Explanatory Memorandum
(Circulated by authority of the Minister for Justice and Customs, Senator the Hon Christopher Martin Ellison)Chapter 3 - Border Compliance Measures
Outline of Chapter
Part 6 of Schedule 3 to this Bill represents the final instalment of proposed legislative amendments to the Customs Act 1901 (the Act) announced by the Prime Minister on 2 November 1997 as part of the Government Tough on Drugs strategy. The objective of the proposed amendments is to provide Customs with more effective legislation in relation to the detection of illicit drugs and other prohibited goods at the border.
Customs is becoming more reliant on screening information to identify suspect consignments rather than rely predominantly on physical checking techniques. The receipt of timely information about the arrival of ships and aircraft and the cargo that is intended to be unloaded in Australia becomes critical in order to be able to detect illicit drugs and other prohibited goods.
The report of the arrival of ships and aircraft and the cargo that is intended to be unloaded is a long-standing requirement. However the level of compliance with the requirement to make these reports has reached a stage where it is affecting the ability of Customs to identify suspect shipments before they have been delivered into home consumption.
After careful deliberation it has been concluded that the introduction of offences and an associated infringement notice scheme is the appropriate way to address the problem.
It is also proposed to make it mandatory to report the arrival of certain ships and aircraft and all cargo by electronic means. The Bill provides for certain moratorium periods to enable all cargo reporters to become familiar with the new arrangements.
The Bill also recognises that there are deficiencies in the current legislation in dealing with the accounting of cargo reported on a cargo report. It is proposed to impose for the first time an obligation on stevedores and depot operators to provide Customs with timely reports about the cargo that has been unloaded. This provision is currently the sole responsibility of the cargo reporter. These amendments will, in effect, reflect commercial practice whereby stevedores and depot operators perform these functions on behalf of cargo reporters.
It is considered that these amendments will result in greater compliance with the requirement to report the arrival of ships and aircraft and their cargo in a timely manner which will enhance Customs ability to detect and prevent the entry of illicit drugs and other prohibited goods into the Australian community.
Detailed explanation of new law
Reporting the impending arrival of a ship or aircraft
The current impending arrival reporting provisions in section 64 of the Act are to be repealed and replaced.
New section 64 of the Act ( item 118 of Schedule 3 ) will require the operator of a ship or aircraft coming from a place outside Australia to a port or airport in Australia to make an impending arrival report. The purpose of the provision is to provide Customs with advance notice of its arrival so that Customs can determine whether the vessel presents any risk to the border based on its past history or where it has been. With advanced knowledge of the arrival, Customs can be prepared to conduct any search of the ship or aircraft or other measures it considers appropriate in relation to the clearance of crew, passengers or cargo.
The operator of a ship or aircraft is defined as the shipping line or airline representative in Australia who is responsible for the operation of the ship or aircraft. In circumstances where there is no shipping line or airline or the shipping line or airline is not represented by a person in Australia, then the operator will be the master of the ship or the pilot of the aircraft (see definition of operator in item 107 of Part 6 of Schedule 3 ).
The operator will be required to provide Customs with the estimated time of arrival of the ship or aircraft. The estimated time of arrival will be an important element in establishing the offences of late report associated with the impending arrival report, the crew report, the store and prohibited goods report, the cargo report and notification of other cargo reporters and the person engaged to unload the ship or aircraft.
For this reason the word arrival is defined ( item 102 of Part 6 of Schedule 3 ). In relation to a ship, arrival is to mean the time the ship is secured for the unloading or loading of passengers, cargo or ships stores. This recognises that ships are sometimes required to wait in a port for allocation of a berth for discharge purposes. It also takes into consideration that some ships do not discharge at conventional wharves but at buoys and other facilities. In relation to aircraft arrival it is to mean when an aircraft comes to a stop after landing. Airport practice recognises that an aircraft has come to a stop when blocks are placed against the wheels of the aircraft.
