Archives For Australia

Trade Community System - Brisbane - DashboardA new Trade Community System (TCS) that will function as a free to access portal bringing together existing data on container shipments is the result of a collaboration between PwC Australia, the Australian Chamber of Commerce and Industry, and the Port of Brisbane.

The goal of the TCS is to link existing supply chain information in disparate systems through blockchain technology, and in the process “revolutionise international trade by removing complexity”.

The developers of TCS noted that one shipment to or from Australia today generates as many as 190 documents and 7,5000 data fields, much of which is duplicating data for different systems, and there is no ability currently to track containers on end to end journeys.

TCS aims to address this with a “National platform that links rather than replaces existing systems, provides end to end visibility and foresight of impediments such as delays and incorrect information, and is permissioned”. All documents, approvals and other requirements would be linked to a single shipment or container number as hashes on a blockchain that supports the TCS system, or stored in an off-chain graph database.

TCS - Brisbane

The developers stressed that TCS “augments, not replaces the systems that are already part of Australia’s supply chains”. Users would access the TCS directly through a web portal or indirectly through their existing systems, and at no upfront cost. “Users are not charged to use the platform or access data about the goods they are managing. Revenue comes from the productivity and service innovations that the data unleashes,” the developers stated.

Speaking at the launch of a proof of concept Trade Community System digital application in Brisbane, Port of Brisbane CEO, Roy Cummins said: “To drive new efficiency gains, industry leaders need to develop mechanisms which facilitate the integration and interoperability of commercial operators across the supply chain and logistics sector”.

This is the goal of the TCS. “The Trade Community System proof of concept is the first stage in building an innovative end-to-end supply chain that will digitise the flow of trading information, improve connectivity for supply chain participants, reduce friction for business and reduce supply chain costs, providing unprecedented productivity gains for Australia’s international businesses,” PwC Partner, Ben Lannan added.

For the Chamber of Commerce and Industry, TCS is an important step in reducing the cost of doing business. “As a trading nation, Australia relies on efficient and effective international supply chains to drive its economic engine room,” said Australian Chamber Director of Trade and International Affairs, Bryan Clark. “At present the current inefficiency across Australian supply chains has added to the cost of doing business, creating up to $450 in excess costs per container. This doesn’t just represent in excess of $1bn in value lost, but goes to the heart of Australian commodity trade viability when it gets priced out of the competitive global market”.

Check out the video – https://vimeo.com/262332930

Source: WorldCargoNews, Editorial, 30 May 2018

 

 

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Companies that have been certified by the Singapore Customs for adhering to robust security practices can now enjoy a faster customs clearance process for goods that they export to Australia, the agency for trade facilitation and revenue enforcement said on Thursday.

In addition to the faster clearance process, certified Singapore firms will also be subject to reduced documentary and cargo inspections. The same will be applied to Australian companies that are certified by the Australian Border Force (ABF) for goods that they export to Singapore.

The move was recognised under a Mutual Recognition Arrangement (MRA) of Authorised Economic Operator programmes signed by Singapore Customs and the ABF on May 31 that aims to foster closer customs collaboration and elevate bilateral trade ties between the two countries.

The MRA comes under the Comprehensive Strategic Partnership signed between Singapore and Australia in 2015. In addition, Singapore is the first Asean country to sign an MRA with Australia.

In its media statement on Thursday, Singapore Customs said: “The Australia-Singapore MRA recognises the compatibility of the supply chain security measures implemented by companies certified under Singapore Customs’ Secure Trade Partnership (STP) programme and the trusted companies of the ABF’s Australian Trusted Trader programme.”

The agreement was signed on Thursday by Singapore’s director-general of customs, Ho Chee Pong, and the commissioner of ABF and comptroller-general of customs, Michael Outram, in Singapore.

Mr Ho said: “The signing of this MRA reinforces the commitment of both our customs administrations to maintain the security of regional and global supply chains, and to facilitate legitimate trade undertaken by Authorised Economic Operators in both countries.

“As major trading partners, I am confident that this new MRA of our respective Authorised Economic Operator programmes will bring about much benefit to our businesses and boost bilateral trade.”

The signing of the Authorised Economic Operator-MRA will further strengthen closer cooperation at the borders and smoothen the passage of goods between our two countries of trusted traders.

