House of Representatives

Explanatory Memorandum

Circulated By Authority of the Minister For Home Affairs, the Honourable Bob Debus MP

SCHEDULE 2 - AGENTS AND CUSTOMS BROKERS

Customs Act 1901

Background

Licensing of customs brokers and eligibility to be nominees

37. Division 3 of Part XI of the Customs Act provides for the licensing of customs brokers. Under section 183CA, an application for a broker's licence by a company or partnership must specify, among other things:

a)

the place(s) at which the applicant proposes to act as a customs broker; and

b)

the person(s) who, if the licence is granted, is to be a nominee of applicant.

38. Under section 183CE of the Customs Act, where the Chief Executive Officer of Customs (the CEO) grants a broker's licence, the CEO shall endorse on the licence:

a)

the place(s) at which the licence holder may act as a customs broker; and

b)

the person(s) who is a nominee of the licence holder and the corresponding place(s) at which the nominee acts as a customs broker.

39. Section 183CD of the Customs Act sets out the conditions that must be fulfilled for a person to be eligible to be a nominee of a customs broker. In particular, under this section, a nominee of a customs broker:

a)

cannot be the nominee of another customs broker (paragraph 183CD(1)(f)); and

b)

cannot be a customs broker at a place other than a place where the first-mentioned customs broker is a customs broker (paragraph 183CD(1)(j)).

Employment of locum or freelance customs brokers restricted

40. The nominees of corporate customs brokers have generally been individual customs brokers employed full-time by the corporate customs brokers (being companies or partnerships). However, corporate customs brokers are increasingly beginning to employ locum or freelance customs brokers to be their nominees on a part-time basis. Such locum or freelance customs brokers can be so employed by a number of different corporate customs brokers at any one time.

41. However, the condition set out in paragraph 183CD(1)(f) of the Customs Act means that such locum or freelance brokers may not act as nominees for more than one corporate customs broker.

42. Further, paragraph 183CD(1)(j) unduly restricts the use of locum or freelance brokers as nominees, since these brokers, by nature, would need to be able to act in a number of different 'places'. In this regard, Customs' current policy is that all broker's licences granted under section 183C by the CEO or his delegate specify, for the purposes of section 183CE, 'all places in the Commonwealth' as the places at which the licence holder may act as a customs broker.

43. This policy renders the condition set out in paragraph 183CD(1)(j) redundant. This is because all corporate customs brokers employing locum or freelance brokers as nominees are currently licensed to act as a customs broker at 'all places in the Commonwealth'. Therefore, the locum and freelance brokers can never be a customs broker at any other place.

44. In recognition of the increasing employment of locum and freelance brokers as nominees by corporate customs brokers, it is proposed to repeal paragraphs 183CD(1)(f) and (j) of the Customs Act. As subsections 183CD(2), (3) and (4) only qualify the operation of paragraphs 183CD(f) and (j), it is proposed to repeal these subsections as well.

Items 1 to 6 - Subsection 183CD

45. Items 3, 5 and 6 of Schedule 2 repeal paragraphs 183CD(1)(f) and (j) and subsections 183CD(2), (3) and (4) of the Customs Act. Items 1, 2 and 4 make technical amendments to the rest of existing subsection 183CD(1) as a consequence of the repeals.