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2004-2005-2006
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
CUSTOMS LEGISLATION AMENDMENT (AUGMENTING OFFSHORE POWERS
AND OTHER MEASURES) BILL 2006
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Justice and Customs,
Senator the Honourable Christopher Martin Ellison)
CUSTOMS LEGISLATION AMENDMENT (AUGMENTING OFFSHORE POWERS
AND OTHER MEASURES) BILL 2006
OUTLINE
The purpose of this Bill is to amend the Customs Act 1901 (the Customs Act) and
1.
the Customs Legislation Amendment and Repeal (International Trade
Modernisation) Act 2001 (the ITM Act) to:
enable Customs officers boarding a ship or aircraft to conduct personal
1.1.1.
searches for, and take possession of, weapons or evidence of specified
offences;
update the broker licensing provisions to recognise the changing
1.1.2.
environment, including the contractual arrangements that exist between
some brokerages and nominees;
modernise provisions relating to duty recovery and payments under
1.1.3.
protest and to allow refunds to be applied against unpaid duty in some
circumstances; and
make it an offence to make false or misleading declarations in using the
1.1.4.
new SmartGate automated passenger processing system.
FINANCIAL IMPACT STATEMENT
The Bill has no financial impact.
2.
CUSTOMS LEGISLATION AMENDMENT (AUGMENTING OFFSHORE POWERS AND
OTHER MEASURES) BILL 2006
NOTES ON CLAUSES
Clause 1 - Short title
This clause provides for the Bill, when enacted, to be cited as the Customs
3.
Legislation Amendment (Augmenting Offshore Powers and Other Measures) Act
2006 (this Act).
Clause 2 - Commencement
Subclause (1) provides that each provision of this Act specified in column 1 of the
4.
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
5.
elsewhere covered by the table commence on the day on which the Act receives the
Royal Assent.
Item 2 of the table provides that Part 1of Schedule 1 commences on the 28th day
6.
after the Act receives the Royal Assent. Part 1 of Schedule 1 makes changes to
offence provisions. The commencement of this Part reflects Commonwealth policy
of commencing changes to offence provisions 28 days after the Royal Assent.
Item 3 of the table provides that Part 2 of Schedule 1 either commences
7.
immediately after the start of the 28th day after the Act receives the Royal Assent or
immediately after the commencement of Schedule 2 to the Law and Justice
Legislation Amendment (Marking of Plastic Explosives) Act 2006 (the Marplex Act),
whichever is later. However, Part 2 of Schedule 1 will not commence if Schedule 2
to the Marplex Act does not commence.
The amendments in Part 2 of Schedule 1 are contingent on the passage of both
8.
Part 1 of Schedule 1 to this Act and Schedule 2 of the Marplex Act. Item 3 of the
table ensures that Part 2 of Schedule 1 commence after both Part 1of Schedule 1 to
this Act and Schedule 2 to the Marplex Act have commenced.
Item 4 of the table provides that Schedule 2 commences on the day after this Act
9.
receives the Royal Assent.
Item 5 of the table provides that items 1 to 5 of Schedule 3 commence on the
10.
28th day after the Act receives the Royal Assent.
Item 6 of the table provides that item 6 of Schedule 3 either commences
11.
immediately after the start of the 28th day after the Act receives the Royal Assent or
Customs Legislation Amendment (Augmenting Offshore Powers and Other Measures) Bill 2006 Page 3
immediately after the commencement of Schedule 5 of the Customs Legislation
Amendment (Border Compliance and Other Measures) Act 2006 (the Border
Compliance Act), whichever is later. However, item 6 of Schedule 3 will not
commence if Schedule 5 to the Border Compliance Act does not commence.
Item 7 of the table provides that items 7 and 8 of Schedule 3 either commence at
12.
the start of the 28th day after the Act receives the Royal Assent or immediately after
the commencement of Schedule 5 of the Border Compliance Act, whichever is later.
However, items 7 and 8 of Schedule 3 will not commence if Schedule 5 to the
Border Compliance Act does not commence.
Item 8 of the table provides that items 9 to 15 of Schedule 3 commence on the 28th
13.
day after this Act receives the Royal Assent.
Item 9 of the table provides that Schedule 4 commences on the 28th day after this
14.
Act receives the Royal Assent.
Subclause (2) provides that column 3 of the table contains additional information
15.
that is not part of the Act.
Clause 3 - Schedule(s)
This clause is the formal enabling provision for the Schedule to the Bill, providing
16.
that each Act specified in a Schedule is amended in accordance with the applicable
items of the Schedule. In this Bill, the Customs Act and the ITM Act are being
amended.
The clause also provides that the other items of the Schedules have effect
17.
according to their terms. This is a standard enabling clause for transitional, savings
and application items in amending legislation.
SCHEDULE 1 - SEARCH POWERS ON CERTAIN SHIPS AND AIRCRAFT
Part 1 - Main amendments
Customs Act 1901
Background
Current Division 1 of Part XII of the Customs Act provide Customs officers with
18.
certain powers that enable them to enforce the Customs Act, Division 307 of the
Criminal Code (that relate to serious drug offences) and any other prescribed Act
that Australia may enforce in accordance with the United Nations Law of the Sea
(UNCLOS) (the specified Acts), against ships found in Australia's various maritime
zones. The Migration Act 1958 and the Fisheries Management Act 1991 are some
of the Acts which have been so prescribed.
The scope of these maritime enforcement powers and the circumstances under
19.
which they may be exercised depend on Australia's jurisdiction under UNCLOS in
the various maritime zones. The maritime zones include the territorial sea, the
contiguous zone, the safety zones around Australian resources installations or
Australian sea installations, and the exclusive economic zone.
In particular, these maritime powers allow Customs officers to board and search
20.
ships suspected of being involved in a contravention against one or more of the
specified Acts. It also allows Customs officers to arrest without warrant any person
found on the ship who is reasonably suspected of being involved in an offence
against one or more of the specified Acts. In exercising these powers, Customs
officers have in recent times encountered violent resistance from persons on board
the ships and attempts to escape custody and dispose of evidentiary material.
The provisions of this Part will amend Division 1 of Part XII of the Customs Act to
21.
allow Customs officers to, immediately on boarding a ship suspected of being
involved in offences against the specified Acts, search for, examine, take
possession of and retain items that may be:
21.1.a weapon;
21.2.used to help a person escape detention; or
21.3.evidence of an offence against the specified Acts.
These amendments ensure the safety of Customs officers from possible attack
22.
while investigating ships suspected of offences against the specified Acts as well as
preventing the possibility of evidence of an offence being thrown overboard before
the ship reaches Australia. Where a person may be arrested as a suspect for an
offence, the amendments would also minimise the opportunities for the suspect to
escape custody. These new powers are complemented by provisions regarding the
proper manner in which such powers may be exercised.
