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CONTENTS
Passage History
Purpose
Background
Main Provisions
Endnotes
Contact Officer and Copyright Details
Customs Amendment Bill (No. 2)
1999
Date Introduced: 25 March 1999
House: House of Representatives
Portfolio: Attorney-General
Commencement: The provisions are to commence
on the same day as amendments to the Import Processing Charges
Amendment Bill 1999 introducing the new screening charge, that is,
on a date to be fixed by proclamation, or failing that, six months
after the Bill receives Royal Assent.
To amend the
Customs Act 1901 to introduce a new registration and
reporting scheme for bulk consignments of goods which are of low
value.
Section 64AB of the Customs Act 1901
requires masters, pilots or owners of ships or aircraft to provide
the Australian Customs Service (ACS) with a cargo report containing
information about each consignment of goods that will be unloaded
at a port or airport. The ACS uses these reports to screen the
cargo and to protect the Australian community from the importation
of prohibited goods.
This Bill seeks to introduce a new reporting
scheme for a particular type of bulk cargo which is of high volume
but low value. Typically such cargo consists of bulk consignments
of documents and consolidated mail orders which are valued at less
than $250 per individual consignment and which are transported to
Australia by specialist operators such as express couriers.
According to the Attorney-General, Hon Daryl Williams, in his
Second Reading Speech, approximately 120,000 consignments of
documents and mail order goods arrive at Sydney Airport each
week.(1)
Currently not all of these consignments are
reported individually, although they are reported at a consolidated
level. When goods are reported at a consolidated level, the ACS
does not have sufficient information to screen the consignments
properly, except by physical random checks. The new scheme will
allow owners of ships and aircraft who are registered as 'special
reporters' to report cargo at a consolidated level, provided that
the ACS has access to their computer facilities where information
relating to each individual consignment is stored and retained.
In 1997 the Government introduced charges for
processing goods imported into Australia by air or sea. (2)This
cost recovery measure applies to all ACS activities that are
directly or indirectly required to process imports. At the time the
new charges were introduced, the Government gave an undertaking
that the costs to be recovered would not include export transaction
costs, investigation costs or the costs of public benefit
functions, such as cargo examinations for drug enforcement
purposes.(3) In 1997-98 import processing charges raised $2.6m and
were estimated to raise slightly more than $3m in 1998-99.(4) Of
this amount, $1 m has been raised annually from screening
charges.(5)
Section 64ABC of the Customs Act requires a
person communicating a cargo report to the ACS to pay a screening
charge. The amount of the screening charge is established by
Section 7 of the Import Processing Charges Act 1997.
Currently the screening charge is $2.40 for each line of a cargo
report that relates to a consignment of goods valued at less than
$250. According to the Explanatory Memorandum there are usually
more than 300 individual consignments included in each cargo
report, so the total screening charge payable on a cargo report
could be at least $720.(6) The Government proposes to amend the
Import Processing Charges Act 1997 to introduce a new
charge of $45 per cargo report for consignments that are reported
under the new scheme. The new charge apparently reflects the lesser
cost to the ACS of screening all bulk documents and bulk mail order
consignments under the new scheme.
The new reporting scheme is likely to result in
lower screening charges for some users, particularly those
reporting mail order consignments. However it is likely to be more
expensive for express couriers who have not been paying screening
charges for individual consignments of documents.(7)
As part of the National Illicit Drugs Strategy
(NIDS), the Government has provided funds to develop a system that
will enable the ACS to access electronically the consignment
information held by express courier cargo reporters. A feasibility
study was completed in 1997-98 and a number of companies in the air
express courier industry have participated in the development and
trialing of the system during the past year.(8)
The use of electronic cargo reporting is
widespread in Australia. According to the latest Annual
Report of the Australian Customs Service, 99% of air cargo and
approximately 85% of sea cargo is now reported
electronically.(9)
The purpose of Item 1 is to
make the definition of the expression 'insolvent under
administration' applicable to all the provisions of the Customs
Act 1901 (the Customs Act). At present the definition appears,
in exactly the same words, in subsection 77F(1) of the Act.
