This instrument implements the Regional Comprehensive Economic Partnership (RCEP) rules of origin and related customs procedures for Australia. It sets how origin is calculated (two value methods and tariff‑change rules), how material value is determined, what records exporters and producers must keep, and an approved‑exporter approval and supervision regime. It affects producers and exporters (who bear documentation and valuation burdens) and gives the Comptroller‑General of Customs decision and enforcement powers that determine eligibility for preferential tariffs.
This instrument, the Customs (Regional Comprehensive Economic Partnership) Regulations 2021, is a subordinate instrument made under the Customs Act 1901 (the Act). It supplies technical rules and administrative procedures that implement certain origin, valuation, record keeping and approved exporter arrangements that are to be applied for goods exported to or produced in a Party under the relevant free trade Agreement (the instrument uses the defined term Agreement as given by subsection 153ZQB(1) of the Act). The instrument does not restate the primary Act provisions it implements; instead it operates “for the purposes of” particular subsections of the Act by prescribing formulas, valuation rules, documentary and retention requirements, and administrative processes for approved exporter status.
Mechanically, the instrument:
Prescribes the method for treating intermediate non‑originating materials that fail a change in tariff classification test but are wholly produced in a Party from other non‑originating materials, by permitting recursive application so the intermediate is “taken to satisfy” the change in tariff classification where the underlying inputs do (s 5).
Sets out the two permissible regional value content (RVC) calculation formulas and identifies the components to be included or sourced for those formulas: the direct or build‑up method in s 6 and the indirect or build‑down method in s 7.
Provides rules for determining the monetary value of originating and non‑originating materials used in production (Part 4, especially s 8), including which international valuation framework to apply for imported inputs (the Agreement on Implementation of Article VII of GATT 1994) and what costs may be deducted.
Requires the inclusion of packaging, containers, accessories, spare parts, tools and instructional or other information materials in RVC calculations where particular Act paragraphs apply, and indicates how to treat such components as originating or non‑originating for the purposes of the RVC formulas (ss 9 and 10).
Current sections
Direct links to the current provisions in Customs (Regional Comprehensive Economic Partnership) Regulations 2021.
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Part 1
Preliminary
Part 1—Preliminary
1
Name
1 Name
This instrument is the Customs (Regional Comprehensive Economic Partnership) Regulations 2021.
3
Authority
3 Authority
This instrument is made under the Customs Act 1901.
4
Definitions
4 Definitions
In this instrument:
Act means the Customs Act 1901.
Agreement has the meaning given by subsection 153ZQB(1) of the Act.
Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 means the Agreement of that name:
(a) set out in Annex 1A of the Marrakesh Agreement establishing the World Trade Organization, done at Marrakesh on 15 April 1994; and
(b) as in force for Australia from time to time.
Note: The Marrakesh Agreement establishing the World Trade Organization is in Australian Treaty Series 1995 No. 8 ([1995] ATS 8) and could in 2021 be viewed in the Australian Treaties Library on the AustLII website (http://www.austlii.edu.au).
Harmonized System has the meaning given by subsection 153ZQB(1) of the Act.
non‑originating materials has the meaning given by subsection 153ZQB(1) of the Act.
originating materials has the meaning given by subsection 153ZQB(1) of the Act.
Party has the meaning given by subsection 153ZQB(1) of the Act.
production has the meaning given by subsection 153ZQB(1) of the Act.
Proof of Origin has the meaning given by subsection 153ZQB(1) of the Act.
Part 2
Tariff change requirement
Part 2—Tariff change requirement
5
Change in tariff classification requirement for non‑originating materials
5 Change in tariff classification requirement for non‑originating materials
For the purposes of subsection 153ZQE(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:
(a) it was produced entirely in a Party from other non‑originating materials; and
(b) each of those other non‑originating materials satisfies the change in tariff classification, including by one or more applications of this section.
customs value means the customs value of the goods worked out under Division 2 of Part VIII of the Act.
direct labour costs includes wages, remuneration and other employee benefits.
direct overhead costs means the total overhead expense.
other costs has the same meaning as it has in Article 3.5 of Chapter 3 of the Agreement.
profit has the same meaning as it has in Article 3.5 of Chapter 3 of the Agreement.
value of originating materials means the value, worked out under Part 4, of the originating materials that are acquired by the producer, or produced by the producer, and are used by the producer in the production of the goods.
(2) Regional value content must be expressed as a percentage.
customs value means the customs value of the goods worked out under Division 2 of Part VIII of the Act.
value of non‑originating materials means the value, worked out under Part 4, of the non‑originating materials used in the production of the goods.
(2) Regional value content must be expressed as a percentage.
Part 4
Determination of value
Part 4—Determination of value
8
Value of goods that are originating materials or non‑originating materials
8 Value of goods that are originating materials or non‑originating materials
(1) For the purposes of subsection 153ZQB(2) of the Act, this section explains how to work out the value of originating materials or non‑originating materials used in the production of goods.
(2) The value of the materials is as follows:
(a) for originating materials acquired in a Party, or produced in a Party, by the producer of the goods—the value of the materials worked out in accordance with the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 on the assumption that those materials had been imported into the Party by the producer of the goods;
(b) for non‑originating materials imported into a Party—the value of the materials worked out in accordance with the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994;
(c) for non‑originating materials acquired in a Party by the producer of the goods—the earliest ascertainable price paid or payable for the materials;
(d) for non‑originating materials produced in a Party by the producer of the goods—the sum of:
(i) all the costs incurred in the production of the materials, including general expenses; and
(ii) an amount that is the equivalent of the amount of profit that the producer would make for the materials in the normal course of trade.
(3) For the purposes of paragraph (2)(b), in working out the value of particular non‑originating materials, the following must be included:
(a) the cost of freight of the non‑originating materials to the port or place of entry in the Party;
(b) the cost of insurance related to that freight.
(4) For the purposes of paragraph (2)(b), (c) or (d), in working out the value of particular non‑originating materials, the following may be deducted:
(a) the costs of freight, insurance, packing and other transport‑related costs incurred in transporting the non‑originating materials to the producer of the goods;
(b) duties, taxes and customs brokerage fees on the non‑originating materials that:
(i) have been paid in a Party; and
(ii) have not been waived or refunded; and
(iii) are not refundable or otherwise recoverable;
including any credit against duties or taxes that have been paid or that are payable;
(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 renewable scrap or by‑products.
9
Value of packaging material and container
9 Value of packaging material and container
If paragraphs 153ZQF(1)(a) and (b) of the Act are satisfied in relation to goods and the goods must have a regional value content of not less than a particular percentage worked out in a particular way:
(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 Part 3 of this instrument; and
(b) if that packaging material or container is an originating material—for the purposes of sections 6 and 8 of this instrument, that packaging material or container must be taken into account as an originating material used in the production of the goods; and
(c) if that packaging material or container is a non‑originating material—for the purposes of sections 7 and 8 of this instrument, that packaging material or container must be taken into account as a non‑originating material used in the production of the goods.
10
Value of accessories, spare parts, tools or instructional or other information materials
10 Value of accessories, spare parts, tools or instructional or other information materials
If paragraphs 153ZQG(1)(a), (b) and (c) of the Act are satisfied in relation to goods and the goods must have a regional value content of not less than a particular percentage worked out in a particular way:
(a) the value of the accessories, spare parts, tools or instructional or other information materials must be taken into account for the purposes of working out the regional value content of the goods under Part 3 of this instrument; and
(b) if the accessories, spare parts, tools or instructional or other information materials are originating materials—for the purposes of sections 6 and 8 of this instrument, those accessories, spare parts, tools or instructional or other information materials must be taken into account as originating materials used in the production of the goods; and
(c) if the accessories, spare parts, tools or instructional or other information materials are non‑originating materials—for the purposes of sections 7 and 8 of this instrument, those accessories, spare parts, tools or instructional or other information materials must be taken into account as non‑originating materials used in the production of the goods.
