CUSTOMS LEGISLATION AMENDMENT (OZONE PROTECTION AND SYNTHETIC GREENHOUSE GAS MANAGEMENT CONSEQUENTIAL AMENDMENTS) REGULATIONS 2017 (F2017L01645) EXPLANATORY STATEMENT

Commonwealth Numbered Regulations - Explanatory Statements

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CUSTOMS LEGISLATION AMENDMENT (OZONE PROTECTION AND SYNTHETIC GREENHOUSE GAS MANAGEMENT CONSEQUENTIAL AMENDMENTS) REGULATIONS 2017 (F2017L01645)

EXPLANATORY STATEMENT

Issued by the Minister for Immigration and Border Protection

Customs Act 1901

Customs Legislation Amendment (Ozone Protection and Synthetic Greenhouse Gas Management Consequential Amendments) Regulations 2017

The Customs Act 1901 (the Act) concerns customs related functions and is the legislative authority that sets out the customs requirements for the importation, and exportation, of goods to and from Australia.

Subsection 270(1) of the Act provides, in part, that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters, which by the Act are required or permitted to be prescribed.

Section 50 of the Act provides, in part, that the Governor-General may, by regulation, prohibit the importation of goods into Australia and that the power may be exercised by prohibiting the importation of goods absolutely or by prohibiting the importation of goods unless specified conditions or restrictions are complied with.

Section 112 of the Act provides, in part, that the Governor-General may, by regulation, prohibit the exportation of goods from Australia and that the power may be exercised by prohibiting the exportation of goods absolutely or by prohibiting the exportation of goods unless specified conditions or restrictions are complied with.

The purpose of the Customs Legislation Amendment (Ozone Protection and Synthetic Greenhouse Gas Management Consequential Amendments) Regulations 2017 (the Regulations) is to amend the Customs (Prohibited Exports) Regulations 1958 (the Prohibited Exports Regulations) and the Customs (Prohibited Imports) Regulations 1956 (the Prohibited Imports Regulations) to align export and import controls with recent amendments made by the Ozone Protection and Synthetic Greenhouse Gas Management Legislation Amendment Act 2017 (the OPSGGM Amendment Act) to the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989 (OPSGGM Act).

The OPSGGM Act regulates the exportation and importation of certain ozone depleting substances (ODS) and synthetic greenhouse gases (SGGs) and implements Australia's international obligations under the Vienna Convention for the Protection of the Ozone Layer and its Montreal Protocol on Substances that Deplete the Ozone Layer (the Montreal Protocol), the United Nations Framework Convention on Climate Change and the Kyoto Protocol. The import, export and manufacture of substances controlled under the OPSGGM Act, and the import and manufacture of certain products containing or designed to contain some of these controlled substances, is prohibited in Australia unless the correct licence or exemption is held.

The OPSGGM Amendment Act, in part, amends the OPSGGM Act to:

* implement Australia's international obligations under the Kyoto Protocol to regulate two newly listed SGGs: nitrogen trifluoride and PFC-9-1-18 (C₁₀F₁₈); and

* remove a hydrofluorocarbon (CH₃CH₂F (HFC-161)), to accord with the October 2016 Kigali Amendment to the Montreal Protocol.

SGGs specified in the OPSGGM Act are prohibited exports under regulation 13F of the Prohibited Exports Regulations, and prohibited imports under regulation 5K of the Prohibited Imports Regulations, respectively, unless a licence granted under section 16 of the OPSGGM Act to do so is produced to a Collector. These prohibitions support the administration and enforcement of controls set out in the OPSGGM Act.

The Regulations therefore ensure that the export and import of the two newly listed SGGs are also prohibited exports and imports, and provide for the removal of hydrofluorocarbon CH₃CH₂F (HFC-161) from being a prohibited export and import. In addition, the Regulations also make related amendments to provide for harmonised definitions, update cross-references to amended provisions of the OPSGGM Act, and include 'chemical common names' for legislative clarity and consistency.

