Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Customs and Other Legislation Amendment Bill 2016

Bill home page  


Download WordDownload Word


Download PDFDownload PDF

2016

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

HOUSE OF REPRESENTATIVES

Customs and other legislation amendment bill 2016

EXPLANATORY MEMORANDUM

(Circulated by authority of the Minister for Immigration and Border Protection,

the Hon. Peter Dutton MP)



 

Customs and other legislation amendment bill 2016

 

OUTLINE

 

The Customs and Other Legislation Amendment Bill 2016 (the Bill) amends the Customs Act 1901 (the Customs Act) the Commerce (Trade Descriptions) Act 1905 (the Commerce (Trade Descriptions) Act) and the Maritime Powers Act 2013 (the Maritime Powers Act).

 

The Bill amends the Customs Act to:

 

·          Allow the Governor-General to make regulations for the purposes of section 112 to permit the revocation of a licence or permission to export goods if the Defence Minister is satisfied that the exportation of the goods would prejudice the security, defence or international relations of Australia;

·          Remove the requirement in Part XA of the Customs Act that the Comptroller-General of Customs enter into an interim trusted trader agreement with an entity;

·          Allow for the exemption from paying import declaration processing charge;

·          Extend the circumstances in which an application can be made to move, alter or interfere with goods for export that are subject to customs control;

·          Clarify and simplify the provisions concerning the making of tariff concession orders for made-to-order capital equipment;

·          Remove unnecessary and outdated provisions.

 

The Bill amends the Commerce (Trade Descriptions) Act to provide that the regulations made under this Act may prescribe penalties for offences against those regulations.

 

The Bill amends the Maritime Powers Act to confirm that the powers under that Act are able to be exercised in the course of passage through or above the waters of another country in a manner consistent with the United Nations Convention on the Law of the Sea .

 

The Bill repeals the Customs (Tariff Concession System Validations) Act 1999 and the Import Processing Charges (Amendment and Repeal) Act 2002 as these Acts are now obsolete.

 

FINANCIAL IMPACT STATEMENT

 

These amendments will have no financial impact.

 

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

 

A Statement of Compatibility with Human Rights has been completed in relation to the amendments in this Bill and assesses that the amendments are compatible with Australia’s human rights obligations. A copy of the Statement of Compatibility with Human Rights is at Attachment A .



 

CUSTOMS AND OTHER LEGISLATION AMENDMENT BILL 2016

 

NOTES ON INDIVIDUAL CLAUSES

 

Clause 1   Short title

 

1.         Clause 1 provides that the short title by which this Act may be cited is the Customs and Other Legislation Amendment Act 2016 .

 

Clause 2   Commencement

 

2.         Subclause 2(1) provides that each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

 

3.         Table item 1 provides that sections 1 to 3 and anything in this Act not elsewhere covered by this table commencing on the day this Act receives the Royal Assent.

 

4.         Table item 2 provides that Schedule 1 commences on the 28 th day after this Act receives the Royal Assent.

 

5.         Table item 3 provides that Schedule 2 commences on a single day to be fixed by Proclamation. However, if the provisions do not commence within the period of 6 months beginning on the day this Act receives the Royal Assent, they commence on the day after the end of that period.

 

6.         Table item 4 provides that Schedules 3 to 9 commence the day after this Act receives the Royal Assent.

 

7.         The note after subclause 2(1) states that this table relates only to the provisions of this Act as originally enacted. It will not be amended to deal with any later amendments of this Act.

 

8.         Subclause 2(2) provides that any information in column 3 of the table is not part of this Act. Information may be inserted in this column, or information in it may be edited, in any published version of this Act.

 

Clause 3   Schedules

 

9.         This clause is the formal enabling provision for the Schedules to the Bill, providing that each Act specified in a Schedule is amended or repealed in accordance with the applicable terms of the Schedule. This Bill amends the Customs Act, the Commerce (Trade Descriptions) Act and the Maritime Powers Act.

 

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



 

Schedule 1 - Amendments concerning prohibited exports

 

Customs Act 1901

 

11.     The purpose of Schedule 1 of the Bill is to amend section 112 of the Customs Act to provide that the regulations the Governor-General may make prohibiting the exportation of goods from Australia may include the revocation of a licence or permission to export goods if the Defence Minister is satisfied that the exportation of the goods would prejudice the security, defence or international relations of Australia.

 

Item 1                  At the end of subparagraphs 112(2A)(b)(i) and (ii)

 

12.     This is a consequential amendment to item 3 below.

 

Item 2                  At the end of paragraph 112(2A)(b)

 

13.     This item adds new subparagraph (v) at the end of paragraph 112(2A)(b) of the Customs Act.

 

14.     Section 112 of the Customs Act permits the Governor-General to prohibit the exportation of goods by regulation. That power may be exercised by prohibiting the exportation of goods unless certain conditions or restrictions are complied with. Those regulations, which are the Customs (Prohibited Exports) Regulations 1958 (the PE Regulations) may make provision for, and in relation to, matters concerning licences or permissions to export goods.