Part 5
Record keeping obligations
Part 5—Record keeping obligations
11
Exportation of goods to a Party—record keeping by exporter who is not the producer of the goods
11 Exportation of goods to a Party—record keeping by exporter who is not the producer of the goods
(1) For the purposes of subsection 126AQB(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:
(a) records of the purchase of the goods by the exporter;
(b) records of the purchase of the goods by the person to whom the goods are exported;
(c) evidence that payment has been made for the goods;
(d) evidence of the classification of the goods under the Harmonized System;
(e) if the goods include any accessories, spare parts, tools or instructional or other information materials that were purchased by the exporter:
(i) records of the purchase of the accessories, spare parts, tools or instructional or other information materials; and
(ii) evidence of the value of the accessories, spare parts, tools or instructional or other information materials;
(f) if the goods include any accessories, spare parts, tools or instructional or other information materials that were produced by the exporter:
(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
(ii) evidence of the value of the materials so purchased; and
(iii) records of the production of the accessories, spare parts, tools or instructional or other information materials;
(g) if the goods are packaged for retail sale in packaging material or a container that was purchased by the exporter:
(i) records of the purchase of the packaging material or container; and
(ii) evidence of the value of the packaging material or container;
(h) if the goods are packaged for retail sale in packaging material or a container that was produced by the exporter:
(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
(ii) evidence of the value of the materials so purchased; and
(iii) records of the production of the packaging material or container;
(i) a copy of the Proof of Origin for the goods;
(j) any other documents in support of the goods being originating goods in accordance with Chapter 3 of the Agreement (including documents from the producer or supplier of the goods).
(2) The records must be kept for at least 5 years starting on the date the Proof of Origin for the goods is issued.
(3) The exporter:
(a) may keep the records at any place (whether or not in Australia); and
(b) must ensure that:
(i) the records are kept in a form that would enable a determination of whether the goods are originating goods in accordance with Chapter 3 of the Agreement; and
(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
(iii) if the records are kept by mechanical or electronic means—the records are readily convertible into a hard copy in English.
12
Exportation of goods to a Party—record keeping by the producer of the goods
12 Exportation of goods to a Party—record keeping by the producer of the goods
(1) For the purposes of subsection 126AQB(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:
(a) records of the purchase of the goods;
(b) if the producer is the exporter of the goods—evidence of the classification of the goods under the Harmonized System;
(c) evidence that payment has been made for the goods;
(d) evidence of the value of the goods;
(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;
(f) evidence of the value of those materials;
(g) records of the production of the goods;
(h) if the goods include any accessories, spare parts, tools or instructional or other information materials that were purchased by the producer:
(i) records of the purchase of the accessories, spare parts, tools or instructional or other information materials; and
(ii) evidence of the value of the accessories, spare parts, tools or instructional or other information materials;
(i) if the goods include any accessories, spare parts, tools or instructional or other information materials that were produced by the producer:
(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
(ii) evidence of the value of the materials so purchased; and
(iii) records of the production of the accessories, spare parts, tools or instructional or other information materials;
(j) if the goods are packaged for retail sale in packaging material or a container that was purchased by the producer:
(i) records of the purchase of the packaging material or container; and
(ii) evidence of the value of the packaging material or container;
(k) if the goods are packaged for retail sale in packaging material or a container that was produced by the producer:
(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
(ii) evidence of the value of the materials so purchased; and
(iii) records of the production of the packaging material or container;
(l) a copy of the Proof of Origin for the goods.
(2) The records must be kept for at least 5 years starting on the date the Proof of Origin for the goods is issued.
(3) The producer:
(a) may keep the records at any place (whether or not in Australia); and
(b) must ensure that:
(i) the records are kept in a form that would enable a determination of whether the goods are originating goods in accordance with Chapter 3 of the Agreement; and
(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
(iii) if the records are kept by mechanical or electronic means—the records are readily convertible into a hard copy in English.
Part 6
Approved exporters
Part 6—Approved exporters
13
Application for approval as approved exporter
13 Application for approval as approved exporter
(1) For the purposes of section 126AQE of the Act, an entity may make an application to the Comptroller‑General of Customs for approval as an approved exporter.
(2) An application may be made by document or electronically.
(3) A documentary application must:
(a) be communicated to the Comptroller‑General of Customs; and
(b) be in an approved form; and
(c) contain the information required by the approved form; and
(d) be signed in a manner indicated by the approved form.
(4) An electronic application must communicate such information as is set out in an approved statement.
(5) An entity may withdraw an application at any time by notice in writing given to the Comptroller‑General of Customs.
14
Eligibility criteria
14 Eligibility criteria
For the purposes of section 126AQE of the Act, the eligibility criteria that an entity must meet in order for the Comptroller‑General of Customs to approve the entity as an approved exporter are the following:
(a) a trusted trader agreement with the entity is in force under section 176A of the Act;
(b) the Comptroller‑General is satisfied that the entity knows and understands the rules of origin as set out in Section B of Chapter 3 of the Agreement;
(c) the Comptroller‑General is satisfied that, if the entity were to complete a Declaration of Origin for goods exported to a Party, the entity would be able to obtain from the producer of the goods a declaration:
(i) claiming that the goods are originating goods in accordance with Chapter 3 of the Agreement; and
(ii) stating that the producer is willing to cooperate with any verification process in accordance with Article 3.24 of Chapter 3 of the Agreement and is able to meet the requirements of Section B of that Chapter.
15
Comptroller‑General of Customs to decide application
15 Comptroller‑General of Customs to decide application
(1) For the purposes of section 126AQE of the Act, the Comptroller‑General of Customs may, in writing, approve an entity as an approved exporter if:
(a) the entity makes an application in accordance with section 13 of this instrument; and
(b) the Comptroller‑General is satisfied that the entity meets the eligibility criteria under section 14 of this instrument.
(2) For the purposes of section 126AQE of the Act, the Comptroller‑General must consider the following matters in deciding whether to approve an entity as an approved exporter:
(a) whether a trusted trader agreement between the entity and the Comptroller‑General has been varied, suspended or terminated under section 178A of the Act;
(b) whether the Comptroller‑General is considering varying, suspending or terminating a trusted trader agreement between the entity and the Comptroller‑General.
(3) Subsection (2) does not limit the matters the Comptroller‑General may consider in deciding whether to approve an entity as an approved exporter.
Approved exporter code
(4) An approval under subsection (1) must specify the entity’s approved exporter code.
Copy of approval to be given to entity
(5) The Comptroller‑General of Customs must give a copy of an approval under subsection (1) to the entity.
Period for which approval is in force
(6) An approval under subsection (1) must specify the period for which it is in force.
Note: See section 17 for variation, suspension or termination of an approval.
Refusal to approve entity as approved exporter
(7) If an entity makes an application for approval as an approved exporter and the application is in accordance with section 13, the Comptroller‑General of Customs may, in writing, refuse to approve the entity as an approved exporter.
(8) If the Comptroller‑General does so, the Comptroller‑General must notify the entity of the refusal and of the reasons for the refusal.
Review
(9) An application may be made to the Administrative Review Tribunal for review of a decision to refuse to approve an entity as an approved exporter.
16
Conditions of approval
16 Conditions of approval
For the purposes of section 126AQE of the Act, an approval of an entity as an approved exporter is subject to the following conditions:
(a) the entity complies with paragraph 3 of Article 3.21 of Chapter 3 of the Agreement;
(b) any other conditions specified in the approval by the Comptroller‑General of Customs.
17
Variation, suspension or termination of approval
17 Variation, suspension or termination of approval
(1) For the purposes of section 126AQE of the Act, the Comptroller‑General of Customs may, in writing, vary, suspend or terminate an entity’s approval as an approved exporter if the Comptroller‑General is satisfied that:
(a) the entity no longer meets the eligibility criteria under section 14 of this instrument; or
(b) the entity has not complied, or is not complying, with any condition of the entity’s approval.
(2) Without limiting subsection (1), a variation of an approval may involve imposing new conditions on the approval or varying or removing existing conditions.
Process for making decision
(3) Before making a decision under subsection (1), the Comptroller‑General of Customs must give the entity notice in writing:
(a) stating the decision the Comptroller‑General is considering making; and
(b) stating the reasons why the Comptroller‑General is considering making the decision; and
(c) inviting the entity to make written submissions to the Comptroller‑General within the period specified in the notice (which must be a period of at least 10 business days starting on the day on which the notice is given).
(4) In deciding whether to make a decision under subsection (1), the Comptroller‑General must consider any submissions received from the entity within the period specified in the notice.
(5) Subsection (4) does not limit the matters the Comptroller‑General may consider in deciding whether to make a decision under subsection (1).
Notice of decisions
(6) The Comptroller‑General must give notice of a variation, suspension or termination to the entity.
(7) The notice must specify the day the variation, suspension or termination takes effect (which must not be before the day after the notice is given to the entity).
(8) The Comptroller‑General must give the entity notice in writing of any decision not to vary, suspend or terminate the entity’s approval as an approved exporter.
