Bills Digest no. 89 2006–07
Customs Legislation Amendment (Augmenting Offshore
Powers and other Measures) Bill 2006
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage History
Purpose
Background
Financial implications
Main Provisions
Endnotes
Contact Officer & Copyright Details
Passage History
Customs Legislation Amendment
(Augmenting Offshore Powers and other Measures) Bill
2006
Date introduced: 7 December 2006
House: House of Representatives
Portfolio: Justice and Customs
Commencement: Sections 1 to 3 commence on Royal
Assent. Schedules 1 to 4 commence at various times as noted in the
relevant descriptions in the background section of this
Digest.
Schedule 1 of the Bill will amend the
Customs Act 1901 (the Customs Act) to provide for changes
to the powers of search and seizure available to customs officers
in the offshore environment.
Schedule 2 will amend the Customs Act to
update brokers licensing provisions to accommodate locum customs
brokers who can then be employed by a number of different corporate
customs brokers at any one time.
Schedule 3 of the Bill proposes amendments to
the Customs Act in response to the decision in Malika Holdings
Pty Ltd v Stretton (2001) 204 CLRL 290 ( Malika ) to put the
time available to recover customs duty beyond doubt and modernise
the duty recovery provisions.
Schedule 4 amends the Customs Act to provide
that a statement or declaration made is taken to be a statement
made to the Chief Executive Officer of Customs.
Background
The amendments proposed in the Bill address
differing policy imperatives.
The Minister s second reading speech states
that the provisions relating to search and seizure are to
ensure:
the personal safety of the officers in
exercising their enforcement functions, help prevent the escape of
any person detained as a suspect, and help prevent the disposal of
evidence.(1)
The Bill was referred to the Senate Standing
Committee on Legal and Constitutional Affairs on 7 December 2006
and the Committee reported on 8 February 2007. Several
submissions were received by the Committee, including from
Australian Customs Service (ACS) who also had representatives
appear before the Committee hearings.
The ACS submission provides more detail on the
rationale for the extension of search and seizure powers contained
in the Bill. In response to a question by Senator Ludwig on the
general nature of search and seizure powers under the Act, ACS
responded in writing that:
The amendments in this Bill are to powers
available to officers in the unique circumstances that occur in the
offshore environment after making a request to board a ship under
section 184A or to land for boarding an aircraft under section 184D
of the Customs Act. This usually occurs where the commander of a
Commonwealth ship or aircraft has formed a view that there is a
suspected contravention of an offence under the Customs Act,
Division 307 of the Criminal Code or another
Act.(2)
In its written submission to the
Committee(3), ACS documented recent examples of
escalations in the level of resistance encountered when Customs
have boarded vessels suspected of contraventions of the Customs Act
or other legislation. The ACS submission outlines the concerns of
officer safety and risk to evidence being destroyed as the main
driving factors for these amendments:
an incident occurred during a boarding of an Indonesian fishing
vessel located inside the Australian Exclusive Economic Zone. The
team began to conduct an investigative boarding to determine if
there was evidence of any offences. As a decision had not been
made to detain the vessel, physical pat down searches were
unable to be conducted. During the search of the vessel an
Indonesian crew member produced a weapon and physically threatened
the boarding team. A tactical withdrawal occurred to avoid physical
injury to any Customs officers.
During another recent boarding of an Indonesian fishing vessel,
the Customs boarding team identified sufficient evidence for the
vessel to be detained and escorted to port for further enquiries.
Subsequent pat down search of the crew located a concealed Global
Positioning Satellite in the trousers of a crew member. There was
potential for this piece of evidentiary material to be disposed of
from the time of boarding until the search finally took place once
the vessel had been detained. If no other evidence of suspected
offences had been identified, it would not have been possible to
detain the vessel and conduct the searches and the GPS would not
have been located. [emphasis added]
Currently, there a number of requirements that
must be satisfied before a pat down search of persons can take
place. Essentially these are:
In case of Australian ships, there appears to
be no requirement that the ship is suspected of a contravention of
Australian law before it can be boarded: see paragraph 185(1)(c).
Once boarded, an Australian or foreign ship can only be detained
under subsection 185(3) if there is a reasonable suspicion of a
contravention of Australian law. The proposed amendments will,
amongst other things, do away with the requirement to detain a ship
before searches be made under section 185AA. Thus they will allow
any person on an Australian ship that is boarded to be subject to a
personal search, notwithstanding that there may be no reasonable
suspicion of the ship being involved in a contravention or that the
person themselves has been involved in a contravention. ACS goes on
to note:
It is recognised that the proposed personal
search powers are wider in scope than other personal search powers
under Commonwealth legislation. This is due to the remote locations
in which offshore patrols are conducted and the unique
circumstances facing officers when conducting personal searches in
confined spaces.(4)
Concerns were expressed by Queensland Council
of Civil Liberties and the ACT Director of Public Prosecutions on
the aspects of the Bill authorising Customs offers to carry out
personal searches without a warrant and the ambit of the immunity
granted to officers and other persons acting on their direction.
