What does 'Chilean originating goods' actually mean when importing something?

In Plain English

If you're importing goods and want them to be considered "Chilean originating goods" under Australian law, it generally means they can qualify for preferential tariff treatment (lower customs duties) under the Australia-Chile Free Trade Agreement. To be considered "Chilean originating goods", the goods must meet specific rules of origin requirements as set out in the Customs Act 1901 and the Customs (Chilean Rules of Origin) Regulations 2008. These rules determine if the goods are truly from Chile based on factors like where they were made, what materials were used, and how much value was added in Chile. Meeting these rules often requires a Certificate of Origin to prove the goods qualify.

Detailed Explanation

The term "Chilean originating goods" is defined within the context of the Australia-Chile Free Trade Agreement (the Agreement) and is legislated in Australia through Division 1F of Part VIII of the Customs Act 1901. The Customs Tariff Act 1995 states that goods are Chilean originating goods if, and only if, they are Chilean originating goods under Division 1F of Part VIII of the Customs Act 1901.

Here's a breakdown of what it entails:

  1. General Definition: "Chilean originating goods" are goods that, under Division 1F of Part VIII of the Customs Act 1901, are considered to have originated from Chile.

  2. Wholly Obtained Goods: Goods can be considered "Chilean originating goods" if they are "wholly obtained" in Chile (Customs Act 1901 section 153ZJC). This includes things like:

    • Minerals extracted in Chile.
    • Certain goods listed in Section II of the Harmonized System that are harvested, picked, or gathered in Chile.
    • Live animals born and raised in Chile.
    • Goods obtained from live animals in Chile.
    • Fish, shellfish, or other marine life taken from the high seas by Chilean ships.
    • Waste and scrap derived from production operations or used goods collected in Chile and fit only for raw material recovery.
    • Goods produced entirely in Chile from the items listed above.

  3. Goods Produced from Originating Materials: Goods produced entirely in Chile from "originating materials" are also considered "Chilean originating goods" (Customs Act 1901 section 153ZJD). "Originating materials" include:

    • Chilean originating goods used in the production of other goods.
    • Australian originating goods used in the production of other goods.
    • Indirect materials (Customs Act 1901 section 153ZJB).

  4. Goods Produced from Non-Originating Materials: Even if goods are made using some materials that aren't from Chile or Australia ("non-originating materials"), they can still qualify as "Chilean originating goods" if they meet specific requirements outlined in Annex 4-C of the Agreement (Customs Act 1901 section 153ZJE). These requirements often involve a change in tariff classification.

    • Change in Tariff Classification: The Customs Act 1901 and the Customs (Chilean Rules of Origin) Regulations 2008 outline rules for when non-originating materials are considered to have undergone a sufficient change in tariff classification.
    • De Minimis Rule: Even if some non-originating materials don't meet the change in tariff classification requirement, the goods can still qualify if the total value of those materials is below a certain threshold (typically 10% of the customs value of the goods) (Customs Act 1901 section 153ZJE).
    • Regional Value Content: In some cases, goods must have a certain percentage of their value added in Chile (or Chile and Australia) to qualify (Customs Act 1901 section 153ZJE). The Customs (Chilean Rules of Origin) Regulations 2008 outline how to calculate this "regional value content".

  5. Accessories, Spare Parts, and Tools: Accessories, spare parts, tools, or instructional materials that are imported with other goods can also be considered "Chilean originating goods" under specific conditions (Customs Act 1901 section 153ZJG).

  6. Non-Qualifying Operations: Certain minimal operations, like simple packaging or preservation for transport, don't qualify goods as "Chilean originating goods" (Customs Act 1901 section 153ZJH).

  7. Consignment: Goods must be shipped directly from Chile to Australia (or undergo only specific operations in other countries) to maintain their "Chilean originating goods" status (Customs Act 1901 section 153ZJI).

  8. Certificate of Origin: Generally, to claim preferential tariff treatment, the importer needs to have a valid Certificate of Origin at the time of import (Customs Act 1901 section 153ZJC, 153ZJD, 153ZJE). However, Australia may waive this requirement in some cases.

The Customs (Chilean Rules of Origin) Regulations 2008 provide further details on how to determine if goods meet the tariff change requirements and how to calculate regional value content.