Consequences of suspension
(9) An approval has no effect while suspended, but the period for which it remains in force continues to run despite the suspension.
(10) The Comptroller‑General of Customs may, under subsection (1), vary or terminate an approval while it is suspended.
Revocation of suspension
(11) The Comptroller‑General of Customs may, in writing, revoke a suspension under subsection (1).
(12) The Comptroller‑General must give notice of the revocation of the suspension to the entity. The notice must specify the day the revocation takes effect.
Review
(13) An application may be made to the Administrative Review Tribunal for review of a decision to vary, suspend or terminate an entity’s approval as an approved exporter.
Part 7
Application provisions
Part 7—Application provisions
18
Amendments made by the Customs Legislation Amendment (ASEAN‑Australia‑New Zealand Free Trade Area Second Protocol Implementation and Other Measures) Regulations 2025
18 Amendments made by the Customs Legislation Amendment (ASEAN‑Australia‑New Zealand Free Trade Area Second Protocol Implementation and Other Measures) Regulations 2025
The amendment of subsection 11(1) made by Schedule 2 to the Customs Legislation Amendment (ASEAN‑Australia‑New Zealand Free Trade Area Second Protocol Implementation and Other Measures) Regulations 2025 applies in relation to goods produced on or after the commencement of that Schedule.
Source text: opening excerpt
Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
Part 1 Preliminary
Part 1—Preliminary
1 Name
1 Name
This instrument is the Customs (Regional Comprehensive Economic Partnership) Regulations 2021.
3 Authority
3 Authority
This instrument is made under the Customs Act 1901.
4 Definitions
4 Definitions
In this instrument:
Act means the Customs Act 1901.
Agreement has the meaning given by subsection 153ZQB(1) of the Act.
Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 means the Agreement of that name:
(a) set out in Annex 1A of the Marrakesh Agreement establishing the World Trade Organization, done at Marrakesh on 15 April 1994; and
(b) as in force for Australia from time to time.
Note: The Marrakesh Agreement establishing the World Trade Organization is in Australian Treaty Series 1995 No. 8 ([1995] ATS 8) and could in 2021 be viewed in the Australian Treaties Library on the AustLII website (http://www.austlii.edu.au).
Harmonized System has the meaning given by subsection 153ZQB(1) of the Act.
non‑originating materials has the meaning given by subsection 153ZQB(1) of the Act.
originating materials has the meaning given by subsection 153ZQB(1) of the Act.
Party has the meaning given by subsection 153ZQB(1) of the Act.
production has the meaning given by subsection 153ZQB(1) of the Act.
Proof of Origin has the meaning given by subsection 153ZQB(1) of the Act.
Part 2 Tariff change requirement
Part 2—Tariff change requirement
5 Change in tariff classification requirement for non‑originating materials
5 Change in tariff classification requirement for non‑originating materials
For the purposes of subsection 153ZQE(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:
(a) it was produced entirely in a Party from other non‑originating materials; and
(b) each of those other non‑originating materials satisfies the change in tariff classification, including by one or more applications of this section.
Prescribes record keeping obligations for exporters who are not producers and for producers, listing documents to be retained, retention period and format and translation requirements (ss 11 and 12).
Establishes the application, eligibility, approval, conditions, and procedural rights and obligations for “approved exporters”, referencing the trusted trader regime and the Comptroller‑General’s administrative powers to approve, vary, suspend or terminate approvals; it also prescribes minimum procedural steps such as notice and opportunity to make submissions and an administrative review avenue (Part 6, ss 13-17).
Contains an application provision dealing with an amendment made by a later instrument (a 2025 Regulations instrument) and fixes that amendment’s temporal operation for goods produced on or after that later commencement date (s 18).
The instrument repeatedly operates “for the purposes of” specified sections of the Customs Act , notably subsections 153ZQE(3), 153ZQE(6)(b), 153ZQB(2), 126AQB(1), and 126AQE , and hence its legal effect is to populate those Act provisions with operational detail. The instrument also cross‑references international obligations in the Agreement and the WTO valuation Agreement. The Comptroller‑General of Customs retains decisionmaking authority and discretion in approvals and variations, but the instrument prescribes minimum procedural protections such as written reasons, notice and a minimum 10 business day period to make written submissions before adverse action on an approval (s 17(3)).
Main concepts
The instrument revolves around a small set of technical concepts used to determine whether goods are originating goods under the relevant Agreement and how to calculate the regional value component that determines origin.
Agreement and Parties: The instrument uses the defined term Agreement (as defined in subsection 153ZQB(1) of the Act) and the notion of a Party. The Agreement is the reference for the substantive origin rules, and individual Members to that Agreement are the Parties in which production or acquisition occurs. The instrument references particular Articles within Chapter 3 of the Agreement, for example Article 3.5 (defining profit and other costs for RVC), Article 3.21 (approved exporter provisions), and Article 3.24 (verification cooperation by producers).
Originating materials and non‑originating materials: These defined terms carry the meaning given by subsection 153ZQB(1) of the Act. The instrument repeatedly instructs how to value such materials and how to treat them in the RVC calculations. The distinction drives the RVC numerator or denominator depending on the chosen method.
Change in tariff classification requirement and recursive treatment (s 5): Some rules of origin are satisfied by a change in tariff classification of a material when it has been sufficiently transformed. Section 5 provides a mechanism where a non‑originating material that itself fails to meet the change in tariff classification can nevertheless be treated as meeting it if it was wholly produced in a Party from other non‑originating materials and each underlying non‑originating material does satisfy the classification change, including by recursive application of s 5. This permits multi‑stage processing entirely within Parties to be accounted for when applying a classification change requirement.
Regional value content (RVC) methods (ss 6-7): Two alternative RVC computation methods are prescribed:
Direct/build‑up method (s 6): RVC = (Value of originating materials + Direct labour costs + Direct overhead costs + Profit + Other costs) / Customs value × 100. The instrument defines the components: customs value is the value under Division 2 of Part VIII of the Act, direct labour costs include wages and benefits, direct overhead costs means total overhead expense, and “profit” and “other costs” have the meanings given in Article 3.5 of Chapter 3 of the Agreement. The value of originating materials is to be worked out under Part 4 of the instrument.
Indirect/build‑down method (s 7): RVC = (Customs value − Value of non‑originating materials) / Customs value × 100. Customs value is again per Division 2 of Part VIII, and the value of non‑originating materials is worked out under Part 4.
Valuation rules for materials (Part 4, s 8): The instrument sets out how to determine the “value” of originating and non‑originating materials for the RVC formulas:
Originating materials that are acquired in a Party, or produced in a Party, by the producer of the goods: value is worked out according to the WTO Agreement on Implementation of Article VII of GATT 1994, on the assumption that those materials had been imported into the Party by the producer.
Non‑originating materials imported into a Party: value worked out in accordance with the WTO valuation Agreement.
Non‑originating materials acquired in a Party by the producer: the earliest ascertainable price paid or payable.
Non‑originating materials produced in a Party by the producer: the sum of all production costs including general expenses, plus an amount equivalent to profit the producer would make in the normal course of trade.
The instrument also prescribes what must be included for imported non‑originating materials (freight to port/place of entry and insurance), and what may be deducted (freight/insurance/packing/transport to the producer, duties/taxes/customs brokerage paid in a Party and not refundable or recoverable, and costs of waste/spoilage reduced by renewable scrap/by‑product values).
Packaging and ancillary items (ss 9-10): Where the relevant Act paragraphs (153ZQF and 153ZQG) apply, packaging materials and accessories/spare parts/tools/instructional material must be included in the RVC calculation and treated as originating or non‑originating materials as appropriate for the purposes of ss 6-8.
Record keeping and format requirements (Part 5, ss 11-12): Exporters who are not producers and producers themselves must retain a catalogue of documents: purchase records, evidence of payment, Harmonized System classification evidence, production records, values of materials, copies of Proofs of Origin and supporting documents from suppliers or producers. Records must be retained for five years from the date the Proof of Origin is issued, may be stored outside Australia, must enable determination of origin, and if not in English must be stored so that an English translation can be readily made; electronic records must be readily convertible to hard copy in English.
