CUSTOMS AMENDMENT (MERCHANT FEES) REGULATION 2016 (F2016L01905) EXPLANATORY STATEMENT 
Commonwealth Numbered Regulations - Explanatory Statements
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CUSTOMS AMENDMENT (MERCHANT FEES) REGULATION 2016 (F2016L01905)
EXPLANATORY STATEMENT
Select Legislative Instrument 2016 No.
Issued by the Minister for Immigration and Border Protection
Customs Act 1901
Customs Amendment (Merchant Fees) Regulation 2016
The Customs Act 1901 (the Customs Act) relates to customs functions and provides, amongst other things, for the importation and exportation of goods, to and from Australia.
Subsection 270(1) of the Customs Act provides, in part, that the Governor-General may make regulations, not inconsistent with that Act, prescribing all matters which by that Act are required or permitted to be prescribed, or which are necessary or convenient to be prescribed for giving effect to that Act.
Additionally, subsection 270(1A) of the Customs Act provides that the regulations may make provision for and in relation to:
(a) the charging and recovery of fees in respect of any matter under that Act or the regulations;
(b) the way in which fees are to be paid;
(c) the persons who may be paid fees on behalf of the Commonwealth, and
(d) the remission, refund or waiver of fees of a kind referred to in paragraph (a) or the exempting of persons from the payment of such fees.
The purpose of the "Customs Amendment (Merchant Fees) Regulation 2016" (the Amendment Regulation) is to amend the Customs Regulation 2015 (the Customs Regulation) to enable the Department of Immigration and Border Protection (the Department) to recover merchant fees by charging a surcharge in respect of customs-related charges, fees, duties and taxes or other amounts paid by credit card and PayPal.
Merchant fees are charged to the Department by credit card issuers and PayPal on amounts paid to the Department via credit card, or by PayPal, and do not form part of the customs-related charges, fees, duties and taxes or other amounts paid by clients. Each surcharge is commensurate with the charges imposed by the credit card issuer, PayPal and the Department's banking service provider and is a percentage of the amount of the charges, fees, duties, taxes or other amounts paid with a credit card or PayPal.
The surcharge rates are consistent with those rates charged by the Department for migration and citizenship related fees and charges.
The recovery of merchant fees is allowed under the Reserve Bank of Australia (RBA) surcharging standards and is consistent with the cost recovery guidelines issued by the Department of Finance. Recovery of these costs is now commonplace across the Commonwealth. The surcharge will be limited by the RBA surcharging standards.
Details of the Amendment Regulation are set out in Attachment A.
A Statement of Compatibility with Human Rights has been prepared and is at Attachment B.
As the Amendment Regulation has no regulatory impact on individuals, businesses and community organisations, no external consultation was undertaken for the purpose of the Amendment Regulation.
The Amendment Regulation commences on the later of:
(a) the day after it is registered on the Federal Register of Legislation; and
(b) immediately after the commencement of the Customs and Migration Legislation Amendment (2016 Measures No. 1) Regulation 2016.
OPC62260 - A
ATTACHMENT A
Details of the Customs Amendment (Merchant Fees) Regulation 2016
Section 1 - Name
This section provides that the title of the Regulation is the Customs Amendment (Merchant Fees) Regulation 2016 (the Amendment Regulation).
Section 2 - Commencement
This section provides that the Amendment Regulation is to commence on the later of:
(a) the day after it is registered on the Federal Register of Legislation; and
(b) immediately after the commencement of the Customs and Migration Legislation Amendment (2016 Measures No. 1) Regulation 2016.
Section 3 - Authority
This section provides that the Amendment Regulation is made under the Customs Act 1901 (the Customs Act).
Section 4 - Schedule(s)
This section provides for each instrument that is specified in a Schedule to the Amendment Regulation to be amended or repealed as set out in the applicable items of the Schedule concerned, and for any other item contained in that Schedule to have effect according to its own terms. The instrument that is being amended is the Customs Regulation 2015.
Schedule 1 - Amendments
Customs Regulation 2015 (the Customs Regulation)
Item 1 - At the end of Division 5 of Part 17
This item amends Division 5 of Part 17 to the Customs Regulation to insert two new sections; 150B "Credit card surcharge"; and 150C "PayPal surcharge".
