Bills Digest no. 32 2014–15
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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.
Moira Coombs
Law and Bills Digest Section
1 October 2014
Contents
Purpose of the Bill
Background
Committee consideration
Financial implications
Key issues and provisions
Concluding comments
Date introduced: 17 July 2014
House: House of Representatives
Portfolio: Immigration and Border Protection
Commencement: The Act will commence on the day after Royal Assent.
Links: The links to the Bill, it's Explanatory Memorandum and second reading speech can be found on the Bills’ home page or through the Australian Parliament website.
When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the ComLaw website.
The purpose of the Customs Amendment Bill 2014 (the Bill) is to amend the Customs Act 1901[1] (the Act) to:
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enable authorisations made by the Chief Executive Officer (CEO) of the Australian Customs and Border Protection Service to extend to an office or position that comes into existence after the authorisation is given
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extend Customs control to certain places that are not proclaimed ports or airports
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enable greater flexibility when reporting on the arrival of ships and aircraft in Australia and reporting on stores and prohibited goods
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make application processes clearer in relation to approvals sought from the Collector of Customs concerning loading, unloading or transferring stores on board ships and aircraft
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extend the powers of examination by customs officers to include domestic passengers or cargo travelling or carried on international flights or voyages within Australia and
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correct a technical error in relation to the interaction of a new Infringement Notice Scheme with the process for seeking the return of goods that have been seized by Customs.
In July 2013 the Blueprint for Reform 2013–2018 was launched.[2] It set out the broad reform initiatives for the Australian Customs and Border Protection Service (ACBPS). In January 2014, the Government announced further funding of $88 million ‘to increase screening and examination of international mail, air cargo and sea cargo’.[3] The ‘Tackling Crime—increased screening at the border’ measure will provide the funding over four years from
2013–14, constituting $74.3 million in operating budget and $13.7 million in capital budget. The funding will be allocated across a number of areas, including:
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$30 million for increased inspections in international mail and air cargo
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$8.5 million for expansion of the Detector Dog Program
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$24 million for increased sea cargo examinations
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$4 million for specialist examination capabilities
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$6 million for establishment of a cargo investigation squad and
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$16 million for additional related new technology.
[4]
In the 2014–15 Budget the Government announced a further $480.5 million four year package to fund the following measures:
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$99 million for enforcement capability, including the establishment of the Strategic Border Command
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$257 million for intelligence and systems
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$71 million for trade and travel system and
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$54 million for workforce measures and training, including the College.
[5]
In his second reading speech on the Bill, the Minister for Immigration and Border Protection, Scott Morrison, refers to it as an omnibus Bill that proposes a number of minor changes to the Customs Act 1901.[6] The primary changes include treating domestic travellers who travel on an international flight or voyage within Australia in the same way as international travellers entering the country. They will be subject to Customs powers of examination. It is not clear what the practical realities will be for Australian travellers travelling within Australia on an international flight or voyage in terms of being subject to Customs control. The Minister notes that the amendment:
[w]ill ensure that Customs control and powers of examination are provided for the goods of domestic travellers and of domestic cargo on international flights or voyages equal to the powers to examine the goods of international travellers and international cargo. This will close the gap in the treatment of identified border risks and reduce the advantage taken by criminal entities where domestic and international interactions can occur.[7]
Ships and aircraft may arrive in Australia at ports or airports which are not proclaimed as Customs airports or ports, either because they are forced to arrive there due to bad weather or some other reasonable cause. The Bill provides for these abnormal arrivals to be subject to Customs examination. In these situations the ports and airports concerned do not usually have a strong presence of Government agencies. The Minister notes:
It is in these instances that vulnerabilities exist when ships or aircraft brought to non-proclaimed places as part of an international journey may also be involved in disembarking travellers or unloading goods in those locations. Extending Customs control and examination powers to these non-proclaimed places will minimise the risks that these activities may pose.[8]
Although these changes to the Act are relatively minor, they fall against the backdrop of recent changes made to the ACBPS. The Immigration and Border Protection portfolio additional estimates statement of 2013–14 sums up these changes:
As part of the Administrative Arrangement Orders announced on 18 September 2013, the ACBPS was transferred from the Attorney–General’s Portfolio to the newly formed Immigration and Border Protection portfolio.