Approved exporter regime and procedural safeguards (Part 6, ss 13-17): Entities may apply to the Comptroller‑General of Customs to become approved exporters. Application formats are prescribed (documentary application in approved form with signature, or electronic application by approved statement). Eligibility is limited to entities with a trusted trader agreement in force under s 176A of the Act, and to those the Comptroller‑General is satisfied know the origin rules and can obtain producer declarations that include willingness to cooperate in verifications (Article 3.24). The Comptroller‑General may approve, refuse, vary, suspend or terminate approvals in writing, must give reasons and notice of refusal, must specify an approved exporter code and period of force, and must afford pre‑decision notice and at least 10 business days to make written submissions before varying, suspending or terminating approval. Decisions are reviewable by the Administrative Review Tribunal.
Administrative links to the primary Act and international instruments: The instrument expressly relies on the customs value provisions in Division 2 of Part VIII of the Act and on the WTO valuation Agreement, and it invokes several specific Article provisions of the Agreement that give substantive definitions (Article 3.5), verification expectations (Article 3.24) and approved exporter discipline (Article 3.21).
Who it affects
The instrument affects a defined set of economic actors and administrative actors engaged in cross‑border trade between Australia and Parties to the relevant Agreement, and it allocates duties and compliance tasks among them.
Primary private sector actors affected
Producers of goods (s 12): Producers are required to keep detailed records of purchases, production processes, values of materials, Harmonized System classifications of materials, and copies of Proofs of Origin. Producers who also export goods must keep evidence of HS classification of the goods. Producers that produce accessories, packaging or containers must keep purchase records for the materials used and production records for those items where produced in‑house. All producers must retain the records for five years from the Proof of Origin issuance date and must ensure records are in a form to permit determination of origin and conversion/translation as required.
Exporters who are not producers (s 11): Exporters who purchase goods for export but are not the producer must keep records of their purchases, records of purchases by the importer, evidence of payment, HS classification evidence, copies of Proofs of Origin, and supporting documentation, including for accessories, packaging and any parts purchased or produced by the exporter. Same retention, translation and convertible format obligations apply.
Suppliers and upstream vendors: The instrument requires exporters and producers to be able to obtain supporting documentation from suppliers or producers (s 11(1)(j)). The approved exporter eligibility criteria require that an applicant be able to obtain a producer declaration claiming the goods as originating goods and stating that the producer will cooperate with verification (s 14(b),(c)). This creates demand on upstream suppliers to provide timely and verifiable declarations and supporting evidence.
Secondary private sector actors and intermediaries
Logistics, packing and freight service providers: The valuation rules (s 8(3) and s 8(4)) involve freight and insurance costs to port or producer; therefore suppliers of freight, insurance and packing services will see their invoices and cost allocations form part of origin determinations and potential deductions.
Accountants and compliance advisors: The prescribed valuation methodologies, the requirement to calculate RVC under two alternative methods, and the need to keep detailed records will impose work for advisers who must design compliant systems and prepare evidence for verification requests.
Entities seeking approved exporter status (s 13-17): To be eligible as an approved exporter, an entity must be party to a trusted trader agreement under s 176A of the Act. This means participants in that trusted trader programme will be potential applicants. Entities without trusted trader agreements cannot meet the eligibility criteria set out in s 14(a).
Administrative and enforcement actors
The Comptroller‑General of Customs: The instrument vests decisionmaking power in the Comptroller‑General over approvals, conditions, variances, suspensions and terminations (e.g. s 15 and s 17). The Comptroller‑General also must give copies of approvals and notices of decisions (ss 15(5), 17(6) and 17(12)). The instrument prescribes the matters the Comptroller‑General must, at a minimum, consider and the process to be followed in proposing adverse actions.
Administrative Review Tribunal: The instrument provides that an application may be made to the Administrative Review Tribunal for review of refusals and of decisions to vary, suspend or terminate an approved exporter status (ss 15(9), 17(13)). The Tribunal is the review body for administrative actions under the instrument.
Who pays and who does the work
Exporters and producers pay compliance costs: They must keep and store documentary evidence for five years, implement systems to calculate RVC under the prescribed formulas, gather and maintain producer declarations where required, and provide translations and hard copy conversion capability for electronic records. If seeking approved exporter status, they must also enter a trusted trader agreement and demonstrate knowledge and capacity to comply with origin rules.
The Comptroller‑General and Customs pay administrative and verification costs: The instrument enables verification activities by the Comptroller‑General and places obligations on producers to cooperate (via approved exporter eligibility requirements referencing Article 3.24). The instrument requires notice processes that impose administrative work on the Comptroller‑General’s office and provide appeal pathways through the Administrative Review Tribunal.
Concentrated versus diffuse burdens and benefits
Concentrated duties and obligations fall on exporters/producers who trade with Parties under the Agreement: These entities must implement record keeping and valuation methods and, if part of the approved exporter regime, satisfy eligibility and cooperate with verification.
Benefits of preferential access and tariff reduction accrue directly to exporters and importers who can establish origin and satisfy RVC or other origin criteria. The instrument itself documents the operational pathway to access such benefits but does not describe the tariff schedule or the magnitude of preferential tariff benefits; those remain outside the instrument’s text.
Cross‑border and operational impacts
Offshore recordkeeping permitted (ss 11(3)(a), 12(3)(a)) reduces locational friction for multinational supply chains but retains obligations that records be readily convertible into English hard copy (ss 11(3)(b)(iii), 12(3)(b)(iii)). This creates obligations for export compliance systems and for suppliers outside English speaking jurisdictions to supply translations and convertibility.
The recursive change in tariff classification rule (s 5) affects multi‑stage production chains by allowing intermediate goods produced wholly in a Party from other non‑originating inputs to be treated as satisfying classification change requirements, provided the underlying inputs satisfy the classification changes. This alters incentives in supply chain design where multi‑stage transformation occurs wholly within Parties.
Key duties and rights
The instrument imposes specific duties on producers, exporters and applicants for approved exporter status, and it simultaneously creates procedural rights and discrete administrative obligations for the Comptroller‑General. The duties and rights are precise and technical; below they are grouped by actor.
Duties of exporters who are not producers (s 11)
Record keeping duty: An exporter who is not the producer must keep a defined set of records for each consignment that is the subject of subsection 126AQB(1) of the Act. The list includes purchase records for the goods, purchase records of the goods by the importer, evidence of payment, Harmonized System classification evidence, purchase and value documentation for accessories or packaging if purchased, production records where accessories or packaging were produced by the exporter, and a copy of the Proof of Origin (s 11(1)(a)-(l)).
Retention period: Records must be kept for at least five years starting on the date the Proof of Origin is issued (s 11(2)).
Format and accessibility: Exporters may store records at any place (including outside Australia), but must ensure the records enable determination of origin under Chapter 3 of the Agreement, are readily translatable into English if not in English, and if stored electronically are readily convertible to a hard copy in English (s 11(3)(a)-(b)(iii)).
Duties of producers (s 12)
Record keeping duty: Producers must keep purchase records for the goods, evidence of payment, evidence of value, records of purchases of all materials used in production with HS classification evidence, evidence of value of those materials, production records, purchase and value documentation for accessories and packaging (whether purchased or produced), and a copy of the Proof of Origin (s 12(1)(a)-(l)).
Retention period and format: Same five year retention period and format/translation/convertibility obligations as exporters (s 12(2)-(3)).
Valuation duties (Part 4)
When calculating RVC, producers must use the valuation approaches specified in Part 4. For originating materials acquired or produced by the producer, the value is to be worked out according to the WTO valuation Agreement on the assumption the materials had been imported by the producer (s 8(2)(a)). For imported non‑originating materials, valuation is the WTO method (s 8(2)(b)). For materials acquired locally, use earliest ascertainable price paid or payable (s 8(2)(c)). For materials produced by the producer, use actual costs plus a profit equivalent (s 8(2)(d)). For imported non‑originating materials, freight to port/place of entry and insurance must be included (s 8(3)). Certain transport costs, duties/taxes/customs brokerage, and waste costs may be deducted in specified circumstances (s 8(4)).
RVC calculation duties (ss 6-7)
Producers must calculate RVC either under the direct/build‑up method (s 6) or the indirect/build‑down method (s 7), express RVC as a percentage (s 6(2), 7(2)), and apply the definitions set out for customs value, direct labour, overheads, profit and other costs.
Treatment of packaging and accessories (ss 9-10)
Where the Act’s prerequisites apply, packaging, containers and accessories/spare parts/tools/instructional materials must be included in RVC calculations and treated as originating or non‑originating as appropriate for the RVC formulas (ss 9 and 10).
Approved exporter duties and rights (Part 6)
Application procedure: Entities may apply for approved exporter status by document or electronically, using approved forms or approved statements, and may withdraw applications at any time (s 13).
