Review of Border Cost Recovery Regime

1. Review of Border Cost Recovery Regime

2. Review of Biosecurity Cost Recovery: • Current regulations in place since May 2003; • Current regime proving difficult to administer • Some under-recovery; some over recovery.

3. Funding review – cost recovery appropriate when those charged can: • Change behaviour to reduce the costs of the service or the risks that give rise to the need for the service • Assess whether the benefits of the service at its current level exceeds the cost • Determine whether the service is being delivered efficiently

4. Proposed principles for revised border regime: • Costs which are variable should be recovered by charges which reflect this variability (ie hourly rates) • Costs which are fixed should be recovered by costs payable as specific amounts • Fees should be kept as simple as possible and those that are very similar are combined so as to reduce transaction and compliance costs

5. Key changes proposed: • Simplify charges for border clearance • Hourly rate charge increase from $72.30 to $98.00 • Charges at either hourly rates or specific amounts as appropriate • Organism identification full cost recovery • Sea container levy • Biosecurity entry levy • Memorandum accounting

6. Proposals to charge at hourly rates: • Non complying shipping containers • Offshore inspection of ships • Unaccompanied baggage or effects • Sawn timber • Logs or round wood • Stored produce • Fishmeal • Plant material

7. Costs payable as set fees: • Organism identifications • Inspection of vehicles • Inspection of animals or animal material • Permits issued under Import Health Standards • Travel costs (Zone charges) • Biosecurity entry levy • Container levy

8. Proposed hourly rate charges: • Currently 4 inspection hourly rates charged (from $72 - $130); • MAF is proposing to rationalise to 2 charging rates; • Veterinary inspection rate $96.10 • All other MAF inspections $98.00 • Current minimum charge is for 30 minutes • Proposed minimum charge is for 15 minutes

9. Proposed sea container levy: • Current charge of $8.75 for monitoring and verifying sea containers replaced by: • Levy to implement the Import Health Standard for Sea Containers • Levy of $13.00 on loaded containers (paid by importer) • Levy of $5.00 on empty containers (paid by shipping company)

10. Actions to be funded by proposed sea container levy: • Monitoring and verifying container compliance • Identifying high risk containers and notifying port company • Auditing the clearance of containers • Paying port companies for moving audit containers for inspection • Notifying the port company when the container can be moved to transitional facility

11. Further actions funded by container levy: • Responding to accredited persons’ enquiries • Identifying organisms intercepted by accredited persons • Entering data and issuing biosecurity clearance for compliant containers • Analysing data sourced from accredited persons and other sources • Providing information (newsletters and manuals) to assist in identifying and managing biosecurity risks

12. Inspection of non-complying sea containers • Currrent charge is $40.40 per container • MAF will charge for inspection at an hourly rate • MAF will pay port companies for requesting them to move containers • MAF will charge importer for the cost of moving for 6 sided inspection

13. Proposed charges for used vehicles • Simplify the current 15 categories of charge to 4 as follows: • Motor cycles and mopeds - $15 • Light motor vehicles - $25 • Heavy motor vehicles- $50 • Used machinery etc - $98 per hour • Re-inspection charged same amount as initial inspection

14. Proposed memorandum accounting • Under or over recovery of costs to be carried forward and costs subsequently adjusted • Will apply to: • Used vehicles • Sea container levy

15. Biosecurity Entry Levy • Levy will replace current documentation fee of $28.70 • Levy will fund electronic screening to identify risk goods • Proposed levy of $2.25 on all NZCS import entries • Levy to be paid by all importers and collected by NZCS (when it collects its own fees)

16. Identification (ID) of organisms • Review of policy on organism ID and charging underway • Two proposed options for charging if importer is required to have an organism ID undertaken: • Option 1: importer would only pay organism ID cost if organism is found to be regulated; • Charge applies irrespective of whether organism ID is needed for clearance or for future risk profiling.

17. Organism ID; option 1 (cont.) • Crown would fund IDs for non-regulated organisms. • Where live organism is found, importers could have goods treated, without having to wait for ID; • Importers would be required to pay for both treatment of their goods and organism ID.

18. Organism ID; option 2 • Option 2: importer would pay for organism ID only where it is required for clearance; • ID charge would be applied to all organisms; regulated & non-regulated; • Where a live organism is found, importers could have goods treated and not be required to have organism identifed; • Importer would be required to pay for treatment of goods but not organism ID.

19. Organism ID (cont) • MAF preference is for Option 2. • Charges for organism ID will not be included in regulations • Charges contestable & subject to market forces • Other competing providers can provide organism identifications.

20. Proposed charges: • Current charge is $130.55 per specimen ($174.60 after hours) • Proposed charges per submission and per product line are: • $370 (single or multiple IDs) for identification of invertebrates, nematodes, fungi & bacteria; • $490 (single or multiple IDs) for identification of viruses; • Level 3 post-entry quarantine actual and reasonable costs.

21. Travel costs for MAF staff • Payable by person who needs service: • Zone 1: 0-10 km: $45 • Zone 2: 11-25 km: $70 • Zone 3: 26-50 km: $140 • Zone 4: 51-75 km: $200 • Where the distance is greater than 75 km, hourly rate of $98 and actual and reasonable costs would apply

22. Proposal for offshore inspection of ships • Charge ship operator actual travel costs and travel time to complete inspection at $98 per hour • General surveillance and clearance of ship in port relating to refuse and meat lockers will continue to be Crown funded

23. Proposal for individual risk goods • Risk goods imported in baggage to be charged actual and reasonable cost of treatment by MAF approved treatment supplier; • Costs of packaging & returning goods also to be paid; • Charges will be paid before treatment commences; • Goods requiring on-site cleaning, (eg, dirty footwear, tents), at ports of first arrival or International Mail Centre will not be charged.

24. Proposed timeline • Consultation completed by 24 May 06 • Sea container and biosecurity entry levies, revised charges for used vehicles, and revised hourly rates in place by 1 July 06, or as soon as possible thereafter; • Revised system for identification of organisms to be implemented from November 2006 if not sooner.