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2010-2011
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
CUSTOMS AMENDMENT (EXPORT CONTROLS AND OTHER MEASURES) BILL 2011
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Home Affairs,
the Honourable Brendan O'Connor MP)
CUSTOMS AMENDMENT (EXPORT CONTROLS AND OTHER MEASURES) BILL 2011
OUTLINE
The purpose of this Bill is to amend the Customs Act 1901 (the Customs Act)
and the Customs Depot Licensing Charges Act 1997 (the Charges Act) to
strengthen the extent of Customs controls over export cargo and ensure
consistent depot and warehouse licence conditions.
In particular, the Bill will:
a) allow Customs to give directions relating to goods in the export
environment;
b) allow Customs to seek additional information in relation to goods being
exported;
c) ensure continued Customs control of goods at a prescribed place for
export;
d) ensure depot operators do not breach licence conditions when complying
with a direction of the Secretary of the Department of Infrastructure and
Transport;
e) allow Customs to impose new conditions on depot and warehouse licences
at any time;
f) address breaches of the conditions of a depot or warehouse licence;
g) strengthen the powers of officers to give directions to depot licence
holders;
h) allow the Chief Executive Officer of Customs (the CEO) to suspend or
cancel depot licences;
i) set out the timeframes within which the CEO must decide whether or not
to grant a warehouse licence;
j) allow the CEO to vary the place covered by a warehouse licence;
k) refund the warehouse licence fee on cancellation of a warehouse licence;
l) remove references to redundant provisions, and
m) remove the requirement to make a report of cargo in certain
circumstances concerning lost or wrecked ships or aircraft.
A reference to 'Customs' in this Explanatory Memorandum means the agency
continued in existence under subsection 4(1) of the Customs Administration
Act 1985.
FINANCIAL IMPACT STATEMENT
The Bill has no financial impact.
CUSTOMS AMENDMENT (Export controls and other measures) BILL 2011
NOTES ON CLAUSES
Clause 1 - Short title
This clause provides for the Bill, when enacted, to be cited as the Customs
Amendment (Export Controls and Other Measures) Act 2011.
Clause 2 - Commencement
Subclause (1) provides that each provision of this Act specified in column
1 of the table in that subclause commences, or is taken to have commenced,
on the day or at the time specified in column 2 of the table. This
subclause also provides that any other statement in column 2 of the table
has effect according to its terms.
Item 1 of the table provides that sections 1 to 3 and anything in this Act
not elsewhere covered by the table will commence on the day on which the
Customs Act receives the Royal Assent.
Item 2 of the table provides that Schedule 1 and 2 commence on a day to be
fixed by Proclamation, and if any of the provisions do not commence within
6 months beginning on the day this Act receives the Royal Assent, they
commence on the day after the end of that period.
Item 3 of the table provides that Schedule 3 commences on the 28th day
after this Act receives the Royal Assent.
Clause 3 - Schedule(s)
This clause is the formal enabling provision for the Schedule to the Bill,
providing that each Act specified in a Schedule is amended in accordance
with the applicable items of the Schedule. This Bill amends the Customs
Act and the Charges Act.
The clause also provides that the other items of the Schedules have effect
according to their terms. This is a standard enabling clause for
transitional, savings and application items in amending legislation.
Schedule 1 - control of export goods
Part 1 - Goods no longer for export
Customs Act 1901
Background
Section 30 of the Customs Act sets out the circumstances in which goods are
subject to the control of the Customs (Customs control). If goods are
subject to Customs control, officers of Customs can exercise various powers
in respect of such goods, for example the power to examine the goods. In
addition, under section 33 of the Customs Act, it is an offence to move,
alter or interfere with goods subject to Customs control except as
authorised under the Customs Act.
Under paragraph 30(1)(d) of the Customs Act, goods for export that were
made or prepared in, or brought into, any prescribed place for export, such
as a wharf or airport, are subject to Customs control until exported or, in
the case of excisable goods that are not exported, returned to an excise
licensed premises. However, as soon as such goods are 'no longer for
export', they cease to be subject to Customs control. If these goods are
not subject to Customs control, a person may remove the goods from an
airport or wharf without Customs approval. In addition, officers of
Customs can no longer examine the goods.
Goods can become no longer for export under several circumstances. These
include where an export declaration that has been communicated under
section 114 of the Customs Act is withdrawn for change of mind, or where an
authority to deal granted in relation to an export declaration is suspended
or cancelled under section 114C of the Customs Act.
To increase the level of security in the export cargo environment, the Bill
strengthens Customs control over goods when they become no longer for
export, by introducing a new regime whereby such goods can only be moved,
altered or interfered with in accordance with Customs permission.
Item 1 At the end of subsection 30(1)
This item amends the Customs Act by inserting new paragraph 30(1)(e).
Section 30 of the Customs Act sets out the circumstances in which goods are
subject to Customs control.
New paragraph (e) applies to goods made or prepared in, or brought into, a
prescribed place for export that are no longer for export. Customs control
commences from the time the goods are made or prepared in, or brought into
the prescribed place until the goods are moved from the place in accordance
with a permission given under new section 119AC. Item 8 below inserts new
section 119AC.
Item 2 At the end of section 33
This item inserts an additional note at the end of section 33. As
mentioned above, section 33 contains the offence relating to moving,
altering or interfering with goods subject to Customs control except as
authorised under the Customs Act.
New Note 3 states that for permissions to move, alter or interfere with
goods that are no longer for export, refer to sections 119AB and 119AC.
Items 3 and 4 Subparagraph 114D(1)(b)(ii) and paragraph 117AA(3)(b)
These items amend subparagraph 114D(1)(b)(ii) and paragraph 117AA(3)(b)
respectively.
Sections 114D and 117AA both deal with restrictions on dealing with goods
for export, except in certain circumstances. These items amend these
sections by inserting an additional exception, which includes where
permission to move, alter or interfere with goods has been given under new
section 119AC (see below).
Items 5, 6 and 7 Subsections 119AA(3), 119AA(4) and 119AA(6)
Section 119AA sets out the circumstances in which permission can be sought
and granted to move, alter or interfere with goods for export that have
been entered for export and in relation to which an authority to deal is in
force. Currently under this section, such an application can only be made
electronically.
Item 5 amends subsection 119AA(3) to also allow such an application to be
made by document. The documentary application must:
a) be communicated to Customs by sending or giving it to an officer of
Customs doing duty in relation to export entries:
b) be in an approved form; and
c) contain such information as is required by the form and
d) be signed in a manner specified in the form.
These requirements are similar to the requirements that apply to other
approved forms under the Customs Act.
Item 6 amends subsection 119A(4) to also allow the CEO to approve different
forms for documentary applications in different circumstances or by
different classes of persons (in the same way that the CEO can currently
approve different statements for electronic applications).
Item 7 amends subsection 119AA(6) to extend the means by which an officer
can send a message informing an applicant that the permission has been
given or has been refused. Currently this message can only be sent
electronically. This item amends subsection 119AA(6) to also allow this
message to be given by document.
Item 8 After section 119AA
This item amends the Customs Act by inserting new sections 119AB and 119AC.
These sections set out the circumstances in which permission can be sought
and granted to move, alter or interfere with goods that are subject to
Customs control and are no longer for export. This regime is similar to
the regime under section 119AA (as amended above) that applies to goods for
export that have been entered for export and in relation to which an
authority to deal is in force.
Under section 119AB, an application for such permission can be made by
document or electronically. The documentary application is subject to the
same requirements as set out in subsection 119AA(3) (see above), and an
electronic communication must communicate such information as is set out in
an approved statement. Similar to section 119AA, the CEO can approve
different forms and statements for applications in different circumstances
or by different classes of persons.
Under section 119AC, if an application is made under section 119AB, an
officer may direct the applicant to ensure that the goods to which the
application relates are held in the place where they are currently located
until a decision is made on the application. This direction power is the
same as the direction power in subsection 119AA(6). Under subsection
119AC(2), an applicant can be:
a) given permission to move, alter or interfere with the goods in
accordance with the application, either unconditionally or subject to
the conditions specified in the message conveying that permission has
been given; or
b) refused permission to move, alter or interfere with the goods - in
this circumstance, the message conveying this decision must set out
the reasons for the refusal.
