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Commerce (Trade Descriptions) Amendment Bill 2018

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2016-2017-2018

 

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

 

 

 

COMMERCE (TRADE DESCRIPTIONS) AMENDMENT BILL 2018

 

 

 

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Law Enforcement and Cybersecurity, the Hon. Angus Taylor MP)



COMMERCE (TRADE DESCRIPTIONS) AMENDMENT BILL 2018

 

OUTLINE

 

This Bill contains the following Schedules:

 

Schedule 1 - Country of origin representations

 

This Schedule would amend the Commerce (Trade Descriptions) Act 1905 (the CTD Act) to incorporate the exception, under section 255 of Schedule 2 to the Competition and Consumer Act 2010 (the Competition and Consumer Act) that applies in relation to representations as to the country of origin of goods, such that the exception would also apply in relation to a false trade description.

 

As part of the reform to Australia’s Country of Origin Labelling framework, the Government implemented the Country of Origin Food Labelling Information Standard 2016 (the Food Labelling Information Standard) for food, and also implemented a requirement that applies generally to all goods through the enactment of the Competition and Consumer Amendment (Country of Origin) Act 2017 (the Competition and Consumer Amendment Act).

 

A key purpose of the reform is to ensure that businesses provide consumers with the information they want in order to make purchasing decisions in line with their preferences. The framework seeks to balance this interest with the cost to business of providing this information.

 

Amongst other changes, the Competition and Consumer Amendment Act amended section 255 of Schedule 2 to the Competition and Consumer Act. Broadly, section 255 provides an exception under which certain representations as to the country of origin of certain goods do not contravene the provisions of that Schedule that deals with misleading or deceptive conduct and false or misleading representations.

 

The Government’s position is that the legislation regulating the importation of goods and the legislation regulating the domestic sale of goods should be consistent as far as the false description of goods is concerned. Schedule 1 of the Bill would amend the CTD Act to provide for the exception under section 255 of Schedule 2 of the Competition and Consumer Act to also apply in relation to false trade descriptions under the CTD Act.

 

This amendment would have the effect of providing a defence against an offence of the importation of goods to which a false trade description is applied.

 

Schedule 2 - Incorporation of information standards

 

This Schedule would amend the CTD Act to enable information standards made or declared under Schedule 2 of the Competition and Consumer Act, and that are in force or existing from time to time, to be incorporated by reference in the Commerce (Trade Descriptions) Regulation 2016 (the CTD Regulation). This Schedule would insert an express provision to override the effect of subsection 14(2) of the Legislation Act 2003 (the Legislation Act).

 

Information standards made or declared under Schedule 2 of the Competition and Consumer Act are legislative instruments (paragraph 131E(i) of the Competition and Consumer Act refers). As a result, information standards that are in force or existing from time to time are publicly, readily and freely available to access from the Federal Register of Legislation.

 

These information standards are, however, not subject to the disallowance process under section 42 of the Legislation Act. This is primarily because the Competition and Consumer Act facilitates an intergovernmental scheme (the Australian Consumer Law) to which subsection 44(1) of the Legislation Act applies such that the information standards are not subject to disallowance under section 42 of that Act. Therefore, the Food Labelling Information Standard that is in force at 1 April 2017 is incorporated by reference in the CTD Regulation in accordance with paragraph 14(1)(b) of the Legislation Act.

 

Information standards may be amended from time to time to ensure that labelling information requirements remain effective and continue to facilitate consumer protection against misleading or deceptive conduct and false or misleading representations.

 

The departure from the general position reflected in subsection 14(2) of the Legislation Act is intended to ensure that future amendments to the Food Labelling Information Standard, or to any other information standards subsequently incorporated into the CTD Regulation for the purpose of setting out labelling requirements, are automatically incorporated into the CTD Regulation.

 

FINANCIAL IMPACT STATEMENT

 

The amendments in the Bill will have no financial impact.

 

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

 

A Statement of Compatibility with Human Rights completed in relation to the amendments in the Bill assesses the amendments to be compatible with Australia’s human rights obligations. The Statement of Compatibility with Human Rights is at Attachment A .

 



COMMERCE (TRADE DESCRIPTIONS) AMENDMENT BILL 2018

 

NOTES ON CLAUSES

 

Clause 1  Short Title

 

1.         This clause provides for the Bill, once enacted, to be cited as the Commerce (Trade Descriptions) Amendment Act 2018 .

 

Clause 2  Commencement

 

2.         This clause sets out, in a table, the date on which provisions of the Bill, once enacted, will commence.

 

3.         Items 1 and 2 of the table provide for sections 1 to 3 and anything in this Bill not elsewhere covered by the table, and Schedule 1 of the Bill, to commence on the day the Bill, once enacted, receives the Royal Assent.

