Bills Digest no. 64, 2016–17
PDF version [627KB]
Paul Davidson
Economics Section
16 February 2017
Contents
Purpose of the Bill
Structure of the Bill
History of the Bill
Committee consideration
Senate Legal and Constitutional
Affairs Legislation Committee
Selection of Bills Committee
Senate Standing Committee for the
Scrutiny of Bills
Policy position of non-government
parties/independents
Position of major interest groups
Financial implications
Statement of Compatibility with Human
Rights
Parliamentary Joint Committee on
Human Rights
Key issues and provisions
Schedule 1—Prohibited exports
Schedule 2—Australian Trusted Trader
Programme
Schedule 3—Import processing charges
Schedule 4—Permissions to move, alter
or interfere with goods for export
Schedule 5—Tariff concession orders
Produced in Australia—current law and
proposed amendment
Stakeholder views
Substitutable goods—current law and
proposed amendment
Reason for change
Extension of timeframe—current law
and proposed amendment
Effect of amendment
Stakeholder views
Schedule 6—Repeal of redundant
provisions relating to the collection of duty on goods imported for a temporary
purpose
Schedule 7—Trade descriptions
Effect of amendment
Schedule 8—Maritime powers
Schedule 9—Repeal of Acts
Date introduced: 30
November 2016
House: House of
Representatives
Portfolio: Immigration
and Border Protection
Commencement: Schedule
1 commences on the 28th day after the Act receives Royal Assent. Schedule 2 commences on a day to be fixed by
proclamation or six months after Royal Assent, whichever occurs first. Schedules 3 to 9 commence the day after the
Act receives Royal Assent.
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s 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 Federal Register of Legislation
website.
All hyperlinks in this Bills Digest are correct as
at February 2017.
Purpose of
the Bill
The purpose of the Customs
and Other Legislation Amendment Bill 2016[1]
(‘the Bill’ or ‘the current Bill’) is to make a number of amendments to the Customs Act 1901 (Cth), the Commerce (Trade
Descriptions) Act 1905
(Cth), and the Maritime Powers Act
2013 (Cth).
The Bill also proposes to repeal both the Customs (Tariff
Concession System Validations) Act 1999 (Cth) and the Import Processing
Charges (Amendment and Repeal) Act 2002 (Cth) in full.
Structure
of the Bill
The Bill comprises nine Schedules:
- Schedules
1–6 amend the Customs Act and relate to prohibited exports; the
Australian Trusted Trader Programme; import processing charges; permission to
move, alter or interfere with goods for export; tariff concession orders; and
the delivery of goods
- Schedule
7 amends the Commerce (Trade Descriptions) Act to allow Regulations
made under that Act to prescribe penalties for offences
- Schedule
8 amends the Maritime Powers Act relating to the exercise of certain
maritime powers and
- Schedule
9 repeals the Customs (Tariff Concession System Validations) Act and
the Import Processing Charges (Amendment and Repeal) Act.
History of
the Bill
The Migration
and Maritime Powers Amendment Bill (No. 1) 2015 (Cth)[2]
(‘the Migration and Maritime Bill’) lapsed with the prorogation of the 44th
Parliament on 15 April 2016. The amendments to the Maritime Powers Act contained
in Schedule 4 to the Migration and Maritime Bill have been reflected in Schedule
8 of the Bill. The Migration and Maritime Bill was sent to Committee for
inquiry and report (see below). A Bills
Digest was prepared for the Migration and Maritime Bill.[3]
The Customs
and Other Legislation Amendment Bill 2016 (Cth)[4]
(‘the lapsed Bill’) was introduced in the 44th Parliament and lapsed with
the prorogation of Parliament. The lapsed Bill contained six Schedules. Those
six Schedules are reflected as Schedules 3–8 in the Bill. The lapsed
Bill was sent to Committee for inquiry and report, but the inquiry itself
lapsed with the prorogation of Parliament (see below).
Committee
consideration
Senate Legal and Constitutional Affairs Legislation
Committee
The Legal and Constitutional Affairs Senate Committee
inquiry report recommended that the Migration and Maritime Bill be passed,
subject to a clarification in the Explanatory Memorandum that is not relevant
to the current Bill.[5]
The lapsed Bill was referred to the Senate Legal and
Constitutional Affairs Legislation Committee for inquiry and report by 20 June
2016.[6]
However, with the prorogation of Parliament on 15 April 2016 the inquiry
lapsed.
