Customs (Peruvian Rules of Origin) Regulations 2019

The Regulations revolve around a small set of technical concepts that operationalise origin treatment for the Peru market. Those concepts are defined either in the instrument itself or by reference to the Customs Act 1901 (s 4). Key concepts are:

• Customs value. For the purposes of both regional value content methods, the Regulations require the use of the customs value determined under Division 2 of Part VIII of the Customs Act 1901 (ss 6(1), 7(1)). The instrument therefore ties RVC calculations to the statutory customs valuation rules in the Act rather than to unilateral commercial invoicing or accounting values (s 6(1), s 7(1)).
• Regional value content (RVC). The instrument prescribes two established RVC approaches: the build‑down method and the build‑up method (Parts 3, ss 6-7). Each RVC must be expressed as a percentage (ss 6(2), 7(2)). The build‑down method derives RVC from the share of the customs value that is not attributable to non‑originating materials (s 6(1)). The build‑up method derives RVC from the share of the customs value that is attributable to originating materials (s 7(1)). The Regulations specify where the numerator and denominator inputs must come from, and refer valuation inputs back to Part 4 of the instrument.
• Value of materials. Section 8 defines how to work out the value of both originating and non‑originating materials used in production of goods. It creates three principal categories and valuation rules: imported materials (value must be worked out in accordance with the Agreement on Implementation of Article VII of GATT 1994, s 8(2)(a) read with s 4 definition), materials acquired in the territory of Peru (three alternative measures, including price paid or payable and the earliest ascertainable price, s 8(2)(b)), and materials produced by the producer (costs plus a profit equivalent, s 8(2)(c)). The section also specifies inclusion of international shipment costs for imported materials (s 8(3)) and permits addition or deduction of in‑country freight, duties, taxes and packaging and waste costs depending on whether the material is originating or non‑originating (ss 8(4)-(5)).
• Tariff change (change in tariff classification) treatment. Section 5 provides a rule that treats certain non‑originating materials as having satisfied a required change in tariff classification if they were produced entirely in Peru, or in Peru and Australia, from other non‑originating materials where those other materials satisfy the tariff change. The section allows recursive application of the same provision so the change in tariff classification can be satisfied through staged production entirely in the designated territories (s 5).
• Inclusion of accessories and packaging. Sections 9 and 10 implement the Act’s statutory propositions relating to accessories, spare parts, tools and information materials (153ZIP(7)(a)-(d) of the Act) and to packaging materials and containers (153ZIQ(1)(a)-(b) of the Act). Where the Act’s conditions are met, the Regulations instruct that such items must be taken into account for purposes of working out RVC and they specify whether they are to be treated as originating or non‑originating materials for the RVC formulas (ss 9-10).
• Record keeping. Parts 5 and sections 11-12 specify the documentary requirements for exporters who are not the producer (s 11) and for producers (s 12). The required records include purchase records, HS classification evidence, payment evidence, production records, and copies of the Certificate of Origin. Both exporters and producers must keep records for at least five years from the date the Certificate of Origin is issued (ss 11(2), 12(2)). The Regulations permit records to be held outside Australia but require the records to be in a form allowing determination of whether the goods are Australian originating, and to be readily translatable into English and convertible into an English hard copy if kept electronically (ss 11(3), 12(3)).

The Regulations intentionally cross‑refer to specific provisions of the Customs Act for conditions and thresholds (for example ss 153ZIP, 153ZIM, 153ZIQ and 126AJF of the Act are repeatedly cited as the conditions that bring the Regulations into play). That design means the Regulations are an operational layer which must be read alongside the Act’s definitions, origin tests and enforcement provisions.

