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SCOPE, COVERAGE AND TREATMENTS
Australia's statistical territory
2.5 Australia uses import and export declarations collated by the Department of Home Affairs as the primary source for compiling international merchandise trade statistics. Many other countries use a similar method for compiling statistics through their national Customs/Trade Agencies. The jurisdiction of the Department of Home Affairs does not extend to goods exported and imported by Norfolk Island, Heard Island, McDonald Islands, Christmas Island, Cocos (Keeling) Islands, Ashmore and Cartier Islands, the Australian Antarctic Territory, the Joint Petroleum Development Area (JPDA) or Australia's territorial enclaves abroad. As a result these areas are excluded from the statistical territory covered by Australia's international merchandise trade statistics.
TABLE 2.1 WHAT IS INCLUDED IN AUSTRALIA'S STATISTICAL TERRITORY?
VALUE THRESHOLDS FOR CUSTOMS DECLARATIONS
2.6 In principle, the scope of international merchandise trade statistics is not limited to goods which are the subject of a commercial transaction, but is intended to cover all goods which add to or subtract from Australia's stock of material resources. In practice, however, coverage is limited to those goods which pass the customs frontier and for which a full customs declaration is required.
2.7 The value thresholds applied by the Department of Home Affairs for goods are:
These value thresholds do not apply to goods requiring a permit; a customs declaration is required for these goods.
2.8 Some data with values below these thresholds are received by the Department of Home Affairs and provided to the ABS. The ABS treatment of these out of scope records is explained in the Data Sources and Compilation Methods chapter (paragraph 4.22).
2.9 In the past, lower value thresholds were applied by the Department of Home Affairs and the ABS (see paragraphs 2.8 and 2.9 of International Merchandise Trade, Australia, Concepts, Sources and Methods, 2001). For changes to thresholds since 1988 see Appendix 2 in the Downloads tab of this publication.
GOODS INCLUDED IN AUSTRALIA'S INTERNATIONAL MERCHANDISE TRADE STATISTICS
2.10 This section (paragraphs 2.11-2.40) describes the goods included in Australia's international merchandise trade statistics. Any limitations associated with the inclusion of the goods is also explained. A description of those goods which are excluded from Australia's international merchandise trade statistics are described in the Goods Excluded from Australia's International Merchandise Trade Statistics section (paragraphs 2.41-2.61).
2.11 Non-monetary gold. Non-monetary gold refers to gold that is traded like any other commodity. It includes unrefined gold, gold powder, semi-processed, other unwrought or semi-manufactured gold, coins, bullion and bars. Such gold might be for industrial use, jewellery making, or use as a store of value. These are regarded as commodities, rather than financial assets, as they principally derive their worth from either their gold content or their value as collectors pieces.
2.12 Banknotes, securities and coins, unissued or not in circulation. These are regarded as commodities rather than financial assets and are valued at their production cost, not face value. Banknotes are classified to the HS heading number 4907 while coins are classified to heading number 7118 (unless presented as coin collections, or as separate pieces clearly intended for a particular collection, when they are classified to heading number 9705). The ABS investigates significant export and import declarations to determine the nature of the transaction, that is, financial or trade in goods. Any financial transactions are removed.
2.13 Goods traded in accordance with barter agreements. The exchange of goods under barter agreements involves payment in kind rather than through a financial transaction. These goods are included when the Department of Home Affairs determines that the value is in excess of the customs value threshold.
2.14 Goods traded on government accounts. These include government purchases and sales of civilian and military use goods which cross Australia's customs frontier. Goods supplied under foreign aid programs (including goods permanently traded under grants, loans, barter or transfer arrangements). War reparations are also included.
2.15 Humanitarian aid, including emergency aid. Articles of food, clothing, medicine and other goods entering or leaving Australia under aid programs or as emergency assistance, whether provided by governments, international organisations or non-government organisations are included.
2.16 Goods for military use. Military goods that cross the customs frontier are included in Australia's international merchandise trade statistics, unless they are used by the Australian Defence Force overseas, or are excluded under an inter-governmental agreement.
