Bills Digest No. 85, 2012–13

12 March 2013

Customs Amendment (Miscellaneous Measures) Bill 2012

Leah Ferris, Law and Bills Digest Section

Eugenia Karanikolas, Economics Section

Date introduced: 28 November 2012

House: House of Representatives

Portfolio: Home Affairs

Commencement: Sections 1 to 3 commence on Royal Assent. Parts 2-9 of Schedule 1 commence the day after Royal Assent. Part 1 of Schedule 1 commences on a day to be fixed by Proclamation or the day after the end of a six month period after the date of Royal Assent, whichever is earliest.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill's home page, or through http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation. When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website at http://www.comlaw.gov.au/.

Purpose of the Bill

The purpose of the Customs Amendment (Miscellaneous Measures) Bill 2012 (the Bill) is to amend the Customs Act 1901 (the Customs Act)[1] to:

·         prescribe a new category of goods (“restricted goods”) and make it an offence to bring such goods into Australia. Initially this new category of “restricted goods” would be limited to child pornography and child abuse material[2]

·         amend various valuations definitions to better align with Article 8 of the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994

·         provide for the CEO of Customs to request additional information from an applicant for a warehouse licence

·         standardise the rules with respect to when cargo reporters are required to have completed their various reports and

·         repeal the expired moratorium period for cargo reporting.[3]

The Bill also provides for a number of other minor amendments, which include:

·         clarifying that self-powered ships and aircraft that are imported or intended to be imported are subject to the control of Customs and should be entered for home consumption

·         allowing for Customs to designate a customs controlled area for crew members, as well as passengers, and enable the CEO to designate a seaport as a customs controlled area and

·         repealing the legislation which introduced the accredited client program.[4]

Background

Due to the nature of the amendments proposed in the Bill, there has been little material available explaining the background to this Bill.[5]

Exposure Draft

In September 2012, the Australian Customs and Border Protection Service (Customs) released an exposure draft with regards to this Bill.[6] Interested parties had until the 8 October 2012 to make submissions on the proposed changes outlined in the exposure draft.[7] While it would seem that those submissions received were never released for public viewing, the Minister commented in his second reading speech that ‘key stakeholders such as Shipping Australia, QANTAS and CAPEC have all responded positively to these changes’.[8] He further commented that the proposed amendments ‘make little changes in the way these organisations do business, but clarify their obligations under the Customs Act’.[9] In its submission to the Senate Standing Committee on Legal and Constitutional Affairs (Senate Committee for Legal and Constitutional Affairs), Customs commented that it had received two submission responses via email:

The Law Council of Australia stated “No errors or inconsistencies in the changes have come to our attention”. Shipping Australia advised “Our members have considered its contents and have no objections”.[10]

Customs further commented that they had met with representatives of the Confederations of Asia Pacific Express Carriers (CAPEC), an unnamed airline and an unnamed shipping company, who required further clarification on some matters.[11]

Interestingly, certain parts of the Bill were not included in the exposure draft:

·         Part 1 of Schedule 1—unlawful bringing of goods into Australia

·         Part 4 of Schedule 1— designation of Customs places and

·         Part 9 of Schedule 1—other amendments.[12]

Part 1 of Schedule 1 of the Bill creates a strict liability offence[13] for bringing ‘restricted goods’ into Australia. This offence applies where there is not an intention to actually import restricted goods into Australia, and would initially be used in situations where child pornography is detected in the personal effects of a ship’s crew. Currently these goods cannot be seized unless there is an intention to import them.[14] The penalty for the proposed offence is 1000 penalty units ($170 000).[15]

Part 4 of Schedule 1 of the Bill allows officers of Customs to designate a customs controlled area for both passengers and crew, and the CEO to designate a seaport as a customs controlled area. Currently, Customs may only designate such an area for passengers (or where there are both passengers and crew) and this amendment allows them to now search the personal belongings of crew members. Part 4 also extends this power to seaports (Customs can currently only designate controlled areas with respect to aircraft).

The remaining provisions that were included in the exposure draft were inserted word-for-word into the Bill, which would appear to reflect the Minister’s statement that the stakeholders who did choose to comment on the draft had no recommendations to make.[16]

On 29 November 2012, Customs released a notice announcing the introduction of this Bill.[17]

Committee consideration

Senate Committee for Legal and Constitutional Affairs

At its meeting on the 28 November 2012, the Senate Selection of Bills Committee determined that the provisions of the Bill be referred immediately to the Senate Committee for Legal and Constitutional Affairs for inquiry and report by 13 March 2013.[18]

The Senate Committee for Legal and Constitutional Affairs has so far received two submissions. The first is from Customs, which to a large degree re-iterates the summary of the provisions of the Bill provided in the Explanatory Memorandum.[19] The submission does provide some detail into the background to these amendments.

