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1999
THE PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF REPRESENTATIVES
EXPLANATORY
MEMORANDUM
(Circulated by authority of
the Minister for Justice and Customs,
Senator, the Honourable Amanda
Vanstone)
ISBN: 0642 391572
CUSTOMS AMENDMENT BILL (NO 2) 1999
OUTLINE
Section 64AB of the Customs Act 1901 (the Act)
currently requires masters, pilots or owners of ships or aircraft to communicate
to Customs a report detailing cargo intended to be unshipped at a particular
port or airport of arrival. Under the Act, the "owner of a ship or aircraft"
includes "a charterer of the ship or aircraft or a slot charterer or freight
forwarder responsible for the transportation of goods on the ship or aircraft".
The cargo report contains certain information in relation to each consignment of
goods that will be unloaded at an airport or port.
This Bill proposes to
make special arrangements about the reporting of high volume low value cargo.
High volume cargo relates to large number of consignments consolidated by the
owner of a ship or aircraft at a place outside Australia for transportation to
Australia. Such consignments are considered low value because the amount of
customs duty and sales tax are so small that they are not viable to be
collected. Consignments that are exempted from customs duty and sales tax are
also included in this class of consignments.
High volume low value
consignments may be typified by inter-office documents, letters, legal documents
and small mail order consignments.
In the transportation of goods,
different commercial arrangements are entered into by the owners of ships or
aircraft in order to maximise the commercial advantages in the transportation of
goods.
As a consequence, there may be a number of parties involved in the
reporting of cargo on a particular ship or aircraft. For example, the operator
of the ship or aircraft may be under contract to carry cargo on behalf of a
freight forwarder. In turn, a freight forwarder may further sublet its space on
the ship or aircraft to another freight forwarder and so on. The operator of the
ship will only have limited information about the cargo of the party to whom it
has sublet space on the ship or aircraft. Only the party to whom the space is
finally let, that is, the party who is contracted to transport the cargo to
Australia by the consignor will have all the information required to report the
cargo to Customs. These various arrangements are expressed in various commercial
documents namely the ocean bill of lading and house bill of lading, in the case
of sea cargo, and master, submaster and house air waybills (also known as a
consignment note), in the case of air cargo.
Currently, not all high
volume low value consignments are reported individually although they are
reported at the consolidated level that is at the master and submaster air
waybill levels. This situation is partly attributable to the limited capacity of
the Customs sea and air cargo reporting systems. However, the report at this
consolidated level does not give Customs sufficient information to properly
screen the consignments except by physical random checks.
Although high
volume low value consignments pose a low risk to revenue, it is, nevertheless,
crucial for Customs to be able to check that such consignments reported as high
volume low value consignments are, in fact, consignments of that nature. In
addition, Customs requires the information about each consignment to detect and
prevent the importation of prohibited goods such as illicit drugs. Previous
checks have shown that such goods Consequently, it has become necessary to
create a scheme to enable Customs to have access to information on high volume
low value consignments entering the country whilst also assisting the owners of
ships or aircraft to comply with their reporting obligations under the Act. This
Bill proposes amendments to the Act by introducing a new registration and
electronic cargo reporting scheme (referred throughout this memorandum as 1he
Scheme") for owners of ships and aircraft bringing high volume low value
consignments into Australia. Under the Scheme, owners of ships and aircraft may
apply for registration as "special reporters" and, if registered, would be
allowed to electronically report low value cargo at the level of specificity of
an ocean bill of lading or a master or sub-master air waybill, instead of
reporting the cargo at the individual consignment level. Thus, the Scheme allows
for a less detailed cargo report than is required by section 64AB for other
cargo. The Scheme also provides for a lower cost recovery screening charge in
respect of high volume low value cargo reports. The change in the screening
charge would be effected by the amendments to the Import Processing Charges Act
1997 contained in the Import Processing Charges Amendment Bill
1998.
While allowing for a less detailed report to be presented to
Customs, the Scheme requires special reporters to store and retain in their
computer facilities all information relating to each individual consignment. The
Scheme then provides Customs officers with access, either by consent or under a
warrant, to the premises of the special reporters so that Customs may audit the
information contained in the special reporter's computer facilities. Although
the Scheme will initially cover bulk consolidated mail order and bulk document
consignments, other classes of cargo may be included over time by amending the
Customs Regulations to so provide. The principal elements of the Scheme are as
follows:
Registration - To report high volume low value cargo
under the Scheme, a person must apply to be registered as a special reporter. To
be eligible for registration as a special reporter, a person must, among other
requirements, already be a registered user in relation to the Air Cargo
Automation System or the Sea Cargo Automation System under section 67C of the
Act and have computer facilities meeting the specifications determined by
Customs which would enable that person, if registered as a special reporter, to
electronically communicate to Customs a less detailed cargo
report.
Conditions - Upon registration, a special reporter must
comply with certain conditions relating to, among others, the storage and
maintenance of information in respect of individual consignments of the cargo
reported. A special reporter is also required to provide Customs With online
access to the information stored and with the capacity to download or upload the
information as required by Customs.
Renewal and cancellation of
registration - A registration under the Scheme lasts for 2 years from a date
specified by the CEO. A special reporter may seek to renew his or her
registration before its expiry. However, the CEO may, at any time, cancel the
special reporter's registration if he or she is satisfied, among other matters,
that the special reporter has breached any condition under the
Scheme.
Monitoring warrants - Due to the less detailed nature of
the cargo report to be made under the Scheme, it is necessary to provide Customs
with a facility to monitor the special reporter's compliance with the
requirements of the Scheme. A Customs officer may, therefore, apply to a
magistrate to obtain a monitoring warrant to enter the premises of the reporter
for that purpose, particularly where a special reporter refuses to voluntarily
consent to the entry of the officer to the
premises.
REGULATION IMPACT STATEMENT
PROPOSAL
FOR SPECIAL REPORTING AND CLEARANCE ARRANGEMENTS FOR HIGH VOLUME, LOW VALUE
CONSIGNMENTS
1. Specification of Policy
Objective(s)
Background
The Customs Amendment
Act (No. 1) 1997 introduced cost recovery charges relating to the reporting
and clearance of cargo. In particular, section 64ABC of the Act introduced the
liability to pay a screening charge.
Section 7 of the Import
Processing Charges Act 1997 determined the amount of the screening charge
to be $2.40 for each line of the cargo report that relates to a consignment of
goods the value of which does not exceed $250. This means that if a cargo report
contained 100 lines relating to consignments with a value less than $250, the
total screening charge which is payable would be $240. If the consignment is
valued at more than $250, then the consignment is required to be formally
entered in accordance with section 68(1)(a)-(c) of the Act.
All cargo
landed in Australia is required to be reported to Customs in accordance with
section 64AB of the Act. This report is required from the person who is
responsible for the transport of the cargo to Australia (herein referred to as
"the reporter"). It is the means by which Customs establishes that goods are
landed in Australia and the trigger to account for the goods for revenue and
community protection purposes (that is, the detection of illicit drugs and other
prohibited goods).
Cargo is required to be reported at the consignment
level. A consignment is represented by a commercial contract between the
consignor and a transport organisation (e.g. airline company, freight forwarder
or express courier) related to the transport of particular goods to the
consignee in Australia. The transport organisation is the reporter for the
purposes of the Act. In relation to air transport, the contract can take the
form of a master air waybill (MAWB), submaster waybill (SMAWB) or consignment
note.
These documents may represent contractual arrangements not only
related to the consignor and the reporter, but also reflect the contractual
arrangements between different transport organisations related to the
sub-letting of space on a particular flight or voyage. MAWBs and SMAWBs can act
as umbrella documents representing many consignment notes.
Customs
operates a computer system named Air Cargo Automation (ACA) which enables
persons required to report air cargo to Customs, in accordance with section 64AB
of the Act, to do so electronically.
Section 68 of the Act requires all
goods imported into Australia to be entered. There are a number of exceptions to
this requirement. Under section 68(1)(f) of the Act, if the goods are valued at
less than $250 an entry is not required. To determine whether an entry is
required, Customs screens the cargo report to identify which consignments may be
released without an entry.
In circumstances where a consignment is valued
at less than $250 but Customs duty and sales tax of more than $50 is payable,
the consignment is not released until the Customs duty and sales tax have been
paid. Customs By-Law 9640087, Item 32B of Schedule 4 to the Customs Tariff Act
1995 enables Customs to waive the payment of Customs duty and sales tax where
the combined amount payable is less than $50 on any one
consignment.