2.17 Goods acquired by travellers, including non-resident workers and international students. These goods are included when the amounts or values of such goods exceed the customs value thresholds or other legal requirements as defined by Australian law for reporting to the Department of Home Affairs. Most of the goods purchased by Australians travelling overseas or non-resident travellers in Australia fall below the customs value thresholds. These are recorded as travel services (credits and debits respectively) in the balance of payments but they are not included in international merchandise trade statistics.
2.18 Goods on consignment. These are goods, such as diamonds, pearls, artworks, exported or imported for sale by an agent. Although title for the goods is held by the consignor until the goods are actually sold, it is expected that consigned goods will be sold, rather than returned after export or import.
2.19 Media whether or not recorded. CDs, DVDs and other media with software, video or audio recordings developed for general use (not customised) are included in Australia's international merchandise trade statistics at their full transaction value. Media containing original recordings, customised software (software created for a specific client), or data with fixed-period use licences are excluded as these are treated as services in the balance of payments (defined in paragraph 2.34 below, paragraphs 2.49 and 2.55 in the Goods Excluded from Australia's International Merchandise Trade Statistics section and paragraphs 2.71-2.72 in the Special Cases and their Treatment section).
2.20 Goods for processing with or without a change of ownership. Goods for processing enter or leave a country to undergo specific operations or manufacturing.
2.21 Goods which cross borders as a result of transactions between related parties (e.g. parent corporations and their direct investment enterprises (affiliates/branches)). These include capital equipment and other goods provided by foreign multinational companies to their Australian subsidiaries or Australian companies to their foreign subsidiaries.
2.22 Returned goods. If previously exported Australian produced merchandise is subsequently returned to Australia, the inward transaction should be recorded as a merchandise re-import (see paragraph 3.4 in the Trade System, Valuation and Time of Recording chapter) at the time the good is returned. Similarly, where merchandise previously treated as imported into Australia is subsequently returned overseas, the outward transaction should be recorded as a merchandise re-export (see paragraph 3.5 in the Trade System, Valuation and Time of Recording chapter). Where identifiable, the value of the returned goods is the same as the initial transactions value. This treatment maintains the equilibrium between the incoming and outgoing transaction, albeit increasing the overall volume of both merchandise exports and imports.
2.23 Electricity, gas, oil and water. Australia's valuation of these goods is the net of any delivery charges.
2.24 Goods dispatched or received through postal or courier services. These are included if the value of the goods being traded exceeds the customs value threshold.
2.25 Migrants' effects - imports. Migrants to Australia are required to lodge an import declaration or Self Assessed Clearance (SAC) for the following goods:
2.26 Where an import declaration is completed and the value of goods exceeds the customs value threshold the goods are included in Australia's international merchandise trade statistics. Migrants' effects are excluded from goods in the balance of payments as there is no change of ownership between a resident and a non-resident. The Department of Home Affairs does not require export declarations for personal or household effects of passengers (including emigrants) meaning these goods are not included in international merchandise exports.
2.27 Goods transferred from or to a buffer stock organisation. These organisations try to influence the supply, demand and price of certain commodities by maintaining a large stock. Where these organisations or schemes operate and goods are imported to, or exported from, Australia the goods are included in Australia's international merchandise trade statistics. A buffer stock scheme was operated by the Australian Wool Corporation during the 1970s and 1980s.
2.28 Goods under financial lease. Goods are considered to be under financial lease if the lessee assumes the rights, risks, rewards and responsibilities in relation to the goods, and from an economic point of view can be considered the de facto owner. Goods entering, or departing from, Australia under financial lease are included in Australia's international merchandise trade statistics (see paragraphs 2.85-2.86 in the Special Cases and their Treatment section).
2.29 Ships and aircraft. These are included if there is a change of economic ownership between an Australian resident and a non-resident and the ship or aircraft enters or leaves Australia's territory. Ships and aircraft remaining in international waters or used in international flights are excluded (defined in the Goods Excluded from Australia's International Merchandise Trade Statistics section (paragraph 2.51 and paragraph 2.58) and Special Cases and their Treatment section (paragraphs 2.68-2.70)).
