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House: Senate

Portfolio: Industry, Science and Technology

Commencement: The amendments to the Customs Act 1901 outlined in this Digest relating to the search and seizure powers of Customs officials commence on 1 July 1995, and those to the Customs Administration Act 1985 relating to term of office of the Chief Executive Officer and power of the Minister to give directions to the CEO will commence on Royal Assent.

+=5"> Purpose

The main provisions of this Bill amend the principal pieces of Customs legislation to give effect to the Government's response to the Review of the Australian Customs Service (the Conroy Review). The key amendments relate to the search and seizure powers of Customs officials, provide for the replacement of the office of Comptroller- General of Customs with that of Chief Executive Officer (CEO), and reduce the term of office of the CEO from 7 years to 5 years.

The Bill also makes a number of other amendments to legislation administered by the Industry, Science and Technology portfolio, including:

insertion of new provisions governing the movement of goods where there has been a breakdown in the Australian Customs Service (ACS) computer entry system;

extend the rules of origin of preference provisions; and

allow the Minister to substitute by- laws made by the CEO prescribing, for excise tariff purposes, exempt onshore oil fields or exempt offshore oil fields where satisfied of certain matters.

While the focus of this Digest is those provisions which represent the Government's response to the Conroy Review, a brief background and legal synopsis of the other amendments proposed by this Bill is available from the Bills Digest Service.

+=5"> Background

For a complete understanding of the historical, political and legal background to this legislation it is recommended that the reader obtain copies of the following reports and press releases:

Australian Law Reform Commission, Customs and Excise, 1992.

Joint Committee of Public Accounts, The Midford Paramount Case and Related Matters, 1992.

Review of the Australian Customs Service - 'The Turning Point', December 1993.

Minister for Small Business, Customs and Construction, Media Release, 26 April 1994 (Government Response to Conroy Review); and

Senate Legal and Constitutional Legislation Committee, Customs, Excise and Bounty Legislation Amendment Bill 1995, May 1995.

The May 1995 report of the Senate Legal and Constitutional Legislation Committee concluded:

...that the proposed legislation achieves the correct balance between judicial scrutiny to protect the rights of individuals on the one hand, and the ability of the Australian Customs Service to protect the community through seizing prohibited goods and preventing fraud on the Commonwealth.

The Committee notes that the Australian Customs Service has expressed its willingness to consider the introduction of further amendments to the Bill to accommodate some of the drafting concerns raised by the Law Council and the Australian Federal Police.

The Committee considers that the training of Customs officers to assist them in applying this proposed legislation is of paramount importance for its effectiveness. The Committee is concerned that the anticipated commencement date of 1 July 1995 may be too early to allow sufficient training of Customs staff, and recommends that the date for the commencement of the proposed legislation be reconsidered to allow for adequate training of Customs officers.

The reference above to drafting concerns raised by the Law Council and the Australian Federal Police is a reference to concerns which included:

the proposed legislation provided for no reduction, in line with the recommendations of the ALRC, in the categories of forfeited goods as defined in proposed section 183UA;

the Bill does not provide, in the factors to be considered in proposed section 203(3), of the necessity of having the goods available before a Court as evidence in themselves of an offence;

provisions such as proposed sections 203B and 203C do not allow members of the Australian Federal Police or the Defence Forces to seize narcotics; and

proposed section 203R is not clear as to whether it would allow the return of prohibited goods to a person if no prosecution has been commenced or no conviction registered. 1

The Senate Legal and Constitutional Legislation Committee recommended, by a majority, that the Bill as introduced be enacted.

It should be noted that Senator Sid Spindler, Democrat Spokesperson on Customs, wrote a dissenting report. Two concerns with the Bill where raised by Senator Spindler, namely, that it does not oblige Customs officials to inform people of their rights prior to the commencement of body searches, and that the date of commencement of the Bill may be too early to allow sufficient training of customs staff.

A copy of the recommendations of the Conroy Report and the Government's response to the Conroy Report, which require legislative action are attached to this Digest.

+=5"> Outline of Current Law and Main Amendments

The main amendments proposed by this Bill to the Customs Act 1901 (the Principal Act) provide for the:

repeal of sections 197- 203; and

insertion of new sections 197- 203S.

Currently, sections 200 and 203 are the key empowering provisions with respect to search and seizure by the ACS.