The Department of the Environment and Energy (DoEE) completed extensive stakeholder consultation during the negotiations on the Kigali Amendment to the Montreal Protocol and the Doha Amendment to the Kyoto Protocol. Consequently, the consultation process undertaken by DoEE encompassed all matters set out in the Regulations and therefore it was not necessary for the Department of Immigration and Border Protection (the Department) to undertake further consultation.

Details of the Regulations are set out in Attachment A. In accordance with the Human Rights (Parliamentary Scrutiny) Act 2011, a Statement of Compatibility with Human Rights has been prepared and is at Attachment B.

The sections and Schedule 1, Part 1 of the Regulations commence on the day after it is registered on the Federal Register of Legislation. The remaining items in Schedule 1 commence on the latter of the day after registration or 1 January 2018, to align with relevant OPSGGM Act change commencements.

OPC62989 - A

ATTACHMENT A

Details of the Customs Legislation Amendment (Ozone Protection and Synthetic Greenhouse Gas Management Consequential Amendments) Regulations 2017

Section 1 - Name

This section provides that the title of the Regulation is the 'Customs Legislation Amendment (Ozone Protection and Synthetic Greenhouse Gas Management Consequential Amendments) Regulations 2017' (the Regulations).

Section 2 - Commencement

This section sets out, in a table, the date on which each of the provisions contained in the Regulations will commence. Subsection 2(1) contains commencement provisions as follows:

Table item 1 provides for sections 1 to 4, and any provisions elsewhere in the Regulations not covered by items in the table to commence on the day after registration of the Regulations on the Federal Register of Legislation.

Table item 2 provides for Part 1 of Schedule 1 of the Regulations to commence the day after registration of the Regulations on the Federal Register of Legislation.

Table item 3 provides for items 9 and 10 of Part 2 of Schedule 1 to commence on the later date of either immediately after the commencement of the provisions covered by table item 2 (outlined above as the day after registration) or at the same time as the provisions covered by table item 4 (outlined below). This is a technical commencement provision for the reasons outlined in relation to items 9 and 10 below.

Table item 4 provides for items 11 to 16 of Part 2 of Schedule 1 to commence on the later of either the day after registration of the Regulations or 1 January 2018.

Section 3 - Authority

This section sets out the authority under which the Regulations are made, which is the Customs Act 1901.

Section 4 - Schedules

This section is the formal enabling provision for the Schedule to the Regulations, and provides that, each instrument that is specified in a Schedule to the Regulations, is amended or repealed as set out in the applicable items in the Schedule concerned, and that any other item in a Schedule to this instrument has effect according to its terms.

The instruments being amended are the Customs (Prohibited Exports) Regulations 1958 (the Prohibited Exports Regulations) and the Customs (Prohibited Imports) Regulations 1956 (the Prohibited Imports Regulations).

Schedule 1-Amendments

Part 1 - Amendments commencing day after registration

Customs (Prohibited Exports) Regulations 1958

Item 1 - Subregulation 2(1) (definition of SGG)

This item repeals the existing definition of ‘SGG' and substitutes it with an updated definition of 'SGG' or 'synthetic greenhouse gas' to include 'sulphur hexafluoride' in addition to the already listed substances HFC and PFC, consistent with the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989 (OPSGGM Act).

This amendment is made in order to clarify that 'sulphur hexafluoride', which is referred to in Part 11 of Schedule 15 of the Prohibited Exports Regulations, is a synthetic greenhouse gas (SGG), consistent with the definition of 'SGG' in the OPSGGM Act.

Item 2 - Subregulation 2(1)

To complement the above-mentioned change to the definition of 'SGG' or 'synthetic greenhouse gas', this item inserts a definition of the substance 'sulphur hexafluoride' to mean the substance referred to in Part 11 of Schedule 15, whether existing alone or in a mixture. The substance referred to in Part 11 of Schedule 15 is 'SF₆'.

