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Export Control Amendment (Quotas) Bill 2015

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2013-2014-2015

 

The Parliament of the

Commonwealth of Australia

 

HOUSE OF REPRESENTATIVES

 

 

EXPORT CONTROL AMENDMENT (QUOTAS) BILL 2015

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

This Bill is circulated by authority of the Hon. Barnaby Joyce MP,

Minister for Agriculture and Water Resources

 

EXPORT CONTROL AMENDMENT (QUOTAS) BILL 2015

General outline

Where export tariff rate quotas are established by trade agreements Australia seeks to manage the quotas in order to offer exporters the maximum concessions possible on agricultural products . For example, eight new quotas introduced under the Japan-Australia Economic Partnership Agreement saved exporters approximately $3 million in tariffs in the period January to May 2015. 

Australia administers quotas in a way that:

·                      minimises market distortion from quota administration

·                      minimises regulatory intervention and barriers to exporting

·                      optimises the commercial value and use of the quota

·                      ensures consistent, transparent and efficient administration

·                      considers commercial arrangements, and

·                      rewards market development.

The Bill consolidates four Acts that govern tariff rate export quotas into one Act that covers all commodities. The Bill enables the Secretary to make orders providing for, or in relation to, the establishment and administration of a system, or systems, of tariff rate quotas for the export of goods. Orders may be made to cover goods currently subject to quota regulation but could cover any other goods that quotas may apply to in the future. 

The Bill provides the ability for the Secretary to make directions in relation to matters covered by an order. Directions provide flexibility to deal with complex situations relating to an individual exporter in a fair and transparent manner. The amendments enable the directions to override an order. This is consistent with subsection 17(4) of the Australian Meat and Live-stock Industry Act 1997 which provides that if a direction given by the Secretary is inconsistent with an order, the direction prevails.

Exporter participation in a scheme of tariff rate quotas is voluntary. However, an exporter’s failure to comply with an order or direction would be a relevant factor in the use of the Secretary’s discretion under an order in respect of quota entitlements, certificates, conditions, audit and reporting requirements. 

The Bill also introduces new powers consistent with contemporary, flexible and efficient legislation, such as the use of registers and computer systems to make decisions under a system of tariff rate quotas.

The Bill will facilitate reduction in red tape in accordance with the Government’s election commitments. Bringing regulation of quotas under the same legislation as other export controls of the same commodities will offer opportunities for synergies in deployment of staff. It will also enable a consistent approach to appointment of third parties as authorised officers where permitted by importing countries. 

The Bill will commence on Royal Assent except for repeals of existing regulation of quotas under the Australian Meat and Live-stock (Quotas) Act 1990, the Australian Meat and

Live-stock Industry Act 1997
and the Dairy Produce Act 1986 . This allows for all existing quotas to run their course under current legislative arrangements before being phased out and orders under the new powers to commence. The existing legislation governing quotas is repealed later on 1 January 2017.

Consultation with stakeholders has determined that a comprehensive quota regime is preferred to the existing commodity specific regimes.

The Bill complements the government’s strategic approach for capturing premium markets outlined in the Agricultural Competitiveness White Paper and builds on the gains from recent free trade agreements with our major trading partners.

Financial impact statement

This Bill has no financial impact.



 

Statement of Compatibility with Human Rights
 Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
 
 Export Control Amendment (Quotas) Bill 2015 
 
 This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
 
 Overview of the Bill
 This Bill amends law relating to export quotas and related purposes to:
 • amend the Export Control Act 1982 to provide the Secretary with powers to make orders providing for, or in relation to, the establishment and administration of a system or systems of tariff rate quotas 
 • enable the Secretary to make directions in relation to matters covered by an order, and to override the order
 • introduce new powers consistent with contemporary, flexible and efficient legislation
 • repeal existing regulation of quotas under the Australian Meat and Live-stock (Quotas) Act 1990, the Australian Meat and Live-stock Industry Act 1997 and the Dairy Produce Act 1986.
 