Eligibility: To be approved, an entity must have a trusted trader agreement in force under s 176A of the Act; must be shown by the Comptroller‑General to “know and understand” the rules of origin in Section B of Chapter 3 of the Agreement; and must be able to obtain producer declarations claiming origin and stating willingness to cooperate with verification under Article 3.24 (s 14).
Conditions: Approval is subject to compliance with paragraph 3 of Article 3.21 of Chapter 3 of the Agreement and any other conditions specified by the Comptroller‑General in the approval (s 16).
Administrative process rights: The Comptroller‑General must consider particular matters before deciding, must set an approved exporter code and the approval period, must give a copy of approval to the entity, and must provide written notice and reasons on refusal (s 15). If the Comptroller‑General proposes to vary, suspend or terminate approval, there is a statutory pre‑decision notice requirement with stated reasons and a minimum 10 business day opportunity to make written submissions (s 17(3)). Decisions to vary, suspend or terminate are notified in writing, must specify the day they take effect, and decisions may be reviewed by the Administrative Review Tribunal (s 17(6), (7), (13)).
Suspension technicality: While suspended, an approval has no effect but the period for which the approval remains in force continues to run despite the suspension (s 17(9)). The Comptroller‑General may vary or terminate an approval while it is suspended and may revoke a suspension (s 17(10)-(12)).
Procedural rights to administrative review
Applicants refused approval, or whose approval is varied, suspended or terminated, may apply to the Administrative Review Tribunal for review of the decision (ss 15(9), 17(13)). The instrument does not specify the Tribunal’s remedy or timeframe; those remain governed by the Tribunal rules and the Act.
Compliance and verification cooperation
The approved exporter eligibility requirements explicitly require that a producer’s declaration state willingness to cooperate with verifications in accordance with Article 3.24 (s 14(c)(ii)). The instrument therefore establishes a duty on producers to cooperate with verification processes to the extent that cooperation is a precondition to an entity obtaining approved exporter status.
Rights and limitations of the Comptroller‑General
The Comptroller‑General has discretion to approve or refuse, and to impose conditions, and must comply with the prescribed notice and decision communication obligations (ss 15 and 17). The instrument lists certain matters the Comptroller‑General must consider (for example whether a trusted trader agreement has been varied, suspended or terminated under s 178A of the Act, s 15(2)(a)-(b)), but the instrument also explicitly states these prescribed matters do not limit other matters the Comptroller‑General may consider (s 15(3), s 17(5)).
Penalties and enforcement
The instrument itself does not create new civil or criminal penalties. Instead it operates as an implementing instrument under the Customs Act 1901 and thereby links compliance obligations to the enforcement and penalty regime found in the Act. The instrument’s enforcement architecture is therefore mediated by three mechanisms: statutory duties created “for the purposes of” specific Act subsections, administrative decisionmaking and review procedures vested in the Comptroller‑General, and statutory record keeping and verification expectations that will feed any enforcement action under the Act.
Enforcement anchors in the instrument
Link to Act offences and penalties: The instrument’s record keeping obligations are prescribed “for the purposes of subsection 126AQB(1) of the Act” (ss 11(1) and 12(1)). Subsection 126AQB and other connected provisions within the Act provide the legal footing for penalties and enforcement action arising from failures to keep required records, provide misleading information, or otherwise fail to comply. The instrument does not itself specify penalty amounts or criminal offences; those are in the primary Act.
Administrative remedies: The Comptroller‑General may approve, refuse, vary, suspend or terminate approved exporter status (ss 15 and 17). Suspension removes the approval’s effect while the suspension persists, but the approval period keeps running (s 17(9)). The Comptroller‑General may vary or terminate approvals while they remain suspended, and may revoke suspensions (s 17(10)-(12)). These administrative powers are the principal enforcement levers the instrument affords the Comptroller‑General with respect to the approved exporter regime.
Procedural protections and review: The instrument mandates procedural steps prior to adverse administrative action. Before varying, suspending or terminating an approval, the Comptroller‑General must provide written notice stating the contemplated decision and reasons, and invite written submissions with a minimum 10 business day period (s 17(3)-(4)). Notifications of decisions must be given in writing and specify the day they take effect (ss 15(4)-(6), 17(6)-(7), 17(12)). Decisions to refuse, vary, suspend or terminate approvals may be the subject of review by the Administrative Review Tribunal (ss 15(9), 17(13)). Those procedural steps create administrative limits and a review path for regulated entities.
Verification cooperation mention: Approved exporter eligibility requires that the producer be willing to cooperate with verification processes under Article 3.24 of Chapter 3 of the Agreement (s 14(c)(ii)). While the instrument does not itself set out verification powers or sanctions for non‑cooperation, the eligibility criteria connect verification cooperation to the right to hold an approval and to thereby access administrative privileges under the instrument.
Practical enforcement consequences for regulated parties
Loss of preferential treatment: Non‑compliance with record keeping or origin rules may lead, via the Act, to denial of preferential tariff treatment on importation into a Party, in addition to any administrative sanctions under the Act. The instrument’s requirements feed the evidentiary standard customs authorities will apply when verifying origin claims.
Administrative suspension and termination: The Comptroller‑General’s power to suspend or terminate an approved exporter status is an enforcement measure that creates immediate commercial consequences: while suspended, approvals have no effect, meaning the entity cannot rely on the approval to make origin declarations that might streamline export/import procedures or secure preferential tariffs (s 17(9)).
Record retention and documentation vulnerability: The five year retention period for records (ss 11(2), 12(2)) means that audits and verification can extend over a multi‑year span. Failures to produce requisite documentation within that period expose parties to the Act’s enforcement provisions.
Limitations and transparency
The instrument requires the Comptroller‑General to give reasons for refusal and notices of decisions (s 15(8)-(9), s 17(3)-(6)), which supports administrative transparency. It also prescribes minimum procedural timelines for submissions before an adverse decision (s 17(3)).
The instrument does not itself define specific penalty amounts, penalty units, or criminal provisions. Those remain in the Act. Users must look to the Act for concrete penalty schedules and enforcement powers, including seizure, fines, or criminal prosecution where applicable.
How it interacts with other laws
This instrument is tightly cross‑referenced to the Customs Act 1901 and to international instruments that set valuation and origin norms. Its operation therefore depends on the substantive provisions of those instruments and on the administrative frameworks established elsewhere in the law.
Primary statutory interactions
Customs Act 1901: The instrument is made under the Act (s 3) and repeatedly operates “for the purposes of” specific subsections of the Act, including but not limited to:
Subsection 153ZQE(3) and 153ZQE(6)(b): ss 5, 6 and 7 specify how certain origin tests and RVC calculations are to be applied for the purposes of those Act subsections.
Subsection 153ZQB(2): Part 4 (s 8) explains how to work out values of materials for the purposes of that subsection.
Subsection 126AQB(1) and section 126AQE: Parts 5 and 6 (ss 11-17) prescribe record keeping obligations and the approved exporter application and eligibility framework for the purposes of those Act provisions.
Division 2 of Part VIII of the Act: the definition of customs value in ss 6 and 7 refers to the customs value worked out under Division 2 of Part VIII of the Act, so the instrument’s RVC formulas are constrained by and must be read alongside the Act’s customs valuation rules.
Trusted trader provisions under the Act: Eligibility for approved exporter status requires a trusted trader agreement in force under section 176A of the Act and the Comptroller‑General must consider whether a trusted trader agreement has been varied, suspended or terminated under section 178A of the Act when deciding an application (s 14(a), s 15(2)(a)-(b)). The instrument therefore imports the operational consequences of the trusted trader regime into the approved exporter pathway.
International instrument interactions
Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (the WTO valuation Agreement): Part 4 (s 8) directs that the value of originating materials acquired in a Party or imported non‑originating materials is to be worked out in accordance with that Agreement. The instrument therefore ties domestic valuation for origin purposes to an accepted international valuation framework.
The Agreement (Chapter 3 Articles): The instrument refers to several Article provisions within Chapter 3 of the Agreement, including Article 3.5 (definitions of “profit” and “other costs”), Article 3.21 (approved exporter provisions), and Article 3.24 (verification cooperation). The instrument imports by reference the substantive meanings and obligations in those Articles where it uses those terms.
Administrative and tribunal interactions
Administrative Review Tribunal: Decisions to refuse approval or to vary, suspend or terminate approvals may be reviewed by the Administrative Review Tribunal (ss 15(9), 17(13)). The instrument thus creates a pathway for administrative review which will be operated under Tribunal procedures and the Act.
