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Joint Standing Committee on Foreign Affairs, Defence and Trade
06/07/2017
Australia’s trade and investment relationship with the United Kingdom

GYNGELL, Mr Julian, Principal, Kepdowrie Chambers

[12.22]

CHAIR: Thank you very much for appearing before us. We appreciate it. Do you have any comment to make on the capacity in which you appear?

Mr Gyngell : I established a law firm about 12 or 13 years ago called Kepdowrie Chambers, and I am also a director of a company called the Adept Trade Group, which itself is an Australia-UK joint venture. You might be able to tell from my voice that I spend a lot of time in England. I was born there, but I have spent most of my life in Australiahalf my working life probably in London, half my working life in Sydney.

The invitation to attend today came through the Australian British Chamber of Commerce. I have to add, though, that that was just passed on to me. I do not come here to represent, quite frankly, anybody. I do not represent a stakeholder. I do not represent the ABCC. I represent probably more just myself, in the sense that probably 30 per cent of my practice involves UK-based companies setting up here in Australia. I do not represent my clients in that sense. When I got this invitation from the ABCC, I thought I would jot down almost like a wish list: if there were half a dozen, 10 things, that I thought I could delve back into my files and say, 'Wouldn't it be nice if these 10 things were either improved or solved.'

CHAIR: Thank you. Someone with your experience

Mr Gyngell : It is almost like a brain dump in that sense. In that regard I have spent probably the last 12 years working very closely with what is now called DIT, Department for International Trade, formerly called UKTI. I have a couple of very good contacts within that organisation. Again I am not here as a mouthpiece for DIT. As I said I am simply downloading information.

It might sound defensive but I am not a politician, I am not an economist and I am not an academic. I say that purely to recognise that, on certain things that I might say to you, you are going to say, 'That just doesn't add up economically, it's not politically feasible,' or whatever. You have to then factor in the fact that my skillset is as a lawyer, but a lawyer who spends most of his time negotiating agreementsalbeit not FTAs, but negotiating big deals and very small ones.

I think the most valuable part of my contribution, if it is characterised as valuable, is that most of the companies that set up over here that are in my filing cabinet, as it were, are SMEs. By definition, if you have a FTSE 100 company in London, they are not going to come to a small firm like Kepdowrie Chambers. They either have their own massive internal resources or they are going to be using Mallesons or KPMG.

Again that slightly defines my window onto the client base in the SMEs in the UK. I am the local Australian director for about 25-plus Australian subsidiaries of UK-based companies. That is partly because of the requirement that one has to have a resident Australian. It is a good thing. It is not just about me being there as a silent director and exposing my insurance certificate; it is about me recognising that, by being on the board, I have much more visibility. I act as company secretary. I make sure that they comply with ATO requirements. That is by way of making sure that they engage a good accountant who does their BAS returns and that sort of stuff.

When I looked at your terms of reference I dissected that, perhaps because I am a lawyer, and identified four elements. I think that is relevant in terms of what I am going to say, in that, because I am a lawyer and I dissected it as four elements, certain things will be more relevant to one or the other aspects of the terms of reference. I will list them as I saw them: likely impact of Brexit, (1); whether Australia should pursue a trade agreement with the UK, (2); what the main barriers to trade are, (3); and what role the federal government can play to help grow export-import opportunities, (4).

Some of the things I am going to say probably do not fall within, for example, No. 2 and the FTA. The evidence of the people I have heard before me and the questions I have heard have been very FTA-focused. Some of my comments will go more to what barriers to trade are. They may not be solved under an FTA. I can see that there might be ad hoc solutions for certain things. If it is part and parcel of an FTA, though, so be it. The process does not worry me, or what form the agreement takes, whether it is called an FTA or just fixing things. So I will get on with it.

CHAIR: Bravo, Mr Gyngell. We are looking forward to hearing this.

Mr Gyngell : I will start with what I have got. I am a lawyer. I can talk forever!

Mr PERRETT: We don't charge.

