BEO2004
International Trade Practices
S2B3, 2022
Group Assignment
(30% of total Assessment)
Due date: Session 9 of Week 3
Question 1 (10 marks)
You are employed by Australian company looking to diversify the range of products to increase scoop of their operations. You have been given a task to choose one product out six, the cheapest one in total cost, listed below (3 countries, 2 products) to import to Australia.
Identify the custom classification code for each listed product in Table 1.
https://www.abf.gov.au/importing-exporting-and-manufacturing/tariff-classification/current-tariff
Calculate amount of duty payable on entering the product for home (local) consumption.
Provide hard copy of foreign exchange rate used for calculations
1.3 Calculate the VoTI (Value of Taxable Imports)
Refer to pp.110-115 of the prescribe textbook
1.4 Calculate the total cost of products at the end of the customs clearance.
Instructions:
Students must complete six calculations (three products, each product has two potential countries to import from)
Freight costs are for sea transport from the country of origin to Melbourne Victoria Australia.
In calculating the costs, you will have to convert these to AUD.
https://www.anz.com/aus/RateFee/fxrates/fxpopup.asp
Cost of goods given as an equivalent FOB value for customs purposes.
There is no option in deferring GST.
1.5 Complete Import Declaration (N10) form for the product you have calculated as the cheapest one in total cost.
Table 1: Product and origin information
Product A
Product: FRESH SHELLED COCONUT
Origin
India
Thailand
Price
INR 85 per unit
THB 50 per unit
Quantity
10,000 units
10,000 units
Freight costs to Australia
USD 2,500.00
USD 2,200.00
Cargo Insurance costs
USD 950.00
AUD 1,400.00
Product B
Product: REFINED OLIVE OIL
Origin
Israel
Italy
Price
ILS 3 per tint
EUR 1.5 per tint
Quantity
10,000 tints
10,000 tints
Freight costs to Australia
USD 2,500.00
EUR 2,200
Cargo Insurance costs
USD 1,300.00
AUD1,350.00
Product C
Product: WOMEN’S CROCHETED BLOUSE
Origin
United States
Mexico
Price
USD 2 per garment
MXN 30 per garment
Quantity
10,000 garments
10,000 garments
Freight costs to Australia
AUD 2,100.00
USD 1,800.00
Cargo Insurance costs
AUD 1,200.00
USD 1200.00
Question 2 (10 marks)
XYZ Pty Ltd has decided that it will be exporting to Japan. You have heard about the benefits of preferential duty treatment for Australian goods under the Japan Australia Free Trade Agreement (JAFTA).
The products you will export are listed in Table 2 and dimensions in Table 3 (prices shown on an EXW Incoterms 2020 basis):
Table 2: Product details
Australian Lamb Code AULM
Australian Wine Code AUWN
Quantity: 40 kg per box
Quantity: 12 bottles per box
Price: AUD 10 per kg
Price: AUD 8 per bottle
Total quantity of lamb: 840kg
Total quantity of wine: 2400 bottles
Table 3: Product sizes and measurements
Product Gross
Weight per box
Measurement per box
A
40 kgs
0.3 m3
B
15kgs
0.2 m3
2.1 You must decide whether you will enter a forward exchange contract or not
(You must email your group decision to me at the end of the Session 2)
2.2 In Week 1 Session 1 (4/10/2022) you are to obtain the following information:
The spot rate for the Japanese Yen – JPY (Provide screenshot evidence of exchange rate on the day)
https://www.anz.com/aus/RateFee/fxrates/fxpopup.asp
The value of the contract is as per product you are selling above (details as in Table 2).
Calculate the amount receivable when converted to AUD using the spot rate obtained on in Week 1 Session 1 (4/10/2022)
2.3 In Week 3, Session 7 (18/10/2022) you are to obtain the following information:
Obtain the spot rate for the YEN (must be from the same source as of Week 1).
Calculate the amount receivable in AUD using the spot rate obtained on Tuesday in
Week 3 Session 7 from the same source as for Week 1. (Provide screenshot evidence of exchange rate on the day)
Table 3 Comparison of amount receivable in Week 1 and Week 3
Week1
Week3
Spot rate
Amount receivable in AUD equivalent
2.4 Anticipate the amount receivable in Week 3 and analyze the effect of the exchange rates movement on the amount receivable in AUD, benefit, and cost of forward contract as an exchange rate risk management tool.
Question 3 (10 marks)
Use OZDOCS TO COMPLETE THIS TASK
Complete the necessary export documentation to clear Customs and enable the importer to complete border clearance processes in Malaysia for products in Table 2&3, Question 2.
Please note: Q.2 and Q.3 are not related.
You must also complete a MAFTA compliant Certificate of Origin (from the exporter’s point of view) for the above products.
https://www.dfat.gov.au/trade/agreements/in-force/mafta/Pages/declarations-of-origin-and-certificates-of-origin-under-mafta
You must decide whether to use air or sea transport, based on the information provided below.
Seller: AusieDream Pty Ltd, 1002 Gumbeach Avenue, Portside, Vic 3999 Australia.
Tel: +61 3 94135432
Buyer: ABC Imports. 156 Portbank Road, Kuala Lumpur, 10150, Malaysia.
Tel: +66 0 26013826
Terms of Delivery: DAP Kuala Lumpur, uncleared for import, all charges outside for buyer’s account, Incoterms 2020
Method of payment: Letter of Credit
Transport details:
A)
Sea transport: Vista Voyage 112
Departing Melbourne 5 May 2022, destination Port Penang, Malaysia.
Latest receival date: 1 May 2022
Bill of Lading Number: BS1584
Transit time to Kuantan Port: 28 days
Costs:
Seafreight: USD00.
Carriage to wharf: AUD 150.00.
Documentation: AUD 320.00
B)
Air Transport:
Flight TG000 Melbourne- Kuala Lumpur,
Departing Melbourne: 10 May 2022,
AWB number: 052 – 26067621
Costs:
Airfreight: USD 4830.00.
Carriage to airport: AUD 285.00.
Documentation: AUD 260.00
Insurance charges (regardless of mode of transport chosen). Premium = (CPT invoice value X 110%) X 0.3%