Provision of the impending arrival report to Customs will be either in document or electronic form ( new subsections 64(3) and (4) ). However it will be mandatory for the operator of a ship or aircraft unloading cargo to make the report electronically. This is necessary in order that the clearance status of each consignment of cargo can be transmitted electronically and promptly to the cargo reporter.
The approved form or statement on which the report is to be made will require certain information including characteristics of the ship or aircraft and its journey as well as the estimated arrival time of the ship or aircraft at the nominated port or airport in Australia.
It is proposed to allow the Chief Executive Officer (CEO) of Customs to allow the use of different approved forms or statements for different types of operators of ships and aircraft ( new subsection 64(11) ). This recognises that Customs requires more details about certain kinds of ships and aircraft, for example, those ships and aircraft involved in commercial operations. The purpose is to minimise the collection of information where it is not necessary to collect it, for example, pleasure craft visiting Australia.
The operator of a ship or aircraft will be required to make the report within a specified time. Generally this time will be 48 hours before the estimated time of arrival of a ship and 3 hours before the estimated time of arrival of an aircraft. For journeys that take less time than the specified times, the report is to be made 24 hours prior to the estimated time of arrival of a ship or 1 hour prior to the estimated time of arrival of an aircraft ( new subsections 64(5), (6), (7) and (8) ). The regulations will be able to prescribe times for specific short haul journeys such as Port Moresby to Cairns or Dili to Darwin.
It is proposed to allow the report times to be amended by regulation to cater for instances where future electronic enhancements reduce the time required for Customs to fulfil its risk assessment and processing obligations.
It is also proposed to insert a limit as to how early a report may be given. It may not be made more than 10 days prior to the estimated time of arrival of the ship or aircraft. This is necessary to ensure the information is as accurate as possible. The further in advance such a report is made the greater the chance that modifications may be made to the original schedule (paragraphs 64 (5)(a) and 64(7)(a)).
It is proposed that a tiered scheme of sanctions with three levels will apply to offences against this section. The first tier will be a mens rea offence to be prosecuted before a court. The second tier will be a strict liability offence also to be prosecuted before a court. The third tier is an infringement notice scheme. Instead of facing prosecution in a court, the offender is given the choice of paying an infringement penalty or, in default of paying the penalty, being prosecuted.
Currently the requirement of an operator to report the crew for a ship or aircraft is covered by section 64AC of the Act. Because of proposed new different time limits in relation to the reporting of crew as distinct to the passenger report, it is proposed to repeal the current provision and insert separate provisions, one for passengers ( new section 64AC ) and the other for crew ( new section 64ACA , item 122 of Part 6 of Schedule 3 ).
It is proposed that the operator be required to make a crew report. The crew report will be able to be provided to Customs either in document or electronic form. Provision is made for the CEO of Customs to be able to approve different forms for different circumstances. The approved form or statement by which the report is to be made will require certain information about the crew including full name, date of birth, country of birth, passport number and position on the ship or aircraft ( new subsections 64ACA(2), (3), (6) (7) and (8) ).
The operator of a ship or aircraft will be required to make the report within specified times. For the operator of a ship these time limitations are the same as those for an impending arrival report. In relation to an aircraft the operator may not make the report before the aircraft leaves the last airport outside Australia. Crew are often changed at last overseas airports and the chance of incorrect crew being reported is minimised ( new subsections 64ACA(4) and (5) ).
It is expected that this report will be provided to Customs at the same time as the impending arrival report.
It is proposed that a tiered scheme of sanctions with three levels, as outlined above, will also apply to offences against this section.
As previously mentioned, it is proposed to repeal the current provision and insert separate provisions, one for passengers and the other for crew.
In new section 64AC , the operator is required to make a passenger report. The passenger report will be able to be provided to Customs either in document or electronic form. Provision is made for the CEO of Customs to be able to approve different forms and different statements for different circumstances. The approved form or statement by which the report is to be made will require certain information about the passengers including the number of passengers and their names ( new subsections 64AC(2), (3), (6) (7) and (8) ).