Selection
of Bills Committee
On 9 February 2017, the Selection of Bills Committee decided
not to refer the Bill to a Committee for inquiry and report.[7]
Senate
Standing Committee for the Scrutiny of Bills
The Scrutiny of Bills Committee has sought advice from the
Minister on item 4 of Schedule 7 to the Bill, which would amend
the Commerce (Trade Descriptions) Act to allow Regulations made under
that Act to prescribe penalties not exceeding 50 penalty units (currently
$9,000[8])
for offences against the Regulations.[9]
While noting that the proposed provision complies with the Guide to Framing
Commonwealth Offences, Infringement Notices and Enforcement Powers,[10]
the Committee reiterated its expectation that significant matters, such as the
imposition of penalties, should usually be dealt with in primary legislation and
that any provisions that propose to allow penalties of any level to be imposed
through delegated legislation should be justified in the Explanatory
Memorandum.[11]
The Committee made no comment on the lapsed Bill or on
Schedule 4 of the Migration and Maritime Bill.[12]
Policy
position of non-government parties/independents
The Australian Greens issued a Dissenting Report on the
Senate inquiry into the Migration and Maritime Bill. The Greens expressed
concern that the proposed amendments to the Maritime Powers Act in the
Migration and Maritime Bill (which are replicated in Schedule 8 of the current
Bill) ‘include[d] provisions in breach of international law and undermine[d]
Australia's relationship with other states, by purporting to authorise the turn
back of boats into another country’s territorial waters.’[13]
Position of
major interest groups
Five submissions were received by the Senate Legal and
Constitutional Affairs Legislation Committee as part of its (lapsed) inquiry
into the lapsed Bill.[14]
The submissions mainly related to the proposed amendments in Schedule 6 of the
lapsed Bill, which sought to amend the Maritime Powers Act. (The
amendments are replicated in Schedule 8 to the current Bill.) The views
of submitters are set out below in the discussion of individual Schedules.
Financial
implications
The Government considers that the Bill will have no
financial impact.[15]
However, the proposed amendments in Schedule 3 which
allow the exemption of specified persons, specified goods, or both, from the
liability to pay the import declaration processing charge, may reduce future
government revenues. Additionally, to the extent that any legislative
instrument made (as a result of the proposed amendments) has retrospective
effect on imported goods which are covered by the effect of the instrument,
those persons who paid the liability will be entitled to a refund of the charge
paid. To the extent that such a situation arises, government revenues will be reduced
(see below). Import processing charges were estimated at $370.6 million of
revenue in 2015–16.[16]
The proposed amendments in Schedule 5 may increase
customs duties and hence government revenues. The amendments have the effect of
lowering the threshold that Australian businesses need to meet to demonstrate
that they are capable of producing substitutable goods which are the subject of
a tariff concession order application. The effect of making it more difficult
to grant a tariff concession order would mean that the imported good (assuming
that the good is still imported) would be subject to a tariff rate (other than
zero), rather than being imported duty-free under a tariff concession order
(see below).
The proposed amendments under Schedule 7 may
increase government revenue due to the significant increase in the value of
fines for offences against the Commerce (Trade Descriptions) Act (see below).
Statement of Compatibility with Human Rights
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.[17]
Parliamentary
Joint Committee on Human Rights
At the time of writing, the Parliamentary Joint Committee on
Human Rights had not considered the current Bill. The Committee considered that
the lapsed Bill did not raise human rights concerns.[18]
The Committee raised a number of concerns in relation to the Migration and
Maritime Bill, but not in respect of the amendments that are replicated in the
current Bill.[19]
Key issues
and provisions
Schedule
1—Prohibited exports
Section 112 of the Customs Act 1901
allows Regulations to be made to prohibit the exportation of specified goods
from Australia. Those Regulations are the Customs (Prohibited
Exports) Regulations 1958. Regulations made under section 112 may prohibit
the export of goods:
- in
all circumstances
- in
certain circumstances
- to
a specified place or
- unless
specified conditions or restrictions are complied with.[20]
Without limiting the general power to make Regulations prohibiting
the exportation of goods unless specified conditions or restrictions are
complied with, subsection 112(2A) specifies certain issues that may be dealt
with in the Regulations. Paragraph 112(2A)(b) provides that, in relation to
licences or permissions granted under the Customs Act, the Regulations
may make provision for and in relation to a number of circumstances, including the
surrender or revocation of a licence or permission due to failure to comply
with a condition or requirement.
Item 2 proposes to amend paragraph 112(2A)(b) of
the Customs Act to explicitly provide that the Regulations may make
provision for the revocation of an export licence or permission if the Defence Minister
is satisfied that the exportation of the goods would prejudice the security,
defence or international relations of Australia. Item 3 proposes to repeal
subsections 112(2AB) to (2AD) which largely cover analogous existing
provisions that permit the Defence Minister to revoke a licence or permission
to export goods. Item 4 is an application provision and proposes that Regulations
made under new subparagraph 112(2A)(b)(v) (inserted by item 2)
apply to a licence or permission that is granted on or after the commencement
of item 4 (which will be 28 days after Royal Assent), as well as
applying to licences or permissions that have been granted and were currently
in force immediately prior to the commencement of item 4.
