Explanatory Memorandum
(Circulated by authority of the Minister for Justice and Customs, Senator the Honourable Christopher Martin Ellison)Notes on clauses
Part 1 - preliminary
6. This clause provides for the Bill, when enacted, to be cited as the Customs Legislation Amendment (Application of International Trade Modernisation and Other Measures) Act 2003.
7. Subclause (1) provides that each provision of this Bill specified in column 1 of the table in that subclause commences or is taken to have commenced on the day or at the time specified in column 2 of the table.
Item 1 of the table provisions that sections 1 to 18 and anything not elsewhere covered by the table commences on the day on which this Act receives the Royal Assent. Sections 1 to 3 are the title, commencement and enabling provisions. The commencement of sections 4 to 19 and the items in the Schedules are explained below with the relevant provisions.
8. This clause is the formal enabling provision for the Schedule(s) to the Bill, providing that each Act specified in a Schedule is amended in accordance with the applicable items of the Schedule. In this Bill the Customs Act, the Customs Legislation Amendment Act (No. 1) 2002, the Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001, the Import Processing Charges (Amendment and Repeal) Act 2002 and the Migration Act 1958 are being amended.
9. The clause also provides that the other items of the Schedules have effect according to their terms. This is a standard enabling clause for transitional, savings and application items in amended legislation.
Part 2 - Transitional and application rules in relation to international trade modernisation
Replacement of transitional provisions
10. The Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001 (the ITM Act) makes substantial changes to the Customs Act 1901 (the Customs Act). The changes relating to monitoring and examination powers, infringement notices, record retention obligations and certain offences were proclaimed to commence on 1 July 2002. The remainder of the changes haven't commenced and are awaiting the development of a new computer system (the Integrated Cargo System or ICS) by the Australian Customs Service (Customs).
11. Currently the Customs Act sets out the computer systems that must be used to communicate with Customs. The Air Cargo Automation System (ACA) and Sea Cargo Automation System (SCA) are used to make reports relating to the arrival of ships, aircraft and cargo, COMPILE is used to make import entries and refund applications and EXIT is used to make export entries. All of the provisions relating to these specific systems will be replaced by provisions that either require or permit electronic communications to be sent to Customs. The CEO will then be required to establish and maintain electronic systems for people to communicate with Customs. The Customs Act will no longer refer to specific computer systems and the new information technology requirements that have to be met in order to communicate with Customs will be set out in Gazette notices.
12. The remaining provisions of the ITM Act will be proclaimed to commence in two stages: those relating to exports in early 2004 and those relating to the arrival of ships and aircraft, cargo reporting and imports (which will be referred to as the imports provisions of the ITM Act) at some time later.
13. The ITM Act contains some transitional provisions relating to export and import entries. Since those provisions were made, it was realised that the systems being developed would not accommodate those transitional provisions and that transitional provisions relating to the arrival of ships and aircraft and cargo reporting were also needed.
14. The export transitional provisions will be replaced in the Customs Legislation Amendment Act (No. 2) 2003.
15. Clauses 4 to 18 of this Bill will replace the transitional provisions relating to import entries and create transitional provisions relating to the arrival of ships and aircraft and cargo reporting.
16. Item 31 of Schedule 1 will repeal item 82 of Schedule 3 to the ITM Act which contains the current transitional provisions for import entries.
17. Currently the following communications may be required to be made under the Customs Act:
- 1.
- impending arrival report - must be made in respect of each port or airport a ship or aircraft is due to arrive and may be made by document, telephone call, facsimile or, in the case of a report made by an owner of a ship who is a registered user in relation to SCA, by computer;
- 2.
- arrival report -must be made in respect of each port or airport a ship or aircraft has arrived at and must be made by document and includes a report of ship or aircraft's stores;
- 3.
- cargo report - must be made in respect of each port or airport a ship or aircraft is due to arrive at and may be made by document or using ACA or SCA;
- 4.
- import entry - must be made in respect of certain imported goods and may be made by document or using COMPILE;
- 5.
- provision of information in respect of other imported goods - must be provided in the manner and form prescribed by regulations.
18. There are a number of other communications that are made at the same time as these (eg passenger and crew reports) but the systems for making them will not be changing.
Communications after the imports provisions of the ITM Act commence
19. When the import provisions of the ITM Act commence the following communications will be required:
- 1.
- impending arrival report - must be made in respect of each port or airport a ship or aircraft is due to arrive at and may be made by document (except if there is cargo on board) or electronically;
- 2.
- arrival report - must be made in respect of each port or airport a ship or aircraft has arrived at and may be made by document (except if there is cargo on board) or electronically;
- 3.
- report of stores and prohibited goods - must be made in respect of each port or airport a ship or aircraft has arrived at and may be made by document or electronically;
- 4.
- notification of cargo reporters - must be made in respect of each port or airport a ship or aircraft is due to arrive at and must be made electronically;
- 5.
- report of persons engaged to unload cargo - must be made in respect of each port or airport a ship or aircraft is due to arrive at and must be made electronically;
- 6.
- cargo report - must be made in respect of each port or airport a ship or aircraft is due to arrive at and must be made electronically (except during moratorium periods);
- 7.
- outturn report - must be made in respect of cargo unloaded from a ship or aircraft or moved to a place other than a warehouse and must be made electronically;
- 8.
- import entry - an import declaration (by document or electronically), a warehouse declaration (by document or electronically) or request for cargo release (electronically) must be made in respect of certain imported goods;
- 9.
- self-assessed clearance declaration - a declaration of certain imported goods not requiring an import entry and must be made electronically.
- 10.
- provision of information in respect of other imported goods not requiring an import entry - must be provided in the manner and form prescribed by regulations.
The new transitional provisions
20. The highlighted terms are defined in clause 4. A diagram of how the systems will operate is set out below.
21. It was decided that there would be a period during which the current computer systems and the ICS would be available. The transitional provisions set out which system a person will have to use during that period of overlapping operation and what happens when the current computer systems are turned off.
22. Due to the way in which the current computer systems and the ICS will operate, the transitional provisions need to ensure that once a communication in respect of a voyage of a ship or aircraft is made in one system the remaining communications in respect of that voyage are made in that same system.
23. Whilst the transitional provisions are imperative for computer/electronic communications they will also apply to documentary communications. Hence, rather than setting out which systems are to be used, the transitional provisions specify whether the ITM import amendments apply in certain circumstances.
24. The ITM import amendments are defined as the amendments in Schedule 3 to the ITM Act that commence at the same time as item 38 of Schedule 3 to the ITM Act and a number of amendments that have been made since the ITM Act was passed that either amend the provisions that will be replaced or inserted by the ITM Act or relate to them (eg amendments to the A New Tax System (Goods and Services Tax) Act 1999 that reflect new section 71 of the Customs Act as will be replaced by the ITM Act).
25. The transitional provisions also refer to the unamended Customs Act and amended Customs Act. The unamended Customs Act is the Customs Act before the ITM import amendments commence (on the ITM import commencement date ) and the amended Customs Act is the Customs Act after the ITM import amendments commence.
26. Which version of the Act will apply and hence which system must be used will depend on the time at which a ship or aircraft is due to arrive at its first port or aircraft in Australia since departing from outside Australia.
27. Under clause 5, the Chief Executive Officer of Customs (the CEO) will be required to set an import cut-over time before the ITM import amendments commence. That time must be not more than 40 days after these amendments commence and must be notified in the Gazette.
28. Communications in respect of a ship or aircraft (and goods on board) that is due to arrive at its first Australian port or airport before the import cut-over time will be required to be made under the unamended Customs Act (subject to the exemption explained below). In respect of a ship and aircraft due at or after the import cut-over time, the ITM import amendments will apply (that is, the amended Customs Act will apply).
29. Hence communications in respect of a ship or aircraft due to arrive at its first Australian port or airport before the import cut-over time will have to be made under the unamended Customs Act using ACA/SCA/COMPILE as necessary. It is possible that communications in respect of such ships and aircraft may be required to be made a considerable amount of time after the ITM import commencement date. For example, a ship due to arrive in Brisbane before the import cut-over date may continue on to Sydney, Melbourne, Perth and then to a place outside Australia. All of the impending arrival reports, cargo reports and entries in respect of goods on board that ship would have to be made under the unamended Customs Act. However since it may take some time to reach Perth and it may not be possible to maintain ACA, SCA and COMPILE until all of the relevant communications have been made. It is therefore proposed to set a time at which SCA, ACA and COMPILE will be turned off (the turn off time) and any outstanding communications will have to be made by document.
30. Under clause 6, the CEO must specify a turn-off time which must be not more than 40 days after the import cut-over time and must be published in the Gazette.
31. The provisions also deal with the circumstances where a ship or aircraft arrives earlier or later than expected (and hence arrives on the other side of the import cut-over time).
32. Subject to the exception below, the intended time of arrival will determine which version of the Customs Act applies, not the actual time of arrival. That is, if a ship or aircraft was due to arrive in Australia at or after the import cut-over time but arrives before that time, the amended Customs Act will still apply. This is because some reports have to be made before the actual arrival of a ship or aircraft in Australia and this provides certainty to the people who make those reports. It also ensures that people who make subsequent reports and entries based on the estimated time of arrival do not have to remake them if the ship or aircraft arrives earlier than expected (for example, import entries which can be made any time before the relevant goods are imported).
