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Customs Amendment (Australian Trusted Trader Programme) Bill 2015

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2015

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

CUSTOMS AMENDMENT (AUSTRALIAN TRUSTED TRADER PROGRAMME) BILL 2015

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

(Circulated by authority of the Assistant Minister for Immigration and Border Protection, Senator the Hon Michaelia Cash)

 





CUSTOMS AMENDMENT (AUSTRALIAN TRUSTED TRADER PROGRAMME) BILL 2015

OUTLINE

The purpose of this Bill is to amend the Customs Act 1901 (the Customs Act) to establish the Australian Trusted Trader Programme.    

In particular the Bill will:

·          Enable entities to nominate themselves to participate in the Australian Trusted Trader Programme (the Programme);

·          Allow the Comptroller-General of Customs to enter into a trusted trader agreement (an agreement) with an entity and provide administrative benefits to that entity if:

o   the entity nominates itself to participate in the Programme; and

o   the Comptroller-General of Customs considers that it is reasonably likely that the entity will satisfy the qualification criteria set out in the rules;

·          Allow the Comptroller-General of Customs to vary an agreement to provide additional administrative benefits and / or legislative benefits under Part IV (other than Division 1) and Part VI (other than Division 1) of the Customs Act if he or she is satisfied, following validation of the qualification criteria, that the entity satisfies the qualification criteria set out in the rules;

·          Provide that agreements may be subject to conditions prescribed by the rules and terms and conditions specified in the agreement;

·          Allow the Comptroller-General of Customs to vary, suspend or terminate an agreement unilaterally if he or she reasonably believes that the entity has not, or is not complying with any condition prescribed by the rules or any term or condition specified in the agreement;

·          Allow a decision of the Comptroller-General of Customs to refuse to enter into a trusted trader agreement, to be a decision subject to review by the Administrative Appeals Tribunal (AAT);

·          Allow a decision of the Comptroller-General of Customs to refuse to vary a trusted trader agreement, to be a decision subject to review by the AAT;

·          Allow a unilateral decision of the Comptroller-General of Customs to vary, suspend  or terminate a trusted trader agreement, to be a decision subject to review by the AAT;

·          Allow the Comptroller-General of Customs to maintain a public register containing information of a kind prescribed by the rules in relation to each trusted trader agreement entered into under new Part XA of the Customs Act; and

·          Allow the Comptroller-General of Customs to prescribe rules, by legislative instrument, for and in relation to the operation of the Programme.

FINANCIAL IMPACT STATEMENT

The Bill has no financial impact.

 

 

 

                                                                                                             

 



Statement of Compatibility with Human Rights

 

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

CUSTOMS AMENDMENT (AUSTRALIAN TRUSTED TRADER PROGRAMME) BILL 2015

This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in the definition of human rights in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

Overview of the Bill

The Bill will amend the Customs Act 1901 (Customs Act) to:

·          Establish the Australian Trusted Trader Programme (the Programme);

·          Enable entities to nominate themselves to participate in the Programme;

·          Allow the Comptroller-General of Customs to enter into a trusted trader agreement (an agreement) with an entity and provide administrative benefits to that entity if:

o   the entity nominates itself to participate in the Programme; and

o   the Comptroller-General of Customs considers that it is reasonably likely that the entity will satisfy the qualification criteria set out in the rules;

·          Allow the Comptroller-General of Customs to vary an agreement to provide additional administrative benefits and / or legislative benefits under Part IV (other than Division 1) and Part VI (other than Division 1) of the Customs Act if he or she is satisfied, following validation of the qualification criteria, that the entity satisfies the qualification criteria set out in the rules;

·          Provide that agreements may be subject to conditions prescribed by the rules and terms and conditions specified in the agreement;

·          Allow the Comptroller-General of Customs to vary, suspend or terminate an agreement unilaterally if he or she reasonably believes that the entity has not, or is not complying with any condition prescribed by the rules or any term or condition specified in the agreement;

·          Allow a decision of the Comptroller-General of Customs to refuse to enter into a trusted trader agreement, to be a decision subject to review by the Administrative Appeals Tribunal (AAT);

·          Allow a decision of the Comptroller-General of Customs to refuse to vary a trusted trader agreement, to be a decision subject to review by the AAT;

·          Allow a unilateral decision of the Comptroller-General of Customs to vary, suspend  or terminate a trusted trader agreement to be a decision subject to review by the AAT;

·          Allow the Comptroller-General of Customs to maintain a public register containing information of a kind prescribed by the rules in relation to each trusted trader agreement entered into under new Part XA of the Customs Act; and

·          Allow the Comptroller-General of Customs to prescribe rules, by legislative instrument, for and in relation to the operation of the Programme.

Human rights implications

This Bill promotes the right to a fair and public hearing and engages the rights of equality and non-discrimination and privacy and reputation. 

