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Competition and Consumer Amendment (Payment Surcharges) Bill 2015

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2013-2014-2015

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

Competition and Consumer Amendment (Payment Surcharges) Bill 2015

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

(Circulated by the authority of the

Treasurer, the Hon Scott Morrison MP)

 



Table of contents

Glossary.............................................................................................................. 1

General outline and financial impact............................................................ 3

Chapter 1               Ban on excessive payment surcharges........................... 5

Chapter 2               Statement of Compatibility with Human Rights............ 17

Index................................................................................................................. 21

 

Do not remove section break.



 

The following abbreviations and acronyms are used throughout this explanatory memorandum.

Abbreviation

Definition

ACCC

The Australian Competition and Consumer Commission

ACL

Australian Consumer Law

the Bill

Competition and Consumer Amendment (Payment Surcharges) Bill 2015

CC Act

Competition and Consumer Act 2010

ICCPR

International Covenant on Civil and Political Rights

the Inquiry

Financial System Inquiry

PSR Act

Payment Systems (Regulation) Act 1998

RBA

The Reserve Bank of Australia



 

Overview

Schedule 1 to the Competition and Consumer Amendment (Payment Surcharges) Bill 2015 (the Bill) amends the Competition and Consumer Act 2010 (CC Act) to establish a legislative and regulatory framework to ban surcharges imposed in respect of particular payment methods that exceed the cost of acceptance for those payment methods. The amendments will apply to excessive surcharges in respect of payments covered by a Reserve Bank standard or by regulations made for this purpose. Surcharges will be excessive where they exceed the permitted amount specified in the Reserve Bank standards or in the regulations.  

The amendments also ensure that the Australian Competition and Consumer Commission (ACCC) is the primary enforcement agency for the ban and that it has appropriate powers of enforcement.

Date of effect : The amendments will commence on the day the Bill receives Royal Assent. However, the provisions will have substantive effect only on the making of a new Reserve Bank standard or regulations that set out the permitted surcharge for a payment method.

Proposal announced : The Government announced on 20 October 2015 its intention to introduce this ban on excessive card surcharging as part of the Government’s response to the Financial System Inquiry (the Inquiry).

Financial impact Nil.

Human rights implications :  This Bill does not raise any human rights issue. See Statement of Compatibility with Human Rights — Chapter 2.

Compliance cost impact There is no regulatory compliance cost associated with this Bill.



Chapter 1          

Ban on excessive payment surcharges

Outline of chapter

1.1                   This Chapter provides an overview of the Bill and describes how the legislative and regulatory framework of the ban on excessive payment surcharges will be implemented.

Context of amendments

Policy background

1.2                   The payments system plays a vital role within the financial system in facilitating transactions between parties in effective and efficient ways.

1.3                   The Reserve Bank of Australia (RBA) has wide-ranging powers in the payments system as set out in section 10 of the Payment Systems (Regulation) Act 1998 (PSR Act). This includes the setting of a Reserve Bank standard on payment systems designated by the RBA for regulation.

1.4                   The RBA has designated the eftpos (debit and prepaid), MasterCard and Visa (credit, debit and prepaid) and American Express companion cards payment systems under the PSR Act. There are other payment systems that have not to date been designated, including American Express and Diners Club proprietary cards, amongst others. American Express and Diners Club have provided voluntary undertakings to the RBA to comply with existing Reserve Bank standards on surcharging.

1.5                   The Reserve Bank standards apply to the designated payment systems and cover a range of aspects including interchange fees and merchants’ card surcharge arrangements. For instance, under the Reserve Bank standard on merchant pricing, regulated payment system may not prevent merchants from imposing a surcharge on customers who pay with credit cards. American Express and Diners Club have voluntarily undertaken not to prevent merchants from imposing charges on customers who pay with their cards.

1.6                   The Reserve Bank standards allow card payment systems to limit a merchant’s surcharge to ‘the reasonable cost of acceptance’, which includes - but is not limited to - the merchant service fee that the merchant pays to its financial institution. Limits on surcharges are established by the rules of any card payment system that chooses to adopt them, though the Reserve Bank standards do not oblige the card payment systems to alter their rules to limit surcharges, or to enforce rules that are in place.