Source: The Business Times (Singapore), original article by Navin Sregantan, 31 May 2018

 

BBC - Oz HS

Well, one things for sure – “customs” as an exterior entity is all but gone down under – Australian Prime Minister Malcolm Turnbull announced on Tuesday he will set up a single ministry to oversee the country’s internal security, including police, intelligence, border protection and immigration affairs.

Turnbull said the measure was necessary to address the complexity and rapid evolution of security challenges in the country, including domestic terrorism, international organized crime and cybercrimes.

“We need these reforms, not because the system is broken, but because our security environment is evolving quickly,” Turnbull said at a press conference.

“When it comes to our nation’s security, we must stay ahead of the threats against us. There is no room for complacency,” he added.

Immigration Minister Peter Dutton will now head the Australian Federal Police, Australian Security Intelligence Organisation (ASIO) and the Australian Border Force.

Turnbull said the initiative, which will take a year to implement, is the largest internal security reform in 40 years and that the creation of the super ministry emulates similar decisions taken by other countries such as the United Kingdom.

The new portfolio will be similar to the United Kingdom’s Home Office arrangement, a federation, if you will, of border and security agencies,” he told reporters on Tuesday. As part of the reform, a single national intelligence office will be the coordinating authority, and will comprise a new center that will be dedicated to cybersecurity.

The reform was approved despite initial resistance by Attorney-General George Brandis, Foreign Minister Julie Bishop and Minister of Justice, Michael Keenan.

Turnbull assured that both the federal police and ASIO will retain their independence and that actions by the security agency will have to be approved by the attorney general.

The opposition criticized the decision and accused Turnbull of trying to use the reform to consolidate his leadership in the face of pressure from the most conservative sections of the ruling coalition.

Australia raised its terror alert in September 2014 and has passed a series of anti-terrorist laws to prevent attacks on its territory.

Since then Australia has suffered five violent incidents and has thwarted 12 other potential attacks. Source: laht.com

ibmThe Australian Broadcast Company (ABC) has been told IBM looks increasingly unlikely to hit its October 31 deadline and there are growing fears in the Department of Immigration and Border Protection that the risk of a system failure is rising, as the busy Christmas holidays loom and a long-running industrial dispute remains unresolved.

An IT failure could have serious national security implications as the mainframe will manage Australia’s border controls, including red flagging terror suspects attempting to enter or leave the country.

In response to a series of questions from the ABC, the department issued a statement saying: “This schedule remains under active review.”

“This is common to all major system changes in which the protection of operational capability and security protections remains the overarching priority,” the statement said.

The concerns about the enterprise-wide mainframe contract come in the wake of the high profile woes of another federal agency.

The Australian Bureau of Statistics was embarrassed by a census-night shutdown, which Prime Minister Malcolm Turnbull blamed on IBM.

The company is also currently embroiled in a Canadian payroll scandal, where tens of thousands of public servants have been underpaid, overpaid or not paid at all.

And that echoes the billion-dollar health payroll debacle in Queensland, after which the State Government banned its agencies from signing contracts with IBM.

Rand Corporation review of the merger between Immigration and Customs that said there was “an absence of a solid plan” for executing the integration.

Before Customs and Immigration merged in 2015, two companies had been delivering IT services — IBM for Customs; and CSC, another US information technology giant, for Immigration.

CSC lost the bid for the combined tender and was told in February that its contract would be terminated 20 months early, with the new finish date set at October 31, this year. That upped the ante on transferring enormous amounts of information between CSC-managed and IBM-managed data centres.

As that deadline approaches, fears have grown within the department that IBM is not ready and that the system might fail.

There have been meetings between IBM and officials as they war game solutions, which might include IBM hiring CSC’s workforce.

The total value through to 2019 of the mainframe contract is $509 million, and it is understood that the department does not have any more money to bolster the transition and is struggling to find the staff it needs within its own ranks to handle the change.

It is just one of many contracts IBM has with the Federal Government.

The department’s statement in response to the ABC’s questions also said it “has a robust risk management framework in place to address any potential risks that may arise from a large scale change to border systems”.

“IBM has had a long relationship with the former Australian Customs and Border Protection Service and has maintained a stable computing environment for critical border systems,” the statement said. Source: ABC

trusted-trader-transparent

A new customs program aimed at bringing Australia into line with other major trading nations could substantially cut costs when exporting to Asia.