Customs Legislation Amendment (Augmenting Offshore Powers and Other Measures) Bill 2006 Page 5
Similar powers exist in the Fisheries Management Act 1991 that enable fisheries
23.
officers to enforce fisheries offences in the maritime zones safely and more
effectively.
Customs officers also have similar powers to enforce the Customs Act and
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Division 307 of the Criminal Code in relation to aircraft that is in Australia. Therefore,
Part 1 of Schedule makes similar amendments to the enforcement powers of
Customs officers in relation to aircraft.
The provisions of this Part also make minor or consequential amendments to other
25.
provisions of Division 1 of Part XII that relate to search powers.
Items 1 and 2 - Definition of frisk search
The term "frisk search" is currently defined in subsection 4(1) of the Customs Act for
26.
the purposes of the Customs Act and in subsection 183UA(1) of the Customs Act for
the purposes of Division 1 of Part XII of the Customs Act.
Subsection 4(1) defines "frisk search" to mean:
27.
(a) a quick search of the person by the rapid and methodical running
of hands over the person's outer garments; and
(b) an examination of anything worn by the person that can be
conveniently removed and is voluntarily removed by the person;
to:
(c) determine whether:
(i) if the search is conducted in circumstances described in
subsection 219L(1) or (1A)--the person is unlawfully
carrying any prohibited goods; and
(ii) if the search is conducted in circumstances described in
subsection 219L(1B) or (1C)--the person is carrying any
weapon or thing capable of being used to inflict bodily
injury on a person conducting a search under Division 1 of
Part XII; and
(d) recover any such goods;
By contrast, subsection 183UA(1) defines "frisk search" to mean:
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(a) a search of a person conducted by quickly running the hands
over the person's outer garments; and
(b) an examination of anything worn or carried by the person that is
conveniently and voluntarily removed by the person;
Paragraphs (a) and (b) of the two definitions are slightly different and this creates
29.
confusion. Further, paragraphs (c) and (d) of the existing definition in subsection
4(1) go beyond defining the term. These paragraphs limit the purposes for which a
frisk search may be carried out and empower goods to be recovered as a result of
the search. These additional matters are more appropriately dealt with in a
substantive provision than in a definition provision.
To deal with these drafting issues, item 1 substitutes the definition of "Frisk search"
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in subsection 4(1) with the definition of "frisk search" in current subsection 183UA(1)
and item 2 repeals the definition of "frisk search" in subsection 183UA(1).
This leaves a single new definition of "frisk search" in subsection 4(1) that applies to
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the whole Customs Act and removes any confusion. This definition is preferred as it
is more consistent with the definition of "frisk search" in other Commonwealth
legislation, for example, the Crimes Act 1914 and the Excise Act 1901.
In addition, the matters that are dealt with in paragraphs (c) and (d) of the existing
32.
definition of "frisk search" in subsection 4(1) are addressed in new inserted
subsection 219M(1A) (see item 16 below).
Item 3 - After paragraph 185(2)(ca)
The powers of officers under subsection 185(2) of the Customs Act include a power
33.
to search a ship or aircraft and any goods on such a ship or aircraft, and to require
persons on the ship or aircraft to produce documents. These powers also include
powers to secure goods found and to take copies or extracts of documents found or
produced.
Subsection 185(4A) provides that evidence of the commission of an offence against
34.
the law of the Commonwealth, a State or a Territory obtained in the exercise of
powers under section 185 may be used, or given to another body for use, in
investigating or prosecuting the offence. However, there is no explicit power in
section 185 that allows an officer to take possession of and retain goods found or
documents produced, where such goods or documents may be evidence of the
commission of an offence.
Item 3 inserts new paragraphs 185(2)(cb) and (cc), which give officers additional
35.
powers to take possession of and retain goods found or documents produced under
subsection 185(2), if such goods or documents may afford evidence of the
commission of a relevant offence. New subsection 185(7) sets out the matters that
determine if such goods or documents may afford evidence of the commission of a
relevant offence (see item 6 below).
This amendment makes it explicit that Customs can take possession of and retain
36.
relevant evidentiary material found or produced in the exercise of the powers under
subsection 185(2), for the purposes of investigating and prosecuting the relevant
offence. This amendment also aligns the existing powers under subsection 185(2)
with the amended personal search power under section 185AA (see items 8 to 12
below).
Customs Legislation Amendment (Augmenting Offshore Powers and Other Measures) Bill 2006 Page 7
The new paragraphs 185(2)(cb) and (cc) do not apply with respect to narcotic goods
37.
as there is already an existing power under subsection 185(2)(e) to seize without
warrant any narcotic goods found as a result of a search under subsection 185(2).
Items 4 and 5 - Insertion of Notes
The amended personal search power under section 185AA applies to a person
38.
found on a ship or aircraft boarded under paragraph 185(2)(a) and to a person
placed on a ship or aircraft under subsection 185(3AA).
Items 4 and 5 insert Notes at the end of subsection 185(2) and subsection 185(3AA)
39.
linking these subsections to the amended personal search power under
section 185AA.
Item 6 - At the end of section 185
Item 6 inserts new subsection 185(7) that sets out, for the purposes of new
40.
paragraphs 185(2)(cb) and (cc) (see item 3 above), the circumstances that satisfy
the criteria that "goods found or documents produced on a ship or aircraft may
afford evidence of the commission of a relevant offence".
In the case where the ship is in Australia, the criteria is satisfied only if the goods or
41.
documents may afford evidence of the commission of an offence, either in or
outside Australia, against the Customs Act, Division 307 of the Criminal Code of an
Act prescribed consistently with UNCLOS.
In the case where the ship is outside Australia, the criteria is satisfied only if the
42.
goods or documents may afford evidence of the commission of an offence:
42.1.in Australia against the Customs Act, Division 307 of the Criminal Code of
an Act prescribed consistently with UNCLOS;
42.2.in Australia's exclusive economic zone against an Act prescribed
consistently with UNCLOS
In the case where the aircraft is in Australia, the criteria is satisfied only if the goods
43.
or documents may afford evidence of the commission of an offence, either in or
outside Australia, against the Customs Act or Division 307 of the Criminal Code.
The limits on the scope of the power to take possession of and retain evidentiary
44.
material set out under new subsection 185(7) are in accordance with Australia's
jurisdiction under UNCLOS in the various maritime zones. Similar limits are applied
to the power to arrest a person found on board a ship under paragraph 185(2)(d)
and the new power to conduct a personal search for evidentiary material under new
paragraph 185AA(1B).