Under subsection 119AC(3), if a person moves, alters or interferes with
goods otherwise than in accordance with the permission, that movement is
taken not to have been authorised by the Customs Act for the purposes of
paragraph 229(1)(g) of the Customs Act. Under paragraph 229(1)(g), all
goods subject to the control of the Customs that are moved, altered or
interfered with except as authorised by the Customs Act are forfeited to
the Crown.
Item 9 Subsection 119D(3)
This item amends the Customs Act by repealing and substituting subsection
119D(3).
Section 119D sets out the various circumstances in which communications in
relation to goods for export can be sent to Customs, and when such
communications are taken to have been communicated to Customs. In
particular, subsection 119D(3) provides that an electronic application
under section 119AA (see above) is taken to have been communicated to
Customs when an acknowledgement of the application is communicated by
Customs electronically to the person who sent the application.
New subsection 119D(3) extends this deeming provision to the new
documentary application under section 119AA, and to the new documentary and
electronic applications under new section 119AB. In relation to
documentary applications, the application is taken to have been
communicated to Customs when an acknowledgement of the application is given
by Customs to the person who sent the application. In relation to
electronic applications, the application is taken to have been communicated
to Customs when an acknowledgement of the application is sent by Customs to
the person who sent the application.
The Note to this item provides that the heading to section 119D is altered
by inserting a reference to 'applications'.
Items 10, 11 and 12 Subsection 122H(3)
Section 122H of the Customs Act sets out the circumstances in which an
authorised officer may enter premises where goods intended for export are,
or have been and examine goods. However, these powers are only to be
exercised in relation to such goods before the goods become subject to
Customs control and therefore are not currently exercisable on or in
premises which are prescribed for the purposes of paragraph 30(1)(d) of the
Customs Act. Any goods that are brought into such prescribed premises for
export become subject to Customs control.
Item 10 amends subsection 122H(3) to include a reference to premises
prescribed of the purposes of new paragraph 30(1)(e). As referred to
above, goods brought into such prescribed premises for export but which are
no longer for export are also subject to Customs control. Therefore, these
premises on which these goods are on or in will also not be subject to
section 122H.
Items 11 and 12 amend the current Note to subsection 122H(3) and inserts a
new Note, as a consequence of item 10. Item 11 renumbers the existing Note
as 'Note 1' and item 12 inserts a new Note stating that paragraph 30(1)(e)
of the Customs Act subject to the control of Customs goods made or prepared
in, or brought into, a prescribed place for export that are no longer for
export.
Part 2 - Power to give directions
Customs Act 1901
Background
Division 2 of Part VI of the Customs Act outlines the procedures for the
entry and clearance of goods for export.
Most goods that are to be exported from Australia must be reported to
Customs (entered for export) on an export declaration under section 113AA
of the Customs Act before they can be exported. Such goods cannot be
loaded onto a ship or aircraft in which they are to be exported unless an
authority to deal ('ATD') with them is in force. Once an ATD has been
granted (which is usually granted shortly after an export declaration is
made), the goods can be loaded for export.
When goods are brought to a prescribed place for export (usually a wharf or
airport or customs licensed depot), they become subject to Customs control
and can be examined by Customs. However, Customs currently does not have
the power to give directions to owners of such goods, wharf operators,
airport operators or persons engaged to load cargo at wharfs or airports as
to the movement or storage of goods for export. Such directions may need
to be given, for example, for the purposes of examination of those goods by
Customs after an ATD has been granted.
The amendments in this Part amend the Customs Act to allow Customs to give
written directions about the movement and storage of goods for the purpose
of ensuring compliance with the Customs Acts and other legislation
prescribed by the regulations, or for the protection of the revenue. The
Bill also inserts two new offences - one containing fault elements and one
a strict liability offence. Because of the higher degree of culpability,
the maximum penalty for the fault-based offence is greater than that for
the strict liability offence. The Bill also extends the existing
infringement notice scheme in the Customs Act to the new strict liability
offence.
Item 13 At the end of section 77Y
Section 77Y of the Customs Act authorises a Collector to give written
directions in relation to goods in a depot licensed under section 77G that
are subject to Customs control. These goods can include goods that are
intended for export.
This directions power may overlap with the new directions power that is to
be inserted by this Bill (as new section 112C). Therefore, this item
inserts new subsection 77Y(6) which provides that section 77Y does not
limit the directions that a Collector may give under section 112C. New
section 112C also includes a reciprocal provision.
Item 14 After Division 1 of Part VI
This item amends the Customs Act by inserting new Division 1A of Part VI,
which is entitled 'Directions in relation to goods for export etc. that are
subject to Customs control'. New Division 1A comprises sections 112C and
112D.
New section 112C
New subsection 112C(1) provides that a Collector may give a written
direction to move or not move, or about the storage of, goods that are
subject to Customs control under paragraph 30(1)(b), (c) (d) or (e) if the
direction is:
a) for the protection of the revenue; or
b) for the purpose on ensuring compliance with the Customs Acts, any
other law of the Commonwealth prescribed by the regulations, or a law
of a State or Territory prescribed by the regulations.
The goods referred to in paragraph 30(1)(b) are goods in respect of which a
drawback claim has been made before exportation - these goods are subject
to Customs control from the time the claim is made until they are exported,
the claim is withdrawn or disallowed, whichever happens first. The goods
referred to in paragraph 30(1)(c) are goods that are subject to export duty
- these good are subject to Customs control from the time they are brought
to any port or place for exportation until the payment of the duty.
The goods referred to in paragraphs 30(1)(d) and (e) are explained in
detail above in relation to Part 1.
Subsection 112C(2) sets outs to whom a direction can be given, being:
a) the person who made the export declaration in relation to the goods;
b) the owner of the goods;
c) if the goods are in a place prescribed for the purposes of paragraph
30(1)(d) or (e) - the person in charge of the place, or part of such a
place. Currently, for paragraph 30(1)(d), a wharf or airport
appointed under section 15 of the Customs Act and a depot licensed
under section 77G of the Customs Act are some of the places
prescribed. Similar places are expected to be prescribed for new
paragraph 30(1)(e);
d) a person who takes delivery of the goods at a wharf or airport; or
e) a person engaged to load the goods on a ship or aircraft.
These persons are all of the persons who may be involved with goods that
are for export once the goods have become subject to Customs control.
Subsection 112C(3) provides that section 112C does not limit the directions
that a Collector my give under section 77Y (in relation to depots). This
is the reciprocal provision to new subsection 77Y(6), as mentioned above.
New section 112D
New section 112D establishes new offences for refusing or failing to comply
with a direction given under new section 112C. One offence has fault
elements and the other is a strict liability offence. Because of the
higher degree of culpability, the maximum penalty for the fault-based
offence is greater than that for the strict liability offence. These
offences are necessary to bolster the integrity of the regulatory regime.
New subsection 112D(1) establishes the fault-based offence providing that a
person commits an offence if:
a) the person is given a direction under new section 112C; and
b) the person intentionally refuses or fails to comply with the
direction.
This offence is punishable by a maximum penalty of 120 penalty units. A
penalty unit is currently equal to $110.
New subsection 112D(2) establishes the strict liability version of the
offence, which is punishable by a maximum penalty of 50 penalty units. The
Note after subsection 112D(2) points the reader to section 6.1 of the
Criminal Code for further information about the operation of strict
liability.
In developing these offences, consideration was given to both the Senate
Standing Committee for the Scrutiny of Bills Sixth Report of 2002 on
Application of Absolute and Strict Liability Offences in Commonwealth
Legislation and the Guide to Framing Commonwealth Offences, Civil Penalties
and Enforcement Powers.
Item 15 - Subsection 243X(1)
This item inserts in subsection 243X(1) of the Customs Act a reference to
new subsection 112D(2). The inclusion of the new subsection 112D(2) in
subsection 243X(1) means that Division 5 of Part XIII of the Customs Act,
which provides for infringement notices to be issued in lieu of
prosecution, applies to this new strict liability offence. The extension
of the infringement notice scheme to this offence provides Customs with
greater flexibility to deal with non-compliance.