Schedule
2—Australian Trusted Trader Programme
The Australian Trusted Trader Programme (the Programme) is a
voluntary trade facilitation initiative that is open to Australian businesses
with a secure supply chain and compliant trade practices.[21]
The Programme promises benefits such as: priority service when requesting
advanced rulings on tariffs, valuations, and origin; less extensive
examinations of goods; and use of the Australian Trusted Trader logo.[22]
The Comptroller-General of Customs is empowered to establish the Programme under
Part XA of the Customs Act and may prescribe rules under section 179 of
that Act. The relevant rules are the Customs (Australian
Trusted Trader Programme) Rule 2015 (the Rule).
In order to become a Trusted Trader under the current
provisions, an entity needs to nominate to participate in the Programme and the
Comptroller-General must consider ‘that it is reasonably likely that the entity
will satisfy the qualification criteria set out in the Rule’. If these requirements
are satisfied the Comptroller-General may enter into an agreement with the
entity. The agreement confers interim trusted trader status on
the entity (section 176A of the Customs Act). Once the
Comptroller-General is satisfied that the entity satisfies the qualification
criteria set out in the Rule (through an on-site validation of the entity’s
trade compliance and supply chain security measures[23])
he or she may vary the agreement to provide the entity with ongoing
trusted trader status (section 177). In summary, the effect of the
amendments under Schedule 2 of the Bill is to remove interim trusted
trader status.
Item 2 will amend subsection 176A(1) of the Customs
Act to remove the ability to confer interim trusted trader status on an entity
that the Comptroller-General considers is ‘reasonably likely’ to satisfy the qualification
criteria in the Rule. Instead, trusted trader status will be able to be
conferred on entities that satisfy those qualification criteria.
Item 3 proposes to repeal and replace subsection 176A(3),
which currently confers interim trusted trader status on an entity on entry to a
trusted trader agreement. Proposed subsection 176A(3) will allow the Comptroller‑General
of Customs to specify in a trusted trader agreement with an entity one or more
obligations covered by subparagraphs 179(1)(d)(i)–(ii). Those subparagraphs
relate to import and export obligations under Parts IV and VI of the Customs
Act. The effect of item 3 is to allow the Comptroller-General of
Customs to specify in a Trusted Trader Agreement that an entity is released
from the obligations under Parts IV or VI, or that the entity may satisfy the
obligations under Parts IV or VI in a different manner. In the latter case, the
agreement will state the manner in which those obligations are to be satisfied.
Item 3 would also insert proposed subsection
176A(4),which would provide that an entity that is a party to a trusted
trader agreement may receive benefits that are prescribed by the rules under
existing paragraph 179(1)(e).
Items 4-6 propose minor consequential amendments,
including the repeal of Subdivision B of Division 2 of Part XA of the Customs
Act.
Currently a decision of the Comptroller-General of Customs to
refuse to vary a trusted trader agreement under subsection 177(2) is reviewable
by the Administrative Appeals Tribunal (AAT) (paragraph 273GA(1)(jd)). Subsection
177(2) relates to the Comptroller-General of Customs providing an entity
special treatment in relation to that entity’s obligations under Parts IV and
VI of the Customs Act. Item 7 proposes to remove this review right.
This is consequential upon the repeal of section 177 by item 4. Administrative
Appeals Tribunal review will continue to be available for a decision by the Comptroller-General
not to enter into a trusted trader agreement with an entity (paragraph
273GA(1)(jc)).
Schedule
3—Import processing charges
When most goods are imported for home consumption or warehousing,
the owner must make an import declaration or a warehousing declaration to the
Department (section 68 of the Customs Act). For this the owner becomes
liable to pay an import declaration processing charge (under section 71B of the
Customs Act) or a warehouse declaration processing charge (under section
71DI of the Customs Act). If the goods fall within the broad description
of goods to which the charges apply, there are no exemptions.
Item 1 of Schedule 3 amends section 71B of the
Customs Act to allow the Minister to make a legislative instrument exempting
specified persons, specified goods, or both, from the liability to pay an
import declaration processing charge. It also expressly provides that a
processing charge is a debt due to the Commonwealth. Item 1 also
provides that where an import declaration processing charge has been paid by a
person covered by the legislative instrument (after it has taken effect) they
are entitled to a refund of the charge. Item 1 proposes to permit
legislative instruments made under proposed subsection 71B(4) to
possibly have retrospective effect and may have an impact on Commonwealth
finances (see above).
