Carriage of goods by sea

Australia's maritime law is headlined by its Carriage of Goods by Sea Act 1991 (Cth), which governs the liability of carriers and the sea carriage of goods.

A modified version of the Hague-Visby Rules applies to all shipments out of Australia and includes the package limitation of a carrier liability of the greater of 666.67 Special Drawing Rights (SDRs) per package or unit, or two SDRs per kilogram of gross weight of the goods lost or damaged.

The rule applies to bills of lading and consignment notes, sea waybills and ships' delivery orders, as well as to electronic bills of lading. A carrier's responsibility for shipments out of Australia extends from the time the goods are delivered to it within the limits of the port or wharf until the goods are delivered from the limits of the discharge port.

In certain circumstances, a carrier may also be liable for a loss due to delay but liability is limited to two-and-a-half times the freight payable for the goods delayed. For shipments into Australia, jurisdiction clauses contained in bills of lading are ineffective if they preclude or limit the jurisdiction of Australian courts.

Ship arrest

Australia is a signatory to the 1952 Convention on the Arrest of Sea-Going Ships.

Under the Admiralty Act 1988 (Cth), in rem jurisdiction is exercised by Australia's Federal Court and the Supreme Court of each state and territory. The right to commence proceedings against a ship extends to maritime liens, proprietary maritime claims (ie claims to title in respect of the mortgage of a ship) and general maritime claims, which include claims for damage to goods or property, claims for salvage and personal injury claims.

For general maritime claims, in rem proceedings can only be commenced if the person with personal liability for the claim, ie the "relevant person", is the owner or demise charterer of the ship at the time proceedings are commenced. In rem proceedings can also be commenced against a surrogate or sister ship.

By commencing in rem proceedings, the plaintiff has an automatic right to obtain an arrest warrant from a court unless a caveat against arrest has been lodged.

Following arrest, it is common for security to be provided by a P&I Club (a mutual insurer of shipowners) for the amount of the claim plus interest and costs by way of a written undertaking, also known as a "Club letter".

Limitation of liability

Australia is a signatory to the 1996 Protocol to the 1976 Convention on Limitation of Liability for Maritime Claims.

Under the Limitation of Liability for Maritime Claims Act 1989 (Cth), shipowners, including owners, charterers, managers and operators of a sea-going ship, are entitled to limit liability for damage to property occurring on-board or in direct connection with the operation of the ship.

Registering a ship

A ship must be registered under the Australian flag if:

  • More than half of the 64 possible shares in the ship are owned by Australian nationals or companies, where there are multiple or common owners, or it is operated by Australian nationals or an Australian company
  • It is a commercial ship more than 12 metres in overall length
  • It is a commercial ship more than 12 metres in overall length on demise, ie bare boat, chartered to an Australian-based operator.

A ship may be registered in Australia if:

  • More than half of the 64 possible shares in the ship are owned by Australian nationals or companies
  • It is less than 12 metres in length overall and wholly owned or operated by Australian residents, nationals or companies
  • The ship is less than 12 metres in length overall and on demise, ie bare boat, chartered to an Australian-based operator.

Carriage of goods by air

Since 24 January 2009, the Montreal Convention 1999 has formed part of Australian law and is incorporated into Australian law by way of amendments made to the Civil Aviation (Carriers' Liability) Act 1959 (Cth).

Under the Montreal Convention, an air carrier is strictly liable for damage to goods occurring during international air carriage.

If the country from where the goods have been carried is a signatory to the Montreal Convention, the amount recoverable is limited to 19 SDRs per kilogram of cargo. When the country from where the goods have been flown is not a signatory to the Montreal Convention, the 250 gold franc limit provided for in the Warsaw Convention may apply.

In relation to death or injury claims, an air carrier is strictly liable for damages up to 113,100 SDRs and is exposed to unlimited damages unless it can establish that damage was not caused by its negligence or was caused by the negligence of a third party.

In relation to baggage claims, the limit of carrier liability is 1,131 SDRs.

In relation to domestic air carriage by a regular public transport operator, the current limit of passenger liability is AU$500,000 for death or personal injury.

Carriage of goods by road

In Australia, road carriers are able to limit or exclude their liability for loss or damage to goods by incorporating properly worded terms and conditions into their carriage contracts. This is different from many other countries and it is usual for Australian road carriers to claim to exclude all liability for loss or damage to goods.

However, in the case of carriage and storage of household goods and personal effects, implied guarantee to exercise due care and skill applies in line with certain contracts for the supply of services. In this case, Australia's Competition and Consumer Act 2010 (Cth) and the Australian Consumer Law that forms part of that Act come into play.


Imports and exports

Importing and exporting goods is principally covered by the Customs Act 1901 (Cth) (Customs Act) and associated Regulations.

Compliance with customs

The Australian Customs Service (Customs) expects that industry and the international trading community will comply with the customs legislation in all transactions involving the movement of ships and aircraft to and from Australia. There are a number of penalties for noncompliance, many of which are strict liability and do not require intent in order to be proven. These relate to providing false or misleading statements, unauthorised goods or interference with goods, and loading goods for export without authority to deal. Customs will consider whether a sanction is the best means for achieving future compliance.

