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Singapore-Australia Free Trade Agreement (SAFTA) - a business guide

Chapter 3:  Selling goods to Singapore (and buying goods originating from Singapore)

Singapore is a free port.  However, prior to the entry into force of SAFTA, it levied import duies on a limited number of Australian products, namely beer, ale, stout and porter.  The entry into force of SAFTA results in the elimination of all tariffs on goods originating in Australia and Singapore. 

Selling to Singapore

All Australian products, including beer and stout, may now enter Singapore tariff-free.  Other Singapore Government taxes and charges, if relevant, are still payable. 

For Australian beer and stout to enter Singapore duty-free, they must meet the rules of origin set out in Article 3, Chapter 3 of SAFTA (PDF).  It follows that for each shipment, the goods must be accompanied by a valid Certificate of Origin and a declaration by either the exporter or manufacturer stating that the products are the produce or manufacture of Australia.  The Australian exporter and manufacturer can apply for a Certificate of Origin, valid for a period of two years from the date of issue, from the Australian Chamber of Commerce and Industry (ACCI) or the Australian Industry Group (AIG).  ACCI contacts are listed in Appendix 13 to Australian Customs Manual Volume 12, Export Control (PDF).  To contact AIG, please phone the AIG Trade and Development Officer on (03) 9867 0152.  Declarations are made by the exporter and many appear on the invoice for the goods or in a separate document.

Importers in Singapore are also required to produce both the Certificate of Origin and the exporter’s declaration at the time of entry of the products.  Further details of documentation requirements can be found in the Australian Customs Notice No. 2003/59 (PDF).

0% tariff on beer and stout

Little Creatures to sell to Singapore

The elimination of all tariffs under SAFTA is an important win for Australian exporters of beer and stout.  Australian products can now enter Singapore duty free, while imports from most other countries still attract import duties, at S$1.70 per liter for stout and porter, and S$ 0.80 per liter for beer and ale.

Little Creatures, a micro-brewery in Western Australia, welcomed this news.  Following its extraordinary success in the Australian market after only three years of production, it is now looking to export.  As an export market, Singapore holds many attractions, and the zero rate of import duty granted to Australian beer and ale under SAFTA makes Singapore even more attractive to Little Creatures.

Little Creatures produces two types of beer, Pale Ale and Rogers.  Using whole hop flowers, the brewing is hop-driven through an infusion device similar to a tea bag.  Little Creatures won Australia’s Best Craft Beer at the Australian Liquor Industry Awards in 2003 and Best Boutique Beer in 2002.

(Source: Little Creatures Brewing, 40 Mews Road, Fremantle, WA 6160, tel: (618) 9430 5155, fax: (618) 9430 5640)

The main government taxes and charges that are still payable on Australian goods imported into Singapore are excise duties and goods and services tax (GST).  Singapore imposes these taxes and charges on all other imports as well as on its own locally produced goods.  Excise duties are charged on four categories of products: alcohol, tobacco, petroleum products and motor vehicles.  Singapore levies a flat 5 per cent GST on most goods and services.  The only exceptions are financial services or the sale or lease of residential properties.

Buying from Singapore

Similarly, Singapore products may be imported into Australia duty-free.  However, excise-equivalent duties, goods and services tax (GST), dumping duties and other taxes and levies, if relevant, are still payable. 

For Singapore products to be qualified for duty-free entry into Australia, they must meet the rules of origin as set out in Article 3, Chapter 3 of SAFTA (PDF), and these are summarised below. 

Similar to the requirements for duty-free entry into Singapore of Australian products, Singapore exporters or manufacturers must produce a valid Certificate of Origin and a declaration stating that the products are the produce or manufacture of Singapore before they are exported.  Importers in Australia must be able to produce both the

Certificate of Origin and the exporter’s declaration at the time of entry of the products into Australia.  For more information on import entry requirements, please refer to the Australian Customs Notice No. 2003/49 (PDF) .