Item 2 of Schedule 3 amends section 71DI of
the Customs Act to expressly provide that the amount of a warehouse
declaration processing charge is a debt due to the Commonwealth.
Stated justification for the amendment
The Explanatory Memorandum to the Bill says that the
exemption ‘allow[s] Australia to honour any international agreements that
specifically exempt certain imports from payment of fees at the border.’[24]
Schedule
4—Permissions to move, alter or interfere with goods for export
The effect of Schedule 4 is to amend the Customs
Act so as to expand the circumstances under which goods for export can be
moved, altered or interfered with.
Section 96A of the Customs Act deals with goods
sold at duty free shops. Subsection 96A(2) allows permission to be given for
goods from duty free shops to be taken from Australia by individual travellers
on an international flight without having been entered for export. Item 3
proposes to permit goods that are subject of a permission in force under
subsection 96A(2) to be moved, altered or interfered with.
As noted in the Explanatory Memorandum to the Bill, since
international gateway airports commenced security screening all liquids,
aerosols and gels in 2014, the screening procedures have applied to, among
other things, the duty-free ‘sealed bag scheme’. In the event that an alarm was
triggered when items covered under the sealed bag scheme passed through a
security scanner, the sealed bag was to be opened and the duty-free goods
removed from it for checking. Currently, opening the sealed bag and tampering
with the contents constitutes an offence under section 33 of the Customs Act,
unless such interference is authorised.[25]
The effect of item 3 is to authorise such interference, movement or
alteration.
Item 3 makes consequential amendments and item 4
deals with the application of the new rules.
Schedule
5—Tariff concession orders
Schedule 5 proposes to amend the Customs Act
in relation to tariff concession orders.
Tariffs are charges levied on imports. A dominant purpose
of tariffs is to protect manufacturers of Australian‑made goods that are
substitutes for particular imports. Where there are no Australian-made
substitutes the case for tariffs on those imports is diminished. The mechanism
in the Customs Act for exempting goods from tariffs is the tariff
concession order. Tariff concession orders (TCOs) relate to the importation of
goods where no substitutable Australian good is produced in Australia in the
ordinary course of business. The effect of a TCO applying to a particular good
is that that good is imported duty-free, rather than being subject to its
applicable tariff rate.
Produced in
Australia—current law and proposed amendment
Item 1 proposes to repeal and substitute subsection
269D(1) of the Customs Act, which defines the circumstances under which
goods are deemed to have been produced in Australia. Essentially the definition
currently provides that goods (other than unmanufactured raw products) are
taken to be produced in Australia if:
- the
goods are wholly or partly manufactured in Australia and
- not
less than one quarter of the factory or work costs of the goods is represented
by the sum of the values of Australian labour, Australian materials, and
factory overhead expenses incurred in Australia in respect of the goods.
Item 1 proposes to remove the requirement that not
less than one quarter of the factory or work costs of the goods be incurred in
Australia. As noted in the Explanatory Memorandum to the Bill, satisfying this criterion
requires detailed accounting evidence, which is costly for businesses to
provide. The rationale for the amendment is to therefore lower the regulatory
burden on these businesses by no longer requiring detailed accounting
information.[26]
In its current form, subsection 269D(1) effectively
provides an avenue for Australian businesses to stop or revoke a TCO. The
effect of the amendment will make it easier for Australian businesses to
demonstrate that they have produced goods in Australia for the purposes of a
TCO application. In turn, that means that the person applying for a TCO will
have more difficulty in demonstrating that there are no substitutable
Australian goods, especially given the application of subsection 269D(2) in
conjunction with the broad definition of substantial process in the
manufacture of the goods in subsection 269D(3). By lowering the
regulatory burden on Australian businesses that purport to be making
substitutable Australian goods, the amendments have increased the regulatory
burden on Australian businesses seeking to import goods duty-free under a TCO.
By reducing the evidentiary burden on businesses contesting a TCO application,
it may be that less TCO applications are granted and as a result, duties will
continue to be paid on such goods that are the subject of such applications. In
turn, tariff revenue for the government may increase.
Item 2 makes necessary consequential amendments to
the Customs Act as a result of item 1.
