{"id":"F2018L01602","name":"Customs (Pacific Islands Rules of Origin) Regulations 2018","slug":"customs-pacific-islands-rules-of-origin-regulations-2018","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":439843,"registerId":"F2018L01602-fast-fetch-1775955712807","compilationNumber":null,"startDate":"2026-04-12","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Customs (Pacific Islands Rules of Origin) Regulations 2018","content":"---\nmeta-content-style-type: text/css\nmeta-content-type: application/xhtml+xml; charset=utf-8\n---\n\n?xml version=\"1.0\" encoding=\"utf-8\" standalone=\"no\"?>\n\n![Commonwealth Coat of Arms of Australia](image.001.jpeg)\n\n \n\nCustoms (Pacific Islands Rules of Origin) Regulations 2018\n\nI, General the Honourable Sir Peter Cosgrove AK MC (Ret’d), Governor‑General of the Commonwealth of Australia, acting with the advice of the Federal Executive Council, make the following regulations.\n\nDated 21 November 2018\n\nPeter Cosgrove\n\nGovernor‑General\n\nBy His Excellency’s Command\n\nLinda Reynolds\n\nAssistant Minister for Home Affairs  Parliamentary Secretary to the Minister for Home Affairs\n\n \n\n \n\n \n\n \n\n \n\n \n\nContents\n\nPart 1—Preliminary\n\n1 Name\n\n2 Commencement\n\n3 Authority\n\n4 Definitions\n\nPart 2—Tariff change requirement\n\n5 Change in tariff classification requirement for non‑originating materials\n\nPart 3—Regional value content requirement\n\n6 Regional value content requirement\n\nPart 4—Determination of value\n\n7 Value of goods that are non‑originating materials\n\n8 Value of accessories, spare parts, tools or instructional or other information materials\n\n9 Value of packaging material or container\n\nPart 5—Record keeping obligations\n\n10 Exportation of goods to a Party—record keeping by exporter who is not the producer of the goods\n\n11 Exportation of goods to a Party—record keeping by the producer of the goods\n\n \n\nPart 1—Preliminary\n\n \n\n1  Name\n\n  This instrument is the Customs (Pacific Islands Rules of Origin) Regulations 2018.\n\n2  Commencement\n\n (1) Each provision of this instrument specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.\n\n \n\n- Commencement information\n- Column 1 Column 2 Column 3\n- Provisions Commencement Date/Details\n- 1. The whole of this instrument At the same time as Schedule 1 to the Customs Amendment (Pacific Agreement on Closer Economic Relations Plus Implementation) Act 2018 commences. 13 December 2020\n\n\nNote: This table relates only to the provisions of this instrument as originally made. It will not be amended to deal with any later amendments of this instrument.\n\n (2) Any information in column 3 of the table is not part of this instrument. Information may be inserted in this column, or information in it may be edited, in any published version of this instrument.\n\n3  Authority\n\n  This instrument is made under the Customs Act 1901.\n\n4  Definitions\n\n  In this instrument:\n\nAct means the Customs Act 1901.\n\nAgreement has the meaning given by section 153ZKL of the Act.\n\nAgreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 means the Agreement of that name set out in Annex 1A of the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April 1994.\n\nNote: The Marrakesh Agreement Establishing the World Trade Organization is in Australian Treaty Series 1995 No. 8 ([1995] ATS 8) and could in 2018 be viewed in the Australian Treaties Library on the AustLII website (http://www.austlii.edu.au).\n\nDeclaration of Origin has the meaning given by section 153ZKL of the Act.\n\nHarmonized System has the meaning given by section 153ZKL of the Act.\n\nnon‑originating materials has the meaning given by section 153ZKL of the Act.\n\noriginating materials has the meaning given by section 153ZKL of the Act.\n\nParty has the meaning given by Article 2 of Chapter 1 of the Agreement.\n\nproduction has the meaning given by section 153ZKL of the Act.\n\nPart 2—Tariff change requirement\n\n \n\n5  Change in tariff classification requirement for non‑originating materials\n\n  For the purposes of subsection 153ZKO(3) of the Act, a non‑originating material used in the production of goods that does not satisfy a particular change in tariff classification is taken to satisfy the change in tariff classification if:\n\n (a) it was produced entirely in the territory of one or more of the Parties from other non‑originating materials; and\n\n (b) each of those other non‑originating materials satisfies the change in tariff classification, including by one or more applications of this section.\n\nPart 3—Regional value content requirement\n\n \n\n6  Regional value content requirement\n\n (1) For the purposes of subsection 153ZKO(6) of the Act, the regional value content of goods is worked out using the formula:\n\n![](image.002.png)\n\nwhere:\n\ncustoms value means the customs value of the goods worked out under Division 2 of Part VIII of the Act.\n\nvalue of non‑originating materials means the value, worked out under Part 4, of the non‑originating materials used in the production of the goods.\n\n (2) Regional value content must be expressed as a percentage.