As per Tomax bulletins late last week, the Entry Into Force (EIF) date for the China-Australia Free Trade Agreement (ChAFTA) has been confirmed as 20 December 2015. The majority of items imported from China will now be duty free on presentation of a valid Certificate of Origin (COO) at time of entry lodged on or after 20 December 2015. The Australian Government has been working to have the EIF for ChAFTA to start from in December 2015 for some time. Their push was due to the ability to then have YEAR 1 under ChAFTA as being the period from 20 December 2015 to 31 December 2015. YEAR 2 will then commence (with reduced duty rates) from 1 January 2016.

It is important to note that COOs issued in China will need to have been produced by one of two certified organisations. The two organisations able to issue COOs in China are:

- AQSIQ (General Administration of Quality Supervision, Inspection and Quarantine
- CCPIT (China Council for the Promotion of International Trade)

Duty rates on the majority of products will become zero immediately with other duty rates phasing down over a few years. There has been some confusion in relation to duty rates on textiles, clothing and footwear under ChAFTA. When the terms and schedules for ChAFTA were first discussed the duty rate on clothing was 10 percent and as such the schedules worked on reducing rates from 10 percent to 0 percent over 4 years. Over the last few years however, the general duty rate on clothing has reduced already to 5 percent. The reductions under ChAFTA for clothing are Year 1 = 6.7%, Year 2 = 3.3%, Year 3 = 1.6%, Year 4 = 0%. So effectively, if you were to use ChAFTA to claim a preferential duty rate for clothing between 20 December and 31 December 2015 you would actually be paying duty at a higher rate than the current general rate.

Hong Kong and Macau are not covered under the ChAFTA agreement, normal duty rates will continue to apply for those SARs of China.

Cargo of Chinese origin (with a valid COO) that tranships through Hong Kong (without the goods undergoing certain processing) will continue to be able to claim preferential ChAFTA rates.

Further information is available on the DFAT website at this link - click here, or you can contact the Customs team at Tomax Logistics on 1300 186 629.