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Magazine Stories August Issue 2008
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Saturday, 21 June 2008
NEWS that Australia was provisionally free of equine influenza (EI) was good for the horse racing, breeding and eventing industry, both in Australia and elsewhere - especially across the Tasman in New Zealand. It also was very much a bubbly-popping occasion for Australasia’s big equine air cargo sector, which has been in the doldrums for much of the time since the EI scourge hit the country’s east coast, writes Kelvin King.
While some horse flights were able to continue during the stand-down period —between New Zealand and Melbourne, for instance, and between some Australian ports and countries which did not totally bar equine air movements - the usual pace had fallen from a gallop to a sedate trot, picking up speed a little from about January.
Things won’t be back 100 per cent to normal for a while yet, but already several horse flights have been made and schedules prepared for regular operations.
The return to business as usual got under way within hours of the NSW Government announcing at the end of February that the state was EI-free. “It’s official, horse flu has now been eradicated from NSW,” said Ian Macdonald, the Minister for Primary Industries.
He explained that “the once heavily-infected purple zone and the Illawarra red zone have been abolished and replaced with a minimal risk green zone. All other areas join the white zone.”
Macdonald said that “given the extensive spread of the EI virus before it was detected and its highly contagious nature, we have succeeded in stamping out this disease in an extremely short time, if not record time.
“South Africa is the only other country to have eradicated EI. New Zealand and Iceland are the only other EI-free countries.”
The very same afternoon, New Zealand Bloodstock announced that NZB Airfreight would resume horse flights to Sydney the following week and intended to be back working a normal flight schedule by the week after that.
On March 13, Queensland announced it was in the final stages of freeing itself from the EI scourge. “If there are no further cases detected, we should be able to declare ourselves EI-free by June 30, with international recognition of freedom on Christmas Day, one year after the last horses were known to be infected,” said Tim Mulherin, minister for Primary Industries and Fisheries.
The developments in NSW and Queensland were welcomed by Tony Burke, the Federal Minister for Agriculture, Fisheries and Forestry.
He thanked everyone involved. “The hard work and dedication of authorities, veterinarians and the broader horse industry has brought us to this stage in the eradication effort much sooner than expected.”
Burke confirmed that to satisfy WHO requirements, Australia would have to maintain an effective surveillance system for EI until the end of the year.
Another Burke was also very happy with the way things had panned out. It had been a difficult time, said Chris Burke, operations director in Australia for International Racehorse Transport, one of the main global players in this sector.
“Although imports from New Zealand were not significantly interrupted, exports to New Zealand and imports from the northern hemisphere were suspended through to mid-October. From then on IRT managed to import over 17 horses before the end of 2007 from the USA and the EU.
“Although we continued to export horses during the EI outbreak to the USA, Europe and some other destinations like Jordan and India, this area of our business was the most affected, with no shipments heading to Asia until January,” Burke explained.
Since then IRT had successfully undertaken several shipments to Japan, Hong Kong, Singapore and Dubai. The company expected to be back to near-normal operations shortly, including full two-way traffic on the Tasman.
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Magazine Stories August Issue 2008
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Saturday, 21 June 2008
A RAFT of new legislation is now before the Australian parliament including two new Customs amendment Bills and a Tradex amendment Bill.
Some of the proposed legislation had already been before the previous parliament but lapsed when the election was called. In addition, the Australian government has also now introduced a new Bill to implement the Montreal Convention on liability for air transport of passengers and cargo.
Aircargo Asia-Pacific’s legal expert and regular contributor, Andrew Hudson, a partner at Hunt and Hunt Lawyers said the government was moving on some issues which had been held up by the dissolution of the previous parliament.
“The new legislation will clarify the period of liability for customs duty, formalise the position of the "locum" broker, impose new provisions for claiming preferential treatment under the Singapore Australia Free Trade Agreement (FTA), create a new regime for certain prohibited imports and provide for the accession to the Montreal Convention on liability for international air carriers,” explained Hudson.
While the Tradex amendment Bill was introduced in late February and has already been the subject of parliamentary debate, the new Customs Bills and the Bill to implement the Montreal Convention were only introduced on 20 March.
The new Bills are the Customs Legislation Amendment (Modernising) Bill 2008 and the Customs Legislation Amendment (Strengthening Border Controls) Bill 2008.
“The provisions in these Bills largely comprise provisions which were in the Bills which had lapsed when the last Federal Parliament was dissolved,” said Hudson.
“The new Customs Legislation Amendment (Modernising) Bill 2008 is intended to update the broker licensing provisions to recognise the changing environment, including the contractual arrangements that exist between some brokerages and nominees. This introduces the concept that a nominee broker will be able to work for more than one licensed corporate broker and formalise the role of the ‘locum broker’ explained Hudson.
