WORLD TRADE  
ORGANIZATION  TN/TF/W/66 
28 September 2005 
 
 (05-4301) 
Negotiating Group on Trade Facilitation Original:   English 
  
 
COMMUNICATION FROM AUSTRALIA 
  
 The following communication, dated 28 September 2005, from the Delegation of Australia, is 
being circulated in advance of the Negotia ting Group meeting of 5-6 October 2005.   
 
 
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BINDING ADVANCE RULINGS 
 
Australia's Experience
 
  
I. INTRODUCTION 
1. Enhancing transparency, certainty and predictab ility in the application of border regulations 
and procedures are core objectives of GATT Article X.  Advance rulings
1 facilitate trade by:   
• providing certainty for traders and their agents, as to how their goods will be treated by the 
country of import;   
• promoting consistency and equity in the trad ing process and application of the law;   
• establishing confidence between Customs administrations and traders;  and 
• encouraging compliance and minimizing delays, complaints and appeals.   
 2. Australia was pleased to cosponsor a proposal for possible commitments on advance rulings 
(TN/TF/W/9).  That paper, and subsequent cont ributions from other Members, set out possible 
elements for advance ruling systems.  The present paper outlines the procedures adopted by, and the 
experiences of, the Australian Customs Service (Cus toms) in providing binding advance rulings in 
relation to valuation and classification issues.  Th e paper's intention is to share with Members 
Australia's system of advance rulings and the principles underlying that system.   
II. COVERAGE OF BINDING ADVANCE RULINGS 
3. On request, Australia provides binding ad vance rulings on tariff classification, 
origin/preference and valuation issues.  The vast majority of advance rulings relate to tariff 
classification.  In 2004-05, the number of binding ad vance rulings issued by Customs was:  3,254 for 
tariff classification, 85 for valua tion and 35 for origin/preference. 
                                                     
 
1 The term "advance rulings" generally refers to the possibility for a customs administration (or any 
other competent authority) providing, upon application by a trader/agent in connection to the planned importation of goods, a written ruling with respect to the specific requirements or entitlements, such as tariff 
classification, valuation, origin or eligibility for preference. TN/TF/W/66 
Page 2  
 
 4. This service is available to Australian importers  and to overseas exporters and their agents.  
The service provided is similar in concept and operation for each of the issues mentioned above.  
Section III addresses the experience of Australia in respect of its Valuation Advice Service (VAS), 
while Section IV provides an overview of procedures for tariff classification advice. 
III. PROCEDURES ADOPTED FOR VALUATION ADVICES 
5. The valuation of imported goods is  determined in accordance with  the valuation provisions of 
Customs Act 1901 .  Those provisions are based on the Agreement on Implementation of Article VII of 
the General Agreement on Tariffs and Trade 1994 .  Policy and procedural guidelines for issuing 
valuation advices are set out in Volume 8A of the Australian Customs Service Manual (the Customs 
Manual ).
2   
6. In Australia, applications for a Valuation Advice (VA) can be lodged:   
• electronically, being input directly into a Cu stoms mainframe computer database (TAPIN) by 
licensed users;  or 
• in writing, using a specially prepared form (available from the Australian Customs Service 
website, www.customs.gov.au). 
 7. Details of manually prepared VAs are input into TAPIN by Customs staff.   
8. Each application needs to be accompan ied by supporting documentation.   
9. Supporting information needs to be submitted to  Customs within five working days.   
10. The information may include but is not limited to:   
• identifying the goods;   
• identifying the parties to the importation/transac tion and, where relevant, explaining the roles 
of each party;   
• outlining the proposed treatment of the valua tion issue and the reasons for that proposed 
treatment;   
• nominating the relevant provisions of the Customs Act 1901
3 that the applicant has 
considered;   
• identifying all contracts, agreements and arrangeme nts that relate directly or indirectly to the 
transaction;  and 
• where relevant, explaining the fina ncing and payment arrangements.   
 
11. Each application can address only one valuation issue.   
12. An applicant can withdraw an application at an y time prior to finalization of the decision by 
Customs.   
13. Where additional information is required to fi nalize a VA, Customs will request the provision 
of that information within 28 days.  If the applicant does not provide that information, or request an extension of time, within 28 days, Cust oms will cancel the application.    
                                                     
 
2 Available from the Australian Customs Service website, www.customs.gov.au .   
3 The Customs Act 1901  is readily accessible through the Austra lian Government's legislative website, 
www.comlaw.gov.au.    TN/TF/W/66 
 Page 3 
 