The operator of a ship or aircraft will be required to make the passenger report within a specified time. Generally this time will be 48 hours before the estimated time of arrival of a ship and 3 hours before the estimated time of arrival of an aircraft. For journeys that take less time than the specified times, the report is to be made 24 hours prior to the estimated time of arrival of a ship or 1 hour prior to the estimated time of arrival of an aircraft.
It is proposed that these times will be able to be changed by regulation in the event that Customs makes an assessment that it requires a lesser time to fulfil its obligations under the Act. The regulations will be able to prescribe times for specific short haul journeys such as Port Moresby to Cairns or Dili to Darwin ( new subsections 64AC (4) and (5) ).
It is expected that this report will be provided to Customs at the same time as the impending arrival report.
It is proposed that a tiered scheme of sanctions with three levels, as outlined above, will also apply to offences against this section.
The current arrival reporting provisions in section 64AA of the Act are to be repealed and replaced ( item 118 of Part 6 of Schedule 3 ). It is proposed that the new provisions relate solely to the arrival of a ship or aircraft.
The operator is to report to Customs the particulars of the arrival of a ship or aircraft and the actual arrival time of the ship or aircraft at the port or airport. In relation to a ship, this report is to be made within 24 hours of the ships arrival or before the issue of a clearance certificate whichever occurs first. In relation to an aircraft, the report must be made within 3 hours of the arrival of the aircraft or before the issue of a clearance certificate, whichever occurs first ( new subsections 64AA(2) and (3) ). These time limits are the same as current provisions.
While the arrival report will be able to be made either in document or electronic form, it is proposed that operators who intend unloading cargo at a port or airport will be required to make their arrival report electronically ( new subsections 64AA(4) and (5) ).
This is necessary to give effect to an electronic cargo reporting environment which will enhance Customs ability to detect and prevent the entry of illicit drugs and other prohibited goods into the Australian community.
The report is to be made in an approved form or approved statement. It is proposed to allow the CEO to make different approved forms or statements for different types of operators of ships and aircraft. This recognises that Customs requires more details about certain kinds of ships and aircraft, for example, those ships and aircraft involved in commercial operations. The purpose is to minimise the collection of information where it is not necessary to collect it, for example, in relation to pleasure craft visiting Australia ( new subsections 64AA(6), (7,) and (8) ).
It is proposed that a tiered scheme of sanctions with three levels, as outlined above, will also apply to offences against this section.
Reporting stores and prohibited goods
The operator of a ship or aircraft is currently required to make a report of stores carried by the ship or aircraft as well as any prohibited goods such as medications and firearms. This report is made as part of the arrival report in current section 64AA . It is proposed to make this requirement a separate provision in new section 64AAA . The reason for this change is that certain operators will be required to make an electronic arrival report.
Ships and aircrafts stores are defined by section 130C of the Act and means stores for the use of the passengers and crew of a ship or aircraft or for the service of the ship or aircraft. Prohibited goods means all imported goods that are subject to prohibition or a restriction by a law of the Commonwealth.
The requirements of the provision will be similar to those for reporting the arrival of a ship or aircraft. In circumstances where a person is making the report using documents, it is expected that the report will be made in conjunction with the arrival report.
It is proposed that a tiered scheme of sanctions with three levels, as outlined above, will also apply to offences against this section.
Notification of cargo reporters
It is proposed to insert a new provision to require an operator of a ship or aircraft or a cargo reporter to notify Customs of any other person with whom they have entered into an arrangement to carrying cargo on the other persons behalf ( new section 64AAB ). Persons notified by the operator or other cargo reporters will in turn be required to make a cargo report for their part of the cargo being carried on a particular voyage or flight.
A cargo reporter means an operator or charterer of a ship or aircraft or a slot charterer of a ship or a freight forwarder.