The second submission received by the Committee is on behalf of the Australian Shipowners Association (ASA).[20] The ASA raised concerns about the new policy approach of Customs with regards to ship importation:

There has been a change in the approach of Customs and Border Protection towards vessel importation with significant negative consequences to industry and the nation. Importation decisions are being based on a new interpretation by Customs of when a vessel is entered into the commerce of Australia, with no regard to the particular circumstances and timeframes in question or the intentions of the operator. Determinations around vessel importation has serious consequences for the application of other Australian laws, including immigration law, and threatens the ability of many operators to continue to do business in Australia.[21]

In its submission, Customs referred to a meeting that took place with an unnamed shipping company, who had ‘raised concerns with the measure concerning self-powered ships and aircraft that are imported, or intended to be imported’.[22] Customs clarified that ‘the measure was not a change in policy or practice but an amendment that provides clarity and is of a minor or machinery nature’ and ‘does not affect ships or aircraft on a continuing international voyage to a place outside Australia’.[23]

While the ASA submission does raise some concerns with the proposed amendments, the major issues discussed appear to relate to the current policy on ship importation.[24]

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills (Scrutiny of Bills Committee) raised concerns with Part 1 of Schedule 1 of the Bill which deals with the offence of bringing ‘restricted goods’ to Australia.

In particular the Committee had concerns about the inclusion of significant elements of a criminal offence in regulations:

Although the committee may accept that the penalty of 1000 penalty units for bringing goods such as child pornography into Australia is ‘appropriately high’, the explanatory memorandum has not provided a sufficiently detailed explanation for prescribing ‘restricted goods’ in regulations rather than including them in primary legislation. The committee therefore seeks further information about the nature of other goods which may be prescribed as ‘restricted goods’ and the frequency with which the facility to prescribe such goods is likely to be exercised. The committee also seeks advice as to whether consideration has been given to including an obligation to ensure that persons entering Australia are informed of the prohibition on bringing restricted goods into Australia even where there is no intention to import such goods.[25]

The Committee also commented on the fact that the offence is one of strict liability:

As the explanatory memorandum does not address the appropriateness of strict liability for the offence created, the committee seeks the Minister’s advice as to the justification for the proposed approach and whether it is consistent with the principles set out in the committee’s Report 6/2002 discussed in the Guide to Framing Commonwealth Offences.[26]

Ultimately the Scrutiny of Bills Committee concluded:

Pending the Minister’s reply, the Committee draws Senators’ attention to the provisions, as they may be considered to trespass unduly on personal rights and liberties, in breach of principle 1(a)(i) of the Committee’s terms of reference.[27]

At the time of writing the Digest, the Minister has not yet responded to the Committee.

Parliamentary Joint Committee on Human Rights

The Statement of Compatibility with Human Rights can be found at page 3 of the Explanatory Memorandum to the Bill.[28] As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[29]

In its first report of 2013, the Parliamentary Joint Committee on Human Rights (the Joint Committee on Human Rights) examined all bills introduced in the 17 November 2012 - 4 January 2013 period, which included this Bill.[30]

In determining whether the Bill sufficiently complied with the Human Rights (Parliamentary Scrutiny) Act 2011[31], the Joint Committee on Human Rights raised concerns regarding whether the “new strict liability offence of importing restricted goods is compatible with the presumption of innocence under article 14(2) of the International Covenant on Civil and Political Rights (ICCPR)”.[32]

The Committee commented that:

The proposed new offence is designated as a criminal offence of strict liability by the new section itself. Even though the penalty for the offence involves only the payment of a sum of money (a maximum of 1,000 penalty units), the absence of imprisonment as an option for punishment does not turn the offence into a ‘civil penalty’. Thus, the criminal procedural guarantees of article 14 of the ICCPR apply directly as the offence is a criminal offence under domestic law.

Accordingly, the right to be presumed innocent is engaged, as the new offence is a strict liability offence. The statement of compatibility does not refer to this or provide any justification as to why the imposition of strict liability is justified in this context.[33]

The Joint Committee on Human Rights concluded that it intended to write to the Minister ‘to request clarification as to whether the imposition of strict liability under the new offence of importing restricted goods is consistent with the presumption of innocence in article 14(2) of the ICCPR’.[34]

Financial implications

According to the Explanatory Memorandum, the proposed amendments will have no financial impact.[35]

Key issues and provisions

Unlawful bringing of restricted goods into Australia

Prohibited imports

Under paragraph 233(1)(b) of the Customs Act, it is currently an offence ‘to import any prohibited imports into Australia’. Sections 50 and 51 of the Customs Act define ‘prohibited imports’ to mean goods which have been prohibited from being imported to Australia by the Governor-General, under the regulations.[36] Under the Customs (Prohibited Imports) Regulations 1956[37] (the Prohibited Imports Regulations) a number of goods have been defined as prohibited imports.