\n\nPart 4—Determination of value\n\n \n\n7  Value of goods that are non‑originating materials\n\n (1) For the purposes of subsection 153ZKL(2) of the Act, the value of non‑originating materials used in the production of goods is:\n\n (a) for non‑originating materials imported into the territory of a Party—the value of the non‑originating materials worked out in accordance with the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994; or\n\n (b) for non‑originating materials acquired in the territory of a Party where the goods are produced—the earliest ascertainable price paid or payable for the non‑originating materials in the territory of the Party.\n\n (2) For the purposes of paragraph (1)(a), in working out the value of particular non‑originating materials, the following must be included:\n\n (a) the cost of freight of the non‑originating materials to the port or place of entry in the Party;\n\n (b) the cost of insurance related to that freight.\n\n (3) For the purposes of paragraph (1)(a) or (b), in working out the value of particular non‑originating materials, the following may be deducted:\n\n (a) the costs of freight, insurance, packing and all other costs incurred in transporting the non‑originating materials, within or between the territories of the Parties, to the producer of the goods;\n\n (b) duties, taxes and customs brokerage fees on the non‑originating materials that:\n\n (i) have been paid in the territory of one or more of the Parties; and\n\n (ii) have not been waived or refunded; and\n\n (iii) are not refundable or otherwise recoverable;\n\n  including any credit against duties or taxes that have been paid or that are payable;\n\n (c) the costs of waste and spoilage resulting from the use of the non‑originating materials in the production of the goods, reduced by the value of reusable scrap or by‑products;\n\n (d) the costs of processing incurred in the territory of one or more of the Parties in the production of the non‑originating materials;\n\n (e) the costs of originating materials used or consumed in the production of the non‑originating materials in the territory of one or more of the Parties.\n\n8  Value of accessories, spare parts, tools or instructional or other information materials\n\n  If paragraphs 153ZKO(7)(a), (b), (c), (d) and (e) of the Act are satisfied in relation to goods:\n\n (a) the value of the accessories, spare parts, tools or instructional or other information materials covered by paragraph 153ZKO(7)(e) of the Act must be taken into account for the purposes of working out the regional value content of the goods under section 6 of this instrument; and\n\n (b) for the purposes of sections 6 and 7 of this instrument, those accessories, spare parts, tools or instructional or other information materials are taken to be non‑originating materials used in the production of the goods.\n\n9  Value of packaging material or container\n\n  If paragraphs 153ZKP(2)(a) and (b) of the Act are satisfied in relation to goods:\n\n (a) the value of the packaging material or container in which the goods are packaged must be taken into account for the purposes of working out the regional value content of the goods under section 6 of this instrument; and\n\n (b) for the purposes of sections 6 and 7 of this instrument, that packaging material or container is taken to be a non‑originating material used in the production of the goods.\n\nPart 5—Record keeping obligations\n\n \n\n10  Exportation of goods to a Party—record keeping by exporter who is not the producer of the goods\n\n (1) For the purposes of subsection 126AKF(1) of the Act, an exporter of goods mentioned in that subsection, who is not also the producer of the goods, must keep the following records:\n\n (a) records of the purchase of the goods by the exporter;\n\n (b) records of the purchase of the goods by the person to whom the goods are exported;\n\n (c) evidence that payment has been made for the goods;\n\n (d) evidence of the classification of the goods under the Harmonized System;\n\n (e) if the goods include any accessories, spare parts, tools or instructional or other information materials that were purchased by the exporter:\n\n (i) records of the purchase of the accessories, spare parts, tools or instructional or other information materials; and\n\n (ii) evidence of the value of the accessories, spare parts, tools or instructional or other information materials;\n\n (f) if the goods include any accessories, spare parts, tools or instructional or other information materials that were produced by the exporter:\n\n (i) records of the purchase of all materials that were purchased for use or consumption in the production of the accessories, spare parts, tools or instructional or other information materials; and\n\n (ii) evidence of the value of the materials so purchased; and\n\n (iii) records of the production of the accessories, spare parts, tools or instructional or other information materials;\n\n (g) if the goods are packaged for retail sale in packaging material or a container that was purchased by the exporter:\n\n (i) records of the purchase of the packaging material or container; and\n\n (ii) evidence of the value of the packaging material or container;\n\n (h) if the goods are packaged for retail sale in packaging material or a container that was produced by the exporter:\n\n (i) records of the purchase of all materials that were purchased for use or consumption in the production of the packaging material or container; and\n\n (ii) evidence of the value of the materials so purchased; and\n\n (iii) records of the production of the packaging material or container;\n\n (i) a copy of the Declaration of Origin for the goods.