Besides determining whether an entry is required or duty is
payable on a consignment, Customs also checks the information pertaining to the
consignment for prohibited imports (such as illicit drugs) and other community
protection matters (e.g. goods subject to quarantine).
The screening
charge is payable by the reporter. It is payable in relation to those
consignments which are not required to be entered in terms of section 68(1)(f)
of the Act.
The screening charge of $2.40 for each consignment is based
on the cost of Customs' maintenance and development of ACA. The cost of
screening for community protection purposes of is not included in this
calculation. The majority of reporters reporting air cargo, report their cargo
electronically. The charge also includes costs related to the screening element
of the process which is performed manually by Customs officers. Consignments
valued at less than $250 by their nature are usually imported as air
cargo.
Issues
Subsequent to the implementation of
the screening charge, a number of consequential issues have been
identified.
• Document consignments
Enormous numbers
of consignments of documents arrive in Australia, for example, a minimum of
120,000 consignments arrive at Sydney's Kingsford Smith Airport each week. Over
the past 10 years, this business has grown by 650%.
Currently, these
consignments are not reported individually by reporters on ACA in accordance
with section 64AB of the Act. While they are not reported at the consignment
level, reporters, namely express couriers, do report consignments at a
consolidated level - the MAWB or SMAWB level.
However such reports do not
provide Customs with the information required in terms of section 64AB of the
Act and are merely an alert to Customs that a bulk consignment of documents has
landed. Consequently, Customs is unable to properly screen the consignments,
other than by physical random checks. At the same time it should be noted that
ACA does not have the capacity to handle the large volumes of bulk consignments
entering the country.
Because the consignments are not reported
individually on ACA, Customs is unable to determine the number of these
consignments. Consequently Customs is unable to apply the screening charge on
each consignment as required by section 7 of the Import Processing Charges
Act 1997. This is inequitable to all other reporters who are required to
report cargo at the consignment note level and do report consignments at this
level.
The effect is that the reporters of document consignments are not
paying any screening charges on document consignments, whereas all other
reporters of consignments are paying the screening charge. Customs uses the same
screening process for ail consignments and therefore the screening cost is
incurred by all reporters of consignments with a value of less than
$250.
• Mail order consignments
A number of freight
forwarders are making arrangements with overseas mail order houses whereby the
freight forwarder arranges consolidation and transport of the mail order
consignments from these mail order houses to Australia and then arranges for
their local distribution. These consignments are currently being reported on ACA
and the persons making the report are paying the screening
charge.
Although starting from a low base figure, this business is
growing by 600% annually. Such a growth rate will place increasing pressure on
ACA. A feature of these consignments is that there is a certain predictability
about their contents, because Customs knows of the particular mail order house
with which the freight forwarder is dealing.
Currently, freight
forwarders involved in the transportation of mail order consignments are
reporting all their consignments on ACA. They are paying the screening charge
for each consignment which has a value of less than $250.
• The
cost of screening document and mail order consignments
Because
Customs recognises that there is a degree of predictability about the contents
of document consignments and mail order consignments, it does not normally
screen such consignments with the same intensity as other
consignments.
2. Identification of implementation
option(s)
Under current arrangements there are inconsistencies in the
way costs are recovered:
• Express couriers involved in the
transportation of bulk consolidated documents are not paying a screening charge
but should be paying a charge because such consignments are subject to
screening.
• Freight forwarders involved in the transportation of
bulk consolidated mail order consignments are paying the screening
charge.
Objectives
The objective of the proposal is
to ensure that the screening charge is applied in a manner consistent with the
cost of processing consignments across all persons involved in the report of
consignments with a value of less than $250. This can be achieved
by:
• amending the current cargo reporting provisions of the Act to
enable bulk consolidated consignments, namely, bulk document shipments and bulk
mail order consignments to be reported in a different manner to other cargo; and
• introducing a separate screening charge on such bulk consolidated
shipments, reflecting the fact that Customs does not apply the same intensity of
processing resources to such consignments.
The issue of the screening
charge being applied in a manner consistent with the cost of processing
consignments can be resolved by firstly making the reporters of bulk document
consignments, namely express couriers, actually report each consignment to
Customs. Currently, such consignments are only reported as a consolidation of
consignments at the MAW13/SMAW13 level. Such reports do not provide any details
of individual consignments.
Customs is unable to insist that all
individual consignments be reported on ACA because of the considerable pressure
such reporting would place on the capacity of ACA. If Customs was to insist on
cargo being reported on ACA the capacity of the system would need to be
increased four fold at an estimated cost of $2,000,000.
It is therefore
proposed to introduce a scheme whereby express couriers and freight forwarders
may apply to Customs to report bulk document shipments and bulk mail order
consignments at the MAWBISMAW13 level rather than at the consignment level. This
would be permitted, subject to certain conditions being met by them.
The
most important of these conditions is that Customs would be allowed to access
the details of each consignment covered by the MAW13/SMAW13 on the express
courier's or freight forwarder's electronic in house records. Such access would
overcome the need for express couriers and freight forwarders to report these
details on ACA. Customs would administer the arrangements by extension of its
current compliance auditing and risk management practices.
The other
conditions which the applicants must meet to be eligible to join the scheme
are:
• the applicant must already be a registered user of ACA in
accordance with section 67C of the Act;
• the applicant must be a "fit
and proper” person;
• the applicant must advise Customs of
changes in company management;
• the applicant must keep the details of
each consignment which would otherwise be required to be reported for 2 years
after the date of arrival of the consignment on dedicated computer
facilities;
• the applicant must transmit the information to Customs if
required;
• and the applicant must have an agreement with the mail
order house where the applicant is a freight forwarder dealing in bulk mail
order consignments, and to advise Customs of any changes to such an
agreement.
A new screening charge of $45 per MAWBISMAW13 is proposed to
be introduced for these consignments. This charge will be less than the current
$2.40 per consignment as usually more than 300 consignments are attached to each
MAWB or SMAWB. This new charge reflects the lesser cost to Customs of screening
all bulk document and bulk mail order consignments.
3. Assessment of
impact (cost and benefits) of options
Impact group
identification
• Express couriers involved with bulk
document shipments
Express couriers involved in the movement into
Australia of bulk consolidated consignment of documents, who will for the first
time be required to pay a screening charge for each MAWBISMAW13 ($45). If they
are not part of the scheme the standard charge of $2.40 for each consignment
will be applied. There are some 30 express couriers affected by the
proposal.
It is estimated that during 1998 calendar year some 16,336
MAWBs/SMAWBs will be reported. At $45 per MAWBISMAW13 the total cost to freight
forwarders will be $735,120 annually. It is expected that the charge will be
passed onto the importer.
It should be noted that if the current
screening charge was applied to them, the cost would be considerably more. Based
on the current estimate of 120,000 consignments arriving in Sydney each week,
the annual cost would be $14,960,400.
• Freight forwarders
involved with bulk mail order consignments
Freight forwarders
involved in arrangements with overseas mail order houses to move bulk
consolidated low value mail order consignments into Australia will pay a
screening charge for each MAW13/SMAW13 of $45 rather than $2.40 for each
consignment. There are only a small number of freight forwarders affected by the
proposal.
It is estimated that during 1998 calendar year some 520
MAWBs/SMAWBs will be reported. At $45 per MAWB/SMAWB the total cost to freight
forwarders will be $23,400 annually. This cost compares to the estimated costs
for 1997198 of $1,200,000 based on the screening charge of $2.40 per
consignment.
• Freight forwarders involved with other
consignments valued at less than $250
The screening charge will
remain the same for all other consignments, not being bulk consignments,
reported by freight forwarders, airline companies and shipping
companies.
• The general impact on small business
The
scheme is about resolving issues related to high volume transactions. It defines
minimum volumes of transactions which applicants must satisfy to join the
scheme. Because the scheme is about high volumes, it is possible to argue that
some small businesses could be excluded from joining it on the basis that the
size of the business is linked to number of transactions. The minimum volumes
have been set to take account of the majority of current participants in the
industry including those in the industry who could be regarded as small
businesses. if the volume of transactions for eligibility purposes is set too
low then the administrative viability of the scheme will become
questionable.
Assessment of costs
The administration
of the proposal will be cost neutral. The administration costs are estimated at
$750,000. Some resources will be saved by not undertaking some of the current
screening functions related to these consignments. These resource savings will
be diverted to undertaking functions associated with compliance auditing and the
administrative arrangements.