Both submissions raised the point that the circumstances of the
provisions do not require that there be any suspicion or belief
that any offence is or may have been committed.
The Police Federation of Australia (PFA) made
a submission to the effect that the PFA did not consider that the
additional powers proposed to be granted to Customs officers would
encroach unduly into the professional domain of policing.
The Senate Standing Committee for the Scrutiny
of Bills has recently reported on Entry Search and Seizure
Provisions in Commonwealth Legislation(5) (Twelfth
Report, 2006). The scope of this Inquiry was to examine and
review the Government s responses to the Committee s previous
report on entry and search provisions, Fourth Report of 2000:
Entry and Search Provisions in Commonwealth Legislation.
The Twelfth Report, 2006 discusses the
national security justification for these measures and notes that
the powers are consistent with other national security law. The
discussion is in the framework of the Customs Legislation
Amendment (Airport, Port and Cargo Security) Act 2004 and the
Report notes:
The Minister advised that the purpose of the
powers is to protect Customs officers and prevent the destruction
of evidence when a person is suspected of having committed a
serious Commonwealth offence, is the subject of a Commonwealth
arrest warrant, or is on bail where a condition of the bail is that
a person not depart Australia. The Minister also advised that
Customs officers already have broad personal search powers under
the Customs Act 1901 and receive extensive training in
relation to this aspect of their operational activity.6
The Committee noted that its consideration of the bill would have
been assisted by the inclusion of this explanation in the
explanatory memorandum. The Committee also stated that it continues
to have concerns with personal search provisions as they may be
considered to trespass on personal rights and liberties.
The
Explanatory Memorandum(6) has further background on
the proposed provisions and according to the description on the
amending provisions, the ship being boarded is a ship suspected
of being involved in offences against specified Acts. It
states that the amendments ensure the safety of Customs officers
from possible attack while investigating ships suspected of
offences against the specified Acts as well as preventing the
possibility of evidence of an offence begin thrown overboard,
although as discussed above it appears that in the case of
Australian ships there is no requirement for any such
suspicion.
The Senate Standing Committee on Legal and
Constitutional Affairs tabled its
Report on the Bill on 8 February 2007. The Committee accepted
ACS s evidence that the powers are necessary as an adjunct to the
proposed search and seizure powers and that the retaining of
evidence was not likely to occur where no suspicion of the
commission of an offence was present prior to a search being
conducted. (7)
The Committee made 4 recommendations, 2 of which
require amendments to the Bill. The first picks up a submission
from the ACT Director of Public Prosecutions, Mr Refshauge SC, to
protect legal professional and other privileges when the search and
seizure powers are exercised, and the second recommends a review of
Schedule 1 of the Bill within 3 years by the Commonwealth
Ombudsman.
Amendments to Schedule 1 Part 1 commence on the
28th day after Royal Assent.
In the case of broker s licences held by
corporations or partnerships, that licence must, amongst other
matters, specify those persons who may act as nominees for the
licence holder and the places where the various nominees may act as
a customs broker. To be eligible to be a nominee a person cannot be
the nominee of another customs broker. According to the Explanatory
Memorandum, corporate customs brokers are increasingly employing
locum or freelance customs brokers who can be employed by a number
of different corporate customs brokers, but such locums cannot act
as nominees for more than one corporate broker by virtue of
paragraph 183CD(1)(f). Accordingly, the paragraph is being
repealed.
To avoid the unduly restrictive nature of section
183CD (1)(j), the policy has been adopted of declaring all places
in the Commonwealth as places where licensed brokers can practise.
Accordingly this condition has become obsolete and is being
repealed.
Amendments to Schedule 2 commence on the day of
Royal Assent.
The amendments being made in Schedule 3 of the
Bill are to overcome the High Court decision of Malika.
That decision held that the 4-year time limit within which Customs
may recover customs duty only applied if the under payment of duty
or the overpayment of a duty rebate etc was due to a Customs error.
However, as a matter of policy, Customs applies the 4-year time
limit to all duty recovery, other than in cases of fraud, whether
or not there is a customs error. The proposed amendments seek to
bring the Act into line with this policy by placing a 4-year time
limit on all duty recovery other than in cases of fraud or evasion.