Right to Equality and Non-discrimination

Article 26 of the International Covenant on Economic, Social and Cultural Rights (ICCPR) provides the right of all persons to be equal before the law and to be entitled without any discrimination to the equal protection of the law.  This requires the law to prohibit discrimination and provide guarantees to all persons of equal and effective protection against discrimination on any ground.  In General Comment 18 (non-discrimination), the UN Human Rights Committee observed that not every differentiation of treatment will constitute discrimination, if the criteria for such differentiation are reasonable and objective and if the aim is to achieve a purpose which is legitimate under the ICCPR.

Under the Bill, the Comptroller-General of Customs may enter into a trusted trader agreement with an entity if the entity nominates itself to participate in the Programme; and the Comptroller-General of Customs considers that it is reasonably likely that the entity will satisfy the qualification criteria set out in the rules.  The requirement for entities to satisfy qualification criteria to participate in the Programme may be considered to limit the right to equality and non-discrimination as not all entities who nominate themselves to participate in the Programme will be eligible to participate.

The Programme is based on the World Customs Organization (WCO) Authorised Economic Operator concept which encourages Governments to tailor their border clearance requirements to match risks specific to particular goods and entities in the international supply chain, consistent with the World Trade Organization’s Agreement on Trade Facilitation (WTO ATF).  As a result, the qualification criteria to participate in the Programme will be based on the WCO SAFE Framework of Standards to Secure and Facilitate Global Trade (WCO SAFE Framework).  This framework sets out a range of principles and standards to guide international customs administrators in facilitating global trade by assessing business operations, supply chain security, trade compliance and general best practice.  Consistent with the WTO ATF and the WCO SAFE Framework, the Programme introduces a differentiated trust-based regulatory treatment at the border for those entities that meet or exceed international supply chain security and trade compliance standards.  

As a result, the qualification criteria is a reasonable and appropriate limitation to ensure that only those entities with strong supply chain security and trade compliance standards are eligible to participate in and receive trade facilitation benefits under the Programme.

To support the legitimate aim of the Programme and ensure that entities are afforded the right to equal and effective protection against discrimination, the Bill allows a decision of the Comptroller-General of Customs to refuse to enter into a trusted trader agreement to be subject to external merits review by the Administrative Appeals Tribunal (AAT).

Right to Privacy

Article 17 of the ICCPR prohibits unlawful or arbitrary interferences with a person’s privacy.  It also prohibits unlawful attacks on a person’s honour or reputation.  It provides that persons have the right to protection of the law against such interference or attacks.  An interference with privacy will not be arbitrary if it is authorised by law or consistent with the provisions, aims and objectives of the ICCPR and reasonable in the circumstances.  Reasonableness, in this context, incorporates notions of proportionality, appropriateness and necessity.  In essence, this will require that limitations: 

-        serve a legitimate objective

-        adopt a means that is rationally connected to that objective, and

-        the means adopted are not more restrictive than they need to be to achieve that objective.

A number of amendments in the Bill engage the right to privacy contained in Article 17 of the ICCPR because they require the collection, use and disclosure of commercial and personal information.

Nomination

Under the Bill, the Comptroller-General of Customs may enter into an agreement with an entity if, amongst other things, the entity nominates itself to participate in the Programme.  Participation in the Programme is voluntary and will require the entity to disclose information to the Comptroller-General of Customs as part of its nomination.    

A nomination made by an entity must be in an approved form (if made by document) or an approved statement (if made electronically).  The nomination will require the entity seeking to participate in the Programme to complete a self-assessment questionnaire that may involve the disclosure of commercial in confidence or personal information.  If relevant, the information provided by the entity may need to be disclosed to other government border agencies for the purposes of assessing the risk associated with entity being an interim or ongoing trusted trader.  This limitation is necessary as the basis of the Programme is for an entity to demonstrate how they meet specified supply chain security and trade compliance standards in their activities in the international supply chain.  To satisfy some of the qualification criteria, the entity may need to disclose personal information, for example, personnel records to demonstrate who has access to the goods, or commercial in confidence information, for example, financial records to demonstrate the entity’s financial viability.  The collection, use and disclosure of this information will be done in accordance with the Privacy Act 1988 and the Australian Privacy Principles

To the extent that an entity’s right to privacy is affected by the amendments, the impact is not arbitrary.  The amendments are reasonable, necessary and proportionate to achieving the legitimate aim of the Programme and will ensure proper governance of the Programme within the Department. 

Variation

Amendments in the Bill allow for the variation of an agreement if, following a validation based on physical inspection and audit, the Comptroller-General of Customs is satisfied that the entity meets the qualification criteria set out in rules.  As part of the validation, staff of the Department will need to enter the premises of the entity to assess the entity against the qualification criteria in the rules and verify the information supplied in their nomination (self-assessment questionnaire).  This may be seen as limiting the right to privacy; however the entry to premises will not be able to occur without the written consent of the entity.  Any validation activity that requires entry to an entity’s premises will be arranged in consultation with the entity. In addition, the collection, use and disclosure of any information obtained during the validation process will be in accordance with the Privacy Act 1988 and the Australian Privacy Principles .   