Item 4, outlined below, modifies this reference to allow the substance to be stated in full as 'Sulfur hexafluoride (SF₆)'.

Item 3 - Part 9 of Schedule 15 (table item 11)

Under the OPSGGM Act, certain listed hydrofluorocarbons are subject to a prohibition on manufacture, import and export without a licence or in prescribed circumstances. One particular substance, a hydrofluorocarbon known as CH₃CH₂F (HFC-161), is no longer listed under the OPSGGM Act having been removed by the Ozone Protection and Synthetic Greenhouse Gas Management Legislation Amendment Act 2017 (OPSGGM Amendment Act). The substance was removed following a decision taken in the recent October 2016 Kigali Amendment to the Montreal Protocol on Substances that Deplete the Ozone Layer which incorporated a list of hydrofluorocarbons for regulation, but omitted CH₃CH₂F (HFC-161) from that list on the basis of its low global warming potential. The present amendments therefore remove CH₃CH₂F (HFC-161) from both the Prohibited Exports Regulations and Prohibited Imports Regulations to mirror its removal from the OPSGGM Act, consistent with Australia's international obligations.

Therefore, this item repeals table item 11 of Part 9 of Schedule 15, which is the hydrofluorocarbon substance 'CH₃CH₂F (HFC-161)' from the Prohibited Exports Regulations, consistent with the OPSGGM Act and Australia's international obligations.

This amendment commences the day after registration of the Regulations on the Federal Register of Legislation to immediately align the Prohibited Exports Regulations with the list of regulated hydrofluorocarbons in the OPSGGM Act. The remaining list of hydrofluorocarbons continues to implement the Australian Government's commitment to phase-down import, export and production of hydrofluorocarbons.

For consistency, the same amendment is made for the purposes of the Prohibited Imports Regulations, outlined below at item 7.

Item 4 - Part 11 of Schedule 15 (table item 1)

This item repeals table item 1 of Part 11 of Schedule 15, which is the substance 'SF₆'and replaces the item with 'Sulfur hexafluoride (SF₆)'. There is no substantive change to this item, as the listed substance remains the same with its chemical name included in full for clarity.

Customs (Prohibited Imports) Regulations 1956

Item 5 - Subregulation 2(1)

This item inserts into subregulation 2(1) a definition of 'sulphur hexafluoride' to mean the substance referred to in Part 11 of Schedule 10, whether existing alone or in a mixture.

This amendment is made in order to clarify that the term 'sulphur hexafluoride', which is included in the existing definition of 'SGG' in the Prohibited Imports Regulations, is the substance referred to in Part 11 of Schedule 10. The substance referred to in that Part is 'SF₆' and item 8, outlined below, modifies this reference to refer to the substance with its chemical name in full as 'Sulfur hexafluoride (SF₆)'.

Item 6 - Subregulation 5K(6)

This item omits the present cross-reference in subregulation 5K(6) which refers to 'the conditions in paragraph 13(6A)(b) or (c)' of the OPSGGM Act and replaces it with an updated cross-reference to 'subsection 13(5) or (6)' of the OPSGGM Act.

Section 13 of the OPSGGM Act prohibits the manufacture, import and export of listed ozone depleting substances (ODS), SGGs and related equipment, without a licence or in circumstances prescribed by the regulations. The Prohibited Imports Regulations however provide for an exception in subregulation 5K(6) for the import of ODS or SGG equipment which meets the conditions specified under section 13(6A)(b) or (c) of the OPSGGM Act. Section 13 was recently restructured under the OPSGGM Amendment Act, and, although without change to its substantive prohibitions and exemptions, references to paragraphs 13(6A)(b) or (c) are now redundant. As such, the purpose of this amendment is to update cross-references in the Prohibited Imports Regulations to the present applicable subsections 13(5) or (6) of the OPSGGM Act, following the legislative changes made to that Act.