Paragraph 229(1)(b) of the Customs Act provides that all prohibited imports must be forfeited to the Crown. Under subsection 183UA(1) of the Customs Act, all prohibited imports are classed as special forfeited goods for the purposes of section 203B, which permits the seizure of special forfeited goods without a warrant at a Customs place.[38]

Restricted goods

The need for the proposed amendments arises out of the definition provided under section 233(1)(b) of the Customs Act, which requires the need for the intention to import to be established with respect to prohibited imports. Therefore, if a person does not intend to import a particular item, then that item cannot be seized by Customs.[39] The Explanatory Memoranda suggests that this sort of situation is most likely to occur in the case of crew members.[40]

Item 6 of the Bill will insert proposed section 233BABAE into the Customs Act, which will make it an offence to bring restricted goods into Australia. Under this new proposed section, restricted goods are goods that if imported would fall under the definition of prohibited imports (sections 50 and 51 of the Customs Act, as discussed above) and are classed as restricted goods under the regulations.[41] Item 4 amends the definition of special forfeited goods to insert a reference to restricted goods, in order to ensure that restricted goods will be allowed to be seized without a warrant. Item 5 amends section 229 of the Customs Act to ensure that all restricted goods must be forfeited to the Crown.

Proposed subsection 233BABAE(1) provides that a person commits a strict liability offence upon bringing restricted goods into Australia. The maximum penalty for this offence is 1000 penalty units ($170 000).[42]

Proposed subsection 233BABAE(4) provides that the new offence will only apply in relation to purposes related to external affairs. These include giving effect to an international agreement to which Australia is a party and to addressing matters related to international concern.[43]

Proposed subsection 233BABAE(2) sets out an exception to the offence, stating that proposed subsection 233BABAE(1) does not apply if the person brings the goods into Australia with a written permission given by the Minister.

In his second reading speech, Michael Keenan commented on the importance of such a provision:

It is important to note that there is a caveat within the legislation that goods of this type can be imported into Australia with the written permission of the minister if they are to be used for law enforcement purposes. An example of that would be child abuse material contained on a computer overseas; if the Australian Federal Police would like to import that hard drive then the minister can rightly give them permission to do so for it to be used in prosecutions of the person who had committed that offence.[44]

In determining what goods are likely to be classed as restricted goods, the Minister has provided some guidance:

Initially, the new category of restricted goods will be limited to child pornography and child abuse material. In future, this could be extended to give effect to international agreements or to address matters of international concern and could be applied to any purpose related to external affairs.[45]

It appears that there have been occasions where the absence of such an offence has been noted by Customs officers:

On occasion, Customs and Border Protection identifies the presence of child pornography in the personal effects of commercial ship’s crew. As there is no intention to import these goods, the owner has not breached Customs law. Customs and border protection may refer the detection to the state or territory police force for consideration of a possession offence; however this approach provides an inconsistent result based on the police resources available to respond to such a referral as well as the different laws in place in different states. Alternatively the Customs Act empowers Customs and Border Protection to secure these types of goods on board or withhold the goods, but regardless of whether the goods are secured on board or withheld, they are returned to the owner on their departure from Australia.[46]

Customs further noted that:

The return of these goods to the owner is unlikely to be consistent with community expectations around law enforcement’s treatment of child pornography and child abuse material. It is also likely to be seen as incongruent with Australia’s ratification of the United Nations Optional Protocol to the Convention on the Rights of the Child on the sale of children, child prostitution and child pornography.[47]

There have been a number of concerns raised with respect to these amendments. For example, the Joint Committee on Human Rights commented on the use of strict liability offences in this particular scenario.[48] The application of strict liability to offences removes the requirement for the prosecution to establish either negligence or fault.[49] According to the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers (the Guide), ’strict and absolute liability should only be used in limited circumstances and where there is adequate justification for doing so’.[50] As recognised by the Joint Committee on Human Rights, there appears to be no justification in either the Explanatory Memorandum or in the Minister’s second reading speech as to why strict liability has been used.[51] The Joint Committee on Human Rights also referred to Article 14 of the International Covenant on Civil and Political Rights (ICCPR)[52], which lists the minimum guarantees in criminal proceedings required under Australia law.[53] In particular, the right to be presumed innocent would appear to conflict with the offence being one of strict liability, especially where the Government has not provided sufficient justification.

The Scrutiny of Bills Committee also raised questions regarding the use of strict liability, though its concerns related more to the use of strict liability offences in regulations.[54] The Scrutiny of Bills Committee referred to the justification provided in the Explanatory Memorandum[55]:

Creating a category of ‘restricted goods’ which will be defined by regulation will give Customs and Border Protection some flexibility in regulating goods consistent with international treaty obligations and matters of international concern without the need for legislative amendment.[56]

The Scrutiny of Bills Committee also recognised the limitations imposed under subsection 233BABAE(4) with respect to the external affairs power.[57] In its submission to the Senate Committee for Legal and Constitutional Affairs, Customs stated that ‘the Australian Government Solicitor has advised that this approach is Constitutionally sound and is consistent with similar provisions such as subsection 21(2)(a) of the Australian Sports Anti-Doping Authority Act 2006 and subsection 7(4)(a) of the Tourism Australia Act 2004 amongst others’.[58] While it would appear that the Government’s intention is that these amendments are to be limited initially to child pornography and child abuse material, there is a significant potential for a number of other goods to be classed as restricted goods, provided they fall under the external affairs provision.[59]

The Scrutiny of Bills Committee ultimately stated that it sought:

further information about the nature of other goods which may be prescribed as ‘restricted goods’ and the frequency with which the facility to prescribe such goods is likely to be exercised. The committee also seeks advice as to whether consideration has been given to including an obligation to ensure that persons entering Australia are informed of the prohibition on bringing restricted goods into Australia even where there is no intention to import such goods.[60]

The other significant issue that was raised with these proposed amendments was the use of criminal penalties and the high amount of penalty units imposed.