Public Register of Trusted Trader Agreements

Amendments in the Bill also allow the Comptroller-General of Customs to publish and maintain a public register containing certain information on trusted trader agreements which have been entered into. This engages the right to privacy, honour and reputation because the public register may contain information such as:

-        the name of the entity who has entered into a trusted trader agreement;

-        the status of the agreement (including whether it confers an interim or ongoing status, whether it is in force, whether it or has been suspended (including the period of that suspension) and whether it has been terminated); and

-        the kinds of benefits that the entity is receiving, or will receive, under the agreement.  

Disclosure of this information is necessary to ensure transparency of the Programme.  It will identify the entities who are participating the Programme and provide the status of that agreement, including the kind of benefits the entity is receiving, at any given time.  This information is necessary for other entities in the international supply chain to make an informed decision when they are choosing business partners and want to link with other trusted traders to ensure an end to end secure international supply chain. 

To the extent that an entity’s right to privacy is affected by the amendments, the impact is not arbitrary.  The amendments are reasonable, necessary and proportionate to achieving the legitimate aim of the Programme and will ensure proper governance and transparency of the Programme within the Department. 

Finally, the amendments do not limit the obligations of the Department under the Privacy Act 1988 and the Australian Privacy Principles .  The Department will adhere to the safeguards in the Privacy Act 1988 and Australian Privacy Principles to ensure no unlawful interference with privacy, honour or reputation occurs.

Right to a Fair and Public Hearing

Article 14.1 of the ICCPR provides the right a fair and public hearing in civil proceedings as one of the guarantees in relation to legal proceedings.  The right to a fair hearing provides that all persons are equal before courts and tribunals and the right to a fair and public hearing before a competent, independent and impartial court or tribunal established by law.

The Bill promotes this human right because it provides for the external merits review of the certain decisions by the Comptroller-General of Customs under the Programme.  These include:

-        a decision of the Comptroller-General of Customs to refuse to enter into a trusted trader agreement under subsection 176A(1);

-        a decision of the Comptroller-General of Customs to refuse to vary a trusted trader agreement under subsection 177(2); and

-        a decision of the Comptroller-General of Customs to vary, suspend or terminate a trusted trader agreement under subsection 178A(1).  

This supports the right to a fair hearing as entities may apply to the AAT to seek an independent review of a decision made by the Comptroller-General of Customs.  

An internal review mechanism is also intended to be available for entities to seek an initial review of these decisions.  This internal review mechanism is intended to be established administratively during the pilot of the Programme, with a view to test and refine this approach before establishing it in the Customs Act. 

Conclusion

The Bill is compatible with human rights as it seeks to promote the right to a fair and public hearing.  While some of the amendments engage human rights relating to equality and non-discrimination and the right to privacy and reputation, it maintains all existing protections contained in Australian law and does not seek to limit these rights in any way. 

Assistant Minister for Immigration and Border Protection, Senator the Hon Michaelia Cash



CUSTOMS AMENDMENT (AUSTRALIAN TRUSTED TRADER PROGRAMME) BILL 2015

Background

1.    In June 2005, the World Customs Organization (WCO) established the SAFE Framework of Standards to Secure and Facilitate Global Trade (WCO SAFE Framework).  The WCO SAFE Framework introduced standards that promote supply chain security and trade facilitation at a global level to allow certainty and predictability of trade moving across international borders.  This concept has been adopted by all of Australia’s major trading partners such as the United States, Canada, New Zealand, Japan, China and the European Union over the last ten years.  The WCO SAFE Framework promotes standards that enable a harmonised and integrated approach to supply chain management for all participants in the international supply chain.  

2.    Consistent with the WCO SAFE Framework, the Australian Trusted Trader Programme will introduce a differentiated trust-based regulatory framework at the border for those entities that meet or exceed international supply chain security and trade compliance standards.  Entities meeting these standards will be assessed as low-risk and benefit from reduced regulatory burden and streamlined customs processes.  This will alleviate a significant trade burden and enhance the competitiveness of Australian international businesses.

3.    While the Australian Trusted Trader Programme is a trade facilitation initiative based on internationally recognised supply chain security and trade compliance standards, it contributes to a holistic compliance framework as an important element of the compliance continuum that provides a better understanding of the entities moving goods across our borders.  This strategy will work to ‘shrink the haystack’ by removing trusted entities from traditional transaction based border risk assessment.

4.    This approach aligns with the Government's deregulation agenda and contributes to the Economic Action Strategy and the Prime Minister's Industry Innovation and Competitiveness Agenda.  These reforms are important for managing volume growth and ensuring that resources can be diverted away from highly compliant traders to focus on risk and non-compliance. 