The Department of Immigration and Border Protection (DIPB) believes that the benefits to the Australian economy of this streamlined export process could be worth up to $1.5 billion for every one per cent increase in efficiency of transport and logistics supply chains.

The pilot for the Australian Trusted Trader (ATT) program launched this month will eventually allow accredited export businesses to gain streamlined customs and security clearance in countries that have a mutual recognition agreement with Australia.

Similar programs have already been adopted by more than 58 international jurisdictions – including China, India, Japan, Singapore, Taiwan and South Korea – since being introduced by the World Customs Organisation (WCO) in 2005.

Known generally as Authorised Economic Operator (AEO) schemes, they provide a framework of standards for trading partners in recognising each other’s customs and security regimes.

According to the Centre for Customs and Excise Studies (CCES) at Charles Stuart University, the goods of exporters who are accredited to the New Zealand AEO scheme are 3.5 times less likely to be inspected or held up on arrival in the US.

Professor David Widdowson, head of school at CCES, and a leading advocate and advisor on the introduction of the ATT, says that accreditation to an AEO is often an imperative for many international supply chains.

“When exporters send goods overseas and they get held up, there’s basically two ways that countries are dealing with them,” he said. “There those that come from a known secure supply chain – such those where a mutual AEO agreement is in place – and they’re treated as low-risk; and then there’s the rest, which are treated as high-risk.

“Without being part of an AEO or trusted trader agreement, Australian exporters are more often likely to fall into the latter category.

“In some jurisdictions it can be very difficult to be accepted onto an AEO scheme as an importer, so big multinationals often actively look for partners and suppliers who are already accredited to a scheme in their own country – and won’t deal with anyone who isn’t. They don’t want to run the risk of their non-accredited parts of their supply chain compromising their status on the scheme.

“So we can see how AEOs are actually now being used by commerce as a key indicator of the standard that business is looking for in terms of protecting their international supply chain.”

The aims of the ATT include expedited border clearance, reduced or priority inspections and priority access to trade services. The DIPB will also explore the possibilities for duty deferral and streamlined reporting arrangements.

Accredited trusted traders are to be assigned an account manager within the DIPB, as a single point of contact to assist with customs and export issues across all federal departments.

To apply to enter the program, Australian exporters and supply-chain businesses – including freight-forwarders, brokers and logistics firms – first need to obtain a self-assessment questionnaire from DIPB.

The information submitted by the business is then audited by the DIPB to ensure that the necessary security systems and procedures are in place, before accreditation can be given. There is no licence or application fee for the program, and Prof Widdowson expects the process to take “a few weeks if it’s a major company or it could be a few days if it’s a medium-sized company”.

The pilot phase will be completed in this current financial year, and only four companies will be taking part initially: Boeing Aerostructures Australia, Devondale Murray Goulburn, Mondelez Australia and Techwool Trading.

Teresa Conolan, assistant secretary of the Trusted Trader and Industry Branch at the DIPB, said more companies would be included in the pilot as it progresses.

“We’re hoping to have around 40 companies over the 12 months in the pilot, across a range of business sectors, so we can actually test the processes and make sure they are not too burdensome,” she said.

“Over four years we’re expecting around 1500 companies to join the scheme – so it’s certainly not going to cover all business.”

Conolan added that preliminary discussions with some countries were already underway, though negotiations on agreements were unlikely to begin until the ATT was fully launched next July.

She said Australia’s key trading partners would be the priority, but expected the negotiations and implementation of agreements with some of them to take a further year.

The rollout of the pilot program follows years of pressure from the Australian business community to embrace AEO, after initial reluctance by the Australian Customs and Border Protection Service (ACBPS).

Following an article by The Australian Financial Review on March 20, 2013, which flagged Australia’s non-participation, business leaders sponsored a research study, undertaken by the CCES, which found that the scheme could be highly beneficial. Business groups began to lobby the federal government, by which time the ACBPS had reversed its attitude and agreed to consider implementing an Australian scheme.

For more information on the Australian Trusted Trader scheme, visit – trustedtraders@borders.gov.au

Also read:

Aus-drug-bustAustralian law enforcement agencies have seized methylamphetamine worth AUS$1.26bn in the country’s largest-ever haul of the illicit drug in its liquid form, officials said Monday.