Express couriers involved in the movement of
bulk document consignments and freight forwarders involved in bulk mail order
consignments will experience a lower screening charge cost compared to the
current charge associated with the present screening charge. The new charge
reflects the lower cost to Customs associated with screening bulk consignments.
The screening charge will remain the same for all other persons currently
required to pay the charge.
However they may also incur some costs to
operate under the scheme. These costs are associated with ensuring computer
systems are compatible. At this point it is not possible to give a firm estimate
of this cost, as this is dependent on the final technical solutions. However,
such costs are not expected to be significant. The technical arrangements and
costs will be negotiated with the express couriers and freight
forwarders.
Assessment of benefits
Express couriers
and freight forwarders who are eligible to join the scheme will enjoy
considerable cost saving to them. The ability of the express couriers and
freight forwarders to grade the consignments into the types of goods (i.e. bulk
document consignments and bulk mail order consignments) prior to shipping adds
predictability to these imports and minimises their risk for Customs
purposes.
Because the Customs risk is lower for these types of
consignments, Customs is not required to devote the same level of resources to
them to ensure compliance. Customs is recognising the lower administrative costs
by reducing the screening charge for eligible express couriers and freight
forwarders.
The new screening charge Will more accurately reflect the
cost of screening such consignments by Customs compared to all other
consignments.
The proposal will also restore equity between express
couriers involved in the reporting of bulk document consignments and freight
forwarders involved in the reporting of bulk mail order consignments and other
freight forwarders involved in the reporting of consignments with a value of
less than $250.
The new reporting arrangements Will provide Customs with
a more accurate and effective report of the importation of such bulk
consignments. This is particularly important in relation to bulk document
consignments. Random checks of these bulk consignments have detected goods other
than documents in them, including illicit drugs. The arrangements will provide
Customs with information to detect such irregularities and ensure Customs duty
and Sales tax are collected on them.
The proposed arrangements will also
assist Customs in detecting illicit drugs and other prohibited goods and
quarantinable goods in such consignments. The reporting information will enable
Customs to use electronic profiling systems thereby increasing the effectiveness
of the screening process for this
purpose.
Consultation
Discussions have been held
with the express couriers (the International Air Couriers Association of
Australia) and freight forwarders involved in the movement of bulk document
consignments and bulk mail order consignments. They support the Customs
proposal.
4. Implementation and review
It is proposed to
introduce the scheme as soon as practicable after the passage of this Bill
through the Parliament. Discussions will be held with the express couriers and
the freight forwarders to ensure that they are familiar with the operation of
the scheme, including the application procedure, the electronic record keeping
arrangements, and audit arrangements.
The scheme will be subject to on
going monitoring by the Australian Customs Service to ensure that there is
consistency in the distribution of cost associated with the processing of
consignments, the charges remain cost neutral and the benefits outlined above
are achieved.
FINANCIAL IMPACT STATEMENT
The administrative
cost to Government of the proposed legislative change will be diminutive.
Currently, freight forwarding companies are paying Customs approximately
$1,000,000 annually in screen free charges. Revenue under the proposed scheme is
estimated at $750,000. This revenue is anticipated to be commensurate with the
costs expected to be incurred in the processing of the high volume, low value
transactions under the Scheme.
With regard to the screening associated
With the detection of prohibited goods, Customs is currently developing the
Advanced Cargo Profiling System. This development is separately funded at a cost
of $2.8 million under the Government's National Illicit Drugs
Strategy.
CUSTOMS AMENDMENT BILL (NO. 2) 1998 [sic -
1999?]
NOTES ON CLAUSES
Clause 1 - Short
title
This clause provides for the Act to be cited as the Customs
Amendment Act (No. 2) 1999 (Amendment Act).
Clause 2 -
Commencement
This clause provides for the Amendment Act to commence
on the day on which it receives the Royal Assent. The items of Schedule 1 are to
commence at the same time as items 2 to 7 of Schedule 1 to the Import Processing
Charges Amendment Act 1999
Clause 3 - Schedules
This
clause is the formal enabling provision for the Schedule to the Amendment Act,
providing that each Act specified in the Schedule is amended or repealed as set
out in the applicable items of the Schedule. The clause also provides that the
other items of the Schedule have effect according to their terms. This is a
standard enabling clause for transitional, savings and application items in
amending legislation. There are no such items in this Bill.
SCHEDULE 1
-AMENDMENT OF THE CUSTOMS ACT 1901 (the Act)
Item 1 - Subsection
4(1)
This item inserts a definition for the expression '7nsolvent
under administration" which currently appears in subsection 77F(1) of the
Act, in subsection 4(1). This expression means a person who, under the
Bankruptcy Act 1966 or the law of an external Territory or the law of a
foreign country, Is an undischarged bankrupt. It also includes a person whose
property is subject to control or who has at any time during the preceding 3
years executed a deed of assignment or arrangement or whose creditor has
accepted a composition under the Bankruptcy Act 1966 or the corresponding
provisions of the law of an external Territory or foreign country.
This
item makes the definition of the expression applicable to all the provisions of
the Act where this expression is used including subsection 77F(1). Consequently,
the definition in subsection 7717(1) is no longer necessary. Item 13 repeals the
definition in subsection 771F(1).
Item 2 - Subsection
4(1)
This item inserts a definition of the expression 'low value
cargo" which is a concept central to the new registration and cargo reporting
scheme (1he Scheme"). This definition has the same meaning of the expression
contained in new section 63A.
Item 3 - Subsection 4(1)
This
item inserts a definition for the expression "special reporter. This
definition has the same meaning of the expression contained in new section
63A.
Item 4 - Before section 64
The Act is currently
structured so that Divisions 3 and 3A of Part IV contains provisions relating to
cargo reporting and the use of computers in the sea and air cargo automation
systems. In light of the proposed provisions relating to the registration and
reporting of low value cargo, it is considered appropriate to restructure
Divisions 3 and 3A by repealing the heading to Division 3A and creating new
Subdivisions A, B, C and D under Division 3 to contain provisions relating the
definitions of certain words and expressions used in Division 3 (this item
refers) to cargo reporting, the use of computers in sea and air cargo automation
systems (item 11 refers), the new registration and reporting requirements for
low value cargo and the monitoring and auditing powers of special reporters
(item 12 refers).
This item inserts a new heading "Subdivision A -
General reporting requirements" and a new section 63A to provide for
definitions of certain expressions and words used in Division 3 of Part IV of
the Act, which deals with how imported cargo is reported to
Customs.
abbreviated cargo report
The definition of the
expression "abbreviated cargo report" distinguishes it from the computer
cargo report presently communicated by a registered user under the Air Cargo
Automation System and Sea Cargo Automation System used to report cargo to
Customs under section 64AB of the Act. The abbreviated cargo report is a
shortened form of a cargo report electronically made by a special reporter in
relation to 1ow value cargo" under the Scheme. It contains sufficient
information for Customs to identify the bulk
consignments.
applicant
An "applicant" under the Scheme
means an applicant for registration or renewal of registration as a special
reporter in relation to low value cargo of a particular
kind.
application
An "application" under the Scheme means
an application for registration or for renewal of registration as a special
reporter in relation to low value cargo of a particular
kind.
dedicated computer facilities
The expression
“dedicated computer facilities" in relation to a person who is seeking to
be registered or is or has been registered, as a special reporter means computer
facilities of that person that meet the requirements of Subdivision C relating
to the making of abbreviated cargo report, and the storage of electronic
information concerning individual consignments covered by those
reports.
house agreement
The definition of the expression
"house agreement" provides for the terms that must be included in a written
agreement between a particular mail-order house and a particular registered user
handling consignments from that house. The agreement must:
(a) set out
the arrangements made by the user with the house for the shipment of low value
goods consigned by that house and handled by that user.
(b) provide that
all such consignments from that house that are to be handled by that user will
be consolidated at a single place of export outside Australia designated or
determined in accordance with the agreement.
(c) provide that the house
will transmit electronically to the user full particulars of each such
consignment for which an order has been placed including details of the
consignment's transportation to Australia.
low value
cargo
This definition introduces the new concept of low value cargo
for the purposes of the Scheme. The Act currently requires cargo, whether
electronic or documentary, to be reported at the consignment level. The Scheme
proposes to only require the owners of ships or aircraft to report low value
cargo at a level of specificity not below the ocean bill of lading or the
sub-master air waybill.