Part 3 - Suspension of an authority to deal with export goods
Customs Act 1901
Background
Currently, section 114A of the Customs Act allows Customs to seek
additional information relating to goods being exported. This information
is required for risk assessment purposes. Officers of Customs currently
have the power to seek this additional information by asking questions or
providing information in writing in respect to goods being exported to
verify the particulars of goods reported in an export declaration, but only
before an ATD has been granted.
In the majority of situations, officers will not have the opportunity to
make a request for additional information for risk assessment purposes,
because an ATD is granted almost immediately after an export declaration is
lodged. Accordingly, officer cannot perform an adequate risk assessment.
However, the need to perform this risk assessment function still exists up
until the time that goods for export are actually exported from Australia.
Section 114C of the Customs Act allows an officer of Customs to suspend an
ATD if the officer has reasonable grounds to suspect that the goods to be
exported have been dealt with in contravention of a Customs-related law.
However, this section cannot be utilised in the majority of situations
where an officer is risk assessing export goods as the officer will not
have reasonable grounds to suspect that the goods have been dealt with in
contravention of a Customs-related law until the officer has been able to
obtain further information and has been able to risk assess the goods.
Sections 240AA and 240AC of the Customs Act also allow an authorised
officer of Customs to require a person to produce commercial documents or
records within fourteen days of the request. In the majority of situations
in which information relating to export goods is requested under the
Customs Act, the goods will have been exported prior to Customs receiving
the information. This means an adequate risk assessment of goods being
exported may not be able to be conducted before the goods are exported.
To address these issues, the amendments in this Part insert new provisions
to enable an officer of Customs to suspend an ATD, at any time before goods
authorised to be dealt with are so dealt with, in order the verify
particulars of goods shown in an export declaration. This new power is in
addition to the power to suspend an ATD under section 114C.
Item 16 - After section 114C
This item amends the Customs Act by inserting new sections 114CA, 114CB and
114CC
New section 114CA
New subsection 114CA(1) provides that an officer of Customs may, at any
time before goods authorised to be dealt with in accordance with an export
entry advice are so dealt with, suspend the ATD for a specified period in
order to verify particulars of the goods shown in an export declaration.
Similar to section 114A, this verification may be done by reference to
information in commercial documents relating to the goods previously
provided to Customs, or by reference to other written information given to
Customs.
If an ATD is suspended in relation to a documentary export declaration,
under new subsection 114CA(2) the officer must sign a notice to this
effect, setting out the reasons for the suspension, and serve a copy of the
notice on either the person who made the declaration or the person in
possession of the goods. The suspension has effect from the time when the
notice is served.
If a notice is suspended in relation to an electronic declaration or an
Accredited Client Export Approval Number (ACEAN), under new subsection
114CA(3) the officer must electronically send a message to the person who
made the declaration or the ACEAN to this effect, setting out the reasons
for the suspension. The suspension has effect from the time when the
message is sent.
New section 114CB
Under new subsection 114CB(1), an officer must revoke a suspension under
section 114CA if, during the period of suspension, the officer verifies the
particulars of the goods shown in the relevant export declaration.
Under new subsection 114CB(2) and (3), the officer must send a notice
notifying that the suspension has been revoked to the same person who was
originally notified that the ATD had been suspended (under new subsections
114CA(2) and (3)).
New section 114CC
New section 114CC sets out the powers of an officer of Customs to seek
information in relation to goods that are the subject of an export
declaration where the ATD has been suspended under new section 114CA.
Under subsection 114CC(2), an officer may require the owner of such goods
to deliver certain commercial documents or other written information that
will assist the officer to verify the particulars in an export declaration
to the officer. The commercial documents can only relate to the goods and
must be in the owner's custody and control. The other written information
can only be information that is within the knowledge of the owner or as the
owner is reasonably able to obtain.
Under subsection 114CC(2), a documentary requirement to deliver documents
or information must be in an approved form, and be communicated to the
person who communicated the export declaration to Customs, or on whose
behalf it was communicated.
Under subsection 114CC(3), an electronic requirement to deliver documents
or information must be in an approved statement, and be sent electronically
to the person who made the export declaration to Customs.
Under subsection 114CC(5), in addition to the power in subsection 114CC(2),
an officer may also ask any questions relating to the goods the subject of
an export declaration. The officer may ask questions of the owner of the
goods, or if another person made the export declaration on behalf of the
owner, the other person.
Subsection 114CC(6) merely restates the position that an officer of Customs
may require an owner to verify the particulars shown in an export
declaration either by producing documents, or making a declaration.
Under subsection 114CC(7), if a person delivers a commercial document to an
officer of Customs under section 114CC, the officer must deal with the
document and return it to the person. This requirement is subject to
section 215 of the Customs Act, which allows Customs to retain or impound
certain documents in certain circumstances. If that occurs, the person
entitled to such a document is instead entitled to a certified copy of the
document.
Schedule 2 - strengthening of security measures at depots and warehouses
PART 1 - DEPOT LICENCES
Customs Act 1901
Background
Currently, under Part IVA of the Customs Act, a person can be licensed to
operate a depot. Such licensed depots are used to store imported goods and
goods for export subject to Customs control until the goods are entered for
home consumption and the duty is paid or the goods are exported. Storage
of goods in depots is short term only. Depots can be used for the
unpacking and deconsolidation of imported goods while still under Customs
control. They are also used to consolidate goods for export. While there
are many similarities in the administration of licensed warehouses and
depots, there are differences in a number of the statutory requirements
that govern the regimes. The amendments in this Part strengthen depot
controls and provide greater consistency with the legislative scheme for
warehouses.
Items 1 and 2 - Subsection 20(8)
These items amend subsection 20(8) of the Customs Act by repealing the
inclusion of a place appointed under paragraph 17(b) of the Customs Act
from the definition of 'waterfront area'. Section 20 of the Customs Act
provides powers exercisable by Customs officers in a waterfront area.
These amendments are consequential upon the repeal of paragraph 17(b) by
the Customs Amendment Act (No. 1) 1997, and which were not made at that
time.
Item 3- Subsection 77F(1) (definition of depot licence charge)
This item omits the reference to section 77M in subsection 77F(1) of the
Customs Act, as a consequence of the repeal of section 77M by item 6 below.
Items 4 and 5 - Section 77L
These items amend section 77L of the Customs Act as a consequence of the
repeal of paragraph 17(b). Section 77L sets out provisions relating to the
granting of a depot licence and, when originally enacted, this section was
not intended to apply in relation to any outstanding applications to
appoint a place under paragraph 17(b) of the Customs Act. As paragraph
17(b) was repealed 14 years ago, there is no longer a continuing need for
this exemption, which is set out in subsection 77L(3). Therefore,
subsection 77L(3) is to be repealed.
Item 6 - Section 77M
This item repeals section 77M. This section sets out the transitional
provisions for places that were appointed under paragraph 17(b). Again, as
paragraph 17(b) was repealed 14 years ago, there is no longer a continuing
need for these transitional provisions. Therefore section 77M is to be
repealed.
Item 7 - Subsection 77Q(1)
This item repeals subsection 77Q(1) and substitutes new subsections 77Q(1),
(1A) and (1B). This item also replaces the heading to section 77Q with
'The CEO may impose additional conditions to which a depot licence is
subject' and inserts a subheading to subsection 77Q(1) of 'Imposition of
additional conditions' and to subsection 77Q(2) of 'Variation of imposed
conditions'.
Under Part IVA of the Customs Act, the CEO of Customs may grant a depot
licence for a place, described in the licence, to be used for holding,
unpacking or examining imported goods that are subject to Customs control
or for holding, packing or examining goods for export that are subject to
Customs control. Sections 77N and 77P of the Customs Act impose several
statutory conditions upon a depot licence. In addition, the CEO of Customs
may specify conditions upon a depot licence under 77Q of the Customs Act,
which are in addition to the conditions imposed by sections 77N and 77P.
The CEO may also vary such specified conditions. A breach of a condition
of the depot licence is an offence under section 77R of the Customs Act.
Under current section 77Q, the CEO is restricted to specifying conditions
that are for the purpose of protecting the revenue or for ensuring
compliance with the Customs Act. The CEO cannot specify conditions to
ensure compliance with other Commonwealth and State or Territory laws. For
example, Customs is not fully able to support export air cargo security
initiatives because the CEO does not have the ability to impose depot
licence conditions for the purpose of ensuring compliance with the Aviation
Transport Security Act 2004 and the Aviation Transport Security Regulations
2005.