5.    The approach is also a key component of the World Trade Organization's Agreement on Trade Facilitation and an integral part of the Government's commitment to lower the cost of trading across borders as outlined in the Government's G20 Australia 2014 - Comprehensive Growth Strategy.

6.    The Australian Trusted Trader Programme has been co-designed with industry stakeholders, partner agencies and international counterparts both at multilateral and bilateral levels.  The Australian Trusted Trader Programme is expected to enhance economic competitiveness, reduce regulatory burden, increase supply chain security, enhance the risk management of goods at the Australian border and support accelerated trade resumption following an international security incident. 

7.    Participation in the Australian Trusted Trader Programme will be voluntary and allow entities in the international supply chain such as importers, exporters, customs brokers, freight forwarders and transport companies to nominate themselves to participate.  The Australian Trusted Trader Programme is a voluntary partnership between government and business underpinned by shared responsibility and transparency.  Entities that choose not to participate will not be considered high-risk or targeted for not taking part in the Programme.

8.    To participate in the Australian Trusted Trader Programme an entity will be required to meet specified qualification criteria which will be based on the WCO SAFE Framework.  The WCO SAFE Framework addresses a number of key areas of business operations to support supply chain security, trade compliance and general best practice. Examples of the requirements include specific standards in the areas of personnel security, information security, physical security and conveyance security.

9.    An assessment of how the entity meets the qualification criteria will occur through the consideration of an entity’s response to a self-assessment questionnaire and a validation process involving a physical inspection and audit.  Once the entity is participating in the Australian Trusted Trader Programme, the entity will be subject to ongoing monitoring and will be required to undergo validation against the qualification criteria at regular intervals and, if necessary, following the identification of an incident or irregularities.  The entity will also have a continuing obligation to notify the Department, as soon as practicable, of any changes that may affect their trusted trader status and any supply chain security or trade compliance incidents or irregularities.

10. There are no upfront or ongoing fees and charges associated with making a nomination to participate in the Australian Trusted Trader Programme.  However, there may be some additional business costs associated with meeting the qualification criteria.  In return for meeting the qualification criteria, entities participating in the Australian Trusted Trader Programme will benefit from reduced regulatory burden and streamlined customs processes.  The benefits available to participants will be structured to promote best practice management of supply chain security and trade compliance.

NOTES ON CLAUSES

Clause 1 - Short title

11. This clause is a formal provision specifying the short title of the Bill, which, when enacted, is to be cited as the Customs Amendment (Australian Trusted Trader Programme) Act 2015 .

Clause 2 - Commencement

12. This clause provides for the commencement of the Act, as set out in the commencement information table.  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.

13. The first item of the table provides that sections 1 to 3 and anything in this Act not covered elsewhere by the table commence on the day this Act receives the Royal Assent.

14. The second item of the table provides that Schedule 1, Part 1 of the Act will commence as follows:

(a)    if this Act receives the Royal Assent before 1 July 2015 - 1 July 2015;

(b)   if this Act receives the Royal Assent on or after 1 July 2015 - the day after the Act receives the Royal Assent.

15. The third item of the table provides that Schedule 1, Part 2 of the Act will commence as follows:

(a)   if this Act receives the Royal Assent before 1 July 2015 -  immediately after the commencement of section 54 of the Australian Border Force Act 2015 ; and

(b)   if this Act receives the Royal Assent on or after 1 July 2015 - the day after this Act receives the Royal Assent.

16. Subclause 2(2) provides that any information in column 3 of the table is not part of the 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

17. This clause provides that legislation specified in a Schedule to this Act is amended or repealed by items in the Schedule concerned.  Any other item in a Schedule to this Act has effect according to its terms.



Schedule 1 - AUSTRALIAN TRUSTED TRADER PROGRAMME

Part 1 - Main amendments

Customs Act 1901

Item 1 - Subsection 4(1)

18. Item 1 amends subsection 4(1) of the Customs Act 1901 (the Customs Act) to define two new terms referred to in this Act which relate to the Australian Trusted Trader Programme.  These new terms are outlined below.

rules , in relation to Part XA has the meaning given by section 179.

trusted trader agreement means an agreement entered into under section 176A between the Comptroller-General of Customs and an entity, and includes such an agreement as varied and in force from time to time.

Item 2 - At the end of Division 1A of Part IV

19. This item inserts a new section into Part IV of the Customs Act.  Part IV deals with the importation of goods.

20. Under the Australian Trusted Trader Programme, agreements may be entered into with an entity under new Part XA of the Customs Act (as set out below).  These agreements may, after the interim status stage, be varied to allow an entity to either be released from a statutory obligation or to satisfy a statutory obligation in a different way.  This will only apply in respect of obligations in Part IV (other than Division 1) or Part VI (other than Division 1) of the Customs Act which are set out in the rules and specified in an agreement.

