How to Avoid Common Customs Mistakes in Australia & New Zealand

The real cost of customs non-compliance in Australia and New Zealand

When importing into Australia or New Zealand, the initial consideration for most businesses is the cost of duties—the upfront payments required to bring goods across the border. On paper, these duties might seem like the primary expense, a straightforward line item in the budget. However, the true cost of customs compliance extends far beyond these visible figures.

For most compliant importers, customs procedures remain routine and unobtrusive. But once a business slips up—whether intentionally or through oversight—the consequences quickly escalate and can become far more damaging than the original duties.

Immediate repercussions

At first glance, the risks of non-compliance might appear limited to fines imposed for breaking the rules. While financial penalties can be substantial, they are often just the tip of the iceberg.

Because non-compliance issues are rarely isolated incidents, a single breach changes everything. Not only is the problematic delivery examined, but all past and future deliveries come under the microscope. Suddenly, deliveries that once moved seamlessly may be subject to holds, leading to demurrage and storage charges that accumulate daily. These costs can quickly outpace any initial penalty.

Long-term implications

If a business loses its Trusted Trader or Secure Exporter status, it faces a future of frequent inspections and delayed clearances. Not to mention, the reputational damage from compliance issues can affect customer relationships and market access.

The most severe consequences

In severe cases, goods may be forfeited entirely under the Customs Act or Biosecurity Act. Compliance errors may also mean missing opportunities for free trade agreement (FTA) duty savings and paying more than necessary on every future delivery until the issue is corrected.

Top 5 compliance errors and how to avoid them

To better understand where businesses often falter, it is helpful to examine the most common compliance mistakes made by importers. Avoiding these pitfalls is crucial for maintaining smooth operations and minimising costly disruptions.

1. Incorrect tariff classification

This is the most frequent compliance issue across Australia and New Zealand. Importers often rely on marketing descriptions or supplier information instead of properly applying the Harmonised System structure and legal notes.

These errors stem from not understanding that classification must consider material, function and form, not just what the product is called. The fact that even regulators grapple with these distinctions underscores the need for strong internal classification processes and expert guidance.

How to avoid

Conduct pre-import classification reviews and maintain a master HS database for your products. Engaging a licensed customs broker with proven experience in your industry can help to ensure classifications are accurate, compliant and up to date with current regulations.

2. Customs valuation errors

Common valuation mistakes include the omission of assists such as moulds, tooling and design services provided free of charge to suppliers, undeclared royalties or licence fees tied to imported goods and related-party transactions that fail to demonstrate arm’s-length pricing. Companies often neglect to adjust declared values for year-end transfer-pricing adjustments, creating discrepancies that trigger audits.

How to avoid

Implement a customs valuation policy aligned with transfer-pricing documentation. Having a strong policy in place ensures all relevant costs—such as assists, royalties and year-end adjustments—are consistently captured and declared, reducing the risk of discrepancies that could trigger audits. Regularly review and reconcile customs values with financial records to confirm accuracy and compliance and involve both your finance and customs teams in the process to maintain robust oversight.

3. Free Trade Agreement documentation failures

Certificates not issued by authorised bodies or missing key data fields cannot support duty preference claims. Incorrect application of “wholly obtained” or “substantial transformation” rules, breaks in direct delivery requirements under various FTAs and confusion between “country of manufacture” and “country of origin” definitions all create FTA claim failures. Inconsistent supplier declarations, especially in multi-sourced supply chains, compound these issues and often are not discovered until an audit.

How to avoid

Conduct a thorough review to ensure each certificate of origin is issued by an authorised body, aligns with the specific rules of the FTA and contains all required data fields, such as product descriptions, tariff codes and country of origin information. Make sure that you keep copies of all certificates securely in a centralised digital archive for easy retrieval in case of regulatory review or audit. If uncertainty remains regarding FTA eligibility or documentation requirements, seek clarification from customs or a licensed customs broker prior to importation to avoid compliance failures.

4. Biosecurity non-compliance

Biosecurity violations carry consequences that exceed typical customs infractions. Authorities can detain goods indefinitely, mandate expensive treatments, require re-export or even order destruction. Unlike duty disputes that can be resolved retrospectively, biosecurity regulations lead to immediate operational crises with limited remediation options.