As the Joint Committee on Human Rights correctly noted, ‘even though the penalty for the offence involves only the payment of a sum of money (a maximum of 1000 penalty units), the absence of imprisonment as an option for punishment does not turn the offence into a “civil penalty”’.[61] As has been already noted, the Scrutiny of Bills Committee has raised concerns ‘about the inclusions of significant elements of a criminal offence in regulations’.[62] However, this would not appear to be unusual with respect to Customs’ legislation and furthermore, it is relevant that the penalty is monetary and not a term of imprisonment.

The Guide also provides guidance on the use of penalties:

A penalty should be consistent with penalties for existing offences of a similar kind or of a similar seriousness. This should include a consideration of existing offences within the legislative scheme and other comparable offences in Commonwealth legislation such as the Criminal Code.[63]

The Explanatory Memorandum noted that:

given the nature of the material proposed to be included as restricted goods, 1000 penalty units is appropriately high so as to deter people from bringing into Australia the kinds of goods which will be restricted goods.[64]

Under section 233 of the Customs Act, the maximum penalty for importing prohibited imports into Australia is a penalty not exceeding five times the amount of the duty evaded or, where the duty cannot be calculated, a penalty not exceeding 1000 penalty units. However, under section 233BAB of the Customs Act, the maximum penalty for importing tier 2 goods (which includes child pornography material) is a fine not exceeding 2500 penalty units or imprisonment for ten years, or both.

While the maximum penalty able to be imposed under proposed subsection 233BABAE can be considered to be rather high, the serious nature of the goods listed under the Prohibited Imports Regulations suggests that this is reasonable and necessary in deterring people from bringing these goods into Australia.

Designation of Customs controlled area

An explanation of the current situation regarding the designation of Customs controlled areas is set out in the Explanatory Memorandum:

Section 234AA of the Customs Act allows places to be set aside for the purposes of examining the personal baggage of holding passengers. Sections 234A and 234AB contain offence provisions relating to places designated under section 234AA.

However, the reference to passengers in section 234AA does not include a reference to crew. Consequently, a Customs controlled area cannot be designated under section 234AA for the purposes of clearing an aircraft or vessel that arrives in or departs from Australia carrying only crew, where that Customs place is not also used for clearing passengers.[65]

Item 29 of the Bill amends section 234AA of the Customs Act to include a reference to crew members. Items 31-33 of the Bill consequently amend sections 234A and 234AB of the Act to provide that it is also an offence for crew members to enter into certain places, ships, aircraft or wharves without authorisation or to use cameras and sound recorders without authorisation when in such places.

Under subsection 234AA(3) of the Act, the CEO has the power, to publish a Gazette Notice, to designate an area of an airport as a place to which section 234AA applies. Item 30 of the Bill amends section 234AA(3) to extend this power to seaports.

It appears that the purpose behind this amendment is to allow Customs to search the personal baggage of crew members to ensure that they are not bringing restricted goods into Australia. By extending the power to designate customs controlled areas to seaports, the Government is ensuring that crew members on ships who are in possession of restricted goods will fall under the new offence provisions.

Valuation of imported goods

Customs Valuation

Customs valuation is the methodology that countries use to value imported goods in order to collect duty. The Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (WTO Customs Valuation Agreement)[66] sets the international rules that must be followed. The agreement aims to provide certainty for importers by setting out a uniform and fair process for valuating goods and as result outlaw the use of arbitrary or fictitious customs values.

Customs valuation for production-assist costs

All goods imported into Australia have to be assigned a Customs value[67] even if the goods were provided free of charge.

The methodology used by Customs to value imported goods in order to collect duties follows the WTO Customs Valuation Agreement, which Australia is a signatory to.[68]

To determine the value of a good, Customs predominantly uses the ‘transaction value’ method, ‘which is the price the importer actually paid (or is going to pay) for the goods’.[69]

According to Article 8 of the Customs Valuation Agreement, Customs is permitted to add further costs to the price actually paid or is payable (ie. the invoice price) by the importer, to the extent that they are incurred by the buyer but are not included in the price actually paid or payable for the goods’.[70]

This also includes goods or services provided free of charge or at a reduced cost for use in connection with the production and sale for export of the imported goods. Goods which are deemed to have contributed to the production of imported goods (also known as production-assist costs under the Customs Act) include:

(i) materials, components, parts and similar items incorporated in the imported goods;

(ii) tools, dies, moulds and similar items used in the production of the imported goods;

(iii) materials consumed in the production of the imported goods;

(iv) engineering, development, artwork, design work, and plans and sketches undertaken elsewhere than in the country of importation and necessary for the production of the imported goods;[71]

Currently under the Australian legislation, when Customs is calculating the customs value of the imported goods it is required to include the actual cost of acquisition of the materials which formed part of the imported goods. However, in the cases where the material was provided free of charge, the cost of acquisition is treated as zero. This, as pointed out in the Explanatory Memorandum, is inconsistent with the intention of Article 8 of the Customs Valuation Agreement[72], which as explained above requires a value to be included in the customs value even when the materials were acquired free of charge.