Section 49C - Obligations under this Part may be satisfied in accordance with a trusted trader agreement

21. New subsection 49C(1) provides that an entity is released from an obligation that the entity would otherwise be required to satisfy under Part IV (other than Division 1), if the obligation is:

(a)   of a kind prescribed by the rules for the purposes of Part XA; and

(b)   specified in those rules as an obligation from which an entity may be released; and

(c)   specified in a trusted trader agreement between the Comptroller-General of Customs and the entity.

22. This will put it beyond doubt that the entity does not have to comply with the relevant statutory obligation in the Customs Act and will not be in breach of the Act if it fails to so comply.

23. New subsection 49C(2) applies if an obligation must be satisfied under a provision of Part IV (other than  Division 1) and the obligation is:

(a)   of a kind prescribed by the rules for the purposes of Part XA; and

(b)   specified in those rules as an obligation that may be satisfied in a way other than required by Part IV; and

(c)   specified in a trusted trader agreement between the Comptroller-General of Customs and an entity.

24. This provision states that, despite the relevant provision in the Customs Act, the entity may satisfy the obligation in the way specified in the agreement.  This means that the entity will not be in breach of the Customs Act if it satisfies the obligation in the way specified in the trusted trader agreement.

Item 3 - Before Division 1 of Part VI

25. This item inserts a new division into Part VI of the Customs Act.  Part VI deals with the exportation of goods.

26. Under the Australian Trusted Trader Programme, agreements may be entered into with an entity under new Part XA of the Customs Act (as set out below).  These agreements may, after the interim status stage, be varied to allow an entity to either be released from a statutory obligation or to satisfy a statutory obligation in a different way.  This will only apply in respect of obligations in Part IV (other than Division 1) or Part VI (other than Division 1) of the Customs Act which are set out in the rules and specified in an agreement.

Division 1AAA - Preliminary

Section 107 - Obligations under this Part may be satisfied in accordance with a trusted trader agreement

27. New subsection 107(1) provides that an entity is released from an obligation that the entity would otherwise be required to satisfy under Part VI (other than Division 1), if the obligation is:

(a)   of a kind prescribed by the rules for the purposes of Part XA; and

(b)   specified in those rules as an obligation from which an entity may be released; and

(c)   specified in a trusted trader agreement between the Comptroller-General of Customs and the entity.

28. This will put it beyond doubt that the entity does not have to comply with the relevant statutory obligation in the Customs Act and will not be in breach of the Act if it fails to so comply.

29. New subsection 107(2) applies if an obligation must be satisfied under a provision of Part VI (other than  Division 1) and the obligation is:

(a)   of a kind prescribed by the rules for the purposes of Part XA; and

(b)   specified in those rules as an obligation that may be satisfied in a way other than required by Part VI; and

(c)   specified in a trusted trader agreement between the Comptroller-General of Customs and an entity.

30. This provision states that, despite the relevant provision in the Customs Act, the entity may satisfy the obligation in the way specified in the agreement.  This means that the entity will not be in breach of the Customs Act if it satisfies the obligation in the way specified in the trusted trader agreement.

Item 4 - After Part X

31. This item inserts a new Part XA into the Customs Act titled ‘Australian Trusted Trader Programme’.

Part XA - Australian Trusted Trader Programme

Division 1 - Preliminary

Section 176 - Establishment of the Australian Trusted Trader Programme

32. This section provides that the Comptroller-General of Customs may, in accordance with this new Part XA, establish a programme to provide trade facilitation benefits to entities.

33. A programme established under this Part is to be known as the Australian Trusted Trader Programme.

Division 2 - Trusted trader agreement

Subdivision A - Assessment of qualification criteria based on documentary evidence

Section 176A - Trusted trader agreement may be entered into

34. New subsection 176A(1) allows the Comptroller-General of Customs to enter into a trusted trader agreement with an entity if:

(a)   the entity nominates itself to participate in the Australian Trusted Trader Programme; and

(b)   the Comptroller-General of Customs considers that it reasonably likely that the entity will satisfy the qualification criteria set out in the rules.

35. The standard of reasonably likely in this context means that it is probable that the entity will satisfy the qualification criteria set out in the rules upon physical inspection and audit.

36. In deciding whether to enter into a trusted trader agreement, new subsection 176A(2) provides that the Comptroller-General of Customs must consider:

(a)   any matter set out in the rules; and

(b)   any other matter that he or she considers relevant.

37. Other matters that the Comptroller-General of Customs may consider relevant might include things like the role of the entity in the international supply chain, the nature of the goods that the entity may handle, the location of the entity’s premises, and the various points of activity in the international supply chain.

38. New subsection 176A(3) provides that if a trusted trader agreement is entered into with an entity:

(a)   the agreement confers an interim trusted trader status on the entity; and

(b)   the entity may receive benefits of a kind prescribed by the rules and specified in the agreement.

39. Unless the agreement is suspended or terminated, this ‘interim trusted trader’ status will be conferred on the entity until the Comptroller-General of Customs is satisfied, following validation, that the entity meets the qualification criteria.  The validation will require a physical inspection and audit of the entity to assess them against the qualification criteria and verify the information supplied in their nomination. Details regarding the validation will be specified in the trusted trader agreement. 