Stakeholder
views
In its submission on the lapsed Bill, the Law Council of
Australia submitted that the rationale for tariff concession orders is to
remove an otherwise punitive tax on the operations of Australian businesses
where there are no domestic substitutable goods produced. Since the effect of
granting a tariff concession order is to reduce the tariff from its current
rate to duty‑free, any amendment that makes it more difficult to achieve
this outcome is a protectionist measure.[27]
In relation to the amendment to subsection 269D(1) of the Customs Act
proposed by item 1 of Schedule 5, the Law Council submitted that the current
requirement to show that at least 25 per cent of the factory or works
costs of producing a product are incurred in Australia causes an inconvenience
to one firm, but that there are potentially thousands of importers who benefit
from a tariff concession order being granted and receiving duty-free access to
the good.[28]
Substitutable
goods—current law and proposed amendment
Section 269C currently provides that a TCO application is
taken to meet the core criteria if, on the day the TCO application was lodged,
no substitutable goods were produced in Australia in the ordinary course of
business. Section 269E currently provides a definition of substitutable goods
that were produced in the ordinary course of business. The substantive
amendments proposed by item 3 are in relation to the capacity of an
Australian producer to produce substitutable goods; and to extend the timeframe
for producers to demonstrate that they have made goods requiring the same
labour skills, technology and design expertise as the substitutable goods.
Reason for
change
The first of the substantive amendments is based on a
recent decision of the Administrative Appeals Tribunal (AAT), where it was held
that in order for made-to-order capital equipment to be considered a
substitutable good, it must have been previously produced in Australia. The AAT
decided that section 269E requires consideration of:
... whether goods that are substitutable
goods in relation to the goods that are the subject of a TCO application (TCO
goods) have been produced in Australia in the ordinary course of business. They
do not deem substitutable goods to have been produced in Australia in the
ordinary course of business when there have been none.[29]
However, on appeal to the Full Federal Court the
Tribunal’s decision was unanimously overturned.[30]
An application to seek special leave to the High Court of the Full Federal
Court’s decision was dismissed.[31]
The amendment therefore provides additional legislative guidance consistent
with the Full Federal Court’s decision. That is, the proposed amendments
clarify that in order to be a substitutable good, made-to-order capital equipment
does not need to have been produced in Australia in the past, but instead must
be capable of being produced in Australia.
Extension
of timeframe—current law and proposed amendment
The second proposed amendment relates to existing
subparagraph 269E(2)(c)(i) which provides that made-to-order capital equipment
that is a substitutable good is taken to be produced in Australia in the
ordinary course of business if a producer in Australia has made goods requiring
the same labour skills, technology and design expertise as the substitutable
goods in the two years before the application was lodged. The amendment
proposes to extend the timeframe to five years before the application was
lodged.
Effect of
amendment
The change allows Australian manufacturers a longer period
to demonstrate that they have the capacity to produce substitutable goods in
respect of goods that are the subject of a TCO application. It therefore also
means that firms applying for TCOs will have a more onerous task as they are
required to conduct inquiries to assist in establishing whether there were any
Australian producers of substitutable goods.[32]
Hence the amendment can be seen as a means of protecting domestic
manufacturing.
Stakeholder
views
In relation to proposed subsection 269E(2) of the Customs
Act, at item 3, the Law Council of Australia submitted that the
proposed amendments, by making it easier for Australian manufacturers to assert
that they could hypothetically manufacture goods that are the subject of a
tariff concession order application, would amount to a protectionist measure,
and could create a risk that tariff concession orders are refused when it would
be appropriate for them to be granted. The Law Council submitted that if this
occurred, ‘it would impose higher costs on businesses that import made to order
capital goods which costs would be passed on to other businesses and consumers
downstream in the supply chain’.[33]
The Law Council further submitted that new subsection 269E(2) could also expose
existing tariff concession orders to challenge.
Schedule 6—Repeal
of redundant provisions relating to the collection of duty on goods imported
for a temporary purpose
Item 1 of Schedule 6 repeals subsection
162A(5A) which relates to duty not being payable on goods brought into
Australia for a purpose covered by Regulation 125A of the Customs Regulation
1926 (Cth). Regulation 125A was originally made so as to allow goods to be
temporarily imported for the Sydney 2000 Olympic Games and a number of related
events.[34]
The Customs Regulations 1926 sunsetted on 1 April 2015 and
Regulation 125A was not remade in the current Regulations, the Customs Regulation
2015.[35]
Item 1 therefore repeals subsection 162A(5A) as it is redundant. Items
2 and 3 make necessary consequential amendments to the Customs Act (removing
references to subsection 162A(5A)) as a result of item 1.