One of the purposes of the proposed amendments in Part 3 of Schedule 1 of the Bill is to change the way value is assigned to materials which formed part of the production of the imported goods and were acquired free of charge so that an appropriate value is apportioned on the imported goods.

Consequently, items 18-27 amend the following definitions in the Customs Act to align with Article 8 of the WTO Customs Valuation Agreement:

·         “purchaser’s material costs” (Items 18-19)

·         “purchaser’s subsidiary costs” (Items 20-22)

·         “purchaser’s tooling costs” (Items 23-24) and

·         “purchaser’s work costs” (Items 25-27).

It may be worth noting here that the proposed changes apply to the valuation of goods for costs relating to the production of the imported goods not the imported goods as such. The process that Customs has to follow in determining the cost of imported goods, including those goods that were acquired free of charge is dealt with in the current legislation under section 159[73] of the Customs Act.

Warehouse licences

Under section 79 of the Customs Act, the CEO of Customs currently has the power to grant warehouse licences, which allow for a person to use the place described in the licence for the warehousing of goods.[74] Section 81 of the Act sets out the requirements the CEO must take into account when choosing whether or not to grant the request for the licence. In the process of making this determination, the CEO is unable to request further information from the applicant.

This varies significantly with regards to other situations where the CEO currently has the power to request further information.

These situations include:

·         an application for a depot licence[75]

·         a variation to an application for a depot licence[76] and

·         a variation to an application for a warehouse licence.[77]

Item 35 of the Bill inserts proposed section 80A into the Customs Act, which will allow the CEO to request additional information from an applicant for a warehouse licence. Proposed subsection 80A(1) requires the CEO to advise the applicant by written notice that they are required to supply further information within the period specified in the notice.[78] In the event the applicant supplies the requested information, but fails to do so in the time specified, the CEO must not take into account the information supplied.[79]

Item 36 consequentially amends paragraph 81(2)(d) to require the CEO to have regard to any misleading statement made in the further information requested by the CEO in determining whether a person is a fit and proper person, as required under subsection 81(1) of the Customs Act.

As stated by the Minister, the purpose of this amendment is to ‘enable issues to be clarified without the need for industry to submit a further application’.[80] While this amendment is likely to decrease the number of overall submissions received by Customs, it could inadvertently ’have the effect of extending the overall process’.[81]

Notification of particulars for cargo reporters

Item 39 of the Bill inserts proposed subsection 64AAB(9) into the Customs Act, which standardises the rules with respect to when cargo reporters are required to have completed their various reports.

A detailed explanation of this amendment is provided in the Explanatory Memorandum:

The Customs Act requires a cargo reporter to make a report of cargo before the start of a certain period measured with respect to the estimated time of arrival. Where the actual time of arrival is after the estimated time of arrival, the cargo reporter will not be prosecuted or served with an infringement notice if the report of cargo is made before the start of the same period measured with respect to the actual time of arrival.

The report of other cargo reporters, required under section 64AAB, is to be made in the same timeframe as the cargo report. The amendments contained in this item align the requirements for the two reports. The amendments will establish that a person will not be liable to be prosecuted or cannot be served with an infringement notice for an offence under section 64AAB if the report of other cargo reporters is made no later than the period required by the Customs Act before the actual arrival of the ship or aircraft in Australia where the actual arrival is after the estimated time of arrival.[82]

Electronic cargo reporting

In October 2005, the Integrated Cargo System (ICS) officially became operational in Australia. The ICS is an electronic system used to facilitate and record the movement of goods into and out of Australia.[83] This transition was implemented into legislation, with the Customs Amendment and Repeal (International Trade Modernisation) Act 2001[84] inserting section 64AB into the Customs Act, which required all cargo reports to be made electronically. Under the legislation, a general moratorium period was established.[85] The period allowed industry a chance to transition from paper based reporting to electronic cargo reporting, and ended in October 2007.[86]

The purpose of Part 8 of Schedule 1 of the Bill is to repeal all the redundant provisions of section 64AB, which refer to the moratorium period.

Other amendments

The various other technical amendments are discussed briefly:

Entry of ships or aircraft for home consumption or warehousing

The purpose of the amendments in Part 2 of Schedule 1 of the Bill is to clarify that self-powered ships and aircraft that are imported, or intended to be imported, are subject to the control of Customs and should be entered for home consumption.[87] Home consumption occurs when the goods are imported into Australia (brought in to be unloaded here) and the owner of the goods has had an import entry for the goods entered under their name.[88]

Items 10 and 11 clarify that self-powered ships and aircraft that are imported, or intended to be imported, shall be subject to the control of Customs from when they first arrive in Australia to when they first leave.[89] Item 12 requires the goods to be entered for home consumption or warehousing and allows an owner to enter the goods before the ship or aircraft carrying the goods arrives in Australia.[90]

Accredited client program

The amendments in Part 7 of Schedule 1 of the Bill remove references to the accredited client program from a number of Acts.