Item 13 repeals the definition in subsection
77F(1). The insertion of the definition of the expression in
subsection 4(1) (Item 1 refers)
would make that definition applicable to all provisions of the Act,
including subsection 77F(1), except where there is a contrary
intention in a particular provision.
Summary of proposed changes to the
Customs Act to introduce the new registration and reporting
system
Divisions 3 and 3A of Part IV of the Customs Act
contain provisions relating to cargo reporting and the use of
computers to report sea and air cargoes. The proposed amendments
contained in items 4-12 are intended to
restructure Divisions 3 and 3A by repealing the heading to Division
3A (item 10) and creating new Subdivisions
A, B, C and D under Division 3.
-
- Item 4 inserts new Subdivision A -
General reporting requirements which contains the
definitions of certain words and expressions used in Division
3.
-
- Item 11 inserts new Subdivision B -
the Use of computers in sea and air cargo automation
systems
-
- Item 12 inserts new Subdivisions C and
D to establish the requirements of the new registration
and reporting system for low value consignments, and the powers to
monitor and audit the 'special reporters'.
Definitions
The expression 'low value
cargo' is defined in new section 63A to
cover certain types of consignments, namely:
-
- cargo consigned from a mail order house, or
-
- cargo comprising reportable documents, or
-
- cargo comprising other goods of a kind prescribed by the
regulations.
In addition, the cargo must
-
- be consigned, other than by post, from one person to another,
and
-
- be transported to Australia all together in the same ship or
aircraft, and
-
- have a value not exceeding $250 or other prescribed amount,
and
-
- have a total liability for import duty and sales tax of less
than $50 or other prescribed amount, not exceeding $75.
The expression 'low value cargo' is included in
items 5 and 8 (see below).
A 'special reporter' is defined
as a person or a partnership registered under Subdivision C to
report low value cargo of a particular kind. In order to become a
special reporter, the person or partnership must be already
registered to communicate cargo reports under the Air Cargo
Automation System or Sea Cargo Automation System. A special
reporter is entitled to submit an abbreviated cargo report
electronically to Customs and to pay a reduced screening fee. In
return, a special reporter will be required to retain and store in
his or her computer facilities, all the information relating to the
consignment, in a manner which will allow the information to be
accessed by the ACS. Amendments relating to this definition are
found in items 5, 9 and 12 (see below).
The expression 'reportable
document' is defined to cover materials such as company
reports, financial statements, legal documents, manuals of
instructions, and personal correspondence. The definition excludes
advertising material and blank forms, blank diskettes and video
tapes.
New reporting requirements for low value
cargo
The purpose of item 5 is to
insert new subsections in the Customs Act to provide for the
proposed reporting requirements for low value cargo. New
subsection 64AB(3B) requires a special reporter of low
value cargo to transmit each cargo report to the ACS by computer.
The amount of detail required under the new electronic reporting
scheme is sufficient for the ACS to identify the bulk consignments,
but not to identify individual consignments [new subsection
64AB(3D)].
The effect of item 6 is to
apply the screening charges to cargo arriving by sea as well as to
air cargo unloaded at a particular airport. Item 8
restricts the application of the screening charge to reports of low
value cargo made by special reporters in accordance with the
reporting requirements prescribed in new subsection 64AB(3B).
Registration, rights and obligations of
special reporters
Item 12 inserts a new
Subdivision C into the Customs Act. It contains new
sections relating to the registration, rights and obligations of
special reporters under the proposed electronic cargo reporting
scheme. In order to be registered as a special reporter, a person
or a partnership must:
-
- be a registered user of the Air Cargo Automation System or the
Sea Cargo Automation System [new paragraph
67EB(1)(a)]
-
- regularly report large volumes of consignments (at least 1000
individual consignments of reportable documents or 5000 mail order
consignments per month during the three months immediately before
making an application as a special reporter) [new
paragraphs 67EB(2)(a) and (b)]
-
- have dedicated computer facilities compatible with the ACS,
and
-
- be a fit and proper person to participate in the scheme
[new paragraph 67EB(1)(d)].
New subsections 67EB(3) and (4)
set out the matters which the Chief Executive Officer of Customs
must consider in deciding whether a person or a company is fit and
proper to be registered as a special reporter.