CHAIR: We're not paying today, Mr Gyngell!

Mr Gyngell : Touché! Bring in the damages writ! What is the likely impact of Brexit? Considerable, already. The pipeline that I call my practice, or the pipeline of work that is referred to me and actually materialises into a client, or more broadly just from the interest level shown, I would have thought that DIT, or UKTI as it was, probably introduced me to a client or a potential client once a month going back. Since Brexit, it is probably getting close to one a week.

That does not mean they all translate into clients. Some of them, being SMEs, are dipping their toe in the water. Some of them make the analysis that they do not want to go ahead. Sometimes it is because of the things I have come up with. Some of them are just slow. It is difficult to predict the conversion of that pipeline into actual clients, looking at it from my point of view. But in answer to the question: what is the likely impact of Brexit? It is considerable.

That almost answers the next question: should Australia pursue a trade agreement with the UK? We absolutely must pursue one. As with any agreement I negotiate with the counterparty, that doesn't mean you reach one. Sometimes when you reach onealmost always when you reach oneone recognises that the whole nature of an agreement is that certain aspects will be more in your favour and some aspects will be less in your favour. I am not trying to teach you to suck eggs, but at the end of the day you don't do a bad agreement just to have an agreementthere is the recognition that the nature of an agreement is give and take. No genius there!

In regard to that statement about pursuing a trade agreement with the UKI know there was a question about whether it should be the UK or Europe, or in which batting orderI don't have a strong view. I don't know enough about the EU side of things. My experience has been almost exclusively with UK-based companies. But, in answering the question about whether one should pursue the agreement, my note here is that it is almost a no-brainer: why wouldn't Australia and the UK leverage their underlying historical, cultural, political, legal, commercial, social and sporting similarities, traditions and rivalries, assuming that Cricket Australia can sort out the Ashes?

CHAIR: Yes.

Mr Gyngell : So there is already a very high level of cooperation, whether you look at the Five Eyes relationship at the security levelyou will have more examples than I will. Already fundamental building blocks are in place at so many different levels, such as sporting. Great Britain has what is called its GREAT initiative. So X, Y, Z is GREAT Britain, sport is GREAT Britain, technology is GREAT Britain. It is a marketing throwaway line, but it works. Under that banner of 'GREAT', I am just downloading something that I saw on what's called the BBN. I am also a member of the BBN, the British Business Network. They sent me an email the other day: 'The UK government network in Australia is working together with local businesses, including but not limited to sports, science, technology and health sector companies as well as government, universities. There will be plenty of opportunities for BBN members to be involved over the coming years.' So there is already a high level of this integrationusing that word slightly broadlyand then also recognising that in my area of the law many things are already very similar: setting up a company, directors and shareholders. You go through the same process at ASIC as you do at Companies House in Cardiff.

With intellectual property, one of my key subjects, it is very, very similarpartly driven by the fact that intellectual property is part of the GATT under WTO. But general commercial law and corporate law is based on the same principles, and no surprise there. At the end of the day, Australia, or the colonies, inherited their laws when Captain Cook planted the flag—or was it Captain Phillip?

Mr PERRETT: In August 1770. It was an island up in the Torres Strait.

CHAIR: Keep going, Mr Gyngell.

Mr Gyngell : In answer to whether you should pursue, my submission would be that inevitably one should at least pursue. The main barriers to trade, and I can be a lot more succinct here, are distancebut we can't do anything about thatand then two words that I have already heard used a couple of times by the previous speakers: a lack of harmonisation and mutual recognition at the macro level. I will comment on the micro issues. What role the federal government can play is item 4 in the terms of referenceI will come to that with my wish list in a few minutes. I also recognise as part of the process that in what I am going to say I am acutely aware of very significant advances. So when I make my suggestions I am not ignoring things like the recent changes to FIRB. I am not discounting, for example, the progress made on joining the UN Convention on the Use of Electronic Communications. That would be a good thing. It is all in the right direction. Whether that is part of FTA or whether it is just part of a WTO thing, I don't mind about the process.