The instrument creates obligations and operational steps for a circumscribed set of actors in export supply chains involving Peru. The primary affected parties are:

• Producers of goods that will be exported to Peru. The Regulations specify the valuation rules for materials produced by the producer, require that producers keep production records and detailed material purchase records (s 12(1)(e)-(g)), and require producers to hold a copy of the Certificate of Origin (s 12(1)(l)). Producers must retain records for at least five years from the date the Certificate of Origin is issued (s 12(2)). Producers may store those records anywhere but must ensure they are in a form that permits determination of whether the goods are Australian originating goods and are convertible into English hard copy if electronic (s 12(3)).
• Exporters who are not the producer. Exporters that are intermediaries must keep records about their purchases and sales, evidence of payment, HS classifications, and evidence of the value and origin status of accessories and packaging where applicable (s 11(1)(a)-(i)). They must also keep a copy of the Certificate of Origin (s 11(1)(i)). The retention and form requirements mirror those that apply to producers (s 11(2)-(3)).
• Importers of materials into the territory of Peru and suppliers within Peru. Materials imported into Peru by the producer are valued under the Agreement on Implementation of Article VII of GATT 1994 (s 8(2)(a) and s 4 definition). Suppliers and sellers within Peru are implicated because the Regulations permit use, for materials acquired in Peru, of the price paid or payable or the earliest ascertainable price in Peru (s 8(2)(b)). Those prices and records therefore underpin origin calculations and will be required to be maintained by producers or exporters.
• Customs brokers, freight forwarders and customs agents. The Regulations require customs valuation and RVC calculations to use the customs value under Division 2 of Part VIII of the Act (ss 6(1), 7(1)). Advisers that prepare customs entries and Certificates of Origin will therefore need to apply the valuation and RVC rules in the Regulations and to ensure the underlying records are available for audit.
• Accountants, compliance officers and auditors. The Regulations’ valuation rules, the allowance for added costs or deductions depending on origin status (ss 8(4)-(5)), and the detailed record keeping requirements create compliance responsibilities for internal control and audit functions. Those functions must ensure documentary support for prices, costs, profit equivalents, freight, duties and waste calculations, and they must preserve documents for at least five years from issue of the Certificate of Origin (ss 11(2), 12(2)).
• Australian Customs officials and government decision makers. Although the Regulations do not themselves set criminal or civil penalty amounts, they are made pursuant to the Customs Act 1901 (s 3) and feed into the enforcement and audit functions exercised under the Act. Customs staff will rely on the Regulations to evaluate whether goods are Australian originating goods for the purposes of claiming preferential treatment under the relevant Agreement as referenced in the Act.

Who bears the primary ongoing compliance costs: producers and exporters. They must assemble and preserve the specified records, perform RVC and customs valuation calculations using the formulas and valuation rules in the Regulations (Parts 3 and 4), and produce or make records available on request. Who benefits from the Rules of Origin: parties claiming preferential treatment under the Agreement referenced in the Act, conditional on meeting the origin tests and producing a Certificate of Origin. The Regulations allocate the burden of proof to the exporter or producer through the record keeping specifications (ss 11-12) and by prescribing the technical methods for calculation.

The Regulations establish discrete duties and procedural rights that govern how origin is assessed and evidenced for exports to Peru. The obligations are implemented through references to the Customs Act and through direct prescriptive rules.

Key duties

• Duty to apply specified RVC formulas and customs valuation inputs. When RVC is a required origin test under the Act, the exporter or producer must calculate RVC using either the build‑down method in section 6 or the build‑up method in section 7, and the customs value used must be the customs value under Division 2 of Part VIII of the Customs Act 1901 (ss 6(1), 7(1), 6(2), 7(2)).
• Duty to value materials according to the rules in section 8. Producers and exporters must value imported materials in accordance with the Agreement on Implementation of Article VII of GATT 1994 (s 8(2)(a)), value materials acquired in Peru by reference to price paid or payable or the earliest ascertainable price (s 8(2)(b)), and value materials produced by the producer by summing costs and adding an appropriate profit equivalent (s 8(2)(c)). The section also prescribes how international shipment costs are to be treated in valuing imported materials (s 8(3)).
• Duty to include or treat accessories and packaging in RVC calculations where the Act requires it. If the legislative prerequisites in the Act’s paragraphs 153ZIP(7)(a)-(d) or 153ZIQ(1)(a)-(b) are satisfied, accessories, spare parts, tools or information materials (s 9) and packaging materials or containers (s 10) must be taken into account in the RVC calculations and treated as originating or non‑originating for the purposes of sections 6, 7 and 8 as applicable.
• Duty to keep records. Exporters (who are not producers) must keep a specified set of records, including purchase and classification evidence and a copy of the Certificate of Origin (s 11(1)). Producers must keep a broader set of records including production records, material purchase records, HS classification of materials, evidence of values and a copy of the Certificate of Origin (s 12(1)). Both must retain records for at least five years from the date of issuance of the Certificate of Origin (ss 11(2), 12(2)). Records can be held outside Australia but must be in a form that enables determination of whether the goods are Australian originating goods and must be readily translatable and convertible into an English hard copy (ss 11(3), 12(3)).