33. Conversely, if a ship or aircraft is due to arrive in Australia before the import cut-over time but actually arrives at or after that time, the unamended Customs Act will apply except if the ship or aircraft is so delayed that it arrives after turn-off time. If it does arrive after turn-off time, the amended Customs Act will apply to that ship or aircraft and any goods on board. It is unusual for a ship or aircraft to arrive a substantial amount of time after its expected time of arrival. Further, due to the expected period of time between the ITM import commencement date and turn-off time, it is not considered that this will impose a substantial burden on the relevant communications to be remade under the amended Customs Act.
34. Clauses 7, 8, 13, 14, 15 16, 17 and 18 set out these rules.
35. Clause 7 applies to those ITM import amendments that relate to:
- 1.
- the impending arrival or the arrival of a ship or aircraft at a port or an airport in Australia from a place outside Australia; or
- 2.
- the unloading of cargo from a ship or aircraft.
36. Paragraph (a) covers impending arrival reports, notification of cargo reporters, report of persons engaged to unload cargo, cargo reports, arrival reports and reports of stores and prohibited goods. Paragraph (b) covers outturn reports.
37. The ITM import amendments will only apply if the relevant ship or aircraft:
- 1.
- is due to arrive at its first port or airport in Australia at or after the import cut-over time;
- 2.
- has arrived at its first port or airport and was due to arrive at or after the import cut-over time; or
- 3.
- arrives at its first port or airport at or after the turn-off time.
38. These paragraphs have been drafted so that at any time before or after the ship or aircraft has arrived at its first port or airport in Australia a person can ascertain whether the ITM import amendments will apply to the communications they are making.
39. Subclause (2) makes it clear that paragraphs 7(1)(c) and (d) apply even if the ship or aircraft arrives before cut-over time. This will cover ships and aircraft that arrive earlier than expected and ensures that the reports and declarations already made do not have to remade just because of the early arrival of the ship or aircraft.
40. Subclause (3) makes it clear that the unamended Customs Act applies to ships and aircraft due to arrive before import cut-over time except if it arrives after turn-off time.
41. Clause 8 contains the same provisions as clause 7 in respect of goods that are, or are intended to be, imported into Australia. This is subject to clauses 9, 10, and 11 explained below. This will cover import entries, self-assessed clearance declarations and other provisions requiring information in respect of imported goods. Hence if goods are on board a ship or aircraft:
- 1.
- due to arrive at its first port or airport in Australia at or after the import cut-over time;
- 2.
- that has arrived at its first port or airport and was due to arrive at or after the import cut-over time; or
- 3.
- that arrives at its first port or airport at or after the turn-off time
they will have to be reported to Customs in accordance with the amended Customs Act. This may be via an import declaration, a request for cargo release, a self-assessed clearance declaration or in the prescribed manner and form. All other goods will have to be reported in accordance with the unamended Customs Act.
Warehoused goods and returns under sections 69 and 70
42. There are some communications made to Customs in respect of imported goods which do not need to be made in the same system as the other reports and communications mentioned above. These are entries for home consumption of warehoused goods, returns for like customable goods and special clearance goods. Since clause 8 relates to imported goods and these three communications also relate to imported goods it is necessary to distinguish these goods from the goods covered by clause 8 and to set out when the unamended Customs Act and the amended Customs Act will apply to them. Clauses 9, 10 and 11 specify that those communications made before the ITM import commencement date will have to be made under the unamended Customs Act and those made after than date will have to be made under the amended Customs Act. Which system is used is not dependent on when the ship or aircraft carrying the goods is or was due to arrive.
43. It is possible for ships and aircraft to imported into Australia but not be goods on board another ship or aircraft (ie the ship or aircraft can travel to Australia under its own steam). As with other imported goods, imported ships and aircraft have to be entered.
44. Item 12 provides that the unamended Customs Act applies to those ships and aircraft entered before the ITM import commencement date and the amended Customs Act after that date. This is because such goods are not reported on a cargo report and hence the computer systems will not reconcile the entry with a cargo report (and hence requiring both to be made in the same system).
Communications after turn-off time
45. As explained above, after turn-off time any reports and entries that have to be made under the unamended Customs Act will have to be made by document. There are many provisions that allow these to be made by computer and hence these provisions need to be overridden.
46. Clause 13 provides that if a person is required to make an impending arrival report under section 64 of the unamended Customs Act after turn-off time, then, despite subsection 64(2A), the person must make the report by document, telephone call or fax and not by computer.
47. Clauses 14 and 15 provide that despite subsection 64AB(3A) and section 64ABA of the unamended Customs Act which allow for computer cargo reports and amendments of cargo reports, all cargo reports and amendments made under the unamended Customs Act after turn-off time must be made by document.
48. Clause 17 contains a similar provision in respect of import entries, that is despite paragraph 71A(1)(d) of the unamended Customs Act, import entries must be made by document after turn-off time.
49. After an import entry is made Customs communicates an import entry advice back to the person who sent the entry stating the goods are cleared or directed for further examination. Once all of the relevant duties, charges and taxes have been paid Customs sends the person an authority to deal. This must be sent in the same manner as the entry was communicated to Customs. That is if, the entry was sent via COMPILE, the authority to deal must also be sent by COMPILE. However, after turn-off time COMPILE will not be able to send authorities.
50. Clause 16 allows Customs to provide the authority in writing.
51. The unamended Customs Act contains contingency provisions which apply when ACA, SCA or COMPILE are inoperative. The COMPILE contingency arrangements in sections 77C, 77D and 77E of the unamended Customs Act allow a person to apply for permission to take goods into home consumption, or to warehouse them without entry. The person is required to provide a return to Customs and pay any duty or other charge owing at the time the return is given to Customs. If COMPILE becomes inoperative after an import entry advice is given but before an authority to deal has been received, a person may apply for permission in writing to take the goods into home consumption or to warehouse them. Section 67E provides that if ACA or SCA are inoperative, the reports usually made in those systems and variations must be made by document. Since these computer systems will be inoperative after turn-off time and clauses 13 to 17 set out how communications are to be made to Customs after turn-off time it is not proposed to rely on the contingency arrangements.
52. Clause 18 provides that the contingency arrangements in the unamended Customs Act cease to have effect from turn-off time.
53. All of the transitional provisions will commence on the Royal Assent of the Bill (see items 1 and 19 of the table in clause 2). Whilst these provisions will have no effect until the ITM import commencement date, the CEO is required to specify the import cut-over time and turn-off time before the ITM import commencement date.
Electronic communications systems
54. As mentioned above the CEO must establish and maintain such information systems as are necessary to enable persons to communicate electronically with Customs (new section 126D refers). The CEO must then determine information technology requirements in respect of those systems (section 126DA refers).
55. These provisions will be proclaimed to commence in early 2004 at the same time as the exports provisions of the ITM Act are proclaimed to commence. Due to a transitional provision relating to the export provisions contained in item 38 of the Customs Legislation Amendment Act (No. 2) 2003, sections 126D and 126DA will only apply to exports and departures of ships and aircraft.
56. When the imports provisions of the ITM Act commence, sections 126D and 126DA need to be extended to apply to communications made in respect of imports. Clause 19 provides that despite the export transitional provision, sections 126D and 126DA have effect according to their terms from the ITM import commencement date. This will ensure that those sections apply to the imports communications and any communication requirements inserted into the Customs Act subsequently.
57. The extended application of sections 126D and 126DA will commence on the later of the start of the day on which this Bill receives the Royal Assent and the time when item 38 of Schedule 3 to the ITM Act commences (item 2 of the commencement table refers). Item 38 contains some of the imports amendments and the ICS will need to be able to be used to make import communications from that date. Whilst it is expected that the imports provisions will not be proclaimed to commence until after the transitional provisions in this Bill commence, the commencement provision ensures that this amendment will not operate retrospectively should the opposite occur.
Schedule 1 - ITM import amendments
Self-assessed clearance (SAC) declarations
58. Currently goods described in paragraphs 68(1)(d), (e), (f) or (i) of the Customs Act do not have to be entered when they are imported into Australia. The owner of such goods has to provide Customs with prescribed information in prescribed circumstances (section 71 refers).
59. The ITM Act replaces section 71 so that those goods described in paragraph 68(1)(d) (accompanied and unaccompanied personal effects) remain subject to those requirements (new subsection 71(1) refers).
60. The importation of the goods described in paragraphs 68(1)(e), (f) or (i) will have to declared to Customs on a self-assessed clearance (SAC) declaration (new subsection 71(2) refers). These are goods that:
- 1.
- are consigned through the Post Office by one person to another that have a value not exceeding $1,000 (or such other value as prescribed);
- 2.
- are consigned otherwise than by post by one person to another, are all transported to Australia in the same ship or aircraft and have a value not exceeding $250 (or such other value as prescribed); or
- 3.
- are exempted from section 68 in the regulations.
61. These goods will be defined as 'specified low value goods'. The other goods currently covered by new section 71 will be defined as 'Subdivision AA goods'.
62. New section 71 contains limited provisions about the procedures relating to SAC declarations. It has been realised that more detailed provisions relating to SAC declarations are required in the Customs Act. Item 6 of Schedule 1 contains those detailed provisions. These new provisions will also recognise that SAC declarations may or may not be communicated with a cargo report. Those provisions relating to SAC declarations not communicated with a cargo report mirror the provisions that will apply to import declarations as contained in the ITM Act. Slightly different provisions apply to SAC declarations communicated with cargo reports. Due to the number of provisions being inserted it is proposed to replace section 71 with a number of smaller sections.