The provision is necessary to ensure Customs knows from whom to expect a cargo report. The necessity for the provision has arisen as a result of changes to commercial practices related to the sharing of ships and aircraft by shipping lines and airlines and the major role that freight forwarders now play in the transportation of cargo.
The notification is to be made electronically in accordance with an approved statement ( subsection 64AAB(3) ). The notification is to be made within certain times which are the same as the time requirements for the making of a cargo report ( new subsection 64AAB(4) ).
In practice the notification will be made in conjunction with the cargo report.
It is proposed that there is to be strict liability offence for failing to comply with the provision, with the option of paying an infringement penalty.
Notification of persons engaged to unload cargo
It is proposed to insert a new provision requiring the operator of a ship or aircraft to notify Customs about the person who is to unload the ship or aircraft ( new section 64AAC ). This provision is necessary to identify the person who will be responsible to account for the cargo that is unloaded. Custom will expect to receive an outturn report from this person identifying cargo that is not unloaded in accordance with the cargo report or that is landed but does not appear on the cargo report. In addition, this information is necessary so that Customs will know where to send the electronic messages in relation to the cargo that is unloaded.
In relation to sea cargo the operator of the ship will be required to nominate the stevedore who unloads containers and non containerised cargo. In relation to air cargo the operator of an aircraft will be required to nominate the depot operator who first receives the cargo after it has been unloaded.
The notification must be made electronically in accordance with an approved statement ( new subsection 64AAC(3) ). In practice the notification will be made in conjunction with the impending arrival report. The notification is to be made within the same time requirements for the making of a cargo report ( new subsection 64AAC(4) ).
It is proposed to create a strict liability offence for failing to comply with the provision, with the option of paying an infringement penalty.
The current cargo reporting provisions in section 64AB of the Act are to be repealed and replaced ( item 118 of Part 6 of Schedule 3 ).
The proposed new provision allows cargo reporters more time to provide a cargo report to Customs. It does not substantially alter cargo reporting requirements. The provision has primarily been remade to take account of the fact that offences will now be imposed under the provision for non compliance.
There will be a general requirement for a cargo reporter to make a cargo report to Customs. As a result of the notification of cargo reporters to Customs by the operator of a ship or aircraft or another cargo reporter, Customs will know from whom to expect a cargo report. The cargo report, in relation to a particular voyage or flight, is to provide a list of all goods intended to be unloaded at a particular port or airport in Australia ( new subsection 64AB(2) ).
The accompanied baggage of the crew of the ship or aircraft or its' passengers and the stores carried by the ship or aircraft will not be required to be reported. The stores will be reported as part of the stores and prohibited goods report. Accompanied baggage will be declared to Customs by the passenger or crew member who owns it.
A cargo reporter will be required to include in the cargo report cargo that has been loaded at another Australian port or airport. In order to be able to identify the imported cargo Customs needs to be aware of other cargo that may be unloaded from the ship or aircraft at the same time. Such avenues have the potential to introduce a new element of risk for Customs in relation to substitution of cargo and insertion of prohibited goods into such cargo.
It is proposed that the report must be provided to Customs electronically in an approved statement ( new subsection 64AB(4) ). The approved statement will require certain information about each consignment of cargo including the consignor and consignee names and addresses. This information is particularly important in assisting Customs to identify suspect shipments.
However the terms consignor and consignee have various commercial connotations. It is therefore necessary to define them for purposes of the approved statement ( new subsection 64AB(5) ). The intention of the definitions is to identify the supplier of the goods (consignor) and the ultimate recipient of them (consignee). By way of further explanation, if a person orders goods from another person and that person arranges to send the goods to the person ordering the goods, then the person ordering the goods is the consignee and person supplying the goods consignor. Intermediaries such as persons involved in the transporting or distribution of the goods (ie. freight forwarders) are not consignors or consignees for the purpose of these definitions.
