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Customs Amendment (Military End-Use) Bill 2011

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2010-2011

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

CUSTOMS AMENDMENT (MILITARY END-USE) BILL 2011

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

(Circulated by authority of the Minister for Home Affairs,

the Honourable Brendan O’Connor MP)



CUSTOMS AMENDMENT (MILITARY END-USE) BILL 2011

OUTLINE

The purpose of this Bill is to amend the Customs Act 1901 (the Customs Act) to include a power to prohibit the export of “non-regulated” goods that may contribute to a military end-use that may prejudice Australia’s security, defence or international relations.  This power may only be exercised in relation to goods that are not prohibited exports under section 112 of the Customs Act.

The power, to be included in new section 112BA of the Customs Act, will enable the Minister for Defence to prohibit the export of specified non-regulated goods to a particular place or person. In exercising this power, the Minister for Defence must suspect that the goods would or may be used for a military end-use that may prejudice Australia’s security, defence or international relations.  Where the Minister forms such a suspicion, the Minister may issue a prohibition notice preventing the export.

Under new subsection 112E(13), goods are or may be for a ‘military end-use’ if the goods are or may be for use in operations, exercises or other activities conducted by an armed force or an armed group, whether or not the armed force or armed group forms part of the armed forces of the government of a foreign country

These provisions are being included in the Customs Act to reinforce Australia’s export controls, by providing authority for intervention at the border of goods not otherwise regulated, but nonetheless potentially being exported for a military end-use contrary to Australia’s national interest.

This new power is just one in a suite of powers that are designed to strengthen Australia’s Defence Export controls.  The other powers, including controls on the provision of technology and services, and the brokering of goods, technology and services, are included in the Defence Trade Controls Bill 2011.  That Bill will also implement the Treaty Between the Government of Australia and the Government of the United States of America Concerning Defense Trade Cooperation which was concluded in September 2007.

FINANCIAL IMPACT STATEMENT

The Bill has no financial impact.

 

 



CUSTOMS AMENDMENT (military end-use) BILL 2011

NOTES ON CLAUSES

Clause 1 - Short title

This clause provides for the Bill, when enacted, to be cited as the Customs Amendment ( Military End-Use) Act 2011 .

Clause 2 - Commencement

Clause 2 provides that this Act will commence on the day after the Act receives the Royal Assent. 

Clause 3 - Schedule(s)

This clause is the formal enabling provision for the Schedule to the Bill, providing that each Act specified in a Schedule is amended in accordance with the applicable items of the Schedule.  In this Bill, the Customs Act is being amended.

The clause also provides that the other items of the Schedules have effect according to their terms.  This is a standard enabling clause for transitional, savings and application items in amending legislation. 



Schedule 1 - AMENDMENTs

Customs Act 1901

Background

Item 1 - After Division 1 of Part VI

This item amends the Customs Act by inserting new Division 1AA into Part VI.  This new Division in entitled “Export of goods for a military end use”. This new Division is comprised of new sections 112BA and 112BB.

New section 112BA - Notice prohibiting export

New subsection 112BA(1) provides that if:

(a)       the Defence Minister suspects that, if a person (the first person ) were to export particular goods to a particular place or to a particular person, the goods would or may be for a military end-use that would prejudice the security, defence or international relations of Australia; and

(b)       the goods are not prohibited exports under section 112 of the Customs Act;

the Defence Minister may give the first person a notice prohibiting the first person from exporting the goods to the particular place or particular person.

The Defence Minister may issue a prohibition notice if he or she suspects that the export would be contrary to Australia’s security, defence or international relations.  The Minister may consider factors, including but not limited to, whether the export:

(a)    is destined for countries to which the United Nations Security Council has imposed sanctions restricting the sale, supply or transfer of defence or dual-use goods;

(b)    is destined for countries where the goods might be used in a manner contrary to Australia’s international obligations or commitments;

(c)    poses a clearly identifiable risk that the goods would be used to commit or facilitate serious human rights abuses;

(d)    might contribute to instability in the region or aggravate a threat to international and regional peace and security or aggravate the situation in a region which becomes a cause of serious concern;

(e)    might be used in internal or external conflict, or that could further militarise the situation, in the destination country;

(f)     might compromise Australia's wider security interests, its obligations to its allies and friends and its broader international responsibilities;

(g)    is destined for countries with policies or interests which are inimical to the strategic interests of Australia or its friends and allies;

(h)    might adversely affect Australia’s military capability or substantially compromise its operational capabilities or enhance the power projection capabilities of our potential adversaries;

(i)      is destined for countries developing (or suspected of developing) weapons of mass destruction or the means for their delivery, or supporting terrorism, or whose behaviour or foreign policies risk major disruption to global or regional stability;

(j)      might cause adverse reactions by third countries important to Australia, which may affect Australia's interests, in particular, our regional relations; and

(k)     might be used for mercenary, terrorist or other criminal activities.

These factors are consistent with the factors that the Defence Minister considers for an application for the export of tangible Defence and Strategic Goods List goods or technology under the Customs (Prohibited Export) Regulations 1956.

