STRUCTURED ORDERING is where multiple orders are placed with one supplier in a short timeframe, with all orders having a customs value at or below the $1000 threshold and which separately arrive. 

ABF policy is that multiple packages will form a single consignment where those packages are ‘known to be part of the same order’ even if the goods arrive in separate packages on separate days. Therefore, where the total value of all the packages forming an order from a consignor to a consignee exceeds AUD1000, a FID is required for lodgement. This policy relies only on ABF interpretation of Customs Act 68 and s.71A. It has not been tested in Court.  

In ACN 2021/01, ABF’s position is that that it is inconsistent with the requirements of section 68 to structure a consignment in such a way as to deliberately avoid duty and GST liability.  Unfortunately, it is not always clear to the importer when they have overstepped the mark between acceptable and unacceptable behaviour.  

ABF advice is that the fundamental factor when determining whether goods form a consignment, is whether the goods are a single arranged shipment from a consignor to a consignee. At its simplest, a consignment will consist of a single order and will generally (but not always) be transported to Australia in the same ship or aircraft.  

  

But ABF also says that multiple packages will also form a single consignment where those packages are ‘known to be part of the same order’. Therefore, where the total value of all the packages forming an order from a consignor to a consignee exceeds $1000, a FID is required for lodgement.   

Duty minimisation 

In the past, the term ‘duty avoidance’ as distinct from ‘duty evasion’ was used to signify that the importer had employed legitimate methods or “schemes” for reducing their tax liability.  It did not imply wrongdoing but merely involved paying less tax than otherwise required.  This process is referred to as ‘duty minimisation’ and is the objective of duty planning.  It includes classification reviews, TCOs and of course FTA and preference 

Duty evasion consists of some blameworthy act or omission on the part of the taxpayer and is against the law.   

Where there is money to be made there is crime and where there is an obligation to pay duties or taxes, there will always be people who try to avoid it.  Similarly, and assuming that most people do not wish to pay any more duty than legally required, duty minimisation is a common practice in order to reduce that liability. But is it cheating to use legitimate means to minimise duty and tax payable?  

ACN 2021/01 provides that the ABF does not consider businesses that normally place multiple small orders at ad hoc intervals and ad hoc values, as attempting structured ordering. If the importer objects to ABF’s assessment of whether multiple orders of goods are separate consignments, the onus is on them to provide additional information, such as evidence of ordering patterns over previous months that would support a different conclusion.  

Acts Interpretation Act 1901 

Section 15AA of the Acts Interpretation Act 1901 (Cwlth) provides that when interpreting ambiguous provisions, the courts can draw upon the purpose and intention of the legislation. Is s.68 ambiguous?  

In the Customs Act there are 75 references to “consignment”, none of which support the expanded meaning applied by ABF to s.68 in ACN 2021/01. A consideration of the purpose and intention does not provide for interpretations that expand its scope beyond its common meaning. The courts have repeatedly stated that determining the proper interpretation of an Act commences with consideration of the words of the provision itself. 

The courts have often also stated that the language used in the legislation is the surest guide to legislative intention. A perceived intention cannot on its own determine how a provision should operate. Nor should legislation be approached with an eye to reading it to conform with a desirable policy. 

Is the ABF interpretation valid? Only the Courts can decide.