 Human rights implications
 This Bill does not engage any of the applicable rights or freedoms.
 
 Conclusion
 This Bill is compatible with human rights as it does not raise any human rights issues.
 
 The Hon. Barnaby Joyce MP, Minister for Agriculture and Water Resources
  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 



NOTES ON ITEMS

Clause 1           Short title

Clause 1 provides that the Act is cited as the Export Control Amendment (Quotas) Act 2015 .

Clause 2          Commencement

Clause 2 provides a schedule for commencement.

The heads of power to make orders are to commence on Royal Assent and the repeals of existing regulation of quotas occurs on 1 January 2017. This allows for all existing quotas to run their course under current legislative arrangements before being phased out and orders under the new powers to commence.

The repeal contemplated by Schedule 1 Item 7 also commences on Royal Assent for the reasons set out under the explanation for that item.

Clause 3          Schedules

Clause 3 enables Schedule 1 to have effect.

 

Schedule 1 Amendments

 

Part 1 Tariff rate quota amendments

Export Control Act 1982

Item 1             Section 3 (definition of order )

Item 1 amends the definition of ‘order’.

This change is to ensure that prohibitions and permissions in subsections 25(3) to (9) of the Export Control Act 1982 (Act) apply to the new orders made under section 23A (which is under the Act rather than regulations). 

It will also ensure that the Secretary can delegate powers under the new section 23A orders under section 19 of the Act. It is intended that the Secretary will be able to delegate his or her powers to make orders under new section 23A and delegate the Secretary’s powers under the order to an authorised officer. This is because section 19 extends to all powers under the Act (which is defined to include regulations, which is defined to include orders). 

This is an existing set of powers under the Act which is intended to apply in relation to the new quotas scheme so that the department can administer export control in a consistent way across all importing country requirements. It will also enable a consistent approach to appointment of third parties as authorised officers where permitted by importing countries.  It is a key element of the capacity of these amendments to facilitate red tape reduction.

Item 2                         23A   Tariff rate quota systems

Item 2 introduces a new section 23A.

Section 23A introduces a new comprehensive scheme of regulation of export tariff rate quotas. It has been included as a separate section to limit its interaction with other provisions of the Act and to make it clear that it does not affect the other regulation of the same goods under the Act.

The section provides the Secretary with the capacity to create orders providing for, or in relation to, the establishment and administration of a system or systems of tariff rate quotas for the export of goods.  This is similar to the arrangements which currently govern meat quotas under the Australian Meat and Live-stock Industry Act 1997

The note clarifies that the orders may make different provisions for, or in relation to, different classes of goods in accordance with subsection 33(3A) of the Acts Interpretation Act 1901 .

The amendments allow any order to establish and administer quotas, irrespective of their complexity and origin. The matters which may be provided for in the order are as follows.

(a)     Determining the amount of tariff rate quota for the export of goods for a period. The order will define quota amount by reference to the relevant international instrument where needed, allowing for periodic increases in quota. It could also limit the amount available under the relevant international instrument to a defined period, such as a quarter.

(b)    Methods for determining tariff rate quota entitlements. This will enable market specific systems that may differ across commodities. It also does not limit the methods that can be used. It could include first come first served, allocation (based on shipping history, proportional shares or some other basis), auction, sale or lot.

(c)     Establishing and maintaining a register of tariff rate quota entitlements. It is intended that this would be accessible to exporters in respect of their own entitlements much like they would access information held in their bank account. There are certain elements of the register which could be made available to all exporters, such as the entities holding quota to facilitate trading in quota entitlements. A list of entitlement holders of quota is currently published on the Department of Agriculture and Water Resources website for this purpose.

(d)    Surrender, transfer, variation, and cancellation of tariff rate quota entitlements. These matters are currently provided for under sections 27 and 28 of the Australian Meat and Live-stock Industry Act 1997 .  They provide necessary flexibility to manage quotas.