Specified rights and permitted treatments

• Recourse to a specific tariff change treatment for non‑originating materials. Section 5 permits a non‑originating material that would not otherwise satisfy a particular change in tariff classification to be treated as satisfying that change if it was produced entirely in Peru, or in Peru and Australia, from other non‑originating materials that satisfy the change. The section permits the rule to be applied repeatedly (recursive application) so staged production wholly within the territories can qualify (s 5).
• Permitted inclusions and deductions. Section 8 allows certain costs and taxes to be added to the value of originating materials (s 8(4)) and permits specified deductions from the value of non‑originating materials (s 8(5)). For example, costs of in‑country transport, duties and non‑refundable taxes and costs of waste can be included in the value of originating materials (s 8(4)(a)-(c)), and equivalent items can be deducted for non‑originating materials (s 8(5)(a)-(c)). The Regulations therefore give producers and exporters specific, structured levers to increase or decrease the material values used in the RVC calculation depending on whether the material is originating or non‑originating.
• Right to retain records offshore and electronically, with conditions. Both exporters and producers may keep records at any place, including outside Australia (ss 11(3)(a), 12(3)(a)). Where records are not in English or are kept electronically, there is a duty to ensure they are readily translatable and convertible to an English hard copy (ss 11(3)(b)(ii)-(iii), 12(3)(b)(ii)-(iii)).

Procedural interplay with the Customs Act

• The Regulations are made under the Customs Act and are written to supply operational detail required by the Act. Several duties imposed by the Regulations are expressly tied to provisions and conditions in the Act (for example the RVC thresholds and accessory/packaging inclusion conditions are governed by ss 153ZIP and 153ZIQ of the Act) and the Regulations repeatedly note that their provisions apply for the purposes of specific subsections of the Act (for example s 5 for subsection 153ZIP(3) and s 6 for subsection 153ZIP(6)). Enforcement mechanisms and penalties for non‑compliance are not created by these Regulations; they are handled under the Act itself.

The Regulations do not themselves set monetary fines or criminal penalties. Instead, they function as a rules module to be enforced under the Customs Act 1901 and the statutory provisions referenced in the instrument. That design has several immediate implications for enforcement and compliance risk.

• No standalone penalties in the instrument. The text contains no penalty schedules or specified penalty amounts. Obligations such as the record keeping requirements in sections 11 and 12 are framed "for the purposes of subsection 126AJF(1) of the Act" (ss 11(1), 12(1)). Subsection 126AJF(1) of the Act is the Act’s hook that makes record keeping obligations enforceable; the sanctions and enforcement powers will therefore be found in the Act’s enforcement provisions, not in the Regulations (see s 11(1) and s 12(1)).
• Enforcement via the Customs Act framework. Because the instrument is made under the Customs Act (s 3), enforcement, audit and penalty powers available to the Commissioner of Customs or other authorised officers under the Act will be used to implement the Regulations. That means audits, questions, document production orders, seizures, or penalty notices are governed by the Act’s procedures. The Regulations specify what records officials can reasonably expect to inspect and what valuation methodologies officials will accept, and the Act supplies the sanctions for false statements, omissions and failure to produce records.
• Evidentiary effect of a Certificate of Origin. The instrument requires exporters and producers to keep a copy of the Certificate of Origin and to retain supporting documents for five years from its issue (ss 11(1)(i)-(2) and 12(1)(l)-(2)). In practice this means that, on audit, Customs and other authorised agencies will use the combination of the Certificate and the prescribed records to test origin claims. The Regulations thus place documentary burden on the exporter/producer to substantiate origin. Failure to produce the records required by the Regulations is a matter dealt with under the Act, including by reference to subsection 126AJF(1) and the Act’s compliance and penalty machinery.
• Administrative discretion and interpretive issues. The Regulations prescribe formulas, valuation inputs and a number of conditionals that defer to the Act (for example the conditions in ss 153ZIP and 153ZIQ). Enforcement will therefore involve interpretation of how those statutory conditions apply case by case. That gives customs officials scope to examine transaction‑by‑transaction compliance and to apply the Act’s general anti‑circumvention and fraud provisions where relevant facts indicate misuse.
• Audit and retention windows. The Regulations impose a minimum retention period of five years from the date the Certificate of Origin is issued (ss 11(2), 12(2)). That retention period sets the minimum window during which audits or compliance checks may require production of records. The instrument also enables records to be stored anywhere but requires conversion into English and into a hard copy if electronic (ss 11(3), 12(3)), creating a practical compliance duty to make records readily available for inspection.