 

4.         Item 3 of the table provides for Schedule 2 of the Bill to commence 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 the Bill, once enacted, receives the Royal Assent, Schedule 2 will commence on the day after the end of that period.

 

Clause 3  Schedules

 

5.         This clause is the formal enabling provision for the Schedules to the Bill, and provides that legislation specified in a Schedule to the Bill, once enacted, is to be amended or repealed as set out in the applicable items in the Schedules. Both Schedules of the Bill amend the CTD Act.

 

6.         Additionally, clause 3 also provides that, any other item in a Schedule to the Bill, once enacted, has effect according to its terms.

 



Schedule 1 - Country of origin representations

 

Commerce (Trade Descriptions) Act 1905

 

Item 1  At the end of subsection 9(2)

Item 2  At the end of section 9A

Item 3  At the end of subsection 10(1)

 

7.         These items would add a new note to the end of subsection 9(2), section 9A and subsection 10(1) of the CTD Act to refer to new rules in item 4 below. The new rules in item 4 apply to an offence of applying a false trade description on to goods proposed to be imported into Australia or on to imported goods found in Australia.

 

8.         The CTD Act, amongst other things, prohibits the importation of goods to which a false trade description is applied, and contains an offence, punishable upon conviction by a penalty of up to 100 penalty units, for the importation of such goods (see sections 9 and 10 of the CTD Act).

 

9.         Goods to which a false trade description is applied are forfeited to the Crown (section 10 of the CTD Act refers). Where goods to which a false trade description is applied are found in Australia, such goods shall, until the contrary is proved, be deemed to have been imported in contravention of the CTD Act (section 9A of the CTD Act refers), and as such are also forfeited to the Crown.

 

10.     The term trade description is defined in section 3 of the CTD Act. Broadly, a trade description is any description, statement, indication, or suggestion, direct or indirect about goods and includes (but is not limited to) the nature, quantity, quality, weight, the manufacture or producer, and the country of origin, of the goods.

 

11.     Under the CTD Act, and the CTD Regulation, a trade description is required to be applied to goods proposed to be imported into Australia and on to imported goods found in Australia. Where a trade description, by reason of anything contained therein or omitted therefrom, is false or likely to mislead in a material respect as regards the goods to which it is applied (whether by way of addition, effacement or otherwise), such a description for the purposes of the CTD Act is a false trade description (section 3 of the CTD Act refers).

 

12.     These new notes being added to subsection 9(2), section 9A and subsection 10(1) of the CTD Act would refer to new rules in item 4 below that apply in relation to determining whether a trade description applied on to goods proposed to be imported into Australia, or on to imported goods found in Australia, is a false trade description.

 

Item 4  At the end of Part III

 

13.     This item would add the new section 10AA to the end of Part III of the CTD Act to set out new rules that would apply in relation to determining whether a trade description applied on to goods proposed to be imported into Australia, and on to imported goods found in Australia, is a false trade description.

 

14.     The purpose of the new rules is to give effect to an objective of the Government’s Country of Origin Labelling Reform to incorporate the exception under section 255 of Schedule 2 to the Competition and Consumer Act so that the exception also applies in relation to a false trade description under the CTD Act. The Government’s position is that the legislation regulating the importation of goods and the legislation regulating the domestic sale of goods should be consistent as far as the false description of goods is concerned.

 

New subsection 10AA(1)

 

15.     New subsection 10AA(1) would provide that, for the purposes of sections 9, 9A and 10, goods do not have a false trade description applied to them, and do not bear a false trade description, only by the making of a representation of a kind referred to in an item in the first column of the table in subsection 255(1) of Schedule 2 to the Competition and Consumer Act, if the requirements of the corresponding item in the second column are met.

 

16.     Section 255 of Schedule 2 to the Competition and Consumer Act sets out the exception under which certain representations as to the country of origin of certain goods do not contravene the provisions of that Schedule that deal with misleading or deceptive conduct and false or misleading representations.

 

17.     An example of when the exception applies is where a representation is made as to a particular country in which a good is grown, and each significant ingredient or significant component of the good was grown in that country, and all or virtually all processes involved in the production or manufacture of the good happened in that country. Another example of when the exception applies is where a representation in the form of a mark specified in an information standard relating to country of origin labelling of a good is made, and the requirements under the information standard relating to the use of that mark are met.

 

18.     The effect of this amendment is that, if one of the circumstances under the exception is satisfied in relation to a trade description, the trade description would not be a false description.

 

New subsection 10AA(2)

 

19.     New subsection 10AA(2) would provide that subsections 255(2), (5), (7), (8) and (9) of Schedule 2 to the Competition and Consumer Act apply in relation to subsection 10AA(1) of the CTD Act in a way corresponding to the way in which they apply in relation to subsection 255(1) of Schedule 2.