Customs verification and audit powers: The instrument requires producers to cooperate with verification processes via the approved exporter eligibility criteria (s 14). The Act contains customs powers for verification and audit; the instrument’s record keeping obligations and specified valuations create the evidentiary baseline those powers will interrogate.
Consequential and hybrid interactions
Harmonized System classification law: The instrument repeatedly requires evidence of classification under the Harmonized System (ss 11(1)(d), 12(1)(e)). Classification typically intersects with tariff law and HS interpretation tools. The instrument’s reliance on HS classification means that customs classification decisions under the Act, and any judicial or administrative interpretation of HS headings, will affect origin outcomes under this instrument.
Trade remedies and other customs laws: While the instrument does not reference trade remedies or anti‑dumping law, origin determinations and RVC calculations can affect eligibility for preferential tariffs and thus interact with any separate trade remedy or safeguard measures that apply to particular goods in importing Parties.
Limits of interaction within the instrument
The instrument confers procedural limits on administrative action and prescribes specific documentation and valuation methods, but it does not alter the substantive tariff schedules, the Act’s penalty framework or the contents of the Agreement itself. Those remain outside the instrument and will determine the ultimate commercial and legal consequences when an origin determination is contested.
Users must read the instrument in tandem with the specified Act subsections and with the referred international instruments for a complete legal picture.
Amendment history
The instrument as provided is the Customs (Regional Comprehensive Economic Partnership) Regulations 2021. The text includes a specific application provision addressing a later amendment made by a separate instrument, indicating that the instrument’s operation has been subject to subsequent legislative change.
2025 consequential amendment application (s 18): Section 18 states that the amendment of subsection 11(1) made by Schedule 2 to the Customs Legislation Amendment (ASEAN‑Australia‑New Zealand Free Trade Area Second Protocol Implementation and Other Measures) Regulations 2025 applies in relation to goods produced on or after the commencement of that Schedule. This is an express transitional or temporal savings provision fixing the commencement boundary for that specific amendment. The instrument therefore recognises that subsection 11(1) of this instrument was amended by the 2025 Regulations, and s 18 prescribes the temporal application for goods produced on or after that schedule’s commencement.
No other internal amendment notes are present in the text provided. The instrument itself contains references to other statutory sections and international agreements that may be amended independently of this instrument (for example the Customs Act, the Agreement and the WTO valuation Agreement). Where those external instruments change, the practical operation of parts of this instrument (which operates “for the purposes of” particular subsections of the Act or uses terms defined in the Act) will be affected. The instrument’s reference style implies it is designed to be read dynamically with the Act.
Practical implications of the recorded amendment
Temporal application detail: s 18 creates a cut‑off rule tied to the commencement date of Schedule 2 of the 2025 Regulations. Entities must therefore be alert to the production date of the goods to determine which version of subsection 11(1) applies. The instrument itself does not state the content of the 2025 Schedule 2 amendment; it only prescribes the operative temporal rule.
Ongoing legislative maintenance: Because this instrument imports concepts from the Customs Act and the Agreement, future amendments to those source instruments may trigger secondary amendments to these Regulations or change how certain provisions operate in practice. The presence of s 18 demonstrates that such subsequent amendments have already occurred and may continue.
The text provided does not include a wider amendment history, amendment dates, or variant versions. To trace the full legislative history beyond the single 2025 application note in s 18 would require consulting legislative databases and the official registers of amendments which are external to this instrument.
Litigation history
The instrument's text does not cite any judicial decisions or administrative determinations. It contains no recitation of litigation history, no references to court cases, and no examples of contested applications or Tribunal decisions.
Direct consequences of that absence
No cases named: The instrument does not name any cases nor provide precedent guidance on how the Comptroller‑General’s discretions have been exercised in contested contexts. The Administrative Review Tribunal or courts may have since considered related decisions under the Customs Act or these Regulations, but none is included in the text before us.
Reliance on administrative review: The instrument expressly contemplates administrative review by the Administrative Review Tribunal for decisions to refuse approval or to vary, suspend or terminate an approved exporter status (ss 15(9), 17(13)). The absence of reported decisions in the instrument leaves parties without instrument‑specific precedent about how tribunals or courts interpret the instrument’s eligibility criteria, the sufficiency of documentary records, or the discretion exercised by the Comptroller‑General.
What users should do to obtain litigation guidance
Consult Tribunal and court records: Practitioners seeking to understand how the instrument has been litigated or interpreted should search Administrative Review Tribunal decisions and any Federal Court or Full Federal Court decisions that engage with the relevant Act subsections (for example 126AQE, 126AQB, 153ZQE etc.) or with the Regulations themselves.
Look for customs audit and verification cases: Because the instrument’s operation has factual components (for example valuation, HS classification, RVC computations and record sufficiency), litigation and Tribunal jurisprudence addressing those factual tests will be instructive. The instrument does not provide those cases.
In the absence of an internal litigation history in the instrument, practitioners must treat the instrument’s text as the primary source and then seek case law outside the instrument to establish precedential interpretations or to identify enforcement patterns.
Gotchas
This instrument contains several technical traps and practical details that can catch commercial operators unaware. Below are the most salient operational pitfalls, each tied to the specific provisions.
Recursive tariff classification treatment creates evidential chains (s 5)
Pitfall: s 5 allows a non‑originating material that fails a tariff classification change to be treated as satisfying the change where it was produced entirely in a Party from other non‑originating materials that do satisfy it, including by recursive application. This can produce long chains of upstream evidence being required to demonstrate the underlying materials meet classification tests.
Operational consequence: Exporters and producers must retain and be able to present documentation mapping the multi‑stage history of an intermediate material, including evidence that each upstream non‑originating input met the classification change. Gaps in that trail can defeat the recursive acceptance.
Valuation assumptions may inflate or deflate RVC (s 8)
Pitfall: The value of originating materials produced by the producer is to be worked out on the assumption those materials had been imported into the Party by the producer (s 8(2)(a)). That notional import assumption can increase the value recognised for RVC purposes because it invokes the WTO valuation Agreement approach rather than local cost. This assumption may result in different treatment compared to domestic cost accounting.
Operational consequence: Producers must be careful in selecting the valuation basis; accountants must prepare alternative valuations and document the basis, because the valuation assumption can affect whether the goods meet an RVC threshold.
Freight, insurance, packing and deductible costs require careful allocation (s 8(3)-(4))
Pitfall: For imported non‑originating materials the value must include freight and insurance to port or place of entry (s 8(3)), but the producer may deduct freight, insurance, packing and other transport costs incurred in transporting the non‑originating materials to the producer (s 8(4)(a)). The instrument separates inbound freight to port from internal transport to the producer, which requires precise accounting and documentary support.
Operational consequence: Invoices and freight documents must be aligned to show which costs were incurred to port and which were subsequent transport costs. Misallocation can lead to incorrect valuation and potentially deny origin.
Packaging and accessories inclusion depends on Act conditions (ss 9-10)
Pitfall: Inclusion of packaging material, containers and accessories in RVC calculations is triggered only if particular Act paragraphs (153ZQF(1)(a),(b) and 153ZQG(1)(a),(b),(c)) are satisfied. The instrument does not restate those Act conditions, so practitioners must cross‑check the Act to determine when these items must be included.
Operational consequence: Failure to consult the Act to determine trigger conditions can lead to either omitting required components or including items unnecessarily, both of which can alter RVC percentages.
Approved exporter eligibility is conditional on trusted trader status (s 14(a))
Pitfall: To be an approved exporter an entity must have a trusted trader agreement under s 176A of the Act. Entities that cannot secure such an agreement cannot access the approved exporter pathway even if otherwise compliant with origin rules.
Operational consequence: Applicants must ensure they participate in the trusted trader programme and maintain that agreement in force; the Comptroller‑General will consider whether the trusted trader agreement has been varied, suspended or terminated when deciding approval (s 15(2)(a)).
Suspension does not pause approval period (s 17(9))
Pitfall: When an approval is suspended it has no effect, but the approval period continues to run. A suspension therefore shortens the remaining effective duration of the approval.
Operational consequence: Applicants and approvers must be conscious that a long suspension may render the remaining approval period commercially worthless; entities should consider requesting revocation of suspension or appeal promptly.
Record retention obligations require English convertibility and hard copy readiness (ss 11(3)(b)(iii), 12(3)(b)(iii))
Pitfall: Records can be kept offshore and electronically, but they must be readily convertible into a hard copy in English. The instrument does not specify turnaround times for producing English hard copies upon request.