In short, the instrument prescribes the substantive and documentary rules that underlie origin claims for exports to Peru, but enforcement and penalty application flow from the Customs Act. Practitioners and compliance officers must therefore map the Regulations’ technical requirements against the Act’s penalty and enforcement sections to understand the full risk profile for non‑compliance.

The Regulations are explicitly designed to operate within the statutory architecture of the Customs Act 1901 and international valuation rules referenced by that Act. The instrument contains multiple cross‑references to the Act and to an international agreement. Those cross‑references determine the primary interactions with other legal instruments.

Primary statutory interactions

• Customs Act 1901. The Regulations are made under the Customs Act (s 3) and repeatedly refer to defined terms and tests in the Act (s 4 defines Agreement, Australian originating goods, Certificate of Origin, Harmonized System, non‑originating materials, originating materials, production, territory of Australia and territory of Peru by reference to s 153ZIM of the Act). The RVC methods apply "for the purposes of subsection 153ZIP(6) of the Act" (ss 6 and 7). The tariff change averaging rule in s 5 operates "for the purposes of subsection 153ZIP(3) of the Act." Record keeping duties are framed "for the purposes of subsection 126AJF(1) of the Act" (ss 11-12). This structure means that the Regulations supply operational detail that supplements and implements the origin, certificate of origin and audit provisions found in the Act. Any enforcement or penalty consequences are therefore determined under the Act.
• Customs valuation rules under Part VIII of the Act. The Regulations instruct that "customs value" in the RVC formulas is the customs value worked out under Division 2 of Part VIII of the Act (ss 6(1), 7(1)). Practically, this requires users to apply the Act’s valuation rules when calculating RVC, and means valuation disputes or differences in methodology will be resolved against the Act’s valuation principles.

International agreements

• Agreement on Implementation of Article VII of the GATT 1994. Section 8(2)(a) mandates that the value of materials imported into the territory of Peru by the producer must be worked out in accordance with the Agreement on Implementation of Article VII of the GATT 1994. The instrument thus pulls an international valuation standard into domestic application. That Agreement is the WTO Agreement on customs valuation. The instrument also notes where that Agreement can be found in the Australian Treaties Library (s 4 note). Where customs valuation disputes arise, reference will be made to that Agreement as the governing standard for imported material values.

Interplay with the Peru Agreement (implied)

• The instrument’s title and its cross‑reference to origin provisions in the Act indicate that the Regulations implement rules of origin connected to an Agreement referred to in the Act (the Act’s s 153ZIM framework). The Regulations do not reproduce the entire text of any bilateral or multilateral trade agreement. Instead, they provide the domestic mechanics for how origin tests are computed and evidenced, consistent with the Act and with the customs valuation Agreement mentioned above.

Administrative law and evidentiary interactions

• Evidence and administrative review. The prescribed documentary lists in ss 11-12 interact with general administrative law and evidentiary principles by specifying the proofs an exporter or producer must hold. Because the Act provides the enforcement path, administrative review or merits review of decisions taken under the Act may arise in the Federal Court, AAT or designated administrative review bodies as permitted by the Act. The Regulations themselves do not specify review mechanisms; those are matters governed by the Act and general administrative law.
• Interaction with domestic taxation and duties. The Regulations permit inclusion or deduction of duties, taxes and customs brokerage fees in material valuations under specified conditions (ss 8(4)(b), 8(5)(b)). Where duties or taxes are paid in Peru or Australia and are non‑refundable, they may be included or deducted. That creates a practical interaction with domestic tax and tariff regimes because the recoverability or refundability of a tax or duty affects the material value used in RVC and therefore the origin outcome.