 

15.     Section 112 of the Customs Act does not currently permit the Governor-General to make regulations providing that a licence or permission may be revoked in circumstances where the Defence Minister is satisfied that the exportation of the goods would prejudice Australia’s security, defence or international relations.

 

16.     The limited scope of this revocation power means that the Defence Minister cannot revoke a permit in circumstances where he or she is satisfied that the exportation of goods would prejudice the security, defence or international relations of Australia.

 

17.     The effect of new subparagraph 112(2A)(b)(v) is that the regulations prohibiting the exportation of goods from Australia, in relation to a licence or permission granted as prescribed by the regulations, may include the revocation of a licence or permission to export goods if the Defence Minister is satisfied that the exportation of the goods would prejudice the security, defence, or international relations of Australia.

 

18.     This amendment aligns with Australia’s participation in the international export regimes of which Australia is a member, and will support Australia’s counter proliferation activities by providing the Defence Minister with the power to revoke permits quickly where he or she is satisfied that the security, defence or international relations of Australia would be prejudiced. This new revocation power will allow regulation 13E of the PE Regulations to be aligned with the revocation powers in other export control legislation, specifically, the Defence Trade Controls Act 2012 .

 

Item 3                  Subsections 112(2AB) to (2AD)

 

19.     This item repeals subsections 112(2AB) to (2AD) of the Customs Act.

 

20.     The effect of these provisions is that if the Defence Minister informs the holder of a licence or permission to export goods that the exportation of specified goods to a specified place is contrary to the national interest, the permission to export those goods is taken to be withdrawn.

 

21.     As a consequence of new subparagraph 112(2A)(b)(v), these provisions are no longer required.

 

Item 4                  Application provision

 

22.     This provision provides that the regulations made for the purposes of new subparagraph 112(2A)(b)(v) of the Customs Act apply in relation to a licence or permission that is granted on or after commencement of the provision, and a licence or permission that was granted before that commencement and was in force immediately before that commencement.

 



23.      

Schedule 2 - Australian Trusted Trader Programme

 

Customs Act 1901

 

24.     The purpose of Schedule 2 of the Bill is to amend Part XA of the Customs Act to remove the requirement that the Comptroller-General of Customs enter into an interim trusted trader agreement with an entity.

 

Item 1                  Subdivision A of Division 2 of Part XA (heading)

 

25.     This item repeals and substitutes the heading of Subdivision A of Division 2 of Part XA of the Customs Act.

 

26.     The new heading clarifies that the purpose of Subdivision A of Division 2 of Part XA is to authorise the Comptroller-General of Customs to enter into trusted trader agreements with entities.

 

Item 2                  Paragraph 176A(1)(b)

 

27.     This item repeals and substitutes paragraph 176A(1)(b) of Subdivision A of Division 2 of Part XA of the Customs Act.

 

28.     The effect of this amendment, together with the repeal of Subdivision B of Division 2 of Part XA of the Customs Act below, is to abolish the current distinction between interim and ongoing trusted trader agreements. That is, it is no longer the case that the Comptroller-General of Customs will enter into an interim trusted trader agreement with an entity under section 176A, and subsequently vary the trusted trader agreement under subsection 177(4) to confer ongoing trusted trader status on the entity. Rather, under proposed new section 176A, the Comptroller-General will simply enter into a trusted trader agreement with an entity if satisfied that the entity satisfies the qualification criteria set out in the ATT rule.

 

Item 3                  Subsection 176A(3)

 

29.     This item repeals and substitutes subsection 176A(3).

 

30.     When the Comptroller-General of Customs varies an interim trusted trader agreement under section 177 to enter into an ongoing trusted trader agreement with an entity, he or she can vary the trusted trader agreement to release an entity from an obligation that it would otherwise be required to satisfy under Part IV or Part VI of the Customs Act, or vary the agreement to allow the entity to satisfy such an obligation in another way.

 

31.     New subsection 176A(3) of the Customs Act essentially replicates current subsection 177(2), but reflects the fact that that the Comptroller-General of Customs can release the entity from an obligation it would otherwise be obliged to satisfy under Part IV or Part VI of the Customs Act, or specify in the trusted trader agreement an alternative way of satisfying that obligation when entering into a trusted trader agreement with an entity. The Comptroller-General of Customs no longer does this when varying the trusted trader agreement to transform an interim trusted trader agreement into an ongoing trusted trader agreement, as interim trusted trader status is abolished by the amendments made by this Schedule.