Following policy decisions taken since the 2013-14 Budget, the ACBPS will receive funding to implement a number of the government’s 2013 Election commitments.
The government will provide the ACBPS with $88.0m over four years from 2013-14 to implement the measure Tackling Crime – increased cargo and mail screening at the border. This measure will expand and enhance screening, examination, investigation and intelligence activities to increase the detection of illicit goods, including drugs and firearms. The government has agreed to fund this measure on an ongoing basis.[9]
A technical matter is corrected in relation to the new Infringement Notice Scheme (INS) which commenced on 1 February 2014. The Explanatory Memorandum notes:
Under the Act, prohibited imports can be seized and if this occurs then the claims process set out in Division 1 of Part XII of the Act is also triggered. Since the commencement of the INS, a technical error has been identified in the interaction of the INS with the claims process when dealing with prohibited imports.[10]
The Explanatory Memorandum sets out in detail the nature of the uncertainty which arises when an infringement notice is withdrawn.[11] Persons may make a claim for the return of the seized goods. In a recent press release, the ACBPS noted:
Goods may be returned where legislation exists, making the goods legal to import with appropriate permission or permits. Where no legislation exists for the import of prohibited goods, such as child exploitation material, the goods will remain in custody of Australian authorities.
Between 25 February 2013 and 25 February 2014 there were 1,440 claims for return of seized goods made in accordance with section 205B of the Customs Act 1901 (Cth).
In approximately two thirds of claims, the goods in question were not returned. However, in approximately one third of claims the goods were returned, usually after the importer was able to provide relevant permits to ACBPS.[12]
The Committee, at its meeting on 27 August 2014, resolved to refer the provisions of the Bill to the Legal and Constitutional Affairs Legislation Committee for inquiry and report by 30 September 2014.[13]
The Committee is currently inquiring into the Bill and will report on 30 September 2014.[14]
The Committee drew attention to the strict liability offence in proposed subsection 127(9) of the Act, inserted by item 18 of the Bill. The Committee noted that the:
… imposition of strict liability for this offence appears to be consistent with the committee’s established principles.
The Committee went on to note that in:
… developing this offence consideration was given to both the Committee’s Sixth Report of 2002 on the Application of Absolute and Strict Liability Offences in Commonwealth Legislation and the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers. The statement of compatibility (pp 4-5) also contains a detailed justification and explanation of the approach.[15]
Accordingly, the Committee made no further comment.
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.[16] The Government considers that the Bill is compatible.
The Parliamentary Joint Committee on Human Rights also considered that the Bill was compatible with human rights. However the Committee did draw attention to the strict liability offence in proposed subsection 127(9). The Committee noted:
While the statement of compatibility identifies and provides a justification for the proposed offence, it does not address the question of the standard of proof that a defendant would have to discharge in order to make out the available defence of honest and reasonable mistake of fact.
The imposition of a legal or evidential burden of proof on a defendant to establish a defence is a limitation of the presumption of innocence (article 14(1) of the [International Covenant on Civil and Political Rights] ICCPR) because a defendant’s failure to discharge the burden of proof may permit their conviction despite reasonable doubt as to their guilt.