 

20.     As explained above, section 255 of Schedule 2 to the Competition and Consumer Act sets out the circumstances under which certain representations as to the country of origin of goods do not contravene provisions relating to misleading or deceptive conduct and false or misleading representations under that Schedule.

 

21.     Subsection 255(1) sets out circumstances that must be met in order for the exception to apply to a representation of a kind as to the country of origin. Subsections 255(2), (5), (7), (8) and (9) then set out additional requirements that must also be met in order to satisfy certain circumstances set out in subsection 255(1). An example of an additional requirement is in subsection 255(2), which sets out the circumstances whereby goods are considered substantially transformed. Another example of an additional requirement is in subsection 255(7), which sets out the circumstances whereby goods, ingredients or component of goods are considered grown in a country.

 

22.     The purpose of this amendment is, for the purposes of determining whether a trade description is a false trade description, to incorporate the additional circumstances that also apply to the requirements set out in subsection 255(1) of Schedule 2 to the Competition and Consumer Act.

 

23.     This amendment would ensure that the circumstances under which representations for the country of origin are exceptions for the purposes of a false trade description are consistent with the exceptions under subsection 255(1) of Schedule 2 to the Competition and Consumer Act.

 

New subsection 10AA(3)

 

24.     New subsection 10AA(3) would provide that regulations made for the purposes of subsection 255(3) of Schedule 2 to the Competition and Consumer Act apply in relation to subsection 255(2) of that Schedule (as applied by subsection 10AA(2)) in a way corresponding to the way in which they apply in relation to subsection 255(2) of that Schedule.

 

25.     Subsection 255(3) of Schedule 2 to the Competition and Consumer Act enables regulations to be prescribed to clarify the substantial transformation test set out in subsection 255(2) of that Schedule.

 

26.     Similar to new subsection 10AA(2) above, the purpose of this amendment is to ensure regulations made for subsection 255(2) of Schedule 2 to the Competition and Consumer Act would also apply in relation to a false trade description.

 

Item 5  Application provision

 

27.     This item would set out the goods to which the new rules in item 4 of Schedule 1 to this Bill will apply. That is, the new rules would apply to a trade description applied on to goods proposed to be imported into Australia, or imported goods found in Australia, on or after this Bill, once enacted, receives Royal Assent.

 



Schedule 2 - Incorporation of Information Standards

 

Commerce (Trade Descriptions) Act 1905

 

Item 1  After subsection 7(3)

 

28.     This item would insert new subsections 7(3A) and (3B) after subsection 7(3) of the CTD Act.

 

New subsection 7(3A)

 

29.     New subsection 7(3A) would provide that, despite subsection 14(2) of the Legislation Act, regulations made for the purposes of this section may make provisions in relation to a matter by applying, adopting or incorporating, with or without modification, any matter contained in an information standard as in force or existing from time to time.

 

30.     This amendment together with new subsection 7(3B) would enable information standards made or declared under Schedule 2 of the Competition and Consumer Act, and that are in force or as existing from time to time, to be incorporated by reference in the CTD Regulation.

 

31.     Information standards made or declared under Schedule 2 of the Competition and Consumer Act are legislative instruments (paragraph 131E(i) of the Competition and Consumer Act refers). As such, information standards that are in force or existing from time to time are publicly, readily and freely available to access from the Federal Register of Legislation.

 

32.     These information standards are, however, not subject to the disallowance process under section 42 of the Legislation Act. This is because the Competition and Consumer Act facilitates an intergovernmental scheme (the Australian Consumer Law), and that Act, through Schedule 2 of that Act, authorises information standards to be made for the purposes of the Australian Consumer Law. As such, subsection 44(1) of the Legislation Act applies such that information standards are not subject to disallowance.

 

33.     The CTD Regulation currently incorporates various requirements, in relation to a statement of the country of origin, under the Food Labelling Information Standard. These requirements form part of the requirements for a trade description that must be satisfied under the CTD Regulation. By way of an example, for food imported in a package, paragraph 16(1)(b) of the CTD Regulation requires a statement of the country of origin of the food (determined in accordance the Food Labelling Information Standard in force on 1 April 2017, which is the date on which the CTD Regulation commenced) to be included in the trade description applied on to that imported food.

 

34.     Due to the non-disallowable nature of the Food Labelling Information Standard, and in accordance with paragraph 14(1)(b) of the Legislation Act, the requirements incorporated into the CTD Regulation are the relevant requirements in the Food Labelling Information Standard as at 1 April 2017.

 

35.     Information standards may be amended from time to time to ensure that labelling information requirements remain effective and continue to facilitate consumer protection against misleading or deceptive conduct and false or misleading representations.