I'll get onto my wish list. As a high-level statement, I don't think one should have to be embarrassed about making the assertion that if you come to an FTA, and I think clause 1 of most FTAs states this, the two countries, or if it is multilateral more, will accord MFNmost favoured nationstatus. Now, to me, to translate 'most favoured nation status' into the real world means without shirking whatsoever from the statement 'positive discrimination'. If one is going to accord MFN status, then to turn that almost rhetoric into reality we have to say: 'We have to have positive discrimination in favour of that country, which may mean that we treat that country better', whichever one it is, not in the nasty discriminatory way that the word 'discrimination' sometimes gets used, but in a positive way, and accepting that there will be many more success stories in reality than the headline grabbing negative stories, because newspapers are newspapers.

I will start with a really frustrating thing, which is so trivial, but so annoying. When I register, here in Australia, an Australian company which is a wholly owned subsidiary of the English parent company, not surprisingly the English parent company that is giving me the instructionslet's say it is called Joe Bloggs Limitedwant their Australian subsidiary to be called 'Joe Bloggs Pty Ltd'. I fill in all the forms, good old form 201. They get submitted to ASIC. The software that ASIC uses unilaterally decides that I got it wrong. It decides that what I really meant to say was that the parent company was the Australian company. So it decides that the shareholder of the Australian company is Joe Bloggs Pty Ltd, which of course it can't be. I have had this discussion so many times with people on the phone at ASIC. Somebody from corporate relations, or customer relations, got back to me and insisted that this was not a fault in the software; it had been designed this way. Therefore it wasn't a fault. It was a little bit Kafka-esque.

CHAIR: Unbelievable.

Mr Gyngell : That means nothing more than a half-hour phone call from me to ASIC. Problem solvedexcept that the records are there. The Australian company goes to Westpac or whatever to try and open a bank account, to get on with doing business and can't do so because Westpac says, 'What the hell's going on here? You cannot have yourself as your own shareholder.' So by the time ASIC corrects the problemnot just my phone call, but actually corrects it, and their records show up and another search is donethe company wanting to get up and running and starting—and the key thing is opening a bank account—is delayed by 72 hours. At the end of the day, it gets solved.

CHAIR: Does that happen every time?

Mr Gyngell : Every time, to the point now where I always encourage my client not to choose. Call yourself 'Joe Bloggs Australia Pty Ltd' and then it won't happen. But, because the 'Joe Bloggs', the substantive part of the name, is identical to the English limited company, the software just cannot cope. So I did write to the commissioner. I am not trying to get him into trouble or anything like that. I have now resigned myself to set up the company and I'll make the phone call immediately after the ACN comes through. But it is getting a little tedious, and involves, as I say, for me a half-hour phone call. It delays the banks and it delays the process of getting an ABN. Hopefully, that's the most trivial of what I am going to say.

Mr PERRETT: It starts with a cowboy message, doesn't it? It starts with a hick message.

Mr Gyngell : It means that I should apologise to my client and convince them that I didn't stuff up, but that this is a problem which I will solve for them immediately

CHAIR: I imagine you are also not working for 25 bucks an hour either, so it adds to the cost of doing business in Australia for your potential client because you have had to spend hours sorting out