In addition, section 77Q does not clearly indicate that the CEO may specify
additional licence conditions at any time after the initial granting of a
depot licence (as opposed to varying existing conditions). This means that
Customs cannot confidently impose additional conditions on existing depot
licences in order to respond to emerging risks to cargo security, risks to
the revenue or for community protection purposes.
The Bill amends the CEO's powers under section 77Q to extend the
circumstances in which the CEO may specify additional conditions to address
these concerns.
New subsection 77Q(1) provides that the CEO may, at any time, impose
additional conditions to which a depot licence is subject if the CEO
considers the conditions to be necessary or desirable:
a) for the protection of the revenue; or
b) for the purpose of ensuring compliance with the Customs Acts, any
other law of the Commonwealth prescribed by regulations or a law of a
State or Territory prescribed by the regulations. These laws would
be prescribed in the Customs Regulations 1926; or
c) for any other purpose.
These additional conditions can be imposed at the time the depot licence is
granted or at any time after the initial granting of the licence, thereby
giving the CEO the ability to respond to emerging risks to cargo security,
risks to the revenue or for community protection purposes.
New subsection 77Q(1A) states that if the CEO imposes a condition under
subsection (1), the condition must be specified in the licence.
New subsection 77Q(1B) states that if the CEO imposes conditions under
subsection (1) after the depot licence has been granted, the CEO must, by
notice in writing, notify the holder of the licence of the new conditions.
In addition, the conditions cannot take effect before the end of 30 days
after such notice is given. However, if the CEO considers that it is
necessary for the conditions to take effect earlier, they will take effect
at the end of the shorter period specified in the notice. This enables the
CEO to respond in circumstances that may require urgent action, such as
dealing with a significant security incident.
Item 8 - Subsection 77Q(2)
This items makes a technical amendment to substitute the reference to
'specified with 'imposed', as a consequence of new subsection 77Q(1).
Item 9 - Subsection 77Q(3)
This item repeals and substitutes subsection 77Q(3). This subsection sets
out the timeframe for the taking effect of a condition on a depot licence
that is varied under subsection 77Q(2). Currently, such a variation cannot
take effect before the end of 30 days after notice of the variation is
given to the holder of the licence. Consistent with new subsection 77Q(1)
in relation to the imposition of additional conditions, under new
subsection 77Q(3) a variation can now also take effect at the end of the
shorter period specified in the notice, if the CEO considers that it is
necessary for the conditions to take effect earlier. Similar to subsection
77Q(1B), this is to enable the CEO to respond in circumstances that may
require urgent action, such as dealing with a significant security
incident.
Items 10 and 11 - Section 77R(1)
Section 77R of the Customs Act establishes a strict liability offence for
breaching conditions imposed on a depot licence under sections 77N, 77P and
77Q. Item 10 amends subsection 77R(1) to clarify that section 77R applies
to a condition varied under section 77Q, as well as conditions imposed
under section 77Q. Item 11 inserts a Note after subsection 77R(2), to
point the reader to section 6.1 of the Criminal Code for further
information about the operation of strict liability.
Item 12 - At the end of section 77R
This item inserts new subsection 77R(3) into the Customs Act.
Section 44C of the Aviation Transport Security Act 2004 (the ATSA)
establishes the regulated air cargo agent scheme (RACA). RACAs are
required to operate under a transport security program and to comply with
directions given by the Secretary of the Department of Infrastructure and
Transport.
A RACA may also be the holder of a depot licence granted under Part IV of
the Customs Act. Therefore, it is possible that in complying, or
attempting to comply, with a direction of the Secretary of the Department
of Infrastructure and Transport, a RACA that is also a holder or a depot
licence may breach a condition of the depot licence and commit an offence
under section 77R of the Customs Act. For example, in accordance with
subsection 77N(2A) of the Customs Act, it is a condition of a depot licence
that the holder of the depot licence must not cause or permit a substantial
change in the physical security of the depot or the keeping of records
unless the holder has given Customs 30 days notice prior to the change. In
the event of a heightened security alert, the Secretary may give a special
security direction concerning physical security for immediate action. Any
depot licence holder that complied with the security direction would be in
breach of their depot licence conditions.
To address this potential issue, new subsection 77R(3) provides that
section 77R does not apply if:
a) the holder of a depot licence breaches a condition of the licence
referred to in subsection 77R(1); and
b) the breach occurred only as a result of the holder's compliance, or
attempted compliance, with a direction given under section 21 of the
ATSA, or a special security direction (within the meaning of section 9
of the ATSA), that applies to the holder.
A Note to this new subsection indicates that, in accordance with subsection
13.3(3) of the Criminal Code, the defendant bears the evidential burden in
relation to the matters in new subsection 77R(3).
Item 13 - Section 77S (note)
This item repeals and substitutes the Note to section 77S (which deals with
the duration of depot licences). This Note currently refers to section 77M
of the Customs Act, which is to be repealed by item 6 above. Therefore,
this Note is being amended so that it no longer refers to section 77M.
This Note is also being amended to refer to new section 77VC as the section
under which depot licences are cancelled (see below) as opposed to current
section 77V, which is being amended (see below also).
Item 14 - Subsection 77U(1)
This item amends subsection 77U(1), which deals with the depot licence
charges, to omit the reference to section 77M, as a consequence of the
repeal of section 77M by item 6 above. Section 77U is otherwise unchanged.
Item 15 - Subsection 77V(1)
Section 77V of the Customs Act provides that the CEO may give notice of
intention to revoke a depot licence in certain circumstances. Section 77V
also sets out the CEO's power to revoke a depot licence in certain
circumstances. However, unlike the regime that governs warehouse licences,
the CEO currently does not have the ability to suspend a depot licence.
The only option available to the CEO to respond to non-compliance under the
current legislation is to revoke the licence. The former licence holder
would then be required to re-apply for a depot licence. Suspension of the
licence would provide an opportunity to address matters that may be able to
be dealt with and which would enable the suspension to be lifted.
The possibility of the suspension of a depot licence would provide a
greater incentive for industry to comply with the depot licensing
requirements. It is therefore proposed to amend section 77V so that it
allows for the suspension of a depot licence, in the same circumstances
under which a depot licence can currently be revoked as set out subsection
77V(1). It is also proposed to create a new section 77VC which sets out
the circumstances in which a depot licence can be cancelled. In this new
section, the term 'cancelled' is used in place of the current term
'revoked' in order to the align the terminology with that used in relation
to warehouse licences.
This item amends subsection 77V(1) to remove the reference to the intention
to revoke a depot licence under section 77V in the notice given to the
holder of a depot licence under this provision. A notice will still be
given to the holder under subsection 77V(1), but it will be in different
terms (see new subsection 77V(4) below).
Items 16 and 17 - Paragraph 77V(1)(b)
Paragraphs 77V(1)(a) and (b) set out the circumstances in which a notice of
intention to revoke can be given by the CEO to the holder of a depot
licence under section 77V. Under paragraph (b), the CEO can give notice if
satisfied on grounds other than those set out in paragraph (a) that the
revocation is necessary for the protection of the revenue or for ensuring
compliance with the Customs Act.
Item 17 amends paragraph (b) so that it extends to ensuring compliance with
any other law of the Commonwealth prescribed by the regulations, or a law
of a State of Territory prescribed by the regulations. These laws would be
prescribed in the Customs Regulations 1926. Item 16 also amends paragraph
(b) to replace the reference to 'revocation' with 'cancel' so that the
terminology is consistent with new section 77VC (below).
Item 18 - Subsection 77V(4) to (11)
This item repeals existing subsections 77V(4) to (11) and substitutes new
subsections 77V(4) to (11), which set out the details in relation to a
notice given by the CEO to the holder of a licence under subsection 77V(1).
Under new subsection 77V(4), the notice must be in writing and served on
the holder of the licence, either personally or by post. Alternatively,
the notice can be served on a person who, at the time of service,
apparently participates in the management or control of the depot.
New subsection 77V(5) sets out the matters that are to be included in the
notice. The notice must state that, if the holder of the licence wishes to
prevent the licence being cancelled he or she may give a written statement
to the CEO showing cause why the licence should not be cancelled. This
statement must be given within 7 days of the notice under subsection (1)
being served.