Section 200 provides that any Customs officer, or police officer, who has a Writ of Assistance or a Customs Warrant may at any time enter and search any house, premises or place and break open and search any chests, trunks or packages in which goods may be or are supposed to be.

Section 203 provides that any member of the Defence Force, Customs officer or police officer may seize any forfeited goods or any goods that he/she believes on reasonable grounds are forfeited goods. The term 'forfeited good' includes any ship or aircraft used in smuggling or knowingly used in the unlawful importation, exportation, or conveyance of any prohibited imports or prohibited exports.

Central to the operation of the power accorded by section 200 is the obtaining of a Writ of Assistance or a Customs Warrant. A Writ of Assistance is granted under section 198, on application by the Minister or Comptroller or Collector of Customs for a State or Territory, by a State or Territory Supreme Court. A Writ of Assistance remains in force so long as any person named in it remains a Customs officer and it is not superseded. Schedule III to the Act sets out the form a Writ of Assistance takes.

A Customs Warrant is granted under section 199 by the Comptroller, or the Collector of Customs for a State or Territory, to any Customs or police officer in accordance with the form in Schedule IV of the Act. A Customs Warrant remains operative until the expiration of the period specified in the Warrant, or until it is revoked, whichever occurs first. A Customs Warrant only has force in the State or Territory in which it was issued.

The most important difference between the current and proposed sections is that the power accorded to the Comptroller, or the Collector of Customs for a State or Territory, to issue a Customs Warrant will be shifted to a 'judicial officer' (ie magistrate, justice of the peace or other authorised person).

The other major amendments proposed by this Bill provide for replacement of the Office of Comptroller- General of Customs with that of Chief Executive Officer (CEO); provide the Minister with the power to give directions to the CEO with respect to the general policy to be pursued in relation to the administration of Customs; and reduce the term of office of the CEO from 7 years to 5 years.

The search and seizure provisions of this Bill can be broken down into two groups, based on whether a warrant is, or is not, required.

(1) Search, seizure provisions which do not require a warrant (proposed sections 197, 203B, 203C, 203D of Schedule 2 of the Bill).

(2) Search and seizure provisions which do require a warrant (proposed sections 198- 203A).

The main amendments to the ACS organisational structure proposed by this Bill are contained in Schedule 3 (Items 6 and 8).

+=5"> Main Provisions

Power of CEO to Give Search and Seizure Directions

A new section 183UC is inserted in the Customs Act 1901 (the Act) by Item 26 of Schedule 2, the effect of which is to give the Chief Executive Officer (CEO) the power to give directions, subject to disallowance by Parliament, concerning:

the circumstances in which powers under Division 1 of Part XII of the Act (which deals with the search and seizure powers of customs officers) may be exercised;

Customs officers who are entitled to exercise such powers; and

way and number of times the exercise of such powers are to be reported to the CEO.

Item 28 repeals sections 197- 203 of the Act and inserts new sections 197- 203S.

Power to Stop Aircraft, Vehicles or Vessels

Where a conveyance (ie. aircraft, vehicle or vessel of any kind) is about to leave a Customs place (eg. port or airport), and the Customs officer believes, on reasonable grounds, that the conveyance is carrying goods subject to Customs control, proposed section 197 provides the power to:

require the conveyance to stop;

check to establish there is appropriate documentation to authorise the movement of goods subject to Customs control from the Customs place;

question the person apparently in charge of the conveyance about any goods in, or in a container on, the conveyance; and

give directions relating to the unloading of any goods from the Conveyance, or their movement to a particular part of the Customs place for further examination.

A Customs officer must not detain a conveyance for longer than is necessary and reasonable to exercise their powers [ proposed subclause 197(5)].

Search and Seizure - General Provisions

Proposed section 198 is one of the most important provision dealing with search warrants because it defines the limits of a search warrant (Note: the seizure of 'forfeited goods' is dealt with under proposed section 203) and the conditions attaching to a search. References to a 'search warrant' in the Bill and this Digest, unless specified otherwise, are references to a section 198 search warrant.