Item 7 - At the end of subsection 185A(2)
The amended personal search power in 185AA (see items 8 to 12 below) will apply
45.
to a person found on a ship boarded under paragraph 185A(2)(a). Item 7 inserts a
Note after subsection 185A(2) to link paragraph 185A(2)(a) to the amended
personal search power in section 185AA.
Items 8 to 12 - Amended search powers under section 185AA
Existing section 185AA of the Customs Act allows an officer to search for, take
46.
possession of and retain items on a person, or in that person's immediate control,
that could inflict bodily injury or help the person to escape.
However, these personal search powers can only be exercised where the person is
47.
on a detained ship or aircraft, or where the person is on a detained ship or aircraft
and is being placed on another ship or aircraft for the purpose of moving him or her.
Further, the existing powers do not allow officers to search for and take possession
of potential evidentiary material.
Items 8 to 12 amend section 185AA to expand the scope of the personal search
48.
powers and the circumstances under which these powers may be exercised.
Item 8 - Subsections 185AA(1), (2) and (3)
Item 8 repeals subsections 185AA(1), (2) and (3) and substitutes new
49.
subsections 185AA(1), (1A), (1B), (2), (2A), (3), (3A), (3B) and (3C).
New subsections 185AA(1), (1A) and (1B)
Under new subsections 185AA(1) and (1A), if a person is:
50.
50.1.found on a ship or aircraft boarded under section 185(2)(a); or
50.2.placed on a ship or aircraft under subsection 185(3AA),
the person and any clothing and other property within the immediate control of that
person may be searched for the purposes of finding out if that person is carrying or
hiding;
50.3.a weapon or thing capable of being used to inflict injury or help the person
escape; or
50.4.a document or other thing that may afford evidence of the commission of a
relevant offence.
New subsection 185AA(1B) sets out the circumstances in which a document or
51.
other thing may afford evidence of the commission of a relevant offence, which
effectively limits the scope of the power to search for evidence. The circumstances
are the same as those set out in new subsection 185(7) for the purposes of new
paragraphs 185(2)(cb) and (cc) (see items 3 and 6 above).
Customs Legislation Amendment (Augmenting Offshore Powers and Other Measures) Bill 2006 Page 9
New subsection 185AA(2) and (2A)
Under new subsections 185AA(2) and (2A), if a person is found on a ship boarded
52.
under paragraph 185A(2)(a), the person and any clothing and other property within
the immediate control of that person may be searched for the purposes of finding
out if that person is carrying or hiding a weapon or thing capable of being used to
inflict injury.
Section 185A relates to the boarding of certain foreign ships by officers on the high
53.
seas, where Australia has only very limited jurisdiction. In addition to the power to
board, the only other powers relate to establishing the identity of the ship and its
occupants. Generally, officers have no power to enforce any Australian law.
Consequently, the only purpose for which the personal search power may be
exercised on a ship boarded under section 185A is to search for weapons or
potential weapons.
New subsections 185AA(3), (3A) and (3B) - power to examine things found
New subsection 185AA(3) provides a new power for an officer to examine any thing
54.
found in the course of a search under section 185AA. If the thing found is a
document, the examination may include reading the document, either directly or with
the help of an electronic device.
Under new subsection 185AA(3A) an officer may do, or arrange for another officer
55.
or another person to do, whatever is reasonably necessary to permit the
examination of the thing or things being examined. A similar power exists in current
subsection 185(2C) in relation to the power to examine goods under current
paragraph 185(2)(b).
New subsection 185AA(3B) limits the scope of subsection 185AA(3A) by prohibiting
56.
an officer from damaging a thing being examined by forcing it, or part of it, open
unless:
56.1.the person being searched has been given a reasonable opportunity to
open the thing of part of it; or
56.2.it is not reasonably practicable to give the person such an opportunity.
A similar limitation exists in current subsection 185(3C) in relation to the powers to
57.
board, search and examine goods under section 185.
New subsection 185AA(3C)
New subsection 185AA(3C) enables an officer to:
58.
58.1.take possession of:
a. a weapon or other thing capable of being used to inflict injury or help
the person escape; or
b. a document or other thing that may afford evidence of the commission
of a relevant offence,
that is found in the course of a search under new subsection 185AA(1A);
and
58.2.retain the weapon, document or thing for such time as the officer thinks is
necessary for the purposes of the Customs Act, Division 307 of the
Criminal Code or an Act prescribed under subsection 185AA(1B), as the
case may be.
New subsection 185AA(3C) also enables an officer to:
59.
59.1.take possession of a weapon or other thing capable of being used to inflict
injury that is found in the course of a search under new subsection
185AA(2A); and
59.2.retain the weapon or other thing for such time as the officer thinks is
necessary for the purposes of the Customs Act.
Existing subsections 185AA(4) and (5)
Existing subsection 185AA(4) makes it clear that section 185AA does not authorise
60.
the removal of a person's clothing or to require a person to remove any of his or her
clothing, except the person's outer garments.
Existing subsection 185AA(5) provides that a search of a person or a person's
61.
clothing under section 185AA must be conducted by an officer who is of the same
sex as the person. Where no officer of the same sex is available to conduct the
search, the search may be conducted by any other person of the same sex who is
requested by an officer to conduct the search and agrees to do so.
Existing subsections 185(4) and (5) continue to apply to a search under new
62.
subsections (1A) or (2A).
Item 9 - Subsection 185AA (6)
Existing subsection 185AA(6) provides immunity against civil or criminal
63.
proceedings to a person who conducts a search under section 185AA at the request
of an officer, if the person acts in good faith and in accordance with
subsection 185AA(7).
Existing subsection 185AA(7) prohibits an officer or other person who conducts a
64.
search under section 185AA from using more force, or subjecting a person to
greater indignity, than is reasonably necessary in order to conduct the search.
Item 9 repeals and substitutes subsection 185AA(6). New subsection 185AA(6)
65.
retains the current immunity and extends it under the same conditions to an officer
who conducts a search under section 185AA.
Customs Legislation Amendment (Augmenting Offshore Powers and Other Measures) Bill 2006 Page 11
Item 10 - After subsection 185AA(7)
Item 10 inserts new subsection 185AA(7A). Under new subsection 185AA(7A), if an
66.
officer who conducts a search under section 185AA obtains evidence of the
commission of an offence against a law of the Commonwealth, a State or a
Territory, that evidence may be used, or given to another body for use, in
investigating or prosecuting the relevant offence. New subsection 185AA(7A) does
not override or limit the laws of evidence of a State relating to proceedings for an
offence against a law of that State.
Existing subsection 185(4A) is a similar provision applying to evidence obtained
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during the exercise of search powers under section 185.
item 11 - Subsection 185AA(8)
The term "officer" is defined separately for sections 185 and 185A in existing
68.
subsections 185(5) and 185A(7) respectively. Existing subsection 185AA(8)
provides that for section 185AA, "officer" has the same meaning as it has in section
185. This is because existing personal search powers in section 185AA relate to
persons who are on board a ship or aircraft detained under section 185(3) or who
have been placed on board a ship or aircraft under section 185(3AA).