63. Item 1 of Schedule 1 amends the definition of authority to deal in the Customs Act to ensure that it covers the authority given in respect of specified low value goods and Subdivision AA goods.
64. Item 2 of Schedule 1 inserts a definition of self-assessed clearance declaration into the Customs Act.
65. Item 3 of Schedule 1 inserts a definition of self-assessed clearance declaration advice into the Customs Act. These advices have to be provided under new section 71AAAG.
66. New section 71 provides that a person to whom section 71AAAB or 71AAAF applies must give Customs information under this section in circumstances mentioned in those sections and, Customs must, if circumstances in Subdivision AA or AB of Division 4 require it, give an authority to deal with goods under this section. This provision also allows Customs, in circumstances mentioned in section 71AAAB, to refuse under section 71 to authorise the delivery of goods into home consumption. Other legislation refers to information provided under section 71 and authority to deal given and refused to be given under that same section. New section 71 ensures that this other legislation does not have to be amended despite the provisions of section 71 as contained in the ITM Act being moved into a number of other sections.
Subdivision AA - Information and grant of authority to deal with Subdivision AA goods
67. New section 71AAAA defines Subdivision AA goods as goods of a kind referred to in paragraph 68(1)(d) and goods that are prescribed by regulations made for the purposes of subsection 71AAAE(1). Paragraph 68(1)(d) covers goods that are accompanied or unaccompanied personal or household effects of a passenger, or a member of a crew, of a ship or aircraft.
68. Under new subsection 71AAAB(1), the owner of Subdivision AA goods or the person who is covered by regulations made under subsection 71AAAE(2) may be required to provide information to Customs. The regulations will specify in what circumstances the information has to be provided and the time, manner and form in which that information must be provided.
69. Under section 71 as contained in the ITM Act, certain goods or persons can be exempted from the requirement to provide a SAC declaration by regulations. Once those goods or persons are exempt there would be no reporting requirements relating to them. However, those goods and persons are currently subject to the requirements prescribed in the regulations.
70. New paragraph (b) of the definition of 'Subdivision AA goods' and paragraph 71AAAB(1)(b) ensure that the owner goods that are excluded from the SAC declaration provisions is still required to provide information to Customs about the goods.
71. New subsections 71AAAB(2), (3) and (4) which relate to the authority to deal with Subdivision AA goods replicate subsections 71(4), (6) and (7) as contained in the ITM Act.
72. New section 71AAAC relates to the suspension of an authority to deal with Subdivision AA goods and replicates subsections 71(8), (9) and (10) as contained in the ITM Act.
New subdivision AB - Information and grant of authority to deal with specified low value goods
New section 71AAAD - Meaning of specified low value goods
73. New section 71AAAD defines 'specified low value goods' as goods of a kind referred to in paragraph 68(1)(e), (f) or (i).
New section 71AAAE - Regulations
74. New section 71AAAE allows regulations to be made prescribing goods that are excluded from being specified low value goods and prescribing persons who are not required to comply with the provisions of Subdivision AB. This section replicates subsection 71(3) as contained in the ITM Act. However, the provisions no longer refer to classes of goods and person as subsection 46(2) of the Acts Interpretation Act 1901 will allow classes to be prescribed.
New subsection 71AAAF - Making a self-assessed clearance declaration
75. New subsection 71AAAF(1) requires the owner of specified low value goods, or a person acting on behalf of the owner, to give Customs a self-assessed clearance declaration under section 71 containing the information that is set out in an approved statement. The person acting on behalf of an owner does not have to be a licensed broker.
76. Currently, new subsection 71(2), as contained in the ITM Act, requires the person who makes a SAC declaration to state:
- 1.
- whether the value of the goods is less than $250, or such other amount as is prescribed; and
- 2.
- whether the goods are subject to quarantine.
77. Due to the nature of electronic communication some people will not be able to state those things when they make a SAC declaration.
78. New subsection 71AAAF(1) will only require the information as set out in an approved statement to be provided (the CEO approves statements under section 4A of the Customs Act and such statements are disallowable instruments).
79. New subsection 71AAAF(2) requires a SAC declaration to be made electronically (this is currently in subsection 71(2) as contained in the ITM Act).
80. New subsection 71AAAF(3) makes it clear that a SAC declaration may be communicated together with a cargo report. The ICS has been designed so that cargo reporters can communicate cargo reports and SAC declarations together. This is currently recognised in the Import Processing Charges Act 2001 which sets different charges for certain types of SAC declarations. Different provisions will apply to those SAC declarations communicated with a cargo report (see below).
New section 71AAAG - Customs' response if a self-assessed clearance declaration is communicated separately from a cargo report
81. New section 71AAAG requires Customs to provide a SAC declaration advice electronically to the person who made the declaration and sets out what must be included in this advice. Once a SAC declaration advice is provided Customs may provide an authority to deal with the goods (new subsection 71AAAI(1) refers). These provisions mirror the requirements that will apply to import declarations when the import provisions of the ITM Act commence.
New section 71AAAH - Customs' response if a self-assessed clearance declaration is communicated together with a cargo report
82. SAC declarations communicated with a cargo report will be subject to a different process. Rather than sending a SAC declaration advice Customs will provide an authority to deal immediately if the goods are cleared for delivery into home consumption. Otherwise the goods will be subject to a direction that the goods be held in their current location or further examined. New section 71AAAH contains the direction power. Once Customs is satisfied that the goods comply with all relevant laws an authority to deal will be provided.
New section 71AAAI - Authority to deal with goods covered by a self-assessed clearance declaration
83. New subsection 71AAAI(1) relates to authorities to deal with goods covered by a SAC declaration that is not communicated with a cargo report. This provision mirrors that which will apply to import declarations when the import provisions of the ITM Act commence.
84. New subsection 71AAAI(2) provides that if a SAC declaration is received together with a cargo report, Customs must communicate electronically an authority under section 71 to deliver the goods covered by the declaration into home consumption. If the goods have been subject to a direction to be held or further examined, Customs will provide the authority to the person who has possession of the goods. If a direction hasn't been given, the authority has to be sent to the person who made the declaration. Whilst it is anticipated that in most cases the person who made the declaration and the person who has possession of the goods will be the same person, the authority will have to be sent to the person with possession after the goods have been subject to direction as these goods will have been in Australia for some time and this will ensure that the person with possession will not release them until they receive the authority to deliver.
New section 71AAAJ - Contents of authority to deal with specified low value goods
85. New section 71AAAJ sets out what an authority must set out and that an authority may be subject to conditions. This section mirrors new subsections 71C(8) to 71C(10) that will apply to import declarations when the import provisions of the ITM Act commence.
New section 71AAAK - No authority to deal with specified low value goods while subject to a direction to hold or further examine
86. New section 71AAAK makes it clear that Customs does not have to give an authority to deal with goods if the goods are subject to a direction under subparagraph 71AAAG(2)(b)(ii) or section 71AAAH. This mirrors new subsection 71C(5) that will apply to import declarations when the import provisions of the ITM Act commence.
New section 71AAAL - No authority to deal with specified low value goods unless duty etc paid
87. New subsection 71AAAL(1) provides that Customs must not give an authority to deal with specified low value goods unless the duty, other charges (other than self-assessed clearance declaration charge) or tax payable has been paid. This replicates subsection 71(7) as contained in the ITM Act however subsection 71(7) only exempted the payment of self-assessed clearance charge payable under an arrangement made under subsection 71AAB(2) to be paid.
88. Under new subsection 71AAB(2), the CEO may make an arrangement with a person under which the person agrees to pay the SAC declaration charge to the Commonwealth in the manner provided in the arrangement. For those people who have not made an arrangement, they must pay all the SAC declaration charges for which they are liable each month within 21 days after Customs notifies of that liability. That is, that charge will be payable monthly. However, under new subsection 71(7), Customs would not have been able to authorise the delivery of goods if SAC declaration charge had not been paid. That provision takes into account the charge that is paid under an arrangement but does not take into account the monthly payments for everyone else who is liable.
89. New subsection 71AAAL(1) provides that no SAC declaration charge has to be paid before the authority to deal will be provided (taking into account that charge paid under an arrangement and that paid monthly).
90. New subsections 71AAAL(2) and (3) are exceptions to subsection 71AAAL(1) and relate to provisions that allow the payment of duty, goods and services tax, luxury car tax and wine equalisation tax to be deferred. These provisions mirror new subsections 71C(6) and (7) which will apply to import declarations when the import provisions of the ITM Act commence.
New section 71AAAM - Suspension of authority to deal with specified low value goods
91. New section 71AAAM sets out when an authority to deal may be suspended. It replicates subsections 71(8) to (10) as contained in the ITM Act. However, the suspension of an authority to deal in respect of goods covered by a SAC declaration communicated with a cargo report must be communicated to the person in possession of the goods and not the person who made the declaration. Similarly the revocation of that suspension must be communicated to the person who has possession of the goods.
New section 71AAAN - Cancellation of authority to deal with specified low value goods
92. New section 71AAAN allows an authority to deal to be cancelled. This mirrors subsection 71C(11) which will apply to import declarations when the import provisions of the ITM Act commence.