Four Hong Kong passport holders were arrested in Sydney last month over the import from China of 720 liters of the drug hidden in boxes of silicon bra inserts and art supplies, police said in a statement

The liquid could have made about 500kg of high-grade crystal meth, commonly known in Australia as ice, Australian Federal Police Commander Chris Sheehan said.

Officials also seized 2kg of the crystalized form of the drug.

Justice Minister Michael Keenan said the operation used information gathered through new cooperation between Australian Federal Police and China’s National Narcotics Control Commission. The Australian and Chinese agencies established a joint task force in November to investigate criminal syndicates trafficking methamphetamine.

“This largest seizure of liquid methylamphetamine to date is the result of organized criminals targeting the lucrative Australian ice market from offshore,” Keenan told reporters.

The four will appear in a Sydney court next month charged with importing and manufacturing commercial quantities of illegal drugs. Each suspect faces a potential life sentence if convicted.

Keenan said the seizure was one the largest hauls of illicit drugs in Australian history. Source: Perth News

Oz Tax Office2Global pharmaceutical companies paid tax of just $85 million in Australia on revenues of more than $8 billion, including $3.5bn from taxpayer-subsidised drugs, Labor senator Sam Dastyari says.

“What is so extraordinary is that you’ve had companies that have been able to arrange their affairs to be able to drive down their revenue to such an extent that their taxable income is simply one per cent of the revenue that they have,” Senator Dastyari said.

Senator Dastyari addressed media during a break at a senate inquiry into corporate tax avoidance in Sydney that is hearing from nine of the biggest drug companies operating in Australia.

“The question before us today was ‘Is this a genuine representation of how profitable these companies have been?’,” Senator Dastyari said.

“The evidence is that they have done what they can to drive up their costs to make themselves as artificially unprofitable as possible in Australia and make themselves more profitable in other jurisdictions to avoid paying tax here.”

Senator Christine Milne, who is also on the senate committee conducting the inquiry, said Johnson and Johnson’s vice president of global taxation had given extraordinary evidence that the company had a profit formula that the Australian subsidiary was required to meet.

“Then they work out their tax affairs so that they move their profits offshore and they maximise their costs here,” Senator Milne told journalists.

“And the extraordinary thing is in the negotiation with the government on the pharmaceutical benefits scheme they ask what the market will bear in terms of the cost of those drugs but they don’t reveal what they actually pay for those drugs from their head office.

“People in the community are saying well look the government keeps coming after us to pay more tax – what about the big end of town?” Source: theaustralian.com.au

Triton drone surveillance fleet to be based at Edinburgh air force base in Adelaide (ABC News)

Triton drone surveillance fleet to be based at Edinburgh air force base in Adelaide (ABC News)

Australia today announced it will buy unmanned surveillance drones from the US to protect its borders and commercial interests.

The fleet, to be based in Adelaide, would provide the defence force “with unprecedented maritime surveillance capabilities”, PM Tony Abbott said. The drones would also be used to protect energy resources, he added. The drones, which are still being tested by the US navy, can remain airborne for up to 33 hours. The number of drones to be purchased is yet to be determined.

“We do need to have a strong defence – national security is as important as economic security when it comes to the good government of our country,” Abbott said. “Given that Australia has responsibility for something like 11% of the world’s oceans, it’s very important that we’ve got a very effective maritime surveillance capability.” The MQ-4C Triton drones, which are unmanned aerial vehicles used for surveillance, can cruise at altitudes up to 55,000 feet. The vehicle’s size is comparable to a small aircraft with a wingspan of 40 metres (131 feet).

In Australia, the drones are to be stationed at Adelaide’s air force base. Abbott said the purchase plan would boost South Australia’s economy with about A$100m ($90m, £54m) in investments. The announcement comes as Australia steps up its maritime border patrols to deter asylum seekers arriving by boat from neighboring Indonesia. Source: The Nation

High Density Container Terminal  (Picture credit - Getty Images)

High Density Container Terminal (Picture credit – BBC News/Getty Images)

Thanks to the kind reader who passed me this story. BBC News Environment correspondent, Matt McGrath, reports that current methods of measuring the full material cost of imported goods are highly inaccurate. In a new study, researchers have found that three times as many raw materials are used to process and export traded goods than are used in their manufacture.

