Customs Tariff (Suspension of Preferential Tariffs for Trans-Pacific Partnership Originating Goods) Notice 2024

Safeguard goods - This is the central concept. Subsection 16B(5) of the Customs Tariff Act 1995 defines the term, and this instrument relies on that definition. The instrument specifies which goods are to be treated as safeguard goods for the purpose of the suspension. Being a “safeguard good” means the good loses its preferential tariff treatment during the suspension period. The concept is borrowed from trade remedy law: a safeguard is a temporary import restriction to protect a domestic industry from injury caused by a surge in imports after a tariff concession. Here, the instrument does not require proof of injury; the government has simply designated these goods as safeguard goods administratively.

Trans-Pacific Partnership originating goods - Defined in section 13EB of the Customs Tariff Act 1995. These are goods that satisfy the rules of origin under the CPTPP, which for the UK took effect when the UK acceded to the agreement. Only goods that meet those origin rules could ever claim the preference. The instrument suspends the preference for those goods, so proof of origin is still relevant: if the goods are not originating goods, they do not get the preference anyway, and the suspension is moot. However, if they are originating goods and fall within the listed tariff subheadings (and descriptions) and have undergone their last substantial production in the UK, the suspension applies.

Minimal operations - The instrument requires that the last production process other than minimal operations occurred in the United Kingdom. The expression “minimal operations” is defined by reference to subsection 16(4ABB) of the Act. This prevents goods that underwent only superficial processing in the UK (such as packaging or simple cutting) from being treated as UK-originating goods for this suspension. The aim is to ensure that the safeguard applies only to goods that actually obtained their essential character through UK processing, consistent with the origin rules.

Tariff classification and descriptions - The instrument operates through the Harmonized System tariff classification as set out in Schedule 3 to the Customs Tariff Act 1995. The 62 items in s5(2) are blanket: any good classified to those subheadings, regardless of technical specifications, is covered. The 12 items in s5(3) add a descriptive filter. For example, item 1 in the second table covers subheading 7209.16.00 but only if the products are “not electrical”. “Electrical” is defined in s4(1) by strict watt-loss per kilogram parameters under a specific test. This means that a product classified under that subheading that meets the electrical definition escapes the suspension. Similarly, certain hot-dip galvanised products (item 7 of the second table) are excluded explicitly with detailed compositional limits.

Relevant composition and tool steel - These are technical definitions used to carve out specific higher-value steel products from the suspension. “Relevant composition” (s4(1)) sets out a narrow band of carbon, chromium and molybdenum content. “Tool steel” (s4(1)) is defined by multiple alternative compositional combinations, such as both at least 0.8% carbon and at least 0.05% vanadium. These carve-outs reduce the scope of the suspension, concentrating the tariff burden on more commodity-grade steel products where Australian domestic producers are likely most vulnerable to import competition.

The instrument directly affects importers of covered steel products from the United Kingdom. For any import transaction that would have qualified for a preferential (typically zero) tariff under the CPTPP, the importer now faces the full most-favoured-nation (MFN) rate, which for most of the listed subheadings is 5% ad valorem. That is a direct cost increase. The effect is concentrated on importers who source steel from the UK rather than from other free trade agreement partners (such as Korea, Japan, ASEAN countries or Chile) or from domestic mills. The importer must also invest in compliance: correctly classifying goods under the 62 subheadings and verifying whether any descriptive exclusion (such as “electrical” or “tool steel”) applies. If an importer mistakenly claims the preferential rate for a good that falls within the suspension, they risk penalties for underpayment of duty. Conversely, if an importer pays MFN duty on a good that in fact qualifies for an exclusion, they overpay. UK steel exporters are indirectly affected: the UK is a relatively new CPTPP member (accession took effect in December 2024). The suspension makes UK steel less competitive in the Australian market compared to other CPTPP partners that do not face the suspension (unless those countries also face separate safeguards). Australian domestic steel producers, particularly BlueScope Steel and others producing flat-rolled products, bars, rods and tubes, are the intended beneficiaries. They gain temporary relief from UK import competition on the product lines covered. Downstream Australian manufacturers that use imported steel as an input (e.g. construction, automotive, whitegoods) face higher input costs, which may reduce margins or be passed on to consumers. Customs brokers and trade compliance professionals must update their systems to treat UK originating goods of the covered tariff subheadings as non-preferential. The Australian Border Force and the Department of Home Affairs administer the tariff at the border; they must train officers to recognise the suspension and enforce it. The instrument also affects trade agreement administrators: the CPTPP allows safeguard measures, and this instrument is an exercise of that right. The UK government may view the measure as protectionist, potentially prompting consultations or reciprocal actions.