Additional provisions relating to SAC declarations
93. Item 6 of Schedule 1 also inserts sections 71AAAO, 71AAAP, 71AAQ, 71AAAR, 71AAAS and 71AAAT into the Customs Act. These provisions mirror new sections 71DA, 71F, 71G, 71H, 71J and 71L as they will apply to import declarations when the imports provisions of the ITM Act commence.
94. New section 71AAAO allows an officer to seek documents and information and ask questions before giving an authority to deal in respect of goods specified in a SAC declaration. Since SAC declarations must be made electronically a requirement to produce documents and information will also be made electronically (the requirement in respect of import declarations can be made by document). It will not be an offence to not provide documents required under this provision (item 22 of Schedule 1 refers). This is because Customs will refuse to provide an authority to deal with goods until the documents are provided.
95. New section 71AAAP allows a SAC declaration to be withdrawn or amended.
96. A withdrawal must be communicated electronically and can be communicated by the owner of the goods or a person acting on their behalf. This reflects subsection 71AAAF(1) which allows a SAC declaration to be made by these people.
97. New section 71AAAQ prohibits a SAC declaration being made twice in respect of the same goods. This offence is an offence of strict liability and mirrors the existing offence in respect of import declarations. The offence is regulatory in nature and the penalty for this offence is low, that is 15 penalty units.
98. Item 23 of Schedule 1 amends section 243X of the Customs Act so that an infringement notice can be issued in respect of this offence (the equivalent offence for import declarations is also subject to the infringement notice scheme). Item 24 of Schedule 1 amends subsection 243X(2) as it currently restricts the operation of the infringement notice scheme to the provisions inserted, amended or replaced by the ITM Act and those provisions if further amended or replaced. New section 71AAAC does not fall into these categories and hence subsection 243X(2) needs to be extended to provisions inserted, substituted or amended by a later Act.
99. New section 71AAAR sets out the effect of withdrawal of a SAC declaration. Once the withdrawal takes effect, any authority to deal with the goods to which the declaration relates is revoked and despite the withdrawal the person may prosecuted for making a false or misleading statement in a SAC declaration and a penalty may be imposed under the infringement notice scheme. However, were a person voluntarily notifies Customs that they have made an error in a declaration, the person will not commit an offence under section 243T or 243U which contain strict liability offences for making false or misleading statements.
100. New section 71AAAS makes it clear that an annotation of a SAC declaration by Customs does not constitute a withdrawal of the declaration (other amendments do constitute a withdrawal and remaking). This is required because an amendment to a SAC declaration will usually constitute a withdrawal and remaking of the declaration.
101. New section 71AAAT makes it clear that the CEO can approve different statements in relation to different classes of goods for which a SAC declaration is required. It is anticipated that there will be one statement to be made in respect of goods declared at the same time as a cargo report is made and another statement for other SAC declarations. This provision also recognises that the communications in respect of SAC declarations have to be made electronically. Further since there will not be a SAC declaration advice in respect of SAC declarations communicated with cargo reports, such declarations are taken to be communicated to Customs when Customs sends an acknowledgement of the declaration.
Self-assessed clearance declaration charge
102. New section 71AAA provides that the person who makes a SAC declaration is liable to pay the SAC declaration charge. New subsection 71AAA(3) provides in part that the charge is not payable if the owner of the goods is exempted by the regulations from paying the charge. SACs can be made by a person on behalf of the owner. However, those people will only be exempted from the payment of SAC declaration charge if the owner of the relevant goods is exempted.
103. Item 7 of Schedule 1 amends section 71AAA as result of the renumbering described above.
104. Item 8 of Schedule 1 also amends section 71AAA so that the person who sent the communication can be declared by regulations to be exempt from payment of the SAC declaration charge regardless of whether or not the owner is also exempt. It is anticipated that regulations will be made exempting people who are not the owner of the goods and who make less than a specified number of declarations in a month from payment of the charge.
Refunds of duty for goods on a SAC declaration
105. Subsection 163(1AE) of the Customs Act provides that for the avoidance of doubt, if a person has:
- 1.
- altered an electronic copy of an import entry as a step in making an application for a refund or rebate of duty in respect of goods covered by the entry; or
- 2.
- altered an electronic copy of an import entry as such a step and paid the application fee (if any) associated with the making of such an application;
but the person did not or does not, within the time prescribed for making that application, communicate the altered import entry to Customs, either manually or, after the commencement of this subsection, by computer, the person's actions in modifying that import entry and paying any such application fee are of no effect.
106. Items 17 to 21 of Schedule 1 amend this subsection so that it applies equally to SAC declarations.
107. Item 25 of Schedule 1 amends section 273GA so that any decision to cancel or suspend an authority to deal in respect of SAC declarations may be subject to review by the Administrative Appeals Tribunal.
108. These items commence on the later of the start of the day on which this Bill receives the Royal Assent and the time when item 38 of Schedule 3 to the ITM Act commences (items 3, 6 and 9 of the commencement table refer). Item 38 contains some of the new imports provisions and new section 71 will commence when item 38 commences. Item 38 will commence on 20 July 2005 unless proclaimed to commence earlier.
109. Item 118 of Schedule 3 to the ITM Act will insert new section 64AAA into the Customs Act. That provision will require the operator of a ship or aircraft that has arrived in Australia to report to Customs the particulars of the ship's stores or aircraft's stores and of any prohibited goods on board at the time of arrival.
110. New section 64AAA requires an operator to report all prohibited goods on board the ship or aircraft, whether or not the prohibited goods are under their control.
111. The relevant operators would not normally know if there are prohibited goods on board the ship or aircraft besides those prohibited goods that are within the ship or aircraft stores. For example, they would not usually know what is in the cargo or in the personal effects of the passengers or crew. Therefore, the operator may not be able to comply with new section 64AAA.
112. Item 4 of Schedule 1 would amend new section 64AAA so that an operator would only be required to report prohibited goods that are contained in stores of the ship or aircraft.
113. Item 4 of Schedule 1 commences on the later of the start of the day on which this Bill receives the Royal Assent and immediately after the commencement of item 118 of Schedule 3 to the ITM Act (item 4 of the commencement table refers). Item 118 will insert new section 64AAA into the Customs Act. It has not commenced yet and will commence on 20 July 2005 if it is not proclaimed to commence earlier.
114. Item 118 of Schedule 3 to the ITM Act will insert new sections 64ABAA and 64ABAB into the Customs Act. New section 64ABAB will also be amended by item 1 of Schedule 1 to the Customs Legislation Amendment Act (No. 2) 2003.
115. New subsection 64ABAA will provide that when a container is unloaded from a ship at a port, the stevedore must report the container to Customs (an outturn report). Once amended, new subsection 64ABAB(2) sets out the timing requirements related to containers unloaded from a ship at a wharf. There is an inconsistent reference to port and wharf in these provisions.
116. Item 5 of Schedule 1 amends new section 64ABAB so it also refers to containers unloaded from a ship at a 'port'.
117. This item commences on the later of the start of the day on which this Bill receives the Royal Assent and immediately after the commencement of item 1 of Schedule 1 to the Customs Legislation Amendment Act (No. 2) 2003 (item 5 of the commencement table refers). Item 1 commences immediately after the commencement of item 118 of Schedule 3 to the ITM Act. Item 118 has not commenced yet and will commence on 20 July 2005 unless it is proclaimed to commence earlier. The Customs Legislation Amendment Act (No. 2) 2003 is currently before the Parliament. The commencement item makes it clear that item 5 of Schedule 1 will not commence if the relevant item in the Customs Legislation Amendment Act (No. 2) 2003 does not commence.
Application for permission to move goods
118. Goods that are imported into and exported from Australia will at some time be subject to Customs control (section 30 of the Act refers). It is an offence under section 33 to move, alter or interfere with those goods except as authorised by, or under, the Customs Act.
119. A person can apply to move imported goods that are subject to Customs control (or may become subject to that control) under section 71E of the Customs Act. The ITM Act will amend subsection 71E(2A) so that if imported goods have not been entered for home consumption or warehousing only relevant operators of ships or aircraft, cargo reporters, stevedores and depot operators can apply for permission to move those goods. Further, such application to move must be made electronically.
120. Items 22 and 23 of Schedule 3 to the Customs Legislation Amendment Act (No. 1) 2002 will amend new subsection 71E(2A) (as contained in the ITM Act) to make it clear that this restricted application provision only relates to goods that are required to be entered and to extend the class of depot operators who may make an application.
121. Under section 162A of the Customs Act, prescribed goods can be imported into Australia without the payment of duty and other taxes as long as they are going to be exported within a specified period. There are two classes of goods that are presently subject to section 162A:
- 1.
- those accompanied by, and described in temporary admission papers issued in accordance with a relevant international agreement;
- 2.
- those which the owner applies under section 162AA to temporarily import without payment of taxes and duty.
122. The CEO may accept a security in respect of those goods for payment of the duty and other taxes payable on the goods and once the security or an undertaking has been accepted a Collector may grant the person permission to take delivery of the goods without payment of duty and other taxes.
123. Once the goods are delivered in accordance with that permission they are deemed to have been entered for home consumption.