Item 11 repeals and substitutes existing subsection 185AA(8). Under new
69.
subsection 185AA(8), "officer" in section 185AA means an officer within the meaning
of subsection 185(5) or subsection 185A(7). This reflects the fact that the personal
search powers in new subsections 185AA(1A) and (2A) apply in respect of persons
found on ships or aircraft boarded under paragraph 185(2)(a) as well as ships
boarded under section 185A(2)(a).
Item 12 - At the end of section 185AA
Item 12 inserts new subsection 185AA(9), which extends the scope of the phrase "a
70.
person found on a ship or aircraft" in section 185AA to include a person suspected
on reasonable grounds by an officer of having landed from, or left, the ship or
aircraft.
New subsection 185AA(9) is based on existing subsection 185(6) that applies with
71.
respect to the same phrase in section 185.
Items 13 and 14 - Subsections 219L(1B) and (1C)
Items 13 and 14 repeal existing subsections 219L(1B) and (1C) respectively. These
72.
two subsections enable a detention officer to detain a person for the purposes of
conducting a frisk search under section 219M, in circumstances where a ship or
aircraft has been boarded under section 185. A frisk search is a type of personal
search.
The scope of the personal search powers under new subsection 185AA(1A) are
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slightly more robust than a frisk search. Further, the circumstances in which these
new powers can be exercised, as set out in subsection 185AA(1), completely
overlap the circumstances in which a person may be detained for the purpose of a
frisk search under subsections 219L(1B) or (1C). Therefore, the new
subsections 185AA(1) and (1A) render subsections 219L(1B) and (1C) redundant
and they are to be repealed.
Item 15 - Subsection 219L(2)
Item 15 omits references to subsections 219L(1B) and (1C) in subsection 219L(2)
74.
as a consequence of the repeal of subsections 219(1B) and (1C).
Item 16 - Before subsection 219M(1)
Existing section 219M sets out the manner in which a frisk search of a person
75.
detained under section 219L is to be conducted. However, although the power to
conduct such a search is implied on the reading of sections 219L and 219M, there is
no explicit power in either section to conduct a frisk search.
Item 16 inserts new subsection 219M(1A). New subsection 219M(1A) provides an
76.
express power for a Customs officer to conduct a frisk search on a person detained
under section 219L for purpose of determining if the person is unlawfully carrying
prohibited goods. This purpose is consistent with the remaining circumstances
under subsections 219L(1) and (1A) in which a person can be detained following the
repeal of subsections 219L(1B) and (1C). Both circumstances relate to where a
detention officer suspects on reasonable grounds a person of carrying prohibited
goods.
New subsection 219M(1A) also provides a power to recover any prohibited goods
77.
found in the course of the frisk search.
Items 17 to 20 - Consequential amendments
Items 17 to 20 repeal subsection 219M(4), section 219NA and paragraph
78.
219ZE(1)(cb) and make amendments to paragraph 219ZE(1)(ca) as a consequence
of the repeal of subsections 219L(1B) and (1C) by items 13 and 14 of Schedule 1.
Item 21 - Application
Item 21 provides that the amendments made in items 3, 6, 8, 9, 10, 11 and 12 that
79.
relate to the new search powers apply in relation to ships and aircraft that are
boarded on or after the commencement of this item.
Customs Legislation Amendment (Augmenting Offshore Powers and Other Measures) Bill 2006 Page 13
Part 2 - Amendments contingent on the Law and Justice Legislation
Amendment (Marking of Plastic Explosives) Act 2006
The Law and Justice Legislation Amendment (Marking of Plastic Explosives) Act
80.
2006 (the Marplex Act), among other things, would control the movement of plastic
explosives that do not have the required markings specified in that Act. In
particular, the Marplex Act would insert new section 72.13 into the Criminal
Code that makes it an offence to import or export such plastic explosives without
authorisation.
Items 6 to 20 of Schedule 2 to the Marplex Act would also amend the Customs Act
81.
to broaden the scope of the regulatory powers in Subdivision B of Division 1 of Part
XII of the Customs Act to enable the investigation of a possible offence under
section 72.13 of the Criminal Code.
Part 1 of Schedule 1 to this Act contains amendments to sections 185 and 185AA,
82.
which are part of the regulatory provisions in Subdivision B of Division 1 of Part XII
of the Customs Act.
Part 2 of Schedule 1 (comprising items 22 to 29) contains amendments contingent
83.
on the passage of the Marplex Act that would further amend sections 185 and
185AA, so that they are in line with the other amendments made to Subdivision B of
Division 1 of Part XII of the Customs Act under Schedule 2 to the Marplex Act.
Part 2 of Schedule 1 commences after Part 1 of Schedule 1 to this Act and
84.
Schedule 2 to the Marplex Act have both commenced but does not commence if
Schedule 2 to the Marplex Act does not commence at all.
SCHEDULE 2 - AGENTS AND CUSTOMS BROKERS
Customs Act 1901
Background
Licensing of customs brokers and eligibility to be nominees
Division 3 of Part XI of the Customs Act provides for the licensing of customs
85.
brokers. Under section 183CA, an application for a broker's licence by a company or
partnership must specify, among other things:
85.1.the place(s) at which the applicant proposes to act as a customs broker;
and
85.2.the person(s) who, if the licence is granted, is to be a nominee of applicant.
Under section 183CE of the Customs Act, where the Chief Executive Officer of
86.
Customs (the CEO) grants a broker's licence, the CEO shall endorse on the licence:
86.1.the place(s) at which the licence holder may act as a customs broker; and
86.2.the person(s) who is a nominee of the licence holder and the
corresponding place(s) at which the nominee acts as a customs broker.
Section 183CD of the Customs Act sets out the conditions that must be fulfilled for a
87.
person to be eligible to be a nominee of a customs broker. In particular, under this
section, a nominee of a customs broker:
87.1.cannot be the nominee of another customs broker
(paragraph 183CD(1)(f)); and
87.2.cannot be a customs broker at a place other than a place where the
first-mentioned customs broker is a customs broker
(paragraph 183CD(1)(j)).
Employment of locum or freelance customs brokers restricted
The nominees of corporate customs brokers have generally been individual customs
88.
brokers employed full-time by the corporate customs brokers (being companies or
partnerships). However, corporate customs brokers are increasingly beginning to
employ locum or freelance customs brokers to be their nominees on a part-time
basis. Such locum or freelance customs brokers can be so employed by a number
of different corporate customs brokers at any one time.