1.7                   Throughout the Financial System Inquiry (the Inquiry), the community expressed significant concern that certain surcharges being imposed were at times far in excess of what could be fairly considered to be the costs to merchants of accepting cards. There were in excess of 5000 submissions on credit card surcharging. Most of the submissions called for surcharges to be banned. Some industry submissions noted the important role surcharging could play in accurately reflecting the costs faced by merchants in accepting certain high-cost payment methods.

1.8                   The Government, in its response to the Inquiry’s recommendations on interchange fees and customer surcharging, agreed to take action to improve interchange fee and surcharging arrangements to achieve a more efficient system and deliver fairer outcomes for consumers, merchants and system providers.

1.9                   The amendments contained in this Bill will enhance transparency for consumers and improve price signals on payment method costs, helping consumers to understand the costs of competing payment methods and encouraging the use of the most efficient methods of payments.

1.10               The measure will also ensure that any cases of excessive surcharging can be readily addressed by the ACCC which will be the primary enforcement agency for the ban.

1.11               Under the CC Act as it currently stands, there is no specific prohibition against excessive surcharging. However, there are existing provisions that prohibit false and misleading misrepresentations. The amendments will complement these existing provisions of the CC Act.

Summary of new law

1.12               The amendments set up the legislative and regulatory framework to ban excessive card surcharging and establish the ACCC as the primary enforcement agency for the ban. It does this by inserting a new Part IVC into the CC Act.

1.13               Payment surcharges will be excessive where:

•             the surcharge is for a kind of payment covered by:

-                a Reserve Bank standard; or

-                regulations made for the purposes of the ban; and

•             the amount of the surcharge exceeds the permitted surcharge referred to in the Reserve Bank standard or the regulations.

Comparison of key features of new law and current law

New law

Current law

Excessive surcharging by merchants - where the additional cost passed on is above the merchant’s cost of acceptance of the payment method - will be banned.

The ACCC will be the primary enforcement agency for the ban.

The permitted surcharge will be set in most cases by the RBA but by regulation if necessary in relation to payments systems that are not covered by an RBA standard.

Excessive surcharging by merchants may be (and usually is) prevented under contractual arrangements between payment systems and merchants, but are not banned by law.

The RBA has sole responsibility for:

-          designating a particular payment system as being subject to RBA regulation; and

-          setting standards and rules for participation in the payment system.

 

Detailed explanation of new law

1.14               With a view to ensuring that surcharges imposed for using particular payment methods do not exceed the cost of accepting payment by that means, the Bill inserts a new Part IVC in the CC Act which:

•             prohibits charging excessive payment surcharges; and [Schedule 1, item 3, Part IVC, Division 2, CC Act]

•              provides the ACCC additional powers to gather information and issue infringement notices in enforcing the ban on excessive surcharges. [ Schedule 1, item 3, Part IVC, Division 3, CC Act] [Schedule 1, item 3, Part IVC, Division 4, CC Act]

1.15               Section 6 of the CC Act currently extends the application of parts of the CC Act to persons who are not corporations in reliance of the Commonwealth’s constitutional powers in relation to trade and commerce and other powers. Section 6 is amended to similarly extend the application of the CC Act in reliance on the Commonwealth’s constitutional powers in relation to postal, telegraphic, telephonic and other like services for the purposes of the new Part IVC of the CC Act. As a result the ban on excessive surcharging will apply to both corporations as well as certain persons who are not corporations where the payment surcharge was charged for processing a payment by means of an electronic communication (or similar) means and in the other relevant circumstances specified under section 6. [Schedule 1, item 2, subsection 6(2E), CC Act]

1.16               The extension is facilitated by adding a definition of electronic communication to section 4 of the CC Act to clarify that these communications by means of guided and/or unguided electromagnetic energy should be considered an ‘other like service’ for the purposes of the CC Act, and in particular for subsection 6(2E). [Schedule 1, item 1, subsection 4(1), CC Act]

Excessive payment surcharging

1.17               The Bill amends the CC Act to include a ban on excessive surcharging. This will allow the ACCC to take action against corporations (and others specified under subsection 6(2E) of the CC Act) that engage in excessive surcharging. [Schedule 1, item 3, Part IVC, Division 1, CC Act]

1.18               The amendments to the CC Act include an overview of the object of the new Part IVC. The object reflects that the aim of this legislation is to prevent excessive surcharging while recognising the important role that appropriate surcharges plays in effective price signalling - informing consumers about the relative costs of particular payment methods. [Schedule 1, item 3, section 55, CC Act]

1.19               A ‘listed corporation’ is given the same definition as used in the Corporations Act 2001 . It means a body corporate that is included in an official list of a prescribed financial market. [Schedule 1, item 3, section 55A, CC Act]

1.20               A payment surcharge means:

•             an amount charged, in addition to the price of the goods or services, for processing payment for the goods or services; or

•             an amount (however described) charged for using one payment method rather than another.

