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The Trusted Trader Programme- is participation worth consideration for your company?

The Australian Customs and Border Protection Service ( Australian Customs) has issued a discussion paper on the proposed Trusted Trader Programme. The program seeks to reduce Australian Customs’ administrative costs while conferring certain benefits to program participants that can demonstrate that their entities are “low risk” for supply chain security issues.

Trusted Trader ProgrammeThe Trusted Trader Program will consists of two elements:

The Import Trusted Trader Scheme (ITTS) – which is intended to promote trade compliance and provide enhanced border clearance privileges for participants; and

The Export Trusted Trader Scheme (ETTS) – which has a supply chain security focus in line with the WCO’s AEO model.
Three types of entities can participate- overseas exporter entities, supply chain participants such as freight forwarders, carriers, brokers, etc. and Australian importers. Each category of participants will have its own eligibility requirements and benefits.

About ITTS
It is proposed that participants in ITTS are assigned a tier ranking (A, B and C) depending on their compliance record, utilization of technology for inventory management, their supply chain security programs, and level of risk associated with their organization. Participants would be given the opportunity to progress up this scale as these areas are recognized as having improved, and presumably they could also be downgraded should these areas be deemed to have become weaker. Benefits of participation would vary based on the tier ranking of the participant.

About ETTS
The ETTS would utilise the same tiered structure as the ITTS with a number of benefits granted to exporters at each tier. The ETTS is based on the WCO’s Standards to Secure and Facilitate Global Trade (SAFE framework), which is most commonly implemented as the Authorised Economic Operator (AEO) model. It is presumed that by Australia implementing the ETTS, with the goal of mutual recognition by countries implementing the AEO model, that Australian exporters will benefit from increased market access in those countries as well as improved economic competitiveness. Both countries governments would benefit from increased assurance over supply chain security and increased trade compliance. Australian Customs hopes to have a pilot program for the ETTS established before May 2015 as it will be able to benchmark much of the foundations for ETTS on the AEO Pilot Project conducted in 2009.

Of course, the road to mutual recognition may be a long one as Australia’s Customs service will have to secure mutual recognition agreements (MRAs) from the governments of our major trading partners. It is thought that the establishment of MRAs will make certain Australian products more attractive to the global marketplace. An example would be enhancing the already high regard for Australian food products in Asian nations.

cargo laden ship

What are the tangible benefits to Australian industry?
Australian Customs is seeking to work with industry over the coming months to ascertain what types of benefits industry is looking for in exchange for their voluntary participation in these programs. The discussion paper lists twelve “benefits” that it believes may be attractive to Australian industry, including the “establishment of account-based controls rather than transaction processing”, which would allow for monthly acquittal and alternative methods of duty collection. Another benefit listed is the promise of “priority service” as it relates to the processing of tariff advices, valuation advices, duty drawback and duty refunds. There are ten other benefits listed. The discussion paper is also seeking industry comment on other benefits industry would find beneficial.

With help from the operations, sales and finance departments, most commercial entities can conduct their own rough analysis to determine whether making the effort to join one or both programs will result in any reduction to supply chain costs or result in increased sales of their products abroad. Those entities with overseas affiliates or parent companies participating in the foreign equivalents of the Trusted Trader Program would be best positioned to understand the pros and cons of joining such a program. Australian industry is encouraged to read the discussion paper and then conduct their own internal analysis to determine what the benefits would be (if any) of joining the Trusted Trader Programme.

For assistance with this type of analysis, please contact Eva Galfi on 0421 506 095

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