However, the condition set out in paragraph 183CD(1)(f) of the Customs Act means
89.
that such locum or freelance brokers may not act as nominees for more than one
corporate customs broker.
Customs Legislation Amendment (Augmenting Offshore Powers and Other Measures) Bill 2006 Page 15
Further, paragraph 183CD(1)(j) unduly restricts the use of locum or freelance
90.
brokers as nominees, since these brokers, by nature, would need to be able to act
in a number of different `places'. In this regard, Customs' current policy is that all
broker's licences granted under section 183C by the CEO or his delegate specify,
for the purposes of section 183CE, `all places in the Commonwealth' as the places
at which the licence holder may act as a customs broker.
This policy renders the condition set out in paragraph 183CD(1)(j) redundant. This is
91.
because all corporate customs brokers employing locum or freelance brokers as
nominees are currently licensed to act as a customs broker at `all places in the
Commonwealth'. Therefore, the locum and freelance brokers can never be a
customs broker at any other place.
In recognition of the increasing employment of locum and freelance brokers as
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nominees by corporate customs brokers, it is proposed to repeal
paragraphs 183CD(1)(f) and (j) of the Customs Act. As subsections 183CD(2), (3)
and (4) only qualify the operation of paragraphs 183CD(f) and (j), it is proposed to
repeal these subsections as well.
Items 1 to 8 - Subsection 183CD
Items 3, 5, 6, 7 and 8 of Schedule 2 repeal paragraphs 183CD(1)(f) and (j) and
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subsections 183CD(2), (3) and (4) of the Customs Act. Items 1, 2 and 4 make
technical amendments to the rest of existing subsection 183CD(1) as a
consequence of the repeals.
SCHEDULE 3 - DUTY RECOVERY
Part 1 - Amendments
Customs Act 1901
Background
Duty recovery
The current position of Customs in relation to the time available to recover customs
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duty is guided by the decision of the High Court in Malika Holdings Pty Ltd v Stretton
(2001) 204 CLR 290 (Malika). Prior to Malika, it was considered that the authority to
recover customs duty under section 153 of the Customs Act was restricted by
section 165 of the Customs Act, such that Customs must demand payment within
1 year of the short payment, or overpayment of a refund, rebate or drawback, of
customs duty. If the demand was not made within that timeframe, the debt ceased
to be recoverable.
However, in Malika, the High Court found that the time limit in section 165 only
95.
limited the recovery power under section 153 where the short payment of duty and
the overpayment of refund, rebate or drawback are the result of a Customs' error.
Therefore, if the short payment of duty, or the overpayment of a refund, rebate or
drawback, is not the result of a Customs' error, there is no time limit on recovery of
the short payment or overpayment.
In 2005, the time limit in section 165 of the Customs Act was extended to 4 years by
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the Customs Legislation Amendment and Repeal (International Trade
Modernisation) Act 2001 (the ITM Act). The basis for this extension of time was that
1 year was not sufficient to undertake post-transaction audits and to follow up on
any necessary duty recovery. In addition, as a matter of policy, Customs applies a
4-year time limit to all duty recovery other than in cases of fraud, notwithstanding the
open-ended recovery period under section 153.
The main purpose of the amendments to the Customs Act in items 1 to 4 of
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Schedule 3 to the Bill is to consolidate current sections 153 and 165 of the Customs
Act into a new section 165, and to place a 4-year statutory time limit on all duty
recovery, other than in cases of fraud or evasion, thereby formalising Customs'
current policy. This time frame, and its exceptions, is the same regime that applies
to the recovery of indirect tax under section 150-50 of Schedule 1 to the Taxation
Administration Act 1935.
Item 1 - Section 153
This item repeals section 153 as a consequence of new section 165. The new
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section, which is being inserted by item 4 of Schedule 3, will, amongst other things,
incorporate the concepts set out in current section 153.
Customs Legislation Amendment (Augmenting Offshore Powers and Other Measures) Bill 2006 Page 17
Item 2 - Subsection 161L(2)
This item amends subsection 161L(2) of the Customs Act to delete the wording of
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current section 165 of the Customs Act that is included in that subsection and
substitute the new wording of section 165.
Section 161L deals with the review of determinations and other decisions in relation
100.
to the valuation of goods. If, as a result of such a review, the amount of duty that
was levied is less than the amount that should have been levied, or the amount of
duty that was refunded is greater than the amount that should have been refunded,
section 165 of the Customs Act applies to the demand for the short levy or
overpayment. This amendment will merely substitute the new wording of
section 165 (which will remove any reference to Customs or client error) for the
current wording of section 165 (which refers to duty short levied and duty
erroneously refunded).
Item 3 - Division 3 of Part VIII (heading)
This item repeals and substitutes the heading of Division 3 of Part VIII of the
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Customs Act to more accurately reflect the content of Division 3. The new heading
will refer to the "Payment and recovery of deposits, refunds, unpaid duty etc.".
Item 4 - Section 165
This item, amongst other things, repeals current section 165 of the Customs Act and
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substitutes new section 165.
New subsection 165(1) provides that an amount of duty that is due and payable in
103.
respect of goods is:
103.1.a debt due to the Commonwealth; and
103.2.is payable by the owner of the goods.
This new subsection is a restatement of the principles set out in current section 153.
New subsection 165(2) provides that an amount of drawback, refund or rebate of
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duty that is overpaid to a person:
104.1.is a debt due to the Commonwealth; and
104.2.is payable by the person.
Therefore, by contrast with new subsection 165(1), the debt created by the
overpayment of a drawback, refund or rebate is payable only by the person to whom
the overpayment was made.
Both of these new subsections remove any connotation that the debt due to the
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Commonwealth is the result of any error by either Customs or its clients. This
eliminates any uncertainty as to the existence of the debt and the complexities that
currently exist in determining how the debt arises.
New subsection 165(3) provides that the CEO may make, in writing, a demand for
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payment of an amount that is a debt due to the Commonwealth under new
subsection (1) or (2). This new subsection is a restatement of the CEO's power to
make a demand under current subsections 165(1) and (3).
New subsection 165(4) provides that a demand under new subsection 165(3) must
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specify the amount and include an explanation of how the amount has been
calculated. Therefore, the demand must include an actual dollar amount of the duty
or overpayment that is being demanded. There is some concern in the importing
community that the current provisions allow the time limit to be met by simply
demanding that the duty or overpayment be paid or repaid, without including a dollar
amount in the demand. This new subsection will put that matter beyond doubt. If
the demand does not include the amount and the required explanation, it will not be
a valid demand.
New subsection 165(5) provides that a demand under new subsection 165(3) must
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be made within 4 years from:
108.1.if the amount is a debt due to the Commonwealth under new
subsection 165(1) - the time the amount was to be paid by under the
Customs Act; or
108.2.if the amount is a debt due to the Commonwealth under new
subsection 165(2) - the time the amount was paid,
unless the CEO is satisfied that the debt arose as the result of fraud or evasion.