1.21               The definition is split into two self-contained subparagraphs so as to maximise coverage and minimise avoidance.  The intention is to capture payments that are, in substance, imposed as a result of the use of a particular payment method. Paragraph (a) refers to charges “for processing payment”.  This term intends to cover merchants’ processes surrounding card acceptance, including the process of incurring costs for accepting cards. For example, if a merchant charges a 2 per cent surcharge for use of a particular payment method, and this is expressed or implied to be compensation for the cost of accepting the card, then the 2 per cent surcharge is ‘for processing payment’ and is a payment surcharge within paragraph (a).

1.22               Paragraph (b) of the definition of ‘payment surcharge’ is intended to extend the definition to include charges that may be described in a way that implies they are unrelated to particular payment methods, but in substance are so related.  For example, if charges described as ‘booking’, ‘service’, or ‘transaction’ fees are in substance imposed as a result of the payment being made by card rather than an alternative payment method such as cash or direct debit (as would obviously be the case if they applied to card payments but not those other payment methods), they are intended to be caught by the ban. If on the other hand, additional fees are applied equally regardless of payment method used, and do not purport to be for the purpose of compensating for the cost of payment acceptance, they are not properly ‘payment surcharges’ and are not intended to be caught.  Uniform ‘add-on’ payments such as these will remain subject to other consumer protection action to the extent that they breach misleading and deceptive conduct or other consumer protection provisions (see for instance, section 48 of the Australian Consumer Law (ACL)). [Schedule 1, item 3, section 55A, CC Act]

1.23               Similarly, if a merchant offers two alternative payment methods and the price of the underlying good or service using the cheapest method is $100, while the price using an alternative method is $110, then the merchant has charged a payment surcharge under subparagraph (b) of the definition, and the amount of the surcharge is $10.

1.24               Reserve Bank standard means a standard determined under section 18 of the PSR Act. Under this section, the RBA has the power to impose an access regime on a payment system and to establish standards to be complied with by participants in the system. These standards are then published by the RBA. The RBA has indicated that it will be consulting on standards to operate for the purpose of this law. The relevant standards for the purposes of the ban will be those made by the RBA after the commencement of the Bill. [Schedule 1, item 3, section 55A, CC Act]

1.25               Subsection 55B(1) in Division 2 of Part IVC bans excessive payment surcharging. It contains two elements. A corporation in trade or commerce makes an excessive surcharge if:

•             it imposes a ‘payment surcharge’ (as defined in section 55A); and

•             that payment surcharge is excessive (as defined in subsection 55B(2)). [Schedule 1, item 3, section 55B, CC Act]

1.26               The definition of ‘excessive’ makes clear that the ban in subsection 55B(1), will only apply in respect of payments covered either by a Reserve Bank standard or through regulations. The ability to add payment methods by regulation provides an alternative avenue for extending the ban, in the event that there are significant concerns about surcharging on payment methods that are not directly covered by a Reserve Bank standard. This will also give flexibility to the legislation as new and innovative payment methods emerge. [Schedule 1, item 3, paragraph 55B(2)(a), CC Act]

1.27               The RBA will undertake its normal process in determining which schemes should be designated through the Payments System Board. The RBA has also entered into undertakings with a number of card schemes in relation to surcharging matters. The legislative ban on excessive surcharging is expected to have flow-on effects on merchant behaviour in respect of surcharging on cards in those schemes. However, in the event that excessive surcharging practices arise outside designated schemes, the RBA could be expected to consider explicit designation of those schemes. Alternatively, regulations could be made to cover those schemes.