 

Item 4                  Subdivision B of Division 2 of Part XA

 

32.     This item repeals Subdivision B of Division 2 of Part XA of the Customs Act.

 

33.     New subsection 176A(3) is drafted in similar terms to current subsection 177(2). The effect of subsection 177(2) is that if the Comptroller-General of Customs varies an interim trusted trader agreement, the Comptroller-General of Customs may release the entity from obligation(s) concerning the importation or exportation of goods, or vary the agreement to allow the entity to satisfy the obligation(s) in another way.

 

34.     With the abolition of interim trusted trader status and the authority for the Comptroller-General of Customs to enter into a trusted trader agreement being contained in section 176A alone, the ability of the Comptroller-General of Customs to specify obligations from which the entity will be released, and/or to specify an alternative way in which the entity may satisfy the obligation, is relocated to that section. Subdivision B (which only contains section 177) is no longer required and is, therefore, repealed.

Item 5                  Paragraphs 179(1)(a) and (b)

 

35.     This amendment is consequential to the amendments made by items 1- 4 above. Specifically, it reflects the fact that section 177 of Subdivision B of Division 2 of Part XA of the Customs Act is abolished so that the Comptroller-General of Customs no longer enters into an interim trusted trader agreement with an entity. The qualification criteria that an entity must satisfy in order to enter into a trusted trader agreement, and the matters the Comptroller-General of Customs must consider in deciding whether to enter into a trusted trader agreement with an entity, are now contained in section 176A.

Item 6                  Subparagraph 179(1)(j)(ii)

 

36.     Subparagraph 179(1)(j)(ii) of the Customs Act allows the Comptroller-General of Customs to prescribe rules for and in relation to the kinds of information that may be published on the Register of Trusted Trader Agreements, including whether the agreement confers interim or ongoing trusted trader status on the entity.

 

37.     The repeal of this subparagraph is consequential to the amendments made by items 1 - 4 above, and reflects the abolition of interim trusted trader agreements.

 

Item 7                  Paragraph 273GA(1)(jd)

 

38.     This item repeals paragraph 273GA(1)(jd) of the Customs Act.

 

39.     This is a consequential amendment to the amendments made by items 1 - 4 above. It reflects the abolition of interim trusted trader agreements and the fact that it is no longer necessary to provide a right of merits review to the Administrative Appeals Tribunal in respect of a decision of the Comptroller-General of Customs to refuse to vary a trusted trader agreement under subsection 177(2).

 

Item 8                  Application provision

 

40.     This item provides that the amendments made by this Schedule apply in relation to nominations to become an Australian trusted trader under paragraph 176A(1)(a) of the Customs Act made on or after commencement, and to a nomination made under that provision before commencement, where the Comptroller-General had not made a decision before that commencement about whether to enter into a trusted trader agreement under subsection 176A(1).

 

41.     This means that all entities that have entered into an interim trusted trader agreement with the Comptroller-General of Customs before commencement will continue to be subject to the current legislation.



 

Schedule 3 -Amendments relating to import processing charges

 

Customs Act 1901

 

42.     The purpose of Schedule 1 of the Bill is to amend section 71B of the Customs Act to give the Minister the ability to determine, by legislative instrument, that certain owners of goods or owners in respect of certain goods, or both, are exempt from liability to pay import declaration processing charge.

 

Item 1                  At the end of section 71B

 

43.     This item adds new subsections (4), (5), (6) and (7) at the end of section 71B of the Customs Act.

 

44.     Under section 71B, an owner of goods is liable to pay import declaration processing charge when an import declaration is, or is taken to be, communicated to the Department. Liability to pay import declaration processing charge does not arise when an import declaration is withdrawn before an authority to deal with the goods is issued.

 

45.     Section 71B as currently drafted does not contain any mechanism by which an owner of goods can be exempt from liability to pay import declaration processing charge. As a result, Australia is unable to honour any international agreements that specifically exempt certain imports from payment of fees at the border.

 

46.   The effect of new subsections 71B(4) and (5) of the Customs Act is that the Minister may determine, by legislative instrument that:

 

·          specified persons;

·          persons in respect of specified goods;

·          specified persons in respect of specified goods

 

are not liable to pay import declaration processing charge.

 

47.   This legislative instrument will take effect on the day specified in the instrument which may be a day which is earlier or later than the day the instrument is made. This may, for example, mean that any exemption from liability to pay import declaration processing charge can be backdated to a particular day. These amendments will allow Australia to honour any international agreements that specifically exempt certain imports from payment of fees at the border.

 

48.   The effect of new subsection 71B(6) of the Customs Act is that if a person pays import declaration processing charge in circumstances where they are exempt from doing so by the legislative instrument made under subsection 71B(4), the Comptroller-General of Customs must give the payer a refund equal to the amount of the charge paid.

 

49.   The effect of new subsection 71B(7) of the Customs Act is to provide on the face of the Customs Act that an amount of import declaration processing charge that a person is liable to pay is a debt due by the person to the Commonwealth that may be recovered by action in a court of competent jurisdiction.