Mr Gyngell : A problem. The other thing is the local director issue. I don't mind being the local director of the Australian companies. But it is a problem for some companies because they don't necessarily want me there on the board. They are very happy for me to be their external lawyer. I can understand their thought process. I say, 'Make sure, for heaven's sake, that you have at least two people in the UK. You can't have any thought of me having signing authority on your bank account; I will be as silent as I can. But on the other hand, if I am a director, guess what? I am a lawyer; I know what director responsibilities are. I have to have some visibility of what's going on.' I think that's actually a good thing, because then when I am doing a marketing speech it means that I insist on them appointing accountants to make sure that their tax obligations are always met, that they don't get behind with BAS, and all that sort of thing. So from that point of view I personally don't really mind, but it is an issue for some overseas companies that they have to appoint a director who is a bona fide resident here, ordinarily resident. I just wonder whether there could be some other designated officer-type approach, some sort of local person, who doesn't necessarily have personal liability but is, nonetheless, a point of contact. That might come up better in the context of a point I am almost coming to, which is more an integration point. I understand, obviously, why ASIC needs a local person, but does that local person have to have the full responsibilities of directorship and exposure to insolvent trading and exposure to tax, when the reality is that the person in question is unlikely to have the capacity to meet any financial obligation in that respect? If I am a director and my company lets me down, at the end of the day the ATO is just going to make me bankrupt. I don't think that addresses the real problem of havingresponsibility, yes, but perhaps not the same degree of liability. There should be some sort of almost acknowledging the existence of a silent director, and the fact that that person shouldn't have the same exposure.

My next point was to consider withholding tax. For my clients, withholding tax is just an administrative hassle. At the end of the day, if there is withholding tax and it is held back here then it is rubbed offso it is a cashflow issue, I accept. But the admin associated with it is a significant overhead for the sorts of companies that I deal with, as smaller companies, and perhaps there just needs to be a threshold there.

Audit requirements is another slightly funny one. I am not an accountant, but if my Australian company client is a subsidiary of a UK company, then it is required to be audited. However, if my Australian company, the offshore shareholders, are individuals in the UK, perhaps the founding shareholders of the UK company, then there is no requirement for an audit. I don't know the reason behind the distinction, but I know it is a distinction. There are costs, again, associated with an audit as opposed to simply filing financial statements. Again, I just pass on that that is a very frustrating overhead, especially when some of my UK clients might take some considerable timeeven up to a yearto really put runs on the board. Yet at the end of the first year they have to be audited. A couple of times they have written back and said: 'Nil'. But an auditor has to sign off on that. So that is immediately $3,000 or $4,000great for auditors because they just write 'Nil'. They charge $3,000 for satisfying themselves that the answer is 'Nil'. Again, perhaps it is a threshold thing.

Mr PERRETT: Rather than minimal activity, there should be some activity, perhaps.

Mr Gyngell : Like a GST. I don't think you need to register for GST until you get to $70,000. There is a threshold. What the threshold is, I am not sure. But that mandatory audit requirement for a company that hasn't traded? Sometimes companies come in thinking that they have won this big order, won a big contract, and it might evaporate. Again, I am not having a go at the public sector, but sometimes, especially in the public sector, there is a delay for whatever good reason, or bad reason, and suddenly

CHAIR: We understand.

Mr Gyngell : Suddenly the income is not there and you are going to be audited just to tell ASIC that nothing happened.

Bank accounts also cause a bit of a frustration. I understand everything to do with the requirements of proof of identity, know your customer, anti-money laundering and all of those good things, especially in the day and age that we exist in.

Mr PERRETT: Your Medicare card as well.

Mr Gyngell : Most of my clients will have bank accounts opened with the equivalent of what they call 'high street banks' over there: Barclays, Lloyds, Midlandnot Midland anymoreHSBC and Westminster. If that process in the UK has been satisfiedtheir proof of identity, know your customerthen cannot Westpac or whoever it is here simply be able to liaise with the counterpart bank? They have already gone through the process there. They have gone through having to show certified copies of various things.

I think that comes back almost to one of my first mutual recognition points: given that the processes in the UK are so similar and we are governed by APRA herethe Prudential Regulation Authority quite rightly regulates the banks and financial institutions hereAPRA's counterpart in the UK, I would argue, does exactly the same and just as good a job. If I cannot make that statement, let us find out if that is the case. If it is the case that they are achieving the same ends, then do we have to do it twice, as it were? Can there at least be some mutual recognition which speeds up the process here?

Of course one has to do one's due diligence. I am not trying to push every pommy company into Australia through a very simple back door but if they have already gone through that door in the UK and we are satisfied that it is the same doorthis is a terrible analogydo we need to push them through a bigger door here?