The expression “low value cargo" is defined
to cover certain types of consignments, namely:
• cargo consigned
from a mail order house; or
• cargo comprising reportable documents;
or
• cargo comprising other goods of a kind prescribed by the
regulations
being cargo in relation to each consignment to which section
68 of the Act does not apply because of paragraph 68(1)i(f) and the total
liability for import duty and sales tax does not exceed $50 or such other
amount, not exceeding $75, as is from time to time prescribed for the purposes
of this definition.
mail-order house
This definition
provides for the expression "mail-order house" to mean a commercial
establishment carrying on business outside Australia that sells goods solely in
response to orders placed with it either by mail or electronic
means.
This definition would include mail order houses that sell products
carrying other brand names sourced from other manufacturers.
notified
premises
This provision defines the expression "notified premises"
in relation to a person who is, or has been, a special reporter to mean the
premises indicated in the application under subsection 67EC(3) as a place in
Australia at which dedicated computer facilities for the storage of information
relating to low value cargo of a particular kind or documents relating to such
information are located and any premises to which all those facilities and
documents are subsequently relocated as notified under subsection
671EF(2).
registered user
This definition provides for the
expression "registered user" to mean a registered user under section 67C of the
Act in relation to the Sea Cargo Automation System and Air Cargo Automation
System. This definition is necessary, as a person must already be a registered
user under section 67C in order to be eligible to apply for registration as a
special reporter.
reportable document
This provision
defines the expression "reportable document". The definition is intended
to cover things such as company reports, financial statements, legal documents,
manuals or instructions and personal correspondence. These items are the kinds
of documents representative of the type of low value cargo currently coming to
Australia.
A reportable document consignment is one of the two
kinds of cargo currently proposed to be specifically covered by the Scheme (the
other being the mail order consignment). A special reporter may communicate to
Customs a cargo
report on such a consignment at a level of specificity not
below the level of an ocean bill of lading or sub-master air
waybill.
Proposed paragraphs (a), (b) and (d) of the definition of the
expression 49 "reportable document" is taken from paragraphs (a), (b) and (c) of
the definition of document in section 25 of the Acts Interpretation Act 1901
whilst paragraph (c) is a new paragraph to include any paper or other material
on which a photographic image or other image is recorded.
However, a
reportable document excludes paper, article or other material covered by
paragraphs (e) and (~ of the definition. This exclusion is necessary to
circumscribe the very general scope of paragraphs (a) to (d) of the definition
so that a paper, article or other material which falls within paragraphs (a),
(b), (c) or (d) but constitutes any of the matters in paragraphs (e) and (f)i of
the definition is not a reportable document.
Paragraph (e) covers paper,
article or other material which comprises advertising material and paragraph (f)
covers things such as blank diskettes, video tapes, blank forms (for example,
blank airline tickets, invoice book and blank stationeries).
special
reporter
This definition provides for the expression "special
reporter", in relation to low value cargo of a particular kind, to mean a
registered user who is registered as a special reporter under Subdivision C in
relation to low value cargo of that kind.
Once a person, who is already
registered as a user under section 67C of the Act is allowed, upon application,
to be registered under the Scheme as a special reporter, he or she is then
entitled to electronically report low value cargo at the level of specificity
not below the ocean bill of lading or submaster air waybill with a reduced
screening charge. However, he or she is required to store and retain in his or
her computer facilities all the information relating to the consignment in
accordance with section 64AB of the Act.
Item 5 - After subsection
64AB(3A)
Section 64AB is the provision establishing the obligation to
report cargo coming into Australia. Subsection (M) gives a person who is obliged
to report cargo the option of making a documentary or computer cargo report.
Subsection (5) sets out the requirements relating to a computer cargo
report.
This item inserts 3 new subsections after subsection 64AB(M) of
the Act to provide for the proposed reporting requirements for low value cargo
under the Scheme.
New subsection 64A13(313) requires a special
reporter of low value cargo to transmit each cargo report to Customs by
computer.
However, subsection (313) does not affect the reporting
obligations of an owner of a ship or aircraft in relation to a particular low
value cargo at any time when the owner is temporarily unable to transmit to
Customs a computer report that covers that consignment (new subsection
64A13(3C
Cargo reports must be made in a form approved by the CEO.
However, new subsection 64A13(31D provides that the relevant approved
form should not require the special reporter to make a computer cargo report at
a level of specificity below the level of an ocean bill of lading or submaster
air waybill.
The approved statement for an air or sea cargo report
currently requires the report to include all the prescribed information relating
to each consignment. of the cargo report derived from a master or submaster air
waybill and consignment note or the ocean bill of lading and house bill of
lading
However, new subsection 64AB(3D) now reduces the level of
specificity in a cargo report so that an owner who is a special reporter may now
report low value cargo only at the level of a master or submaster air waybill
(whichever is relevant) or an ocean bill of lading.
item 6 -
Subsection 64ABC(1)
This item amends subsection 64ABC(1) to ensure
that subsection 64ABC(1) is read subject to new subsection 64ABC(1A): See item 8
below.
Item 7 - Paragraph 64ABC(1)(a)
This item amends
paragraph 64ABC(1)(a) so that screening charges also apply to sea cargo
unshipped from a ship at a particular port. The current provision only applies
screening charges to air cargo unshipped from an aircraft at a particular
airport. This amendment and new subsection 64ABC(1A) (see item 8 below),
therefore, align subsection 64ABC(1) with the intention that the Scheme should
cover both sea and air low value cargo.
Item 8 - After subsection
64ABC(1)
This item provides for a new subsection 64ABC(1A). Whilst
new paragraph 64ABC(1)(a) widens the application of liability for screening
charge, this new subsection narrows it so that screening charge only applies to
cargo reports of low value cargo made by special reporters under the Scheme. All
other cargo reports of goods unshipped by ships at a port in Australia are
exempt from liability for screening charge.
Item 9 - Paragraph
64ABC(I)(c)
Section 64ABC requires a person who communicates to
Customs a report (whether documentary or electronic) to, amongst other things,
provide particulars of a consignment of goods and to pay screening
charges.
This item repeals paragraph 64ABC(1)(c) and substitutes it with
new subparagraphs 64ABC(1)(c)(i) and (ii) so that a special reporter who
makes an electronic report relating to low value cargo is liable. to pay
screening charges.
New subparagraph 64ABC(c)(i) is a remake of the
present paragraph (c).
The proposed new amount of screening charge for
low value cargo report is set out in proposed new section 7 of the proposed
Import Processing Charges Amendment Bill 1999 that complements this
Bill.
Item 10 - Heading to Division 3A of Part IV
This item
repeals the heading to Division 3A. See item 4 above for an explanation of the
restructuring of Divisions 3 and 3A.
Item 11 - Before section
67A
This item inserts a new "Subdivision B - The use of computers
in sea and air cargo automation systems" to cover the present provisions
relating to sea and air cargo automation systems currently applicable to
registered users (sections 67A to 67E).
Item 12 - Before Division
4
This item inserts in the Act a new Subdivision C with the heading
"Subdivision C - The registration, rights and obligations of special
reporters" containing new sections 67EA to EM relating to the registration,
rights and obligations of special reporters under the Scheme.
New
section 67EA Special reporters
New section 67E specifically
provides for partnerships to be a special reporter of low value cargo. This is
because there are businesses in the industry which operates as partnerships and
it is considered necessary to extend the Scheme to them.
New section
67EB Requirements for registration as a special reporter
New
section 67EB sets out the circumstances in which the CEO must not register a
person as a special reporter in relation to low value cargo of a particular
kind.
New subsection 67E13(1) requires the CEO not to register a
person as a special reporter if:
- the applicant is not a registered user
in relation to the Sea Cargo Automation System or Air Cargo Automation System -
paragraph 67E13(1)(a);
- the applicant has not reported as a
registered user in relation to low value cargo of that kind in accordance with
new subsection 671E13(2) -paragraph 67EB(1)(b).
New subsection
67EB(2) sets out the circumstances in which an applicant for registration as
a special reporter in relation to low value cargo of a particular kind will be
taken to have reported as a registered user. This provision sets out the volumes
of consignments that are required to be reported by an applicant in order to be
eligible to participate in the Scheme.
In the case of low value cargo
consigned from a particular mail-order house to consignees in Australia, the
applicant must have reported as a registered user at least 5,000 such
consignments per month from that mail-order house during the 3 consecutive
months immediately before making an application under new section 67EC -
paragraph 67EB(2)(a).
In the case of low value cargo comprising
reportable documents consigned from places outside Australia to consignees in
Australia, the applicant must have reported as a registered user at least 1,000
individual consignments of such documents per month during the 3 consecutive
months immediately before making an application under section 67EC -
paragraph 67EB(2)(b).