The instrument imposes a duty on importers to pay the non-preferential tariff when the conditions in s5 are met. Specifically, if goods are classified to one of the listed subheadings, are Trans-Pacific Partnership originating goods, are safeguard goods as specified, and have undergone their last production process other than minimal operations in the UK, then the preferential tariff is suspended for the period. The importer’s legal obligation is to declare the correct tariff classification and pay the correct duty. There is no option to “opt out” of the suspension; it is mandatory. Importers have a right to claim the exclusion from suspension if the goods fall within the description carve-outs in s5(3). For instance, if the goods are subheading 7209.16.00 but are “electrical” (i.e. meet the watt-loss thresholds), the importer may claim the preference. The burden of proving the exclusion falls on the importer, who must be able to produce test results or certificates showing compliance with the definition. The instrument does not confer any new rights on domestic producers. They have no private right of action if goods are incorrectly entered as preferential. Enforcement is by the Australian Border Force under the Customs Act 1901. The instrument does not create new rights of review or appeal for importers beyond the standard tariff classification review mechanisms. The Minister for Home Affairs has the power (under section 16B of the Customs Tariff Act 1995) to make this instrument. That power includes specifying goods and periods. The Minister could amend or revoke the instrument before 30 June 2026, which would end the suspension early. However, the instrument itself does not contain a power of variation; any variation would require a new legislative instrument. There is no duty on the government to review or consult before ending the suspension early. Importers should be aware that the suspension applies only to the commercial policy treatment of the goods; it does not affect any other regulatory requirements such as import permits, anti-dumping measures, or standard certification.

The instrument itself does not prescribe penalties. Penalties for non-compliance arise under the Customs Act 1901 and the Customs Tariff Act 1995. The principal risk is underpayment of customs duty. If an importer declares that UK-originating goods are entitled to the preferential rate when the suspension applies, the duty payable is higher. The underpayment triggers a debt due to the Commonwealth (Customs Act s153A). Interest on underpaid duty may also be imposed (s153Q). In addition, the Customs Act provides for infringement notices and penalties for making false or misleading statements (s243T). A false declaration of origin or classification to obtain a preference to which the goods are not entitled can attract penalties of up to 60 penalty units. If the underpayment is found to be reckless or intentional, criminal prosecution is possible. Enforcement action is taken by the Australian Border Force. Officers can examine goods at the border, require production of documents, and collect samples for testing. For goods with technical definitions such as “electrical” or “tool steel”, the ABF may require an importer to provide laboratory analysis demonstrating that the goods meet the exclusion criteria. If the importer cannot provide satisfactory evidence, the goods will be treated as subject to the suspension. The suspension period lasts until 30 June 2026. After that date, the instrument ceases to have effect, and UK CPTPP goods revert to the preferential tariff. However, any underpayment of duty during the suspension period remains actionable after the instrument ends. There is no amnesty. The instrument also interacts with other customs compliance frameworks. For example, if an importer holds a tariff concession order (TCO) that would reduce the MFN rate on a particular good, that TCO still applies even if the preference is suspended. The suspension only removes the preference; it does not prevent the use of other duty relief mechanisms.

The instrument is made under section 16B of the Customs Tariff Act 1995. That section was inserted to allow the government to suspend preferential tariffs on safeguard goods in accordance with Australia’s obligations under free trade agreements. The instrument exists because of the United Kingdom’s accession to the CPTPP, which was given effect by the Customs Tariff Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Expansion) Act 2024. Without that Act coming into force, this instrument does not commence. The suspension applies to goods that are Trans-Pacific Partnership originating goods as defined in s13EB of the Act. That definition incorporates the CPTPP rules of origin. The instrument does not alter the origin rules; it only suspends the tariff preference for origin goods. Other free trade agreements that Australia has with the UK could be relevant, but there is no separate bilateral FTA; the UK’s only preferential access to Australia for goods is via the CPTPP. The instrument does not affect importations from other CPTPP parties (e.g. Japan, Canada, Mexico) unless those countries also have safeguard measures applied to them. The instrument is specific to the UK. The Customs Tariff Act 1995 also contains other safeguard provisions (e.g. s16C for global safeguards). This instrument is separate from any global safeguard. The instrument interacts with Schedule 8B of the Customs Tariff Act, which lists certain goods subject to tariff quotas or other safeguards. The items in the instrument’s tables (e.g. item 396A) refer to items in Schedule 8B. This cross-referencing ensures consistency: the instrument suspends preference for goods that are already identified in Schedule 8B as potential safeguard items. The instrument does not amend Schedule 8B; it merely references those items to define the scope of the suspension. The instrument is a legislative instrument under the Legislation Act 2003. It is subject to disallowance by either House of Parliament within 15 sitting days after tabling. It must be registered on the Federal Register of Legislation. The instrument is not a rule of origin or a regulation of trade in goods under the World Trade Organization agreements; it is a unilateral measure permitted under the CPTPP’s bilateral safeguard provisions. Australia is required to notify the UK and the other CPTPP parties of the measure, but that obligation is not reflected in the instrument.

