PURPOSE OF THE BILL AND KEY ISSUES
On 28 November 2012, the Minister for Justice, the Hon Jason Clare MP
(Minister), introduced the Customs Amendment (Miscellaneous Measures) Bill 2012
(Bill) into the House of Representatives.
On 29 November 2012, the Senate referred the provisions of the Bill to the
Legal and Constitutional Affairs Legislation Committee (committee) for inquiry
and report by 13 March 2013.
Purpose of the Bill
The main purpose of the Bill is to introduce a new offence into the Customs Act
1901 (Cth) (Customs Act) for bringing 'restricted goods' into
The Bill will also make a number of technical amendments to the Customs Act,
the A New Tax System (Wine Equalisation Tax) Act 1999 (Cth)
and the Import Processing Charges Act 2001 (Cth), which are intended to
improve regulation in areas such as entry of ships and aircraft for home
consumption, warehouse licencing arrangements and timeliness of cargo reporting.
The Australian Customs and Border Protection Service (Customs) consulted
industry through the release of an exposure draft of the Bill in September 2012.
Customs has advised the committee that key stakeholders responded positively to
the proposed changes contained in the exposure draft.
Conduct of the inquiry
The committee advertised the inquiry in The Australian on 5
December 2012, and wrote to 65 stakeholders inviting submissions by 31 January
2013. Details of the inquiry, including the Bill and associated documents, were
made available on the committee's website at www.aph.gov.au/senate_legalcon.
The committee received two submissions – from the Australian Shipowners
Association (ASA) and Customs – and no public hearings were held for the
Key provisions of the Bill
Schedule 1 of the Bill is comprised of nine Parts.
Part 1 of Schedule 1 – new offence
for bringing 'restricted goods' into Australia
Part 1 of Schedule 1 of the Bill proposes amendments to the Customs Act
to introduce an offence for bringing into Australia a new category of goods,
known as 'restricted goods'. Proposed new section 233BABAE (item 6 of Schedule
1), which will create the offence, contains the definition of 'restricted
restricted goods are goods:
if imported, would be prohibited imports; and
are prescribed by the regulations for the purposes of this definition.
In his second reading speech, the Minister explained that '[i]nitially,
the new category of restricted goods will be limited to child pornography and
child abuse material' but that, in future, it 'could be extended to give effect
to international agreements or to address matters of international concern'.
Proposed new subsection 233BABAE(4) provides that the proposed provision only
has effect for 'purposes related to external affairs, including: for purposes
giving effect to an international agreement to which Australia is a party; and
for purposes related to addressing matters of international concern'.
In its submission to the inquiry, Customs explained the basis for the
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 [however], the owner has
not breached Customs law.
Under the existing law, when such items are identified, Customs may
either: refer the matter to state or territory police for consideration of
offence charges; or Customs may secure the goods on board or withhold the
Where Customs secures or withholds the goods, the goods are returned to the
owner on departure from Australia.
The amendments proposed in Part 1 of Schedule 1 will enable Customs to
seize 'restricted goods' without warrant, when they are detected, by amending
the definition of 'special forfeited goods'
to include 'restricted goods'
(item 4 of Schedule 1). Where 'restricted goods' are seized, the person
will be liable for an offence.
The proposed new offence will carry a penalty of 1,000 penalty units.
As the EM explains:
Given the nature of the material to be included as restricted
goods, 1000 penalty units is appropriately high so as to deter people from
bringing into Australia the kind of goods which will be restricted goods.
Parts 2-9 of Schedule 1 – other
The remaining eight Parts of Schedule 1 make a number of technical
- 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 (Part 2 of Schedule 1);
- amending a number of valuation definitions to ensure consistency
with the Agreement on Implementation of Article VII of the General Agreement on
Tariffs and Trade 1994 (World Trade Organisation Customs Valuation Agreement) (to
give effect to Australia's obligations under the World Trade Organisation
Customs Valuation Agreement) (Part 3 of Schedule 1);
enabling officers of Customs to designate a customs-controlled
area for both passengers and crew, and the Chief Executive Officer (CEO) of
Customs to designate a seaport as a customs-controlled area (Part 4 of Schedule
allowing the CEO of Customs to request further information from
an applicant, to address any concerns prior to the grant of a warehouse licence
and without the need for the applicant to submit a new application (Part 5 of
- aligning the treatment of the timeliness of reports of relevant cargo
reporters to ensure that, in the cases of unexpected changes to the time of
arrival of voyages or flights to Australia, certain cargo reporters are not
liable for an offence for not making their reports within the original
prescribed timeframe (Part 6 of Schedule 1);
- repealing the legislation which introduced the accredited client
program, since that program has never been implemented operationally
(Part 7 of Schedule 1);
- repealing expired transitional moratorium periods for electronic cargo
reporting (Part 8 of Schedule 1); and
- making other minor technical amendments (Part 9 of Schedule 1).
Issues raised during the inquiry
The ASA's submission expressed support for 'most of the content of the [Bill],
and the relevant clarifications that [it] provides';
however, the ASA considered that 'there are additional urgent matters for
consideration in relation to the way the [Customs Act] is being implemented in
very recent times' in the context of ship importation and home consumption
The ASA was concerned in relation to the 'consequences of the proposed
amendments to subsections 71A(7) and (8) and subsections 68(2) and (3) set out
in the Bill [items 13 and 12 of Schedule 1, respectively], and the new policy
approach of Customs...in relation to ship importation'.
The circumstances under which ships are deemed by Customs to
be imported and required to be entered for home consumption has changed.
Customs decisions to import seem now to be based on a very strict
interpretation of whether the vessel has entered the commerce of Australia and
no longer consider the actual intentions of the operator. This is an issue
which is currently of great concern to ship owners and operators and which is
not addressed and is potentially exacerbated as a result of the proposed
The ASA also pointed to the 'significant uncertainty within industry'
regarding the policy connection between recent changes effected by the Coastal
Trading (Revitalising Australian Shipping) Act 2012 in relation to voyage permits
and importation decisions by Customs about when a vessel has entered into the
commerce of Australia.
Specifically, '(v)essels are now being required to be imported that would not
have been previously',
which has 'significant negative flow on effects to Australian businesses and
the Australian economy'.
Customs responded to the matters raised by the ASA as follows:
[T]he matters raised [by the ASA] are not relevant to the
amendments proposed to be made in this Bill. Customs and Border Protection can
also confirm that it does not have a new policy position in relation to
importation of ships.
The proposed amendments are not about determining whether or
not a ship is imported. The Bill is making clear that if self-powered ships or
aircraft are imported or intended to be imported, they must (like all other
goods) be entered for home consumption or warehousing in accordance with
subsections 68(2) and 68(3) [of the Customs Act]. The Bill is clarifying
The committee notes the concerns raised by the ASA, but is satisfied by
the advice provided by Customs that these matters are not relevant to
consideration of the Bill. The committee also notes that no other concerns have
been raised in respect of the Bill.
The main purpose of the Bill is to enable certain items, in the first
instance child pornography and child abuse material, to be classified as
'restricted items' and therefore capable of being seized without warrant where
found in the personal effects of a ship or aircraft's crew. The committee
supports these proposed amendments.
The committee is of the view that the remaining amendments set out in
the Bill are minor technical amendments that will assist in clarifying the law
or removing now redundant provisions.
The committee recommends that the Senate pass the Bill.
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