1.28               A surcharge will be excessive if, and only if, that surcharge exceeds a level for surcharging permitted under either a Reserve Bank standard which covers the kind of payment (as set out in subparagraph 55(2)(a)(i)) or else set out in the regulations. For instance, if a Reserve Bank standard refers to some fixed amount for a particular payment method, or to a specific range of input costs, the amount of the payment surcharge must not exceed the amount stated or calculated as the permitted surcharge. [Schedule 1, item 3, paragraph 55B(2)(b), CC Act]

1.29               The ban on excessive payment surcharges will not apply to a corporation which is exempted from the operation by a specific regulation. This will give flexibility to remove doubt in cases where a price or charge may inadvertently be caught as a payment surcharge, but where this result is not intended. [Schedule 1, item 3, subsection 55B(3), CC Act]

Surcharge information notices

1.30               Division 3 of Part IVC gives a power to the ACCC to collect information and/or documents from a party likely to possess information and/or documents around either the amount of the payment surcharge or the cost of processing a particular payment. Section 55C sets out information about the surcharge information notice :

•             the form and content of the notice; and

•             the parties to whom a notice can be issued. [Schedule 1, item 3, section 55C, CC Act]

1.31               Surcharge information notices may be issued to any surcharge participant . This has been defined so as to capture entities at various stages in processing a payment and is designed to be broader than simply the merchant at point of sale who applies the surcharge. For instance, it is envisaged that the ACCC could issue a notice to a merchant’s financial institution (an ‘acquirer’) for relevant information about the fees charged by the acquirer to a merchant. [Schedule 1, item 3, subsection 55C(2), CC Act]

1.32               A recipient of a surcharge information notice may apply for an extension to provide surcharge information within 21 days of being given the surcharge information notice. The ACCC may extend the period for providing information by giving notice in writing. [Schedule 1, item 3, section 55D, CC Act]

1.33               The Bill creates an offence of strict liability for a failure to comply with a surcharge information notice issued under section 55C. The penalty is set at 30 penalty units (presently $5,400). These penalty amounts are in line with penalty amounts applied under the ACL for similar offences. To ensure timely compliance with the ACCC’s request it is appropriate that these offences exist without the need to prove intent on the part of the surcharge participant issued with the notice. Overarching natural justice protections, as well as Criminal Code provisions around voluntariness, will apply in cases where it is impossible for the notice to be complied with, including in cases where the surcharge participant does not possess and cannot obtain the information requested. [Schedule 1, item 3, section 55E, CC Act]

Infringement notices

1.34               Division 4 of Part IVC provides the ACCC with the power to issue infringement notices in relation to the ban on excessive surcharging. This power is consistent with the ACCC’s existing powers to issue infringement notices in relation to the ACL. The use of infringement notices will supplement the other enforcement powers included in the Bill. [Schedule 1, item 3, Part IVC, Division 4, CC Act]

1.35               The capacity to issue an infringement notice is not intended to amount to the imposition of a financial penalty by the ACCC. It is intended, instead, to provide a mechanism through which a person who, in the opinion of the ACCC, has contravened the new section 55B of the CC Act may forestall an application to the courts by the ACCC for judicial relief, including for an order under section 76 of the CC Act for the payment of a pecuniary penalty.

1.36               Infringement notices allow the ACCC to take action against minor breaches of the provisions more efficiently and effectively than through court action alone, and provide the potential for a speedier resolution of matters than is possible through the courts (although this would depend on the complexity of each matter).

1.37               For infringement notices relating to those alleged contraventions of section 55B, the infringement notice amounts are:

•             600 penalty units (presently $108,000) for listed corporations;

•             60 penalty units (presently $10,800) for bodies corporate that are not listed corporations; and

•             12 penalty units (presently $2,160) for persons other than bodies corporate. [Schedule 1, item 3, section 55J, CC Act]

1.38               These penalty amounts are in line with the penalty amounts applied under the ACL set out in section 134C of the CC Act.