 

50.   The provision means that the Commonwealth will not need to rely on the relevant provisions of the Public Governance, Performance and Accountability Act 2013 (the PGPA Act) and the Public Governance, Performance and Accountability Rule 2014 (the PGPA Rule) in seeking to recover any amount of import declaration processing charge that a person is obliged to pay as a debt to the Commonwealth.

 

Item 2                     At the end of section 71DI

 

51.   This item adds new subsection (4) at the end of section 71DI of the Customs Act.

 

52.   Under section 71DI of the Customs Act, a person is liable to pay warehouse declaration processing charge where a warehouse declaration is communicated, or taken to have been communicated, to the Department. Liability to pay warehouse declaration processing charge does not arise when the declaration is withdrawn before an authority to deal with the goods is issued.

 

53.   Similar to the amendment made by item 1 to section 71B above in relation to import declaration processing charge, the effect of new subsection 71DI(4) is to provide on the face of the Customs Act that an unpaid amount of warehouse declaration processing charge that a person is liable to pay is a debt to the Commonwealth that may be recovered in a court of competent jurisdiction, so that the Commonwealth will not need to rely on the PGPA Act and the PGPA Rule in enforcing the debt.



 

Schedule 4           Permission to move, alter or interfere with goods for export

 

Customs Act 1901

 

Background

 

54.   Under section 30 of the Customs Act, all goods for export are subject to customs control from the time they are brought into a prescribed place for export until their exportation to a place outside Australia. Prescribed places are set out in section 14 of the Customs Regulation 2015 and include airports and wharves appointed under section 15 of the Customs Act.

 

55.   Under section 33 of the Customs Act, there are several offences relating to moving, altering or interfering with goods subject to customs control where these activities are not authorised under the Customs Act. Existing section 119AA of the Customs Act allows for an application to be made to the Department for permission to move, alter or interfere with goods for export that are subject to customs control, that have been entered for export and in relation to which an authority to deal is in force.

 

56.   In April 2014, all Australian international gateway airports commenced screening all duty-free liquids, aerosols and gels (LAGs) presented at a departure screening point. This applies to LAGs provided they are contained in a sealed plastic bag, such as those under the current duty-free ‘sealed bag scheme’ and have an accompanying proof of purchase. In the event that a duty-free LAG item triggers an alarm, it requires re-screening by the screening authority using a suite of LAG screening technologies. This requires the item to be removed from the duty-free packaging.

 

57.   The opening of sealed duty-free bags or tampering with the contents while they are subject to customs control is unlawful under section 33 of the Customs Act, unless such interference is authorised by the Act.

 

58.   Section 96A of the Customs Act deals with duty-free goods. Under that provision, goods that are purchased at an outwards duty-free shop are not required to be entered for export under section 113. As they are not required to be entered for export, an authority to deal is also not required under section 114C. Therefore, permission to interfere with the goods cannot be granted under section 119AA and there is no other statutory means by which authority to interfere with such goods can be granted.

 

Item 1                  Subsection 119AA(1)

 

59.   This is a consequential amendment to the amendments made by items 2 and 3 below.

 

Item 2                  Paragraph 119AA(1)(a)

 

60.   This is a consequential amendment to the amendment made by item 3 below.

 

Item 3                  Paragraphs 119AA(1)(b) and (c)

 

61.   This item repeals and substitutes existing paragraphs 119AA(1)(b) and (c) of the Customs Act.

 

62.   The effect of these amendments is to extend the circumstances in which an application can be made to move, alter or interfere with goods for export that are subject to customs control to circumstances where the goods are the subject of a permission in force under subsection 96A(2) of the Customs Act.

 

63.   The amendments to section 119AA of the Customs Act also amend the wording in relation to goods that are subject to customs control under paragraph 30(1)(b), (c) or (d), and have been entered for export and an authority to deal with the goods is in force. These circumstances are covered in existing subsection 119AA(1) of the Customs Act.

 

Item 4                  Application provision

 

64.   This provision provides that the amendments made by this Schedule apply to an application under subsection 119AA(2) on or after the commencement of the application provision to move, alter or interfere with goods where the goods were entered for export before, on or after commencement of these amendments or whether an authority to deal with the goods was given before, on or after commencement of the amendments.

 

65.   This provision further provides that an application under subsection 119AA(2) on or after the commencement of the application provision to move, alter or interfere with goods for export applies in relation to permissions to export such goods without entering them for export under subsection 96A(2) that were given before, on or after commencement.



 

Schedule 5 - Tariff concession orders

 

Customs Act 1901

 

Background

 

66.   Sections 269D and 269E are contained in Part XVA of the Customs Act, which is concerned with the making of tariff concession orders (TCOs). Goods that are the subject of a TCO are dutiable at a free rate of customs duty. An application for a TCO will be approved if, on the day the application was made, no substitutable goods were produced in Australia in the ordinary course of business.