Under paragraph (a), an example of the time an amount of duty was to be paid
under the Customs Act is where goods are entered for home consumption under
section 71A of the Customs Act. Under section 132AA of the Customs Act, duty is
payable at the time of the entry of goods for home consumption. Therefore, a
demand in respect of goods entered for home consumption must be made within 4
years of the time at which they were so entered.
This provision brings the recovery of customs duty in line with the recovery of GST
109.
and other indirect taxes under the Taxation Administration Act 1953.
New subsection 165(6) provides that an amount that is a debt due to the
110.
Commonwealth under subsection 165(1) or (2) may be sued for and recovered in a
court of competent jurisdiction by proceedings in the name of the Collector if:
110.1.the CEO has made a demand for payment of the amount in accordance
with this section: or
110.2.the CEO is satisfied that the debt arose as a result of fraud or evasion.
Customs Legislation Amendment (Augmenting Offshore Powers and Other Measures) Bill 2006 Page 19
This means that if a valid demand is not made with 4 years from the relevant time,
the debt will not be able to be recovered. The exception to this is where the CEO is
satisfied that the debt arose as a result of fraud or evasion, in which case there will
be no time limit on the recovery of the debt.
Item 4 - Section 165
This item also inserts new section 165A into the Customs Act.
111.
Background
Limited application of drawback, refund or rebate against duty
Sections 163 and 168 of the Customs Act allow for regulations to be made
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prescribing the circumstances in which a refund or rebate (under section 163) or
drawback (under section 168) of duty can be made. The regimes currently require
that the duty be paid before a refund, rebate or drawback can be paid.
In some circumstances, it is possible that Customs, in conducting an audit of an
113.
importer's affairs, may determine that the importer owes customs duty on goods that
have already gone into home consumption. It may also be possible that the
importer may be entitled to a refund or drawback in respect of the goods had the
duty been paid.
For example, an owner may use a Tradex order to import goods without the
114.
payment of duty. A Tradex order allows for the duty free importation of eligible
goods on the understanding that the goods will be subsequently exported. The
goods may, as a result of a Customs audit, be found to be not eligible goods for
which a Tradex order may be used and hence subject to customs duty. If the goods
have been exported, it is possible that the owner of the goods is eligible for a
drawback of duty on the goods. However, under the present provisions of the
Customs Act, the duty would have to be paid to Customs before the drawback can
be paid. This may cause significant cash flow problems for owners, especially if
large amounts of duty are involved.
New section 165A of the Customs Act addresses this and other similar
115.
circumstances by inserting a new regime whereby the CEO may apply the notional
amount of refund, rebate or drawback in respect of goods against the duty payable
on the same goods.
New subsection 165A(1) provides that if:
116.
116.1.an amount of duty is payable by a person in respect of goods that have
been delivered into home consumption; and
116.2.the person would be entitled to an amount of drawback, refund or rebate
in respect of the goods if the amount of duty payable were paid;
then
116.3.the CEO may apply the amount of the drawback, refund or rebate against
the amount of duty payable; and
116.4.the person is taken to have paid, in respect of the goods, an amount of
duty equal to the amount of drawback, refund or rebate applied; and
116.5.the amount of drawback, refund or rebate applied is taken to have been
paid to the person.
If the amount of drawback, refund or rebate of duty on the goods is less than the
amount of duty payable on the goods, the balance of the duty payable, once that
amount of drawback etc is applied under this new section, will still be a debt due to
the Commonwealth. It is possible that the amount of drawback etc will be equal to
the amount of duty payable and, in that case, no further payments by either the
person or Customs will need to be made.
New subsection 165A(2) provides that if the CEO applies an amount of drawback,
refund or rebate against an amount of duty payable, the CEO must give to the
person who would have been entitled to receive the amount of drawback, refund or
rebate written notice of:
116.6.the amount of the drawback, refund or rebate applied; and
116.7.if the amount of drawback, refund or rebate applied is less than the
amount of duty payable - the amount of duty that is still payable by the
person.
This notification requirement will ensure that a person is made fully aware of any
outstanding duty liability they may still have in respect of the goods after the
application of a drawback, refund or rebate.
Item 5 - Subsections 167(3) and (3A)
Background
Payments under protest
Under section 167 of the Customs Act, if there is a dispute as to the amount or rate
117.
of duty payable on goods, the owner of the goods may pay under protest the sum
demanded by a Collector as the duty payable in respect of the goods. If the duty is
paid under protest, the sum paid is deemed to be the proper duty payable unless
the contrary is determined in an action brought in accordance with section 167.
Under subsection 167(4), no action lies for the recovery of any sum paid to the
118.
Customs as the duty payable on goods unless the duty is paid under protest in
accordance with section 167 and the action is commenced within the time frames
set out in that subsection. In addition, under section 273GA of the Customs Act, an
application to the Administrative Appeals Tribunal for the review of a decision of a
Customs Legislation Amendment (Augmenting Offshore Powers and Other Measures) Bill 2006 Page 21
Collector to demand an amount of duty can only be made if the duty has been paid
under protest and the application is made within the time frames as set out in
subsection 167(4).
Section 167 also sets out how an owner makes a payment under protest, for both
119.
documentary and electronic entries. Both of these processes only allow payments
under protest to be made at the time goods are originally entered for home
consumption. However, if Customs conducts an audit on an owner's transactions
after goods have been entered into home consumption and determines that duty, or
additional duty, is payable on goods, there are currently no statutory provisions
specially allowing such post-entry payments under protest to be made. It should be
noted, however, that on numerous occasions post-entry demands have been paid
under protest and been reviewed by the Administrative Appeals Tribunal. Customs
has not challenged the jurisdiction of the Tribunal on these occasions, allowing the
dispute to be heard by a relatively low cost forum with technical expertise in
Customs matters.
In addition, the Integrated Cargo System (the ICS) has replaced the COMPILE
120.
system with effect from October 2005 as the system for communicating with
Customs electronically. However, when the ITM Act made the necessary
amendments to the Customs Act to accommodate the ICS, the provisions relating to
payments under protest with respect to import entries made under COMPILE were
saved and require such payments to still be made by a registered COMPILE user
using COMPILE. However, as COMPILE can no longer be used and people cannot
be registered COMPILE users, an owner of goods cannot strictly comply with this
requirement. As Customs generally conducts post-transaction audits and recovers
duty up to 4 years after goods have entered into home consumption, this will be an
ongoing problem for the next few years.
It is therefore proposed to repeal the existing requirements relating to payments
121.
under protest, including the saved COMPILE requirements, and replace them with
requirements that are general in nature and are easier to comply with.