2.30 Goods delivered to, or dispatched from, offshore installations located in Australia's territory (from, or to, the territory of another country). For example, exports of oil are often shipped directly from an offshore facility. Export declarations are lodged electronically or at the nearest Department of Home Affairs office and the goods are included in Australia's international merchandise trade statistics.
2.31 Fish catch, minerals from the seabed and salvage. These goods are included if they enter or leave Australia's territory and the value exceeds the customs value threshold.
2.32 Bunkers, stores, ballast and dunnage. When supplied to foreign vessels or aircraft in Australia these goods are included. The value of bunkers is estimated as export declarations are not required for these goods. Imports declarations including the value of fuel on foreign vessels are included in imports.
2.33 Satellites and their launchers. These are only included when there is a change of ownership between an Australian resident and a non-resident, the goods enter or leave Australia's territory and the Department of Home Affairs receives an export or import declaration.
2.34 Goods in electronic commerce. These are goods which are ordered and paid for electronically and physically enter or leave Australia's territory. The goods are included when their value exceeds the customs value threshold requiring a full declaration. Packaged software, e-books and other products bought and received electronically are excluded (defined in the Goods Excluded from Australia's International Merchandise Trade Statistics section (paragraph 2.55), and the Special Cases and their Treatment section (paragraphs 2.71-2.72)).
2.35 Gifts and donations. Included are gifts and donations with values exceeding the customs value threshold. Financial donations are excluded.
2.36 Power lines, pipelines and undersea cables. Since June 2014, these goods are included in Australia's international merchandise trade statistics when they are dispatched from Australia for installation in another country (export) or dispatched from another country for installation in Australia (import). Where the goods are to be installed in international waters they are included in international merchandise trade only if there is a change of ownership between an Australian resident and a non-resident. Temporary imports and exports of equipment for the installation of the pipelines or cable have always been excluded from Australia’s international merchandise trade statistics.
2.37 Prior to June 2014, pipelines and undersea cables which were installed in international waters were included whether or not there was a change of ownership between an Australian resident and a non-resident. This treatment was determined before guidance was provided in the international standards for compiling merchandise trade statistics (i.e. no guidance was provided in the IMTS 2010, Rev. 2. Exports of undersea cable laid en route between two countries were attributed to the 'country' receiving the predominant share of the cable or 'International Waters' when the majority of the cable was laid there. For example, an undersea cable laid between Australia and the USA would have been assigned to 'International Waters', as the majority of the cable would be laid outside the territories of all countries along the route. No re-allocation was made for the small portion of the cable laid in either Australia's or the USA's territory.
2.38 Used goods. These include industrial equipment, cars, computer equipment and goods entering or leaving Australia under commercial recycling arrangements.
2.39 Waste and scrap. Metal or other materials to be recycled or otherwise disposed of are included if they have a positive value and are not temporary trade.
2.40 Goods received or sent abroad by international organisations. These goods are included in Australia's international merchandise trade statistics when a customs declaration is lodged.
GOODS EXCLUDED FROM AUSTRALIA'S INTERNATIONAL MERCHANDISE TRADE STATISTICS
2.41 The following goods are excluded from Australia's international merchandise trade statistics. Most of the goods are excluded as recommended by the international standard but some goods are excluded because there is either no available data source or their exclusion is consistent with the scope of the statistics.
2.42 Goods simply being transported through Australia e.g. goods in transit (including transhipments). Goods entering or leaving a country with the sole purpose of reaching a third country are excluded, since they do not add to or subtract from the stock of material resources of the country through which they pass. Goods leaving a country, to return after crossing another country, are excluded from both countries' imports and exports. International transportation routes are such that goods may be transported via one or more countries on their way to or from Australia. Alternatively, goods may transit Australia on their way elsewhere. The Department of Home Affairs does not require full import or export declarations for goods in transit.