The notice may also state that the licence is suspended, if it appears
necessary to the CEO to suspend the licence:
a) for the protection of the revenue; or
b) for the purpose of ensuring compliance with the Customs Acts, any
other law of the Commonwealth prescribed by regulations or a law of a
State or Territory prescribed by the regulations - similar to
provisions set out above, these laws would be prescribed in the
Customs Regulations 1926.
New subsection 77V(6) provides that the suspension of a depot licence is
effective on and from the service of the notice under subsection 77V(1).
Section 77T of the Customs Act sets out provisions relating to the renewal
of a depot licence. Under subsection 77T(1), the CEO must notify each
licence holder of the terms of section 77T before the end of each financial
year (which is also the end of the term of a depot licence). Under
subsections 77T(2) and (4), a licence holder can obtain automatic renewal
of a depot licence if the holder pays the depot licence charge. New
subsection 77V(7) provides that the despite the giving of a notice under
subsection 77V(1), nothing in Part IV otherwise prevents the events under
section 77T occurring. For example, the CEO is still required to give the
notice in accordance with subsection 77T(1) even if the current depot
licence is suspended.
The Note to subsection 77V(7) provides that a depot licence charge may be
refunded under section 77W of the Customs Act.
Item 19 - After section 77V
This item inserts new sections 77VA, 77VB and 77VC into the Customs Act.
New section 77VA
New subsection 77VA(1) sets out a new offence in relation to suspended
depot licences. The new offence provides that if a depot licence is
suspended under section 77V, a person must not use the depot for a purpose
referred to subsection 77G(1). This subsection sets out the Customs
Activities that the CEO may specify in a licence that can take place in a
depot. This new offence contains fault elements and is subject to a
maximum penalty of 50 penalty units.
However, new subsection 77VA(2) sets out the Customs Activities that a
Collector can authorise in relation to a depot where a depot licence has
been suspended. For example, a Collector may allow particular activities
to take place in a depot while the licence is suspended to avoid
inconveniencing other parties. If the Collector authorises an activity, a
person does not commit the new offence in subsection 77VA(1) if an activity
takes place in accordance with this authority. Subsection 77VA(2) also
sets out other actions that a Collector may undertake in relation to a
depot where a depot licence has been suspended.
Under section 77VA(2), a Collector may:
a) permit imported goods, or goods for export, that are subject to the
control of Customs to be held in the depot; and
b) permit the unpacking or packing of such goods; and
c) permit the removal of such goods from the depot, including the removal
of such goods to another depot;
d) by notice in a prescribed manner to the owner of such goods, require
the owner to remove the goods to another depot, or to a warehouse,
approved by the Collector; and
e) take such control of the depot, or all or any goods in the depot, as
may be necessary:
(i) for the protection of the revenue; or
(ii) for ensuring compliance with the Customs Acts, any other law
of the Commonwealth prescribed by the regulations or a law of a
State or Territory prescribed by the regulations (in the Customs
Regulations 1926); and
f) by notice in writing to the holder of the licence, require the holder
to pay to Customs, in respect of the services of officers required as
the result of the suspension, such fee as the CEO determines having
regard to the cost of the services.
A Note to this new subsection indicates that, in accordance with subsection
13.3(3) of the Criminal Code, the defendant bears the evidential burden in
relation to the matters in new subsection 77VA(2).
New subsection 77VA(3) sets out some of the services referred to in
paragraph 2(f) in respect of which a Collector may require that a fee is
payable. These include services relating to the enforcement of the
suspension (such as the attendance of officers of Customs at the premises
to prevent unauthorised removal of goods from the premises while the
licence is suspended) and services relating to the supervision of
activities permitted by a Collector under subsection 77VA(2).
New subsection 77VA(4) provides that if a fee is payable under paragraph
2(f) and the fee is not paid, the amount may be recovered as a debt due to
the Commonwealth in a court of competent jurisdiction.
New section 77VB
New section 77VB sets out provisions dealing with the revocation of a
suspension of a depot licence under new subsection 77V(5). The CEO may, at
any time revoke this suspension. In addition, if the licence is not
cancelled (in accordance with new section 77VC below) within 28 days after
the day on which the licence is suspended, the CEO must revoke the
suspension.
New section 77VC
New section 77VC sets out provisions relating to the cancellation of a
depot licence.
New subsection 77VC(1) provides that the CEO may, by notice in writing,
cancel a depot licence if not satisfied of any matter mentioned in
subparagraphs 77V(1)(a)(i) to (viii), or of any matter mentioned in
paragraph 77V(1)(b) in relation to the licence.
Subparagraphs 77V(1)(a)(i) to (viii), and paragraph 77V(1)(b) set out
several matters in relation to a depot licence that the CEO may consider as
grounds for issuing a notice under subsection 77V(1) (see above). For
example, the CEO may issue a notice of intention to cancel the licence if
he is satisfied that the physical security of the depot is no longer
adequate, or if a licence holder is no longer a fit and proper person to
hold a depot licence. Therefore, if the CEO is satisfied that a licence
holder is no longer a fit and proper person to hold a depot licence, the
CEO may cancel the licence.
Under new subsection 77VC(2), the CEO must, by notice in writing, cancel a
licence if the CEO receives a written request from the holder of the
licence that it be cancelled on and after a specified day. A licence
holder might make such a request if, for example, the business is closing
and they wish to cancel in order to receive a refund of their charges.
Both of these notices must be served on the holder of the licence, either
personally or by post. Alternatively, the notices can be served personally
on a person who, at the time of service, apparently participates in the
management or control of the depot.
Under new subsection 77VA(4), if a depot licence is cancelled, the CEO must
by notice published in a newspaper circulating in the locality in which the
depot is situated, inform the owners of goods in the depot of the
cancellation and the date of the cancellation. This requirement is the
same as the current requirement under subsection 77V(8) in relation to the
revocation of depot licences.
Under new subsection 77VC(5), the person or partnership who held the depot
licence before its cancellation must return the hard copy of the depot
licence to Customs within 30 days after the cancellation. This requirement
is the same as the current requirement under subsection 77V(9) in relation
to the revocation of depot licences.
Item 20 - Subsection 77W(1)
This item repeals and substitutes subsection 77W(1). Subsection 77W(1)
currently sets out the formula for the refund of the depot licence charge
after its revocation. New subsection 77W(1) and (1A) restate this formula
in terms of the cancellation of a depot licence.
Under new subsection 77W(1), a former licence holder is entitled to a
refund of the depot licence charge where a licence is cancelled before the
end of a financial year. This refund is of course only payable if the depot
licence charge for the financial year has been paid at the time the licence
is cancelled.
The pro-rata formula to work out the amount of the refund of the depot
licence charge is:
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The 'annual rate' is $4,000 or such other amount prescribed under
subsection 6(2) of the Charges Act. No other amount has been prescribed as
of 2011. This amendment also corrects an incorrect cross-reference to
subsection 6(1) of the Charges Act in the current definition of 'annual
rate'.
The 'days in the year' are 365, unless a financial year is not 365 days, in
which case the days are the Customs Actual number of days. The 'post-
cancellation days' are the remaining number of days of the financial year
following the cancellation of the licence.
Item 21 - Subsection 77X(1)
This item repeals subsection 77X(1). Section 77X sets out the Collector's
powers in relation to a depot that ceases to be covered by a depot licence.
Current subsection 77X(1) sets out the places to which section 77X applies
and includes a reference to the transitional provisions under section 77M
that applied to places that were appointed under paragraph 17(b). As set
out above, section 77M is to be repealed. As a consequence of the repeal
of section 77M, subsection 77X(1) is to be repealed and its remaining
provisions are to be incorporated into subsection 77X(2).
Item 22 - Subsection 77X(2)
This item amends subsection 77X(2) to incorporate the remaining provisions
of subsection 77X(1). New subsection 77X(2) is prefaced by the phrase "If
a place ceases to be covered by a depot licence". This amendment is a
technical amendment only.
Item 22 - Paragraph 77X(2)(g)
Under current paragraph 77X(2)(g), a Collector may, while controlled goods
are in the place (being a place that has ceased to be covered by a depot
licence) take such control of the place as may be necessary for the
protection of the revenue or for ensuring compliance with the Customs Acts.