What the Regulations do not change

• The Regulations do not alter the Act’s definitions or thresholds themselves outside the operational rules they supply. For example, they do not change the Act’s substantive definition of Australian originating goods; they supply formulas and valuation rules to be applied where the Act requires RVC or other numeric origin tests.
• They do not create new criminal offences or penalties; those remain within the Customs Act enforcement framework.

Practitioners must therefore read the Regulations alongside the relevant provisions of the Customs Act and, where applicable, the text of the international agreements referenced in the Act to fully understand the legal obligations and potential points of contention.

The Regulations, as provided in the text, include a commencement table indicating the whole instrument commenced "At the same time as Schedule 1 to the Customs Amendment (Growing Australian Export Opportunities Across the Asia‑Pacific) Act 2019 commences" and provides a specific date of 11 February 2020 in the commencement column (s 2 and the commencement table). The instrument contains an editorial note that the table relates only to the provisions as originally made and will not be amended to reflect later amendments. There are no subsequent amending provisions, amendment schedules or replacement text included in the document supplied.

The instrument’s preamble records it was made by the Governor‑General on 12 December 2019 and signed by the Assistant Minister for Customs, Community Safety and Multicultural Affairs, Parliamentary Secretary to the Minister for Home Affairs (cover page). Section 3 states the instrument is made under the Customs Act 1901. Section 4 establishes the definitions and expressly brings in, by reference, the Agreement on Implementation of Article VII of the GATT 1994 and the Marrakesh Agreement’s Annex 1A text as the source for the customs valuation Agreement (s 4). The instrument contains a note indicating where the Marrakesh Agreement could be viewed in the Australian Treaties Library as of 2019 (s 4 note).

No later amendment entries, amending instruments or repeal provisions are contained in the supplied text. Because the instrument itself contains only the original commencement table and an editorial note that the table is not amended to deal with later amendments, a reader concerned with amendment history must check the official Federal Register of Legislation or the Customs Act instrument registers for any subsequent amending instruments, repeals or corrigenda that post‑date the original instrument. The Regulations as presented here should therefore be treated as the original 2019 instrument with the commencement date given.

The text of the Customs (Peruvian Rules of Origin) Regulations 2019 contains no statement of case law, litigation history, judicial interpretation or references to litigated matters. It names no decisions or judicial authorities. Sections of the Regulations repeatedly link to provisions of the Customs Act 1901 (for example ss 153ZIM, 153ZIP, 153ZIQ and 126AJF) and to the Agreement on Implementation of Article VII of the GATT 1994, but they do not cite any court or tribunal decisions interpreting those provisions.

Because the Regulations are an administrative instrument that prescribes technical methods for valuation and record keeping and because enforcement occurs under the Customs Act, any litigation that arises in relation to these Rules of Origin is likely to appear in judicial or administrative review proceedings under the Act. Such disputes would typically concern: the proper application of the RVC formulas; the valuation of materials under the rules in s 8; the treatment of accessories and packaging under ss 9-10; the operation of the tariff change provision in s 5; or the adequacy and availability of records required by ss 11-12.

To identify litigation that applies these Regulations, a researcher must search decisions that cite the Regulations or the corresponding sections of the Act (for example decisions that consider subsection 153ZIP or s 126AJF) in the Federal Court, Administrative Appeals Tribunal or state/territory courts as relevant. The instrument itself does not provide any guidance on case law or past administrative practice. Consequently, readers should not infer the existence or absence of litigation from the silence of the instrument; they must consult judicial databases, the AustLII site and authorised case registers to locate any decisions that interpret these Regulations or their parent Act provisions.

The Regulations contain numerous technical features and conditional carve outs that can produce practical compliance pitfalls. The following are concrete mechanics and practical points to watch, with references to the relevant sections.