40. As an ‘interim trusted trader’, the entity will not be entitled to represent itself expressly or by implication as an Australian Trusted Trader or a Trusted Trader. This is because these terms have international connotations and have been promoted by the Department domestically and internationally as a term for those entities that have undergone the full accreditation process, including physical inspection and audit.

41. As an ‘interim trusted trader’ an entity will only be eligible to receive limited administrative benefits such as enhanced client service including a dedicated Department account manager; priority when seeking tariff, valuation and origin advices; and priority when applying for a drawback or refund of duty.  

42. The administrative benefits that may be provided to an entity with an ‘interim trusted trader’ status will be based on the risk assessment of the entity and the role of the entity in the international supply chain.  Because of this, certain benefits will not be relevant for some entities.  For example, the benefit of priority when seeking tariff, valuation and origin advices would not be relevant to a domestic transport company as they would not apply for such advices.

Section 176B - Nomination process

43. As participation in the Australian Trusted Trader Programme is voluntary, entities are required to nominate themselves to the Department if they wish to participate.

44. New subsection 176B(1) provides that a nomination to participate in the Australian Trusted Trader Programme may be made by an entity by document or electronically.   

45. New subsection 176B(2) requires that if a nomination is made by document it must:

(a)   be communicated to the Comptroller-General of Customs; and

(b)   be in an approved form; and

(c)   contain the information required by the approved form; and

(d)   be signed in a manner indicated by the approved form.

46. New subsection 176B(3) provides that an electronic nomination must communicate such information as is set out in an approved statement.

47. While entities may nominate themselves by document or electronically, the intention is for entities to access, complete and submit their nomination electronically through the Trusted Trader Portal. The Trusted Trader Portal will be made available through the Department’s website and will allow entities to access all relevant information concerning the Australian Trusted Trader Programme. The ability for an entity to make a nomination by document has been provided as a contingency only, in case an entity is unable to access, complete and submit their nomination electronically through the Trusted Trader Portal.

48. The nomination will be a self-assessment questionnaire (in an approved form or approved statement) which will contain questions addressing the qualification criteria set out in the rules.  It will also contain general information questions to allow the Comptroller-General of Customs to gather sufficient information to form a comprehensive view of the entity and identify any risks in its international supply chain. 

49. The self-assessment questionnaire will be available on the Trusted Trader Portal and, where possible, will be tailored to the entity depending on its role in the international supply chain. This will be facilitated through an administrative expression of interest (EOI) process before the entity formally nominates itself to participate in the Programme.  The EOI process will require the entity to identify itself and describe its business operations.  This information will then be used to identify relevant parts of the self-assessment questionnaire that will require completion. For example, a freight forwarder that never accepts physical possession of goods will not be required to answer questions relating to cargo security.  Guidance will be provided to the entity on the type of information that will need to be included in the self-assessment questionnaire and the level of detail required in their responses.

Subdivision B - Validation of qualification criteria based on physical inspection and audit

Section 177 - Variation of trusted trader agreement

50. This section allows a trusted trader agreement to be varied by the Comptroller-General of Customs if:

(a)   a trusted trader agreement has been entered into with an entity; and

(b)   the Comptroller-General of Customs is satisfied that the entity satisfies the qualification criteria set out in the rules.

51. In determining whether an entity satisfies the qualification criteria set out in the rules, a validation process will need to occur.  This will require a physical inspection and audit of the entity to assess them against the qualification criteria and verify the information supplied in their nomination (self-assessment questionnaire).  The validation will be undertaken by the Department and is intended to occur within 12 months of entering into the trusted trader agreement, unless otherwise agreed.  Details relating to the physical inspection and audit will be specified in the trusted trader agreement. 

52. If, after the validation process, the Comptroller-General of Customs is not satisfied that the entity meets the qualification criteria set out in the rules, then depending on the degree of non-compliance, the agreement may be varied, suspended or terminated unilaterally by the Comptroller-General of Customs under section 178A.  In this circumstance, to the extent possible, the Comptroller-General of Customs may also provide advice to the entity about how they can improve their standards or procedures to address the non-compliance.  This may allow the entity to address the non-compliance in order to meet the qualification criteria necessary to gain ongoing trusted trader status at a future time.

53. If following validation, the Comptroller-General of Customs is satisfied that the entity satisfies the qualification criteria set out in the rules, then he or she may vary the trusted trader agreement under this section.

54. New subsection 177(2) provides that the Comptroller-General of Customs may vary a trusted trader agreement to provide for:

(a)   the entity to be released from an obligation, of a kind prescribed by the rules and specified in the agreement, that the entity would otherwise be required to satisfy under Part IV (other than Division 1) or Part VI (other than Division 1); or

(b)   the entity to satisfy an obligation, of a kind prescribed by the rules and specified in the agreement, that the entity would otherwise be required to satisfy under Part IV (other than Division 1) or Part VI (other than Division 1) in a way specified in the agreement.