The instrument was made on 13 December 2024 and registered shortly after. As of the date of the instrument, it is the original version. There have been no amending instruments. The instrument has a commencement clause that is conditional: it commences on the later of the day after registration and immediately after the commencement of Schedule 1 to the Customs Tariff Amendment (Comprehensive and Progressive Agreement for Trans-Pacific Partnership Expansion) Act 2024. That Act is a separate piece of legislation. If it has not commenced by the time of reading, the instrument may still be uncommenced. The instrument is expressed to have effect only until 30 June 2026. After that date, it will automatically sunset. No further amendment is needed to end it. However, the government could amend or repeal the instrument before that date by making a new instrument under s16B. Any amendment would be another legislative instrument and subject to disallowance. The instrument defines terms such as “electrical”, “relevant composition” and “tool steel”. These definitions are self-contained within the instrument, not imported from the Customs Tariff Act. If the Act’s definitions change, the instrument’s definitions remain unless the instrument is amended. There is no provision for automatic updating. The instrument’s commencement table notes that information in column 3 of that table is not part of the instrument and may be edited in published versions. This is standard drafting language to note that editorial dates (actual commencement date) are not operative.

As the instrument is very recent (late 2024), there are no reported court decisions or tribunal proceedings directly concerning it. The only potential litigation would involve disputes over tariff classification or the application of the definitions. For example, an importer might argue that their goods are “electrical” within the meaning of s4(1) even though the ABF disputes the watt-loss test results. That would be a reviewable decision under the Customs Act. The Administrative Appeals Tribunal (now the Administrative Review Tribunal) has jurisdiction to review classification determinations. No such cases are yet reported. The instrument could also be challenged on the grounds that the Minister lacked power to make it, but section 16B is broad and the specification of goods and periods appears within power. A challenge would have to argue that the goods are not “safeguard goods” as defined in the Act, or that the condition of “last production process other than minimal operations” being in the UK is not satisfied. The instrument does not require injury findings, so constitutional challenges on the basis of arbitrary deprivation of property (acquittal of customs duty) are unlikely to succeed; customs duty is an exercise of the Commonwealth’s taxation power and does not attract compensation. The only existing “litigation” of note is the potential disputes during the CPTPP state-to-state consultations. Under the CPTPP, the UK may request consultations if it believes the safeguard measure is inconsistent with the agreement. That is a diplomatic process, not domestic litigation. No official complaints have been made public at the time of writing.

Commencement condition - The instrument may not yet be in force if the Schedule 1 to the CPTPP expansion Act has not commenced. Importers should verify actual commencement before relying on the suspension. The instrument says it does not commence at all if the event in paragraph (b) does not occur.

The “electrical” exclusion is narrow - The definition of “electrical” in s4(1) sets specific watt-loss limits tested at 50 Hz and 1 T using the Epstein method. Many steel products that are used in electrical transformers may not meet these limits. If the watt-loss is even slightly higher than the threshold, the exclusion does not apply, so the goods are subject to the suspension. Importers must have test data ready.

The “relevant composition” exclusion excludes only particular chemistries - Item 8 in the second table excludes bars or rods of a “relevant composition” only if they do not have a non-circular cross-section and have a circular cross-section of at least 80mm. This means that even if the chemistry matches, bars with a circular cross-section less than 80mm or with a non-circular cross-section are still suspended. Similarly, item 10 only excludes bars or rods “that are of tool steel” but only under subheading 7228.60.10 and 7228.60.90. So if a tool steel product falls under another subheading, it is not excluded.