2.43 Goods temporarily admitted or dispatched. Goods are sometimes brought into a country, or dispatched from it, with a reasonable expectation of subsequent withdrawal or return within a limited time without any change (except normal depreciation). These include art exhibits, specialised equipment used in particular projects, vehicles, race horses, the belongings of competitors who participate in sporting events, and animals for breeding. Where the transaction has a large value as determined by ABS editing processes it will be checked by an ABS editor to ensure that it is accurately classified to international non-merchandise trade (and therefore excluded from Australia's international merchandise trade statistics).
2.44 Goods for repair or maintenance. This comprises goods temporarily crossing international borders so they can be repaired - this is an activity that reinstates the quality of impaired goods and does not result in the creation of a new product. It includes goods that must be repaired abroad because of warranty arrangements or unavailability of Australian services, and goods brought to Australia for repair. For more information about the treatment of specific repairs see the Special Cases and their Treatment section (paragraphs 2.64-2.70). Goods entering or leaving Australia for repair do not add to, or subtract from, the stock of resources so they are excluded from international merchandise trade statistics but the repair services are recorded separately for inclusion in services in the balance of payments.
2.45 Monetary gold. Monetary gold is gold that is exchanged between national or international monetary authorities or authorised banks. These authorities include the Reserve Bank of Australia (RBA) and other central banks, which hold gold as part of an economy's official reserves (a financial asset). Exchanges of monetary gold between monetary authorities are treated as financial transactions and are excluded from Australia's international merchandise trade statistics. When the RBA sells or lends gold to non-monetary authorities, which may then be exported, it is said to demonetise the gold, turning it into non-monetary gold. Any export of non-monetary gold is recorded in international merchandise trade statistics. Likewise, when the RBA receives gold from abroad (e.g. the repayment of a gold loan) it is said to monetise the gold, turning it into monetary gold. Any import of the gold prior to monetisation is recorded in international merchandise trade statistics.
2.46 Issued banknotes and securities and coins in circulation. Where these goods flow into and out of the Australian economy as payments and receipts for international transactions, they are treated as financial assets as they represent a financial claim. These items are not included in Australia's international merchandise trade statistics.
2.47 Goods consigned to and from territorial enclaves. The economic territory of Australia includes Australian embassies, military bases and other installations that are physically located within the geographic boundaries of other countries, and excludes the enclaves of other nations and international organisations located within Australia's geographic boundaries. The movement of goods between Australia and Australian enclaves abroad is considered an internal flow, and therefore these goods are excluded from international merchandise trade statistics. Goods supplied to foreign embassies or military bases in Australia are also excluded. If a customs declaration is received for these goods, the ABS treats it as out of scope and excludes it from international merchandise trade statistics.
2.48 Non-financial assets, ownership of which has been transferred from residents to non-residents, without crossing borders. These assets are land, structures, equipment and inventories which are excluded from international merchandise trade because they changed ownership without entering or leaving Australia. The acquisition or disposal of land and buildings for Australian embassies overseas are examples of the assets to which this category applies.
2.49 Goods treated as part of trade in services. The boundary between goods and services is sometimes blurred. Items classified as goods may include some service element, and vice versa. For example, personal goods acquired by travellers are included in travel services in the balance of payments and not included in international merchandise trade statistics. The value of transportation services to the border of the exporting country is included in the value of goods exported (see diagram 3.1 in the Trade System, Valuation and Time of Recording chapter). Goods treated as services in the balance of payments and national accounts are:
2.50 Goods under merchanting. Merchanting occurs when an Australian resident purchases goods from a non-resident and subsequently resells the same goods to another non-resident without the goods entering Australia's customs territory. These goods are included in the category Net exports of goods under merchanting in the balance of payments and not included in Australia's international merchandise trade statistics.