Schedule
7—Trade descriptions
Schedule 7 amends the Commerce (Trade
Descriptions) Act 1905. The Commerce (Trade Descriptions) Act
deals with the import and export of goods without a prescribed trade
description, and to the import and export of goods to which a false trade
description has been applied.[36]
Item 1 proposes to amend subsection 5(1) which
relates to the inspection of imports and exports. Currently the law provides
that an officer may inspect and examine all prescribed goods which are imported
or destined for export. This means that the officer’s power to inspect goods
relies on whether the goods to be inspected are prescribed in Regulations. Item
1 amends subsection 5(1) to provide that goods can be inspected by an
officer who knows or reasonably believes that those goods are prescribed in the
Regulation. The Explanatory Memorandum states that this amendment ‘better
reflects current drafting practice’.[37]
Sections 7 and 11 of the Commerce (Trade Descriptions)
Act allows Regulations to be made to prohibit the import or export of goods
without a trade description that meets prescribed requirements. Section 16
of the Commerce (Trade Descriptions) Act provides that if such Regulations
are made, they must not prescribe a trade description which discloses trade
secrets of manufacture or preparation, unless the Governor‑General
considers that the disclosure of the trade secret is necessary for the
protection of the health or welfare of the public. Item 2 replaces the
reference to the Governor-General in section 16 with a reference to the
Minister. As stated in the Explanatory Memorandum, this ‘recognises that the
Minister is responsible for forming opinions and the Governor-General acts on
the advice of the relevant Minister’.[38]
Item 4 amends section 17 of the Commerce (Trade
Descriptions) Act which is a broad Regulation making power. Item 4
proposes to insert subsection 17(2) to allow Regulations which are made
under section 17 to provide for penalties, not exceeding 50 penalty units, for
offences against those Regulations. The relevant Regulations are the Commerce (Imports)
Regulations 1940 (Cth). Currently Regulation 26 of those Regulations provides
that the consequence for contravening any provision of the Regulations is a
penalty of $40.
Effect of
amendment
One penalty unit is currently $180.[39]
If the maximum penalty were to be imposed on an offence against the Regulations,
it would amount to $9,000. This provides for a potentially large increase in
relevant penalties (up to 225 times the current penalty amount). As set out
above, the Scrutiny of Bills Committee has sought a justification from the
Minister on the prescription of penalties in delegated, rather than primary,
legislation.[40]
Schedule
8—Maritime powers
Schedule 8 amends the Maritime Powers Act
2013 (Cth).[41]
Section 40 of the Maritime Powers Act provides that the Act does not
authorise the exercise of powers in another country except in certain
prescribed circumstances (such as at the request or with the agreement of the
other country).Section 8 of the Maritime Powers Act relevantly defines a
‘country’ to include the territorial sea and archipelagic waters of the
country.
Proposed subsection 40(2), at item 2 of
Schedule 8, provides that subsection 40(1) will not apply to an exercise of
powers in the following circumstances:
- the exercise of powers is part of a continuous exercise of powers
that commenced in accordance with any applicable requirements of Part 2
(disregarding new subsection (2)) and
- occurs in the course of passage of a vessel or aircraft through
or above waters that are part of a country; and a relevant maritime officer, or
the Minister, considers that the passage is in accordance with the 1982 United
Nations Convention on the Law of the Sea.[42]
The rationale for this amendment is explained in the
Explanatory Memorandum in the following terms:
The intention behind section 40 is to ensure that powers are
exercised under the Maritime Powers Act in a manner consistent with the
principle of territorial sovereignty at international law. Thus the use of
enforcement powers within another country normally would require some form of
agreement by that country. However, the section did not explicitly allow for
the exercise of powers in the course of passage through and over waters within
another country already permitted under international law, as reflected in
the Convention. Examples of such passage include a vessel in the course
of innocent passage, transit passage or archipelagic sea lanes passage. In
those circumstances, under international law, no further agreement or approval
by the coastal state is required...The purpose of the amendment is to confirm
the operation of the Maritime Powers Act in circumstances where vessels and
aircraft are considered to be exercising passage rights consistent with the
Convention. [Emphasis added][43]
The Andrew and Renata Kaldor Centre for International
Refugee Law (Kaldor Centre) is of the view that this amendment is ‘intended to
justify activities taking place in the territorial waters of other countries,
such as Indonesia, pursuant to Operation Sovereign Borders’.[44]
To this end, the Kaldor Centre notes that ‘turning back boats and patrolling
for this purpose within the territorial waters of another State do not
constitute innocent passage under the Convention ...’.[45]
Proposed subsection 40(3) preserves the lawfulness
of the activity under domestic law in circumstances where there is a defective
consideration of the Convention. The Kaldor Centre states that ‘the fact
that a relevant maritime officer or the Minister mistakenly considers that the
exercise of powers is consistent with the Convention cannot render the
exercise of powers lawful as a matter of international law’.[46]
The Kaldor Centre considered that the amendments to
section 40 appeared ‘to authorise the exercise of powers even in circumstances
where this is contrary to Australia’s obligations’ under international
law.[47]
Similar concerns were expressed in a submission by the Refugee Council of
Australia[48]
and the Law Council of Australia.[49]
The Department of Immigration and Border Protection
considers that the proposed amendments to section 40 provides clarification and
remains consistent with Australia’s international obligations.[50]
Items 1 and 3 are consequential provisions. Item
3 provides that the amendments made by Schedule 8 apply in relation to an
exercise of powers even if the authorisation for exercise of those powers was
provided prior to the commencement of the amendments; or that the powers were
exercised in the course of a continuous exercise of powers that started prior
to the commencement of the amendments; or in relation to a person, vessel or
aircraft who or that were detained or otherwise held prior to the commencement
of the amendments; or in any situation in relation to which powers were (or
could have been) exercised prior to the commencement of the amendments. Item
3 also provides that the amendments made by Schedule 8 have no effect on
the interpretation of the Maritime Powers Act, prior to the commencement
of the amendments, in relation to the exercise of powers before Schedule 8
commences.
