a frustrating exercise for other users down the line from that reporter. And then there are the compulsory “screening” times built into the system. Changes aren’t always immediately effective – depending on the nature of the amendment made there is a delay of between 2 hours and 24 hours until the change is processed and flows down the line.

From a Customs brokers perspective, we are finding that there are many things in the chain that are causing much angst to brokers, and these problems and issues have even forced a lot of skilled players out of the industry in sheer frustration at the extra workload they have been expected to undertake for no increase in remuneration. These frustrations stem right from the importer through to the transport operator delivering the goods from the wharf to the importer. Importers just do not seem to understand their place in the scheme of things – there is a general shift by importers to avoid accepting the inherent risks that being an import trader involves and they try to push these risks to third parties, in particular on to their Customs broker. Freight forwarders, and in some cases, shipping lines, seem to think that the 48 hour reporting cut-off means they don’t have to lodge their reports with Customs until 48 hours before the vessel arrives, irrespective of the fact that they had the documents some 1 or 2 weeks prior to the vessel arrival. Whilst the wharves are generally up to speed with electronic releases, many of the lcl depots are not, and they continue to insist on receiving a piece of paper that shows that the goods are clear of any Customs and AQIS impediments, rather than them interrogating their computer systems to check for the electronic release status that the ICS transmits to the depot on final clearance of the shipment. Similarly, transport companies quite often want that piece of paper, although most of them are vastly improved now they have learnt how the ICS works.

Out of all these frustrations, it seems to me the most infuriating come from the importers and the freight forwarders. Many importers continue to think they can give the broker the clearance papers on the day the vessel arrives, or maybe only 1 or 2 days before. This of course places great pressure on the brokers as they are continually having to rush clearances through due to late paperwork from importers. If there happens to be a problem with the paperwork, then these importers complain about the delay as if it’s the broker’s fault, when in fact if the importer had sent in the documents early enough the problem could have been resolved before arrival of the cargo. In regard to freight forwarders, they exacerbate the problems by reporting as late as possible, and only then do they issue arrival notices and the like to advise brokers and importers of certain essential details of the impending shipment. So, not only do brokers have to cope with documents being given to them at the last minute by the importer, the broker also has to cope with freight forwarders not having reported the cargo, and therefore there is insufficient information available for the broker to prepare the Customs and AQIS clearances. Further aggravating the freight forwarder issue is that it is not uncommon for the importer to send documents to the broker and when the broker contacts the forwarder for information about the shipment, the forwarder has not yet received any documents from his overseas agent!

Note that if the shipment is selected for a random inspection by Customs or AQIS, this is NOT the broker’s fault – brokers can do nothing about these random selections as they are generated by the Customs and AQIS internal computer systems.

There have been many stories over the last 15 months or so of importers walking away from accepting the risk of being an import trader and foisting the costs back onto the broker. For example, I heard of one broker whose client received a container that was missing about $12,000 worth of material. The container was packed by the importer’s supplier at the suppliers factory, sealed by the supplier at the factory, and had the same seal on it (still intact) when it arrived at the importer’s warehouse. The importer deducted the $12,000 from the broker’s account, as if it was all the broker’s fault!! The importer’s reasoning? “I didn’t receive my goods, so why should I pay you”  This is outrageous!!

Importers complain about additional costs incurred as a result of inadequate documentation from their supplier, or perhaps because AQIS have placed an overseas fumigation company on their unacceptable list and the container has to fumigated again on arrival. They think the broker is somehow responsible and deduct the charges from the broker’s account. How can the broker be considered responsible for such occurrences? These events are completely beyond his control, yet importers seem to think they can force the financial cost back onto the broker when the broker is simply the medium acting on behalf of the importer to get goods cleared and delivered. It would be a different story if the expense arose due to some negligence on the part of the broker, however, in circumstances such as those mentioned above, it is clearly not the broker’s fault and therefore the broker should not be expected to bear the financial burden.

Customs brokers these days seem to spend an inordinate amount of time using their considerable expertise on behalf of their clients to resolve problems caused by other parties in the transport chain, yet brokers are quite often expected to carry the costs of these problems until they are resolved, rather than the importer bearing the cost and receiving a refund should one be forthcoming. In the same vein, brokers very, very rarely receive remuneration that truly reflects the effort they expend on behalf of their clients.

If you are an importer reading this, then I urge you to sit down with your broker and get to understand what he has to go through on your behalf. He has done his best to understand your business and works to help you achieve your aims. Remember also that the arrangement between an importer and his broker is one that falls under the general laws of “Principal & Agent”. The basic tenet of these laws is that the Principal is responsible for everything the Agent does on behalf of the Principal, and this includes bearing the burden of the costs incurred by the Agent on behalf of the Principal. Help your broker to help you – make his life a little easier and be prepared to carry the burden of the costs of being an import trader, and give your broker a “fair days pay for a fair days work” – he bloody deserves it, I can assure you!

© Lighthouse Agencies Pty Ltd. All rights reserved.