A cargo reporter who is registered as a special reporter under the Act for the purposes of reporting high volume, low value cargo may report minimal information. This is permitted on the basis that Customs will have electronic access to the consignment details that would normally be required to be reported as part of the approved statement on the cargo reporters electronic system ( new subsection 64AB(7) ).
It is proposed to allow the CEO to make different approved forms or statements for different types of operators of ships and aircraft. This will allow the CEO to approve a statement to accommodate special reporters if other certain circumstances arise.
The operator of a ship or aircraft will be required to make the cargo report within a specified time. Generally this time will be 24 hours before the estimated time of arrival of a ship and 2 hours before the estimated time of arrival of an aircraft. Customs requires this time to screen the information in the cargo report and to make appropriate arrangements to examine targeted consignments. Although it would be desirable for Customs to have the same time limit for air as for sea cargo, the logistics of air transportation do not permit such a time limitation.
It is proposed that there be regulations to prescribe times for specific short haul journeys such as Port Moresby to Cairns or Dili to Darwin ( new subsection 64AB(8) ). It is also proposed to allow these report times to be changed by regulation where future electronic enhancements reduce the time required for Customs to fulfil its risk assessment obligations.
It is proposed that a tiered scheme of sanctions with three levels, as outlined above, will also apply to offences against this section.
It is proposed to make it mandatory for a cargo reporter to make an electronic cargo report. Currently there a number of cargo reporters who do not report their cargo electronically. It is recognised that these cargo reporters will be required to make arrangements so that they can report their cargo electronically.
It is therefore proposed to insert a provision that will provide a six month moratorium period during which time such cargo reporters will be able to continue to make their reports in a documentary form ( new subsection 64AB(3) ). Also, no cargo reporter will be subject to prosecution for the offence of not making the cargo report within the specified times ( new subsection 64AB(12) ).
It is further proposed to insert a provision that will enable the CEO of Customs to further extend the moratorium for a period of up to 2 years where, despite the best endeavours of the cargo reporter, the cargo reporter is unable to make an electronic cargo report ( new subsections 64AB(14) ).
The purpose of an outturn report is to identify cargo that has been unloaded from a ship or aircraft that is not on the cargo report and to identify cargo that has not been unloaded that is on the cargo report.
Section 64ABA of the Act, which currently deals with outturn reports is to be repealed and replaced with new section 64ABAA . The current provision places an obligation on the cargo reporter to make the outturn report. In relation to sea cargo, the commercial practice is that the person who has been contracted by the operator of the ship to unload and deliver cargo from the wharf, also makes an account of the cargo to Customs. In relation to air cargo the commercial practice is for the person who has been contracted by the operator of the aircraft to check in the cargo after unloading to make an account of it. In cases where a cargo reporter has contracted a depot operator to unpack and deliver cargo then the depot operator will make an account of the cargo.
The intention of the proposed amendment is to reflect the commercial practice as much as possible. Consequently, for the first time the provision places an obligation to make an outturn report to Customs on certain operators of Customs places. A Customs place is defined under subsection 183UA of the Act. For the purposes of this provision, the operator of a Customs place will primarily relate to a stevedore and the operator of Customs licensed depot. It will not include the licensee of a Customs licensed warehouse.
As previously described, the operator of a ship will notify Customs of the person engaged to unload cargo. In the case of air cargo the operator of the aircraft will notify Customs of the person who will first receive the cargo after unloading from the aircraft. It is proposed that in relation to the unloading of containers and non containerised cargo from a ship, the stevedore will be required to make an outturn report to Customs ( new subsection 64ABAA(2) ).
In relation to cargo that is unloaded from an aircraft, the depot operator who first receives the cargo after it has been unloaded will be required to make an outturn report to Customs. The depot operator may be located on the airport or away from the airport ( new subsection 64ABAA(1) ).
Where sea containers or air cargo are further moved under Customs control for unpacking, deconsolidation and delivery, the operator of the Customs place will be required to make an outturn report to Customs ( new subsection 64ABAA(3) and (4) ).