 

Item 1                  Subsection 269D(1)

 

67.   This item repeals and substitutes subsection 269D(1).

 

68.   Subsection 269D(1) of the Customs Act sets out when goods are taken to have been manufactured in Australia. Subsection 269D(1) currently provides that goods (other than unmanufactured raw products) are taken to have been produced in Australia if, in addition to the goods being wholly or partly manufactured in Australia, not less than one quarter of the factory works or costs of the goods is comprised of the value of Australian labour, materials or overhead expenses incurred in Australia.

 

69.   This criterion requires Australian businesses to provide detailed and confidential accounting evidence in order to demonstrate compliance with the provision. This evidence is unnecessary because manufacturers who can demonstrate a substantial process of manufacture always easily exceed the 25 per cent factory or works costs test. The requirement to produce such evidence therefore places an unnecessary burden on Australian businesses.

 

70.   Consistent with the Government’s deregulation agenda, new subsection 269D(1) of the Customs Act simplifies the test under which goods are taken to have been produced in Australia, such that goods (other than unmanufactured raw products) are taken to be produced in Australia if they are wholly or partly manufactured in Australia.

 

Item 2                  Subsections 269D(4) and (5)

 

71.   This item repeals subsections 269D(4) and (5) of the Customs Act. These provisions are for the purposes of the factory or works costs criteria in current subsection 269D(1). As a consequence of these criteria being removed from subsection 269D(1), these provisions are no longer required.

 

Item 3                  Subsection 269E(2)

 

72.   This item repeals and substitutes current subsection 269E(2).

 

73.   Section 269E of the Customs Act sets out the circumstances in which substitutable goods are taken to be produced in Australia in the ordinary course of business. Subsection 269E(2) deals with substitutable goods that are made-to-order capital equipment. Such equipment is taken to be produced in Australia in the ordinary course of business if an Australian producer has made goods requiring the same labour skills, technology and design expertise as the substitutable goods in the 2 years before the application was lodged, could produce the substitutable goods with existing facilities, and is prepared to accept an order to supply the goods.

 

74.   There have been difficulties in construing subsection 269E(2). In Vestas Australian Wind Technology Pty Ltd v Chief Executive Officer of Customs [2015] AATA 348 (Vestas) the Administrative Appeals Tribunal (AAT) decided that in order for an item of made-to-order capital equipment to be considered a substitutable good in relation to goods the subject of the TCO application, it must have been previously produced in Australia. That is, the AAT considered that it is not sufficient for an Australian manufacturer to have the capacity to produce the goods in order to be able to object to the making of a TCO or to seek revocation of a TCO.

 

75.   The decision of the AAT in Vestas was set aside on appeal by the Full Federal Court ( Comptroller-General of Customs v Vestas - Australian Wind Technology Pty Ltd [2015] FCAFC 185). The decision of the Full Federal Court is consistent with the Department’s administration of subsection 269E(2). That is, Australian manufacturers can object to the making of a TCO or seek revocation of a TCO where the application relates to the goods that are made-to-order capital equipment if they can demonstrate that they have the capacity to produce substitutable goods in respect of goods that are the subject of the TCO application.

 

76.   An application was made to the High Court for special leave to appeal that Full Federal Court decision. The High Court dismissed the application as the Court could see no reason to doubt the correctness of the Full Court’s reasoning and, accordingly, none of the applicant’s proposed grounds of appeal had sufficient prospects to warrant the grant of special leave to appeal ( Vestas-Australian Wind Technology Pty Limited v Comptroller-General of Customs [2016] HCASL 85 (5 May 2016)).

 

77.   New subsection 269E(2) of the Customs Act more accurately reflects the policy intention of the provision and clarifies it. The new provision emphasises the capacity of the Australian manufacturer to produce goods the subject of the TCO application with existing facilities and that the substitutable goods that could be produced would be made-to-order capital equipment.

 

78.   New subsection 269E(2) also reflects the Government’s position that the Australian producer should be required to have made goods requiring the same labour skills, technology and design expertise as the substitutable goods in the 5 years before the TCO application was lodged (rather than the current period of 2 years). This is because a period of 2 years is often insufficient to give a fair indication of the producer’s capabilities in relation to made-to-order capital equipment, especially given the amount of time and labour necessarily involved in producing such equipment. This amendment will benefit local manufacturers.

 

79.   This amendment to subsection 269E(2) of the Customs Act is also consistent with paragraph 269E(1), which provides that goods (other than made-to-order capital equipment) that are substitutable goods in relation to the goods the subject of a TCO application are taken to have been produced in Australia in the ordinary course of business if they are produced in Australia on an intermittent basis and have been so produced in the 5 years before the application was lodged.

 

Item 4                  Application provision

 

80.   This item provides that the amendments to the Customs Act made by this Schedule apply to an application for a TCO under section 269F of the Customs Act, and to a request for the revocation of a TCO under section 269SB of the Customs Act, made on or after commencement.

