DAFF’s highly compliant importer (HCI) scheme is a reduced inspection intervention scheme that applies to green coffee beans for processing, new tyres, aircraft and machinery and machinery parts of specified tariff classifications whether or not AEPCOMM (automatic entry processing for commodities) is used in the quarantine clearance.
To qualify for the maximum 50% reduction in inspections under the HCI scheme, importers need to ensure eligible commodities classified under these nominated tariff classifications consistently comply with Australia’s biosecurity import requirements and pass inspection. As an example, machinery and machinery parts require 25 consecutive compliant inspections to achieve a reduced inspection rate of 75%. An additional 15 consecutive compliant inspections are then required to achieve a 50% inspection rate.
The HCI scheme is not voluntary and is applied automatically by the q-ruler to eligible products in Agriculture Import Management System (AIMS). The q-ruler is the component of AIMS which applies rules relating to biosecurity concerns. If goods are eligible for the HCI scheme, the q-ruler groups all lines on an entry from the same commodity group and applies one outcome for those lines (that is, inspection or a release from biosecurity control).
As there is no application process to qualify for the scheme, the AIMS q-ruler automatically monitors an importer’s compliance history count and places eligible importers onto the scheme once they meet the qualification number, whether or not they wish to use HCI.
HCI in theory appears to be a good idea, but it needs tweaking. There is unfortunately no ability for an importer or his nominated customs broker to opt out of the scheme, and therefore additional and unnecessary costs can be incurred. These can be substantial, and they can be incurred whether or not the description of the goods matches the product in HCI.
As an example, a recent case referred to me for comment had two 40’FCL containing new and unused repair parts for agricultural machinery. Other than a hydraulic engine (8412) and parts of general use, most of the remaining goods were classified to heading 8432 or 8433. Some were plastic. All required documentation was available and presented. On lodgement of the import declaration the general declaration questions were answered that the goods were new and not used or not second hand.
On lodgement the Australian Quarantine and Inspection Service direction required an HCI inspection. The broker advised that without HCI a tailgate inspection is all that is generally required because of the rural delivery, although methyl bromide fumigation is also required during brown marmorated stink bug season. BICON confirms that the outcome for such consignments is that they may be released upon the presentation of valid documentation but notes that all consignments may be subject to a verification inspection on arrival to verify that the goods are new and free from biosecurity risk material.
It should be noted that HCI applies only to used machinery and machinery parts according to the guidance on the DAFF website.
Assessed for HCI however the two FCL each required a mandatory unpack and repack as well as additional cartage and potential storage. The cost of each unpack is estimated at about $800 to $900 additional. Repack charges are about the same, assuming the goods are able to be repacked. There is also the added risk of damage to the cargo by the double handling. This results in a minimum of $3000 additional charges on one consignment! As it is unlikely that these goods would be imported more than three times a year any potential benefit of HCI is negated as the volume of such consignments will never qualify for HCI.
Is the profile in the ICS too broad and needs adjusting given it also directs new and unused machinery for HCI inspection?
Our government has advised that it is committed to improving the operating environment and financial pressures on business, especially small business, and helping them to thrive. One such way to do this is to introduce an ability for importers to opt out of HCI if the scheme significantly there is no short- or long-term benefit to them.
By Susan Danks, director, Susan Danks Tariff Consulting