In the case of low value cargo of another
prescribed kind consigned from a place outside Australia to a consignee in
Australia, the applicant must have reported as a registered user such number of
consignments of that prescribed kind as may be specified by the regulations -
paragraph 67EB(2)(c).
- if the applicant is applying to be
registered in respect of low value cargo consigned from a particular mail-order
house - the applicant is not a party to a house agreement with that mail-order
house in force at all times during the 3 consecutive months before the making of
the application - paragraph 67EB(1)(c);
- the applicant does not
have dedicated computer facilities (defined in
new section 63A) having such
specifications as are determined, in
writing, by the CEO - paragraph
67EB(1)(d).
- in the CEO's opinion (paragraph 167E13(1)(e):
(i) if
the applicant is a natural person - the applicant is not a fit and proper person
to be registered as a special reporter; or
(ii) if the applicant is a
partnership - any of the partners is not a fit and proper person to be a member
of a partnership registered as a special reporter; or
(iii) if the applicant
is a company - any director, officer or shareholder of a company who would
participate in the management of the affairs of the company is not a fit and
proper person so to participate; or
(iv) an employee of the applicant who
would participate in the management of the applicant's dedicated computer
facilities is not a fit and proper person so to participate; or
(v) if the
applicant is a company - the company is not a fit and proper company to be
registered as a special reporter.
New subsections 67EB(3) and (4)
are provisions setting out the matters to which the CEO must have regard in
deciding whether an applicant for registration under the Scheme is a fit and
proper person.
New subsection 67EB(3) sets out the matters to
which the CEO must have regard in deciding whether a person is a fit and proper
person for the purposes of subparagraphs 67E13(1)(e)(i), (5), (iii) or (iv).
These matters are:
- whether the person has been convicted of an offence
against the Customs Act in the previous 10 years - new paragraph
67E13(3)(a);
- whether the person has been convicted of any offence
against another law of the Commonwealth or a State or Territory in the previous
10 years, being an offence that is punishable by imprisonment for 1 year or
longer - new paragraph 67E13(3)(b);
- whether the person is an
insolvent under administration - new paragraph
67EB(3)(c);
- whether the person was, in the 2 years immediately
before that decision, a director of, or concerned in the management of, a
company
(i) that had been, or is being, wound up - new subparagraph
67E13(3)(d)(i); or
(ii) had had its registration as a special reporter
cancelled because of a breach of any condition - new subparagraph
67EB(3)(d)(ii).
- Whether any misleading information or document has
been furnished in
the application for registration under subsection 67EC(2)
or 67ED(S) or
(371EK(1 2) - new paragraph 67E13(3)(e);
- if any
information or document furnished by or in relation to the person
was false -
whether the applicant knew that the information or
document was false -
new paragraph 67E13(3)( .
New subsection 67E13(4) sets out
the matters to which the CEO must have regard in deciding whether a company is a
fit and proper company to be registered as a special reporter. These matters
are:
- whether the company has been convicted of an offence against the
Customs Act, Commonwealth, State or Territory law in the previous 10 years, at a
time when any current director, officer or shareholder of a kind referred to in
subparagraph (1)(e)(iii), was such a director, officer or shareholder of the
company - paragraph 67E13(4)(a);
- whether a receiver of the
property or part of the property of the company has been appointed -
paragraph 67E13(4Xb);
- whether the company is under
administration within the meaning of the Corporations Law - paragraph
67EB(4)(c);
- whether the company has executed under Part 5.3A of the
Corporations Law a deed of company arrangement that has not yet terminated -
paragraph 67E13(4)(d);
- whether the company has been placed under
official management -paragraph 671E13(4)(e); and
- whether the
company is being wound up - paragraph 67E13(4)(f).
New
subsection 67E13(5) makes it clear that new section 67EB does not affect the
operation of Part V11C of the Crimes Act 1914 particularly the provisions
relieving persons from the requirements to disclose spent convictions and
requiring persons aware of such convictions to disregard them.
New
section 67EC The making of an application
New section 67EC
provides for the procedure and matters with which an applicant must comply in
making an application for registration under the Scheme.
New
subsection 67EQ1) states that an applicant for registration as a special
reporter in respect of low value cargo of a particular kind may make an
application in relation to cargo of that kind. New subsection 67EQ2)
requires an application to:
- be in writing;
- be in an approved
form;
- contain such information as the form requires;
- be accompanied by
such other documentation as the form requires;
- be signed in the manner
indicated in the form; and
- be lodged as required by new subsection
671EC(4).
New subsection 671EQ3) requires an application to
indicate the premises in Australia at which the dedicated computer facilities of
the applicant are located and the premises in Australia at which documents
relating to information required to be stored on those facilities are or will be
located. This is to enable Customs to readily locate the premises where the
facilities are situated so as to be able to carry out its monitoring and
auditing functions under new subdivision D (see below)
New subsection
67EQ4) provides for an application to be taken to have been lodged with
Customs when the application is first received by an officer of Customs
designated by the CEO to receive such applications.
New subsection
671EQ5) requires the day on which an application is taken to have been
lodged to be recorded on the application.
New subsection 671EC(6
is necessary to make it clear that a separate registration is required for
each mail order house agreement, cargo comprising reportable documents or cargo
of any other kind prescribed by regulations.
This provision ensures that
a person seeking to be registered as a special reporter in relation to low value
cargo consigned from more than one mail-order house must make a separate
application for such registration in relation to each such house.
In the
case of a person seeking registration in relation to low value cargo comprising
reportable documents, the person must make a separate application for
registration in relation to cargo of that kind.
In the case of a person
seeking registration in relation to low value cargo of any other kind prescribed
by the regulations, the person must make a separate application for registration
in relation to each prescribed kind of low value cargo.
This means, for
example, that a person cannot apply to be registered as a special reporter in
relation to several mail-order houses or in relation to a mail-order house and
cargo comprising reportable documents under a single registration or in relation
to any possible combination of mail-order houses, cargo comprising reportable
documents or cargo of any prescribed kind. Consequently, a separate application
must be made for the registration in relation to each mail-order house or cargo
comprising reportable documents. or cargo of any other kind prescribed by the
regulations.
By requiring special reporters to be registered separately
in relation to each mail-order house or cargo comprising reportable documents or
cargo of any prescribed kind, Customs would be able to ensure that only the
classes of goods covered by the registration are contained in the consignments
arriving. This will also ease Customs' screening of these
consignments.
New section 67ED Consideration of the
application
New section 67ED provides for the consideration of
an application for registration by the CEO and the decisions he or she may make
in relation to the application.
New subsection 67ED(1) requires
the CEO, in considering an application for registration, to have regard to the
terms of the application and additional information supplied in response to a
request under new subsection 67ED(5).
New subsection 67ED(2)
requires the CEO to make a decision within 60 days after the lodgement of an
application or after the receipt of any additional information supplied by the
applicant requested under new subsection 67ED(5).
If the CEO decides to
register the applicant as a special reporter in relation to low value cargo of a
particular kind, the CEO must notify the applicant, in writing, of that decision
specifying the day on which the registration comes into force - new
subsection 67ED(3)
If the CEO decides not to register an applicant,
he or she must notify the applicant,, in writing, of that decision setting out
the reasons for the decision -new subsection 67ED(4). This is a decision
reviewable by the Administrative Appeals Tribunal: See item 14 of this
Bill.
New subsection 67ED(5) empowers the CEO to require
additional information from an applicant within a period specified in a notice
to the applicant requiring such additional information. An applicant would be
taken to have withdrawn an application if the applicant fails to provide the
additional information within the period specified in the notice.
New
Section 67EE Basic conditions attaching to registration as a special
reporter
New section 67EE sets out the basic conditions with
which a person must, upon registration as a special reporter,
comply.
New subsection 67EE(1) provides for the registration to be
subject to:
- the conditions set out in this new section and section 67EF
- paragraph 67EE(1)(a); (discussed below)
- if the special
reporter is registered as a special reporter in respect of low value cargo
consigned from a mail-order house - the conditions in section 67EG -
paragraph 67EE(1)(b); and
- section 67EH where new conditions are
prescribed by regulations pursuant to section 67EH - paragraph
67EE(1)(c).