The committee therefore draws to the minister’s attention the requirement, as set out in Practice Note 1, that statements of compatibility include sufficient detail of provisions which impact on human rights to enable the committee to assess their compatibility. This includes identifying and providing a justification for any reverse burden provisions in a bill.[17]
The Explanatory Memorandum states that the Bill has no financial impact.[18]
Authorised officer is currently defined in section 4 of the Act to mean ‘in relation to a section of this Act, an officer of Customs authorised in writing by the CEO to exercise the powers or perform the functions of an authorised officer under that section’. Item 4 inserts proposed subsection 4(1A) which provides that if the CEO makes an authorisation under the definition of ‘authorised officer’ and the authorisation is for officers who from time to time hold or occupy or perform the duties of specified offices or positions under specified sections of the Act, the authorisation extends to offices or positions that come into existence after the authorisation is given. The purpose of inserting proposed subsection 4(1A) is to ensure that authorisations can apply to offices and positions that come into existence after the authorisation to a class of offices is given (as is the situation that applies to delegations). This means authorisation instruments do not require regular updating to ensure that new offices are included.[19]
Item 5 repeals section 31 and substitutes proposed section 31. Currently section 31 provides that all goods on any ship or aircraft coming to Australia are subject to the control of Customs while the ship or aircraft is within the limits of any port or airport in Australia. Proposed section 31 provides that all goods on board any ship or aircraft arriving in Australia from a place outside Australia are subject to the control of the Customs while the ship or aircraft:
(a) is in port or at an airport in Australia
(b) at a place where a ship or aircraft has been brought because of stress of weather or other reasonable cause as mentioned in subsection 58(1)[20]
(c) is at a place that is the subject of a permission by the Collector of Customs under subsection 58(2) (which allows the Collector of Customs to give written permission, subject to conditions, for a ship or aircraft to be brought to a place, other than a port or airport and to remain at the place).
All ships or aircraft arriving in Australia will be subject to the control of Customs. Section 186 of the Act governs the general powers of examination of goods subject to Customs control. The Explanatory Memorandum notes:
To ensure that border risks and intervention activities can be managed appropriately, it is proposed that Customs control be extended to goods on board a ship or aircraft at a place to which a ship or aircraft has been brought under subsections 58(1) or 58(2) of the Act.[21]
Item 7 amends section 64AA by inserting proposed subsection 64AA(3A). Currently section 64AA sets out the reporting requirements for a ship or an aircraft on a voyage or flight to Australia from a place outside Australia. Proposed subsection 64AA(3A) provides that the CEO may determine by legislative instrument that reports for specified ships or aircraft in specified circumstances must be made before a specified time or before the occurrence of a specified event in accordance with the legislative instrument.
Currently under section 64AAA, the operator of a ship or aircraft must report to Customs matters relating to the ship’s stores or aircraft stores and any prohibited goods contained in those stores at the time of arrival. A similar provision to proposed subsection 64AA(3A) is inserted by item 10—proposed subsection 64AAA(3A). The Explanatory Memorandum notes that these amendments:
… will enable ACBPS to specify different reporting timeframes for different circumstances. In particular, these amendments will ensure that ACBPS are notified of the arrival, stores and prohibited goods for certain ships or certain aircraft in certain circumstances at a more appropriate time and enable ACBPS to adequately assess risk and deploy necessary resources for boarding and intervention activities.[22]
Section 127 deals with the use of ships’ and aircraft’s stores. Currently subsection 127(1) provides that these stores, whether shipped from a place outside Australia or in Australia are not permitted to be unloaded and are not to be used before the last port of departure in Australia, other than for passengers or crew, or for the service of the ship or aircraft. A violation is an offence of strict liability which incurs a maximum penalty of 60 penalty units.[23] However, subsection 127(1) does not apply if the Collector of Customs has consented to the unshipping, unloading or use under subsection 127(3).
Proposed amendments to section 127, at items 17 and 18 of the Bill, detail how and in what form applications for consent are to be made, what conditions may apply to the consent, and the consequences of not complying with conditions contained in the approval:
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proposed subsection 127(7) — the CEO may approve different forms of applications for different circumstances and by different kinds of masters, pilots and owners of ships and aircraft. The Explanatory Memorandum notes that the amendments to improve application processes ‘will also support initiatives to enable online applications for these permissions’
[24]
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proposed subsection 127(8) — an approval given under subsection 127(3) by the Collector of Customs is subject to any conditions contained in the approval which the Collector considers necessary for the protection of the revenue of Customs or to ensure compliance with the Customs Acts
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proposed subsection 127(9) — creates an offence of strict liability if a person holds an approval under subsection 127(3) and does something, or neglects to do something, which breaches a condition of the approval. The maximum penalty is 60 penalty units.