Schedule
9—Repeal of Acts
Schedule 9 proposes to repeal the Customs (Tariff
Concession System Validations) Act 1999 (Cth). The Customs (Tariff
Concession System Validations) Act operated for a discrete period of time
between 15 July 1996 and 31 May 1999, to validate decisions that had been
made under defective delegations.[51]
The Customs (Tariff Concession System Validations) Act is therefore
largely redundant and item 1 proposes that the whole of the Act be
repealed. The only part of the Customs (Tariff Concession System
Validations) Act that is potentially not redundant relates to the validity
of decisions made, acts and things done, in reliance on affected delegations
under section 5 of that Act. Therefore item 3 is a proposed savings
provision to ensure that actions taken in accordance with section 5 continue to
be valid, notwithstanding the repeal of the Act by item 1.
Item 2 proposes to repeal the Import Processing
Charges (Amendment and Repeal) Act 2002 (Cth). That Act imposed import processing
charges until the Customs
Legislation Amendment and Repeal (International Trader Modernisation) Act 2001 (Cth) took full
effect in 2005 and the import processing charge regime was covered by the Import Processing
Charges Act 2001 (Cth).
According to the Explanatory Memorandum to the Bill, charges under the Import
Processing Charges (Amendment and Repeal) Act ceased to be used from 3 February
2006 and as such the Act is obsolete.
[1]. Parliament
of Australia, ‘Customs
and Other Legislation Amendment Bill 2016 homepage’, Australian Parliament
website.
[2]. Parliament
of Australia, ‘Migration
and Maritime Powers Amendment Bill (No. 1) 2015 homepage’, Australian
Parliament website.
[3]. E
Karlsen, Migration
and Maritime Powers Amendment Bill (No. 1) 2015, Bills digest, 30,
2015–16, Parliamentary Library, Canberra, 2015.
[4]. Parliament
of Australia, ‘Customs and Other Legislation Amendment Bill 2016 homepage’, op.
cit.
[5]. Senate
Legal and Constitutional Affairs Legislation Committee, Migration
and Maritime Powers Amendment Bill (No. 1) 2015 [Provisions], The
Senate, Canberra, November 2015.
[6]. Inquiry
homepage, Senate Legal and Constitutional Affairs Legislation Committee, ‘Customs
and Other Legislation Amendment Bill 2016 [Provisions]’.
[7]. Senate
Standing Committee for Selection of Bills, Report,
1, 2017, The Senate, 9 February 2017.
[8]. A
penalty unit is currently equivalent to $180. See section 4AA of the Crimes Act 1914
(Cth).
[9]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 1, 2017, The Senate, Canberra, 8 February 2017, pp. 12–13.
[10]. Attorney-General’s
Department, A
guide to framing Commonwealth offences, infringement notices and enforcement
powers, Canberra, 2011.
[11]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny digest, 1, 2017, op.
cit., pp. 12–13.
[12]. Senate
Standing Committee for the Scrutiny of Bills, Alert
digest, 5, 2016, The Senate, 3 May 2016; Senate Standing Committee
for the Scrutiny of Bills, Alert
digest, 11, 2015, The Senate, 14 October 2015.
[13]. Senate
Legal and Constitutional Affairs Legislation Committee, Migration and
Maritime Powers Amendment Bill (No. 1) 2015 [Provisions], op. cit., p.
23.
[14]. Senate
Legal and Constitutional Affairs Legislation Committee, Inquiry into Customs
and Other Legislation Amendment Bill 2016 [Provisions], Submissions,
2016.
[15]. Explanatory
Memorandum, Customs and Other Legislation Amendment Bill 2016, p. 1.