124. Until such goods are so delivered, they are still required to be entered by section 68 of the Customs Act and hence if the goods are required to be moved, the limiting provisions in subsection 71E(2A) will apply, ie only the operator, cargo reporter, stevedore or depot operator will be able to apply for permission. However, due to the nature of some of these goods (for example, large professional equipment) the owner of the goods will want to apply to move the goods and they will only be able to make that application by document.
125. Item 12 of Schedule 1 restricts the operation of new subsection 71E(2A) so that it only applies if subsection 71E(2C) does not apply to the goods.
126. Item 13 of Schedule 1 inserts subsection 71E(2C) into amended section 71E so that if the goods are accompanied by, and described in, temporary admission papers referred to above or subject to an application under section 162AA for permission to take delivery of goods and a person wants to apply to move the goods, the application does not have to be made by the relevant operator, cargo reporter, stevedore or depot operator and does not have to be made electronically. Such applications can be made by other people unless the CEO has refused to accept a security or undertaking in relation to the goods or a Collector has refused to grant permission under section 162A to take delivery of the goods. If this happens, the restricted classes of people will have to apply for the movement permission or the owner of the goods could enter them.
127. If the CEO refuses to accept a security or undertaking or the Collector refuses to grant the permission after the movement application is made but hasn't been granted, a Collector will decide whether to give the permission or refuse to give the permission under new subsection 71E(3AB).
128. Item 12 of Schedule 1 will commence on the later of the start of the day on which this Bill receives the Royal Assent and immediately after item 22 of Schedule 3 to the Customs Legislation Amendment Act (No. 1) 2002 (item 7 of the commencement table refers). Item 22 commences immediately after the amendments to section 71E contained in the ITM Act. These amendments will commence on 20 July 2005 if not proclaimed to commence earlier.
129. Item 13 of Schedule 1 will commence on the later of the start of the day on which this Bill receives the Royal Assent and immediately after item 138 of Schedule 3 to the ITM Act (item 8 of the commencement table refers). Item 138 has not commenced and will commence at the same time as the amendments to section 71E.
The making of a periodic declaration
130. Once the import provisions of the ITM Act commence, import entries will be able to be made by certain people by making a import declaration or communicating a request for cargo release. If a request for cargo release is made, a monthly periodic declaration including further information about the goods covered by the request will have to be provided. New subsections 71DC(2) and 71DG(2), as contained in the ITM Act, specify that the request for cargo release (RCR) processing charge and the periodic declaration processing charge are payable when the periodic declaration is taken to have been sent. Item 37 of Schedule 3 to the ITM Act will replace section 71L and new subsection 71L(3) will set out when import entries, withdrawals of import entries and returns are taken to have been communicated to Customs. However there is no provision that specifies when the periodic declaration is taken to have been sent.
131. Items 14 to 16 of Schedule 1 amend new subsection 71L(3) so that a periodic declaration will be taken to have been communicated to Customs when an acknowledgment of the declaration is communicated by Customs electronically to the person identified in the declaration as the person sending it.
132. These items will commence on the later of the start of the day on which this Bill receives the Royal Assent and the time when item 38 of Schedule 3 to the ITM Act commences (item 9 of the commencement table refers). Item 38 contains the amendments relating to requests for cargo releases and periodic declarations. It has not commenced yet and will commence on 20 July 2005 unless it is proclaimed to commence earlier.
133. Items 9, 10 and 11 of Schedule 1 amend new subsection 71C(7) as contained in the ITM Act to correct the references to the A New Tax System (Goods and Services Tax) Act 1999, A New Tax System (Wine Equalisation Tax) Act 1999 and the A New Tax System (Luxury Car Tax) Act 1999.
134. These items commence on the later of the start of the day on which this Bill receives the Royal Assent and immediately after item 38 of Schedule 3 to the ITM Act (item 6 of the commencement table refer). Item 38 contains some of the new imports provisions and new section 71C will commence when item 38 commences. Item 38 will commence on 20 July 2005 unless proclaimed to commence earlier.
Schedule 2 - other amendments
135. Currently, subsection 4(1) of the Customs Act 1901 (the Customs Act) defines arrival as:
- 1.
- in relation to a ship-the securing of the ship for the loading or unloading of passengers, cargo or ship's stores; or
- 2.
- in relation to an aircraft-the aircraft coming to a stop after landing.
136. The term 'arrival' is used in a number of reporting provisions in the Customs Act. For example, the master of a ship or pilot of an aircraft that is due to arrive in Australia from a place outside Australia must report to Customs the ship or aircraft's impending arrival and the passengers and crew on board at the time of arrival. The timing requirements for many reports are linked to the impending or actual arrival of the ship or aircraft.
137. Paragraph (a) of the current definition is limited to the securing of the ship for the loading or unloading of passengers, cargo or ship's stores. There may be circumstances in which a ship arrives in Australia but is not secured for one of these purposes and hence the current definition is too limited.
138. Item 1 of Schedule 2 proposes to amend paragraph (a) so that 'arrival' in respect of a ship means securing the ship in a port (independent of the purpose for being in the port).
139. Item 1 of Schedule 2 commences on the Royal Assent of this Bill (see item 10 of the commencement table).
Movement of ships and aircraft
140. Section 63 provides that no ship or aircraft after arrival at the proper place of mooring or at the proper wharf appointed under subsection 15(2) shall be removed there from before the discharge of the cargo intended to be discharged at the port or airport.
141. This provision was amended in 2002 and inadvertently refers to aircraft arriving at a proper place of mooring or proper wharf and does not cover aircraft that arrive at airports.
142. Item 3 of Schedule 2 amends section 63 so that an aircraft that has arrived at an airport appointed under subsection 15(1) of the Customs Act must have all of its relevant cargo discharged before it can leave the airport.
143. Item 3 of Schedule 2 commences on the Royal Assent of this Bill (item 10 of the commencement table refers).
Cargo report processing charge - in-transit cargo reports
144. On 5 January 2003, the Border Security Legislation Amendment Act 2002 amended the Customs Act to extend the cargo reporting provisions. New subsection 64AB(3A) and 64AB(3B) require the master or owner of a ship or the pilot or owner of an aircraft to report to Customs any cargo on board the ship or aircraft that is intended to be kept on board in Australia, that is, in-transit cargo.
145. There are two charges that may be payable when making a cargo report - cargo report processing charge (section 64ABB) and screening charge (section 64ABC). Screening charge is not payable in respect of reports of in-transit cargo, however the cargo report processing charge is payable.
146. It was always intended to not charge cargo report processing charge in respect of in-transit cargo reports and no money has been collected.
147. Item 4 of Schedule 2 amends section 64ABB to ensure that a person who makes a cargo report relating to in-transit cargo would not be liable to pay the cargo report processing charge for that report.
148. Item 4 of Schedule 2 is taken to have commenced on 5 January 2003 at the same time that the in-transit cargo reporting obligations commenced (item 11 of the commencement table refers). This will not effect anyone as no cargo report processing charge has been collected.
149. Subsection 50(1) of the Customs Act provides that the Governor-General may, by regulation, prohibit the importation of goods into Australia. Subsection 50(2) of the Customs Act provides that the power in subsection (1) may be exercised :
- 1.
- by prohibiting the importation of goods absolutely;
- 2.
- by prohibiting the importation of goods in specified circumstances;
- 3.
- by prohibiting the importation of goods from a specified place; or
- 4.
- by prohibiting the importation of goods unless specified conditions or restrictions are complied with.
150. The Customs (Prohibited Imports) Regulations 1956 (the PI Regulations) set out goods the importation of which is prohibited and the circumstances in which their importation is prohibited. The importation of a limited class of goods is prohibited absolutely. However, the importation of most goods in the PI Regulations is prohibited unless a licence or permission to import the goods is obtained prior to their importation. In some cases, other conditions or restrictions must also be complied with.
151. Therefore, if all of the requirements of the PI Regulations are complied with, the importation of goods is not prohibited (except in the case of goods whose importation is prohibited absolutely).
152. Division 4 of Part IV of the Customs Act sets out the provisions which govern the entry for home consumption of goods that are imported into Australia. Section 68 sets out the circumstances in which are required to be entered. Section 71A sets out the requirements for the making of an entry for home consumption and section 71B sets out how Customs deals with such an entry. Basically, once an import entry advice is given or transmitted under that section and any duty, GST, other taxes, entry processing charge or other charge or fee in respect of the goods is paid, Customs must give an authority to take the goods into home consumption.
153. Some classes of goods are not required to be entered in such a formal manner under section 71B. The entry of goods referred to in paragraphs 68(1)(d), (e) or (f) of the Customs Act is dealt with under section 71 of the Act. Notwithstanding the less formal entry procedures for such goods, Customs must authorise, or refuse to authorise, the delivery of these goods into home consumption once relevant duty and other taxes or charges are paid.
154. Therefore, in relation to goods listed in the PI Regulations, if all of the requirements of the PI Regulations and the Customs Act are complied with, such goods may be delivered from Customs control and taken into home consumption in Australia without any further impediment.
155. There may be circumstances in which good can be delivered into home consumption under the Customs Act but it is considered by the Minister that in the public interest such goods should not be able to be so delivered.
156. Item 5 of Schedule 1 inserts Division 5 into Part IV of the Customs Act. Division 5 contains new sections 77EA, 77EB, 77EC, 77ED, 77EE and 77EF.