According to the Explanatory Memorandum:

The accredited client program was co-designed with industry partners (Business Partner Group) and Government stakeholders to deliver benefits for industry as a trade facilitation measure for highly compliant, low risk traders. Subsequent technology improvements and changes in the policy, procedural and cost environment meant that the program has never been implemented operationally.[91]

Items 40-84 of the Bill amend the following Acts to repeal provisions that refer to the accredited client program:

·         A New Tax System (Wine Equalisation Tax) Act 1999[92] (Items 40-41)

·         Customs Act (Items 42-81) and

·         Import Processing Charges Act 2001[93] (Items 82-84).

Concluding comments

While this Bill provides for a number of technical amendments, the more significant provisions are concerned with the creation of a new offence of bringing into Australia ‘restricted goods’. The content of this new category of goods will be prescribed by regulations and initially will be limited to child pornography and child abuse material. The Government’s explanatory materials indicate that the purpose of these amendments is to allow Customs officials to seize such objectionable material found in the personal effects of a ship’s crew.

As has been discussed throughout the Digest, both the Scrutiny of Bills Committee and the Joint Committee on Human Rights have raised questions regarding these offence provisions. While it is important that the Minister clarify certain aspects of the offence, such as the rationale for imposing strict liability, this type of offence is not unusual in Customs legislation. Furthermore, due to the serious nature of the goods this provision is targeting, the penalty, while high, is not unreasonable. A final point of interest is that there appears to have been little public consultation regarding this new offence provision and the categories of goods it may cover both now and in the future and it remains unclear just what other types of prohibited imports will also be classed as restricted.

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.

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ISSN 1328-8091

[1].              The text of the Customs Act can be viewed at: http://www.comlaw.gov.au/Details/C2013C00064

[2].              J Clare, ‘Second reading speech: Customs Amendment (Miscellaneous Measures) Bill 2012’, House of Representatives, Debates, 28 November 2012, p. 13 667, viewed 10 December 2012, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22chamber%2Fhansardr%2F50ef4858-02bd-437b-a64f-599769ecfec6%2F0037%22

[3].              Explanatory Memorandum, Customs Amendment (Miscellaneous Measures) Bill 2012, p. 2, viewed 10 December 2012, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22legislation%2Fems%2Fr4929_ems_fca39fac-fe06-44e4-bcc1-d4188ee06306%22

[4].              J Amos and A Hudson, Customs Amendment (Miscellaneous) Bill 2012, Hunt & Hunt Lawyers website, 5 December 2012, viewed 31 January 2013, http://www.hunthunt.com.au/news-and-publications/customsamendment

[5].              The Explanatory Memorandum also does not go into any background history with regards to the amendments proposed in this Bill: Explanatory Memorandum, Customs Amendment (Miscellaneous Measures) Bill 2012, op. cit.

[6].              Australian Customs and Border Protection Service (Customs), Customs Amendment (Miscellaneous Measures) Bill 2012, Exposure draft, Canberra, September 2012, pp. 8-9, viewed 31 January 2013, http://www.customs.gov.au/webdata/resources/files/exposuredraftexplanatorydocument2.pdf

[7].              Ibid.

[8].              J Clare, ‘Second reading speech: Customs Amendment (Miscellaneous Measures) Bill 2012’, op. cit., p. 13 667.

[9].              Ibid.

[10].              Australian Customs and Border Protection Service, Submission to the Senate Standing Committees on Legal and Constitutional Affairs, Inquiry into the Customs Amendment (Miscellaneous Measures) Bill 2012, 7 February 2013, pp. 6–7, viewed 14 February 2013, http://www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees?url=legcon_ctte/customs_miscellaneous_measures/submissions.htm

[11].              Ibid.

[12].              Customs, ‘Consultation and legislation’, website, 28 September 2012, viewed 31 January 2013, http://www.customs.gov.au/site/page4671.asp

[13].              In section 6.1 of the Criminal Code Act 1995 strict liability is defined. If an offence is one of strict liability, then there are no fault elements for any of the physical elements of the offence, although the Code will apply a defence of mistake of fact. Fault elements may include intention, knowledge, recklessness or negligence—see section 5.1 of the Criminal Code Act 1995.

[14].              Explanatory Memorandum, Customs Amendment (Miscellaneous Measures) Bill 2012, op. cit., p. 5.

[15].              Section 4AA of the Crimes Act 1914 defines a penalty unit as $170.

[16].              Ibid.

[17].              Customs, ‘Australian Customs and Border Protection Notice No. 2012/67’, website, 29 November 2012, viewed 31 January 2013, http://www.customs.gov.au/webdata/resources/files/ACBPN-introductionoftheMiscellaneousMeasuresBill.pdf

[18].              Selection of Bills Committee, Report No. 16 of 2012, Senate, Canberra, 29 November 2012, viewed 10 January 2013, http://www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees?url=selectionbills_ctte/reports/2012/rep1612.htm

[19].              Australian Customs and Border Protection Service, Submission to the Senate Standing Committee on Legal and Constitutional Affairs, op. cit.

