Leonie Ferretter & Melissa McCosker explore new aviation reforms that could have a significant impact on Australian exporters.
Due to the ever increasing need to strengthen aviation security, from 1 March 2019 100 percent piece level screening will be mandatory for all Australian outbound air cargo that does not originate from a ‘Known Consignor’ holding a Security Declaration.
This change will bring all export destinations in line with current requirements for air cargo destined for the United States.
Known Consignor is an Australian Government initiative which enables eligible exporters that meet strict security measures (including facility security, security of information and personnel and training requirements) to export air cargo without undertaking piece level screening, or to meet Australia’s security requirements without the use of a Regulated Air Cargo Agent (RACA).
Piece-level examinations require individual items in a shipment to be examined by a RACA, via machinery or in person, under an Enhanced Air Cargo Examination Notice. This will include unpacking goods previously packed for export where required. Domestic air cargo movements within Australia and export air freight by Known Consignors remain unaffected by the reform.
All exporters, or businesses that originate air cargo, will need to consider the operational impact of these reforms on their business and their customers. Exporters that are not Known Consignors may incur delays at the border due to the increased volume of goods that must be screened by RACAs. Exporters may also find that the cost of screening increases due to the additional volume of cargo to be screened.
It should also be noted that despite some similarities between the two schemes, Trusted Traders will not receive an exemption as a Known Consignor as the schemes are separate and distinct from each other. The reforms may therefore make the Known Consignor scheme more attractive to exporters of air cargo, or businesses that originate air cargo.
Australian Border Force and the Australian Office of Transport Security have been working to align the Trusted Trader and Known Consignor schemes. However, given there is no set timeframe for alignment, exporters should consider acquiring accreditation for both schemes, where required.
For more analysis on Grants & Incentives, log on to KPMG Tax Now.
Register for KPMG Tax Now if you have not already done so.
© 2020 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Liability limited by a scheme approved under Professional Standards Legislation.
KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.