Item 7 - Part 9 of Schedule 10 (table item 11)

This item repeals table item 11 of Part 9 of Schedule 10 in the Prohibited Imports Regulations, which is the hydrofluorocarbon substance 'CH₃CH₂F (HFC-161)', consistent with the OPSGGM Act, and Australia's international obligations.

As outlined above in relation to the amendment made to the Prohibited Exports Regulations at item 3, it is not necessary to regulate this substance because of its low global warming potential. The remaining list of hydrofluorocarbons reflects Australia's commitment under the recently agreed Kigali Amendment to the Montreal Protocol.

Item 8 - Part 11 of Schedule 10 (table item 1)

This item repeals table item 1 of Part 11 of Schedule 10 which is the substance 'SF₆'and substitutes the item with 'Sulfur hexafluoride (SF₆)'. There is no substantive change made to this item, as the listed substance remains the same with its chemical name included in full for clarity.

Part 2 - Amendments with other commencements

The Doha Amendment to the Kyoto Protocol established a second commitment period from 2013-2020, which Australia ratified on 10 November 2016. Under the second commitment period, Australia is obliged to limit its emissions of SGGs, including the substances nitrogen trifluoride and perfluorocarbon C₁₀F₁₈ (PFC-9-1-18) to 99.5% of its 1990 emissions. The OPSGGM Act will implement Australia's obligations by subjecting these two SGGs to the prohibition on manufacture, import and export without a licence or in prescribed circumstances when relevant amendments commence on 1 January 2018.

Part 2 of Schedule 1 therefore makes the relevant amendments to both the Prohibited Exports Regulations and Prohibited Imports Regulations, respectively, to align the prohibitions on the substances nitrogen trifluoride and perfluorocarbon C₁₀F₁₈ (PFC-9-1-18) with the OPSGGM Act.

Customs (Prohibited Exports) Regulations 1958

Items 9, 10 and 12 - 'nitrogen trifluoride'

Together, items 9, 10 and 12, ensure 'nitrogen trifluoride' is subject to export controls.

Item 10 inserts the substance 'nitrogen trifluoride' into the definition of 'SGG' in subregulation 2(1) of the Prohibited Export Regulations, consistent with its inclusion for regulation under the OPSGGM Act. Item 9 complements item 10 by providing that 'nitrogen trifluoride' means the substance referred to in new Part 12 of Schedule 15, whether existing alone or in a mixture. The substance referred to in that new Part is listed, in item 1 of a table, as 'Nitrogen trifluoride (NF₃)', which is inserted by item 12.

As the regulation of 'nitrogen trifluoride' is not due to commence under the OPSGGM Act until 1 January 2018, the commencement provisions of the Regulations provide, in table item 3 of section 2, for items 9 and 10 to commence on the later of either:

* where registered before 1 January 2018, on 1 January 2018; or

* where registered after 1 January 2018, immediately after Part 1 of Schedule 1, which commences on the day after registration of the Regulations on the Federal Register of Legislation.

Section 2 of the Regulations ensures the commencement of items 9 and 10 occurs after the commencement of item 1 (which is located in Part 1 of Schedule 1), in the event that the Regulations are not able to be registered as intended before 1 January 2018. This ensures that the new definition of 'SGG' as provided in item 1 has commenced, such that 'nitrogen trifluoride' may be subsequently inserted into that definition.

Item 11 - 'perfluorocarbon: C₁₀F₁₈ (PFC-9-1-18)'

This item repeals the table contained in Part 10 of Schedule 15 listing perfluorocarbons (PFCs) and substitutes the table with a modified list of PFCs.

Table items 1 to 7 make no substantive change and remain the same as the presently listed substances. Table items 1 to 7 however are modified to include the 'chemical common names' of the substances inserted in brackets. For example, table item 1 which is 'CF₄' is now listed as 'CF₄ (PFC-14)'.