My next item on the listI will get to the end of thisis grants and assistance. Obviously that is one area that comes under the heading 'What can the federal government do?' if we are looking at the area of positive discrimination. Should there be consideration of positive discrimination in favour of Australian companies benefitting from UK grants and vice versa? I can give you a couple of examples but I think I will move on.

Enhanced consular support is the next one. I heard somebody else mention that there was a question about what more could Australia House possibly be doing? Most of my clients come through, as I say, UKTI, now called DIT, rather than through Austrade. That might be just an accident. But I perceive that UK-based companies do not know about Austrade. I think there is a lack of awareness of the services that Austrade offers. The contact that I have had with Austrade has been in Singapore, Japan and London. I just think that the individuals that I have dealt with have been fantastic. There is no doubt about that. But awareness

CHAIR: That is more by accident than by design.

Mr Gyngell : I did not pick the individuals I dealt with, no. I am applauding the individuals and the service that they provide in the countries where I have worked with Austrade. But with UK-based companies, there is not a general awareness of the services that Austrade and the consular support at Australia House on the Strand provide. I do not think there is a general awareness. If I mention it, it will always be, 'That's a good idea. I'll give them a call.' It is that sort of thing. Perhaps it is just a bit of marketing and, again, even facilitating that, perhaps with that process of getting an ABN, being the port of call to submit documents to get an ABN, or going through proof of identity processes. I have certainly said to clients, when they are going to pay a visit out here, 'Don't forget to go into the Commonwealth,' or, 'Don't forget to go into the ANZ. Get all of that stuff out of the way as quickly as you can, and 'have somebody cite your passport.' Perhaps that could happen as a one-stop shop at Australia House.

As a specific example of something that I probably have already mentionedit seems to me that I mentioned it in the context of opening bank accounts and whether or not there could be more mutual recognition thereI just wonder whether there could be a process whereby the ATO here and HMRC over there were able to exchange information in such a way that again one did not have to repeat the exercise. If we are happy that the process used by Companies House in Cardiff to set up a company there is essentially the same as with ASIC here, then can we streamline the mutual recognition or cooperation process, which we rightly have to go through, by having more communicationand perhaps this results in a sort of an MOU rather than as part of an FTAcooperation and assistance being provided by the same sorts of institutions? Australia and the UK have very similar regulatory institutions, very similar parliaments and it seems we are perhaps re-inventing the wheel. With some countries we have to because there is no real reciprocity, there is no basis for mutual recognition. But if any country in the world would satisfy that I would have thought that the UK

Mr PERRETT: This is the positive discrimination.

Mr Gyngell : That is right, the positive discrimination, exactly. I do not know how much time I have got.

Another one isI think I have heard this beforestandards and regulations. Again it includes harmonisation. I will give you two examples of positive discrimination and mutual recognition.

When a company lists here in Australia it obviously has to go through the ASX listing rules. When a company lists on the London Stock Exchange it goes through the LSE listing rules. The reality is that the listing rules here and the listing rules there are in fact very different and the documentation that you have to submit is quite different. It achieves the same end: transparency, I guess, and investors knowing what they are getting into. But that whole thing does double the cost. I am not suggesting that we change our rules just to be consistent with the UK. I think that would be a very significant task. It might be on the cards, because you could take the view that their listing rules are in fact better than ours. But there is a real philosophical economic debate about that.

But it comes back to this: if a UK-based company has achieved or satisfied the listing rules there, should we have to go through the same process here if we are satisfied that the process there is robust and produces a reliable enough outcome? We should recognise that but also recognise the other way around, that an Australian company that has gone through our listing rules should have mutual recognition for what it has done here to satisfy the ASX that it is a reputable company and has the requirements to meet the ASX listing rules. Otherwise you are doubling the cost from the point of view of dual listing.