Item 5 of Schedule 3 to the Bill repeals and substitutes subsections 167(3) and (3A)
122.
of the Customs Act.
New subsection 167(3) provides that for the purposes of section 167, a payment is
123.
taken to be made under protest if, and only if:
123.1.the owner of the goods or the agent of the owner gives Customs notice in
accordance with subsection (3A), by document or electronically, that the
payment is being made under protest; and
123.2.Customs receives the notice no later than 7 days after the day on which
the payment is made.
This new subsection removes the requirement that the payment under protest has
to be done in the same medium as the original import entry. Therefore, a
documentary payment under protest can be made in relation to an electronic import
entry and vice versa. In addition, the current limitation as to when the payment
under protest can be made has been removed. Payments can be made when duty
is assessed at time an import entry is lodged with Customs, or at a later time when
Customs undertakes an audit of an owner's activities and demands additional duty.
Finally, the notification that a payment is being made under protest does not have to
be communicated to Customs at the same time as the payment is actually made.
The notification only has to be received by Customs within 7 days of the payment
being made.
New subsection 167(3A) sets out the requirements for the purposes of a notice
124.
given under subsection 167(3). The notice must:
124.1.contain the words paid under protest;
124.2.identify the import declaration that covers the goods to which the protest
relates;
124.3.if the protest does not relate to all goods covered by an import declaration
- describe the goods to which the protest relates;
124.4.include a statement of the grounds on which the protest is made; and
124.5.be signed by the owner or the agent of the owner.
These requirements do not substantially differ from existing requirements. As this
new provision does not make specific reference to either COMPILE or the ICS
computer system, the provisions of the Electronic Transactions Act 1999 will
operate to allow payment under protest notices to be given to Customs
electronically.
Items 6 and 7 - Subsection 167(3) and before subsection 167(4)
These items amend section 167 to extend the ability to make a payment of duty
125.
under protest under the Accredited Client Programme (the ACP). The ACP is
implemented by Subdivision C of Division 4 of Part IV of the Customs Act, which
was inserted by the ITM Act.
Under the ACP, a person who has met certain audit requirements may enter into an
126.
import information contract with Customs. Such a person ("an accredited client") is
then able to enter goods that are covered by the contract for home consumption by
making a request for cargo release (RCR) in respect of the goods.
An accredited client will only need to provide minimum information about the goods
127.
in the RCR. The accredited client is then required to provide, for a particular month,
one or more periodic declarations containing more detailed but less time-sensitive
Customs Legislation Amendment (Augmenting Offshore Powers and Other Measures) Bill 2006 Page 23
information on all of the goods entered for home consumption on RCRs during that
month.
Similar to the import processing charge imposed on the making of a normal import
128.
declaration, an RCR processing charge and periodic declaration processing charge
are imposed on the making of an RCR and periodic declaration respectively.
Amendments to the ACP to implement a scheme for the payment of duty and
129.
processing charges in relation to the ACP are contained in the Customs Legislation
Amendment (Border Compliance and Other Measures) Bill 2006 (the Border
Compliance Bill) which, at the time of the preparation of this Explanatory
Memorandum, had not yet been passed by the Parliament. Under the amendments
in general terms, in any month an accredited client will pay an amount of monthly
duty estimate in respect of goods imported in that month. In the following month,
the actual duty on goods imported in the previous month will be calculated and
reconciled with the monthly duty estimate paid for the previous month. The amount
of duty payable (emphasis added) will then be reduced by the amount of monthly
duty estimate paid. If the monthly duty estimate is equal to, or more than, the actual
duty on the goods, no duty will be required to be paid. These provisions are
contained in proposed new sections 71DGA and 71DGB of the Customs Act (see
Schedule 5 to the Border Compliance Bill).
Therefore, without specific provision, it would not be possible to pay duty under
130.
protest under the ACP in the circumstances where no duty is required to be paid.
New subsection 167(3B) contains provisions whereby duty will be taken to be paid
under protest in these circumstances.
New subsection 167(3B) provides that if, under section 71DGA, an accredited client
131.
pays an amount of accredited client monthly duty estimate in respect of goods, then
for the purposes of section 167, the amount of duty that would be payable
(emphasis added) in respect of the goods if the amount of accredited client monthly
duty estimate were not paid (emphasis added) is taken to be paid under protest by
the accredited client if, and only if:
131.1.the accredited client or the agent of the accredited client gives Customs
notice in accordance with subsection 167(3C), by document or
electronically, that the payment is made under protest; and
131.2.Customs receives the notice no later than 7 days after the accredited
client payment day on which the amount of duty would be payable on the
goods under subsection 71DGB(1) if the amount of accredited client
monthly duty estimate were not paid.
The accredited client payment day is the 15th day of the month in which the amount
of duty would otherwise be payable.
Therefore, under this provision, an amount of duty that is not actually paid (because
the liability has been reduced by the payment of an amount of monthly duty
estimate) can still be taken to be paid under protest.
New subsection 167(3C) sets out the requirements for the purposes of
132.
subsection (3B). These requirements are basically the same as those set out in
new subsection 167(3A).
The commencement of these provisions is dependent on the commencement of the
133.
relevant provisions of the Border Compliance Bill.
Item 8 - After subsection 167(4)
This item inserts new subsection 167(4A) into the Customs Act.
134.
As previously mentioned, under subsection 167(4) of the Customs Act, no action
135.
lies for the recovery of any sum paid to the Customs as the duty payable on goods
unless the duty is paid under protest in accordance with section 167 and the action
is commenced within the time frames set out in that subsection.
New subsection 167(4A) will apply the same restrictions in relation to the recovery of
136.
any sum paid to Customs under section 71DGA as an amount of accredited client
monthly duty estimate in respect of goods. This subsection will provide that no
action lies for the recovery of such a sum unless:
136.1.the amount of duty that would be payable in respect of the goods if the
amount of accredited client monthly duty estimate were not paid has been
taken under subsection (3B) to have been paid under protest; and
136.2.the action is commenced within the following times:
136.2.1. (i) if the sum is paid as an estimate of duty payable under any
Customs Tariff--within 6 months after the accredited client payment
day on which the amount of duty would be payable on the goods under
subsection 71DGB(1) if the amount of accredited client monthly duty
estimate were not paid; or
136.2.2. (ii) if the sum is paid as an estimate of duty payable under a
Customs Tariff or Customs Tariff alteration proposed in the
Parliament--within 6 months after the Act, by which the Customs Tariff
or Customs Tariff alteration proposed in the Parliament is made law, is
assented to
The commencement of this provision is also dependent on the commencement of
the relevant provisions of the Border Compliance Bill.