[20].              Australian Shipowners Association, Submission to the Senate Standing Committee on Legal and Constitutional Affairs, Inquiry into the Customs Amendment (Miscellaneous Measures) Bill 2012, 7 February 2013, viewed 14 February 2013, http://www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees?url=legcon_ctte/customs_miscellaneous_measures/submissions.htm

[21].              Ibid., p. 2.

[22].              Australian Customs and Border Protection Service, Submission to the Senate Standing Committee on Legal and Constitutional Affairs, op. cit., p. 6.

[23].              Ibid., pp. 6–7.

[24].              Australian Shipowners Association, Submission to the Senate Standing Committee on Legal and Constitutional Affairs, op. cit., p. 3.

[25].              Scrutiny of Bills Committee, Alert Digest No. 1 of 2013, Senate, Canberra, 6 February 2013, p. 45, viewed 6 February 2013, http://www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees?url=scrutiny/alerts/2013/index.htm

[26].              Ibid.

[27].              Ibid., pp. 45–46.

[28].              Explanatory Memorandum, Customs Amendment (Miscellaneous Measures) Bill 2012, op. cit., p. 3.

[29].              Ibid.

[30].              Parliamentary Joint Committee on Human Rights, First report of 2013, Canberra, February 2013, viewed 6 February 2013, http://www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees?url=humanrights_ctte/reports/2013/1_2013/index.htm

[31].              The text of the Human Rights (Parliamentary Scrutiny) Act 2011 can be viewed here: http://www.comlaw.gov.au/Details/C2012C00726

[32].              Parliamentary Joint Committee on Human Rights, First report of 2013, op. cit., p. 34.

[33].              Ibid., pp. 34–35.

[34].              Ibid., p. 35.

[35].              Explanatory Memorandum, Customs Amendment (Miscellaneous Measures) Bill 2012, op. cit., p. 2.

[36].              Subsection 50(1) of the Customs Act provides that “the Governor-General may, by regulation, prohibit the importation of goods into Australia”. Subsection 51(1) states that ‘goods, the importation of which is prohibited under section 50, are prohibited imports’.

[37].              The text of the Prohibited Imports Regulations can be viewed at: http://www.comlaw.gov.au/Details/F2013C00003

[38].              Subsection 203B(1) of the Customs Act sets out the circumstances when a customs place can be searched without a warrant.

[39].              J Amos and A Hudson, Customs Amendment (Miscellaneous Measures) Bill 2012, op. cit.

[40].              Explanatory Memorandum, Customs Amendment (Miscellaneous Measures) Bill 2012, op. cit., p. 5.

[41].              Proposed subsection 233BABAE(1) of the Bill.

[42].              Section 4AA of the Crimes Act 1914 stipulates that a penalty unit is $170.

[43].              This provision is included because of the need to establish a head of power under section 51 of the Constitution. Due to the removal of the need to demonstrate the goods were imported, the Commonwealth cannot rely on the trade and commerce power (section 51 (i)) with respect to restricted goods: Explanatory Memorandum, Customs Amendment (Miscellaneous Measures) Bill 2012, op. cit., p. 6. Consequently, all goods that are to be classed as restricted goods need to come under the external affairs power (section 51(xxix)).

[44].              M Keenan, ‘Second reading speech: Customs Amendment (Miscellaneous Measures) Bill 2012, House of Representatives, Debates, 6 February 2013, p. 41 viewed, 7 February 2013, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22chamber%2Fhansardr%2F27c8c7aa-70e7-442b-8ceb-93bd0691de92%2F0061%22

[45].              J Clare, ‘Second reading speech: Customs Amendment (Miscellaneous Measures) Bill 2012, op. cit., p. 13 667.

[46].              Australian Customs and Border Protection Service, Submission to the Senate Standing Committees on Legal and Constitutional Affairs, op. cit., p. 2.

[47].              Ibid.

[48].              Parliamentary Joint Committee on Human Rights, First report of 2013, op. cit., pp. 34–35.

[49].              PH Butt and D Hamer, eds, LexisNexis Concise Australian Legal Dictionary, 4th ed., LexisNexis Butterworths, Chatswood, 2011, p. 589.

[50].              Attorney-General’s Department (AGD), A guide to framing Commonwealth offences, infringement notices and enforcement powers, September 2011 edn, AGD, p. 22, viewed 20 February 2013, http://www.ag.gov.au/Publications/Documents/GuidetoFramingCommonwealthOffencesInfringementNoticesandEnforcementPowers/A%20Guide%20to%20Framing%20Cth%20Offences.pdf

[51].              Parliamentary Joint Committee on Human Rights, First report of 2013, op. cit., pp. 34–5.

[52].              A copy of the ICCPR is available here: http://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=IV-4&chapter=4&lang=en

[53].              Parliamentary Joint Committee on Human Rights, First report of 2013, op. cit., p. 34.