55. New subsection 177(2) is necessary to support the provision of streamlined customs procedures to an entity where the Comptroller-General of Customs is satisfied that the entity satisfies the qualification criteria set out in the rules.  The note at the end of this subsection clarifies that Parts IV and VI of the Customs Act deal with the importation and exportation of goods, respectively.  Part IV of the Customs Act includes obligations relating to the reporting of cargo, the entry, unshipment, landing and examination of goods and import declarations.  Part VI of the Customs Act includes obligations relating to entry and clearance of goods for export, examining goods for export that are not yet subject to Customs control and exportation procedures after certificates of clearance are issued.  

56. New subsection 177(3) provides that the Comptroller-General of Customs may vary a trusted trader agreement to provide for benefits of a kind prescribed by the rules and specified in the agreement.  This will allow an agreement to be varied to provide additional administrative benefits to an entity.

57. In deciding whether to vary a trusted trader agreement, new subsection 177(4) provides that the Comptroller-General of Customs must consider:

(a)   any matter set out in the rules; and

(b)   any other matter that he or she considers relevant.

58. New subsection 177(5) provides that if a trusted trader agreement is so varied:

(a)   the agreement confers an ongoing trusted trader status on the entity; and

(b)   the entity may receive benefits of a kind prescribed by the rules and specified in the agreement.

59. As an ‘ongoing trusted trader’, the entity will be entitled to represent itself expressly or by implication as an Australian Trusted Trader or a Trusted Trader.  They may also be eligible to receive further administrative benefits and legislative benefits. Legislative benefits relate to the obligations that an entity may be released from under Part IV (other than Division 1) or Part VI (other than Division 1), or obligations under those Parts (other than Division 1) that the entity may satisfy in an alternative manner. 

60. The benefits (both administrative and legislative) that may be provided to an ongoing trusted trader will be based on the risk assessment of the entity, the role of the entity in the international supply chain and whether the entity demonstrates best practice.  Certain benefits may require the entity to satisfy additional criteria as prescribed in the rules.    

              

Subdivision C - General provisions relating to trusted trader agreements

Section 178 - Terms and conditions of trusted trader agreements

61. This new section provides that a trusted trader agreement may be subject to conditions prescribed by the rules and terms and conditions specified in the agreement.

  Section 178A - Variation, suspension or termination of trusted trader agreements

62. New subsection 178A(1) provides that the Comptroller-General of Customs may vary, suspend or terminate a trusted trader agreement if he or she reasonably believes that the entity to which the agreement relates has not complied, or is not complying with any condition prescribed by the rules; or any term or condition specified in the agreement. 

63. In deciding whether to vary, suspend or terminate a trusted trader agreement, new subsection 178A(2) provides that the Comptroller-General of Customs must consider:

(a)   any matter set out in the rules; and

(b)   any other matter that he or she considers relevant.

64. Under new subsection 178A(3), if a trusted trader agreement is varied, suspended or terminated under subsection (1), it must be done in accordance with the procedure prescribed by the rules.  The procedure prescribed by the rules is intended to be fair and proper and in accordance with the principles of procedural fairness.

65. Despite the unilateral power of the Comptroller-General of Customs in this section, a trusted trader agreement may also be varied, suspended or terminated by mutual consent under general or common law. 

Division 3 - Register of Trusted Trader Agreements

Section 178B - Register of Trusted Trader Agreements

66. New subsection 178B(1) provides that the Comptroller-General of Customs may maintain a register, to be known as the Register of Trusted Trader Agreements, containing information of a kind prescribed by the rules in relation to each trusted trader agreement entered into under new Part XA.

67. New paragraph 179(1)(j) allows the Comptroller-General of Customs to prescribe rules, by legislative instrument, for and in relation to the kinds of information that may be published in the Register of Trusted Trader Agreements, including:

·          that an entity has entered into a trusted trader agreement (subparagraph 179(1)(j)(i)).  This may include the name and ABN/ACN of the entity;

·          whether the agreement confers interim or ongoing trusted trader status on the entity (subparagraph 179(1)(j)(ii)).  This information may be published on the Register to provide the current status of the entity;

·          the kinds of benefits that the entity is receiving, or will receive, under the agreement (subparagraph 179(1)(j)(iii)); 

·          whether the agreement is in force (subparagraph 179(1)(j)(iv)).  This information may be published on the Register to provide the current status of the agreement;

·          whether the agreement is or has been suspended (subparagraph 179(1)(j)(v)).This information may be published on the Register to provide the current status of the agreement and to provide a status history of the entity to identify whether the entity’s agreement has been suspended in the past and if so, the period of that suspension; and

·          whether the agreement has been terminated (subparagraph 179(1)(j)(vi)).  This may be published on the Register to provide a status history of the entity to identify whether the entity’s agreement has been terminated in the past and if so, the period of that termination.