Richer countries who believe they have succeeded in developing sustainably are mistaken say the authors. The research has been published  (click hyperlink to access the report) in the Proceedings of the National Academy of Sciences.

Many developed nations believe they are on a path to sustainable development, as their economic growth has risen over the past 20 years but the level of raw materials they are consuming has declined.

According to  Dr Tommy Wiedmann University of New South Wales “We are saying there is something missing, if we only look at the one indicator we get the wrong information”. This new study indicates that these countries are not including the use of raw materials that never leave their country of origin.

The researchers used a new model that looked at metal ores, biomass, fossil fuels and construction materials to produce what they say is a more comprehensive picture of the “material footprint” of 186 countries over a 20 year period.

“The trade figure just looks at the physical amounts of material traded, but it doesn’t take into account the materials that are used to produce these goods that are traded – so for something like fertiliser, you need to mine phosphate rocks, you need machinery, so you need extra materials.”

In this analysis, the Chinese economy had the largest material footprint, twice as large as the US and four times that of Japan and India. The majority comes from construction minerals, reflecting the rapid industrialisation and urbanisation in China over the past 20 years.

The US is by far the largest importer of these primary resources when they are included in trade. Per capita, the picture is different, with the largest exporters of embodied raw materials being Australia and Chile.

According to the model, South Africa was the only country which had increased growth and decreased consumption of materials.

The researchers believe their analysis shows that the pressure on raw materials doesn’t necessarily decline as affluence grows. They argue that humanity is using natural materials at a level never seen before, with far-reaching environmental consequences.

They hope the new material footprint model will inform the sustainable management of resources such as water. The authors believe it could lead to fairer and more effective climate agreements.

“Countries could think about agreements where they help reduce the emissions at that point of material use,” said Dr Wiedmann. “That’s where it is cheapest to do, where it is most efficient, where it makes more sense.” Source: BBC News

English: The Globe House, headquarters of Brit...

The Globe House, headquarters of British American Tobacco in London, as seen from River Thames (Photo Credit: Wikipedia

Anti-smoking campaigners have accused the UK government of caving in to pressure from the tobacco lobby and running scared of Ukip after plans to enforce the sale of cigarettes in plain packs failed to make it into the Queen’s speech. Minutes released by the Department of Health show that one of the industry’s leading players had told government officials that, if the move went through, it would source its packaging from abroad, resulting in “significant job losses.”

Cancer charities and health experts were expecting a bill to be introduced last week that would ban branded cigarette packaging, following a ban introduced in Australia last December. The plain packaging idea comes from Australia, the country where it was first tried out. Cigarettes there have to be in a drab olive-coloured packaging, and the brand name is in a uniform typeface. The packets are also adorned with graphic images of the effects of lung cancer.

At least one health minister had been briefing that the bill would be in the Queen’s speech. But the bill was apparently put on hold at the last minute with the government saying it would be a distraction from its main legislative priorities.

It has emerged that senior Department of Health officials held four key meetings with the industry’s leading players in January and February, when at least one of the tobacco giants spelled out to the government that its plan would result in thousands of jobs going abroad.

Department of Health minutes released last week reveal that Imperial Tobacco, British American Tobacco (BAT), Philip Morris International and Japan Tobacco International were each invited to make representations to the government, in which they attacked the plan and its impact on the UK economy.

Only the minutes of the meeting with Imperial have been released. They record that Imperial warned if plain packs were introduced it would source packaging from the Far East resulting “in significant job losses in the UK.” (Hmm….the Brits thought little of this when imposing new packaging and labelling for UK bulk-liquor imports from abroad, which will have similar consequential effects (job losses) on foreign economies. Rather hypocritical I would think!)

A tobacco giant, Imperial, also outlined how its packaging research and development department supported small and medium-sized enterprises in the UK and argued that standard packs would “result in some of these being put out of business”.

It added that the plan would boost the illicit trade in cigarettes, which already costs the Treasury £3bn in unpaid duty and VAT a year. And it noted that 70,000 UK jobs rely on the tobacco supply chain, implying some of these would be threatened if the illicit market continued to grow. When asked to hand over its assessment of the impact of the plan, Imperial refused, citing commercial sensitivity.