A judicial officer (ie. magistrate, justice of the peace or other authorised person) may issue a warrant to search a premises if satisfied by information on oath that there are reasonable grounds for suspecting there is, or will be within the next 72 hours, any evidential material (a thing relevant to an offence), other than evidential material that is also a forfeited good, on or in the premises [ proposed subsection 198(1)]. The 'term forfeited good' includes any ship or aircraft used in smuggling or knowingly used in the unlawful importation, exportation, or conveyance of any prohibited imports or prohibited exports.

Where a person applying for a search warrant has at any previous time applied for a warrant relating to the search or seizure of goods on or in the same premises (other than a Customs place), they must give to the judicial officer particulars of those applications [ proposed subsection 198(2)]

Proposed subsections 198(3) and 198(4) sets out matters that the judicial officer is to state in the search warrant, including:

the kind of evidential material that is to be searched for;

the time for which the warrant remains in force, which is not to be more than 7 days;

the seizure of things (other than evidential material for which the warrant is specifically issued) which are found in the course of the search and which are believed to be evidential material in relation to an offence to which the warrant relates or to another offence, and are not forfeited goods; and

whether the warrant authorises an ordinary search or a frisk search of a person at or near the premises when the warrant is executed, where the executing officer or assistance suspects on reasonable grounds the person has any evidential material in their possession.

Successive warrants may be issued in relation to the same premises [ proposed subsection 198(5)].

Where an application for a warrant is by telephone or other electronic means the time period referred to in proposed subsection 198(1) (see above) is reduced from 72 hours to 48 hours, and that in proposed subsection 198(3) (see above) from 7 day to 48 hours [ proposed subsection 198(6)].

The actions that are authorised by a section 198 search warrant are set out in proposed section 199, and include:

enter the warrant premises;

search the premises for evidential material specified in the warrant, and to seize things of that kind found on or in the premises; and

seize other things (other than forfeited goods) found on or in the premises in the course of the search that the executing officer or assistant believes on reasonable grounds to be evidential material in relation to an offence to which the warrant relates or another offence.

Proposed section 201 authorises the use of electronic equipment found during a search.

Proposed section 202 provides for compensation to be payed for damage or corruption caused to equipment and data during a search and seizure as a result of not enough care being taken in selecting the person who was to operate the equipment, or not enough care being taken by the person operating the equipment. Compensation is payable out of money appropriated by the Parliament.

Seizure of Forfeited Goods

Proposed sections 203- 203D deals with the seizure of goods believed to be 'forfeited goods'. Forfeited goods include any ship or aircraft used in smuggling or knowingly used in the unlawful importation, exportation, or conveyance of any prohibited imports or prohibited exports.

Under proposed section 203 a judicial officer may issue a warrant to seize forfeited goods on or in particular premises if satisfied by information, on oath, that an authorised person (ie. a Customs or police officer, or a member of the Defence Force) has:

reasonable grounds for suspecting that the goods are forfeited goods, and are, or within the next 72 hours, will be, on or in the premises; and

has demonstrated the necessity for seizure of the goods [ proposed subsection 203(1)]. This provision will not apply to seizures without warrant [ proposed subsection 203(2)].

In determining whether an authorised person has demonstrated the necessity for the seizure, the judicial officer may, under proposed subsection 203(3), have regard to certain factors, including:

the pecuniary or other penalty that might be imposed for any such offence; and

the nature, quality, quantity and estimated value of the goods.

Proposed section 203 is one of the most important provisions dealing with warrants because it defines the limits of a seizure warrant. A reference to a 'seizure warrant' in this Bill and Digest, unless otherwise specified, is a reference to a section 203 seizure warrant.

Proposed subsections 203(5) and 203(6) sets out matters that the judicial officer is to state in a warrant for the seizure of forfeited goods, including:

a description of the goods to which the warrant relates;

the time for which the warrant remains in force, which must not be more than 7 days; and

that it authorises the seizure of other things (other than forfeited goods) found on or in the premises in the course of the search that the executing officer or assistant believes on reasonable grounds to be evidential material in relation to an offence to which the warrant relates or another offence

Successive warrants may be issued in relation to the same premises [ proposed subsection 203(7)].

Where an application for a warrant is by telephone or other electronic means the time period referred to in proposed subsection 203(1) (see above) is reduced from 72 hours to 48 hours, and that in proposed subsection 203(5) (see above) from 7 days to 48 hours [ proposed subsection 203(8)].