 

36.     This amendment would override the effect of subsection 14(2) of the Legislation Act to enable the Food Labelling Information Standard and any other information standards that are in force or existing from time to time to be incorporated into the CTD Regulation. Such incorporation would not be otherwise possible without this amendment. Such incorporation would enable importers to comply with consistent legislative requirements at the border and at the point of sale, when including a statement of the country of origin of the food in the packages.

 

37.     The departure from the general position reflected in subsection 14(2) of the Legislation Act is intended to ensure that future amendments to the Food Labelling Information Standard, or to any other information standards subsequently incorporated into the CTD Regulation for the purpose of setting out labelling requirements, are automatically incorporated into the CTD Regulation.

 

New subsection 7(3B)

 

38.     New subsection 7(3B) would provide that, for the purposes of subsection 7(3A), an information standard is an information standard made under section 134 or declared under section 135 of Schedule 2 to the Competition and Consumer Act.

 

39.     The purpose of this amendment is to specify the information standards to which the contrary intention referred to in subsection 14(2) of the Legislation Act applies. That is, the information standards made under section 134 or declared under section 135 of Schedule 2 to the Competition and Consumer Act.



Attachment A

 

Statement of Compatibility with Human Rights

 

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

Commerce (Trade Descriptions) Amendment Bill 2018

 

The Legislative Instrument, titled the ‘Commerce (Trade Descriptions) Amendment Bill 2018’ (the 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

 

This Bill would amend the Commerce (Trade Descriptions) Act 1905 (the CTD Act) to incorporate the exception, under section 255 of Schedule 2 to the Competition and Consumer Act 2010 (the Competition and Consumer Act) that applies in relation to representations as to the country of origin of goods, such that the exception would also apply in relation to a false trade description.

 

As part of the reform to Australia’s Country of Origin Labelling framework, the Government implemented the Country of Origin Food Labelling Information Standard 2016 (the Food Labelling Information Standard) for food, and also implemented a requirement that applies generally to all goods through the enactment of the Competition and Consumer Amendment (Country of Origin) Act 2017 (the Competition and Consumer Amendment Act).

 

A key purpose of the reform is to ensure that businesses provide consumers with the information they want in order to make purchasing decisions in line with their preferences. The framework seeks to balance this interest with the cost to business of providing this information.

 

Amongst other changes, the Competition and Consumer Amendment Act amended section 255 of Schedule 2 to the Competition and Consumer Act. Broadly, section 255 provides an exception under which certain representations as to the country of origin of certain goods do not contravene the provisions of that Schedule that deals with misleading or deceptive conduct and false or misleading representations.

 

The Government’s position is that the legislation regulating the importation of goods and the legislation regulating the domestic sale of goods should be consistent as far as the false description of goods is concerned. Schedule 1 of the Bill would amend the CTD Act to provide for the exception under section 255 of Schedule 2 of the Competition and Consumer Act to also apply in relation to false trade descriptions under the CTD Act.

The amendments in Schedule 1 of the Bill would have the effect of providing a defence against an offence of the importation of goods to which a false trade description is applied.

 

This Bill would also amend the CTD Act to enable information standards made or declared under Schedule 2 of the Competition and Consumer Act, and that are in force or existing from time to time, to be incorporated by reference in the Commerce (Trade Descriptions) Regulation 2016 (the CTD Regulation). Schedule 2 of the Bill would insert an express provision to override the effect of subsection 14(2) of the Legislation Act 2003 (the Legislation Act).

 

Information standards made or declared under Schedule 2 of the Competition and Consumer Act are legislative instruments (paragraph 131E(i) of the Competition and Consumer Act refers). As a result, information standards that are in force or existing from time to time are publicly, readily and freely available to access from the Federal Register of Legislation.

 

These information standards are, however, not subject to the disallowance process under section 42 of the Legislation Act. This is primarily because the Competition and Consumer Act facilitates an intergovernmental scheme (the Australian Consumer Law) to which subsection 44(1) of the Legislation Act applies such that the information standards are not subject to disallowance under section 42 of that Act. Therefore, the Food Labelling Information Standard that is in force at 1 April 2017 is incorporated by reference in the CTD Regulation in accordance with paragraph 14(1)(b) of the Legislation Act.

 

Information standards may be amended from time to time to ensure that labelling information requirements remain effective and continue to facilitate consumer protection against misleading or deceptive conduct and false or misleading representations.

 

The departure from the general position reflected in subsection 14(2) of the Legislation Act is intended to ensure that future amendments to the Food Labelling Information Standard, or to any other information standards subsequently incorporated into the CTD Regulation for the purpose of setting out labelling requirements, are automatically incorporated into the CTD Regulation.

 

Human rights implications

 

The Bill does not engage any of the applicable rights or freedoms.

 

Conclusion

 

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

 

 

The Hon. Angus Taylor MP

Minister for Law Enforcement and Cybersecurity