House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Home Affairs, the Honourable Clare O'Neil MP)

NOTES ON INDIVIDUAL CLAUSES [Customs Amendment (Strengthening and Modernising Licensing and Other Measures) Bill 2024]

Section 1 Short title

1. This section provides that the short title of this Bill, when enacted, will be the Customs Amendment (Strengthening and Modernising Licensing and Other Measures) Act 2024 (the Act).

Section 2 Commencement

2. This section sets out in a table the date on which provisions of the Bill, when enacted, commence. It provides that any information in column 3 of the table is not part of the Act, and that information may be inserted in this column or information in it may be edited, in any published version of the Act.

3. Item 1 of the table provides that sections 1 to 3, and anything in the Act not elsewhere covered by the table, commence on the day that the Act receives the Royal Assent.

4. Item 2 of the table provides that Schedule 1, Parts 1 to 13 commence on a single day to be fixed by Proclamation. However, if the provisions do not commence within the period of 6 months beginning on the day that the Act receives the Royal Assent, they commence on the day after the end of the period.

5. Item 3 of the table provides that Schedule 1, Part 14 commence on the later of: immediately after the commencement of the provisions covered by table item 2; and immediately after the commencement of the Excise and Customs Legislation Amendment (Streamlining Administration) Act 2024 (Excise and Customs Act). However, the amendments in Schedule 1, Part 14 do not commence at all if the Excise and Customs Act does not commence.

6. The Excise and Customs Act makes amendments to, relevantly, Part V of the Customs Act. Schedule 1, Part 14 of the Bill concerns amendments to Part V of the Customs Act and are drafted contingent on the basis that the Excise and Customs Act is passed.

7. A note at the foot of the table explains that the table relates only to the provisions of the Act as originally enacted. The table will not be amended to deal with any later amendments of the Act.

8. Subsection 2(2) provides that any information in column 3 of the table is not part of the Act. Information may be inserted in this column, or information in it may be edited, in any published version of the Act.

Section 3 Schedules

9. This section provides that legislation specified in a Schedule to the Act is amended or repealed as set out in the applicable items in the Schedule concerned. This section also provides that any other item in a Schedule to the Act has effect according to its terms.

SCHEDULE 1 - AMENDMENTS [Customs Amendment (Strengthening and Modernising Licensing and Other Measures) Bill 2024]

Part 1 Licence applications

Customs Act 1901

Item 1 After subsection 77H(1)

10. This item inserts a new subsection 77H(1A) after subsection 77H(1). New subsection 77H(1A) permits an application for a depot licence to be made by document or electronically.

11. This provision extends the current requirements in the Customs Act, which currently allows for applications to be made by document, to allow for electronic lodgements. The new requirements for making an application for a depot licence electronically will be set out in new subsection 77H(2A) inserted by item [4].

Item 2 Subsection 77H(2)

12. This item replaces the words "The application" with "A documentary application". The effect of this provision is that subsection 77H(2) will set out the requirements for making a documentary application for a depot licence. This will make a distinction between a documentary application and an electronic application for a depot licence, the latter of which will be set out in new subsection 77H(2A) inserted by item [4].

Item 3 After paragraph 77H(2)(c)

13. This item inserts a new paragraph (ca) which stipulates that a documentary application for a depot licence must be accompanied by any documents required by the associated form. Paragraph 77H(2)(b) requires the application to be in an approved form. The effect of this item is that where a document is required to be submitted by the application form, then the document is a necessary requirement for the application.

Item 4 After subsection 77H(2)

14. This item inserts a new subsection 77H(2A) which sets out the requirements for making an electronic application for a depot licence.

15. An electronic application must communicate such information as is set out in an approved statement, be accompanied by any documents required by the approved statement, and be accompanied by the depot licence application charge.

16. An approved statement consists of data fields to facilitate information to be provided to an electronic system administered by the Comptroller-General of Customs. The authority to make approved statements is contained in subsection 4A(1A) of the Customs Act and facilitates the electronic lodgement of information with the Department.

17. The requirement to submit the depot licence application charge is subject to subsection 77H(3) which provides that Australia Post is not liable to pay the application charge if the application for a depot licence covers the whole or part of an International Mail Centre.