The “minimal operations” condition - For goods to be caught by the suspension, the last production process other than minimal operations must have occurred in the UK. If the steel was substantially manufactured in another country and only minimally processed in the UK, it may not be a UK originating good for CPTPP purposes anyway. But if it is a UK originating good due to sufficient processing in the UK, the suspension applies. The note says minimal operations are listed in s16(4ABB) of the Act. That list includes operations such as repacking, simple cutting, and sorting.

The instrument does not apply to non-originating goods - If a UK exporter ships steel that is not CPTPP originating (e.g. because it contains non-originating inputs), the goods already pay the MFN rate. The suspension does not change that. So not all UK steel imports are affected; only those that would have qualified for the preference.

Coordination with other tariff measures - An importer might hold a tariff concession order (TCO) that reduces the duty rate on a product. If the product is suspended from preference but still qualifies for a TCO, the TCO applies. However, TCOs are subject to the local manufacturing objection process. An importer should check whether a TCO exists for the particular product. Also, anti-dumping duties may apply separately, adding another layer.

The suspension period is fixed - The end date is 30 June 2026, but the instrument may be revoked earlier. Importers cannot assume it will run until that date. The government may remove the suspension if import volumes decline or domestic industry recovers. Conversely, the government could extend it by a new instrument, but that would require a fresh legislative act. The current instrument does not contain a sunset clause beyond 30 June 2026.

No grandfathering - Goods that were exported from the UK before the instrument commenced but entered after commencement are subject to the suspension. There is no transition for goods already in transit. Importers with UK steel orders in pipeline should assess the timing.

Importers of iron and steel products from the UK must implement a systematic compliance process. First, identify whether the goods are classified under any of the 62 subheadings listed in s5(2) or the 12 subheadings with descriptions in s5(3). Use the Harmonized System tariff as set out in Schedule 3 of the Customs Tariff Act 1995. The subheadings are specific: for example, 7208.10.00 is flat-rolled products of iron or non-alloy steel of a width of 600 mm or more, hot-rolled, not clad, plated or coated, in coils, not further worked than hot-rolled, with patterns in relief. If the goods fall within these subheadings, check the origin: are they Trans-Pacific Partnership originating goods? That requires meeting the CPTPP rules of origin, including the product-specific rules for the particular heading. The goods must be wholly obtained or sufficiently processed in a CPTPP party (here the UK). The last production process, other than minimal operations, must have occurred in the UK. Importers should obtain a certificate of origin or a supplier’s declaration that supports the origin claim. If the goods are not originating, the suspension is irrelevant; the goods already pay MFN. If the goods are originating, the importer must then check whether they are excluded by the descriptive conditions in s5(3). For goods in the second table, the descriptions may require technical analysis. For example, for item 1 (subheading 7209.16.00), the description is “Products that are not electrical”. The importer must have evidence that the products are not electrical as defined: i.e., the watt-loss per kilogram under the Epstein method at 50 Hz and 1 T exceeds the specified thresholds for the relevant thickness range. This will likely require a certificate of analysis from the mill. For item 7 (subheading 7210.69.00), the exclusion list is extensive: it excludes products that are plated or coated by hot dip galvanisation with aluminium and/or magnesium, chemically passivated, with or without additional surface treatment, presented in coils, cut-to-length sheets or narrow strips, and containing specified maximum amounts of carbon, aluminium, niobium, titanium and vanadium. This is a detailed exclusion; the importer must confirm that the goods do NOT meet these criteria, because the description says “Products excluding those that are…” followed by the list. So if the goods do meet any of those criteria, they are excluded from the suspension and can claim the preference. This is counterintuitive: the description excludes from suspension certain high-specification goods. The importer must parse the double negative carefully. For item 8 (subheading 7228.30.10), bars or rods are excluded from the suspension if they are of a relevant composition (as defined) and have a non-circular cross-section, or have a circular cross-section of less than 80mm. So the suspension applies only to bars or rods of that subheading that are of relevant composition and have a circular cross-section of 80mm or more, or are not of relevant composition. Again, the importer needs a chemist’s report. The compliance burden is non-trivial. The importer should also verify the commencement of the instrument, as it depends on the CPTPP expansion Act. Maintain records of classification, origin, and technical test results for at least five years (the general customs record-keeping period). Use the Integrated Cargo System (ICS) to enter goods with the correct tariff code. If claiming the preference despite the suspension (because the goods fall within an exclusion), declare the preference code and be prepared to produce supporting evidence upon request. If paying MFN, no special declaration is needed, but ensure the duty is calculated correctly. The instrument applies until 30 June 2026. After that date, importers should revert to claiming the preference for UK CPTPP goods.