Further discussion of these amendments and details can be found in
the
submission to the Committee by ACS and the
Explanatory Memorandum to the Bill.
Schedule 4 makes amendments that will
effectively broaden the scope of the offence of making a false or
misleading statement by providing that information given to Customs
under section 71 is taken to be a statement made to the CEO .
According to the Explanatory Statement this is in anticipation of
the automated passenger processing system known as SmartGate in
early 2007 thus persons entering false or misleading statements
into the automated SmartGate system will be committing an office.
The Explanatory Statement(8) also outlines proposed
amendments to the Customs Regulations 1926 regulation
41.
Schedule 4 commences 28 days after the day of
Royal Assent.
None are identified in the Explanatory
Memorandum.(9)
Items 1 and 2 make amendments
to the definition of frisk search by repealing the existing
definition in section 4 of the Act and replacing it with the
definition in existing subsection 183UA(1). Subsection 183UA(1) is
repealed and the new definition in section 4 will apply to the
whole of the Act. A frisk search will be a search of a person
conducted by quickly running the hands over the person s outer
garments, and an examination of anything worn or carried by the
person that is conveniently and voluntarily removed by the person
(being searched). This definition is the same definition found in
the Crimes Act 1914.
Item 16 inserts new
subsection 219M(1A) to provide an explicit power to
conduct a frisk search under section 219M. The rationale for this
amendment is set out in the Explanatory Memorandum:
Existing section 219M sets out the manner in
which a frisk search of a person 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. 76.
Item 16 inserts new subsection 219M(1A). New subsection 219M(1A)
provides an 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
Currently, the apparent purpose of a section
219M frisk search is to search for weapons or anything that could
be used bodily injury: paragraph 219M(4)(a). However, this
paragraph is being repealed by item 17. Item 16
inserts a new purpose which, as mentioned above, focuses on
prohibited goods.
Existing section 185 of the Act sets out
officers powers to board and search a ship or aircraft in the
circumstances set out in the provision and allows officers to do
such things as secure goods, require persons to answer questions
and produce documents, make copies of documents, and make an
arrest, without warrant, of any person on the ship or a aircraft if
there is a reasonable suspicion that an offence has been committed
or may be committed by that person. Item 3 inserts
new paragraphs 185(2)(cb) and (cc) and expands the
powers by providing that officers may take possession of any goods
found and documents produced and retain such goods or documents.
New subsection 185(7) inserted by item
6 sets out the circumstances when the goods or documents
found or produced under new subsections 185(2)(cb) and
(cc) may afford evidence of the commission of a relevant
offence .
Item 8 repeals existing
subsections 185AA(1),(2) and (3) and inserts new
subsections 185AA(1)-(3C). The key amendment is that the
existing requirement that the ship or aircraft firstly has to be
detained before the search powers can be exercised has been removed
(in conjunction with the amendments in items 13 and
14, below). The amendments also change the circumstances
under which the powers may be exercised. New subsections
185AA(3),(3A),(3B) and (3C) empower officers (and in some
cases non-officers) to examine things or documents found, and to
take possession of and retain weapons, documents or things that are
found.
Item 9 repeals and
substitutes a new version of subsection 185AA(6)
to extend the existing immunity from civil or criminal suit for a
person who exercises powers at the request of an officer under
section 185AA, to now also include an officer who conducts a search
under the section, if the person or officer acts in good faith and
does not breach existing subsection 185AA(7) (use of force and
maintaining a person s dignity).
Item 10 inserts a new
provision, subsection 185AA(7A) to make clear that
evidence obtained under section 185AA can be used for the
investigation and/or prosecution of an Commonwealth, State or
territory offence. However, any possible use of such evidence would
still be subject to any State law regarding evidence in proceedings
for an offence against the law of the relevant State.
Item 11 extends the
definition of officer in new subsection 185AA(8)
to reflect that the new search powers apply in respect of vessels
and/or aircraft boarded under either section 185 or section 185A,
rather than just under existing section 185.
Item 12 extends the meaning
of a person found on a ship or aircraft to include a person
suspected on reasonable grounds to have landed from or left the
ship or aircraft. As section 185AA relates only to searches of
people it does not need to also include goods as in the similar
provisions in section 185(6) and on which this clause is based.