Australia's Biosecurity Act 2015 and New Zealand's MPI Import Health Standards carry strict requirements. Unapproved treatment providers, missing import permits and documentation failures create serious problems such as loss of supply contracts.

How to avoid

Ensure all imports meet the treatment and inspection requirements outlined by the applicable regulation. Only use approved treatment providers and secure all necessary import permits and documentation before delivering goods. Regularly review updates to biosecurity regulations and train staff to identify and address potential risks early in the supply chain.

5. Poor recordkeeping practices

Recordkeeping violations appear straightforward, but can create cascading compliance problems. Common mistakes include failing to retain full copies of import declarations and supporting documents, losing supplier certificates of origin or fumigation certificates and storing critical evidence only with freight forwarders or brokers instead of maintaining internal copies.

Not maintaining classification justifications or valuation worksheets makes audit defence nearly impossible.

How to avoid

Establish a comprehensive recordkeeping and document retrieval system with internal oversight, not relying solely on your broker's records. Maintaining a central digital archive ensures critical documents are readily accessible during audits, allowing minor issues to be addressed promptly and helping avoid major penalties.

Understanding the role of a binding ruling

Where there's any doubt about classification, valuation or compliance requirements, seek binding rulings before importing. A ruling provides certainty and protection, preventing issues before they arise.

Obtaining a binding ruling means you’ll have a formal decision from customs or the Ministry for Primary Industries, which can be relied on during audits or disputes—this greatly reduces your risk of costly errors and delays.

The process typically involves submitting a detailed application outlining your product and supporting documents. The process can take several weeks, so engaging with your customs broker early can help to ensure your application is properly prepared. Securing a binding ruling not only clarifies your obligations, but also demonstrates a proactive approach that regulators view favorably during compliance reviews.

Particularly problematic tariff chapters

Tariff classification can be complex and differing interpretations across regulatory frameworks can create opportunities for inconsistency. It is important to have well-documented classification rationale and, where uncertainty exists, secure a binding ruling before importing.

The international classification system used to assign tariff codes, Harmonised System (HS), consistently creates classification disputes.

For example, Chapters 84-85 (machinery and electrical goods) involve complex determinations of parts versus complete articles. Chapter 39 (plastics) requires distinguishing between finished articles and components. Chapters 73-83 (metal fittings, fasteners and hardware) create issues around “parts of general use” versus specialised parts. Chapter 94 (furniture) involves mixed-material assemblies that complicate classification.

Steps to take if compliance issues emerge

If you discover compliance errors, transparency and speed matter. Work with your customs broker to assess the scope and impact of the issue. Making voluntary disclosures to Australia or New Zealand regulation agencies where appropriate demonstrates good faith and typically results in more favourable treatment.

Document everything: what went wrong, why it went wrong and what you are doing to prevent recurrence. If you disagree with an assessment, experienced brokers can help to explain defence options and connect you with legal expertise when needed. The key is never to ignore compliance issues. Hoping they will go away inevitably makes problems worse.

What to look for in a customs provider

When selecting a customs brokerage provider, consider the ability to offer proactive solutions and support. Look for a provider, like C.H. Robinson, with combination of global expertise and regional knowledge that can assist in establishing robust classification frameworks, implementing effective valuation policies and maintaining audit-ready documentation.

Technology integration is also vital; choose a provider that leverages digital tools to ensure consistency across deliveries and proactively identify potential compliance issues.

Strong working relationships with regulatory authorities, such as the Australian Border Force (ABF) and New Zealand Customs, can facilitate prompt resolution of queries and help address concerns directly.

Additionally, providers that understand what it takes to maintain detailed records on classification, valuation, duty payments and landed costs can uncover patterns and opportunities that may not be apparent internally, supporting better decision-making and risk management.

Start navigating customs with confidence

Successfully managing customs compliance requires continuous attention to detail and a willingness to adapt as regulations evolve. By working with the right customs provider and embracing technology, businesses can proactively avoid the most common mistakes and seize new opportunities in international trade.

Need help strengthening your customs compliance programme? Connect with our customs experts for help reviewing your processes, identifying risks and implementing solutions tailored to your business.