 
 14. In order to provide an effective service to importers and to their representatives, Customs 
aims to finalize all applications within 30 days  (where the applicant does not need to provide 
additional information). 
15. For complex valuation issues, Customs may requi re more than 30 days to finalize the VA.  
Where the VA cannot be finalized within 30 days, Customs notifies the applicant of the extended time 
period.   
16. Each decision on an application, whether accep ting or rejecting the applicant's case, includes 
the reasons for the decision and refers to the section(s) of the Customs Act 1901 supporting the 
decision.  The decision is conveyed to the appli cant in writing and is recorded in TAPIN.   
17. Advices are valid throughout Australia for five years from the date of notification of the VA.  
After five years, the VA is automatically cancelled.  If an advice is still required, the applicant needs 
to lodge a new application.   
18. Although not codified in legislation, Customs treats VAs as internally binding.  Customs' 
stated policy is to honour a VA unless it was provided on the basis of false or misleading information, 
or where the applicant failed to provi de all relevant av ailable documentation.4  This provides certainty 
for traders that rulings will not be arbitrarily overturned.   
19. Customs may revoke or amend a VA within fi ve years where particular circumstances 
warrant, e.g., where:   
• an amendment to the legislation has relevance to the VA;   
• incorrect information was provided or wher e relevant information was withheld;   
• Customs changes its views (this occurs very infrequently and can resu lt from such factors as 
legal precedent or the receipt of supplementary information);  and 
• Customs has issued conflicting VAs.   
 
20. The circumstances under which Customs may amend or cancel a VA are set out in 
Volume 8A of the Customs Manual.   
21. Where an applicant for a VA is dissatisfied with  the decision made by Customs, the applicant 
may request the Central Office of Customs to review the decision.   
22. An application for a review of a VA must be in  writing, and must fully address the reasons 
why the decision is disputed.  The review will take  into account only that information that had been 
provided by the applicant to the original decision maker.   
23. Where an applicant for a VA is dissatisfied w ith the (review) decision of Central Office, the 
applicant may refer the matter to the Administrati ve Appeals Tribunal or to a court of competent 
jurisdiction.   
24. Each ruling is made available only to th e applicant, as the ru ling is based on the 
commercial/financial arrangements of the applicant.   
                                                      
4 Australian Customs Service Manual , Volume 8A.   TN/TF/W/66 
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 IV. PROCEDURES ADOPTED FOR TARIFF ADVICES 
25. Rates of duty payable by importers are determined by the classification of goods within the 
Customs Tariff Act 1995 .
5  Australia's Customs Tariff is based on the Harmonized Commodity 
Description and Coding System (the HS system), developed by the World Customs Organization.   
26. Tariff Advices (TAs) are binding decisions issued  by Customs at the request of a trader or 
their agent regarding the classification of a partic ular good.  Procedures for issuing tariff advices 
operate in a similar way to the valuation advice sy stem.  Specific guidelines for the issue of TAs are 
set out in Volume 7 of the Customs Manual.6   
27. Traders or their agents can apply for a TA:   
• electronically, through TAPIN;  or 
• in writing, using the form available from the Customs website (www.customs.gov.au). 
 
28. When an officer makes a decision,  the result is notified to the tr ader/agent by the return of a 
hard copy or by notification through TAPIN.   
29. Like VAs, TAs remain binding on Customs for five years from the date of advice.   
30. The conditions under which Customs may revoke or  amend a TA are set out in the Customs 
Manual.  Such circumstances include:    
• where there is a change in the law relevant to the advice;   
• where incorrect information was provided to Cu stoms or relevant information was withheld 
from Customs;  and 
• Customs changes its views (this occurs very infrequently and can resu lt from such factors as 
legal precedent or the receipt of supplementary information).   
 31. Where an applicant for a TA is dissatisfied with  the decision made by Customs, the applicant 
may request the Central Office of Customs to review the decision.   
32. An application for a review of a TA must be  in writing, and must fully address the reasons 
why the decision is disputed.  The review will take  into account only that information that had been 
provided by the applicant to the original decision maker.   
33. Where an applicant for a TA is dissatisfied w ith the (review) decision of Central Office, the 
applicant may refer the matter to the Administrati ve Appeals Tribunal or to a court of competent 
jurisdiction.   
34. Details of TAs issued by Customs are maintain ed in a "library" of decisions which are 
available through TAPIN for use by Customs officers.   A percentage of decisions are subject to 
further, in-depth examination by a Customs and a sel ection of these "audited" decisions are kept in a 
separate PRECEDENT database, which is availabl e to Customs officers and owners/agents for 
precedent purposes.   
                                                     
 
5 The Customs Tariff Act 1995 , incorporating Australia's customs tariff, is available on 
www.customs.gov.au. 
6 Available on www.customs.gov.au.  TN/TF/W/66 
 Page 5 
 