New subsection 67EE(2) requires the special
reporter to give the CEO written information of any of the following matters
within 30 days after the occurrence of the matter:
- any matter that
might, if the reporter were not a special reporter but were an applicant for
registration, cause the reporter not to be a fit and proper person within the
meaning of new subsection 67E13(1)l(e) - paragraph
67EE(2)(a);
- if, after the registration or renewal of registration,
of a company as a special reporter, a person commences to participate, as a
director, officer or shareholder, in the management of the affairs of the
company the fact of such commencement - paragraph
67EE(2)(b);
- if, after the registration or renewal of registration,
a new person commences as an employee to participate in the management or
control of the dedicated computer facilities of a special reporter - the fact of
such commencement - paragraph 67EE(2)(c);
- if the special
reporter is a partnership, the fact of any change in the membership of the
partnership - paragraph 67EE(2)(d).
New subsection 67EE(3)
requires a special reporter to communicate such cargo reports by using
dedicated computer facilities except in the circumstances referred to in
subsection 64A13(3C) where the special reporter is temporarily unable to
transmit a computer report.
New section 67EF Storage and record
maintenance conditions
New section 67EF sets out the
conditions relating to the storage and maintenance of information or document
with which a special reporter must comply. As indicated above, the Scheme
operates by requiring a special reporter to report cargo at the ocean bill of
lading or master or submaster air waybill level instead of at the consignment
level. In exchange for that less detailed reporting obligation, the special
reporter must store and retain information on the individual consignments
covered by an ocean bill of lading or master or submaster air waybill which he
or she would otherwise be required to report under the Act. These conditions are
necessary to ensure that special reporters comply with their obligation to store
and retain information on individual consignments.
New subsection
67EF(1) requires a person who is or has been a special reporter
to:
- store in dedicated computer facilities at notified premises all
information relating to individual consignments that the reporter would, but for
the reporter's registration under section 67ED or renewal of registration under
section 67EK, be required to give to Customs under section 64AB - paragraph
67EF(1)(a);
- retain at notified premises all the information stored
under paragraph 67EF(1)(a) and also all physical documents of a prescribed kind
that cover or relate to the consignments for 2 years after the date of the
transmission of the abbreviated cargo report - paragraph
67EF(1)(b).
New subsection 67EF(2) requires a person who is,
or within 2 years after the person ceased to be, a special reporter to notify
the CEO in writing of the intention to change the location of the notified
premises providing particulars of the changes proposed.
New subsection
671EF(3) requires a special reporter to ensure that the changed premises
referred to in subsection (2) are located in Australia.
New subsection
671EF(4) requires a special reporter to provide Customs with online access
to the information stored and retained under subsection (1) and with the
capacity to download that information at any time as required by
Customs.
New subsection 67EF(5 requires a special reporter to also
electronically transfer to Customs the information referred to in subsection (4)
above at any reasonable time as required by Customs. Consequently, in addition
to the obligation to give Customs online access to the information stored in the
special reporter's dedicated computer facilities, the special reporter must also
electronically transfer information to Customs at Customs request.
New
section 67EG Special mall-order house condition
New section 67EG
provides special conditions relating to a special reporter who is registered
in relation to low value cargo consigned from a particular mail-order house.
Such a reporter must:
- ensure, at all times while registered in relation
to that mail-order house, that there is in force between the special reporter
and that mail-order house a house agreement within the meaning of section 63A -
paragraph 67EG(a); and
- notify the CEO, in writing, of the
expiration, termination , breach or alleged breach of that house agreement -
paragraph 67EG(b).
New section 67EH Further conditions may be
imposed by regulations
New section 67EH provides that further
conditions relevant to the registration or renewal of registration as a special
reporter may be specified at any time by the regulations.
New section
67E1 Breach of conditions of registration
New section 67E1
creates a strict liability offence for any person who is a special reporter or
has been a special reporter who breaches a condition of the person's
registration as a special reporter. The maximum penalty for the offence is 50
penalty units.
New section 67EJ Duration of
registration
New section 67EJ provides for the duration of a
registration and the date of effect of a registration.
New section
67EJ provides for a new registration to come into force on a date specified
by the CEO under subsection 67ED(3) (new paragraph 6M(a)) and, in the
case of a renewal of registration, on a date determined under new subsection
671EK(8) (new paragraph 67EJ(b)).
The registration in both cases
will remain in force for 2 years unless it is cancelled under section 67EM
before the expiry of that period - new paragraph
67EJ(c).
Section 67EK Renewal of registration
New
section 67EK provides for the procedure and other matters dealing with the
renewal of registration.
New subsection 671EK(1) requires a
special reporter seeking the renewal of a registration to make and lodge a
further application in accordance with the requirements of section
67EC:
- not later than 30 days before the end of the current period of
registration - new paragraph 671EK(1)(a); or
- not later than such
later date before the end of the period of registration specified by the CEO
where the reporter is unable, for reasons beyond the reporter's control, to meet
the requirements of paragraph 67EK(1)(a) - new paragraph
671EK(1)(b).
New subsection 671EK(2) applies sections 67EB and
67EC to an application for renewal in the same manner as they applied to the
original application. This means that an applicant for the renewal of
registration must observe the requirements of sections 67EB and EC.
In an
application for the renewal of registration, the requirements in subsection
67E13(2) is modified by new subsection EK(3) in the following
manner:
- if the registration relates to low value cargo consigned from a
particular mail-order house, the applicant for renewal must have reported at
least 15,000 consignments of such cargo from that house during the 3 months
immediately before the making of the application for renewal of registration -
new paragraph 671EK(3)(a);
- if the registration relates to
reportable documents, the applicant for renewal must have reported at least
3,000 consignments of such cargo during the 3 months immediately before the
making of the application for renewal of registration - new paragraph
671EK(3)(b);
- if the registration relates to low value cargo of
another prescribed kind, the applicant for renewal must have reported at least
the prescribed number of consignments of such cargo during the 3 months
immediately before the making of the application for renewal ~ new paragraph
671EK(3)i(c);
New subsection 671EK(4) requires a special
reporter to ensure that the dedicated computer facilities meet any variation in
the specifications of the computer facilities made by the CEO in his or her
consideration of the application for renewal of registration.
New
subsection 671EK(5) requires the CEO to, having regard to the terms of an
application for renewal and any additional information supplied under subsection
671EK(1 2), decide whether or not to renew the registration of an
applicant.
New subsection 67EK(6) requires the CEO to make the
decision whether to renew a registration either before or as soon as possible
after the end of the current period of registration.
However, if for any
reason the CEO is unable to make a decision before the current period of
registration expires, the registration is taken to continue until a decision is
made - new subsection 671EK(7 .
If the CEO decides to renew a
registration, the CEO must renew it and notify the applicant, in writing, of
that decision specifying the day on which the renewal comes into force - new
subsection 671EK(8 .
If the CEO decides not to renew a
registration, the CEO must notify the applicant, in writing, of that decision
setting out the reasons for the decision -new subsection 671EK(9 . This
is a decision reviewable by the Administrative Appeals Tribunal: See item
14.
If the CEO decides to renew a registration, the renewal takes effect
on the day following the expiration of the current period of registration or of
that period as extended under subsection 671EK(7) - new subsection 671EK(11
0).
New subsection 671EK(11) sets out the effects on a
registration where the CEO refuses to renew a registration. If the CEO refuses
to renew a registration:
the current period of registration continues
unless it is cancelled before that time - new paragraph 671EK(11)(a);
or
in the case where the period of registration was extended under
subsection 671EK(7), the registration continues until the making of the decision
to refuse to renew the registration - new paragraph
671EK(11)(b).
New subsection 671EK(12) gives the CEO the power
to require, by notice in writing, an applicant for the renewal of a registration
to provide such further information as the CEO specifies Within a period
specified in the notice. Unless the information is given to the CEO within that
specified period, the applicant is taken to have withdrawn the application for
renewal.
Section 67EL CEO to allocate a special identifying code for
each special reporter
New section 67EL requires the CEO to
allocate to a newly registered special reporter, in relation to low value cargo
of a particular kind, a special identifying code for use by the reporter when
making an abbreviated cargo report on the Sea Cargo Automation System or the Air
Cargo Automation System. This is to facilitate the special reporter's use of and
access to the Sea Cargo Automation System or the Air Cargo Automation System as
a special reporter under the Scheme.
Section 67EM Cancellation of
registration as special reporter
New section 67EM provides for
the cancellation of a special reporter's registration in certain
circumstances.