Rules of origin

For products from Australia or Singapore to be eligible for duty-free access into the other market, they must be:

The minimum level of local content for most goods is 50 per cent.  However, a 30 per cent level of local content applies to a limited number of electrical and electronic items and products subject to Tariff Concession Orders (not made in Australia).  Goods subject to the 30 per cent local content threshold are listed in Annex 2 D of SAFTA, and Attachment A of the Australian Customs Notice No. 2003/49.

The accumulation provisions of SAFTA apply to all goods other than a range of textiles, clothing and footwear, passenger motor vehicle items and jewellery.  Goods to which accumulation provisions do not apply are listed in Annex 2 C of SAFTA, and Attachment B of the Australian Customs Notice No. 2003/49.

Accumulation effectively allows all production costs incurred in Australia or Singapore to be taken into account when calculating local content, even where the manufacturing process is interrupted by offshore processing, provided that the control of the material in question does not change before and/or after offshore processing. 

For queries on rules of origin as well as other import entry requirements, please contact the Manager Origin, Trade Branch, Australian Customs Service, at origin@customs.gov.au or (02) 6275 6551.

Customs requirements made easier

To achieve the paperless trading objective, Australia’s and Singapore’s respective Customs administrations are working towards having electronic means for all customs reporting requirements available by 2005.  When implemented, this will help reduce ‘red tape’ and thereby business costs.

Reducing technical barriers to trade

A significant proportion of Australia’s merchandise trade with Singapore is subject to regulation.  Traded goods subject to mandatory technical regulations in the country of import often need to be tested and/or certified for compliance with those requirements by a body located in that country.  For example, previously electrical and electronic equipment manufactured in Australia could not be sold in Singapore unless the Standards Productivity and Innovation Board (SPRING Singapore) and/or the Singapore Public Utilities Board approved it for sale.  The cost of obtaining a test report and certificate of approval for a new product line added to the costs of exporting, of imported inputs to production, and thus increased prices paid by consumers in Australia.

To help reduce costs to Australian manufacturers and exporters and remove barriers to the movement of goods between Australia and Singapore, the Australian Government has been encouraging the Singapore Government to recognise Australia’s standards and conformity assessment procedures.  To this end, Australia and Singapore signed a mutual recognition agreement (MRA) on conformity assessment in February 2001. 

The MRA on conformity assessment provides for mutual recognition of the results of conformity assessment activities, initially in three sectors: medicinal products (good manufacturing practice), electrical and electronic equipment, and telecommunications equipment.  This enables assessment of these products and/or manufacturers to be performed in Australia prior to export, to ensure that they conform to standards and legal requirements in Singapore, and thereby reduce the risks, time delays and costs associated with obtaining regulatory approvals in Singapore. 

SAFTA builds on the MRA on conformity assessment and provides a framework for determining equivalence of Australian and Singapore standards and requirements.  It also commits Australia and Singapore to working towards harmonisation of their mandatory requirements consistent with international standards and guidelines. 

Negotiations on sectoral annexes to SAFTA covering horticultural products and food standards have been concluded.  These annexes are expected to enter into force during the first half of 2004.  When they come into effect, the annexes will provide for streamlined compliance and inspection arrangements for approved products.  For example, the sectoral annex on horticultural goods will result in Singapore accepting Australia’s phytosanitary certificates, treatment certificates and/or test reports.  This is important to many Australian exporters because Singapore is a major market for Australian meat and other food products.  On the other hand, it will be easier to import orchids and foliage from Singapore as they will no longer be subject to mandatory fumigation requirements upon entry into Australia, provided that no actionable pests are detected.  For more information, please contact the Australian Quarantine and Inspection Service (AQIS).

The sectoral annex on food standards will require Singapore to accept Australia’s food standards as determined by the Food Standards Australia New Zealand (FSANZ).  In addition, AQIS and the Agri-Food and Veterinary Authority of Singapore are to negotiate conformity assessment arrangements for food products which will lead to mutual recognition of conformity assessment certificates.

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