[16]. Australian
Government, Portfolio
budget statements 2015–16: budget related paper no. 1.11: Immigration and
Border Protection Portfolio, p. 82.
[17]. The
Statement of Compatibility with Human Rights can be found at page 22 of the
Explanatory Memorandum to the Bill.
[18]. Parliamentary
Joint Committee on Human Rights, Thirty-seventh
report of the 44th Parliament, 2 May 2016, p. 1.
[19]. Parliamentary
Joint Committee on Human Rights, Thirtieth
report of the 44th Parliament, 10 November 2015, pp. 28–52.
[20]. Subsection
112(2) of the Customs Act 1901.
[21]. Department
of Immigration and Border Protection (DIBP), ‘Australian
Trusted Trader’, DIBP website.
[22]. DIBP,
‘Benefits
of Australian Trusted Trader’, DIBP website.
[23]. Department
of Immigration and Border Protection (DIBP), ‘Verification
through on-site validation’, DIBP website.
[24]. Explanatory
Memorandum, Customs and Other Legislation Amendment Bill 2016, op. cit., p. 8.
[25]. Ibid.,
p. 10.
[26]. Ibid.,
p. 12.
[27]. Law
Council of Australia, Submission
to Senate Standing Committees on Legal and Constitutional Affairs, Inquiry
into Customs and Other Legislation Amendment Bill 2016 [Provisions], submission
no. 5, 29 April 2016, pp. 6–7.
[28]. Ibid.,
p. 7.
[29]. Vestas—Australian
Wind Technology Pty Limited and Chief Executive Officer of Customs, [2015] AATA
348 at [3] (Member Ermert).
[30]. Comptroller-General
of Customs v Vestas—Australian Wind Technology Pty Ltd, [2015] FCAFC
185.
[31]. Vestas—Australian
Wind Technology Pty Limited v Comptroller-General of Customs, [2016] HCASL
85.
[32]. Customs Act 1901 (Cth), paragraph
269F(3)(d).
[33]. Law
Council of Australia, Submission
to Senate Legal and Constitutional Affairs Legislation Committee, op. cit.,
submission no. 5, 29 April 2016, p. 9.
[34]. Explanatory
Memorandum, Customs and Other Legislation Amendment Bill 2016, op. cit., p. 16.
[35]. Customs Regulations
1926.
[36]. Explanatory
Memorandum, Customs and Other Legislation Amendment Bill 2016, op. cit., p. 17.
[37]. Ibid.
[38]. Ibid.
[39]. Crimes Act 1914
(Cth), section 4AA(1).
[40]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 1, 2017, op. cit., p. 13.
[41]. The
information in this part of the Digest is taken from E Karlsen, Migration
and Maritime Powers Amendment Bill (No. 1) 2015, Bills digest, 30, 2015–16,
Parliamentary Library, Canberra, 2015.
[42]. United
Nations Convention on the Law of the Sea, done in Montego Bay on
10 December 1982, [1994] ATS 31 (entered into force for Australia and generally
16 November 1994).
[43]. Explanatory
Memorandum, Customs and Other Legislation Amendment Bill 2016, op. cit., pp. 19–20.
[44]. Andrew
and Renata Kaldor Centre for International Refugee Law, Submission
to Senate Legal and Constitutional Affairs Legislation Committee, Inquiry
into Migration and Maritime Powers Amendment Bill (No. 1) 2015, submission
no. 1, 6 October 2015.
[45]. Ibid.
[46]. Ibid.
[47]. Andrew
and Renata Kaldor Centre for International Refugee Law, Submission
to Senate Legal and Constitutional Affairs Legislation Committee, Inquiry
into Customs and Other Legislation Amendment Bill 2016 [Provisions], op.
cit., 8 April 2016, submission no. 1, p. 2.
[48]. Refugee
Council of Australia, Submission
to Senate Legal and Constitutional Affairs Legislation Committee, Inquiry
into Customs and Other Legislation Amendment Bill 2016 [Provisions], 2016,
submission no. 2.
[49]. Law
Council of Australia, Submission
to Senate Legal and Constitutional Affairs Legislation Committee, Inquiry
into Customs and Other Legislation Amendment Bill 2016 [Provisions], 29
April 2016, submission no. 5, p. 5.
[50]. Department
of Immigration and Border Protection, Submission
to Senate Legal and Constitutional Affairs Legislation Committee, Inquiry
into Customs and Other Legislation Amendment Bill 2016 [Provisions], April
2016, submission no. 4, p.4.
[51]. Explanatory
Memorandum, Customs and Other Legislation Amendment Bill 2016, op. cit., p. 22.
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