Currently section 129 provides that the owner or master of a ship or the pilot or owner of an aircraft may apply to the Collector of Customs for approval to takes stores on board the ship or aircraft and the Collector may grant approval. Section 129 also concerns any requirements that may be part of the approval and the consequences for non-compliance with those requirements. The section creates an offence of strict liability for not complying with the requirements of an approval, punishable upon conviction by a penalty not exceeding 60 penalty units. Stores taken on board without complying with the requirements of the approval will be deemed to be prohibited exports. Item 21 inserts two additional subsections to this section, proposed subsections 129(5) and (6). Proposed subsection 129(5) provides the requirements for an application. It must be in writing, on an approved form, contain the information that the form requires and be signed as indicated on the form. Proposed subsection 129(6) provides that the CEO may approve different forms for various circumstances, different kinds of masters or owners of ships or pilots and owners of aircraft, or for different kinds of ships and aircraft.
Part 10 of the Act, section 175 in particular, concerns matters related to the coasting trade. Section 175 concerns the restrictions in place for transferring goods between coastal ships and coastal aircraft and ships and aircraft that are on international voyages or flights (that is, a voyage or flight between a place in Australia and a place outside Australia – section 130C), or prescribed voyages or flights (that is, a voyage or flight between places outside Australia, that does not land in Australia). The Collector may give permission (under subsection 175(3C)) to the owner or master of a coastal ship or the owner or pilot of a coastal aircraft for such transfers to take place. A coastal ship is defined in subsection 175(1) as a ship that is not currently engaged in making an international voyage or a prescribed voyage and a coastal aircraft means an aircraft not currently engaged in making an international flight or a prescribed flight. Item 22 inserts proposed subsections 175(3D) to (3G).
Proposed subsections 175(3D) and 3(E) provide that permission under subsection 175(3C) may only be given on application by the owner or master of a coastal ship, or the owner or a pilot of a coastal aircraft. Proposed subsection 175(3F) sets out the requirements for an application. An application must be in writing, on an approved form, contain such information as the form requires and be signed in the manner indicated on the form. Proposed subsection 175(3G) provides that the CEO may approve different forms for different circumstances, for different kinds of owners or masters of coastal ships or owners or pilots of coastal aircraft, or in relation to different kinds of coastal ships or aircraft.
Section 186 of the Act is concerned with the general powers of examination of goods subject to the control of Customs. Item 27 inserts proposed section 186AA which deals with the general powers of customs officers to examine goods loaded onto or unloaded from ships or aircraft coming to Australia from a place outside Australia or to a place outside Australia from a place in Australia—that is, the section applies only to international voyages and flights and not purely domestic voyages and flights.
Goods are subject to the control of Customs while they are being examined.
Proposed subsection 186AA(2) provides that if an officer believes that goods are to be loaded onto a ship or aircraft at an examinable place and will be unloaded at another examinable place on the same voyage or flight then any officer (subject to proposed subsections 186AA(5) and (6), see below) may examine the goods at the first examinable place before they are loaded onto a ship or aircraft. The goods are subject to the control of Customs while they are being examined.
‘Examinable place’ is defined at proposed subsection 186AA(8) as:
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a port or airport in Australia
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a place where a ship or aircraft has been brought because of stress of weather or other reasonable cause as mentioned in subsection 58(1)
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a place that is the subject of a permission by the Collector of Customs under subsection 58(2).
(This definition mirrors proposed section 31, discussed above.)
Conversely, proposed subsection 186AA(3) provides that goods loaded onto a ship or aircraft at an examinable place and unloaded at another examinable place on the same voyage or flight may be examined by an officer, (subject to proposed subsections 186AA(5) and (6)) at the examinable place where they are unloaded. The goods are subject to the control of Customs while they are being examined.
Proposed subsection 186AA(4) provides that the cost of an examination, including the removal of goods to a place of examination, is to be borne by the owner of the goods.