The Bill amends paragraph 77X(2)(g) to enable a Collector to take control
of such a place for ensuring compliance with other Commonwealth or State or
Territory laws. These laws would be prescribed in the Customs Regulations
1926. This amendment complements the amendments proposed to section 77Q
(as set out above) in relation to the CEO's powers to impose conditions on
the granting of a depot licence.
Item 24 - Subsection 77Y(1)
Section 77Y sets out the powers of a Collector to give directions to the
holder of a depot licence or a person participating in the management or
control of a depot. These directions can only be give in relation to goods
in the depot that are subject to Customs control (in this section, the term
for these goods is 'controlled goods'.) Under subsection 77Y(1), the
directions can be given for the protection of the revenue or for ensuring
compliance with the Customs Acts.
Similar to the amendments to paragraph 77X(2)(g), the Bill amends
subsection 77Y(1) to enable a Collector to give directions for ensuring
compliance with other Commonwealth and State or Territory laws. These laws
would be prescribed in the Customs Regulations 1926. This amendment also
complements the amendments proposed to section 77Q (as set out above).
The proposed amendments to sections 77Q, 77X and 77Y strengthen the powers
that Customs can exercise in relation to goods in depots at all times while
a depot licence is in force and once a licence has expired, has been
suspended or has been cancelled.
Items 25 and 26 - Paragraph 77Y(2)(d) and (e)
Subsection 77Y(2) sets out the types of direction that a Collector an give
under subsection 77Y(1). Under paragraph (d), the Collector may give a
direction about the unpacking from receptacles of imported goods that are
controlled goods. Under paragraph (e), the Collector may give a direction
about the packing into receptacles of goods for export of controlled goods.
In order to widen the power to give directions, the Bill removes the
limitation on the types of controlled goods that are the subject of
paragraphs (d) and (e). A Collector would, therefore, be able to give
direction in relation to the unpacking or packing of any controlled good in
a depot, regardless of whether the goods are imported goods or goods for
export. These amendments enhance Customs ability to respond effectively to
identified high-risk goods, especially in the export environment.
Item 25 removes the reference to 'imported' goods in paragraph 77Y(2)(d)
and item 26 removes the reference to 'goods for export' in paragraph
77Y(2)(e).
Item 27 - After subsection 77Y(3)
Under subsection 77Y(4), it is a strict liability offence to refuse or fail
to comply with a direction given under subsection 77Y(1) or (3). The Bill
introduces a fault based offence relation to the same refusal or failure to
comply to address a greater level of culpability. This offence is
punishable by a maximum penalty of 120 penalty units.
Item 28 - Subsection 243X(1)
This item inserts in subsection 243X(1) of the Customs Act a reference to
subsections 77R(1) and 77Y(4). The inclusion of these subsections in
subsection 243X(1) means that Division 5 of Part XIII of the Customs Act,
which provides for infringement notices to be issued in lieu of
prosecution, applies to these strict liability offences. The extension of
the infringement notice scheme to these offences provides Customs with
greater flexibility to deal with non-compliance.
Items 29, 30, 31 and 32 - Section 273GA
Section 273GA of the Customs Act sets out those decisions under the Customs
Act in respect of which an application for review may be made to the
Administrative Appeal Tribunal. These items make technical amendments to
section 273GA, and add two new decisions to section 273GA.
Item 29 adds the words 'the following' to the opening phrase of subsection
273GA(1). This is a technical drafting amendment only.
Item 30 amends paragraph 273GA(1)(aat) to insert the phrase 'to impose
conditions on a depot licence or'. This extends section 273GA to the new
decision making power of the CEO to impose additional conditions on a depot
licence under the amended section 77Q (as set out above).
Item 31 amends paragraph 273GA(1)(aau) to omit the reference to 'revoke'
and substitute 'suspend'. Paragraph 273GA(1)(aau) applies to decisions
made under section 77V. This amendment reflects the amendments to section
77V (as set out above) whereby a depot licence is suspended under 77V, not
revoked.
Item 32 amends subsection 273GA(1) to insert new paragraph 273GA(1)(aav),
which applies to a decision by the CEO under section 77VC to cancel a depot
licence. This amendment extends section 273GA to the new decision making
power of the CEO to cancel a depot licence under the new section 77VC (as
set out above).
Customs Depot Licensing Charges Act 1997
Item 33 - Section 3 (definition of depot licence charge)
This item repeals the reference to section 77M in the definition of 'depot
licence charge in section 3 of the Charges Act. This amendment is
consequential upon the repeal of section 77M of the Customs Act (as set out
above).
Item 34 - Subsections 4(2) and 5(1)
These items repeal subsections 4(2) and 5(1) of the Charges Act.
Subsection 4(2) sets out the amount of depot licence application charge
payable under section 77M of the Customs Act and is to be repealed as a
consequence of the repeal of section 77M. Subsection 5(1) sets out the
amount of depot licence application charge payable in respect of premises
that were previously appointed under paragraph 17(b) of the Customs Act.
As paragraph 17(b) was repealed 14 years ago, there is no longer a
continuing need for this charge.
Item 35 - Subsection 5(2)
This item omits the reference to '(2)' in this subsection as there is only
one provision in this section as a consequence of the repeal of subsection
5(1).
Item 36 - Subsection 5(2)
This item omits the references to paragraphs 5(1)(a) and (b) in subsection
5(2) as a consequence of the repeal of subsection 5(1) above. Subsection
5(2) now sets out the depot licence application charge for a depot licence.
Item 37 - Subsection 5(2)
This item omits the reference to subsection 6(6) in subsection 6(1) of the
Charges Act. This amendment is consequential on the repeal of subsection
6(6) below.
Item 38 - Subsection 5(2)
This item repeals subsections 6(6) to 6(8) of the Charges Act. These
subsections set out the formulae for depot licence charge payable under
section 77M of the Customs Act and in relation to places previously
appointed under paragraph 17(b) of the Customs Act. These amendments are
consequential on the repeal of section 77M and paragraph 17(b).
PART 2 - WAREHOUSE LICENCES
Customs Act 1901
Under Part V of the Customs Act, a person can be licensed to operate a
warehouse. Licensed warehouses are used to store imported goods in respect
of which customs duty has not been paid. Such goods remain subject to
Customs control until the duty in paid and the goods are delivered into
home consumption. The main difference between a depot and a warehouse is
that warehouses are used for longer term storage of goods. These goods
have been entered for warehousing and detailed information on the goods
including value, origin and classification has been communicated to Customs
and Border Protection. The goods remain subject to Customs control until
such time as they are entered for home consumption and the duty is paid.
Similar to the amendments for depots, the amendments set out in this Part
strengthen warehouse controls and improve administration by providing
clients with standardised procedures and terminology across the two
regimes.
Item 39 - After section 81
This item amends the Customs Act by inserting new section 81A.
Under section 77L of the Customs Act in relation to depots, the CEO has 60
days after the receipt of an application for a depot licence to decide
whether or not to grant the licence This service standard provides
certainty to applicants in understanding when they will receive advice on
the success or otherwise of their application. However, the Customs Act
does not have a corresponding provision setting timeframes for warehouse
licence applications, although the same time frames are applied in practice
and are made available in published service standards
New subsection 81A(1) provides that if an application for a warehouse
licence is made under section 80 of the Customs Act, the CEO must decide
whether or not to grant the licence within 60 days after receiving the
application.
Under new subsection 81A(2), if the CEO does not make this decision within
the 60 day period, the CEO is taken to have refused the application at the
end of that period. These provisions are the same as the provisions that
apply in relation to applications for a depot licence.
This item also inserts new section 81B. Under section 77LA of the Customs
Act, the CEO may upon application by the holder of a depot licence vary the
places described in the licence. However, there is no corresponding
provision in relation to warehouse licences. This means that those matters
that may be dealt with by a variation to a depot licence are unable to be
similarly dealt with for warehouse licence holders. Instead, warehouse
licence holders must submit a new application in relation to the new
premises, which can be a time-consuming process.