New section 77EA - Minister may order goods to be detained
157. New subsection 77EA(1) allows the Minister for Justice and Customs to order Customs to detain goods specified in that order. The Minister will only be able to make this order if the Minister considers that it is in the public interest to do so.
158. Under new subsection 77EA(2), an order to detain goods can only be made:
- 1.
- if the importation of the goods is restricted by the PI Regulations;
- 2.
- the goods have been imported into Australia;
- 3.
- the importation does not breach the Customs Act;
- 4.
- the goods have not been delivered into home consumption in accordance with an authority to deal or exported from Australia.
159. Paragraph (a) restricts the class of goods in relation to which an order may be made. The order can only be made in respect of imported goods and can only be made up until the time the goods are delivered or exported (paragraphs (b) and (d)). This will cover imported goods that are proposed to be delivered into home consumption immediately after importation, warehoused and transhipped goods. Paragraph (c) ensures that if the goods have been imported in contravention of the Customs Act an order cannot be made in respect of them. If they have been so imported, the goods should be dealt with in accordance with the other relevant provisions of the Customs Act. This power can only be exercised in circumstances where the importation and delivery of the goods would otherwise be lawful.
160. Whilst the term 'public interest' has not been defined as the public interest may change over time, it is anticipated that the power to make an order will only be exercised in very limited circumstances. It may be exercised where the Minister considers that the importation of goods may have a harmful impact on the welfare and safety of the Australian community. For example, the Minister may consider that it is not in the public interest to allow a single large importation of dangerous goods to be delivered into home consumption and that they should only be delivered in smaller batches over a period of time.
161. An order has effect despite any provision of the Customs Act to the contrary. For example, if goods have been cleared by Customs and there is no duty, taxes or charges owing on them, Customs must authorise their delivery into home consumption. In those circumstances Customs would detain the goods even though the Customs Act would otherwise require Customs to authorise the delivery of the goods.
New section 77EB - Notice to person whose goods are detained
162. If an order is made, the Minister must, as soon as practicable after making the order, give written notice to the owner of the goods or if the owner cannot be identified after reasonable inquiry - to the person in whose possession or under whose control the goods were at the time the order was given.
New section 77EC - Detention of goods by Customs
163. Under new section 77EC, if the Minister orders Customs to detain goods, Customs must move the goods to a place that is approved by a Collector for the purpose of detaining goods and must detain the goods in that place until the goods are dealt with under the following provisions. It may be necessary that a Collector approve different places for different types of goods depending on their nature. It is intended that Customs will bear the cost of detaining the goods.
New section 77ED - Minister may authorise delivery of detained goods into home consumption
164. The owner of the goods may apply, within 12 months of the date of the order, to the Minister to have the goods delivered into home consumption. On that application being made the Minister may authorise the delivery of the goods, or so much of the goods as the Minister specifies in the authority, into home consumption.
165. Despite that authority, any other requirements of the Customs Act will have to be satisfied (for example, payment of duty).
166. The Minister may specify conditions or other requirements in the authority.
New section 77EE - Minister may authorise export of detained goods
167. The owner of the goods may apply, within 12 months of the date of the order, to the Minister to export the goods. On that application being made the Minister may authorise the exportation of the goods, or so much of the goods as the Minister specifies in the authority.
168. Despite that authority, any other requirements of the Customs Act will have to be satisfied (for example, entry of the goods).
169. The Minister may specify conditions or other requirements in the authority.
New section 77EF - When goods have been detained for 12 months
170. If after 12 months after the date of an order, some or all of the goods have not been delivered into home consumption or exported, the Minister may grant an authority to export the remaining goods. The owner of the goods would have to comply with all of the relevant provisions of the Customs Act before they could export the goods (eg the goods might need to be entered). If the Minister does not grant that authority within 1 month after the end of the 12 month period or the remaining goods have not been exported within 2 months after the date of an authority to export, the Minister must authorise Customs to dispose of the goods in the manner the Minister considers appropriate. It is anticipated that the goods will usually be destroyed.
171. Section 4AB provides that if the Customs Act would result in an acquisition of property and any provision of the Customs Act would not be valid, apart from that section, because a particular person has not been compensated the Commonwealth must pay that person a reasonable amount of compensation agreed on between the person and the Commonwealth, or failing agreement-a reasonable amount of compensation determined by a court of competent jurisdiction.
172. New subsection 77EF(5) makes it clear that nothing in section 77EF prevents a person from seeking compensation in relation to the remaining goods, or other goods order to be detained under Division 5, in accordance with section 4AB.
173. Item 2 of Schedule 2 amends subsection 9(2) of the Customs Act so that all of the decisions by the Minister in respect of detaining goods cannot be delegated.
174. Item 2 will commence on Royal Assent (item 10 of the commencement table refers). Item 5 commences at the same time (item 12 of the commencement table refers).
175. New sections 114E and 114F will be inserted into the Customs Act by the ITM Act. They will require the deliverer and owner of goods that are delivered to a wharf or airport to provide information to the person who takes delivery of the goods (the deliveree). The deliveree will then have to provide certain information to Customs. The nature of the obligation depends on the type of goods being delivered. Items 6 to 14 of Schedule 2 amend new sections 114E and 114F to reflect the systems and procedures that have been developed since the ITM Act was passed.
176. Under new subparagraph 114E(1)(a)(i), the deliverer of goods commits an offence if the goods have been entered for export and the owner does not give particulars of the authority to deal with the goods to be deliveree in the prescribed manner.
177. Item 6 of Schedule 2 amends that paragraph so that the obligation to give the information is on the deliverer and not the owner. All of the other obligations in new section 114E are on the deliverer and in practice they are the person who will be have contact with the deliveree and will be able to provide the relevant information.
178. New subparagraph 114E(1)(a)(ii) and paragraph 114E(1)(b) require the deliverer to give the deliveree particulars of the goods in the prescribed manner.
179. Items 7 to 9 of Schedule 2 will amend all of the requirements to provide particulars of the authority or of the goods so that the deliverer will have to give the prescribed particulars. This will allow Customs to require additional information to be given to the deliveree (who will then forward it to Customs under new section 114F). Whilst the information that will be required will be wider than currently allowed, the information will have to be prescribed and hence subject to parliamentary scrutiny.
180. New subsection 114E(2) provides that certain deliverers can give the deliveree a submanifest number in relation to the goods. Since it is proposed to prescribe the particulars that must be given this provision is no longer necessary.
181. Item 10 of Schedule 2 replaces it with a provision that allows regulations to prescribe different particulars for different kinds of deliverers.
182. Currently goods and classes of goods can be excluded by regulations from the application of new section 114E. However, the deliverer of those goods still has to give information about those goods to the deliveree. Hence, there is no way to exempt goods entirely from the requirements in section 114E.
183. Item 11 of Schedule 2 inserts new subsection 114E(5) into the Customs Act which will provide that prescribed goods, or classes of goods can be exempted from new section 114E. Those goods may include, for example empty containers.
184. New subsection 114F(1A) provides that if a deliveree takes delivery of goods for export at a wharf or airport other than at a prescribed wharf or airport, the deliveree must give Customs a notice stating that the goods have been received and giving such particulars of the receipt of the goods as required by an approved statement.
185. New subsection 114F(1B) (as proposed to be amended by item 3 of Schedule 1 to the Customs Legislation Amendment Act (No. 2) 2003) provides that if goods that have been delivered to a wharf or airport are subsequently removed (other than for the purposes of loading for export), the deliveree must notify Customs giving such particulars of the proposed removal as required by an approved statement.
186. Customs would like to require more information than that relating to the receipt or removal of the goods (for example, in respect of goods received at a wharf or airport they may want to know which ship or aircraft the goods are going to be loaded onto). Items 12 and 13 of Schedule 2 amend new subsection 114F(1A) and subsection 114F(1B) so that the deliveree will have to provide particulars as set out in an approved statement. An approved statement is made under section 4A of the Customs Act and is a disallowable instrument.
187. Wharves and airports and classes of wharves and airports can be exempted from the operation of new section 114F. It was intended that wharves that are used to load bulk goods (eg wheat) would be exempted from these requirements. This is because these goods pose a smaller risk of being dealt with illegally and it is difficult to report them (eg quantities). At the time the ITM Act was passed there were wharves that dealt exclusively with bulk goods and it was proposed to exempt those wharves from the operation of section 114F. Several ports are expanding their operational activities and some of the wharves intended to be excluded are now also handling, or intending to handle non-bulk cargo, including containers. Customs wants the receipt of this type of cargo to be notified to it. Hence it is not desirable to exempt those wharves from the requirements in new section 114F.
188. Item 14 of Schedule 2 inserts subsection 114F(4) into the Customs Act which will allow prescribed goods, or classes of goods, to be exempted from that subsection. This will allow bulk goods to be exempted and ensure that the non-bulk goods received at the same wharf or airport are reported to Customs.
189. Items 6 to 12 and 14 of Schedule 2 will commence on a single day to be fixed Proclamation. If they are not proclaimed to commence within 6 months beginning on the day on which this Act receives the Royal Assent, they commence on the first day after the end of that period (items 13 and 15 of the commencement table refer). This will provide time for the relevant regulations and approved statements to be made.