The decision to delay the introduction of plain packs is a major success for the tobacco lobby, which has run a ferocious campaign against the move. Cigarette makers fear that the loss of their branding will deprive them of their most powerful marketing weapon. The industry has backed a series of front campaign groups to make it appear that there is widespread opposition to the plan, a practice known in lobbying jargon as “astroturfing”. Many of the ideas were imported from Australia, where the tobacco giants fought a bitter but ultimately unsuccessful campaign to resist plain packs. Much of the Australian campaign was masterminded by the lobbying firm Crosby Textor, whose co-founder Lynton Crosby is spearheading the Tories’ 2015 election bid.

Crosby was federal director of the Liberal party in Australia when it accepted tobacco money. Crosby Textor in Australia was paid a retainer from BAT during the campaign against plain packs. Some anti-smoking campaigners are now questioning whether the decision to drop the plain packs bill was as a result of shifting allegiances at Westminster.

“It looks as if the noxious mix of right-wing Australian populism, as represented by Crosby and his lobbying firm, and English saloon bar reactionaries, as embodied by [Nigel] Farage and Ukip, may succeed in preventing this government from proceeding with standardised cigarette packs, despite their popularity with the public,” said Deborah Arnott, chief executive of the health charity Action on Smoking and Health. A Department of Health spokeswoman denied that tobacco lobbying had been a factor in the decision to pull the bill. “These minutes simply reflect what the tobacco company said at the meeting, not the government’s view,” she said. “The government has an open mind on this issue, and any decisions to take further action will be taken only after full consideration of the evidence and the consultation responses.” Source: The Guardian, UK

Oz CustomsCorrupt customs officials have stolen – and possibly sold – seized goods earmarked for destruction, exposing ”extremely haphazard” governance within the agency charged with protecting Australia’s borders. Files from Customs’ internal affairs department also suggest the organisation had no policy to ensure its favoured gun dealers were actually licensed to sell the firearms it had ordered.

Fairfax has obtained the files after a two-year freedom of information battle. The documents reveal an agency overwhelmed by the threat of organised crime, but they also expose several serious management failures in the organisation’s senior ranks.

In the middle of 2008, for example, a licensed weapons dealer threatened to sue Customs, alleging its Weapons and Strategic Goods group, which armed front-line officers with items such as Glock handguns and capsicum spray, was buying weapons ”from a person not authorised to deal in such weapon types”. Investigators did not find any ”discrepancies”, but along the way they made a startling discovery: ”No specific checks [are] conducted regarding appropriate licensing when purchasing weapons.”

On Saturday, Fairfax Media reported that internal inquiries into Customs staff led to adverse findings in about two-thirds of 700 cases between 2007 and 2010. In one case, an officer was caught in June 2009 removing cigarettes marked for destruction from a detained goods facility. He was fined $1500, but the whistleblower had told investigators ”others may be involved and quantities could be much higher”. Internal affairs went on to identify the problem as a ”systemic issue”.

In Queensland about the same time, an audit of one of Customs’ Detained Goods Management stores ”revealed a stock shortage of 1200 sticks of tobacco from the February 2008 DGM stocktake”. A number of Customs officers working in the cargo group were identified by the investigation, the ”goods [were] established as unaccounted for”, and questions were raised about why it was that ”half of staff” in the division had access to the DGM. ”No accountability and controls in place,” Internal Affairs noted in its report. ”Procedures in place at the DGM … were extremely haphazard … poor supervisory and fraudulent records identified.”

The final reports recommended new standard operating protocols for all Customs storage facilities. Several officers may have faced disciplinary proceedings as a result of the inquiry, the files suggest.

At one point, Customs investigators feared poor control of seized goods extended to far more dangerous goods, after a February 2009 audit of the seized goods facility in Queensland reported that more than 16,000 rounds of ammunition ”with a variety of associated equipment” had gone missing. But Customs now says this was just another case of poor management, after major accounting errors were identified in the audit.

The files also raise serious questions about financial controls within the organisation. Customs chief executive Mike Pezzullo (no relation to me) said on Saturday he was planning to overhaul the organisation’s internal affairs unit. Source: The Age (Australia)

Anti-tobaccoAs countries around the world ramp up their campaigns against smoking with tough restrictions on tobacco advertising, the industry is fighting back by invoking international trade agreements to thwart the most stringent rules.