“The bill also seeks to modernise revenue collection provisions in the Customs Act and provide an ability to offset refund and drawback entitlements against duty liability.”
Other legislation seeks to amend the Customs Act to reflect the new certificate of origin requirements for the Singapore – Australia Free Trade Agreement.
There are also moves to strengthen border controls through Customs Legislation Amendment Bill 2008. The general intention of this Bill is to amend the Customs Act 1901 to strengthen Customs investigation and enforcement capabilities and make other amendments.
Paul Zalai, manager freight and business operations for the Customs Brokers and Forwarders Council of Australia (CBFCA) said the new legislation was quite a handful at the one time, all of which would require changes to business practices by service providers, importers and exporters.
“The industry should also be aware that new Anti Money Laundering legislation will require brokers and forwarders to finalise their compliance programs,” said Zalai.
The raft of new bills and changes to legislation has prompted the Customs Brokers and Forwarders Council of Australia Inc (CBFCA) and Hunt and Hunt Lawyers to provide a series of member forums and to advise and assist with implementation of these new obligations. Details of the forums are available on www.cbfca.com.au
Andrew Hudson provides a comprehensive review and explanation of the new legislation and its implications for industry beginning on page 16.
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Magazine Stories August Issue 2008
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Saturday, 21 June 2008
THE AUSTRALIAN government will ask a bipartisan House of Representatives Standing Committee to inquire into the Australian coastal shipping industry.
Such an inquiry would fulfil Labour’s election commitment to review the shipping industry and will make important recommendations on the future of this key domestic transport sector.
Between 1996 and mid-2006, the number of Australian registered trading vessels fell from 75 to 46.
Transport minister, Tony Albanese, said he’d asked the committee to conduct the inquiry and report back to parliament. He said the committee would also assess measures for developing an adequate skilled maritime workforce in order to facilitate the sector’s growth.
“The inquiry is a response to repeated requests from industry for action,” said the minister. “Industry stakeholders have told of their reluctance to invest in replacing an ageing fleet while existing policy arrangements remain in place.
“They are concerned by the industry’s ageing workforce and the limited training opportunities for young people. Our ambition is for a viable coastal shipping industry in a competitive domestic transport sector - an outcome critical to Australia’s economic future and long-term national security.
“As an island continent with a population spread along a vast coastline, shipping can be an efficient transport mode when it comes to transporting large quantities of cargo from one part of the country to another.”
Albanese added that between 2007 and 2020, the volume of freight needing to be transported around the country was predicted to grow by 40 per cent - an average of 14.9 billion tonne kilometres of additional domestic freight each year.
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Magazine Stories August Issue 2008
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Saturday, 21 June 2008
LUFTHANSA Cargo is substantially expanding its flight program, particularly to Asia. The new services include two direct freighter flights per week to Beijing, host city of the upcoming Summer Olympics. For the first time, the cargo carrier’s MD-11F service from Frankfurt to Shanghai and Seoul will be operated non-stop. Since January, Lufthansa Cargo has been serving Mexico City with a direct flight.
Now, two new destinations for customers in China will be added to the route network: From the end of March Nanjing (NKG), will be served five times a week from Frankfurt, and from June Shenyang (SHE), will have a three-times-weekly service from Munich. Both routes will be operated with passenger aircraft –A340-300s — with an average cargo capacity of about 17 tonnes.
The carrier is also launching a new service to Malabo (SSG) in Equatorial Guinea. The passenger airline has taken over this destination from Swiss as part of its network optimisation. Malabo will be served three times a week from Frankfurt by an A330-300 (average cargo capacity about 24 tonnes). The outbound flight to Malabo will continue on to Abuja, Nigeria. The return flight to Frankfurt from Abuja will include a stopover in Malabo.
At the start of the summer timetable, Lufthansa Cargo is also boosting its sales activities in Europe. From 30 March, it will be responsible for marketing the air freight capacity of Jade Cargo International, its Sino-German cargo subsidiary, on routes from Europe to Asia. Routes to Shenzhen and Shanghai Pudong can be booked under Lufthansa flight numbers from Amsterdam, Barcelona, Brescia, Luxembourg and Stockholm. From Shenzhen, direct connections to the Asian economic centres of Osaka and Seoul are available.
As part of the capacity expansion, Frankfurt Airport and Tianjin Airport in China will be integrated into Jade Cargo International’s route network as of 12 April 2008.
The summer timetable is valid from 30 March to 25 October 2008.