It is proposed that all outturn reports will be required to be made to Customs electronically on an approved statement ( new subsection 64ABAA(5) ).
It is proposed to allow the CEO to make different approved statements for different kinds of cargo and for stevedores and operators of Customs places. This is necessary because the characteristics of some kinds of cargo require it to be accounted for in a different manner. Some operators of Customs places will not be able to complete the same outturn report because the terms of their commercial contractual arrangements will limit the amount of information they have about certain kinds of consignments.
It is proposed that a tiered scheme of sanctions with three levels, as outlined above, will also apply to offences against this section.
When the outturn report is to be communicated to Customs
New section 64ABAB will set out the time within which an outturn report will be required to be made to Customs. Customs needs to be aware of containers and cargo that have been unloaded but are not on the cargo report as these containers and cargo are considered high risk. It is necessary for the information to be supplied as soon as possible for Customs to conduct risk assessment for prohibited goods and to ensure compliance with Customs requirements including revenue liabilities.
In relation to containers and cargo that is not unloaded but was on the cargo report, Customs needs to know about such containers and cargo particularly in circumstances where they are suspected to contain prohibited goods. It is possible that they could subsequently be unloaded at another Australian port or airport and evade Customs scrutiny.
It is proposed that in relation to containers that are unloaded from a ship the stevedore is to provide an outturn report every 3 hours from the time the first container is unloaded until the final container is unloaded at which time a final outturn is to be provided to Customs ( new subsection 64ABAB(2) ).
In relation to non containerised cargo that is unloaded from a ship the stevedore is to provide an outturn report within 5 days after the unloading of the ship has been completed. The outturn report must state the time when unloading was completed ( new subsection 64ABAB(3) ).
In relation to cargo that is unloaded from an aircraft the depot operator who first receives the cargo after unloading is to provide Customs with an outturn report within 24 hours of the time of arrival of the aircraft as reported to Customs ( new subsection 64ABAB(1) ).
In relation to sea containers and air cargo that are further moved under Customs control for unpacking, deconsolidation and delivery, the operator of the Customs place will be required to make an outturn report depending on the circumstances of the cargo.
If the container is an empty container or is not to be unpacked at that Customs place, the operator of the Customs place must provide an outturn report within 24 hours after arrival of the container at the Customs place. If the container is to be unpacked at that Customs place the operator of the Customs place must provide Customs with an outturn report within 24 hours after the container is unpacked. If the cargo is not in a container the operator of the Customs place must provide Customs with an outturn report the day after receiving the cargo at that place ( new subsection 64ABAB(4) ).
The obligation to provide an explanation about outturn reports
The operator of a Customs place will report on the factual state of cargo by making an outturn report. However, as the operator of a Customs place was not responsible for arranging the transportation of the goods, this person is unable to explain why cargo on the cargo report did not arrive or why cargo arrived that was not on the cargo report. Only the cargo reporter will be able to ascertain such facts.
For this reason new section 64 ABAC proposes to require the cargo reporter to give an explanation in relation to any cargo shortage or surplus when requested to do so by a Customs officer. It will be an strict liability offence not to comply with such a request, with the option of paying an infringement penalty.
Amendment of provisions related to special reporters
The special reporter scheme is covered by Subdivision D of Division 3 of Part IV of the Act. It enables cargo reporters involved in reporting certain kinds of low value, high volume cargo to register as a special reporter. Being registered as a special reporter enables the special reporter to make an abbreviated cargo report, provided the special reporter electronically stores all the information that would normally be required to be made as part of a cargo report. The special reporter is required to make such information available to Customs on request so that Customs can undertake functions as if all the information had been reported to Customs.
In developing the new electronic cargo reporting arrangements, it has been concluded there will no longer be any benefit for special reporters who are registered to report low value cargo that are reportable documents to remain registered under the scheme. Consequently it is proposed to delete references to low value cargo of a kind comprising reportable documents from the scheme (proposed amendments to section 63A, items 116 and 117 of Part 6 of Schedule 3 ).