Customs Legislation Amendment (Augmenting Offshore Powers and Other Measures) Bill 2006 Page 25
Item 9 - At the end of section 167
This item amends section 167 by inserting a new subsection (6) which contains the
137.
definitions of import declaration and unamended Customs Act for the purposes
of section 167.
Import declaration includes an import entry, within the meaning of the unamended
138.
Customs Act, that was made under that Act. Unamended Customs Act has the
meaning given by section 4 of the Customs Legislation Amendment (Application of
International Trade Modernisation and Other Measures) Act 2004.
The purpose of these two definitions is to ensure that the new payment under
139.
protest requirements described above will also apply, for the next few years, to
import entries made under the COMPILE computer system. The unamended
Customs Act, in this context, is the Customs Act before it was amended by the ITM
Act in relation to imports. An import entry made under the unamended Customs Act
was made using the COMPILE computer system and the reference to an import
declaration in new subsection 167(3A) will include such import entries.
Item 10 - Paragraph 273GA(1)(ja)
This item repeals and substitutes paragraph 273GA(1)(ja).
140.
Subsection 273GA(1) of the Customs Act sets out the decisions made under the
141.
Customs Act in respect of which an application for review may be made to the
Administrative Appeals Tribunal. Paragraph 274GA(1)(ja) relates to a decision of
the CEO under subsection 165(3). This item substitutes a new paragraph (ja) to
take account of the new wording in new section 165.
Customs Legislation Amendment and Repeal (International Trade
Modernisation) Act 2001
Item 11 - Item 45 of Schedule 3
This item repeals item 45 of Schedule 3 to the ITM Act.
142.
Item 45 of Schedule 3 to the ITM Act sets out the savings provisions for the
143.
provisions of the Customs Act relating to the payment under protest on import
entries made under COMPILE. These provisions require such payments to still be
made by a registered COMPILE user using COMPILE. However, as import entries
made using COMPILE will now be covered by the new provisions relating to making
payments under protest, this savings provision in no longer required and is being
repealed.
Part 2 - Application and transitional provisions
Item 12 - Transitional - item 1
This item provides that the repeal of section 153 of the Customs Act made by item 1
144.
of this Schedule does not affect any proceedings brought under that section before
the commencement of this item. Therefore, any recovery proceedings brought
under section 153 that have been completed, or that have commenced but not been
completed, will be unaffected by its repeal.
Item 13 - Transitional - item 4
This item applies to a demand made under section 165 of the old law, which is
145.
section 165 that was in force before item 4 of Schedule 3 repealed and substituted
section 165. This item provides that section 165 of the new law (which is the new
version of section 165) has effect, on and after item 4 commences, as if the demand
made under the old law were a demand made under, and in accordance with, that
section.
This means that even though a demand was made under old section 165,
146.
proceedings in respect of that demand can be commenced in accordance with new
section 165 (now that section 153 will no longer exist). In addition, if a demand
under the old section 165 does not include the matters required to be included
under the new section 165 (such as the method of calculation of the sum
demanded), it will be taken to include such requirements and be a valid demand.
Item 14 - Application - items 5 and 9
This item provides that the amendments made by items 5 and 9 of Schedule 3 apply
147.
in relation to payments made on or after the commencement of those items. These
items relate to the new payment under protest provisions as they apply to import
declarations. These new provisions cannot apply to payments under protest made
in relation to import declarations or COMPILE-related import entries that have been
made before the provisions commence.
Item 15 - Application - item 6 to 8
This item provides that the amendments made by items 6 to 8 of Schedule 3 apply
148.
in relation to payments made on or after the commencement of those items. These
items relate to the new payment under protest provisions as they apply to the ACP.
The commencement of these new provisions is also dependent upon the passage of
the Border Compliance Bill.
Customs Legislation Amendment (Augmenting Offshore Powers and Other Measures) Bill 2006 Page 27
SCHEDULE 4 - TREATMENT OF CERTAIN INFORMATION GIVEN TO CUSTOMS
Customs Act 1901
Customs is preparing to implement an automated passenger processing system
149.
known as SmartGate in early 2007. Arriving air passengers and crew holding
eligible ePassports will be able to clear themselves through the immigration control
point at the Australian border using the SmartGate system where available.
Clearance of personal or household goods through SmartGate
Under paragraph 68(1)(d) of the Customs Act, goods that are the accompanied or
150.
unaccompanied personal or household effects of a passenger or crew of a ship or
aircraft are not required to be entered. Such goods are also Subdivision AA goods
under section 71AAAA of the Customs Act.
However, under section 71AAAB of the Customs Act, the owner of Subdivision AA
151.
goods must, in the circumstances specified in the regulations, provide, under
section 71, the information specified in the regulations. Such information must be
provided at the time and in the manner and form specified in the regulations.
For the purposes of section 71AAAB, regulation 41 of the Customs Regulations
152.
1926 currently sets out the information to be provided under section 71, the relevant
circumstances in which such information must be provided, and the time at which,
and manner and form in which, such information must be provided.
Regulation 41 will be amended to provide for the provision of information under
153.
section 71 on Subdivision AA goods to Customs, in the circumstance where the
owner of the goods is using the SmartGate system. As part of the SmartGate
process, eligible passengers and crew may be required to answer questions and
make declarations electronically to Customs about their accompanied personal and
household effects. These answers and declarations will be used to assess a
person's eligibility for automated clearance and identify persons who may hold items
of interest (e.g. prohibited imports and dutiable/taxable items) to Customs.
Offence of making false and misleading statements
Existing paragraph 234(1)(d) of the Customs Act makes it an offence to make a
154.
false and misleading statement (including an omission), directly or indirectly, to an
officer of Customs.
Passengers and crew who make false and misleading declarations electronically
155.
using the SmartGate system will be making false and misleading statements for the
purposes of paragraph 234(1)(d). However, the false and misleading statements are
made to "Customs" for the purposes of section 71, and not necessarily to an "officer
of Customs".
Item 1 of Schedule 4 inserts new subsection 234(2BC), which provides that for the
156.
purposes of paragraph 234(1)(d), information provided to Customs under section 71
in the circumstances mentioned in section 71AAAB is taken to be a statement made
to the CEO.
This means that passengers and crew making electronic declarations about their
157.
personal or household goods using the SmartGate system are deemed to be
making statements to an officer of Customs for the purposes of paragraph
234(1)(d). Consequently, a person making a false or misleading declaration using
the SmartGate system may be prosecuted for an offence against paragraph
234(1)(d).
New subsection 234(2BC) also applies in relation to any other prescribed
158.
circumstance (set out in regulation 41 or any other regulation) where an owner of
Subdivision AA goods is required to provide information to Customs under
sections 71 and 71AAAB of the Customs Act.
Customs Legislation Amendment (Augmenting Offshore Powers and Other Measures) Bill 2006 Page 29
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