2.51 Goods under operating lease. This category comprises goods shipped under operating, that is non-financial, leasing arrangements. It may include particular ships or aircraft depending on individual circumstances. While these goods are mostly excluded from Australia's international merchandise trade statistics occasionally the length of an operating lease will cover the economic life of the good. In these instances the lease is considered to be more like a financial lease and is included in international merchandise trade statistics (see paragraphs 2.85-2.86 in the Special Cases and their Treatment section).
2.52 Goods lost or destroyed after leaving the economic territory of the exporting country, but before entering the economic territory of the intended importing country, whether or not ownership has been acquired by the importer. Loss or destruction during transit may be sustained as a result of misadventure, inclement weather, rough handling, or theft. Products with a limited shelf life may simply perish. These goods are not included in Australia's import statistics (but goods lost after export from Australia are included in Australia's export statistics).
2.53 Satellites and their launchers. When these goods are produced and launched in a foreign country on behalf of Australia they are excluded from international merchandise trade statistics because the goods do not enter Australia's territory. Also excluded are satellites and their launchers transported into or out of Australia without a change of ownership between an Australian resident and a non-resident.
2.54 Goods functioning as a means of transport. These include aircraft and ships (except those specified in paragraph 2.29 of the Goods Included in Australia's International Merchandise Trade Statistics section) and the containers used to transport cargo. These goods are not included in Australia's international merchandise trade statistics.
2.55 Content delivered electronically. When goods are downloaded, emailed, streamed or electronically received they are excluded from international merchandise trade statistics. These include online books, periodicals, directories and mailing lists, musical audio downloads, streamed audio content, films and other video downloads, streamed video content, system software downloads, application software downloads, online games etc. Electronically delivered or downloaded material is included in services in the balance of payments.
2.56 Waste and scrap. Waste and scrap with no commercial value are excluded from Australia's international merchandise trade statistics.
2.57 Goods entering or leaving Australia illegally. This includes smuggled goods, like drugs. Illegal goods that are detected by authorities are usually destroyed and are not included in Australia's international merchandise trade statistics.
2.58 Mobile equipment (including ships and aircraft) that changes ownership while outside the country of residence of its original owner. This includes goods which were initially temporarily imported or exported e.g. for construction work, offshore drilling or disaster relief but subsequently involve a change of ownership between a resident and a non-resident. These goods are not included in Australia's international merchandise trade statistics.
2.59 Fish caught on the high seas by Australian registered vessels and landed in Australian ports. These goods are not included in Australia's international merchandise trade statistics as they are considered to be of Australian origin. Measurement is also made difficult as customs declarations are not required. Fishing on the high seas by Australian registered vessels require a high sea permit.
2.60 Fish catch, minerals from the seabed and salvage landed by Australian vessels in foreign ports or acquired by foreign vessels on the high seas from Australian vessels. These goods are not included in Australia's international merchandise trade statistics. An example is fish caught in Australian waters and shipped directly to Japan; a coverage adjustment is included in goods in the balance of payments.
2.61 Bunkers, stores, ballast and dunnage that are acquired by Australian vessels or aircraft, outside Australia. These goods are not included in Australia's international merchandise trade statistics.
SPECIAL CASES AND THEIR TREATMENT
2.62 The majority of international merchandise trade transactions are straightforward - the classification and treatment in international merchandise trade statistics can be clearly determined by following the rules defined in the UN standard. However, conceptual or statistical questions and problems can arise. These are addressed through: a thorough examination of the issues; consultation with international statistical colleagues; and application of the basic principles to the available information. Solutions are often based upon the limited information available at the time.
2.63 The following paragraphs explain in greater detail the treatment of some of these types of transactions and events in international merchandise trade statistics.
Aircraft engines and parts
2.64 There are difficulties in consistently treating exports and imports of aircraft engines and parts due to the sometimes limited information supplied about these transactions and the different circumstances under which they cross the customs frontier. These include:
2.65 Australian owned aircraft used on international routes sometimes return to Australia after undergoing repairs. If customs import declarations are received the aircraft and repairs (recorded separately) are treated as non-merchandise trade but the value of the repair will be included in the balance of payments under maintenance and repair services. There is normally no corresponding non-merchandise export declaration as the aircraft were functioning as a means of transport (see paragraph 2.54 of the Goods Excluded from Australia's International Merchandise Trade Statistics section). Where identifiable, any parts shipped from Australia to assist with the repairs are recorded as international non-merchandise trade.