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Magazine Stories August Issue 2008
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Saturday, 21 June 2008
CALLING him the ‘Merchant of Death’ almost romanticises Viktor Bout, especially with his ugly trade having already been dealt with superficially in a major movie. There is little of the light romantic about this man, nabbed by law enforcement agencies in a well-planned Bangkok sting.
Ironically, he has been a major player in international air freight, largely stemming from his arms-running but with most of the carriers also hauling legitimate loads at times.
There has been some speculation that the freight flights were structured partly to launder funds generated from the hugely successful arms trade.
These cargo airlines operated under a variety of names, with a peak fleet of around 50, almost all former Russian military aircraft.
Bout had a seemingly endless supply of such equipment, apparently accessed through his close ties with some elements in the Russian armed forces. He himself served in the Soviet air force, apparently - his background is murky - as an intelligence officer. Some of his air force career was spent in Africa which was later to become fertile territory for his air cargo operations.
At our deadline, Bout was subject to a legal tug of war, with the United States endeavouring to extradite him and the Thai Government equally adamant that it wants to deal with alleged local criminal activities first.
Early rumours suggested that Russia also wanted Bout, which seemed nonsensical, both because he had been living in Russia and also carries clout in the right places. Russia then made it plain that he was not wanted by its authorities.
Bout’s Russian lawyer claimed that Thai authorities, with US collusion, had tried to send him to the United States immediately after his arrest but that this had been resisted by Bout.
Whatever the truth, the Royal Thai Police were quick to parade an impassive Bout, clad in an orange shirt, in front of the media.
The Bangkok sting was led by US Drug Enforcement Administration which helped organise a meeting between Bout, his business partner Andrew Smulian and two people purporting to be arms-buying agents for the FARC rebels in Colombia.
Announcing the arrest, the DEA also acknowledged co-operation by the Romanian Border Police, the Korps Politie Curaçao of the Netherlands Antilles and the Danish National Police Security Services, as well as the Royal Thai Police.
Meantime, Smulian slipped quietly out of Bangkok and later appeared in the United States, under arrest. There were suggestions that he might give evidence against Bout and that he needed protection.
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Magazine Stories August Issue 2008
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Saturday, 21 June 2008
THE NEW Federal Government has been busy introducing new legislation that includes two new Customs amendment Bills, both containing provisions which had been tbled before the last Parliament but lapsed when Parliament was dissolved. In addition the Federal Government has also introduced a new Bill to implement the Montreal Convention on liability for air transport of passengers and cargo. The new Customs Bills and the Bill to implement the Montreal Convention were only introduced on 20 March 2008.
Some preliminary detail on the Bills is below.
Customs Bills
The new Bills introduced in 20 March 2008 are the:
• Customs Legislation Amendment (Modernising) Bill 2008
• Customs Legislation Amendment (Strengthening Border Controls) Bill 2008.
The provisions in these Bills largely comprise provisions which were in the Bills that lapsed when the last Federal Parliament was dissolved.
Customs Legislation Amendment (Modernising) Bill 2008:
• According to the Explanatory Memorandum, the new Bill is intended to cover the following aspects.
• Update the broker licensing provisions to recognise the changing environment, including the contractual arrangements that exist between some brokerages and nominees. This introduces the concept that a nominee broker will be able to work for more than one licensed corporate broker and formalises the role of the “locum broker”.
• Modernise revenue collection provisions in the Customs Act and provide an ability to offset refund and drawback entitlements against duty liability. Put simply this will include provisions to formalise Customs general right to recover customs duty for a period of four years in most cases - unless the CEO of Customs believes that the underpayment is due to fraud or evasion in which case Customs has an ability to go beyond four years to recover underpaid duty.
• To incorporate necessary amendments resulting from the formal introduction of the “Smartgate” passenger processing system.
• Amend the Customs Act to reflect the new certificate of origin requirements for the Singapore — Australia Free Trade Agreement. This will enable a certificate of origin to be used for imports of goods over a period of two years as long as an Exporter Declaration is provided for each import of goods entitled to preferential treatment.
The provisions of this Bill will have significant potential impact on those in industry and there will need to be changes to procedure to ensure that they are properly implemented.
Customs Legislation Amendment (Strengthening Border Controls) Bill 2008:
The general intention of the Bill is said to be to amend the Customs Act 1901 to strengthen Customs investigation and enforcement capabilities and make other amendments.
More specifically the purpose of the Bill is to amend the Customs Act to:
• allow a person to surrender certain prohibited imports that have not been concealed;
• allow for the granting of post-importation permissions for certain prohibited imports;
• allow Infringement Notices to be served for certain offences including importing certain prohibited imports and border security related offences;
• enable Customs officers boarding a ship or aircraft to conduct personal searches for, and take possession of, weapons and evidence of specified offences.