 



 

Schedule 6           Delivery of goods

 

Customs Act 1901

 

Item 1                  Subsection 162A(5A)

 

81.   This item repeals subsection 162A(5A) of the Customs Act.

 

82.   Under subsection 162A(5A) of the Customs Act, duty is not payable on goods temporarily imported into Australia for a purpose described in regulation 125A of the Customs Regulations 1926 and delivered under this section unless the goods are dealt with in contravention of the regulations or the goods are not exported before the end of 31 December 2000 or before a later day specified by the Comptroller-General of Customs.

 

83.   Subsection 162A(5A) was inserted into the Customs Act in 1995 to allow goods to be temporarily imported for the Sydney 2000 Olympic Games and a number of other related events. Regulation 125A no longer exists as the Customs Regulations 1926 sunsetted on 1 April 2015. Regulation 125A was not replicated in the new Customs Regulation 2015 as it is redundant.

 

84.   As a person who temporarily imports goods in contravention of the regulations would be liable to pay duty under subsection 162A(5) of the Customs Act (a provision substantially identical to subsection 162A(5A) of the Customs Act) subsection 162A(5A) is also redundant and is therefore repealed by this item.

 

Item 2                  Subsection 162A(8)

 

85.   Subsection 162A(8) of the Customs Act deals with the enforcement of a security and an undertaking to pay duty, GST and luxury car tax in the circumstances described in subsection 162A(5A) (that is, where goods have been dealt with in contravention of the regulations). As a consequence of the repeal of subsection 162A(5A), this item omits the references to paragraphs 162A(5A)(a) or (b) from this provision.

 

Item 3                  Subsection 162B(3)

 

86.   Section 162B of the Customs Act is concerned with circumstances where duty is not payable on pallets (that is, where the imposition of duty would be a contravention by the Commonwealth of the European Convention on Customs Treatment of Pallets used in international transport). That section is in addition to, and not in derogation of, subsection 162A(5A). As a consequence of item 1 above, this item omits subsection 162A(5A) from this provision.



 

 

Schedule 7 - Trade descriptions

 

Commerce (Trade Descriptions) Act 1905

 

Background

 

87.   The Commerce (Trade Descriptions) Act deals with the importation and exportation of goods without a prescribed trade description and the importation and exportation of goods to which a false trade description has been applied.

 

88.   The Commerce (Trade Descriptions) Act contains a number of offence provisions that impose penalties. Section 6 imposes a penalty on a person in respect of his or her failure to give notice to an officer of his or her intention to export goods. Section 9 imposes a penalty in relation to the importation of goods bearing a false trade description. Section 12 contains a penalty for applying a false trade description to exports.

 

Item 1                  Subsection 5(1)

 

89.   Subsection 5(1) of the Commerce (Trade Descriptions) Act currently provides that an officer may inspect and examine all prescribed goods which are imported, or which are entered for export or brought for export to any wharf or place or are in course of manufacture or preparation for export.

 

90.   The Regulations made under section 17 of the Commerce (Trade Descriptions) Act. prescribe the goods that an officer may inspect and examine under section 5.

 

91.   This item amends subsection 5(1) so that the reasonable belief of an officer is an element of the power to inspect and examine goods, as opposed to forming part of the description of the goods that can be inspected and examined. New subsection 5(1) provides, in relation to imported goods, that an officer may inspect and examine goods that are, or that the officer reasonably believes are, goods prescribed by the regulations which are imported. This amendment better reflects current drafting practice.

 

Item 2                  Section 16

 

92.   Section 16 of the Commerce (Trade Descriptions) Act currently provides that the regulations under sections 7 and 11 of this Act shall not prescribe a trade description which discloses trade secrets of manufacture or preparation, unless in the opinion of the Governor-General the disclosure is necessary for the protection of the health or welfare of the public.

 

93.   The effect of this amendment is that the Minister, rather than the Governor-General, will form an opinion that the disclosure of a trade description that discloses trade secrets of manufacture or preparation is necessary for the protection of the health or welfare of the public. The provision reflects current drafting practice, which recognises that the Minister is responsible for forming opinions and the Governor-General acts on the advice of the relevant Minister.

 

Item 2                  Section 17

 

94.   This is a consequential amendment to the amendment made by item 3 below, which adds a new subsection 17(2) to the Commerce (Trade Descriptions) Act.

 

Item 3                  At the end of section 17

 

95.   Section 17 of the Commerce (Trade Descriptions) Act currently provides that the Governor-General may make regulations prescribing all matters and things required or permitted by the Act to be prescribed or which are necessary and convenient to be prescribed for carrying out or giving effect to the Act.

 

96.   This item amends section 17 of the Commerce (Trade Descriptions) Act so that it provides that the regulations may prescribe penalties, not exceeding 50 penalty units, for offences against the CI Regulations. The new power will not limit the general regulation-making power in new subsection 17(1) of the Commerce (Trade Descriptions) Act.

