Customs and Excise Amendment Regulations 2003

2003/392

Customs and Excise Amendment Regulations 2003

Note

These regulations are administered in the New Zealand Customs Service.

Pursuant to the Customs and Excise Act 1996, Her Excellency the Administrator of the Government, acting on the advice and with the consent of the Executive Council, makes the following regulations.

1 Title

  • (1) These regulations are the Customs and Excise Amendment Regulations 2003.

    (2) In these regulations, the Customs and Excise Regulations 19961 are called “the principal regulations”.

2 Commencement

  • These regulations come into force on the 28th day after the date of their notification in the Gazette.

3 Interpretation

  • (1) Regulation 32 of the principal regulations is amended by revoking the definitions of factory or works, factory or works cost, and manufacturer.

    (2) Regulation 32 of the principal regulations is amended by inserting, in their appropriate alphabetical order, the following definitions:

    “factory or works cost, in relation to any goods, means any expenditure—

    • “(a) that either—

      • “(i) is incurred directly by the principal manufacturer in the production of the goods; or

      • “(ii) is incurred indirectly by the principal manufacturer and can reasonably be allocated to the production of the goods; and

    • “(b) is determined in accordance with regulation 34

    “principal manufacturer, in relation to any goods, means—

    • “(a) a person in Australia who performs the last process in the manufacture of goods in Australia; or

    • “(b) if the person referred to in paragraph (a) performs the last process in the manufacture of goods on behalf of another person in Australia or New Zealand, that other person”.

    (3) Regulation 32 of the principal regulations is amended by omitting from paragraph (a) of the definition of materials the words “the factory or works”, and substituting the words “manufacturing facilities”.

    (4) Regulation 32 of the principal regulations is amended by inserting in the definition of qualifying area content, after the words “by the”, the word “principal”.

4 Australia

  • (1) Regulation 33(1)(b)(i)(C) of the principal regulations is amended by inserting, after the expression “1983”, the words “to be manufactured raw materials”.

    (2) Regulation 33(1)(b)(ii) and (c)(ii) of the principal regulations is amended by inserting, after the words “by the” in both places where they appear, the word “principal”.

    (3) Regulation 33(1)(c)(ii) of the principal regulations is amended by revoking subsubparagraph (A), and substituting the following subsubparagraph:

    • “(A) on labour costs (as set out in regulation 34(1)(b)) and overhead expenses (as set out in regulation 34(1)(c)) incurred in Australia, or in New Zealand, or in Australia and New Zealand; or”.

    (4) Regulation 33(2) of the principal regulations is amended by revoking paragraph (a).

5 Calculation of factory or works cost

  • (1) Regulation 34(1) of the principal regulations is amended by omitting the words “shall be”, and substituting the words “is, subject to regulation 38,”.

    (2) Regulation 34(1) of the principal regulations is amended by revoking paragraph (a), and substituting the following paragraph:

    • “(a) the cost to the principal manufacturer of bringing materials into facilities where the goods are manufactured including any freight and similar costs, but excluding customs duty or excise duty or other duties paid or payable in respect of those materials:”.

    (3) Regulation 34(1)(b) of the principal regulations is amended by inserting, after the words “Labour costs”, the words “incurred by the principal manufacturer in relation to the production of the goods”.

    (4) Regulation 34(1)(b)(i) of the principal regulations is amended by omitting the word “Manufacturing”.

    (5) Regulation 34(1)(b)(ii) of the principal regulations is amended by omitting the words “factory or works”.

    (6) Regulation 34(1)(b)(ii)(H) of the principal regulations is amended by omitting the words “within the factory”.

    (7) Regulation 34(1)(c) of the principal regulations is amended by omitting the words “Factory overhead expenses”, and substituting the words “overhead expenses incurred by the principal manufacturer in relation to the production of the goods”.

    (8) Regulation 34(1)(c)(ix) of the principal regulations is amended by omitting the words “at the factory”.

    (9) Regulation 34(1)(c)(xii) of the principal regulations is amended by—

    • (a) omitting the word “Factory” ; and

    • (b) omitting the word “factory”.

    (10) Regulation 34(1)(c)(xv) of the principal regulations is amended by omitting the words “factory vehicle expenses”, and substituting the words “vehicle expenses directly related to the manufacture of the goods”.

    (11) Regulation 34(1)(d) of the principal regulations is amended by omitting the word “of”, and substituting the words “incurred by the principal manufacturer in relation to”.

    (12) Regulation 34(2)(h) of the principal regulations is amended by omitting the word “Manufacturer's”, and substituting the words “principal manufacturer's”.

    (13) Regulation 34(2) of the principal regulations is amended by revoking paragraph (i).

    (14) Regulation 34(3) and (4) of the principal regulations is amended by inserting, after the words “by the” in both places where they appear, the word “principal”.

6 Qualifying materials

  • Regulation 35(b) and (c) of the principal regulations is amended by inserting, after the words “by the” in both places where they appear, the word “principal”.

7 Special provisions for allocation of expenditure

  • (1) Regulation 38 of the principal regulations is amended by revoking subclause (1), and substituting the following subclause:

    • “(1) For the purposes of regulation 34, if any material, labour, or overhead used in the production of goods has been supplied free of charge or at a reduced cost, the amount to be treated as expenditure in relation to that material, labour, or overhead must be determined as follows:

      • “(a) for any material, or material treated as an overhead, the value of that material must be determined in accordance with the Second Schedule of the Act; and

      • “(b) for any labour or overhead not valued under paragraph (a), the value of that labour or overhead is the normal market value of that labour or overhead; and

      • “(c) adding to the value determined under paragraph (a) or paragraph (b), the cost of freight, insurance, packing, and all other costs incurred in supplying the material, labour, or overhead, as appropriate, whether or not the costs were incurred by the principal manufacturer.”

    (2) Regulation 38(2) of the principal regulations is amended by inserting, after the word “material” in both places where it occurs, the words “, labour, or overhead”.

    (3) Regulation 38 of the principal regulations is amended by revoking subclause (3), and substituting the following subclause:

    • “(3) If the Chief Executive is satisfied that materials, labour, or overheads have been attributed to the production of the goods solely for the purpose of artificially raising the qualifying area content of the goods, the Chief Executive may exclude expenditure on those materials, labour, or overheads from the calculation of factory or works cost under regulation 34.”

    (4) Regulation 38(4) of the principal regulations is amended by—

    • (a) inserting, after the words “cost to the”, the word “principal” ; and

    • (b) inserting, after the word “materials” in both places where it appears, the words “, labour, or overheads”.

Diane Morcom,

Clerk of the Executive Council.

Explanatory note

This note is not part of the regulations, but is intended to indicate their general effect.

These regulations, which come into force on the 28th day after the date of their notification in the Gazette, amend the Customs and Excise Regulations 1996 in order to reflect an understanding that has been reached between New Zealand and Australia in relation to the manner in which outsourced manufacturing is to be treated under the Australia-New Zealand Closer Economic Relations Trade Agreement, 1983 rules of origin.

The effect of these regulations is that in determining which goods are deemed (for the purposes of the Customs and Excise Act 1996 and the Tariff Act 1988) to be the produce or manufacture of Australia, emphasis is placed on the person in overall control of the production of goods, rather than the place where the last process in the manufacture of the goods was performed.

Issued under the authority of the Acts and Regulations Publication Act 1989.

Date of notification in Gazette: 18 December 2003.

  • 1 SR 1996/232