New section 81B sets out the regime whereby the holder of a warehouse
licence may apply to the CEO to vary the licence, either by omitting and
substituting the description of the place described in the licence (ie an
entirely new premises), or by altering such a description (new subsection
81B(1)).
Under new subsection 81B(2), the application must be in writing in an
approved form and must contain the information the form requires and be
signed in the manner the form requires.
Under new subsection 81B(3), the CEO may require an applicant to provide
further information in relation to the application within a specified
period.
Subsections 81B(4) and (5) set out the circumstances in which the CEO must
not grant the application to vary the licence. These circumstances are the
same as those that apply in relation to depots under section 77LA. Under
subsection 81B(4), the CEO must not grant the application if, in the CEO's
opinion:
(a) the physical security of the place whose description is to be
substituted, or of the place that would have the altered description,
would not be adequate having regard to:
(i) the nature of the place; or
(ii) the kinds and quantity of goods that would be kept in the place
if the variation were made; or
(iii) the procedures and methods that would be adopted by the applicant
to ensure the security of goods in the place if the variation were
made; or
(b) the plant and equipment that would be used in relation to goods in the
place, if the variation were made, would not be suitable having regard
to the nature of those goods and that place; or
(c) the books of account or records that would be kept in relation to the
place, if the variation were made, would not be suitable to enable
Customs adequately to audit those books or records.
Under subsection 81B(5), the CEO must not grant the application in relation
to the substitution of the description if, in the CEO's opinion, the place
would be too remote from the nearest place where officers, who regularly
perform their functions for Customs, would be able to conveniently check
whether the Customs Acts are being complied with at the place. For
example, the CEO would be unlikely to approve the relocation of a warehouse
away from a capital city to a regional location with no local Customs
office.
Under new subsection 81B(6), the CEO must decide whether or not to grant
the application within 60 days after receiving the application. If
information is requested and supplied in accordance with subsection 81B(3)
above, the CEO must make this decision within 60 days after receiving the
information.
Similar to the initial application for a warehouse licence, under new
subsection 81B(7), if the CEO does not make this decision within the
relevant 60 day period , the CEO is taken to have refused the application
at the end of that period. These provisions are the same as those that
apply in relation to depots under section 77LA.
Item 40 - Subsection 82(2)
This item repeals subsection 82(2) of the Customs Act. Section 82 sets out
the conditions to which a warehouse licence is subject. Similar to depots,
subsection 82(1) imposes several statutory conditions upon a warehouse
licence. In addition, the CEO and Customs may specify conditions upon a
warehouse licence under subsection 82(2) and 82(3).
For ease of administration, the two provisions under which additional
conditions can be imposed will be consolidated into the one subsection
82(3). Therefore, subsection 82(2) is to be repealed.
Item 41 - Subsection 82(3)
This item repeals and substitutes subsection 82(3) of the Customs Act.
Under current subsections 82(2) and 82(3), similar to the current
restrictions in relation to depots, the CEO is restricted to specifying
conditions that are for the purpose of protecting the revenue or for
ensuring compliance with the Customs Act. The CEO cannot specify
conditions for ensuring compliance with other Commonwealth and State or
Territory laws.
New subsection 82(3) therefore provides that the CEO may impose such other
conditions specified in the licence that the CEO considers the conditions
to be necessary or desirable:
a) for the protection of the revenue; or
b) for the purpose of ensuring compliance with the Customs Acts, any
other law of the Commonwealth prescribed by regulations or a law of a
State or Territory prescribed by the regulations. These laws would
be prescribed in the Customs Regulations 1926; or
c) for any other purpose (this provision is currently in subsection
82(2)).
Item 42 - At the end of section 82
This item amends the Customs Act by inserting new subsection 82(6) which
provides that subsection 82(5) does not limit new section 82B.
Subsection 82(5) provides that the CEO may vary the conditions specified in
a warehouse licence but only if the licence holder applies to the CEO to
vary the conditions. Unlike depots, the CEO does not have the power to
vary the conditions on his or her own initiative. This limits the power of
the CEO to respond to emerging risks to cargo security, risks to the
revenue or for community protection purposes.
New section 82B below addresses this shortcoming. The purpose of new
subsection 82(6) is to put beyond doubt that the powers of the CEO under
new section 82B are not limited by the restriction on the CEO's powers
under current subsection 82(5).
Item 43 - After section 82
New section 82A
This item amends the Customs Act by inserting new section 82A.
Similar to depots, section 82 does not clearly indicate that the CEO may
specify additional licence conditions at any time after the initial
granting of a warehouse licence. This means that, as with depots, Customs
cannot confidently impose additional conditions on existing warehouse
licences in order to respond to emerging risks to cargo security, risks to
the revenue or for community protection purposes. New section 82A
addresses this shortcoming.
New subsection 82A(1) provides that the CEO may, at any time after a
warehouse licence is granted, impose additional conditions to which the
licence is subject if the CEO considers the conditions to be necessary or
desirable:
a) for the protection of the revenue; or
b) for the purpose of ensuring compliance with the Customs Acts, any
other law of the Commonwealth prescribed by regulations or a law of a
State or Territory prescribed by the regulations. These laws would
be prescribed in the Customs Regulations 1926; or
c) for any other purpose.
New subsection 82A(2) provides that the CEO must, in writing, notify the
holder of the warehouse licence of the new conditions. In addition, the
new conditions cannot take effect before the end of 30 days after giving
this notice. However, the CEO can specify a shorter period of effect if he
or she considers that it is necessary that they take effect earlier.
New section 82B
This item also amends the Customs Act by inserting new section 82B.
Under subsection 82(5) of the Customs Act, the CEO may vary the conditions
specified in a warehouse licence by the CEO, but only upon the application
of the holder of the licence. However, unlike in relation to depots, the
CEO cannot of his or her own initiative vary the conditions specified in a
warehouse licence. New section 82B addresses this shortcoming.
New subsection 82B(1) provides that the CEO may vary either the conditions
specified in a warehouse licence under section 82 (that is, when the
licence is originally granted) or the additional conditions imposed under
section 82A (that is, at any time after the licence is originally granted).
This must be done by written notice to the licence holder.
Under new subsection 82B(2), and similar to new subsection 82A(2), the new
conditions cannot take effect before the end of 30 days after giving this
notice. However, the CEO can specify a shorter period of effect if he or
she considers that it is necessary that they take effect earlier.
New subsection 82B(3) provides that new section 82B does not limit the
CEO's powers under subsection 82(5), set out above.
New section 82C
This item also amends the Customs Act by inserting new section 82C.
In relation to depots, under section 77R it is an offence to breach a
condition to which a depot licence is subject. There is no corresponding
offence in relation to the breach of conditions to which a warehouse
licence is subject.
New section 82C establishes a new strict liability offence of breaching a
condition to which a warehouse licence is subject under section 82 or 82A
(which includes a condition varied under subsection 82(5) or section 82B).
The offence is punishable by a maximum penalty of 50 penalty units. A
penalty unit is equal to $110. The offence is necessary to bolster the
integrity of the regulatory regime. Presently, suspension and cancellation
of licences are the only options for breaches of conditions.
In developing this offence, consideration was given to both the Senate
Standing Committee for the Scrutiny of Bills Sixth Report of 2002 on
Application of Absolute and Strict Liability Offences in Commonwealth
Legislation and the Guide to Framing Commonwealth Offences, Civil Penalties
and Enforcement Powers.
Item 44 - Paragraph 83(2)(d)
Section 83 of the Customs Act sets out the duration of a warehouse licence.
Under subsection 83(2), a Collector may authorise several activities that
may be undertaken in relation to a warehouse where its term has expired and
the licence has not been renewed. Under paragraph 83(2)(d), a Collector
may take such control of a former warehouse, or goods in the former
warehouse, that is necessary for the protection of the revenue or for
ensuring compliance with the Customs Acts.
However, a Collector cannot take control of a former warehouse in order to
ensure compliance with other Commonwealth and State or Territory laws. The
amendments to paragraph 83(2)(d) address this shortcoming by extending the
power of a Collector take control for ensuring compliance with any other
law of the Commonwealth prescribed by regulations or a law of a State or
Territory prescribed by the regulations. These laws would be prescribed in
the Customs Regulations 1926.
Item 45 - At the end of section 85
This item amends the Customs Act in inserting new subsections 85(4) and
(5).