Special reporters will require separate
registrations to report on cargoes of documents, mail order
consignments and cargoes of any other kind prescribed by
regulations [new subsection 67EC(6)]. In addition,
a person seeking registration as a special reporter for low value
cargo consigned from more than one mail order house will be
required to make a separate application for registration for each
mail order house. The purpose of these requirements is to ensure
that only the types of goods covered by the registrations are
contained in the consignments. This will assist the ACS to screen
these consignments.
Proposed new section 67EE sets
out the basic conditions that must be complied with by a person
registered as a special reporter. One of the requirements is
notification of any changes in the staff who participate in the
management or control of the special reporter's dedicated computer
facilities [new paragraph 67EE(2)(b)].
New section 67EF sets out the
conditions relating to the storage and maintenance of information
and documents with which the special reporter must comply. In
return for being able to submit an abbreviated cargo report, a
person registered as a special reporter is required to store for
two years the more detailed information, including documents,
relating to individual consignments which they would otherwise be
required to report to the ACS [paragraphs 67EF(1)(a) and
(b)]. They must advise the ACS of the location of their
premises in Australia and any intention to relocate [new
subsections 67EF(2) and (3)]. The special reporter is
required to provide the ACS with online access to the information
stored in their dedicated computer facilities and with the capacity
to download that information whenever it is required by Customs
[new subsection 67EF(4)]. In addition, a special
reporter must comply with a request from the ACS to electronically
transfer the information [new subsection
67EF(5)].
Special reporters who are registered to report
low value cargo from mail order houses are required to meet
additional conditions. New section 67EG requires
that a written agreement exist between a mail order house and the
special reporter, setting out the arrangements for the consolidated
shipment of low value goods from a single place of export outside
Australia, and providing for the electronic transmission to the
reporter of the full particulars of each consignment. This is
referred to as a 'house agreement'.
Registration as a special reporter is to last
for two years [new section 67EJ] and may be
renewed [new section 67EK]. Registration may be
cancelled if any of the conditions are breached or if the
circumstances of the special reporter change [new section
67EM]. A person whose registration is cancelled may apply
to the Administrative Appeals Tribunal for a merit review
(Item 14).
Monitoring and auditing of special
reporters
The purpose of new Subdivision
D is to give powers to the ACS to ensure that special
reporters comply with the conditions and requirements of Division
3. New section 67EN defines the expressions
'monitoring powers' and 'monitoring warrant' and provides
authorised officers with powers to operate equipment on the
premises of the special reporter in order to monitor information in
the reporter's computer facilities. Provision is made for
authorised officers to enter the premises of special reporters in
order to exercise monitoring powers, either with the occupier's
consent [new section 67EO] or under a monitoring
warrant [new section 67EP]. The powers given to
authorised officers to operate computer equipment on a special
reporter's premises, to transfer information relating to individual
consignments onto a disk, tape or other storage device, and to
remove the storage device from the premises, appear to be
comparable to powers already included in sections 198-202 of the
Customs Act ('Search warrants in respect of things believed to be
evidential material'). New section 67ES provides
an authorised officer with the power to require an occupier or
person apparently in charge of premises to answer questions or
produce documents. Failure to do so constitutes a criminal offence.
New section 67ET reflects section 202 of the
Customs Act and makes it a criminal offence to fail to give
assistance to an authorised officer on the reporter's premises.
-
- 'Second Reading Speech', Customs Amendment Bill (No. 2) 1999,
Hon Daryl Williams MP, House of Representatives, Debates,
25 March 1999, p. 3669.
- Budget Statements 1996-97, Budget Paper No. 1, p.
4-24.
- ibid., p. 4-24.
- The Commonwealth Public Account 1998-99, Budget Paper No.
4, p. 35.
- Import Processing Charges Amendment Bill 1999, Explanatory
Memorandum, p. 10.
- Customs Amendment Bill (No. 2) 1999, Explanatory
Memorandum, p. 8-9.
- ibid., p 6-7.
- Australian Customs Service, Annual Report 1997-98, p.
48.
- ibid., p. 97.
Rosemary Bell
6 May 1999
Bills Digest Service
Information and Research Services
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ISSN 1328-8091
© Commonwealth of Australia 1999
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