New subsection 67EM(1) allows the CEO to, at any
time, give a notice of intention to cancel a special reporter's registration if
the CEO is satisfied that:
- the special reporter has ceased to be a
registered user. It must be noted that it is necessary for a person to be a
registered user in relation to the Sea Cargo Automation System or Air Cargo
Automation System under section 67C of the Act before becoming eligible to apply
for registration as a special reporter - new paragraph 67EM(1)(a);
or
- if the special reporter were not a special reporter but were an
applicant for registration - circumstances have arisen whereby paragraph
67EB(1)(e) applies in relation to the reporter. This ground involves the CEO
asking a question - if the special reporter were an applicant applying for
registration under the Scheme, would the CEO consider the special reporter to be
a fit and proper person? - new paragraph 67EM(1)(b); or
- the
special reporter has breached any condition to which the special reporter's
registration is subject in accordance with section 67EE (basic conditions),
section 67EF (storage and maintenance conditions), section 67EG (special
mail-order house conditions) or section 67EH (prescribed conditions) - new
paragraph 67EM(1)(c); or
- in the case of a registration relating to
low value cargo consigned from a particular mail-order house, there is no longer
a house agreement in force between the special reporter and that house or the
terms of the agreement have been breached - new paragraph
671EM(1)(d).
New subsection 67EM(2) is necessary to ensure
that the expression “10 years immediately before the decision"
occurring in subsections 67E13(3) and (4) is taken to be 10 years
immediately before the notice of intention to cancel given by the CEO under
subsection 67EM(1). This means that the CEO may only have regard to any prior
conviction of the special reporter occurring 10 years immediately before the
notice is given in deciding whether the special reporter is a fit and proper
person pursuant to paragraph 671EM(1)i(b) above.
New subsection
67EM(3) sets out the matters that a notice of intention to cancel a
registration under subsection 67EM(1) must contain. The notice
must:
- specify the ground or grounds for the intended cancellation - new
paragraph 67EM(3)(a ; and
- invite the special reporter to provide
a written statement to Customs within 30 days after the notice is given
explaining why the registration should not be cancelled - new paragraph
67EM(3)i(b); and
- state that the CEO may decide to cancel the
registration at any time within 14 days after the end of the 30 days if a ground
for cancellation still exists at that time - new paragraph
67EM(3)(c).
New subsection 67EM(4) allows the CEO to decide,
at any time within the 14 days referred to in paragraph 671EM(3)(c) above, to
cancel the registration of a special reporter, if after having regard to any
statements made by the reporter in response to a notice, the CEO is satisfied
that a ground for the cancellation still exists at the time of the
decision.
New subsection 67EM(5) provides for a cancellation to
take effect either 28 days after the CEO's decision or, ill' the special
reporter applies to the Administrative Appeals Tribunal for a review, when the
Tribunal affirms the CEO's decision.
New subsection 67EM(6)
provides for the cancellation of a registration where a special reporter
requests in writing that the registration be cancellation. In such an event, the
cancellation occurs on or after a specified day indicated in the request
letter.
New subsection 671EM(7) provides for the different manner
in which a notice of intention to cancel under subsection (1), a notice of
cancellation under subsection (4) or (6) may be served on a special reporter.
The notices may be served by:
post at the address indicated by the special
reporter in the application for registration or renewal of registration or at an
address subsequently indicated by the reporter - paragraph 67EM(7)(a);
or
post at the registered office of the reporter if it is a company
-paragraph 671EM(7)l(b) ; or
giving them personally to the
reporter if the reporter is a natural person - paragraph
67EM(7)(c).
New subsection 67EM(8) ensures that a failure by the
CEO to send a notice under subsection 67EM(6) does not affect the cancellation
of a registration.
New subsection 67EM(9) preserves the status of
a special reporter as a registered user of the Sea Cargo Automation System and
the Air Cargo Automation System in spite of the cancellation of his or her
registration as a special reporter.
Subdivision D - Monitoring and
audit powers in respect of special reporters
A new subdivision D is
inserted to provide for monitoring and audit powers in respect of special
reporters. These powers are generally necessary to enable Customs to ensure that
special reporters comply with the conditions and requirements of Division
3.
Section 67EN Definitions
New section 67EN defines
the expressions "monitoring powers" and "monitoring warrant"
provides authorised officers with powers to operate equipment on the premises of
the special reporter for the purposes of this new Subdivision.
New
subsection 67EN(1) defines "monitoring powers" to mean:
(a) in
relation to premises, the power to:
- search the premises - new
subparagraph 67EN(1)(a)(i); and
- examine any information or documents on
the premises that may relate to individual consignments of low value cargo in
relation to which a special reporter has made a cargo report - new
subparagraph 67EN(1)(a)(5); and
- take extracts from, and make copies of,
any information or document apparently relating to such individual consignments
- new subparagraph 671EN(1)(a)(iii); and
take onto the premises any
equipment or material reasonably necessary for the purpose of exercising a power
under subparagraphs (ii) or (iii) above - new subparagraph
67EN(1)(a)(iv).
(b) in relation to any information or document
relating to individual consignments of low value cargo covered by an abbreviated
cargo report that is found on the premises of the special reporter, the powers
described in new subsections 67EN(2) and (3).
The expression
"monitoring warrant” is defined to mean a warrant issued under new
section 67EP (see below).
New subsection 67EN(2) gives an
authorised officer and his or her assistant who enter premises, either with the
consent of the occupier under section 67E0 or under a monitoring warrant, the
power to operate equipment on the premises to see whether:
(a) that
equipment; or
(b) a disk, tape or other storage device that is on the
premises and which can be used with or is associated with that
equipment;
contains information that is relevant to determining whether a
special reporter who has made abbreviated cargo reports has complied with the
requirements of Division 3 in relation to individual consignments covered by
those reports.
If. after operating the equipment, the authorised officer
and his or her assistant find that the equipment, or that disk, tape or other
storage device on the premises contains such information, they may:
(a)
operate the equipment or other facilities to put the information in documentary
form and copy the documents so produced; or
(b) operate the equipment or
other facilities to copy the information onto a storage device that has been
brought to the premises or that is at the premises and remove the storage device
from the premises - new subsection 67EN(3).
Section 67EO
Exercise of monitoring powers with occupier's consent
New section
67E0 provides for the exercise of monitoring powers in the situation where
an occupier or person apparently in charge of the special reporter's premises
has consented to the entry and the exercise of those powers.
New
subsections 67EO(1) and (2) allows an authorised officer to enter any
premises and exercise monitoring powers at any reasonable time without a
monitoring warrant to determine whether a special reporter who has made
abbreviated cargo reports has complied with the requirements of Division 3 in
relation to individual consignments covered by those reports, provided that the
officer obtains the voluntary consent of the occupier or person apparently in
charge of the premises.
New subsection 67EO(3) requires an
authorised officer to, before obtaining the consent of an occupier or person
apparently in charge of premises, inform that person that he or she may refuse
to give consent.
An authorised officer is also required to, before
exercising any powers of entry or monitoring powers, produce to the occupier or
person apparently in charge of the premises written evidence of the fact that he
or she is an authorised officer - new subsection 67EO(4).
New
subsection 67E0(5) sets out the meaning of the expression "reasonable
time" which appears in subsection 67EO(1).
The expression, in
relation to a person who is or has been a special reporter, means:
(a)
unless paragraph (b) below applies - any time during the normal working hours of
that person - new paragraph 67EO(S)(a).
It must be noted that
there are special reporters in the industry who operate around the clock so that
their normal working hours are 24 hours a day everyday whilst there are other
reporters who operate at the usual 9 am to 5pm business hours Monday to Friday.
Consequently, the normal working hours of a special reporter will vary from
reporter to reporter;
(b) in circumstances of urgency - any time of the
day or night - new
paragraph 67EO(5)(b).
This means that, in
circumstances of urgency, an authorised officer may exercise his or her power of
entry or monitoring powers under this section at any time including after the
normal working hours of a special reporter.
Section 67EP Exercise of
monitoring powers under a warrant
New section 67EP provides
for the application and issuance of a monitoring warrant.
New
subsection 67EIP(1) allows an authorised officer to apply to a magistrate
for a warrant in relation to any premises that he or she believes, on reasonable
grounds, may contain information or documents relating to low value cargo in
relation to which an abbreviated cargo report has been made.
Upon the
application being made, a magistrate may issue a warrant if he or she is
satisfied that it is reasonably necessary that the authorised officer should
have access to the premises to determine whether a special reporter who has made
abbreviated cargo reports has complied with the requirements of Division 3 in
relation to individual consignments covered by those reports -new subsection
67EP(2) .
When considering an application, the magistrate must not
issue a warrant unless the authorised officer or someone else has given the
magistrate, either orally (on oath or affirmation) or by affidavit, any further
information the magistrate may require about the grounds on which the warrant is
being sought - new subsection 67EP(3) .