Operational consequence: Entities relying on offshore suppliers should build translation and document retrieval processes with short lead times. Failure to provide an English hard copy in a verification or audit could be treated as non‑compliance.
Proof of Origin date determines retention start point (ss 11(2), 12(2))
Pitfall: The five year retention period runs from the date the Proof of Origin is issued, not from export or production date. Misunderstanding this could lead to premature purging of records.
Operational consequence: Record management systems must index retention periods to Proof of Origin issuance dates.
“Profit” and “other costs” are defined externally (s 6(1) definitions)
Pitfall: The instrument says profit and other costs have the meaning given in Article 3.5 of Chapter 3 of the Agreement. The instrument does not define those terms itself.
Operational consequence: Users must refer to Article 3.5 of the Agreement to determine how to calculate profit and other costs for the direct method; incorrect application can distort the RVC numerator.
Administrative discretion has wide scope with limited prescribed limits (ss 15(3), 17(5))
Pitfall: Although the instrument prescribes certain matters for the Comptroller‑General to consider, it explicitly states those do not limit other matters the Comptroller‑General may consider. That leaves room for consideration of unspecified factors when making approval and variation decisions.
Operational consequence: Applicants should ensure comprehensive compliance across record keeping, verification cooperation and trusted trader commitments. They should also be prepared to rely on the Administrative Review Tribunal where adverse decisions cite novel or unanticipated factors.
Transitional and retrospective application of amendments (s 18)
Pitfall: Section 18 highlights that later instruments can and do amend these Regulations, with specific commencement and production date boundaries. Operators must track not only the Regulations but also downstream amending instruments for temporal application rules.
Operational consequence: Businesses must monitor regulatory updates and check the production date of goods to determine which version of a provision applies.
Those are the main practical pitfalls the instrument contains. Each arises from precise textual features of the Regulations and from how those features interact with the broader statutory and international law framework referenced by the instrument.
How to comply
Compliance with these Regulations requires coordinated legal, accounting and recordkeeping systems. The steps below translate the instrument’s prescriptions into concrete compliance actions, grouped by the principal obligations.
Establish document architecture and retention protocols (ss 11-12)
Create a records inventory that aligns with the lists in s 11(1) for exporters who are not producers and s 12(1) for producers. The inventory should tag records by type: purchase invoices, production records, HS classification evidence, Proofs of Origin, producer/supplier declarations, freight and insurance invoices, packing lists and value documentation for accessories and packaging.
Set retention timelines to five years from the date the Proof of Origin is issued, and build automated alerts tied to issuance dates so records are not purged prematurely (ss 11(2), 12(2)).
Ensure records are stored in a manner that permits ready conversion to hard copy in English. If records are kept electronically or offshore, implement translation workflows and exportable hard‑copy conversion procedures to meet ss 11(3)(b)(iii) and 12(3)(b)(iii).
Document valuation and RVC calculation methods (ss 6-8)
Choose and document a consistent RVC method for each product line, whether direct/build‑up or indirect/build‑down. Ensure the chosen method is supported by the accounting documentation required by the formulas in ss 6 and 7.
For the direct/build‑up method, implement cost capture that segregates:
Value of originating materials as defined and valued under Part 4;
Direct labour costs (wages, remuneration, employee benefits);
Direct overhead costs (total overhead expense allocated reasonably to the product);
Profit and other costs as defined by Article 3.5 of the Agreement.
For the indirect/build‑down method, ensure systems can calculate the customs value per Division 2 of Part VIII of the Act and the value of non‑originating materials as determined under Part 4.
Maintain supporting ledgers and reconciliations that tie the RVC calculation to source documents so that a verifier can follow the source of each element of the numerator and denominator.
Apply the valuation rules for materials precisely (s 8)
For imported non‑originating materials, include freight to the port or place of entry and related insurance in the material’s value (s 8(3)). Retain freight and insurance invoices aligned to each import entry.
For non‑originating materials acquired domestically, document the earliest ascertainable price paid or payable (s 8(2)(c)). Maintain supplier invoices and transaction records that show invoice date, payment terms and price.
For materials produced in a Party by the producer, document all production costs, including general expenses, and compute an amount equivalent to profit that the producer would make in the normal course of trade (s 8(2)(d)). Maintain cost accounting reports and margin analyses.
Maintain records supporting any allowable deductions such as internal transport costs to the producer, duties/taxes/customs brokerage that were paid and non‑recoverable, and costs of waste/spoilage net of renewable scrap/by‑product values (s 8(4)).
Include packaging and ancillary items where required (ss 9-10)
Determine whether paragraphs 153ZQF(1)(a) and (b) or paragraphs 153ZQG(1)(a)-(c) of the Act apply for particular goods; if they do, include the value of packaging, containers, accessories, spare parts, tools and instructional materials in the RVC calculation and treat them as originating or non‑originating in accordance with ss 9 and 10.
Maintain purchase and production records for packaging and ancillary items to substantiate their origin status.
Organise producer declarations and supplier cooperation (s 14)
If you intend to rely on producer declarations for origin or to obtain approved exporter status, ensure suppliers provide declarations that: claim the goods are originating in accordance with Chapter 3 of the Agreement and state willingness to cooperate with verification in accordance with Article 3.24 (s 14(c)(i)-(ii)).
Build contractual clauses into supply agreements that require suppliers to provide timely declarations and to cooperate with verifications; include provisions for retention of documentation and indemnities where appropriate.
Apply for and maintain approved exporter status correctly (ss 13-17)
To apply, ensure you first hold a trusted trader agreement in force under s 176A of the Act. Without that agreement the eligibility criterion in s 14(a) cannot be satisfied.
Prepare the application in the approved documentary form or follow the approved statement route for electronic applications. Include the information required by the approved form and sign as indicated (s 13(3)(a)-(d), s 13(4)).
On approval, keep a copy of the approval and the assigned approved exporter code and note the period for which approval is in force (s 15(4)-(6)).
If you receive notice of proposed variation, suspension or termination, use the minimum 10 business day period provided to prepare written submissions addressing the reasons stated in the notice (s 17(3)). Keep records of submissions and any correspondence with the Comptroller‑General.
If an approval is suspended, understand the commercial implications: while suspended, approvals have no effect, but the approval period continues to run (s 17(9)). Consider seeking prompt revocation of suspension if justified (s 17(11)).
Prepare for verification and audits
Map workflows to enable rapid production of documents required by verifiers. Verifications will rely on the records listed in ss 11 and 12 and on supplier declarations required by s 14.
Maintain a single source of truth for RVC calculations that links the material valuations in Part 4 to the RVC computation in ss 6-7. A verifier should be able to reconcile the customs value and the values of originating and non‑originating materials to source documents.
Ensure record formats are convertible to hard copy in English so that verifiers can receive documents promptly and without conversion friction (ss 11(3)(b)(iii), 12(3)(b)(iii)).
Coordinate internal accounting and customs functions
Align accounting cost centres and product costing to the elements required for the RVC direct method: direct labour, direct overheads and profit. Use consistent allocation bases and document allocation methodologies so they can be scrutinised.
Align customs entries to the customs valuation under Division 2 of Part VIII of the Act, including the derivation of customs value and any adjustments made for RVC purposes.
Monitor regulatory changes and transitional rules (s 18)
Track amendments to these Regulations and to the Customs Act and related instruments. Section 18 shows that later Regulations (in 2025) altered subsection 11(1) and fixed a production‑date commencement rule for that amendment. Businesses must therefore monitor commencement dates and production dates to apply the correct version of the instrument.
Maintain a process to update compliance manuals and training materials when any upstream change occurs, including to the Agreement, the WTO valuation Agreement or the Customs Act.
Engage advisers and set internal escalation
Use external trade lawyers or customs brokers to validate classification, valuation and origin calculations, especially where multi‑stage processing or recursive tariff classification issues under s 5 arise.
Establish an internal escalation path for any customs enquiries, pre‑decision notices from the Comptroller‑General, or audit requests, and document the decision to seek Tribunal review when necessary (ss 15(9), 17(13)).
By implementing these steps, an exporter or producer can align operational systems with the instrument’s prescriptions. The key compliance themes are disciplined recordkeeping, auditable valuation and RVC calculations, supplier declarations and contracts assigning documentation responsibilities, and proactive interaction with the trusted trader and approved exporter administrative routes.