The things that are authorised by a seizure warrant are set out in proposed section 203A, and include to:

enter the warrant premises;

seize the goods described in the warrant; and

seize other goods found on or in the premises in the course of searching for goods which are the subject of the warrant, and that the executing officer or assistant believes on reasonable grounds to be special forfeited goods (eg. prohibited imports or exports).

Search and Seizure of Forfeited Goods Without Warrant

Proposed section 203B provides a Customs officer with a search and seizure power that does not require a warrant. This power operates where:

a Customs officer suspects on reasonable grounds that there are 'special forfeited goods' (eg. prohibited imports or exports) at, or in a container at, a Customs place; or in, or in a container on, a conveyance at a Customs place.

The power is the same as under proposed section 203B, but in relation to narcotics rather than special forfeited goods.

Search and Seizure Without Warrant - Narcotic Goods

Proposed section 203C provides a Customs officer with a search and seizure power that does not require a warrant. This power operates where:

a Customs officer suspects on reasonable grounds there are special forfeited goods (eg. prohibited imports or exports) that are narcotic goods at, or in a container at, a Customs place; or in, or in a container on, a conveyance at a Customs place; and it is necessary to exercise the power to prevent the goods from being concealed, lost or destroyed.

The power enables a Customs officer without warrant to:

search the Customs place or the container for the narcotic goods;

question any person apparently in charge of the place, conveyance or container about any goods or thing at the place or in the conveyance or container;

where the Customs officer when searching for special forfeited goods that are narcotic goods finds something that he/she believes on reasonable grounds is evidential material relating to an offence in respect of those goods, he/she may seize those goods;

stop and detain at the Customs place the conveyance and search it and any container on it for the narcotic goods; and

seize the narcotic goods if he/she finds them there.

Exercise of Power to Search and Seizure Without Warrant

The powers accorded by proposed sections 203B and 203C are subject to proposed section 203D, which set certain limits to the exercise of those powers, including:

that a Customs officer must not detain a conveyance longer than is necessary and reasonable to search it and any container found on it; and

a Customs officer may use such force as is necessary and reasonable in the circumstances, but must not damage any place, conveyance or container unless the person, if any, apparently in charge of the place, conveyance or container has been given a chance to help with the search by giving access or opening the conveyance or container, or it is not possible to give that person such a chance.

Conduct of Ordinary and Frisk Searches

Ordinary and frisk searches of people are to be conducted by a person of the same sex as the person being searched ( proposed section 203E).

Announcement Before Entry

Proposed section 203F requires an officer before entering premises to execute a search or seizure warrant to announce that they are authorised to enter and give any person at the premises a chance to allow entry. These requirements will not apply where the officer believes on reasonable grounds that immediate entry is required to ensure the safety of a person, or to ensure the effective execution of a warrant.

Details of Warrant to be Given to Occupier or Person Being Searched

Where a search or seizure warrant in relation to a premises is being executed, a copy of the warrant must be made available to the occupier of the premises, or their representative if they are present [ proposed subsection 203G(1)]. In addition, persons being searched under a warrant in relation to a premises must be shown a copy of the warrant; and the executing officer must identify themselves to the person at the place where the warrant is executed [ proposed subsections 203G(2) and 203G(3)].

Occupier Entitled to be Present During Search or Seizure

The occupier, or their representative, is entitled to be present during the execution of a search and seizure warrant, except where he/she impedes the search or seizure ( proposed section 203H).

Offence for Making False Statement in Warrants

Proposed section 203P makes it an offence, in an application for a search or seizure warrant, to knowingly make a false or misleading statement. The penalty for such an offence is a maximum term of imprisonment of two years.

Retention of Things Seized Under a Search Warrant or Sections 203B or 203C

Proposed section 203R deals with the retention and return of evidential material seized under a search warrant or under proposed sections 203B or 203C (see above). Where evidential material is seized Customs must return it in the following circumstances:

the reason for its seizure no longer exists or Customs has decided that it is not to be used as evidence; or

60 days after its seizure proceedings in which it may afford evidence have not started, an order allowing its retention has not been made or a court order ordering its retention, destruction or disposal has not been made.