[54].              Senate Scrutiny of Bills Committee, Alert Digest No. 1 of 2013, op. cit., p. 44.

[55].              Ibid., p. 45.

[56].              Explanatory Memorandum, Customs Amendment (Miscellaneous Measures) Bill 2012, op. cit., p. 5.

[57].              Senate Scrutiny of Bills Committee, Alert Digest No. 1 of 2013, op. cit., p. 45.

[58].              Australian Customs and Border Protection Service, Submission to the Senate Standing Committee on Legal and Constitutional Affairs, op. cit., p. 2.

[59].              For example, computer games classified RC (restricted content). Regulation 4A(1AA) of the Prohibited Imports Regulations provides that Regulation 4A(1A) applies to computer games classified RC.

[60].              Senate Scrutiny of Bills Committee, Alert Digest No. 1 of 2013, op. cit., p. 45.

[61].              Parliamentary Joint Committee on Human Rights, First report of 2013, op. cit., p. 34. The Guide sets out a list of factors that must be considered when determining whether a criminal or civil sanction should be applied: Attorney-General’s Department (AGD), A guide to framing Commonwealth offences, infringement notices and enforcement powers, op. cit., pp. 12–14.

[62].              Scrutiny of Bills Committee, Alert Digest No. 1 of 2013, op. cit., p. 44.

[63].              Attorney-General’s Department (AGD), A guide to framing Commonwealth offences, infringement notices and enforcement powers, op. cit., p. 39.

[64].              Explanatory Memorandum, Customs Amendment (Miscellaneous Measures) Bill 2012, op. cit., p. 5.

[65].              Ibid., p. 11.

[66].              World Trade Organisation (WTO), Agreement on implementation of article VII of the General Agreement on Tariffs and Trade 1994, viewed 9 January 2013, http://www.wto.org/english/docs_e/legal_e/20-val.pdf

[67].              Customs value is the value to be used when goods are imported into Australia: Australian Customs and Border Protection Service, ‘Valuation of free-of-charge goods’, Customs website, April 2011, viewed 9 January 2013, http://www.customs.gov.au/webdata/resources/files/ValuationofFree-of-chargeGoodsApril2011.pdf

[68].              World Trade Organisation (WTO), Agreement on implementation of article VII of the General Agreement on Tariffs and Trade 1994, op. cit.

[69].              Australian Customs and Border Protection Service, ‘Valuation of free-of-charge goods’, op. cit.

[70].              World Trade Organisation (WTO), Agreement on implementation of article VII of the General Agreement on Tariffs and Trade 1994, op. cit.

[71].              Ibid.

[72].              Explanatory Memorandum, Customs Amendment (Miscellaneous Measures) Bill 2012, op. cit., p. 10.

[73].              Section 159 of the Customs Act sets out the value of imported goods.

[74].              Subsection 78(1) of the Customs Act defines a warehouse licence to mean “a licence granted under section 79 and includes such a licence that has been renewed under section 84”.

[75].              Section 81B of the Customs Act.

[76].              Section 77LA of the Customs Act.

[77].              Section 77J of the Customs Act.

[78].              Proposed subsection 80A(2) provides that where the applicant has written to the CEO to request that the specified period be extended, the CEO may grant such an extension.

[79].              Proposed subsection 80A(3).

[80].              J Clare, ‘Second reading speech: Customs Amendment (Miscellaneous Measures) Bill 2012, op. cit., p. 13 667.

[81].              J Amos and A Hudson, Customs Amendment (Miscellaneous Measures) Bill 2012, op. cit.

[82].              Explanatory Memorandum, Customs Amendment (Miscellaneous Measures) Bill 2012, op. cit., p. 14.

[83].              Australian Tax Office (ATO), ‘Excise: Integrated Cargo System (ICS)’, ATO website, 6 August 2012, viewed 1 February 2013, http://www.ato.gov.au/businesses/content.aspx?doc=/content/00169405.htm&page=11

[84].              The text of the Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001 can be viewed at: http://www.comlaw.gov.au/Details/C2008C00476

[85].              Explanatory Memorandum, Customs Amendment (Miscellaneous Measures) Bill 2012, op. cit., p. 16.

[86].              J Amos and A Hudson, Customs Amendment (Miscellaneous Measures) Bill 2012, op. cit.

[87].              Explanatory Memorandum, Customs Amendment (Miscellaneous Measures) Bill 2012, op. cit. p. 8.

[88].              Subsection 68(3A) provides that an entry for home consumption is made communicating to Customs an import declaration in respect of the goods or a request for cargo release in respect of the goods.

[89].              Explanatory Memorandum, Customs Amendment (Miscellaneous Measures) Bill 2012, op. cit. p. 8.

[90].              Ibid.

[91].              Ibid., p. 15.

[92].              The text of the A New Tax System (Wine Equalisation Tax) Act 1999 can be viewed at: http://www.comlaw.gov.au/Series/C2004A00452

[93].              The text of the Import Processing Charges Act 2001 can be viewed at: http://www.comlaw.gov.au/Details/C2005C00470