Subsection 85(1) of the Customs Act provides that such fees as are
prescribed are payable in respect of warehouse licences. These fees are
prescribed under regulations 50 and 51 of the Customs Regulations 1956.
Regulation 50B of the Customs Regulations 1956 sets out the methods by
which warehouse licence fees are payable. The fees can either be paid in
full, or by instalments in accordance with the times set out in the
regulations.
Currently, there is no provision in the Customs Act whereby a licence
holder can receive a refund of the warehouse licence fee where a warehouse
licence is cancelled before the end of the financial year (unlike section
77W in relation to depot licence charges).
New subsection 85(4) provides that the regulations may make provisions for,
and in relation to, the refund of any fees referred to in subsection 85(1).
It is proposed that regulations made for the purposes of this subsection
would allow for the pro rata refund of warehouse licence fees, similar to
the circumstances in which a depot licence charge is refundable.
New subsection 85(4) provides that, without limiting new subsection 85(4),
the regulations may set out the means of determining the amount of the
refund. This head of power would allow pro rata formulae for the
calculation of the amount of the refund, including where the warehouse
licence fees are paid by instalments, to be prescribed.
Item 46 - Subsection 86(1)
This item makes a technical amendment to subsection 86(1) by inserting a
comma between 'revenue' and 'or for' in the last phrase of this subsection.
Item 47 - Subsection 86(1)
Item 48 - Paragraph 86(3)(b)
Section 86 of the Customs Act sets out the circumstances in which the CEO
may give a 'show cause' notice to the holder of a warehouse licence. This
notice is similar to the notice that may be given to the holder of a depot
licence in accordance with the proposed amendments to section 77V of the
Customs Act set out above. This notice may include a notification that the
licence is suspended. A suspension of a licence, as opposed to its
cancellation, gives a licence holder the opportunity to address matters
that may be able to be dealt with and which would enable the suspension to
be lifted.
Currently, a notice can be given, and a licence can be suspended, if it
appears to the CEO that it is necessary for the protection of the revenue
or for ensuring compliance with the Customs Acts. However, similar to
current section 86, the CEO cannot give such notice, or suspend a licence,
to ensure compliance with other laws of the Commonwealth or State or
Territory laws. The amendments to subsection 86(1) address this
shortcoming by extending the power of the CEO to give notice, and to
suspend a warehouse licence, for ensuring compliance with any other law of
the Commonwealth prescribed by regulations or a law of a State or Territory
prescribed by the regulations. These laws would be prescribed in the
Customs Regulations 1926.
Item 49 - Paragraph 86(7)(e)
Under subsection 86(7), a Collector may authorise several activities that
may be undertaken in relation to a warehouse during the period in which a
warehouse licence is suspended under subsection 86(3). Under paragraph
86(7)(e), a Collector may take such control of a warehouse, or goods in the
warehouse, that is necessary for the protection of the revenue or for
ensuring compliance with the Customs Acts.
However, a Collector cannot take control of the warehouse in order to
ensure compliance with other laws of the Commonwealth or State or Territory
laws. The amendments to paragraph 86(7)(e) address this shortcoming by
extending the power of a Collector to take control for ensuring compliance
with any other law of the Commonwealth prescribed by regulations or a law
of a State or Territory prescribed by the regulations. These laws would be
prescribed in the Customs Regulations 1926.
Item 50 - At the end of paragraph 87(1)(b)
Section 87 of the Customs Act sets out the circumstances under which the
CEO may cancel a warehouse licence. Similar to the grounds for suspending
a licence, the CEO currently may cancel a licence if, under paragraph
87(1)(b), the CEO in satisfied that cancellation of the licence is
necessary for the protection of the revenue or for ensuring compliance with
the Customs Acts.
However, the CEO currently cannot cancel a warehouse licence if the CEO is
satisfied that cancellation is necessary to ensure compliance with other
laws of the Commonwealth or State or Territory laws. The amendments to
paragraph 87(1)(b) address this shortcoming by extending the power of the
CEO to cancel a warehouse licence for ensuring compliance with any other
law of the Commonwealth prescribed by regulations or a law of a State or
Territory prescribed by the regulations. These laws would be prescribed in
the Customs Regulations 1926.
Item 51 - After subsection 87(1)
This item amends the Customs Act by inserting new subsection 87(1A). Under
this new subsection, the CEO must cancel a licence if the CEO receives a
written request from the holder of the licence that it be cancelled on and
after a specified day. Similar to depots, a licence holder may make such a
request, for example, if the business is closing and they wish to cancel
the licence in order to receive a refund of their warehouse licence fees
(in accordance with new section 87A below).
Items 52, 53 and 54 - Various amendments to section 87
These items amend subsections 87(2), (4), (5) and (7) to replace references
from 'shall' to 'must'. These are technical amendments only and reflect
current drafting style.
Item 55 - Subsection 96A(6) and 96B(6)
Sections 96A and 96B set out the regimes whereby the holder of a warehouse
licence may be authorised to operate their licensed warehouse as an
outwards duty free shop (section 96A) or an inwards duty free shop (section
96B). If premises are so authorised, a Collector may give permission for
goods to be delivered personally to an international traveller for export
by the traveller on an international flight or voyage, and for the goods to
be so exported without having to be entered for export.
Under subsections 96A(6) and 96B(6), a Collector may impose conditions on
such a permission which, in the opinion of the Collector, are necessary for
the protection of the revenue or for ensuring compliance with the Customs
Acts. However, similar to other instances in relation to warehouse
licences described above, a Collector cannot impose conditions that are
necessary to ensure compliance with other laws of the Commonwealth or State
or Territory laws. The amendments to subsections 96A(6) and 96B(6) address
this shortcoming by extending the power of a Collector to impose conditions
that are necessary for ensuring compliance with any other law of the
Commonwealth prescribed by regulations or a law of a State or Territory
prescribed by the regulations. These laws would be prescribed in the
Customs Regulations 1926.
Item 56 - Subsection 243X(1)
This item amends subsection 243X(1) by inserting a reference to new
subsection 82C(1). New subsection 82C(1) sets out the new offence of
breaching a condition to which a warehouse licence is subject under section
82 or 82A
The inclusion of this new offence in subsection 243X(1) means that Division
5 of Part XIII of the Customs Act, which provides for infringement notices
to be issued in lieu of prosecution, applies to this strict liability
offence. The extension of the infringement notice scheme to this offence
provides Customs with greater flexibility to deal with non-compliance.
Schedule 3 - other amendments
Customs Act 1901
Background
Section 65 of the Customs Act currently requires the master or pilot of a
lost or wrecked ship or aircraft to report to the Customs House nearest the
wreck, a manifest of the cargo carried on the lost or wrecked ship or
aircraft. Failure to comply with these requirements is a strict liability
offence.
A review of section 65 concluded that a reporting requirement would be a
duplicated if section 65 requires a report of cargo on a lost or wrecked
ship or aircraft where a cargo report under section 64AB of the Customs Act
or an outward manifest under section 119 of the Customs Act had already
been made. The Bill removes the requirement to report cargo on board a
ship or aircraft that is lost or wrecked if that cargo has been reported on
a cargo report or outward manifest.
Item 1 - After subsection 65(1)
This item inserts new subsection 65(1A). The new provision provides that
subsection 65(1) (which deals with the reporting requirement for lost or
wrecked ships) does not apply to the extent that it requires the master or
owner of a ship to make a report of cargo if the master or owner has:
a) made a cargo report in respect of the cargo; or
b) communicated an outward manifest under section 119 of the Customs Act
in respect of the cargo.
Item 2 - After subsection 65(2)
This item inserts new subsection 65(2A). Similar to new subsection 65(1A),
this new provision provides that subsection 65(2). which deals with the
reporting requirement for lost or wrecked aircraft, does not apply to the
extent that it requires the pilot or owner of an aircraft to make a report
of cargo if the pilot or owner has:
a) made a cargo report in respect of the cargo; or
b) communicated an outward manifest under section 119 of the Customs Act
in respect of the cargo.
A Note to each of these new subsections indicates that, in accordance with
subsection 13.3(3) of the Criminal Code, the defendant bears the evidential
burden in relation to the matters in new subsections 65(1A) and (2A).