190. Item 13 of Schedule 2 will commence on the later of same day as the other provisions or immediately after item 3 of Schedule 1 to the Customs Legislation Amendment Act (No. 2) 2003 (item 14 of the commencement table refers). Item 3 replaces new subsection 114F(1B) and commences immediately after the commencement of item 62 of Schedule 3 to the ITM Act. It is anticipated that item 62 will be proclaimed to commence in early 2004 and hence item 23B will commence at the same time as items 6 to 12 and 14 of Schedule 2. The commencement item makes it clear that item 13 of Schedule 2 will not commence if the relevant item in the Customs Legislation Amendment Act (No. 2) 2003 does not commence.
191. The master or the owner of a ship, or the pilot or the owner of an aircraft that departs from Australia must send Customs an outward manifest. This is a statement of most goods that are on board the ship (or a statement that there are no relevant goods on board). Currently an outward manifest must be made before the ship or aircraft leaves Australia.
192. New section 119 will be inserted by the ITM Act and will allow the time to be varied at which outward manifests have to be provided. Due to the increased reporting requirements in respect of goods delivered to a wharf or airport (see new sections 114E and 114F) it was decided that outward manifests could be given electronically up to 3 days after the ship or aircraft departed. The Customs Legislation Amendment Act (No. 1) 2002 made some amendments to the outward manifest provisions so that prescribed ships and aircraft would be required to give documentary outward manifests before they depart. This is intended to cover those people who cannot report electronically once they have departed. Subsection 119(1) will be amended by item 40 of Schedule 3 to the Customs Legislation Amendment Act (No. 1) 2002 so that it does not apply to prescribed ships and aircraft.
193. Due to recent international events that have lead to a heightened concern about the security of ports, it is now proposed to amend the outward manifest reporting requirements. Item 15 of Schedule 2 amends new section 119 so that the time at which an outward manifest has to be provided to Customs can be amended by regulation. That time can be either before or after departure.
194. This item commences on the later of the start of the day on which this Bill receives the Royal Assent and immediately after the commencement of item 40 of Schedule 3 to the Customs Legislation Amendment Act (No. 1) 2002 (item 16 of the commencement table refers). Item 40 commences immediately after new section 119 as contained in the ITM Act commences. It is expected that new section 119 will commence in early 2004. If item 40 commences before this Bill receives the Royal Assent, the amendment to section 119 described above will commence on Royal Assent of this Bill. This will ensure that this amendment to section 119 does not commence retrospectively.
Duty payable on alcoholic beverages
195. The proposed amendments in items 16 and 17 of Schedule 2 are necessary due to the decision of the Administrative Appeals Tribunal (AAT) in Independent Distillers (Aust.) Pty Ltd v Chief Executive Officer of Customs. In that case, the applicant imported cans of alcoholic beverage with an actual alcoholic content less than that stated on the label. The labels on the cans stated that they contained 5% alcohol by volume whereas the cans contained an average of 4.8% alcohol. Duty on the drinks is calculated on the basis of their Customs value, and the amount of alcohol contained in the drinks. Customs demanded duty calculated on the value of the goods and the stated alcoholic content rather than the actual alcoholic content of the drinks on the basis of section 136 of the Customs Act. The applicant paid the amount of duty under protest pursuant to section 167 of the Customs Act and applied to the AAT to have the decision to demand that amount of duty reviewed.
196. The issue for consideration by the AAT was whether duty on the drink should be calculated using the actual alcoholic content of the drinks or the higher labelled content. The Customs value and the tariff classification of the drinks were not in dispute.
197. In particular, the AAT was asked whether section 136 of the Customs Act applies to the calculation of the duty on these goods. That section provides as follows -
Whenever goods (other than beer that is entered for home consumption after 31 January 1989) are sold or prepared for sale as or are reputed to be of a size or quantity greater than their actual size or quantity duties shall be charged according to such first mentioned size or quantity.
198. The AAT was asked to decide whether this provision has the effect of allowing duty on the goods to be assessed on the basis of the labelled, rather than the actual, alcohol content.
199. The AAT found that this section does not apply to the alcohol component of an imported alcoholic beverage and that the duty should be calculated on the actual alcohol content. In particular, the AAT found that the word 'goods' is defined in section 4 of the Customs Act as 'moveable personal property', and that this definition was not broad enough to include a component of a thing that is moveable personal property, such as alcohol in canned drinks and section 136 therefore cannot apply to the alcohol component of a canned drink.
200. Item 16 of Schedule 2 repeals sections 146 and 147. Section 146 is being replaced by sections 153AB and 153AC and section 147 will be replaced by section 153AD.
201. Item 17 of Schedule 2 inserts sections Division 1AA into Division 1 of Part VIII of the Customs Act. It contains sections 153AA, 153AB, 153AC and 153AD.
202. New section 153AA defines an alcoholic beverage for the purposes of Division 1AA as having the meaning given by the regulations. New sections 153AB and 153AC mirror sections 77FA and 77FB of the Excise Act 1901. Sections 153AB and 153AC have been extended to cover those goods that are not required to be entered for home consumption but are rather delivered into home consumption without entry under section 69 of the Customs Act. Section 69 applies to like customable goods including certain alcoholic beverages. These provisions will ensure that the duty charged on those goods is also subject to these new provisions.
203. Section 153AB provides that the duty on alcoholic beverages is charged according to the percentage by volume of alcoholic content indicated on the label of the beverage where the label content exceeds the actual content. It also provides that if an alcoholic beverage is entered for or delivered into home consumption in a labelled form and an unlabelled form and the alcoholic content on the label is higher than the actual content, the duty on the unlabelled form will be charged according to the label on the labelled form.
204. Section 153AC provides that the CEO with the power to determine rules for working out the percentage by volume of alcohol in a beverage. Subsection 153AC(2) sets two things that the CEO's rules may contain. Subsection 136B(3) provides that the CEO may make different determinations for alcoholic beverages included in different classes of alcoholic beverages.
205. Subsection 153AC(4) ensures that a determination will only apply to alcoholic beverages entered for, or delivered into, home consumption after the determination is made.
206. The CEO is required to publish a determination and publish a notice of the determination in the Gazette and the determination is made at the time of the later of those two (subsections 153AC(6) and (7) refer).
207. New section 153AD replaces section 147 which provided that if in the opinion of the Collector the strength of any spirits cannot immediately be accurately ascertained by hydrometer the strength may be ascertained after distillation or in any prescribed manner. New section 153AD allows distillation or a prescribed manner to be used where the strength cannot be ascertained by application of the rules made under section 153AC.
208. These items will commence on the Royal Assent of the Bill (item 17 of the commencement table refers).
209. Section 184A of the Customs Act and section 245B of the Migration Act 1958 (the Migration Act) set out the circumstances in which a Commander of a Commonwealth ship or Commonwealth aircraft can make a request to board a ship. Once a request is made certain powers can be exercised, for example if the ship fails to stop to be boarded the ship can be chased, if it does stop it can be boarded, searched etc.
210. A Commonwealth ship or aircraft is defined in section 4 of the Customs Act and section 245A of the Migration Act to mean a ship or aircraft in the service of the Commonwealth and displaying the appropriate prescribed ensign or insignia.
211. Currently the person in charge of that type of ship or aircraft or a commissioned officer of the Australian Defence Force can make a request to board.
212. In most circumstances, the Commonwealth ships that would be used in the exercise of the section 184A powers would be Royal Australian Navy (RAN) vessels or Australian Customs Vessels (ACVs). However, there could be circumstances, where no RAN vessels or ACVs are available and Customs is on board a State Police launch or charters a civilian vessel for a maritime response.
213. In this case, this chartered civilian vessel or police launch would be deemed to be a Commonwealth vessel for the purposes of those sections. Further, the civilian master of the chartered vessel or police officer in charge would be the Commander and would need to make the request to board under those sections. Likewise, if Customs charters a civilian aircraft, the commander of the aircraft would be the civilian pilot.
214. Items 18 and 33 of Schedule 2 repeal subsection 184A(13) of the Customs Act and subsection 245B(11) of the Migration Act which were inserted by the Border Protection (Validation and Enforcement Powers) Act 2001. These subsections contain the existing definitions for the purposes of sections 184A and 245B. These are being repealed as there are two subsections 184A(13) and 245B(11). Items 19 and 35 replicate the definitions in the existing subsections 184A(13) and 245B(11) and extend the definitions of commander so that the most senior officer of Customs on board the ship or aircraft is also a commander and hence can make the relevant request.
215. Item 6 of Schedule 6 to the Migration Legislation Amendment Act (No. 1) 2003 (the MLA Act) will renumber section 245B(11) of the Migration Act as inserted by the Border Protection (Validation and Enforcement Powers) Act 2001 so that it becomes subsection 245B(12). If item 6 commences prior to this Bill, item 34 will repeal subsection 245B(12) which will then contain the definitions.
216. Items 18 and 19 commence on Royal Assent of the Bill (item 17 of the commencement table refers). Item 33 will commence on Royal Assent unless item 6 of Schedule 6 to the MLA Act commences on or prior to Royal Assent (as explained above) (item 21 of the commencement table refers).
217. Item 34 commences immediately after the commencement of item 6 of Schedule 6 to the MLA Act. However, if this Bill receives the Royal Assent on a day that is before the day on which item 6 commences28 November 2003, item 33 does not commence (item 22 of the commencement table refers). Item 35 which contains the new definition that will be inserted into the Customs Act and will commence after the repeal of the existing definitions (which may be contained in subsection 245B(11) or 124B(12) depending on whether the MLA Act has received the Royal Assent) (item 23 of the commencement table refers).