• Recursive application of tariff change rule (s 5). Section 5 allows a non‑originating material to be treated as satisfying a change in tariff classification if it was produced entirely in Peru, or in Peru and Australia, from other non‑originating materials that do satisfy the change. That provision can be applied repeatedly. The gotcha is that the rule requires documentary support at each stage showing production location and that the upstream non‑originating materials satisfy the change in classification. In practice this demands traceability across multiple tiers of supply and reliable HS classification evidence and production records for upstream inputs. See s 5.
• Different valuation treatments depending on whether material is originating or non‑originating (s 8(4)-(5)). The Regulations permit adding in‑country freight, non‑refundable duties and similar costs to the value of originating materials (s 8(4)), but permit deduction of equivalent costs for non‑originating materials (s 8(5)). The practical consequence is that the same physical cost item may be treated in opposite directions depending on origin status, which can materially affect the RVC outcome. Practitioners must therefore be precise about origin categorisation at the material level and retain supporting documents for treatment choices.
• Multiple alternative valuation bases for materials acquired in Peru (s 8(2)(b)). For materials acquired in Peru, the producer may use the price paid or payable, the value under imported material rules on an assumption of importation, or the earliest ascertainable price paid in Peru. That flexibility can lead to tax planning or shifting between valuation methods; however, it also creates an audit issue because Customs may challenge which measure is appropriate in the circumstances. Parties must document why a particular approach was chosen and ensure consistency across shipments to avoid disputes.
• Profit equivalent for produced materials (s 8(2)(c)(ii)). When a producer produces a material, its value includes all costs plus an amount equivalent to the normal profit the producer would make or which is usual for similar goods. Calculating and documenting an appropriate profit equivalent requires benchmarking and accounting evidence. The absence of clear internal policy for establishing that profit figure is an audit risk.
• Inclusion of waste and scrap in numerator/denominator (ss 8(4)(c), 8(5)(c)). Costs of waste and spoilage can be included for originating materials or deducted for non‑originating materials, after reducing by the value of reusable scrap or by‑products. Correct measurement and documentation of waste rates and the value of reusable scrap is often operationally difficult, particularly for complex manufacturing processes.
• Accessories, spare parts and packaging conditional on satisfying Act provisions (ss 9-10 referencing ss 153ZIP(7) and 153ZIQ(1) of the Act). The Regulations do not unconditionally require inclusion of accessories and packaging. Inclusion is only required if the statutory conditions in the Act are satisfied. Parties must therefore examine the Act’s conditions as well as the Regulations’ treatment. Failure to confirm the Act’s conditions can lead to incorrect inclusion or exclusion in RVC calculations.
• Record retention and evidence standards (ss 11-12). The Regulations insist on a broad set of purchase, production, classification and payment records and tie the retention period to issuance of the Certificate of Origin (five years). Two practical issues arise: first, exporters often have multiple versions of a Certificate or staggered issue dates for batches, and the five year clock is triggered by the date the Certificate of Origin is issued (ss 11(2), 12(2)). Second, electronic or foreign language records are acceptable only if readily convertible and translatable into English hard copy (ss 11(3)(b)(iii), 12(3)(b)(iii)). Failing to keep records in a readily convertible form imposes an operational disclosure risk on audit.
• Offshore record keeping is permitted but practically constrained (ss 11(3)(a), 12(3)(a)). Records may be kept outside Australia, but the exporter/producer must ensure records are readily available, translatable and convertible into English hard copy. In cross‑border supply chains, reliance on suppliers’ foreign records or cloud services may impede rapid production of documentation in the event of an audit.
• Interplay with customs valuation under the GATT Agreement (s 8(2)(a)). Imported materials must be valued according to the GATT customs valuation Agreement. That pulls in international valuation concepts (for example transaction value adjustments) which can differ from domestic accounting valuations. Practitioners must be attentive to the technical differences when reconciling accounting records to customs declarations.

In short, the technical flexibility in valuation and the staged production/tariff change recursion authorised by the instrument place an onus on robust documentation, consistent internal policies for valuation and profit equivalents, and careful tracking of origin status at the material level.

Compliance with these Regulations requires a combination of correct calculation methodology, record keeping, and demonstrable evidentiary trails. The following is a practical compliance checklist mapped to the sections:

1. Establish the legal basis and read the Act concurrently.

   • Confirm that the goods are being exported under the Agreement and that the Certificate of Origin and Act conditions (for example ss 153ZIP and 153ZIQ) apply. The Regulations repeatedly refer to the Act; read the applicable sections in the Customs Act 1901 in parallel (s 4).

2. Decide the appropriate RVC method and apply the formula.

   • Where the Act requires RVC, choose either the build‑down method (s 6) or the build‑up method (s 7) as permitted by the Act. Apply the formulas in ss 6(1) and 7(1), using the customs value from Division 2 of Part VIII of the Act as the denominator in each case (ss 6(1), 7(1)). Ensure RVC is expressed as a percentage (ss 6(2), 7(2)).