(e)     Issuing and cancellation of tariff rate quota certificates.  These documents are issued in respect of an export consignment to facilitate its entry under the relevant concessional tariff rate applicable to the quota.

(f)     Imposition of conditions including variation and cancellation of conditions. This is consistent with existing subsection 6(4) of the Australian Meat and Live-stock (Quotas) Act 1990 and subsection 28(2) of the Australian Meat and Live-stock Industry Act 1997 . The conditions might be imposed in relation to quota entitlements, use of quota entitlements or quota certificates. The generic reference to conditions is intended to cover all these types of conditions but ensures applicable conditions are not unintentionally limited.

(g)    Auditing and reporting requirements. This enables requirements for exporters to be audited and report on their usage of quota to enable a transparent and accountable quota management system.

(h)    The use of computer programs for making decisions. This power is based on the powers set out in subsections 280(6) and (7) of the Biosecurity Act 2015 . It will enable quota decisions and certificates to be issued at times and in ways that are convenient to exporters while still enabling government control and oversight of the process.

(i)      The review of decisions. This could provide for a range of review mechanisms such as internal review or review by the Administrative Appeals Tribunal.  Under subsection 25(8) of the Act an order shall be deemed to be an enactment for the purposes of the Administrative Appeals Tribunal Act 1975

Subsection 3 enables the Secretary to make a direction to be complied with by a particular person or body in relation to a matter covered by an order.  This power is based on section 17 of the Australian Meat and Live-stock Industry Act 1997 that currently applies in relation to meat quotas. Directions provide flexibility to deal with complex situations relating to an individual exporter in a fair and transparent manner.

Subsections 4 and 5 make it clear which instrument made under the Act prevails.  Subsection 4 is consistent with subsection 17(4) of the Australian Meat and Live-stock Industry Act 1997 which provides that if a direction given by the Secretary is inconsistent with an order, the direction prevails. Subsection 5 is consistent with paragraph 25(2)(h) of the Act which limits the Secretary’s power to make orders to those consistent with the regulations and the Minister’s orders. 

Subsection 6 is included to assist readers, as the direction is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003 .

The ability to impose fees in respect of functions carried out under an order or direction have not been provided for here as they are provided for through regulations made under  paragraphs 25(2)(d) or 25(2)(daa) of the Act.

There is no provision in the section to allow for civil penalties or offences for failure to comply with an order or direction. This is consistent with the voluntary nature of an exporter’s participation in the tariff rate quota scheme. However, an exporter’s failure to comply with an order or direction would be a relevant factor in the use of the Secretary’s discretion under an order in respect of quota entitlements, certificates, conditions, audit and reporting requirements. For example an order may provide for consequences of non-compliance by providing for cancellation of certificates or loss of entitlements if a person does not comply with a direction.

Item 3                         Section 25 (heading)

Item 3 repeals the heading for section 25 and substitutes a new heading ‘25 Regulations and orders’.

This item is consistent with the change to the definition of ‘order’ described under Item 1.

Item 4             After paragraph 25(5)(ab)

Item 4 introduces a new paragraph 25(5)(abb).

Paragraph 25(5)(abb) enables references to instruments or written materials in orders and directions created under section 23A to apply as in force from time to time. Relevant international instruments can change over time and this facilitates appropriate compliance with these requirements without further amendments to the order or direction where these requirements are referenced. Participation in the tariff rate quota scheme is voluntary and there is no requirement for an exporter to obtain the certificate in accordance with these requirements. 

Item 5             At the end of section 25

Item 5 adds a note at the end of section 25.

The note explains that subsections 25(3) to (9) applies to orders made under section 23A of the Act.

 

Part 2 Consequential amendments

Australian Meat and Live-stock Industry Act 1997

Item 6                         Section 3 (definition of quota )

Item 6 repeals the definition of quota.

Following the repeals there will no longer be regulation of quota under the Australian Meat & Live-stock Industry Act 1997 .