68. New subsection 178B(2) provides that the Register of Trusted Trader Agreements is to be made publicly available. The Register of Trusted Trader Agreements is intended to be publicly available on the Department’s website and through the Trusted Trader Portal.

69. The information contained in the Register of Trusted Trader Agreements will be collected, stored, used and disclosed in accordance with the Privacy Act 1988 (Cth).   

70. For the avoidance of doubt, new subsection 178B(3) provides the Register of Trusted Trader Agreements is not a legislative instrument.

Division 4 - Rules

Section 179 -Rules

71. New subsection 179(1) provides that the Comptroller-General of Customs may, by legislative instrument, prescribe rules for and in relation to the following:

(a)   the qualification criteria in relation to which a trusted trader agreement may be:

(i)     entered into under section 176A; or

(ii)    varied under section 177;

(b)   the matters that the Comptroller-General of Customs must consider when deciding whether to:

(i)     enter into a trusted trader agreement under section 176A; or

(ii)    vary the agreement under section 177;

(c)   the conditions on which an entity participates in the Australian Trusted Trader Programme;

(d)   the kind of obligation under Part IV (other than Division 1) or Part VI (other than Division 1) that an entity may be released from, or required to satisfy in a way other than required under those Parts, under a trusted trader agreement;

(e)   the kind of benefits that an entity may receive under a trusted trader agreement;

(f)    any criteria to be satisfied for an entity to receive benefits of a kind mentioned in paragraph (e);

(g)   any other conditions to which a trusted trader agreement may be subject;

(h)   the procedures that the Comptroller-General of Customs must follow when varying, suspending or terminating a trusted trader agreement under section 178A;

(i)     the matters that the Comptroller-General of Customs must consider before deciding whether to vary, suspend or terminate a trusted trader agreement under section 178A; and

(j)     the kinds of information that may be published on the Register of Trusted Trader Agreements, including:

(i)     that an entity has entered into a trusted trader agreement;

(ii)    whether the agreement confers interim or ongoing trusted trader status on the entity;

(iii)   the kinds of benefits that the entity is receiving, or will receive, under the agreement;

(iv) whether the agreement is in force;

(v)   whether the agreement is or has been suspended; and

(vi) whether the agreement has been suspended terminated.

72. New subsection 179(2) provides that for the purpose of paragraph (1)(d):

(a)   a rule prescribed for the purposes of subparagraph (1)(d)(i) must specify that the obligation is one from which an entity may be released; and

(b)   a rule prescribed for the purposes of subparagraph (1)(d)(ii) must specify that the obligation is one that may be satisfied by an entity in a way other than required by Part IV (other than Division 1) or Part VI (other than Division 1).

73. New subsection 179(3) provides that the Comptroller-General of Customs may, by legislative instrument, also make rules prescribing matters:

(a)   required or permitted by this Part to be prescribed by the rules; or

(b)   necessary or convenient to be prescribed for carrying out or giving effect to this Part.

74. For the avoidance of doubt, new subsection 179(4) provides that rules made under this section may not do the following:

(a)   create an offence or civil penalty;

(b)   provide powers of:

(i)     arrest or detention; or

(ii)    entry, search or seizure;

(c)   impose a tax;

(d)   set out an amount to be appropriated from the Consolidated Revenue Fund under an appropriation in this Act;

(e)   directly amend the text of this Act.

75. The reference to ‘directly amend’ in paragraph 179(4)(e) means to make an amendment that would be required by law to be incorporated in a reprint or compilation of the Act.  The paragraph does not prohibit a rule that modifies the effect of a provision, such as by providing that a provision has effect as if it had been amended in a specified way, but does not make a direct amendment of any Act. 

76. Subsection 179(4) is a standard provision to clarify the limitations of rule-making powers.

Item 5 - After paragraph 273GA(1)(jb)

77. This item amends subsection 273GA(1) of the Customs Act to ensure that the following decisions of the Comptroller-General of Customs may be subject to external merits review in the Administrative Appeals Tribunal:

(a)   a decision of the Comptroller-General of Customs to refuse to enter into a trusted trader agreement under subsection 176A(1);

(b)   a decision of the Comptroller-General of Customs to refuse to vary a trusted trader agreement under subsection 177(2); and

(c)   a decision of the Comptroller-General of Customs to vary, suspend or terminate a trusted trader agreement under subsection 178A(1).

Part 2 - Consequential amendments

Australian Border Force Act 2015

Item 6 - Subsection 54(1)

78. This item amends subsection 54(1) of the Australian Border Force Act 2015 to insert the words “(other than section 179 of the Customs Act 1901 )” after “law of the Commonwealth”.

79. The effect of this amendment will mean that the rule-making power in section 179 of this Act will not be delegable by the Comptroller-General of Customs.  This is consistent with Office of Parliamentary Counsel Drafting Directions which provide that a rule-making power should not be delegable.