A key battlefront is Australia, which is trying to repel a legal assault on its groundbreaking law requiring cigarettes to be sold in plain packs without distinctive brand logos or colors. Contesting the law, which came into effect Dec.1, are the top multinational cigarette makers and three countries — Ukraine, Honduras and Dominican Republic — whose legal fees are being paid by the industry.

The dispute underlines broader concerns about trade provisions that enable foreign companies to challenge national health, labor and environmental standards. Once a country ratifies a trade agreement, its terms supersede domestic laws. If a country’s regulations are found to impose unreasonable restrictions on trade, it must amend the rules or compensate the nation or foreign corporation that brought the complaint. In the case of Australia’s plain packaging law, the tobacco industry and its allies are challenging the measure as a violation of intellectual property rights under trade agreements the nation signed years ago.

Public health advocates fear the legal attack will deter other countries from passing strong measures to combat the public health burdens of smoking. The “cost of defending this case, and the risk of being held liable, would intimidate all but the most wealthy, sophisticated countries into inaction,” said Matthew L. Myers, president of the Campaign for TobaccoFree Kids in Washington D.C.

The advocates also say countries should be free to decide how best to protect public health, without being second-guessed by unelected trade panels. Moreover, they argue, tobacco products, which kill when used as intended, should not be afforded the same trade protections as other goods and services. Worldwide, nearly 6 million people a year die of smoking-related causes, according to the World Health Organization, which says the toll could top 8 million by 2030. With fewer people lighting up in wealthy nations, nearly 80 percent of the world’s 1 billion smokers live in low and middle-income countries.

Marlboro, the world’s top-selling brand, packaged under labeling laws of (clockwise) the U.S., Egypt, Djibouti, Hungary/Photos of non-U.S. packs, Canadian Cancer Society

Marlboro, the world’s top-selling brand, packaged under labeling laws of (clockwise) the U.S., Egypt, Djibouti, Hungary/Photos of non-U.S. packs, Canadian Cancer Society

Countries have been emboldened to pass more stringent measures by the Framework Convention on Tobacco Control. In effect since 2005, the treaty has committed about 175 nations to pursue such measures as higher cigarette taxes, public smoking bans, prohibitions on tobacco advertising, and graphic warning labels with grisly images such as diseased lungs and rotting teeth (The U.S. has signed the treaty, but the Senate has not ratified it. The U.S. Food and Drug Administration has ordered graphic warnings for cigarette packs, but an industry court challenge on 1st Amendment grounds has stalled the rule.)

Cigarette makers say they acknowledge the hazards and the need for regulations. “We actually support the vast majority of them,” said Peter Nixon, vice president of communications for Philip Morris International, which has its headquarters in New York, its operations center in Switzerland, and is the biggest multinational cigarette maker with 16 percent of global sales.

But the industry has watched with growing concern as more than 35 countries have adopted total or near-total bans on cigarette advertising. Its big profits depend on consumer recognition of its brands. Yet in many countries, the once-ubiquitous logos and imagery are receding, leaving the cigarette pack as a last refuge against invisibility.

Now the pack, too, is under attack. Along with plain packaging laws such as Australia’s, countries are weighing retail display bans that keep cigarette packs out of view of consumers, and laws requiring graphic health warnings so large that there is barely any room for trademarks. Tobacco companies contend that countries enforcing such rules are effectively confiscating their intellectual property and must pay damages.

The industry also claims that measures like plain packaging are counterproductive. “We see no evidence — none at all — that this will be effective in reducing smoking,” Nixon of Philip Morris International said in an interview. In fact, he said, generic packaging likely will increase sales of cheap, untaxed counterfeit smokes, thus increasing consumption (my emphasis added).

Comment: And for me this is the bottom line. Governments are happy to collect the ‘sin tax’ every year, most increasing it annually under the pretext of curbing the use of alcohol or tobacco products. Forcing draconian law will only increase the contraband ‘underground’ which these same governments have little control over. The worldwide push under the WHO banner appears to have more of a ‘social conditioning’ connotation than a health one.