Almost exactly the same comment can be made about franchising. Quite a number of people that did not turn into clients were franchisors in the UK. The way that franchising is regulated in the UK is robust, like ours is

Mr PERRETT: Sorry, franchisors in the UK?

Mr Gyngell : Franchisors, absolutely, yes, franchisors in the UK who have gone through the process of compliance with the regulatory requirements in the UK, then have had to go through a different regulatory process here. But the processes are again aimed at the same outcome, that is, to make sure that the franchisors do not rip off the franchisees, franchisees have visibility of what they are getting into, a bit like investors into companies. The objective there is the same but the process is very different.

I know from personal experience one very large coffee shopit is not a coffee shop, it is a franchise of many, many, many coffee shops that unfortunately we did not get the benefit of herewhich remained in the UK because they just said, 'Stuff it. We are not going to do it all over again. We are not going to have to duplicate the regulatory compliance which seems to just ramp up all the time.'

But then I looked at things like Hypercat, all focused on the internet. How is that described? It is a consortium and standard which describes itself as 'driving secure and interoperable Internet of Things'. That is all good smart city stuff, and that is great, and those sort of initiatives I applaud. I am just trying to get a balance on what I am saying here. More Hypercats.

I am onto my last page. Labelling and packaging is next. I suspect that I am not the first person to say, 'Wouldn't it be great if we could just harmonise that so that you didn't have to reprint your labels and your packaging for the different markets?' Again, if we are satisfied that the labelling requirements in the UK are sufficient and do the job that we would expect of them to inform customers, health warnings are appropriate and those sort of things, do we not either literally harmonise them, make a determined effort to bring them absolutely into line with the two countries, or again go for the mutual recognition that we are satisfied that in any event nobody reads the damn thing anyway?

Mr PERRETT: Bring back the fluid ounces, is that what you are saying?

Mr Gyngell : I understand fluid ounces better than I

CHAIR: Country of origin.

Mr LITTLEPROUD: That would make it somewhat difficult, I would suspect, considering our consumers would want to know

CHAIR: Especially what is on the sticker.

Mr Gyngell : Do they really want to know? I never read any of those things.

CHAIR: Yes they do.

Mr PERRETT: I can tell you our Australian farmers want it too.

Mr Gyngell : Within the area of health, I imagine that must be the case. It is that sort of alleged useful consumer information about how much sugar or carbohydrate or something like that.

CHAIR: We are with you on that one. It is not the same.

Mr Gyngell : It is those little labels that you have to print up just for the Australian market which say that it is 1.1 grams as opposed to 1.0 grams. Perhaps it is a very personal thing, as I never read them.

Therapeutical goods approval process is the next. Again we have got our TGA; they have got their FDA. If we are happy that the FDA is doing an appropriate job to achieve the outcomes, and they are happy that our TGA does the same thing, that is mutual recognition, positive discrimination. Food safety might be a subset of that. It is the same principle. I will not labour it.

I think the previous speaker spoke well and truly about visas, and I just nodded at everything that he said about the visa approval process. Again I am not being political about what happened in April. It would have been a point that I would have made anyway regardless of what the changes to 457 are. There is no doubt that the key and fundamental requirement to have key people on the ground as soon as possible just comes across so often.

In fact, I spent close to two hours between six and eight o'clock last night with somebody in the UK, a person on my team who does visas. We were trying to work out how best to comply with the laws insofar as we know them and the process of getting 400 or 457 visas. It is not my specialty at all. I do not do it. That is why I have a visa person. But the email that came through from this new client said, 'We have a very urgent time constraint. We have been asked to provide services as soon as possible to' blank 'and are keen to get a visa for an employee as soon as possible to ensure we don't lose the contract.' Given what the previous speaker said about the project that he was referring to in Canberra, I have got a feeling it might be the same project. Anyway, it is a project. It is a large infrastructure transport project in Canberra. That project is

CHAIR: Canberra is not that big; so it must be the same project.

Mr Gyngell : It is wanting a particular person with a particular skillset, which at the moment can only be found in the UK. They want him by 1 August. The bottom line last night was, 'That is going to be challenging'. Again there is a positive discrimination situation there.