Court Order Allowing Retention of Things Seized

Proposed section 203S provides for the retention of evidential material seized under a search warrant or under proposed sections 203B or 203C beyond 60 days or a period previously specified in a magistrate's order. A magistrate may order retention where satisfied of certain matters, including:

where it is necessary for the purposes of an investigation to determine whether an offence has been committed, or for evidence to be assemble for the purposes of a prosecution; and

there has been no avoidable delay in the investigation or assembly of the evidence concerned.

Notice of Seizure

Where goods have been seized under a seizure warrant or under proposed sections 203B or 203C, a notice must be served within 7 days of the seizure on the owner of the goods, or the person in whose possession or control the goods were when seized ( proposed section 205). A notice must set out certain matters, including:

a statement identifying the goods; and

a statement indicating that if a claim for return of the goods has not already been made, and is not made within 30 days ( proposed section 205B deals with claims for return of goods seized), the goods will be taken to be forfeited to the Crown ( proposed section 205A).

Retention of Things Seized Under a Seizure Warrant or Sections 203B or 203C

Proposed section 205E has essentially the same effect as proposed section 203S.

Compensation for Goods Taken to be Forfeited to the Crown and Disposed or Destroyed

Under proposed section 205F compensation is payable with respect to goods forfeited to the Crown which have been disposed off or destroyed where a person satisfies a court that:

he/she is the rightful owner of the goods;

there were circumstances providing a reasonable excuse for not claiming the goods within the required time frame; and

the goods were not involved in the commission of an offence.

Where a right to compensation is established, a court must order the Commonwealth to pay the person an amount equal to, if the goods have been sold, the proceeds of the sale, or if the goods have been destroyed, the market value of the goods at the time of destruction.

Offence for Destruction or Concealment of Evidential Material or Forfeited Goods

The principal effect of proposed section 209A, which is inserted in the Act by Item 43, is to make it an offence, punishable by a maximum term of imprisonment for two years, to:

destroy or make incapable of identification, a document or thing that is, or may be, evidential material or a forfeited good;

make illegible or indecipherable such a document or thing; or

place or conceal on his/her body, or in any clothing worn by the person, such a document or thing;

with the intention of preventing it being seized by a Customs officer under proposed sections 203B or 203C or an authorised person under a search or seizure warrant.

Nature and Functions Magistrates Role Under Sections 203S and 205E

Proposed section 214BA has two main effects. First, to provide that the power conferred on a magistrate by proposed sections 203S and 205E (see above) is conferred on him/her in a personal capacity and not as a court or a member of a court. This provision is necessary because of the separation of powers doctrine. Basically, the power being conferred by proposed sections 203S and 205E is with respect to a non- judicial/administrative function rather than a judicial function. Under the doctrine, a non- judicial function/power cannot be conferred on a court (except to the extent that it was incidental to it judicial functions).

Secondly, proposed section 214BA provides a magistrate performing a proposed section 203S or 205E function with the same protection and immunity as if they were performing the functions as a court.

Item 67 repeals Schedules III, IV and V of the Act. These Schedules sets out the form a Writ of Assistance and a Customs Warrant is to take.

+=5"> Main Amendments to the Customs Administration Act 1985

Ministerial Directions to the CEO

A new section 4A is inserted in the Customs Administration Act 1985 (the Administration Act), by Item 6 of Schedule 3 of the Bill, which gives the Minister power to give the CEO direction, which he/she must comply with, in respect to the general policy to be pursued in relation to the administration of the Australian Customs Service. Ministerial directions must be tabled before each House of the Parliament.

Tenure of Office of CEO

Item 8 of Schedule 3 to the Bill reduces the tenure of office of the CEO from 7 years to 5 years.

Suspension and Removal from Office of CEO

Item 18 of Schedule 3 adds a new ground of failure, without reasonable excuse, to comply with section 4A Ministerial direction as a ground for which the Governor- General may remove the CEO from office.

+=5"> Endnotes

1. Senate Legal and Constitutional Legislation Committee, Customs, Excise and Bounty Legislation Amendment Bill 1995, May 1995, pp. 14 and 21.

Ian Ireland (06 2772438)

Bills Digest Service 8 June 1995

Parliamentary Research Service

This Digest does not have any legal status. Other sources should be consulted to

determine whether this Bill has been enacted and, if so, whether the subsequent Act reflects further amendments.

Commonwealth of Australia 1995

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members and Senators of the Australian Parliament in the course of their official duties.