New section 150B contains four subsections.
New subsection 150B(1)
This amendment provides that a person is liable to pay a fee (the credit card surcharge) if a payment of all or some duty, tax, charge, fee (except credit card surcharge), security, penalty or amount specified in an infringement notice is made by credit card.
The purpose of this amendment is to require the person to pay the credit card surcharge each time a relevant payment is made by a credit card.
New subsection 150B(2)
This amendment provides that the amount of the credit card surcharge payable is as follows:
* for a payment made by Visa or MasterCard credit card--0.98% of the amount of the payment;
* for a payment made by American Express or Japan Credit Bureau (JCB) credit card--1.4% of the amount of the payment;
* for a payment made by Diners Club International credit card--1.99% of the amount of the payment.
The purpose and effect of this amendment is to set out the types of credit cards and their associated surcharge fees.
New subsection 150B(3)
This amendment provides that the credit card surcharge is payable when the payment is made.
The purpose of this amendment is to set out when the credit card surcharge is applied and is payable.
New subsection 150B(4)
This amendment provides that if an amount of the duty, tax, charge, fee (except credit card surcharge), security, penalty or amount specified in an infringement notice payment is refunded, the Minister must refund payment of the credit card surcharge paid in respect of that refunded amount.
The effect of this amendment is to provide the Minister with the power to refund payments of the credit card surcharge where payment of all or some duty, tax, charge, fee (except credit card surcharge), security, penalty or amount specified in an infringement notice is refunded.
New section 150C contains four subsections.
New subsection 150C(1)
This amendment provides that a person is liable to pay a fee (the PayPal surcharge) if a payment of all or some duty, tax, charge, fee (except PayPal surcharge), security, penalty or amount specified in an infringement notice is made by the PayPal system.
The purpose of this amendment is to require the person to pay the PayPal surcharge each time a relevant payment is made by the PayPal system.
New subsection 150C(2)
This amendment provides that the amount of the PayPal surcharge payable is 1% of the amount of the payment.
The purpose of this amendment is to set out the surcharge fees.
New subsection 150C(3)
This amendment provides that the PayPal surcharge is payable when the payment is made.
The purpose of this amendment is to set out when the PayPal surcharge is applied and is payable.
New subsection 150C(4)
This amendment provides that if an amount of the payment of duty, tax, charge, fee (except PayPal surcharge), security, penalty or amount specified in an infringement notice is refunded, the Minister must refund payment of the credit card surcharge paid in respect of that refunded amount.
The effect of this amendment is to provide the Minister with the power to refund payments of the credit card surcharge where payment of all or some duty, tax, charge, fee (except PayPal surcharge), security, penalty or amount specified in an infringement notice is refunded.
ATTACHMENT B
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Customs Amendment (Merchant Fees) Regulation 2016
The Legislative Instrument, titled the Customs Amendment (Merchant Fees) Regulation 2016 (the Amendment Regulation), is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview
The Department of Immigration and Border Protection is focused on encouraging clients to utilise its electronic and online systems and facilities for the payment of Customs-related charges, fees, duties or taxes. However, where payments are made by credit card or PayPal a merchant fee or bank fee is charged to the Department.
The Customs Amendment (Merchant Fees) Regulation 2016 amends the Customs Regulation 2015 (the Customs Regulation) to enable the Department to impose a merchant's fee at the following rates: 0.98% for Visa and Master Card, 1.4% for American Express and Japan Credit Bureau and 1.99% for Diners Club International. The rate of the PayPal surcharge is 1%.
These rates are consistent with the cost recovery guidelines issued by the Department of Finance and will be limited by the Reserve Bank of Australia (RBA) surcharging standards.
Recovery of these costs is now commonplace across the Commonwealth.
Human rights implications
The Amendment Regulation does not engage any of the applicable rights or freedoms.
Conclusion
The Amendment Regulation is compatible with human rights as it does not raise any human rights issues.
The Hon. Peter Dutton MP, Minister for Immigration and Border Protection