 

Item 4                  Transitional provision

 

97.   This item preserves the CI Regulations that were made under section 17 of the Commerce (Trade Descriptions) Act before commencement. This provision is necessary as the above amendments will split current section 17 into two separate subsections.



 

Schedule 8 - Maritime Powers

 

Maritime Powers Act 2013

 

Item 1                  Section 40

 

98.   This item changes existing section 40 into new subsection 40(1) by inserting “(1)” at the beginning of the section. This is a technical amendment that is consequential to the addition of new subsections 40(2) and 40(3), below.

 

Item 2                  At the end of section 40

 

99.   This item inserts new subsections 40(2) and (3) at the end of section 40.

 

100.         Section 8 of the Maritime Powers Act defines a ‘country’ to include the territorial sea and archipelagic waters of the country. Section 40 as currently drafted prevents the exercise of powers under the Maritime Powers Act at a place in another country except in defined circumstances. Section 40 could be interpreted as preventing the exercise of powers under the Maritime Powers Act in waters within another ‘country’ in circumstances where, under the United Nations Convention on the Law of the Sea (the Convention), it would be permissible to exercise those powers, for example when a vessel is in the course of ‘transit passage’ through an international strait. The amendments confirm that powers under the Maritime Powers Act can be exercised in those circumstances.

 

101.         New subsection 40(2) provides that subsection 40(1) does not apply to an exercise of powers if the circumstances in paragraphs 40(2)(a) and (b) exist. These circumstances are that:

 

(a)             the exercise of powers:

(i)              is part of a continuous exercise of powers that commenced in accordance with any applicable requirements of Part 2 (disregarding new subsection (2)); and

(ii)             occurs in the course of passage of a vessel or aircraft through or above waters that are part of a country; and

(b)             a relevant maritime officer, or the Minister, considers that the passage is in accordance with the Convention.

 

102.         The intention behind section 40 is to ensure that powers are exercised under the Maritime Powers Act in a manner consistent with the principle of territorial sovereignty at international law. Thus, the use of enforcement powers within another country normally would require some form of agreement by that country. However, the section did not explicitly allow for the exercise of powers in the course of passage through and over waters within another country already permitted under international law, as reflected in the Convention. Examples of such passage include a vessel in the course of innocent passage, transit passage or archipelagic sea lanes passage. In those circumstances, under international law, no further agreement or approval by the coastal state is required

 

103.         The purpose of the amendment is to confirm the operation of the Maritime Powers Act in circumstances where vessels and aircraft are considered to be exercising passage rights consistent with the Convention.

 

104.         As outlined above, there are two limbs to new subsection 40(2).

 

105.         The first limb, in paragraph 40(2)(a), has two requirements, namely, that the exercise of powers:

 

·          is part of a continuous exercise of powers that commenced in accordance with any applicable requirements of Part 2 (disregarding new subsection (2)); and

·          occurs in the course of passage of a vessel or aircraft through or above waters that are part of a country.

·           

106.         The second limb in new paragraph 40(2)(b) requires that a relevant maritime officer, or the Minister, considers that the passage is in accordance with the Convention.

 

107.         Under the Maritime Powers Act, a continuous exercise of powers is generally contingent on an authorisation by an authorising officer, and a subsequent exercise of powers by a maritime officer within the appropriate geographical area. An authorisation is spent when the continuous exercise of powers under the authorisation ends. A continuous exercise of powers does not end only because there is a period of time between the exercise of one or more of those powers.

 

108.         The ‘continuous exercise of powers’ referred to in the first limb of new subsection 40(2), is explained in section 11 of the Maritime Powers Act.

 

109.         Under the second limb in new paragraph 40(2)(b)either a relevant maritime officer or the Minister must consider that the passage is in accordance with the Convention.

 

110.         A “relevant” maritime officer would not be confined to just the commander of the vessel, but could also apply in relation to more senior maritime officers who have knowledge, involvement in, or command over the operations.

 

111.         In order to exercise powers in the course of passage through or above the waters of another country the relevant maritime officer must consider that passage to be in accordance with the Convention.

 

112.         On some occasions, the Minister may provide a direction or guidance in relation to the exercise of powers. In these instances, it may be appropriate that the Minister considers consistency with the Convention. The Minister may reduce this consideration to writing by way of directions issued under section 75F, or through other mechanisms. This is highlighted by Note 2 to subsection 40(2).

 

113.         Two notes are included at the end of subsection 40(2).

 

114.         Note 1 refers to the definition of country in section 8 and highlights that the territorial sea and archipelagic waters of a country form part of that country.

 

115.         Note 2 refers to the fact that the Minister’s consideration of the passage of a particular vessel or aircraft through or above waters that are part of a country is in accordance with the Convention may be apparent from the terms of a direction given under section 75F. Section 75F provides for the Minister to give directions about the exercise of powers in sections 69, 69A, 71, 72 and 72A of the Maritime Powers Act.

