RODDA COBURN & COCUSTOMS AND INTERNATIONAL TRADE CONSULTANTS

Customs Duty ConcessionsItem 71 Project By-Law

Enhanced Project By-Law Scheme (EPBS)

• The Enhanced Project By-Law Scheme (EPBS) provides customs duty concessions on eligible goods for

significant projects in the mining, resource and water processing, agriculture, food processing, food packaging, manufacturing, power generation and gas supply industries.

• The scheme incorporates an Australian Industry Participation Plan to encourage the use of Australian Industry in projects and global supply chains.

Administration guidelines www.ausindustry.gov.au

1. OVERVIEW

Rodda Coburn Clients

• BHP Billiton Group

• Centennial Coal Operations Group

• Carlton & United Breweries

• Kraft Foods

• Delta Electricity

• ING Real Estate

• Southern Star

2. BENEFITS OF THE EPBSThe Enhanced Project By-Law Scheme enables certain specific

goods to be imported duty free, namely -

• goods for which there is no local manufacture of equivalent goods, or

• goods which are technologically superior to substitutable goods made in Australia.

Eligible goods include:

• functional units (machinery integrally connected to perform a process e.g., longwall mining system and components)

2. BENEFITS OF THE EPBS

Eligible goods (cont)

• procurement packages and equipment packages (a quantity of the same type of machinery, equipment or their components which is used across the project.)

• pipes, pipelines, conveyors and flexible flow-lines

• stainless materials to be incorporated in capital equipment made in Australia

• can be imported is separate shipments

3. SCOPE OF THE EPBSA - Sector Eligibility

The EPBS applies ONLY to the following industry sectors -

• mining• resource and water processing• agriculture• food processing• food packaging• manufacturing• gas supply• power generation

3. SCOPE OF THE EPBSB - Expenditure threshold

• a project is eligible for an EPBS concession if total expenditure on capital equipment exceeds $10.0 million

• the threshold limit includes both imported and locally manufactured goods (I.e., not $10.0 m on imports)

• eligible projects may be new (greenfield) or upgrade (brownfield)

• covers new equipment and components required to improve the performance of existing equipment

3. SCOPE OF THE EPBSC - Comparison of Goods

The scheme provides concessional entry for two classes of goods -

• imported goods for which local industry does not manufacture equivalent goods (being goods that meet the technical and performance requirements of the end user), and

• imported goods which have a demonstrably superior performance advantage over goods made in Australia Must be supported by expert’s report

3. SCOPE OF THE EPBSD - Australian Industry Participation Plan

• applicants must provide a plan to demonstrate that they intend to provide full, fair and reasonable opportunity to Australian industry to participate in all aspects of the project

• plan usually devised in conjunction with the Industry Capability Network

• the Australian Industry Participation Plan (AIPP) must address Australian participation across the entire project and not just the selection process in relation to each eligible good.

3. SCOPE OF THE EPBS

E - Scheme is prospective

• applications must be lodged with AusIndustry before any eligible goods are imported

4. APPLICATION PROCESSTwo Stages -

• Project Acceptance application (overview of the project, including AIPP)

• Implementation Report (demonstrates how the AIPP was implemented)

Applicants must meet the requirements under both stages to obtain a duty concession for goods being imported.

The first stage of the application process involves lodging a Project Acceptance application. The application should provide full details of the project including evidence that the project:

• is consistent with the Policy and Administrative Guidelines

• is in an eligible industry sector

• meets the eligible goods expenditure threshold

• has a satisfactory Australian Industry Participation Plan

• is prospective

• involves eligible goods that are not produced in Australia or are technologically superior to goods produced in Australia.

The Project Acceptance Stage

The Implementation Report Stage

The Implementation Report Stage

The second stage of the application processrequires the lodging of an Implementation Report

• the report should provide evidence that the Australian Industry Participation Plan has been implemented as agreed.

• it must demonstrate that Australian Industry was given full, fair and reasonable opportunity to participate in the project, and describe in detail the goods that are to be imported.

• normally only one Implementation Report is submitted. More than one can be submitted if required. For example, there may be numerous shipments, or a multiple-year project may be involved.

• the Implementation Report can be lodged before the Project Acceptance application has been approved.