\n\n (2) The records must be kept for at least 5 years starting on the day of exportation.\n\n (3) The exporter:\n\n (a) may keep the records at any place (whether or not in Australia); and\n\n (b) must ensure that:\n\n (i) the records are kept in a form that would enable   a determination of whether the goods are   originating goods in accordance with the Agreement; and\n\n (ii) if the records are not in English—the records are kept in a place and form that would enable an English translation to be readily made; and\n\n (iii) if the records are kept by mechanical or electronic means—the records are readily convertible into a hard copy in English.\n\n11  Exportation of goods to a Party—record keeping by the producer of the goods\n\n (1) For the purposes of subsection 126AKF(1) of the Act, a producer of goods mentioned in that subsection, whether or not the producer is the exporter of the goods, must keep the following records:\n\n (a) records of the purchase of the goods;\n\n (b) if the producer is the exporter of the goods—evidence of the classification of the goods under the Harmonized System;\n\n (c) evidence that payment has been made for the goods;\n\n (d) evidence of the value of the goods;\n\n (e) records of the purchase of all materials that were purchased for use or consumption in the production of the goods and evidence of the classification of the materials under the Harmonized System;\n\n (f) evidence of the value of those materials;\n\n (g) records of the production of the goods;\n\n (h) if the goods include any accessories, spare parts, tools or instructional or other information materials that were purchased by the producer:\n\n (i) records of the purchase of the accessories, spare parts, tools or instructional or other information materials; and\n\n (ii) evidence of the value of the accessories, spare parts, tools or instructional or other information materials;\n\n (i) if the goods include any accessories, spare parts, tools or instructional or other information materials that were produced by the producer:\n\n (i) records of the purchase of all materials that were purchased for use or consumption in the production of the accessories, spare parts, tools or instructional or other information materials; and\n\n (ii) evidence of the value of the materials so purchased; and\n\n (iii) records of the production of the accessories, spare parts, tools or instructional or other information materials;\n\n (j) if the goods are packaged for retail sale in packaging material or a container that was purchased by the producer:\n\n (i) records of the purchase of the packaging material or container; and\n\n (ii) evidence of the value of the packaging material or container;\n\n (k) if the goods are packaged for retail sale in packaging material or a container that was produced by the producer:\n\n (i) records of the purchase of all materials that were purchased for use or consumption in the production of the packaging material or container; and\n\n (ii) evidence of the value of the materials so purchased; and\n\n (iii) records of the production of the packaging material or container;\n\n (l) a copy of the Declaration of Origin for the goods.\n\n (2) The records must be kept for at least 5 years starting on the day of exportation.\n\n (3) The producer:\n\n (a) may keep the records at any place (whether or not in Australia); and\n\n (b) must ensure that:\n\n (i) the records are kept in a form that would enable a determination of whether the goods are originating goods in accordance with the Agreement; and\n\n (ii) if the records are not in English—the records are kept in a place and form that would enable an English translation to be readily made; and\n\n (iii) if the records are kept by mechanical or electronic means—the records are readily convertible into a hard copy in English.\n","sortOrder":0}],"analysis":{"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"flash_summary":{"complexity_score":4,"scope_assessment":{"changed":false,"description":"This instrument implements and clarifies the rules of origin and associated valuation and record‑keeping mechanics for the Pacific islands trade Agreement referenced in the Customs Act. It does not expand the subject matter beyond origin determination, valuation and documentation: rather it specifies how certain Act provisions are to operate (tariff‑shift treatment, RVC formula, valuation rules, accessories/packaging treatment, and five‑year record obligations). There is no indication in the instrument text that it broadens the original purpose beyond giving operational effect to the Agreement’s origin requirements."