The provisions regarding the importation of certain prohibited imports are intended to create a new regime to give Customs flexibility when dealing with “prohibited imports”. It will not remove the ability to seize prohibited items and prosecute for prohibited imports. However, it will provide alternative mechanisms to deal with certain (presumably low risk) items which are prohibited or for which the required licences or permits have not or could not have been secured before importation. Customs will identify the relevant goods by way of regulation.
The new regime provides for a variety of enforcement options. Firstly in relation to the relevant categories of prohibited imports, a person importing them when questioned in a “customs place” can surrender those imports as long as they have not been “concealed” without further action and the goods will be forfeited to Customs. Secondly the importer can surrender the goods to be “detained” by Customs pending the permission being secured and the goods can then be returned. Thirdly, Customs will have the option for serving infringement notices in lieu of prosecution for importing prohibited items.
Future of both Customs Bills
As stated above, both Bills contain provisions which were in previous Bills. Those Bills had been before Senate Inquiries and both sides of Parliament largely supported the provisions so it could be anticipated that they should pass without much further review and debate. I have spoken on the relevant provisions at the time they were first introduced in various CBFCA Member Forums and also at CBFCA State Conventions. Discussion is included in the current round of CBFCA Member Forums. Those in industry will need to take care to watch the progress of both Bills and ensure that they are ready to implement them and to make clients aware of their provisions.
Implementation of the Montreal Convention
The Civil Aviation Legislation Amendment (1999 Montreal Convention and other measures) Bill 2008 also was introduced into Federal Parliament on 20 March 2008. As some may be aware, Australia is not a party to the Montreal Convention governing liability for international air carriers even though most of our international trading partners are parties to the Montreal Convention. This has created an inconsistency between the use of the two Conventions especially given that the Warsaw Convention uses some out of date terminology. Even though many parties have voluntarily agreed to be bound by the Montreal Convention and our Carriers Liability Act provides for higher liability limits for Australian international carriers than those provided under the Warsaw Convention, that inconsistency remains. Having considered the various options, the new Government has resolved to accede to the Montreal Convention. This will have the impact of prescribing new limits for injury or death to passengers or for damage or loss to baggage or air cargo or damage caused by delay in the scheduled arrival of a passenger, baggage and freight which occurs in the course of international air carriage.
The adoption of the Montreal Convention would also provide for a “fifth jurisdiction” in which Australian citizens will have access to Australian courts to pursue claims in relation to flights to which the Montreal Convention applies.
The legislation will allow for the limits to increase automatically as the limits are increased under the Montreal Convention. This will require parties involved in international carriage of persons or cargo into Australia to consider their insurance cover and trading conditions.
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Magazine Stories August Issue 2008
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Saturday, 21 June 2008
QANTAS has told the International Air Services Commission that it wants to re-enter the Australia-Argentina market from late November this year and is seeking the necessary capacity allocation.
Services will operate three times weekly - Monday, Wednesday, Saturday - non-stop between Sydney and Buenos Aires, using B744-ER equipment.
“It is intended that LAN Argentina, an Argentine-designated carrier, will code share on Qantas’ services,” said Jane McKeon, QF’s general manager responsible for government and international relations.
“The code share will be a hard-blocked space arrangement including freight capacity, whereby LAN Argentina will set air fares and freight charges independently of Qantas.”
McKeon said that Qantas foresaw no difficulty in obtaining route capacity approvals, as the carrier had previously operated services on the Australia-Argentine run. Previous operations were on a code-share basis with Aerolineas Argentinas, via Auckland in both directions. The arrangement was terminated in 2002 and Qantas asked the IASC to revoke its capacity allocation.
Qantas has also sought new allocations for unlimited passenger and cargo capacity and frequency on the US route. This is a technical matter, related to the removal of restrictions on routes between the two countries, as agreed in inter-government air services consultations held in February.
“In the interests of commercial and operational flexibility, we also seek the ability for this capacity to be utilised by Qantas and any wholly owned subsidiaries of Qantas, and permission for code-sharing among Qantas and its wholly owned subsidiaries on services operated under this allocation,” said McKeon.
Qantas also wants existing code-shares with British Airways, American Airlines, Mexicana Airlines, Air Pacific and Air Tahiti Nui to continue.
But, McKeon noted, “while Qantas’ existing allocations permit it to code-share with Federal Express and United Parcel Service of America, these commercial arrangements are no longer in place.”