Australian courts this week threw out the bid by tobacco conglomerates to block government from introducing plain packaging for cigarettes. Tobacco product distributors operating in Namibia have been banking on a victory in the Australian courts to strengthen their arguments against similar plans by the Namibian government. Namibia Gazetted the Tobacco Products Control Act of 2010 that introduced plain packaging and ban the use of words such ‘mild’ or ‘light’ on cigarette boxes or any other tobacco products sold in Namibia.

The world’s biggest and the Namibian market leader in tobacco products, British American Tobacco (BAT) has been fighting the Act with serious threats to take the government to court if it dared to implement the Act. BAT has been citing the Australian court case as an example of how far it is prepared to go to fight the Namibian government over what it says is tantamount to expropriation of its trademarks properties. BAT also says plain packaging takes away its trade rights to freely communicate to consumers the nature of their lawful products on offer.

The Australian government’s victory now exposes BAT, along with Japan’s Tobacco International (JTI) and Imperial Tobacco to similar laws across the world. Britain, Canada, New Zealand, China, France, India, South Africa, Norway and Uruguay are already considering implementing the plain packaging measures. Southern Africa Customs Union (SACU) member states intend to adopt the generic Tobacco Products Control Act of South Africa that is in line with the World Health Organisation (WHO)’s pressure on the use of tobacco products, through the Framework Convention on Tobacco Control. BAT has been saying the proposed branding would exacerbate the illegal tobacco trade in Namibia where about 225 000 cigarettes are illegally sold every day.

BAT has a market share of about 85 percent of the Namibian tobacco market, selling just over 330 million cigarettes every year in the country. Namibians are said to smoke 75 000 packs of 20 cigarettes each per day or an equivalent of 1.5 million cigarettes each day. The court ruling in Australia makes Australia the first country in the world where cigarettes are sold in drab, olive coloured packets with graphic health warnings and no logos.

The Tobacco Products Control Act of 2010 also mandates the establishment of a fund from levies on sales of tobacco and other sources.The fund would partly use the money to pay for treatment of tobacco-related illnesses. The new proposed packaging features graphic pictures depicting the ill health associated with smoking. These range from stained teeth, throat cancer to damaged lungs and breast cancer with appropriate warnings underneath the picture. If the new legislation is implemented fully there would be a total blackout on advertising, promotion and any public relations activities around tobacco products or companies whose names are directly associated with tobacco products. Source: New Era, Namibia.

Awarding the SKA

June 13, 2012 — Leave a comment

So what does the awarding of the Square Kilometre Array (SKA) and Customs have in common? Sweet blow all as far as I was concerned until a colleague of mine, Roux Raath, pointed out one of the criteria on which the award was made. Reading the actual report one realises this has more to do with the fact that six African countries will be involved and the cross border movements are foreseen to be complex in contrast to movements between Australia and NZ. Therefore, this has less to do with the South African Customs administration than the Southern African geographical environment. The report also refers to duty and tax structures and these issues should perhaps find a home with the DTI as customs does not dictate these. Nonetheless, the fact remains that certain issues have been raised and these should be considered when strategies are devised to support the SKA project.

The SKA Site Advisory Committee (SSAC) reviewed the various customs systems and duty rates, the excise tax regimes and tax rates, and related issues such as import and export processes that will impact the SKA over its lifetime. A wide range of issues was considered since the SKA involves a large multinational investment of funds, materials, and services, including the provision of scientific and technical equipment, and personnel in various remote locations.

The SSAC reviewed the issues presented by the two candidates, including details related to the six diverse South African member countries; cross-border coordination and logistical issues presented by the South African proposal; and the diverse customs, excise, and regulatory structures in the two candidate sites. The SSAC also considered the long-standing Australia–New Zealand Closer Economic Relationship Trade Agreement (ANZCERTA) free-trade and economic cooperation agreement (allowing for the free flow of goods, services, and people between the two countries) and the absence of overall free-trade agreements among the six members of the South African consortium. The SSAC also reviewed the customs, free-trade, economic, and business environments in Australia and New Zealand and considered the written confirmation from the Australian government that there will be no Goods and Services Tax (GST) payable by the SKA in Australia. On the factor of Customs & Excise, the SSAC awarded the following points for each of the contending consortia – 13.3 for ANZ and 6.7 for South Africa.

To read the full report, download here!

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