Liability for payment of customs duty and Goods and Services Tax (GST) arises when the goods are entered for home consumption, ie when they are cleared through customs. Such liability is imposed on the owner of the goods, where "owner" is broadly defined.

Goods must be entered for home consumption by the end of the day following their import into Australia, ie the administrative process of clearing the goods through Customs must be complete by that time. Even if a Customs agent is employed to clear the goods, the importer is responsible for the accuracy of the entry.

If goods are merely passing through Australia, no duty or GST is levied. However, Customs officers have powers of direction over transhipped goods.

Intergrated Cargo System

The Integrated Cargo System (ICS) was introduced in 2005 and Customs now requires all cargo to be reported electronically on the ICS prior to arriving in Australia. This includes in-transit and transhipment cargo.

Customs has a number of specific requirements for communicating electronically with it and these should be reviewed at

Australia Quarantine Inspection Service requirements

The Australian Quarantine Inspection Service (AQIS) has strict quarantine requirements that must be complied with before goods can be imported to, or exported from, Australia. These include examination and inspection of all animal, plant and human products and should be reviewed on the AQIS website at

Import Permit System Regulations

The Customs Act prohibits the import of certain goods, either absolutely or conditionally. The nature of the goods determines whether or not a permit to import the goods is required under the Customs (Prohibited Imports) Regulations. The value of the goods has no bearing on the matter.

Goods requiring an import permit include such things as food and plant imports, protected wildlife, motor vehicles, intellectual property, drugs, firearms and other hazardous or dangerous goods. Permits must be obtained before goods arrive in Australia or they may be forfeited.

Export Permit System Regulations

Goods controlled by the Customs (Prohibited Exports) Regulations or other legislation require a permit to export. Such goods include fruit and vegetables and other primary products, cultural heritage items, protected wildlife and hazardous waste.

Goods may not be exported or loaded on to an aircraft or ship unless they have been entered for export and had an Export Clearance Number assigned. Certificates for departure are only issued once requirements for all cargo are met.

International obligations

Australia's membership of the World Trade Organisation and contracting party status to the General Agreement on Tariffs and Trade 1994 (GATT) and associated multilateral side agreements mean it is obliged to charge no more than its agreed maximum tariff rate on imports from other signatory countries. It must also accord no less favourable tariff treatment to imports from another signatory country.

Australia has given effect to the anti-dumping provisions of the GATT, and the Customs Act sets out the framework for complaints about dumping, which may be applied for where:

  • A consignment of goods has been, or is likely to be, imported into Australia
  • There is, or may be established, an Australian industry producing like goods
  • A person believes that there are, or may be, reasonable grounds for the publication of a dumping duty notice or a countervailing duty notice in respect of the goods in the consignment.

Dumping and countervailing duties impost is governed by the Customs Tariff (Anti-Dumping) Act 1975 (Cth).

Being a member of the World Customs Organisation, Australia has adopted the Harmonised Commodity Description and Coding System 1983. This is given effect through the Customs Tariff Act 1995 (Cth) (Tariff Act), which sets out the rules of interpretation and tariff classification. Where more than one classification item may apply, the Tariff Act provides a mechanism for solution. Australia adopts GATT's Valuation Code Free On Board method to value goods subject to customs duties.

Australia is a signatory to the United Nations Educational, Scientific and Cultural Organisation Agreement on the Importation of Educational, Scientific and Cultural Materials, which excludes educational, scientific or cultural goods from customs duties and other charges.

Preferential rates of duty apply to goods from developing countries.

Bilateral trading agreements

New Zealand

Most goods may be imported from New Zealand free of customs duties as a result of a longstanding bilateral trading agreement between the two countries. This is ratified by the Customs Legislation Amendment (New Zealand Rules of Origin) Act 2006 (Cth), which introduced new rules of origin for goods traded under the Australia New Zealand Closer Economic Relations Trade Agreement.

These rules provide that New Zealand-originating goods will be eligible for a preferential rate of customs duty under the Tariff Act. Goods will be New Zealand-originating goods where they meet the change in tariff classification and/or regional value content requirement.

Other agreements

Australia has bilateral trading agreements with the US, Thailand and Singapore, which allow goods from these countries to be either free of duty or subject to a concessional rate.

Marking requirements on goods

Australia's Competition and Consumer Act 2010 (Cth) prohibits corporations engaging in misleading and deceptive conduct and provides specifically for country of origin representations and whether or not they are misleading and deceptive. Representations are not considered misleading or deceptive if 50% or more of the cost of producing or manufacturing the goods occurred in that alleged country of origin.

The Commerce (Trade Description) Act 1905 (Cth) and associated Regulations prescribe that certain imports, including shoes, electrical appliances, toys, agricultural seeds and jewellery, be labelled before entering Australia for consumption. False trade descriptions or those likely to mislead attract penalties, including forfeiting the goods.

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