 

116.         New subsection 40(3) provides that an exercise of powers in reliance (or purported reliance) on subsection (2) is not invalid by reason of a defective consideration of the Convention.

 

117.         Where the operation of subsection 40(2) is dependent on the opinion of a relevant maritime officer by virtue of paragraph 40(2)(b), there is recognition that this opinion will be the bona fide view of the maritime officer that the passage is in accordance with the Convention. Subsection 40(3) reflects a possibility that, on occasion, an officer though giving due consideration to the matter, comes to an incorrect conclusion.

 

118.         Subsection 40(3) therefore preserves the lawfulness of the activity under domestic law in the case where there is a defective consideration of the Convention.

 

Item 3                  Application provisions

 

119.         This item provides that the amendments made by this Schedule apply in relation to the exercise of powers under the Maritime Powers Act after commencement of the Schedule, even if:

 

·          the authorisation for the exercise of the powers was given under Division 2 of Part 2 of that Act before that commencement; or

·          the powers are exercised in the course of a continuous exercise of powers that started before that commencement; or

·          the powers are exercised in relation to a person, vessel or aircraft who or that started to be detained, or otherwise held, under Division 7 or 8 of Part 3 of the Maritime Powers Act before that commencement; or

·          the powers are exercised in any other situation in relation to which powers were (or could have been) exercised under that Act before that commencement.

 

120.         The amendments of the Maritime Powers Act made by this Schedule do not, by implication, affect the interpretation of that Act, as in force before the commencement of this Schedule, in relation to the exercise of powers under that Act before that commencement.



 

Schedule 9 - Repeal of Acts

 

Part 1 - Repeals of Acts

 

Customs (Tariff Concession System Validations) Act 1999

 

Item 1                  The whole of the Act

 

121.         This item repeals the stand-alone Customs (Tariff Concessions System Validations) Act 1999 (the CTCSV Act).

 

122.         The CTCSV Act was enacted in November 1999. Its purpose was to validate decisions in relation to the making of tariff concession orders that were based on incorrect delegations or the lack of appropriate delegations. The decisions were made during the period between 15 July 1996 and 31 May 1999. As these decisions were made within a discrete 3 year period and the Act is now 17 years old, it is now obsolete.

 

Import Processing Charges (Amendment and Repeal) Act 2002

 

Item 2                  The whole of the Act

 

123.         This item repeals the whole of the Import Processing Charges (Amendment and Repeal) Act 2002.

 

124.         The Import Processing Charges (Amendment and Repeal Act) 2002 continued the operation of the old import processing charges prior to the full commencement of the Customs Legislation Amendment and Repeal (International Trader Modernisation) Act 2001 in 2005 and the new import processing charges imposed by the Import Processing Charges Act 2001 . As the old charges ceased to be used from 3 February 2006, this Act is now obsolete.

 

Part 2 - Saving provisions

 

Item 3                  Saving provision

 

125.         Part 2 of this Schedule contains a consequential savings provision. The savings provision ensures the continued operation of the validation function in the CTCSV Act after the repeal of that Act.

 



 

Statement of Compatibility with Human Rights

 

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

 

CUSTOMS AND OTHER LEGISLATION AMENDMENT BILL 2016

 

This Bill is compatible with 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 the Customs Act 1901 by:

·          Allowing the Governor-General to make regulations for the purposes of section 112 to permit the revocation of a licence or permission to export goods if the Defence Minister is satisfied that the exportation of the goods would prejudice the security, defence or international relations of Australia;

·          Removing the requirement in Part XA of the Customs Act that the Comptroller-General of Customs enter into an interim trusted trader agreement with an entity;

·          Allowing for the exemption from paying import declaration processing charge;

·          Extending the circumstances in which an application can be made to move, alter or interfere with goods for export that are subject to customs control;

·          Clarifying and simplifying the provisions concerning the making of tariff concession orders for made-to-order capital equipment; and

·          Removing unnecessary and outdated provisions.

 

The Bill amends the Commerce (Trade Descriptions) Act 1905 by providing that the regulations under that Act may prescribe penalties for offences against those regulations.

 

The Bill amends the Maritime Powers Act 2013 to confirm that the powers under that Act are able to be exercised in the course of passage through or over the waters of another country in a manner consistent with the United Nations Convention on the Law of the Sea , such as when a vessel is in the course of innocent passage, transit passage or archipelagic sea lanes passage.

 

Human rights implications

 

This legislative instrument does not engage, impact on, or limit in any way, the human rights and freedoms recognised or declared in the international instruments listed in the definition of human rights at section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

 

Conclusion

 

The Bill is compatible with human rights as it does not raise any human rights issues.

 

Minister for Immigration and Border Protection

the Honourable Peter Dutton MP