Items 13 and 14 repeal
subsections 219L(1B) and (1C). These provisions currently require
the detention of person before a frisk search can be undertaken in
the circumstances of a ship or aircraft being boarded under the
powers contained in section 185. The new provisions
subsections 185AA(1) and (1A) allow for a wider
search than a frisk search (removal of garments for example) and
also cover the same circumstances of the subsections to be repealed
and therefore make the subsections obsolete. The effect of the
amendments will be that section 219L will only provide for the
frisk search of a person who has been detained. The amendment in
item 16 new subsection 219M(1A) puts back the
requirements that if a person is detained, an officer of customs
may carry out a frisk search to determine whether the person is
unlawfully carrying prohibited goods and to recover any goods found
which are to be removed from the definition of frisk search in
items 1 and 2. Note that this does allow any other
person to conduct the search other than an officer of customs.
The Explanatory Memorandum(10) also
points out that sections 219L and 219M do not have an explicit
power to conduct a frisk search, so one of the purposes of
new subsection 219M(1A) is to provide for an
express power for a Customs officer to conduct such a search. This
raises the issue whether convictions to date based on these
provisions and evidence obtained there under could be in doubt.
Item 1repeals section 153 of
the Act which provides that amounts owed are Crown debts which are
payable by the owner of the goods and recoverable at any time in
proceedings in the name of the Collector. Section 153 is no longer
needed as the provision is replicated in new section
165, inserted by item 4 of the Bill.
Items 4 and 5 repeal and
substitute existing section 165 with new sections 165 and
165A to ensure that any duty that is due and payable and
an amount of drawback, refund or rebate of duty that is overpaid to
a person is a debt due to the Commonwealth, and is payable either
by the owner of the goods (in the case of any duty) or the person
who is overpaid. The concept of error currently in section 165 see
discussion in the background section of this Digest - is removed in
the new provisions.
New subsection 165(5)
provides that a demand for payment by the CEO must be made within 4
years of the triggering event unless the CEO is satisfied that the
debt arose as the result of fraud or evasion.
New subsection 165A allows
the CEO to apply a notional amount of refund, rebate or drawback in
respect of goods against the duty payable on the same goods and
details of how the provision works with an example can be found in
the Explanatory Memorandum.(11)
The amendments made in items
6-10 make various amendments including amendments of a
technical nature to the payments under protest regime with an
intention of replacing them with requirements that are general in
nature and easier to comply with. Details of the provisions can be
found in the Explanatory Memorandum.
Item 11, and Part 2, items
12-15 make transitional and application amendments as a
consequence of amendments proposed in the Bill.
Item 1 of Schedule 4 amends
section 234 to add new subsection 234(2BC) which
will have the net effect that, in the circumstances covered by
section 71AAAB, information provided to Customs pursuant to section
71 of the Act is taken to have provided to the CEO. This means that
airline passengers and aircrew making electronic declarations about
their personal or household goods using the proposed 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), which
carries a maximum penalty of 100 penalty units ($11 000).
- Second reading speech on the Customs
Legislation Amendment (Augmenting Offshore Powers and Other
Measures) Bill 2006, p.2.
- Question on Notice to the Australian Customs
Service, answer to question 2, p. 2.
- Australian Customs Service, Submission to
the Senate Legal and Constitutional Affairs Committee Inquiry into
the Customs Legislation Amendment (Augmenting offshore Powers and
other Measures) Bill 2006, January 2007, paragraph 4,
p. 2.
- Australian Customs Service, Submission to
the Senate Legal and Constitutional Affairs Committee Inquiry into
the Customs Legislation Amendment (Augmenting offshore Powers and
other Measures) Bill 2006, January 2007, paragraph 9,
p. 3.
- Senate Standing Committee on the Scrutiny of
Bills, Entry, Search and Seizure Provisions in Commonwealth
Legislation, 12th Report, 4 December 2006.
http://www.aph.gov.au/senate/committee/scrutiny/entrysearch/report/report.pdf
accessed on 9 February 2007.
-
http://parlinfoweb.parl.net/parlinfo/Repository/Legis/ems/Linked/07120614.pdf
- Senate Committee on Legal and Constitutional
Affairs, Customs Legislation (Augmenting Offshore Powers and
Other Measures) Bill 2006[Provisions],
February 2007, paragraph 3.60, p. 27. Discussion of this issue can
be found at paragraphs 3.31-3.35 of the
Report.
- Explanatory Memorandum, Customs
Legislation Amendment (Augmenting Offshore Powers and Other
Measures) Bill, paragraphs 150 153, p. 28.
- Explanatory Memorandum, paragraph 2, p.
2.
- Explanatory Memorandum paragraphs 75 and 76,
p. 13.
- Explanatory Memorandum, paragraphs 111 116,
pp.20 21.
Diane Spooner
15 February 2007
Law and Bills Digest Section
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