},"complexity_factors":["Relies on a small set of external defined terms from the Customs Act (multiple cross‑references to s153ZKL, 153ZKO, and related Act provisions).","Short instrument (11 regulations) but several multi‑part subclauses (notably ss7, 10 and 11).","A simple numeric RVC formula (s6) reduces arithmetic complexity but requires correct identification of \"value of non‑originating materials\" (s7), which brings in valuation complexity.","Cross‑reference to the WTO Agreement on Implementation of Article VII (s7(1)(a)) imports a detailed external valuation regime.","Recursive/conditional logic in s5 (tariff‑shift can be satisfied by inputs produced entirely in Parties from other non‑originating inputs that themselves satisfy tariff changes), which requires tracing multi‑tier production.","Detailed record‑keeping lists (ss10–11) with multiple conditional subitems and formatting/translation requirements increase compliance detail.","Several dependencies on satisfying paragraphs of the Customs Act (e.g. ss8–9 apply only if certain Act paragraphs are satisfied), producing conditional complexity across instruments."],"plain_english_summary":"**What this instrument does (mechanically)**\n\n- Implements rules for deciding when goods exported from Australia (or produced in Australia) qualify as \"originating\" under the Pacific islands trade agreement that the Customs Act implements. In practice it tells exporters, producers and Customs how to treat: (a) tariff‑classification changes for non‑originating inputs (s5); (b) how to calculate a product’s Regional Value Content (RVC) (s6); (c) how to value non‑originating materials when working out RVC (s7) and related rules for accessories and packaging (ss8–9); and (d) what records exporters and producers must keep and for how long (ss10–11).\n\n- It does this by adding detail to provisions of the Customs Act — notably the origin rules the Act refers to — so the origin test can be applied consistently at the border and for export documentation (see instrument preamble and ss5–11).\n\n**Who is affected**\n\n- Exporters and producers of goods that will be exported to a Party to the Pacific agreement. Both exporters who are not the producer and producers (whether or not also the exporter) have explicit record‑keeping duties (ss10–11).\n- Customs officials administering origin claims, and the importing authorities in the partner Party who rely on declarations and supporting records.\n- Suppliers in a supply chain: the rules affect whether particular inputs count as \"originating\" or \"non‑originating\", which can change sourcing incentives (s5, s7).\n\n**Key operational rules and consequences**\n\n- Tariff‑shift (change in tariff classification) rule (s5): a non‑originating input that would not itself meet a required tariff change is nonetheless treated as meeting that change if it was entirely produced in the territory of one or more Parties using other non‑originating inputs that do meet the tariff‑change requirement. This can be applied recursively so that intermediate processing within Parties can make later inputs qualify (s5).\n\n- Regional Value Content (RVC) formula (s6): RVC is expressed as a percentage and calculated as: RVC = [(customs value of the goods - value of non‑originating materials) ÷ customs value] × 100. The customs value is the normal customs valuation under Division 2, Part VIII of the Customs Act; the value of non‑originating materials is determined under Part 4 of this instrument (s6).\n\n- Valuation of non‑originating materials (s7):\n  - If an input was imported into a Party, its value is the customs‑value method set out in the GATT Article VII Implementation Agreement (i.e. the standard WTO customs valuation rules) (s7(1)(a)). Freight to port/place of entry and related insurance must be included (s7(2)).\n  - If an input was acquired within the Party where the goods are produced, use the earliest ascertainable price paid or payable in that territory (s7(1)(b)).\n  - Certain deductions are allowed when calculating that value, such as intra‑Party transport costs, duties/taxes already paid in Parties that are non‑refundable, waste and spoilage (less reusable by‑products), processing costs incurred in the Parties, and the costs of any originating materials used in producing the non‑originating input (s7(3)(a)–(e)).\n\n- Accessories, spare parts, tools, instructional materials and packaging: where the Act’s preconditions are met, those items are treated as non‑originating materials and must be included in the RVC calculation (ss8–9).\n\n- Record keeping (ss10–11): exporters (if not the producer) and producers (whether or not they export) must keep detailed records for at least 5 years from exportation. Required items include purchase records, classifications under the Harmonized System, evidence of payment and value, production records, and copies of Declarations of Origin. Records may be kept overseas but must be in a form that permits an English translation and be convertible to a hard copy in English; electronic records must be readily convertible (ss10(2)–(3), 11(2)–(3)).\n\n**Why it matters (claimed purpose and practical effects)**\n\n- The stated purpose is to give effect to the origin requirements of the Pacific islands trade agreement that the Customs Act links to (instrument authority and definitions). That purpose is implemented by setting objective mechanics — tariff‑shift rules, a clear RVC formula, valuation rules tied to WTO customs valuation, and specific record obligations.\n\n- Practical effects and incentives:\n  - Firms that can demonstrate origin under these rules may obtain preferential tariff treatment when exporting to partner Parties; meeting origin thresholds creates a direct financial benefit (see ss6–7 and record rules ss10–11).