News & Insights

On 17 January 2020 the free trade agreement (FTA) with Hong Kong entered into force, providing greater certainty to trade and investment activities between Australia and Hong Kong.

It complements Australia’s Free Trade Agreement with China, which doesn’t cover Hong Kong.

notable highlights of the FTA are:

• zero tariffs on goods originating in Hong Kong, provided you can supply a Declaration of Origin;
  • • A good may be considered to be originating in Hong Kong if it is:
      • wholly obtained or produced entirely in Hong Kong by one or more producers e.g. agricultural goods and natural resources;
      • produced entirely in Hong Kong by one or more producers, exclusively from originating materials (whether those materials originated in Hong Kong or Australia);
      • produced entirely in Hong Kong by one or more producers using non-originating materials provided the good has undergone a substantial transformation in Hong Kong.  The rules around this are quite strict and it is best to obtain legal advice as to whether the good satisfies all applicable requirements of Annex 3-B of the FTA.
• importers can apply for preferential tariff treatment within one year after the import has taken place i.e. it can seek a refund of tariff fees already paid;
• Australian importers must maintain, for five years after the date of importation of the goods, documentation, including a copy of the Declaration of Origin, relating to the importation of the goods;
• market access is guaranteed for –
  • • services suppliers of financial, professional accounting, engineering and construction, education, transport and logistics services;
    • Australian lawyers to provide legal advice on Australian and international law on a cross-border basis, including assisting Hong Kong companies setting up in Australia; and
    • temporary entry to Australia for Hong Kong professionals including intra-corporate transferees and independent executives (and their spouses), and business visitors.
• conditions for two-way investment will be significantly improved, including the threshold at which private Hong Kong investments in non-sensitive sectors are reviewed by the Foreign Investment Review Board has been increased from $261 million to $1,134 million;
• free cross-border data flows (without mandatory local data storage requirements).

For specific information on claiming preferential tariff treatment for any goods or services being imported into Australia, or for further information on any of the above, please contact Mark Metzeling and Macpherson Kelley’s Foreign Owned Subsidiaries Team.

The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.