New subsection 671EP(4)
sets out the matters that must be contained in a warrant. A warrant
must:
- state the purposes for which the warrant is issued -new paragraph
67EP(4)(a);
- identify the premises to which the warrant relates -
new paragraph 67EP(4)(b);
- name the authorised officer who is
responsible for executing the warrant - new paragraph 67EP(4)(c);
- authorise any authorised officer named in the warrant, with such
assistance and using such force as is necessary and reasonable, from time to
time while the warrant remains in force, to enter the premises and exercise
monitoring powers - new paragraph 67EP(4)(d);
- state the hours
during which entry under the warrant is authorised to be made - new paragraph
67EP(4)(e);
- specify the day (not more than 6 months after the day
of issue of the warrant) on which the warrant ceases to have effect - new
paragraph 67EP(4)(f).
New subsection 67EP(5) gives a
magistrate the power to issue a monitoring warrant in respect of premises in
another State or Territory.
Section 67EQ Monitoring warrants may be
granted by telephone or other electronic means
New subsection 67EQ
provides for the granting of a monitoring warrant by telephone or other
electronic means in certain circumstances.
New subsection 67EQ(1)
allows an authorised officer to apply to a magistrate for a monitoring
warrant by telephone, telex, facsimile or other electronic means in an urgent
case or if the delay that would occur if an application were made in person
would frustrate the effective execution of the warrant.
New subsection
67EQ(2) gives the magistrate the discretion to require communication by
voice to the extent that it is practicable in the circumstances.
New
subsection 67EQ(3) requires an application under this section to include all
information to be provided in an ordinary application for a monitoring warrant.
However, the application may, if necessary, be made before the information is
sworn.
New subsection 67EQ(4) provides that a magistrate may
complete and sign the same form of warrant that would be issued under section
67EP if he or she is satisfied that:
- a warrant in terms of the
application should be issued urgently; or
- the delay that would occur if
an application were made in person would frustrate the effective execution of
the warrant.
New subsection 67EQ(5) requires a magistrate to
inform an applicant, by telephone, telex, facsimile or other electronic means,
of the terms of the warrant and the day on which and the time at which it was
signed if the magistrate decides to issue the warrant.
Once an applicant
is informed of a magistrate's decision to issue a warrant, the applicant must
then complete a form of warrant in terms substantially corresponding to those
given by the magistrate stating on the form the name of the magistrate and the
day on which and the time at which the warrant was signed - new subsection
67EQ(6) .
New subsection 67EQ(7) requires an applicant to, not
later than the day after the day of expiry of a warrant or the day on which the
warrant was first executed whichever is earlier, give or transmit to the
magistrate the form of warrant completed by the applicant and if the information
referred to in subsection 67EQ(3) was not sworn, that information duly
sworn.
New subsection 67EQ(8) requires a magistrate to attach to
the documents provided under subsection 67EQ(7) the form of warrant completed by
the magistrate.
New subsection 67EQ(9) allows a court to assume,
unless the contrary is proved, that an exercise of monitoring powers under this
section was not duly authorised if:
- it is material, in any proceedings,
for a court to be satisfied that the exercise of a power under a warrant issued
under this section was duly authorised - new paragraph 671EQ(9)i(a ;
and
- the form of warrant signed by the magistrate is not produced in
evidence - new paragraph 671EQ(9)(b).
Section 67ER Seizures in
emergency circumstances
New section 67ER gives an
authorised officer search and seizure powers to be exercised in emergency
circumstances where the officer is on premises under a monitoring warrant or
with the consent of the occupier.
This section applies when an authorised
officer is on premises under section 67E0 or by virtue of a monitoring warrant -
new subsection 67ER(1).
Under new subsection 67ER(2), an
authorised officer may search for a thing relevant- to an offence against this
Division and seize it if the authorised officer suspects on reasonable
grounds:
- that the thing is relevant to an offence against this Division
and is on the premises - new paragraph 67ER(2)(a);
- it is
necessary to exercise the power to search and seize the thing in order to
prevent the thing from being concealed, lost or destroyed - new paragraph
67ER(2)(b);
- it is necessary to exercise the power without the
authority of a search warrant under section 199 because the circumstances are so
serious and urgent - new paragraph 67ER(2)(c).
Section 67ES
Power to require persons to answer questions etc
New section
67ES provides an authorised officer with the power to require an occupier or
person apparently in charge of premises to answer questions or produce
documents.
New subsection 67ES(1) empowers an authorised officer
who is on or in premises with the consent of the occupier or person apparently
in charge of the premises to ask that occupier or person to:
- answer any
questions put by the authorised officer - new paragraph 67ES(1)(a);
and
- produce any documents requested by the authorised officer - new
paragraph 67ES(1)(b).
New subsection 67ES(2) empowers an
authorised officer who is on or in premises that he or she has entered under a
monitoring warrant to require any person on the premises to:
- answer any
questions put by the authorised officer - new paragraph 67ES(2)(a);
and
- produce any documents requested by the authorised officer - new
paragraph 67ES(2)(b).
New subsection 67ES(3) empowers the
CEO to, by written notice, require any person whom he or she believes, on
reasonable grounds, to be capable of giving information relevant to the
operation of Division 3 to attend before an authorised officer specified in the
notice, at a time and place specified in the notice to:
- answer any
questions put by the authorised officer - new paragraph 67ES(3)(a);
and
- produce any documents requested by the authorised officer - new
paragraph 67ES(3)(b).
New subsection 67ES(4) makes it an
offence for a person to, without reasonable excuse, fail to comply with a
requirement under subsection 67ES(2) or (3). The offence carries a penalty of 6
months imprisonment.
New subsection 67ES(5) provides that it is a
reasonable excuse for a person to refuse or fail to answer a question or produce
a document on the ground that to do so would tend to incriminate the
person.
New subsection 67ES(6) makes it an offence carrying a
penalty of 12 months imprisonment, for a person to, knowingly or
recklessly:
- make a statement to an authorised officer, either orally or
in writing, that is false or misleading in a material particular;
or
- present a document to an authorised officer that is false or
misleading in a material particular.
Section 67ET Persons to assist
authorised officers
New section 67ET empowers an authorised
officer to request assistance from the occupier or person apparently in charge
of premises entered by the officer.
New subsection 671ET(1)
empowers an authorised officer to request the occupier or person apparently
in charge of premises entered by the officer, either by consent under section
67E0 or a monitoring warrant to provide reasonable assistance to the officer, at
any time while the officer is entitled to remain on the premises, for the
purpose of the exercise of the officer's powers under those sections in relation
to the premises.
New subsection 671ET(2) makes it an offence for a
person who, without reasonable excuse, fails to comply with an authorised
officer's request under subsection 671ET(1) above. The offence carries a penalty
of 30 penalty units.
Section 67EU Compensation for damage to equipment
or data
New subsection 67EU(1) requires Customs to pay
compensation to the owner of an equipment or user of data or programs associated
with the use of the equipment that has been damaged or corrupted in the exercise
of monitoring powers. This would arise where insufficient care was exercised in
selecting a person to operate the equipment or insufficient care was exercised
by the person operating the equipment.
New subsection 67EU(2)
makes it clear that, for the purposes of subsection 67EU(1), damage to data
includes damage by erasure of data or addition of other data.
New
subsection 671EU(3) requires Customs to pay the owner of the equipment or
the user of the data or program such reasonable compensation as Customs and the
owner or user agrees on. Where no agreement is reached the owner or user may
institute proceedings in the Federal Court to claim compensation for such
reasonable amount as is determined by that Court.
In determining the
amount of compensation payable, new subsection 671EU(4) requires regard
to be had to whether the occupier of the premises and his or her employees and
agents who were available at that time, had provided any warning or guidance as
to the operation of the equipment that was appropriate in the
circumstances.
Item 13 - Subsection 77F(1) (definition of
insolvent under administration)
This item repeals the definition
of the expression "insolvent under administration" in subsection 77F(1).
The insertion of the new definition of the expression in subsection 4(1) (item 1
above refers) would make that definition applicable to all the provisions of the
Act including subsection 77F(1) where the expression is used, except where there
is a contrary intention in a particular provision.
Item 14 - After
paragraph 273GA(1)(aaab)
This item inserts new paragraphs
273GA(1)(aaac), (aaad) and (aaae) to provide merit review in the
Administrative Appeals Tribunal of:
- a decision by the CEO under section
67ED to refuse to register a person as a special reporter;
- a decision
by the CEO under section 67EK to refuse to renew a person's registration as a
special reporter;
- a decision by the CEO under section 67EM to cancel
the registration of a special reporter.