2.66 Large value customs declarations relating to imports and exports of aircraft engines and parts are identified by the ABS during editing. The ABS editors use the identity of the importer or exporter to help determine treatment and if necessary the customs agent or owner are contacted to confirm entry details and obtain additional information useful for correctly classifying the goods.
2.67 Values vary substantially depending on the nature of the parts and the aircraft in which they are used. Shipments occur reasonably frequently and sometimes contribute significantly to international merchandise trade statistics. The ABS attempts to record large value shipments and the overall exports and imports of aircraft engines and parts in a consistent manner.
Vessel repairs and upgrades
2.68 Repair and maintenance activities reinstate or maintain the quality of the product. Vessel repairs do not result in the creation of a new or a substantially improved vessel. When a vessel crosses the customs frontier for repair purposes, the movements into and out of the country should be recorded as international non-merchandise trade. Any parts exported from the country of the vessel's owner to assist with the repair (usually only identifiable if the value is in excess of the ABS edit value threshold - see the Glossary in the Explanatory Notes tab) are also recorded as international non-merchandise trade. However, low value parts are unlikely to be identified and would be treated as merchandise trade.
2.69 Where substantial improvements are made to the vessel, resulting in a significant increase in its value, the type and value of the improvements are recorded as international merchandise trade. Improvements which have the effect of moving the vessel from one statistical code to another, will also be recorded as international merchandise trade. These improvements are not considered to be repairs.
2.70 Australian components exported for incorporation into a new vessel, to be subsequently imported to Australia, should be recorded as international merchandise trade. Their value upon return to Australia will be included in the overall value of the vessel.
2.71 The recording of international merchandise exports and imports of computer software for statistical purposes is complicated by the fact that computer software often consists of a good (to be included) and a service component (to be excluded) that are difficult to quantify separately. This is further complicated by the growth in online delivery of software and other goods (to be excluded). Accordingly, Australia's treatment of computer software in international merchandise trade statistics is:
2.72 The ABS investigates Australia's international computer software transactions and attempts to separate general use from customised (non-standard) software, as this distinction is not made possible by the Harmonized System. While both exports and imports are investigated, greater attention is given to imports due to their greater relative volume. Tailored edits, contact with the customs agent, exporter or importer, and other information are used including the nature of business undertaken, the per unit value of software, and other goods involved in the transaction. Transactions which are found to contain customised computer software are not included in international merchandise trade but are referred to balance of payments compilers for inclusion in services in the balance of payments.
Liquified natural gas projects
2.73 Australia has abundant natural gas resources in north west Australia, Queensland, the Timor Sea and Bass Strait. The production and export of natural gas as liquified natural gas (LNG) requires significant investment in infrastructure in what is often referred to as an LNG project. The value of an LNG project usually encompasses the design, construction and engineering costs, as well as the LNG plant, LNG train and related infrastructure e.g. vessels or pipelines.
2.74 LNG 'trains' are refrigeration units which cool and condense the natural gas into a colourless and odourless liquid (LNG) for transportation and storage. An LNG train contains a range of components e.g. gas compressor, pumps, filters and storage tanks. An LNG plant can comprise onshore and offshore infrastructure including an LNG train, accommodation modules (for workers involved in the construction and production phases), trunkline, flowline, jetty, treatment plant, pipeline, jacket and platform.
2.75 Included in international merchandise imports are all goods imported for inclusion in the LNG project. The goods are reported to the Department of Home Affairs in the normal way close to the time that they enter Australia. Because the transactions are usually high in value, ABS editors confirm with the importer all the details including the value, quantity and gross weight. These import transactions are included in international merchandise trade statistics in the month that the import transaction is finalised by the Department of Home Affairs. Machinery and equipment imported temporarily for the construction phase are excluded from Australia's merchandise trade and included in international non-merchandise trade.