\n  - The rules create an economic incentive to source more inputs from the Parties or to perform further processing within the Parties so products meet the tariff‑shift or RVC tests (s5, s6). That changes sourcing and production choices.\n  - Administrative and compliance costs fall on exporters and producers: they must collect, retain and present documentary proof (ss10–11). Keeping records overseas is permitted, but records must be translatable and convertible to English, which imposes practical compliance steps (ss10(3), 11(3)).\n\n**Trade‑offs, risks and implementation considerations**\n\n- Compliance burden and cost: the record‑keeping list is detailed (purchase invoices, classifications, production records, values, declarations). Small or informal producers may face non‑trivial compliance costs to meet documentary standards and the 5‑year retention requirement (ss10–11).\n\n- Complexity in supply chains: s5 allows recursive treatment of tariff shifts for inputs produced entirely within Parties, which reduces the strictness of the tariff‑shift test but requires tracing the chain of inputs and verifying that intermediate inputs themselves met tariff‑shift requirements — increasing tracing and verification work for businesses and Customs.\n\n- Valuation interpretation points: tying imported input valuation to the WTO customs‑valuation Agreement (s7(1)(a)) standardises treatment but requires that businesses and Customs apply those valuation rules correctly; the list of permissible deductions in s7(3) narrows or clarifies what may be subtracted when calculating non‑originating input value.\n\n- Potential for strategic behaviour: because origin confers tariff advantages, parties have an incentive to structure transactions and documentation to meet origin tests. The instrument tackles this by specifying valuation and documentary requirements, but monitoring and verification fall to Customs and import/export partners.\n\n**Who pays, who decides, and what changes in behaviour**\n\n- Who pays: exporters and producers pay compliance costs (record keeping, possible changes to procurement, product labelling/packaging practices). Importers may pay less if preferential tariffs apply to qualifying goods.\n- Who decides: producers/exporters decide sourcing and production arrangements to meet origin criteria; Customs applies the rules and verifies declarations using the prescribed records.\n- Behaviour changes: firms are likely to re‑evaluate sourcing (switch to originating inputs where cost‑effective), keep more detailed records, and possibly alter production steps to satisfy tariff‑shift or RVC thresholds.\n\n**Sections cited**: key operational provisions are in sections 5–11 (tariff‑shift: s5; RVC formula: s6; valuation: s7; accessories/packaging: ss8–9; records: ss10–11)."},"kimi_summary":{"content_quality":"ok","complexity_score":4,"scope_assessment":{"changed":false,"description":"The legislation remains tightly focused on its original purpose of implementing rules of origin for the PACER Plus agreement. It covers tariff classification changes, regional value content calculations, valuation methodologies, and record-keeping obligations — all standard components of origin regulations. There is no evidence of scope creep beyond the technical implementation of the trade agreement's origin requirements."},"complexity_factors":["Moderate cross-referencing: Heavy reliance on definitions in the Customs Act 1901 (section 153ZKL) and the PACER Plus Agreement itself","Mathematical formula requirement: Section 6 introduces a specific algebraic formula for regional value content calculation","Nested conditions: Section 5 contains recursive logic where materials can satisfy tariff changes through multiple applications of the same section","Detailed record-keeping schedules: Sections 10-11 contain 11 and 12 separate record-keeping requirements respectively, with sub-paragraphs","Dual valuation methods: Section 7 distinguishes between imported materials (WTO valuation agreement) and domestically acquired materials (earliest ascertainable price)","Multiple deduction allowances: Section 7(3) lists 5 specific categories of costs that may be deducted from material values"],"plain_english_summary":"These regulations set rules for when goods count as originating under PACER Plus, allowing eligible exports between Australia, New Zealand and Pacific Island members to receive reduced or zero tariffs. \n\nThey affect exporters, importers, customs brokers and freight forwarders by defining valuation and documentation requirements and preventing tariff circumvention so only genuine regional products obtain the trade benefits."}},"importantCases":[],"_links":{"self":"/api/acts/customs-pacific-islands-rules-of-origin-regulations-2018","history":"/api/acts/customs-pacific-islands-rules-of-origin-regulations-2018/history","analysis":"/api/acts/customs-pacific-islands-rules-of-origin-regulations-2018/analysis","conflicts":"/api/acts/customs-pacific-islands-rules-of-origin-regulations-2018/conflicts","importantCases":"/api/acts/customs-pacific-islands-rules-of-origin-regulations-2018/important-cases","documents":"/api/acts/customs-pacific-islands-rules-of-origin-regulations-2018/documents"}}