1.39               Compliance with an infringement notice brings the process for enforcing the alleged contravention to an end after its administrative phase. Compliance with an infringement notice is not taken as an admission of liability or a contravention of the CC Act. Furthermore, if a person complies, they are not liable to be subject to further civil or criminal proceedings in relation to the alleged contravention. [Schedule 1, item 3, section 55K, CC Act]

1.40               An infringement notice does not give rise to an enforceable requirement to pay the penalty. If a person does not comply with the infringement notice within the period of time specified, the ACCC cannot enforce the infringement notice itself. Instead the ACCC may bring proceedings against the person in relation to the same alleged contravention under section 76, but not for the failure to pay the penalty in the infringement notice. [Schedule 1, item 3, section 55L, CC Act]

1.41               The ACCC will have the ability to extend the infringement notice compliance period . The infringement notice compliance period is initially 28 days. However, the ACCC may extend the infringement notice compliance period for a further period of 28 days. [Schedule 1, item 3, section 55M, CC Act]

1.42               The ACCC may withdraw an infringement notice if it considers it appropriate, by written notice to the person. The mechanism under which an infringement notice can be withdrawn is set out in the new section 55M. [Schedule 1, item 3, section 55N, CC Act]

Amendments of the CC Act consequential on new ACCC powers

Enforcement and penalties

1.43               Part VI of the CC Act deals with enforcement and remedies. Subsection 75B(1) of the CC Act provides that a reference in Part VI to a person involved in a contravention of certain other provisions within the CC Act shall be read as a reference to a person who has been involved in the contravention, for example, by aiding, abetting, being knowingly concerned or conspiring in the contravention. Subsection 75B(1) is amended so that it applies in relation to a contravention of section 55B.  [Schedule 1, item 4, subsection 75B(1), CC Act]

1.44               Subparagraph 76(1)(a)(i) of the CC Act is amended to provide that a contravention of section 55B will attract effectively similar penalties as a contravention of the prohibition on false or misleading representations in section 29 of Schedule 2 to the CC Act. Contravention of section 55B will incur maximum pecuniary penalties of 6,471 penalty units (presently $1,164,780) for a body corporate and 1,295 penalty units (presently $233,100) for a person that is not a body corporate. [Schedule 1, item 5, subparagraph 76(1)(a)(ia), CC Act] [Schedule 1, item 6, paragraph 76(1A)(ba), CC Act] [Schedule 1, item 7, paragraph 76(1B)(aa), CC Act]

1.45               The levels of pecuniary penalties also reflect the seriousness of the contraventions and represent clear and strong, though proportionate, disincentives for non-compliance. The effectiveness of the new prohibitions hinges on the ability to deter, and where necessary enforce, contraventions. Further, these penalty amounts are in line with the penalty amounts under the ACL for a wide range of contraventions, including false and misleading representations.

Civil remedies

1.46               Subsection 80(1) of the CC Act states who may apply for injunctions, and in what circumstances. Paragraph 80(1)(a) is amended so that an injunction may be granted if the Court is satisfied that a person has engaged, or is proposing to engage, in conduct that constitutes or would constitute a contravention of section 55B. [Schedule 1, item 8, subparagraph 80(1)(a)(iia), CC Act]

1.47               Section 82 of the CC Act currently provides that a person who suffers loss or damage by conduct of another person done in contravention of various provisions the CC Act may recover that amount against any person involved in a contravention. Subsection 82(1) of the CC Act is amended to apply it in relation to section 55B. [Schedule 1, item 9, subsection 82(1), CC Act]

1.48               Section 83 of the CC Act provides that findings of fact in which a person has been found to have contravened or been involved in a contravention of certain provisions of the CC Act is prima facie evidence of that fact for the purposes of section 82 proceedings. Section 83 is amended to apply it in relation to section 55B. [Schedule 1, item 10, section 83, CC Act]

1.49               Subsection 84(1) of the CC Act provides for the state of mind of a body corporate to be established by reference to the state of mind of a director, employee or agent of the body corporate in certain circumstances. Subsection 84(1) of the CC Act is amended to apply it in relation to section 55B. [Schedule 1, item 11, paragraph 84(1)(b), CC Act]

1.50               Subsection 84(3) of the CC Act makes a person vicariously liable by imputing the state of mind of an employee or agent to the person in certain circumstances. Subsection 84(3) of the CC Act is amended to apply it in relation to section 55B. [Schedule 1, item 11, paragraph 84(3)(b), CC Act]

1.51               Section 86 of the CC Act relates to jurisdiction of the courts and confers jurisdiction for matters for certain civil procedures and other matters under the CC Act on the Federal Circuit Court and on the several courts of the States and of the Territories (subject to the Constitution). Subsections 86(1A) and 86(2) are amended to apply give jurisdiction to these courts in relation to section 55B. [Schedule 1, items 12 and 13, subsections 86(1A) and 86(2), CC Act]  