Proposed subsection 186AA(5) provides that an officer may do whatever is reasonably necessary to permit the examination of the goods. The officer may also arrange for another officer or person with the necessary experience to assist in the examination of the goods.
Proposed subsection 186AA(6) sets out examples of what may be done in examining goods, including:
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opening a package in which goods are or may be contained
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using scanning or X-ray equipment
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testing or analysing goods
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measuring or counting the goods
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if the goods are documents, reading those documents
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using dogs to assist in examining the goods.
As mentioned above, a new Customs Act Infringement Notice Scheme (INS) commenced on 1 February 2014.[25] Subsection 243X(1) of the Act allows regulations to be made to set up an INS. Schedule 1ABA of the Customs Regulations 1926 specifies most matters in relation to the INS, except the maximum penalty, which is provided in subsection 243X(2).[26] The Attorney-General’s Department’s Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers explains:
An infringement notice is a notice issued by an authority, either in person or through the post, setting out the particulars of an alleged contravention of an offence or civil penalty provision.
The infringement notice will give the person to whom the notice is issued the option to pay the fine specified in the notice in full, or elect to have the offence heard by a court.
Notices are generally issued for minor offences that are regulatory in nature, such as failing to comply with reporting obligations, respond to a notice or provide information.[27]
Current subsection 243Y(1) provides that if a person pays a penalty under an infringement notice that has been issued as an alternative to prosecution for the offence of importing prohibited goods, and the infringement notice has not been withdrawn, the goods are condemned as forfeited to the Crown. As a result, they cannot be claimed (subsection 205B(1A)).
In circumstances where a claim can be made for seized goods, it must be made within 30 days of a seizure notice being issued (subsection 205D(1)).
A deficiency has been identified in how these provisions interact. Very basically, a problem arises if a penalty has been paid under an infringement notice, which is later withdrawn. While the infringement notice is current, a claim cannot be made for the goods as they are condemned as forfeited to the Crown under subsection 243Y(1). If the infringement notice is withdrawn, the goods will no longer be condemned as forfeited to the Crown and a claim could be made for them, but the timeframe for making such a claim may have expired.
In addition to impacting on the person who might make a claim for the goods, technically this may also have the result that the goods could not be taken as condemned as forfeited under section 205C of the Act (which covers the situation where a claim is not made for seized goods). This is because one of the prerequisites for the forfeiture of goods under that section is that a claim was able to be made for the goods under section 205B. However, a claim will not have been able to be made if a penalty under an infringement notice was paid and the notice was withdrawn more than 30 days after the seizure notice was issued–in this circumstance a claim would not have been possible for the period before the withdrawal of the notice (due to subsection 205B(1A)) or after the withdrawal (due to the timeframe provided in subsection 205D(1)).
Amendments at items 29 to 41 will address the problem.
Proposed subsection 243Y(4), inserted by item 41, provides that subsection 243Y(1) ceases to apply if the infringement notice is withdrawn. This means that the goods will no longer be condemned as forfeited to the Crown. Proposed subsection 205B(1B), inserted by item 31, provides that subsection 205B(1A) ceases to apply to the goods if subsection 243Y(1) ceases to apply because of the operation of subsection 243Y(4). This means that a claim for return of the goods can be made in these circumstances.
As set out above, section 205C of the Act covers the situation where a claim is not made for seized goods. Under proposed subsection 205C(2), inserted by item 35, if a seizure notice has been served and a penalty under an infringement notice has been paid, if the infringement notice is then withdrawn a person has 30 days after the withdrawal of the infringement notice to make a claim for the goods. If no claim is made within that time, the goods are condemned as forfeited to the Crown.
As a result of these amendments, a person will have 30 days after withdrawal of an infringement notice to make a claim for their seized goods and, if a claim is not made within that timeframe, the goods will be condemned as forfeited to the Crown.
The broader reforms to the Australian Customs and Border Protection Service, outlined in the Blueprint for Reform 2013–2018 provide a backdrop for the changes contained in the Bill. Some of the changes are minor and others are a little more substantial, however they accord with the proposals for reform and initiatives for ‘tackling crime’ at the border.
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