3. Value materials according to the categories in s 8.

   • Imported materials: apply the customs valuation rules set out in the Agreement on Implementation of Article VII of GATT 1994 (s 8(2)(a) and s 4 definition). Include international shipment costs where those are part of the customs valuation for imported materials (s 8(3)).
   • Materials acquired in Peru: have documentation to support the price paid or payable, or a rationale if using imported‑assumption valuation or the earliest ascertainable price in Peru (s 8(2)(b)(i)-(iii)).
   • Materials produced by the producer: document costs, general expenses and a transparent method for the profit equivalent (s 8(2)(c)(i)-(ii)). Keep supporting cost allocation and profit benchmarking documentation.

4. Apply the permitted inclusions and deductions precisely.

   • For originating materials, document freight, insurance, packing and other in‑country transport costs, and provide evidence for duties, taxes and brokerage fees that are paid and non‑refundable (s 8(4)). Document waste and spoilage calculations and the value of scrap or by‑products deducted.
   • For non‑originating materials, document and substantiate deductions for in‑country freight and non‑refundable duties and taxes where applicable (s 8(5)).

5. Assess tariff change qualification for non‑originating materials.

   • Where a material does not on its face meet a required change in tariff classification, determine whether it was produced entirely in Peru or Peru and Australia from other non‑originating materials that themselves meet the tariff change (s 5). If relying on s 5, obtain and preserve upstream production records and HS classification evidence for each tier to support recursive application.

6. Treat accessories and packaging only where Act conditions are met.

   • Confirm whether the conditions in ss 153ZIP(7)(a)-(d) or 153ZIQ(1)(a)-(b) of the Act are satisfied. If they are, include accessories, spare parts, tools and information materials in the RVC calculation as required by s 9 and include packaging materials and containers where s 10 applies.

7. Maintain the record package required by the Regulations.

   • Exporters who are not producers must keep the list in s 11(1)(a)-(i). Producers must keep the list in s 12(1)(a)-(l). Ensure records include purchase documents, HS classification evidence, payment evidence, production records, and a copy of the Certificate of Origin.
   • Retain these records for at least five years from the date the Certificate of Origin is issued (ss 11(2), 12(2)). Establish an internal records retention policy tied to Certificate dates.

8. Ensure records are accessible, in English and convertible.

   • Records can be stored outside Australia (ss 11(3)(a), 12(3)(a)), but they must be in a form that allows determination of whether goods are Australian originating goods and must be readily translatable into English and convertible into an English hard copy if stored electronically (ss 11(3)(b)(ii)-(iii), 12(3)(b)(ii)-(iii)). Implement procedures for prompt translation and hard copy conversion on request from authorities.

9. Prepare customs declarations using statutory customs valuation.

   • Because the RVC denominator is the customs value under Division 2 of Part VIII of the Act, ensure customs entry valuation and RVC calculations reconcile. Coordinate with customs brokers so declared customs values and RVC computations use consistent bases (ss 6(1), 7(1)).

10. Build an audit trail and governance documentation.

    • Maintain methodological notes and internal policies explaining selection of RVC method, valuation method for in‑Peru purchases, calculation of profit equivalents and treatment of waste and scrap. These policy documents assist in justifying choices during audits and reduce the risk of inconsistent application across shipments.

11. Review upstream suppliers and contractual terms.

    • Where recursive tariff change treatment under s 5 is relied upon, obtain contractual and production records from suppliers to evidence place of production and HS classification changes. Include clause obligations in supply contracts to obtain and retain the specific records required by ss 11-12.

12. Engage advisers where necessary.

    • For complex multi‑tier production chains, materials with ambiguous HS classification changes, or where profit equivalents are difficult to benchmark, seek customs, trade and accounting advice. The Regulations set technical valuation standards; misapplication can lead to post‑export adjustments under the Customs Act.

By following these steps, exporters and producers can structure their processes to satisfy the Regulations’ calculation and documentary requirements. Given the Regulations’ integration with the Customs Act’s enforcement provisions, compliance is best managed by aligning production, accounting and export documentation practices so that origin assertions can be substantiated promptly in the event of an audit.