The substituted table includes new table item 8, which makes perfluorocarbon 'C₁₀F₁₈ (PFC-9-1-18)' a prohibited export, in accordance with Australia's obligation under the Doha Amendment to the Kyoto Protocol.

Customs (Prohibited Imports) Regulations 1956

Items 13, 14 and 16 - 'nitrogen trifluoride'

Items 13, 14 and 16 mirror the above changes provided by items 9, 10 and 12 made to the Prohibited Exports Regulations to ensure 'nitrogen trifluoride' is also a prohibited import.

Item 14 repeals and substitutes the definition of 'SGG' or 'synthetic greenhouse gas' in subregulation 2(1) of the Prohibited Imports Regulations to include the substance 'nitrogen trifluoride' in the definition, consistent with its inclusion for regulation under the OPSGGM Act. Item 13 complements item 14 by providing that 'nitrogen trifluoride' means the substance referred to in new Part 12 of Schedule 10, whether existing alone or in a mixture. The substance referred to in that new Part is listed, in item 1 of a table, as 'Nitrogen trifluoride (NF₃)', which is to be inserted by item 16.

As the regulation of 'nitrogen trifluoride' is not due to commence under the OPSGGM Act until 1 January 2018, the commencement provisions of the Regulations provide, in table item 4, for these items to commence on the later of either:

* the day after registration of the Regulations on the Federal Register of Legislation; or

* 1 January 2018.

The alternative commencement dates provide flexibility in the event that the Regulations are not able to be registered as intended before 1 January 2018, and to ensure the Regulations do not commence retrospectively.

Item 15 - 'perfluorocarbon: C₁₀F₁₈ (PFC-9-1-18)'

This item repeals the table contained in Part 10 of Schedule 10 listing PFCs (perfluorocarbons) and replace the table with a modified list of PFCs.

The substituted table includes new table item 8, which makes perfluorocarbon 'C₁₀F₁₈ (PFC-9-1-18)' a prohibited import, in accordance with Australia's obligation under the Doha Amendment to the Kyoto Protocol.

ATTACHMENT B

Statement of Compatibility with Human Rights

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

Customs Legislation Amendment (Ozone Protection and Synthetic Greenhouse Gas Management Consequential Amendments) Regulations 2017

This Legislative Instrument 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 of the Legislative Instrument

The importation into Australia and exportation of ozone depleting substances (ODS), synthetic greenhouse gases (SGG) and ODS/SGG equipment from Australia, is prohibited, unless a licence to import or export the substance or equipment has been granted under section 16 of the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989 (OPSGGM Act).

The list of controlled substances in the OPSGGM Act is replicated in the Customs (Prohibited Imports) Regulations 1956 and the Customs (Prohibited Exports) Regulations 1958 (together, the Regulations) for border management purposes. Recent inclusions and removal of controlled substances from the OPSGGM Act give rise to the present consequential amendments to the Regulations. The OPSGGM Act was recently amended to include two new ODS/SGG substances, Nitrogen Trifluoride and Perfluorocarbon PFC-9-1-18, that now require a licence to import and export. One substance, hydrofluorocarbon HFC-161, has also been removed from the Act, and no longer requires a licence. The definition of SGGs is updated to include the substance Nitrogen Trifluoride in both Regulations and the substance Sulfur Hexafluoride in the Customs (Prohibited Exports) Regulations 1958, for consistency with the OPSSGM Act. Additionally, chemical common names for perfluorocarbons have been inserted into the Regulations to assist importers to identify controlled substances, consistent with the OPSGGM Act.

The purpose of the amendments is to ensure effective border compliance of regulated ODS/SGG, and to align the Regulations with recent changes in the OPSGGM Act.

Human rights implications

These Regulations amendments do not engage any of the applicable rights or freedoms.

Conclusion

This Legislative Instrument 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