One of my friends actually said to me when I said I was going to appear here, 'Make sure that we get a dedicated channel at Heathrow so that I do not have to queue up with the others.' I will leave that one. I will move quickly on from that one.

Changing subject quite a bit, I turn to dispute resolution. One thing that obviously does happen between companies is that they get into a dispute, and it would be very helpful if I could say there is a dedicated Australia-UK dispute resolution tribunal or process, because by definition we are not just different countries we are a long, long way apart. You often get involved in a dispute as part of the drafting of an agreement: which country should have jurisdiction? Where are we going to fight, if we are going to fight? People are right to think that one outcome of this could be a dispute, there could be litigation. That is not something you can just sweep under the carpet. Usually in the agreements I draft, you have a jurisdiction clause, you have a dispute resolution mechanism. It would be very nice, just as a message, just to say: 'And guess what? There is a dedicated UK-Australia dispute resolution tribunal which understands the fact that the laws are very similar, that the processes are very similar.' If one could just badge that, it would be a great marketing opportunity. Perhaps it is a private sector solution rather than a public sector solution. Perhaps it is part of an MOU as part of an FTA. It is just an idea.

Finally, existing resources are very significantexisting resources in the sense that I am a member of the BBN here, the British Business Network. That is just a bunch of ex-Poms thrown together, but work out here in Australia, who are willing to give half an hour or an hour of time to a UK-based company who just wants to ask a few questions and wants a few war stories. There is no charge for our time whatsoever. It is just a way of, especially for SMEs, not having to incur two hours of legal expenses, accounting expenses or anything like that. I think the BBN here started about two years ago. We are all volunteers in that sense. I do not even knowperhaps I am already preaching to the convertedis there an ABN? Is there an Australian business network of Aussies anywhere around England who have been brought together? This is all under the British Consulate, by the way. This is all under DIT and the British Consulate. I think there is one full-time equivalent who runs us, as it were, who sends us newsletters and facilitates where a UK company picks up the phone and says, 'We would really like a word with somebody in the aviation industry,' and there is somebody in the aviation industryor somebody in the tourist industry.

Mr PERRETT: Does business often flow from that?

Mr Gyngell : Absolutely. It then turns into business in due course, sometimes.

CHAIR: Mr Gyngell, your understanding is there is not an equivalent in Britain, an Australian business network of Australians domiciled over there offering free info?

Mr Gyngell : That is my understanding, but I would not be in a position to know. If I went back to London the chances are

CHAIR: No, we can ask.

Mr Gyngell : somebody might ring me up and say, 'Hey, you are part of the BBN. Would you like to be part of an ABN?' The DIT has already tried to harness the resources of the Australian British Chamber of Commerce to provide assistance. You have the UK-ASEAN Business Council. I will not labour this point. It is just that there are quite a number of resources available in the UK that I think could be better harnessed and for free, if one joined up some of those resources. We are not trying to reinvent any of them. We are not trying to ask them to do anything more than they already do in some respectsjust that there be a coordinator of it and to make it more visible in terms of market awareness. Those are my thoughts.

Mr PERRETT: Thank you, Mr Gyngell; that is very helpful evidence. I have a couple of questions. Can you tell me about those SMEs? Generally, what are they? What areas are they in?

Mr Gyngell : Sure.

Mr PERRETT: I am sorry; these are the clients

Mr Gyngell : They are UK based. I have three main portholes into UKTI, now DIT. One is the guy down in Melbourne who heads up their IT side of things. He is my main contact. The truth is that an awful lot of them are IT companiesin the broad church of IT; in the broad church of technology, shall we say. The particular individual at DIT in Melbourne looks at the smart city side of things. A preponderance of my UK clients are in the IT sector, but I also have good contacts with a guy who runs the DIT's food and beverage sector. There are a couple of West Country cider importers

Mr PERRETT: Is that where the coffee

Mr Gyngell : Actually, the coffee was nothing to do with that. That was a previous contact, a mate of mine who is a partner in a law firm in London. It was a complete coincidence with the coffee thing.

