Feature Article - Impact of Customs and ABS changes on import statistics from October 2005
Changes to the reporting of imports to Customs were implemented in October 2005 either as a result of, or to coincide with, the introduction of Cargo Management Re-engineering (CMR). A feature article published by the ABS in August 2005 described the ABS management of the impact of the introduction of the imports component of Customs' new computer system (cat. no. 5439.0 - August 2005 Issue). This article outlines in more detail the impact of the introduction of CMR and some other changes on ABS trade statistics.
Users of trade statistics, other than those referencing statistical rate code and preference scheme, should not notice any significant change in the data. However, all users should assess the information presented below to determine the relevance to their particular use of the data. This article has the following structure:
Issues all clients should consider when using import statistics
- Customs' Cargo Management Re-engineering
- Low value threshold change for imports
- Identification of non-merchandise imports
Issues relevant to users of specific import statistics
- Statistical rate code
- Preference scheme
- Mode of transport
- Port data
ISSUES ALL CLIENTS SHOULD CONSIDER WHEN USING IMPORT STATISTICS
Customs' Cargo Management Re-engineering
CMR introduced a number of changes in reporting to Customs for the importation of goods arriving from 12 October. This major redesign of the Customs processes included the introduction of a new computing system, the Integrated Cargo System (ICS). The problems reported in the press with ICS and delays in clearing imports from ports do not appear to have had a significant impact on ABS import statistics. The value of imports for October released by the ABS is largely consistent with the value of the preceding months and previous Octobers. For ABS trade statistics, goods are considered imported into Australia when the Customs declarations/documentation is finalised. Therefore, delays to the clearance of cargo from cargo terminals will not necessarily impact on ABS import statistics.
Both the old and new Customs systems continued to be in use at the end of October and the ABS continues to receive data from both systems. By the end of October nearly 90% of the daily data received by the ABS came from the new system.
A small number of duplicate records (i.e. finalised in both the old and new systems) have been detected, and while all duplicate records with significant values have been deleted, about $7m worth of duplication remains spread across a large number of small value records.
A small number of very old records have been received from the old system and these have generated some old or out of date classifications eg. old statistical rate codes which may appear in some outputs.
Low value threshold change for imports
From 12 October 2005, the low value threshold for imports was raised from $250 to $1000.
Consignments of most imports below the low value threshold do not require a full customs declaration. Since July 1998, the ABS has excluded from the trade data any consignments received with a Customs value below the low value threshold. As well, within consignments with a value over the threshold, the ABS removes any lines which are below the low value threshold. Although large in number, the transactions deleted by the ABS are small in total value. An adjustment of about $30m is included each month in Balance of Payments statistics to account for imports below $250.
The ABS will modify its process to apply the change in the low value threshold from $250 to $1000 for the November 2005 issue of International Merchandise Imports, Australia (cat. no. 5439.0). This change is estimated to reduce the merchandise imports total value by, on average, $111m per month. However, there has already been a change in the reporting for October 2005. The impact has been estimated as a reduction in customs value of about $11m. Balance of Payments adjustments will be made to cover the changed threshold in October and future months. The estimated impact by SITC Section is shown in Table 1.
Table 1. Estimated reduction in the Customs value of merchandise imports statistics as a result of the changed low value threshold
SITC Section Code Label | Estimated reduction in October 2005
$m | Estimated reduction from November 2005
$m |
| 0 Food and live animals | 0 | 2 |
| 1 Beverages and tobacco | 0 | 0 |
| 2 Crude materials, inedible, except fuels | 0 | 0 |
| 3 Mineral fuels, lubricants and related materials | 0 | 0 |
| 4 Animal and vegetable oils, fats and waxes | 0 | 0 |
| 5 Chemicals and related products, nes | 1 | 6 |
| 6 Manufactured goods classified chiefly by material | 1 | 23 |
| 7 Machinery and transport equipment | 6 | 46 |
| 8 Miscellaneous manufactured articles | 4 | 34 |
| 9 Commodities and transactions not classified elsewhere in the SITC | 0 | 0 |
| Total | 11 | 111 |
Identification of non-merchandise imports
Some imports commodities previously reported directly into non-merchandise categories are now reported under the correct goods category with a treatment code to indicate that they are non-merchandise goods. However, some of these goods are now reported under tariffs which do not require duty to be paid and these entries have not been given a treatment code to indicate they are non-merchandise goods. The result is a drop in the number of records contributing to non-merchandise imports and an increase in the value of merchandise data. These records mainly relate to goods returning after repair. The ABS continues to investigate large value records that may be non-merchandise and the change is estimated to only have a small impact on the value of merchandise imports.
ISSUES RELEVANT TO USERS OF SPECIFIC IMPORT STATISTICS
Changes to the reporting of imports data have required some changes to ABS systems. While every effort was made to minimise the impact on the resulting statistics, the changes described below have affected some data.
Statistical rate code
The ABS derivation of statistical rate code (SRC) has changed. While the meaning of the codes has not changed, the data items used to derive the codes have changed. The statistical rate codes were previously generated directly from four duty rates recorded on each line of the Customs entry. The individual duty rates are no longer received and the SRCs are calculated from the amount of duty paid. This new method has resulted in some changes. Some new SRCs have been generated and there has been some movement of data between close SRCs (eg a duty rate of 17.5% used to be rounded to %17 but could now be rounded to %18). Significant increases have been recorded in the amount of duty under some statistical rate codes (%18, %08, 229) and a reduction recorded in the duty where the statistical rate code is not able to be calculated (RNC).
Preference scheme
The ABS derivation of preference scheme for data from the ICS is unable to distinguish data previously divided between category X (the special rate that applies has not been claimed and the general rate of duty has been used) and category Z (no preferential rate of duty has been claimed). Instead, these records are all coded to category Z.
Mode of transport
Customs have introduced a mode of transport of 'other' for goods delivered by pipeline, vessels and aircraft under own power and accompanied commercial goods not reported through normal cargo reporting. The ABS has recoded these to a mode of transport of either 'sea' or 'air' and thus the Customs change has had no impact on the ABS statistics. Gas delivered by pipeline has been classified to 'sea'.
Port data
There are a small number of instances where trade has been allocated to the wrong port by the ABS system. For example, some of the trade for Shannon (Limerick) has been included under "other and unspecified ports - Ireland". These issues are still being investigated and any significant problems should be corrected for the November release.
Contact
Queries about the impact of the changes on ABS trade statistics should be directed to Stephen Wallace on (02) 6252 6106 or emailed to Stephen.Wallace@abs.gov.au.
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