2.76 Goods for an LNG project can appear in different periods in Australia's international merchandise trade, balance of payments and gross fixed capital formation (GFCF) in the national accounts statistics. Goods imported into Australia are recorded in the balance of payments when ownership changes. Change of ownership for large value projects can occur progressively. In the case of an LNG project, this means that the Australian resident company has accepted the risks and responsibilities associated with ownership prior to and sometimes more than a year ahead of the arrival of some imported components. For example, ownership change may occur progressively as major imported components like a storage tank or gas compressor are completed and the expenditure occurs. The recording of large capital imports for LNG projects is the same in the balance of payments and GFCF in the national accounts.
2.77 Where the design, construction or engineering services for the LNG project are provided by a non-resident company the transactions are included in services in the balance of payments.
2.78 When the LNG plant commences production, LNG which is exported is recorded in international merchandise export statistics in the month that it is shipped (or transported via pipeline) from Australia.
2.79 Appendix 3 (see the Downloads tab) shows the treatment of transactions for a hypothetical $1b LNG Project in international merchandise trade, balance of payments and private gross fixed capital formation statistics. The Feature Article: Mining Investment in ABS Publications was included in the March 2012 issue of the ABS publication, Private New Capital Expenditure and Expected Expenditure, Australia (cat. no. 5625.0). The article explains in detail the recording of mining investment across ABS economic statistics.
Floating, production, storage and off-loading (fpso) vessels
2.80 Floating, Production, Storage and Off-loading (FPSO) vessels are used to extract oil or gas from below the seabed, and to process and store it on-board for later off-loading onto tankers or transportation through a pipeline. An FPSO vessel can be either a converted oil tanker or purpose built and may provide accommodation. Processing occurs in modules, known as topsides, and storage occurs in the hull. The FPSO vessel is not fixed to the seabed but is designed to be moored on location (via a turret) for an extended period of time. FPSO vessels are relatively easy and less expensive to relocate compared with fixed platforms.
2.81 To enable oil or gas production there is a range of associated equipment including: subsea equipment which is used to bring the oil onto the FPSO vessel; the manifold which connects the wells; and flexible risers to connect the FPSO vessel to the seabed wells.
2.82 Imported FPSO vessels and any associated equipment (like the turret and wells) are included in Australia's international merchandise trade statistics in the month that the imported goods are initially finalised by the Department of Home Affairs. Usually the goods will be transported to Australia as needed and may therefore be recorded in international merchandise trade statistics over a number of months. Components for the FPSO vessel may also be produced in several countries (including Australia), and assembled prior to being imported. Australian produced components which are exported for assembly are included in international merchandise trade exports and subsequently included in the value of the imported FPSO vessel. The time of recording for an FPSO vessel and its components can be different in international merchandise trade statistics (when the customs declaration is finalised) compared to the balance of payments and national accounts (change of ownership).
2.83 Occasionally an FPSO vessel may be exported for refurbishment. If this involves a significant transformation (not simply maintenance or repair) the FPSO vessel will be included in export statistics when it leaves Australia and included in import statistics when it returns. The value of the refurbished FPSO vessel will include the cost of the refurbishment. FPSO vessels which are temporarily exported for maintenance or repair are recorded as international non-merchandise trade and the value of the maintenance or repair is included in services in the balance of payments.
2.84 When the FPSO vessel commences production, exported petroleum or gas is recorded in international merchandise export statistics.
Financial and operating leases
2.85 Often goods like aircraft, ships, FPSO vessels and other capital equipment are leased rather than purchased. There are two kinds of leases, financial and operating. Financial leases are included in international merchandise trade statistics and operating leases are excluded. Under financial leases the lessee assumes the rights, risks, rewards and responsibilities associated with the goods and can be considered the economic owner. Operating leases do not have these characteristics. When it is difficult to determine which type of lease is in place the duration of the lease is used in conjunction with the economic life of the goods:
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