As a result of experience gained in the operation of the scheme, it is proposed to relax the threshold requirements to become registered as a special reporter of mail order consignments from 5000 consignments per month to 1000 consignments per month ( new subsection 67EB(2) , item 128 of Part 6 of Schedule 3 ).
In meeting this requirement, it is proposed that an applicant will be required to demonstrate to Customs by the production of evidence such as a contract, that the applicant will be able to meet the requirement of reporting 1000 consignments per month. Under the present requirement the applicant must first have reported 5000 consignments for the three months prior to applying for registration. The threshold limits are also to be reflected in the requirements related to the renewal of registration, which occurs 2 years after first being registered.
Movement of goods under Customs control
Section 71E of the Act enables the owner of goods that are under Customs control to make application to Customs to move those goods. The definition of owner in the Act can include a cargo reporter, a stevedore or depot operator. Therefore such persons are able to make application to move goods under Customs control.
Cargo reporters make such applications to move their cargo from wharves and airports to other wharves and airports as well as depots. Because of feeder port concepts applied by the shipping and airline industries, these wharves, airports and depots may be anywhere in Australia.
Due to the high volume of applications made by cargo reporters and the administrative costs associated with such applications it is proposed to streamline the procedure and the provision in relation to those applications first made on arrival of the cargo in Australia. In such circumstances the cargo reporter will be able to specify in a cargo report the proposed movement of goods from one Customs place to another. Where this occurs, this will be taken to be a movement application made under section 71E ( new subsection 71E(3C) , item 140 of Part 6 of Schedule 3 ). Cargo reporters, stevedores and depot operators will still be required to make a separate application in relation to any subsequent movements.
It is proposed that cargo reporters make all their applications to move goods under Customs control electronically ( new subsection 71E(2B) , item 138 of Part 6 of Schedule 3 ). This requirement is necessary if Customs is to have current and effective control of cargo. Cargo reporters are already complying with this requirement.
It is also proposed that only an operator of a ship or aircraft, a cargo reporter, a stevedore or depot operator who has possession of the goods may make an application to move goods under Customs control that have not been entered ( new subsection 71E(2A), item 138 of Part 6 of Schedule 3 ). The proposal underpins a fundamental principle of Customs that an importer cannot have access to the importers goods until they have first been entered.
It is proposed to insert a new power in new section 74 ( item 141 of Part 6 of Schedule 3 ) to enable a Customs officer to give direction about the storage and movement of certain cargo. In circumstances where a Customs officer has reasonable grounds to suspect that particular cargo has not been reported, or has been incorrectly reported on the cargo report, or where the officer has reasonable grounds to suspect that particular cargo contains prohibited goods, then the officer may give directions about the storage and movement of the cargo. The purpose of the proposed provision is to ensure the secure storage of such cargo until the cargo is properly reported or until Customs has had an opportunity to examine the cargo for the suspected prohibited goods, whichever the case may be.
A direction given by a Customs officer must be in writing and may subsequently be cancelled. It is proposed that a tiered scheme of sanctions with three levels, as outlined above, will also apply to offences against this section.
It is proposed that the monitoring powers referred to Chapter 2 of this Explanatory Memorandum will be used to check compliance with the reporting provisions described in this part.
The ship, aircraft cargo and outturn provisions are intended to operate in a real time environment. In this environment Customs officers are checking the information from the reports for the purpose of identifying cargo while it remains under Customs control and before it is delivered into home consumption. Once the cargo has been delivered into home consumption a number of the compliance checks can no longer been undertaken. It is during this time that Customs needs to locate and hold any consignment that has been identified as suspected of containing prohibited goods. Such activities occur routinely everyday.
In this environment Customs will be seeking to obtain a continuing consent to exercise monitoring powers with cargo reporters, stevedores and depot operators thereby minimising any delays.