 
 V. AUSTRALIA'S EXPERIENCE 
35. Binding advance rulings provide Customs and importers with certainty regarding the 
treatment of imported goods.   
36. Another positive aspect of having binding advance rulings is that they provide for a greater 
level of accountability of staff involved in the decision-making process.  Other officers empowered to 
make like decisions can contemplate the reasoning for decisions and this logic can be questioned, or 
used to support deliberations involving similar issues.   
37. The availability and accessibility of recorded decisions on TAPIN is of great benefit to 
Customs in that it contributes to the uniformity and consistency of decisi ons.  The retention of 
decisions on TAPIN can reduce the time taken in maki ng decisions.  Furthermore, binding rulings can 
be dependant on le gal precedents and all decision-makers mi ght not know of the existence, or 
relevance, of decisions of Courts or the Administrative Appeals Tribunal.   
38. The TAPIN database used by Customs provides for transparency in the decision-making 
process:  the decision-maker is required to document the reasons for the decision, and that decision 
and reasoning are available to the appli cant and to other Customs officers.   
39. Until 2002, each regional office of Customs issued  VAs.  The applicant for the VA could seek 
an internal review of the VA.  That review would be conducted in the Customs office where the 
original decision was made.  The review decision could be subject to a second review where the applicant disagreed with the review decision.  Th e second review was undertaken in Central Office.  
TAs were issued and were subject to review in the same way as VAs.   
40. As part of broader measures to improve busin ess practices and to ensure a quality service, 
Customs conducted a review of the VAS (and of TAs)  in 2002.  In the interests of providing greater 
certainty and a speedier resoluti on of issues, Customs decided that, from 1 August 2002, all VAs 
would be issued from its regional office in Melbourne , and that all VAs would be subject to only one 
internal review, in its Central Office.  (Customs also decided that, from 1 July 2002, all TAs would be 
subject to only one internal review).  As a conse quence of the revised review process, all reviews of 
binding advance rulings (i.e., VAs, TAs and Origin Advices) are now conducted in Central Office.   
41. As a result of the changes of 2002, the VAS h as been streamlined with valuation issues now 
being finalized quicker. 
VI. COSTS 
42. The resources devoted to issuing VAs and TAs are as follows:  two officers issue VAs, and 
around 35 officers issue TAs among other tasks.  The resources devoted solely to the issuing of TAs 
(the most frequently requested service) would equa te to around 25 officers.  The TAPIN database was 
recently redeveloped at a cost of around A$600,000.   The annual operating costs for TAPIN (covering 
maintenance, regression testing of changes, fix es and minor enhancements and system changes 
brought about by the impact of other associat ed computer systems) is around A$150,000.   
43. By their nature, advance rulings are sought wher e there is doubt over classification, valuation 
or preference eligibility of a particular good.  While  there is a cost in i ssuing advance rulings, an 
advance rulings system results in efficiency gain s, in improved compliance and in fewer disputes.  
The costs outlined above reflect the automated syst em used by Australia.  Actual implementation 
costs would depend on the type of the system adopted by individual Members, as well as the volume 
of requests handled by the system.   TN/TF/W/66 
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 VII. TECHNICAL ASSISTANCE AND CAPACITY BUILDING 
44. Members that do not currently provide advance ru lings may require technical assistance to put 
in place an advance ruling system ad apted to their circumstances, and to train staff in its operation.  
The Asia-Pacific Economic Cooperation (APEC) has put in place a Collective Action Plan (CAP) 
aimed at establishing advance classification ruling sy stems in member economies.  Seventeen member 
economies have adopted procedures to accept request s for, and provide, an advance classification 
ruling.  A further two are in the process of adopting procedures.   
VIII.  CONCLUSION 
45. This paper outlines the system in  place in Australia for issuing advance rulings.  Australia 
recognizes Members will need to implement advan ce rulings in a way best suited to their own 
national customs infrastructure, according to the me ans available to them.  Nevertheless, Australia 
considers the following basic principles should underpin any advance ruling system:   
• rulings should be issued in writing;   
• rulings should bind the issuing authority (whether or not codified in legislation);   
• rulings should remain valid for a defined pe riod of time, which should be communicated to 
the trader;   
• the system should nonetheless incorporate flexib ility for authorities to modify or revoke 
rulings under certain clearly defined circumstanc es.  Traders should be notified in writing of 
any modification or revocation, and the reasons for it;   
• there must be an opportunity for a trader to seek a review of the ruling;   
• the desirability of making available informati on on rulings with precedent value needs to be 
balanced with legitimate confidentiality considerations;   
• internal records of rulings should be kept to  ensure consistency of decision-making;  and 
• information on the process for obtaining advance rulings should be easily accessible, to 
enable traders and their agents  to benefit from the service. 
 
46. An advance ruling system based on these princi ples, however basic in itself, would provide 
greater certainty, transparency and predictability fo r traders and authorities alike, consistent with the 
aims of GATT Article X.   
 
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