1.52               Section 86A of the CC Act relates to the transfer of certain matters from the Federal Court to a State or Territory Court. Section 86A of the CC Act is amended to allow for the transfer of proceedings relating to section 55B. [Schedule 1, item 14, paragraph 86A(1)(b), CC Act]

1.53               Section 86C of the CC Act provides for the Court to impose an order to undertake a community awareness program, publish an advertisement, attend trade practices awareness training or implement a trade practices compliance program. Section 86C is amended so that these types of non-punitive orders are available as a remedy for a contravention of section 55B. The amendments expressly provide that a community service order or a probation order is not available as a remedy for either of these new sections. [Schedule 1, item 15, subsection 86C(4), CC Act]

1.54               Section 87 of the CC Act confers a wide power on the Court to make remedial orders in appropriate cases relating to conduct engaged in contravention of certain provisions in the CC Act. Section 87 is amended to apply in relation to section 55B. [Schedule 1, items 16 to 18, section 87, CC Act]



Chapter 2          

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Competition and Consumer Amendment (Payment Surcharges) Bill 2015

2.1                   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

2.2                   Schedule 1 to the Bill amends the CC Act to establish a legislative and regulatory framework to ban surcharges imposed in respect of particular payment methods that exceed the cost of acceptance for those payment methods. The amendments will apply to excessive surcharges in respect of payments covered by a Reserve Bank standard or by regulations made for this purpose. Surcharges will be excessive where they exceed the permitted amount specified in the Reserve Bank standards or in the regulations. 

2.3                   The amendments also ensure that the ACCC is the primary enforcement agency for the ban and that it has appropriate powers of enforcement. Human rights implications

Right to Privacy

2.4                   The Bill may marginally engage the right to privacy under Article 17 of the International Covenant on Civil and Political Rights (ICCPR). Article 17 prohibits unlawful or arbitrary interferences with a person’s privacy. It provides that persons have the right to the protection of the law against such interference. An interference with privacy will not be arbitrary if it is not inconsistent with the provisions, aims and objectives of the ICCPR and reasonable in the circumstances. Reasonableness, in this context, incorporates notions of proportionality to the objectives sought to be achieved.

2.5                   The Bill gives the power to the ACCC to issue information notices on corporations involved in payment processing (Schedule 1, item 3, Division 3, Part IVC, CC Act). Failure to comply with an information notice gives rise to an offence of strict liability. The information and/or documents provided under these notices are necessary to determine whether a surcharge has been excessive, in so far as it is greater than the costs of accepting that payment.

2.6                   To the extent that an individual’s right to privacy is affected by the Bill, the impact is not arbitrary. It is reasonable, necessary and proportionate to the achievement of the legitimate objectives of banning excessive surcharging of consumers.

Civil Penalties

2.7                   The Bill introduces a new section which prevents a corporation from making excessive payment surcharges (Schedule 1, item 3, section 55B, CC Act). The existing pecuniary penalty regime (section 76 of the CC Act) is modified so that it applies to contraventions of this prohibition (Schedule 1, items 5, 6 and 7). While the prohibitions are directed at corporations, rather than individuals, individuals could become liable for a pecuniary penalty either through the operation of section 6 of the CC Act (Schedule 1, item 2), which extends the operation of the CC Act to individuals in the circumstances described in that section, or on the basis that the individual has aided or abetted a corporation’s contravention of these prohibitions (paragraph 76(1)(c); paragraphs 76(1)(d) and (e) might also be relevant). It is not anticipated that the direct extension of the prohibitions to individuals through the operation of section 6 of the CC Act will be significant.

2.8                   Pecuniary penalties are civil, rather than criminal penalties, and the civil standard of proof applies. Having regard to the nature and severity of the penalty, however, it is accepted that the penalties should be regarded as criminal penalties for the purposes of human rights law, including Article 14 of the ICCPR.

2.9                   Article 14(2) of the ICCPR provides that a person is entitled to be presumed innocent until proved guilty according to law. Ordinarily, this would require that the case against the person be demonstrated to the criminal standard of proof. The criminal standard of proof is not applied in relation to pecuniary penalty proceedings. Nevertheless, this is compatible with Article 14(2) because the pecuniary penalty provisions have a long and well-litigated history, and it has not been shown that the failure to apply the criminal standard of proof has resulted in injustice. Indeed, the courts have on numerous occasions indicated that the gravity of the allegations being tested in the court will be taken into account, and that the graver the allegation, the greater the strictness of proof that will be required. In particular, more than just ‘inexact proofs, indefinite testimony or indirect references’ will be required.