Amendments to depot licensing provisions
It is proposed to amend the provisions related to the licensing of a depot under the Act. Under Part IVA of the Act, the CEO of Customs may grant a depot licence to a person for a particular place to deal with imported goods and goods for export.
When making an application for such a licence, a person must pay a depot licence application charge of $3000 under the Customs Depot Licensing Charges Act 1997 . This is a cost recovery charge representing the cost of processing a licence application. The largest component of this charge is attributed to costs associated with conducting checks related to the company and its personnel. The remaining components relate to examining the premises proposed to be licensed and the preparation of the report.
From time to time Customs receives applications from depot licensees wishing to make changes to the area that has been licensed by either varying the current licensed area or by moving to new premises. The current provisions do not permit such changes without a completely new application being made.
It is proposed to insert new provisions to simplify the procedure ( new section 77LA , item 146 of Part 6 of Schedule 3 ). Under the proposed amendments a depot licensee seeking to vary an existing licensed area or to move to new premises will only be required to provide such information related to the variation of existing licensed area or information related to the new premises. The licensee will not be required to provide details about the company or personnel in such circumstances.
Because the processing of such an application will require less resources it is also proposed to impose a $300 fee for such applications (see Customs Depot Licensing Charges Amendment Bill 2000).
In addition, it is proposed to amend one of the conditions related to a depot licence ( items 148 and 149 of Part 6 of Schedule 3 ). One of the current conditions of a depot licence is that a depot licensee must notify the CEO of Customs of a substantial change affecting the security of the depot or of a substantial change to the record keeping arrangements. The licensee must advise the CEO of Customs within 30 days of the occurrence of the event.
It is proposed to amend these provisions so that the licensee must advise the CEO of Customs 30 days before such changes are to occur. The purpose of the proposed amendment is to enable Customs to consider the impact of such changes in relation to the control over goods that are under Customs control held by the licensee in the depot.
Interference with goods under Customs control
Section 33 of the Act makes it an offence for a person to move, alter or interfere with goods under Customs control unless authorised by the Act. It is proposed to replace section 33 ( item 3 of Part 1 of Schedule 1 ). New section 33 contains a range of offences reflecting the different persons who may become involved in an offence of moving, altering or interfering with goods under Customs control. New subsections 33(1) and (2) relate to the general offence of moving, altering or interfering with goods under Customs control. New subsection 33(3) recognises that an employee may be following instructions in moving, altering or interfering with goods under Customs control. New subsections 33(5) and (6) create offences in circumstances where a person directs or permits another person to move, alter or interfere with goods under Customs control.
The new three level approach to sanctions as explained in Chapter 5 has also been adopted in respect of the offences contained in section 33. The first level is the mens rea offences which must be prosecuted before a court ( new subsections 33(1) and (5) ). The second level is the strict liability offences which must also be prosecuted before a court ( new subsections 33(2), (3) and (6) ). The third level is where an infringement notice is issued instead of prosecution for a strict liability offence (new Division 5 of Part XIII of the Act). Instead of facing prosecution in a court, the offender is given the choice of paying an infringement penalty. If they do not pay that penalty Customs may prosecute them for the strict liability offence.
As a result of these proposals, a number of consequential amendments will be necessary.
It is proposed to repeal section 74. This provision is the current power for ensuring compliance with reporting requirements. It has not been successful in achieving significant compliance. The provision permits Customs to stop the unloading of cargo from a ship or aircraft until there is compliance all the cargo reporting requirements. In reality the application of the provision would cause significant disruption and cost to industry and has consequently rarely been applied, leaving Customs with no effective instrument to encourage compliance with cargo reporting requirements.
It is also proposed to repeal Section 74A together with section 71B(3A) because the three existing electronic systems for processing air and sea cargo reports, and Customs entries will be replaced by the new single electronic system the provisions referring to the existing systems will be made redundant.