Section 5Change in tariff classification requirement for non‑originating materials
(1) For the purposes of paragraph 153ZQE(6)(b) of the Act, the regional value content of goods under the direct/build‑up method is worked out using the formula:
where:
customs value means the customs value of the goods worked out under Division 2 of Part VIII of the Act.
direct labour costs includes wages, remuneration and other employee benefits.
direct overhead costs means the total overhead expense.
other costs has the same meaning as it has in Article 3.5 of Chapter 3 of the Agreement.
profit has the same meaning as it has in Article 3.5 of Chapter 3 of the Agreement.
value of originating materials means the value, worked out under Part 4, of the originating materials that are acquired by the producer, or produced by the producer, and are used by the producer in the production of the goods.
(2) Regional value content must be expressed as a percentage.
7 Indirect/build‑down method
7 Indirect/build‑down method
(1) For the purposes of paragraph 153ZQE(6)(b) of the Act, the regional value content of goods under the indirect/build‑down method is worked out using the formula:
where:
customs value means the customs value of the goods worked out under Division 2 of Part VIII of the Act.
value of non‑originating materials means the value, worked out under Part 4, of the non‑originating materials used in the production of the goods.
(2) Regional value content must be expressed as a percentage.
Part 4 Determination of value
Part 4—Determination of value
8 Value of goods that are originating materials or non‑originating materials
8 Value of goods that are originating materials or non‑originating materials
(1) For the purposes of subsection 153ZQB(2) of the Act, this section explains how to work out the value of originating materials or non‑originating materials used in the production of goods.
(2) The value of the materials is as follows:
(a) for originating materials acquired in a Party, or produced in a Party, by the producer of the goods—the value of the materials worked out in accordance with the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 on the assumption that those materials had been imported into the Party by the producer of the goods;
(b) for non‑originating materials imported into a Party—the value of the materials worked out in accordance with the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994;
(c) for non‑originating materials acquired in a Party by the producer of the goods—the earliest ascertainable price paid or payable for the materials;
(d) for non‑originating materials produced in a Party by the producer of the goods—the sum of:
(i) all the costs incurred in the production of the materials, including general expenses; and
(ii) an amount that is the equivalent of the amount of profit that the producer would make for the materials in the normal course of trade.
(3) For the purposes of paragraph (2)(b), in working out the value of particular non‑originating materials, the following must be included:
(a) the cost of freight of the non‑originating materials to the port or place of entry in the Party;
(b) the cost of insurance related to that freight.
(4) For the purposes of paragraph (2)(b), (c) or (d), in working out the value of particular non‑originating materials, the following may be deducted:
(a) the costs of freight, insurance, packing and other transport‑related costs incurred in transporting the non‑originating materials to the producer of the goods;
(b) duties, taxes and customs brokerage fees on the non‑originating materials that:
(i) have been paid in a Party; and
(ii) have not been waived or refunded; and
(iii) are not refundable or otherwise recoverable;
including any credit against duties or taxes that have been paid or that are payable;
(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 renewable scrap or by‑products.
9 Value of packaging material and container
9 Value of packaging material and container
If paragraphs 153ZQF(1)(a) and (b) of the Act are satisfied in relation to goods and the goods must have a regional value content of not less than a particular percentage worked out in a particular way:
(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 Part 3 of this instrument; and
(b) if that packaging material or container is an originating material—for the purposes of sections 6 and 8 of this instrument, that packaging material or container must be taken into account as an originating material used in the production of the goods; and
(c) if that packaging material or container is a non‑originating material—for the purposes of sections 7 and 8 of this instrument, that packaging material or container must be taken into account as a non‑originating material used in the production of the goods.
10 Value of accessories, spare parts, tools or instructional or other information materials
10 Value of accessories, spare parts, tools or instructional or other information materials
If paragraphs 153ZQG(1)(a), (b) and (c) of the Act are satisfied in relation to goods and the goods must have a regional value content of not less than a particular percentage worked out in a particular way:
(a) the value of the accessories, spare parts, tools or instructional or other information materials must be taken into account for the purposes of working out the regional value content of the goods under Part 3 of this instrument; and
(b) if the accessories, spare parts, tools or instructional or other information materials are originating materials—for the purposes of sections 6 and 8 of this instrument, those accessories, spare parts, tools or instructional or other information materials must be taken into account as originating materials used in the production of the goods; and
(c) if the accessories, spare parts, tools or instructional or other information materials are non‑originating materials—for the purposes of sections 7 and 8 of this instrument, those accessories, spare parts, tools or instructional or other information materials must be taken into account as non‑originating materials used in the production of the goods.
Part 5 Record keeping obligations
Part 5—Record keeping obligations
11 Exportation of goods to a Party—record keeping by exporter who is not the producer of the goods
11 Exportation of goods to a Party—record keeping by exporter who is not the producer of the goods
(1) For the purposes of subsection 126AQB(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:
(a) records of the purchase of the goods by the exporter;
(b) records of the purchase of the goods by the person to whom the goods are exported;
(c) evidence that payment has been made for the goods;
(d) evidence of the classification of the goods under the Harmonized System;
(e) if the goods include any accessories, spare parts, tools or instructional or other information materials that were purchased by the exporter:
(i) records of the purchase of the accessories, spare parts, tools or instructional or other information materials; and
(ii) evidence of the value of the accessories, spare parts, tools or instructional or other information materials;
(f) if the goods include any accessories, spare parts, tools or instructional or other information materials that were produced by the exporter:
(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
(ii) evidence of the value of the materials so purchased; and
(iii) records of the production of the accessories, spare parts, tools or instructional or other information materials;
(g) if the goods are packaged for retail sale in packaging material or a container that was purchased by the exporter:
(i) records of the purchase of the packaging material or container; and
(ii) evidence of the value of the packaging material or container;
(h) if the goods are packaged for retail sale in packaging material or a container that was produced by the exporter:
(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
(ii) evidence of the value of the materials so purchased; and
(iii) records of the production of the packaging material or container;
(i) a copy of the Proof of Origin for the goods;
(j) any other documents in support of the goods being originating goods in accordance with Chapter 3 of the Agreement (including documents from the producer or supplier of the goods).
(2) The records must be kept for at least 5 years starting on the date the Proof of Origin for the goods is issued.
(3) The exporter:
(a) may keep the records at any place (whether or not in Australia); and
(b) must ensure that:
(i) the records are kept in a form that would enable a determination of whether the goods are originating goods in accordance with Chapter 3 of the Agreement; and
(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
(iii) if the records are kept by mechanical or electronic means—the records are readily convertible into a hard copy in English.
12 Exportation of goods to a Party—record keeping by the producer of the goods
12 Exportation of goods to a Party—record keeping by the producer of the goods
(1) For the purposes of subsection 126AQB(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:
(a) records of the purchase of the goods;
(b) if the producer is the exporter of the goods—evidence of the classification of the goods under the Harmonized System;
(c) evidence that payment has been made for the goods;
(d) evidence of the value of the goods;
(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;
(f) evidence of the value of those materials;
(g) records of the production of the goods;
(h) if the goods include any accessories, spare parts, tools or instructional or other information materials that were purchased by the producer:
(i) records of the purchase of the accessories, spare parts, tools or instructional or other information materials; and
(ii) evidence of the value of the accessories, spare parts, tools or instructional or other information materials;
(i) if the goods include any accessories, spare parts, tools or instructional or other information materials that were produced by the producer:
(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
(ii) evidence of the value of the materials so purchased; and
(iii) records of the production of the accessories, spare parts, tools or instructional or other information materials;
(j) if the goods are packaged for retail sale in packaging material or a container that was purchased by the producer:
(i) records of the purchase of the packaging material or container; and
(ii) evidence of the value of the packaging material or container;
(k) if the goods are packaged for retail sale in packaging material or a container that was produced by the producer:
(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
(ii) evidence of the value of the materials so purchased; and
(iii) records of the production of the packaging material or container;
(l) a copy of the Proof of Origin for the goods.
(2) The records must be kept for at least 5 years starting on the date the Proof of Origin for the goods is issued.
(3) The producer:
(a) may keep the records at any place (whether or not in Australia); and
(b) must ensure that:
(i) the records are kept in a form that would enable a determination of whether the goods are originating goods in accordance with Chapter 3 of the Agreement; and
(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
(iii) if the records are kept by mechanical or electronic means—the records are readily convertible into a hard copy in English.
Part 6 Approved exporters
Part 6—Approved exporters
13 Application for approval as approved
This is an opening excerpt, not the complete document.