218. One of the powers that can be exercised after a request is made in respect of a ship is that an officer can detain the ship and bring it, or cause it to be brought, to a port, or to another place (including a place within the territorial sea or the contiguous zone in relation to Australia), that he or she considers appropriate if:
- 1.
- in the case of a ship that is in Australia-the officer reasonably suspects that the ship is or has been involved in a contravention, either in or outside Australia, of the Customs Act or certain prescribed Acts; and
- 2.
- in the case of an Australian ship that is outside Australia-the officer reasonably suspects that the ship is, will be or has been involved in a contravention, either in or outside Australia, of the Customs Act or any other Act; and
- 3.
- in the case of a foreign ship that is outside Australia-the officer reasonably suspects that the ship is, will be or has been involved in a contravention:
- (i)
- in Australia of the Customs Act or certain prescribed Acts; or
- (ii)
- in Australia's exclusive economic zone of certain prescribed Acts.
219. This power is contained in subsection 185(3) of the Customs Act and subsection 245F(8) of the Migration Act.
220. Items 20 and 36 of Schedule 2 insert subsection 185(3AAAA) into the Customs Act and subsection 245F(8AA) into the Migration Act to make it clear that the power to detain allows an officer to bring a ship, or cause it to be brought, to a place even if it is necessary for the ship to travel on the high seas to reach the place.
221. These provisions are consistent with paragraph 7 of Article 111 of the United Nations Convention on the Law of the Sea which provides:
- "7.
- The release of a ship arrested within the jurisdiction of a State and escorted to a port of that State for the purposes of an inquiry before the competent authorities may not be claimed solely on the ground that the ship, in the course of its voyage, was escorted across a portion of the exclusive economic zone or the high seas, if the circumstances rendered this necessary."
222. These items commence on Royal Assent (items 17 and 24 of the commencement table refer).
223. Section 209 of the Customs Act allows certain forfeited goods to be impounded rather than seized. This procedure allows the person to pay the duty owing plus a penalty and have the goods returned. If the person does not pay those amounts within 21 days of an impoundment notice being served, the goods are taken to be seized.
224. There are two circumstances in which an officer may impound goods. Under subsection 209(2), that power may be exercised where an officer finds goods that are, or he or she has reason to believe are, goods to which section 209 applies in the course of a search of the baggage of a person who has arrived in Australia from a place outside Australia.
225. Subsection 209(3A) allows the power to be exercised "where, under a seizure warrant, an officer has power to seize any goods that are, or that he has reason to believe are, goods to which this section applies, not being goods found by him in the course of a search referred to in subsection (2)".
226. Both powers can only be exercised if, in the opinion of the officer, the total amount of duty sought to be evaded does not exceed $5,000 (subsections 209(3) and (3B) refer).
227. It is not clear whether the power in subsection 209(3A) can only be exercised when there is a seizure warrant in respect of the goods. Often goods which meet all the other criteria are found but if a limited view is taken of subsection 209(3A) a seizure warrant will have to be sought before the goods can be impounded.
228. Hence it is proposed to remove the reference to 'under a seizure warrant' but to limit the power to goods that are in a Customs place (see section 183UA of the Customs Act for a list of those places). If subsection 209(3A) was made in this form, the power in subsection 209(2) is no longer necessary because Customs officers will always search such baggage in a Customs place.
229. Item 21 of Schedule 2 will repeal subsection 209(2), (3), (3A) and (3B) and replace them with a provision that will allow relevant goods in a Customs place to be impounded instead of seized under a seizure warrant. The same duty limit will apply.
230. Items 22, 24 and 25 make consequential changes to paragraphs 209(5)(a), 209(6)(a) and (b). Paragraph 209(5)(a) requires the officer who impounds goods to serve a notice on the owner identifying certain things and stating that the goods are impounded under subsection 209(2) or (3A). Since these have been combined, item 22 replaces paragraph 209(5)(a) so that the notice must state that the article, articles or goods have been impounded under new subsection (2). The drafting style of the subparagraphs in that paragraph have been updated.
231. If the owner of goods that have been impounded pays to a Collector within 21 days of service of the notice the duty owing in respect of the goods and the penalty stated in the notice, the Collector must authorise the delivery of the goods to the owner (subsection 209(6) refers). Further the goods cease to be forfeited and proceedings cannot be brought for an offence against the Customs Act in relation to the importation of the goods. In respect of goods found in the course of a search of baggage, the penalty is an amount equal to the duty sought to be evaded on the goods. In respect of all other impounded goods, the penalty is an amount equal to twice the amount of duty sought to be evaded. Items 24 and 25 amend subsection 209(6) so that the different penalty provisions remain even though the two powers to impound are being combined.
232. Item 23 is a technical amendment to insert the word 'and' at the end of paragraphs 209(5)(b) and (c).
233. These items will commence on Royal Assent (item 19 of the commencement table refers).
234. Under section 240AB of the Customs Act a person is required to keep a record that verifies communications made to Customs for a period of one year. This provision was inserted into the Customs Act by the ITM Act in July 2002 and was intended to enable Customs to monitor compliance of communicators of information, as well as owners and Customs brokers.
235. There may be some communications to Customs under the Customs Act that are a simple communication of an event or fact and do not involve the preparation of a report/declaration based on information or data sourced from a party other than the reporter. In these circumstances there may often be little or no information in existence other than that in the report/declaration itself and no need for Customs to audit such records to verify the accuracy of the communication made.
236. For example, incoming international passengers are required to fill in an Incoming Passenger Card that contains Customs, Immigration and Quarantine questions on it. These questions include name, address, date of birth, flight number and country where the passenger boarded the aircraft. Much of this information would be the general knowledge of the passenger. However, the passenger would be required to keep any records, including their ticket, for 12 months as the Incoming Passenger Card is a communication to Customs. It is also unlikely that Customs would need to audit this information to confirm compliance.
237. A second example is an aircraft impending arrival report. The report contains information such as flight number, estimated time of arrival, country of origin and date of departure. Again there would be few records available to verify the information and Customs would be unlikely to need access to these records to verify the accuracy of the information communicated.
238. Item 26 inserts subsection 240AB(1A) into the Customs Act to provide the regulations may provide that specified communications, or specified kinds of communications, are exempt from section 240AB.
239. This amendment commences on Royal Assent (item 17 of the commencement table refers).
240. Item 43 of Schedule 3 to the ITM Act repeals the fees that must be paid when making a refund, remission or rebate application. This item currently has to commence at the same time as all of the other provisions in Part 2 of Schedule 3 to the ITM Act (that is, the imports provisions). When the imports provisions commence the computer systems used to make refund applications will also change. Further, in many circumstances a person has 12 months to apply for a refund.
241. It is anticipated that some people will wait until the imports provisions of the ITM Act commence and hence when the new system commences and the application fee is repealed to make their refund applications so that they don't have to pay the application fee. Customs is concerned about the impact this may have on the new system. Hence it is proposed to repeal the refund application fees earlier.
242. Items 28, 29 and 30 amend the commencement provisions of the ITM Act so that the commencement of item 43 is no longer linked to the other imports provisions of the ITM Act and it can be proclaimed to commence on a different date.
243. Items 67 and 68 of Schedule 3 to the Customs Legislation Amendment Act (No. 1) 2002 commence immediately before Part 2 of Schedule 3 to the ITM Act (item 23 of the commencement table in that Act refers). These provisions may now possibly commence on two separate days (the repeal of refund application fees may commence earlier than the other provisions). Hence item 27 of Schedule 2 amends item 23 of the commencement table in the Customs Legislation Amendment Act (No. 1) 2002 so that the amendments commence immediately before item 27 of Schedule 3 to the ITM Act.
244. Items 28, 29 and 30 commence on Royal Assent (item 19 of the commencement table refers). Item 27 commences immediately after the commencement of section 2 of the Customs Legislation Amendment Act (No. 1) 2002 which was 10 October 2002 (item 18 of the commencement table refers). Whilst retrospective this amendment amends a commencement provision which has not operated yet.
Technical amendment to the Import Processing Charges (Amendment and Repeal) Act 2002
245. Item 6 of the commencement table contained in subsection 2(1) of the Import Processing Charges (Amendment and Repeal) Act 2002 provides that Schedule 1 of that Act commences on the later of immediately after the commencement of the Import Processing Charges Act 2001 (paragraph (a)) and the day on which that Act received the Royal Assent (paragraph (b)). However certain parts of the IPC Act 2001 commenced on Royal Assent in 2001 and others will commence on the proclamation of certain items in the ITM Act. Hence it is not clear which of these is being referred to in paragraph (a).
246. Item 32 amends paragraph (a) so that it is clear that the relevant day is the day on which section 5 of the IPC Act 2001 commences. Section 5 will commence when the import provisions of the ITM Act are proclaimed to commence. This will be before 20 July 2005.
247. Since this provision does not impose taxation it has been included in this Bill.
248. This item will commence immediately after the commencement of section 2 of the Import Processing Charges (Amendment and Repeal) Act 2002 which was on 8 October 2002 (item 20 of the commencement table refers). Whilst it commences retrospectively, item 32 is ensuring that Schedule 1 to that Act commences later when the imports provisions of the ITM Act are proclaimed to commence. Retrospectively making this amendment will not have an adverse effect on anyone.