Item 7                         Subparagraph 17(3)(c)(i)

Item 7 omits the words ‘otherwise than in accordance with a quota’ from subparagraph 17(3)(c)(i).

At present an order made under section 17 of the Australian Meat and Live-stock Industry Act 1997 cannot require payment of a fee relating to the export of a consignment under a quota. This is because cost recovery for a quota is currently regulated in accordance with section 6 of the Australian Meat and Live-stock (Quotas) Act 1990 section 28 of the Australian Meat and Live-stock Industry Act 1997.

The phrase ‘otherwise than in accordance with a quota’ is removed to enable fees in respect of issuing quota certificates under section 17 orders. These fees will be imposed in accordance with the changes to quota cost recovery arrangements set out in the Food Export Cost Recovery Statement.  Once the quota has transitioned to an order under section 23A of the Act the same cost recovery regime will apply under that legislation. From 1 January 2017 there will no longer be quota management under the Australian Meat and Live-stock Industry Act 1997 .

Item 8                         Division 3 of Part 2

Item 8 repeals the Division regulating meat export quotas.

This repeals regulation of export quotas including establishing a quota, cancellations, licensing and review of decisions. Quotas currently regulated under these provisions will have been transitioned to orders under section 23A of the Act before this Division is repealed.

Dairy Produce Act 1986

Item 9                                     Part V

Item 9 repeals the Part regulating export control of regulated dairy produce.

This repeals the head of power for the current regulation of dairy quotas under the Dairy Produce Regulations 1986 . Quotas currently regulated under these provisions will have been transitioned to orders under section 23A of the Act before this Part is repealed.

Export Charges (Collection) Act 2015

Item 10                       Section 6 (subparagraphs (a)(ii), (b)(ii), and (c)(ii) of the definition of export control instrument)

Item 10 repeals the subparagraphs and substitutes a new subparagraph regarding ‘orders made under such regulations or that Act’.

The section 6 amendments are consequential on allowing section 23A orders to be made under the Act.

Item 11                       Subparagraphs 12(5)(a)(ii), (b)(ii), and (c)(ii)

Item 11 r epeals the subparagraphs and substitutes a new subparagraph regarding ‘orders made under such regulations or that Act’.

A decision to suspend or revoke an export control instrument under section 12 of the Export Charges (Collection) Act 2015 is subject to internal review by the Secretary under section 17 of the Export Charges (Collection) Act 2015 . This enables a consistent approach to orders made under the Act as orders made under the regulations are export control instruments.

 



 

Part 3 Repeals

Australian Meat and Live-stock (Quotas) Act 1990

Item 12                       The whole of the Act

Item 12 repeals the whole of the Australian Meat and Live-stock (Quotas) Act 1990 .

Quotas currently regulated under this legislation will have been transitioned to orders under section 23A of the Act before this legislation is repealed.

 

Part 4 Transitional rules

Item 13                       Transitional rules

Item 13 enables the Minister to make rules prescribing matters of a transitional nature.

New orders created under section 23A of the Act would apply to export quota markets for quota periods starting after the new order commences.

The instruments repealing the old schemes would deal with any transitional issues from winding up the old schemes. The repeal regulation may need to preserve some of its application after the repeal (for example to ensure that relevant fees are covered).  The transitional provisions in the repeal regulation would be supported by the relevant legislation until it is repealed on 1 January 2017.

If anything is required after the repeal of the relevant legislation, the repeal instruments could not deal with this as the power to make the instrument under the relevant legislation would no longer exist.

This item allows for transitional rules to be made dealing with the repeal of the instrument making powers. 

The powers to create the rules are limited.  As well as the prohibitions in subitem (2), there would be limits on the rules having retrospective effect and textual amendments of the instruments themselves would not be permitted. 

The purpose of delaying the repeals of legislation to 1 January 2017 is to provide sufficient time for appropriate transitional arrangements to be settled and to address complexities that may arise from the gradual transition of quotas to the new scheme as each quota year finishes.