So it is food and beverage, clothing and, believe it or not, office furniture. If I looked right across, it is actually a pretty good spectrum representative of industry but probably heavily weighted to a broad church of technology companies, and in particular these days, IT service providers rather than softwareand also multimedia companies, digital agency companies, are coming in and doing our websites for us.

Mr PERRETT: The flipsidedo you ever help Australian companies going that way?

Mr Gyngell : I do, but the reality is mostly in the sense of referring them on to a law firm or accountants over there. Although I do have dual qualifications, I think it would be silly for me to try to be their English lawyer.

Mr PERRETT: You channel them.

Mr Gyngell : It is referring them to mates, my previous partners at the law firms that I worked for in London.

Mr PERRETT: In terms of your very extensive listbank account directors, global directors et ceterado you know of countries that have such arrangements in a bilateral sense, leaving aside the EU?

Mr Gyngell : No. I would assume that if we do not with the UK we probably do not with anybody. If anybody is the likely starting point, I suppose you could say it is the US. But it all comes back to that point that there are so many similarities across the board that you can imagine that many countries would not pass that threshold of confidence in their underlying systems. I am not being nasty. I am not going to pick on any particular country. You would have to go for Western or, obviously, First World countries, one would assume, as the short list. If we do not have that with the UK then I cannot imagine

Mr PERRETT: I was just thinking that our doctors can almost close one hospital door and open another one in the other country. I think with our lawyers there is a bit of constitutional law and a few other things. Our engineers can go back. There are many things that we do with the UK. I am just trying to think of any other countriesmaybe the US and Canadathat have anything like these sorts of arrangements. I am not sure whether NAFTA extends

Mr Gyngell : You could not even generalise about Commonwealth countries. With accountants and engineers and other professions and skilled trades, it is probably easier for them than lawyers. The qualification process as between Australia and EnglandI had to do that cross-qualificationdid not involve doing much, but it did involve doing three or four exams for me to get requalified.

Mr PERRETT: Considering they may not be as familiar with our Constitution as they should be, even though they created it. Who would have thought?

Mr Gyngell : I do not think it is a constitutional issue. It is just a Law Society thing.

Mr PERRETT: The Constitution is an act of the British Parliament.

CHAIR: But our Constitution has been constructed through a range of forums

Mr PERRETT: Yes, but it was passed in the British

CHAIR: of Australians as part of that process.

Mr Gyngell : We wrote it.

CHAIR: They did not create it; they enacted it.

Mr Gyngell : My understanding of the history is that around 1890-something a couple of people were tasked to write the Constitution and they wrote

Mr PERRETT: It was a bit before

Mr Gyngell : There was no Constitution because before that we were colonies. We did not have a Constitution.

Mr PERRETT: I was wondering: where does our Prime Minister keep his moneythe Caribbean?

Mr LITTLEPROUD: The Caymans.

Mr PERRETT: The Caymans. I was wondering about the first one you mentionedbank accounts and whether there are directors. There must not be a lot of Cayman Island lawyers like you

Mr Gyngell : If my clients start mentioning the Cayman Islands or Panama, I just say it does not pass the sniff test to me.

Mr PERRETT: Okay. Switzerland? There must be other more reputable places that have worked out these challenges that we can learn from.

Mr Gyngell : I see where you are goingwhether there is a precedent to look to. I am not aware of one. My practice has been very much Australia and England, England and Australia.

Mr PERRETT: That is fine. They are great ideas, great initiatives.

CHAIR: Thank you very much for the benefit of your evidence.

Mr Gyngell : Thank you for your time.

CHAIR: We really appreciate the very practical solutions that you have been able to put forward to us. If we have any questions on notice we might be in touch further. Thank you very much, Mr Gyngell.

Proceedings suspended from 13:09 to 13 : 46