2.10               In any event, the pecuniary penalty provisions are directed primarily at corporations, rather than individuals. If it is unnecessary to apply the criminal standard of proof in relation to corporations, it would be inappropriate to apply a different standard of proof to individuals, who would ordinarily only be liable to the extent that they had aided or abetted the contravening conduct of a corporation.

2.11               It is also relevant that the pecuniary penalty provisions are but one of a number of enforcement provisions provided in the CC Act, which include infringement notices (Schedule 1, item 3, Division 4, Part IVC, CC Act), injunctions (Schedule 1, item 8, section 80, CC Act), non-punitive orders (Schedule 1, item 15, section 86C, CC Act) and compensation orders (Schedule 1, items 16, 17 and 23, section 87, CC Act). The amendments made by the Bill tap into the existing pecuniary penalty regime, and do not create a new regime.

2.12               Article 14(3)(g) of the ICCPR provides that a person has the right “not to be compelled to testify against himself or to confess guilt” in criminal proceedings. Nothing in the Bill is inconsistent with this requirement, including the information notice provisions. Notwithstanding the requirement under the new section 55D, an individual would be excused from giving information or producing a document on the ground that the information or document might tend to incriminate the individual or expose the individual to penalty under overarching Common Law and statutory principles.

2.13               Article 14(7) of the ICCPR provides that no one is to be liable to be tried or punished again for an offence of which she or he has already been finally convicted or acquitted. Nothing in the Bill is inconsistent with this requirement. In particular, criminal proceedings cannot be brought for substantially the same conduct that gave rise to the civil proceedings.

Conclusion

2.14               The Bill is compatible with human rights because the only potential limitations on human rights that the Bill imposes relate to the right to privacy and criminal process rights and they are reasonable, necessary and proportionate in achieving the Bill’s legitimate policy objective of banning excessive payment surcharging.



 

Schedule 1: Amendments

Bill reference

Paragraph number

Item 1, subsection 4(1), CC Act

1.16

Item 2, subsection 6(2E), CC Act

1.15

Item 3, Part IVC, Division 4, CC Act

1.14

Item 3, Part IVC, Division 2, CC Act

1.14

Item 3, Part IVC, Division 3, CC Act

1.14

Item 3, Part IVC, Division 1, CC Act

1.17

Item 3, section 55, CC Act

1.18

Item 3, section 55A, CC Act

1.19, 1.22

Item 3, section 55A, CC Act

1.24

Item 3, section 55B, CC Act

1.25

Item 3, paragraph 55B(2)(a), CC Act

1.26

Item 3, paragraph 55B(2)(b), CC Act

1.28

Item 3, subsection 55B(3), CC Act

1.29

Item 3, section 55C, CC Act

1.30

Item 3, subsection 55C(2), CC Act

1.31

Item 3, section 55D, CC Act

1.32

Item 3, section 55E, CC Act

1.33

Item 3, Part IVC, Division 4, CC Act

1.34

Item 3, section 55J, CC Act

1.37

Item 3, section 55K, CC Act

1.39

Item 3, section 55L, CC Act

1.40

Item 3, section 55M, CC Act

1.41

Item 3, section 55N, CC Act

1.42

Item 4, subsection 75B(1), CC Act

1.43

Item 5, subparagraph 76(1)(a)(ia), CC Act

1.44

Item 6, paragraph 76(1A)(ba), CC Act

1.44

Item 7, paragraph 76(1B)(aa), CC Act

1.44

Item 8, subparagraph 80(1)(a)(iia), CC Act

1.46

Bill reference

Paragraph number

Item 9, subsection 82(1), CC Act

1.47

Item 10, section 83, CC Act

1.48

Item 11, paragraph 84(1)(b), CC Act

1.49

Item 11, paragraph 84(3)(b), CC Act

1.50

Items 12 and 13, subsections 86(1A) and 86(2), CC Act

1.51

Item 14, paragraph 86A(1)(b), CC Act

1.52

Item 15, subsection 86C(4), CC Act

1.53

Items 16 to 18, section 87, CC Act

1.54