The Minister’s decision to issue a prohibition notice will not be subject to merits review.  This decision making power is personally vested in the Minister due to its highly sensitive nature and the fact that they involve issues of the highest consequence to government.  Such decisions are of high political content and concern Australia's national interest, security and defence and may affect Australia's relationships with other countries.  The approach of excluding this decision from merits review is consistent with the provisions of the Weapons of Mass Destruction (Prevention of Proliferation) Act 1995   where the authority for decisions under that remains solely with the Minister for Defence and is not subject to merits review.

Reasons for notice

New subsection 112BA(2) provides the prohibition notice must include the Minister’s reasons for giving the prohibition notice.  However, if the Minister believes that the disclosure of the reasons would prejudice the security or defence or international relations of Australia, new subsection 112E(3) provides that the reasons must not be disclosed. Where this occurs, the prohibition notice must state that the reasons are not disclosed in the notice.  

 

 

Period notice in force

New subsection 112BA(5) provides that a prohibition notice comes into force at the time that the notice is received by the person.  Under new subsection 112BA(6) ,the prohibition notice remains in force for the period specified in, or worked out in accordance with, the notice unless it is revoked earlier. The notice cannot remain in force for more than 12 months.

Later notice

Under new subsection 112BA(7), a further prohibition notice may be given while the current notice is in force and before the current prohibition notice expires. This later prohibition notice may be expressed to take effect from the date the current prohibition notice expires.  New subsection 112BA(8) makes it clear that subsection (7) does not prevent a notice being given under subsection 112BA(1) after an earlier notice ceases to be in force. 

Notice not a legislative instrument

New subsection 112BA(9) provides that a notice under subsection 112BA (1) is not a legislative instrument within the meaning of section 5 of the Legislative Instrument Act 2003 .  This subsection is merely declaratory of the law and does not operate as an actual exemption from that Act.

Revoking a notice

New subsection 112BA(1) provides that the Defence Minister may, by writing, revoke a prohibition notice given to a person under subsection 112BA(1). The Minister must notify the holder of the notice that is has been revoked, and the revocation takes effect at the time that the revocation notice is received by the person.

New section 112BB sets out a new head of power for supporting Regulations that would prescribe methods by which a notice under new section 112BA can be given and would also prescribe when the prohibition notice or a revocation notice is taken to be received.

Offence

Under new subsection 112BA(12), a person commits an offence if a person exports goods to a particular place or person and the export contravenes a notice in force under subsection 112E(1), and the person knows of the contravention.

This offence will attract a maximum penalty of 2500 penalty units or 10 years imprisonment or both.  This is a significant penalty as the Government considers that this is a serious offence and should attract a commensurate deterrent. These penalties are similar to those that apply under the Customs Act in relation to the exportation of UN-sanctioned goods, and goods on the Defence and Strategic Goods List, from Australia.  UN-sanctioned goods are goods that are the subject of a United Nations Security Council resolution. 

Definition - military end-use

Under new subsection 112BA(13), goods are or may be for a ‘military end-use’ if the goods are or may be for use in operations, exercises or other activities conducted by an armed force or an armed group, whether or not the armed force or armed group forms part of the armed forces of the government of a foreign country.

New section 112BB - How notices are to be given

New subsection 112BB(1) provides that a notice given to a person under section 112BA must be given by one of the methods prescribed by the regulations.  Supporting regulations will be made which would set out the different methods for the purposes of this subsection.

Under new subsection 112BB(2), if a notice is given to a person under section 112BA by one of those prescribed methods, then, for the purposes of the Customs Act, the person is taken to have received the notice at the time prescribed by, or worked out in accordance with, the regulations.  Again, supporting regulations will be made which would set out the times or methods at which a notice is taken to be received.

New subsection 112BB(3) provides that this section has effect despite any provision in the Electronic Transactions Act 1999 .

Item 2 - Subsection 183UA(1)(definition of special forfeited goods)

Item 3- After paragraph 229(1)(n)

Subsection 229(1) of the Customs Act sets out those goods that are forfeited to the Crown for the purposes of the Customs Act. 

Under Part XII of the Customs Act, a warrant can be granted for the seizure of forfeited goods.  However, under subsection 183UA(1) of the Customs Act, certain forfeited goods are defined as ‘special forfeited goods’ , including all prohibited imports and prohibited exports.  If goods are special forfeited goods, they can be seized in a Customs place without a warrant.  “Customs place’ includes all appointed wharves, ports or airports, and all Customs licensed depots and warehouses. 

Item 3 of Schedule 1 to the Bill will add a new class of forfeited goods to subsection 229(1) as new paragraph (na) in the following terms:

“(na) All goods that are the subject of a notice under subsection 112BA(1) and are put on any ship or aircraft for export or are brought to any wharf or place for the purpose of export.”

Therefore, if a notice is in place before the goods are brought to a place of export for the purpose of export, the goods will become forfeited goods.  Also, if goods are at a place of export and the notice is given while the goods are at that place, the goods will become forfeited goods if they are then put on any ship or aircraft for export. 

Item 2 of Schedule 1 to the Bill will add a new category of goods to the definition of ‘special forfeited goods , being the forfeited goods referred to in new paragraph 229(1)(na).  As above, this means that these goods will be able to be seized without a warrant in a Customs place.