Item 5 At the end of subsection 77H(3)

18. This item adds the words "or (2A)" at the end of subsection 77H(3). This is a consequential amendment required to cater for new subsection 77H(2A), as inserted by item [4], to provide that an electronic application for a depot licence made by Australia Post will not attract the depot licence application charge, as is the case for a documentary application.

Item 6 Section 77J (at the end of the heading)

19. This item adds the words "or documents" at the end of the heading of subsection 77J to signpost that the section allows the Comptroller-General of Customs to require an applicant for a depot licence to supply documents in relation to the application for a depot licence.

Item 7 Subsection 77J (1)

20. This item adds the words "or documents" after the words "further information" in subsection 77J(1) to provide that the Comptroller-General of Customs may, by written notice, require the applicant for a depot licence to supply documents in relation to the application.

Item 8 Paragraph 77J(3)(a)

21. This item adds the words "or documents" after the words "further information" in paragraph 77J(3)(a). In conjunction with items [7], [9] and [10], the effect of this provision is that documents required by the Comptroller-General of Customs under subsection 77J(1) which an applicant for a depot licence fails to provide within a period specified under that section, but supplies at a subsequent time, must not be taken into account in determining whether to grant the depot licence.

Item 9 Paragraph 77J(3)(b)

22. This item adds the words "or documents" after the word "information" in paragraph 77J(3)(b). In conjunction with items [7], [8] and [10], the effect of this provision is that documents required by the Comptroller-General of Customs under subsection 77J(1) which an applicant for a depot licence fails to provide within a period specified under that section, but supplies at a subsequent time, must not be taken into account in determining whether to grant the depot licence.

Item 10 Subsection 77J(3)

23. This item adds the words "or documents" after the words "take the information" in subsection 77J(3). In conjunction with items [7], [8] and [9], the effect of this provision is that documents required by the Comptroller-General of Customs under subsection 77J(1) which an applicant for a depot licence fails to provide within a period specified under that section, but supplies at a subsequent time, must not be taken into account in determining whether to grant the depot licence.

Item 11 Paragraph 77L(1)(b)

24. This item replaces the words "further information relating to the application to be supplied by the applicant under section 77J and the applicant supplied the information in accordance with that section—the receipt of the information" in paragraph 77L(1)(b) with "further information or documents relating to the application to be supplied by the applicant under section 77J and the applicant supplied the information or documents in accordance with that section—the receipt of the information or documents". Subsection 77L(1) sets out the time in which the Comptroller-General of Customs must decide whether or not to grant a depot licence. The effect of this item is that a decision must be made within 60 days of receipt of the information or documents that have been requested under section 77J.

Item 12 After subsection 77LA(1)

25. This item inserts new subsection 77LA(1A) after subsection 77LA(1). New subsection 77LA(1A) permits an application to vary the places covered by a depot licence to be made by document or electronically.

Item 13 Subsection 77LA(2)

26. This item replaces the words "The application" with the words "A documentary application". The effect of this provision is that subsection 77LA(2) will set out the requirements for making a documentary application to vary the places covered by the depot licence. This will make a distinction between a documentary application and an electronic application to vary the places covered by a depot licence which will be set out in new subsection 77LA(2A) inserted by item [14].

Item 14 After subsection 77LA(2)

27. This items inserts new subsection 77LA(2A) to set out the requirements for making an electronic application to vary the places covered by a depot licence.

28. An electronic application must communicate such information as is set out in an approved statement, and be accompanied by the depot licence variation charge.

Item 15 Section 80A (at the end of the heading)

29. This item adds the words "or documents" at the end of the heading to subsection 80A to signpost that the section allows the Comptroller-General of Customs to require an applicant for a warehouse licence to supply documents.

Item 16 Subsection 80A(1)

30. This item adds the words "or documents" after the words "further information" in subsection 80A(1) to provide that the Comptroller-General of Customs may, by written notice, require the applicant for a warehouse licence to supply documents in relation to the application.

Item 17 Paragraph 80A(3)(a)

31. This item adds the words "or documents" after the words "further information" in paragraph 80A(3)(a). In conjunction with items [16], [18] and [19], the effect of this provision is that documents required by the Comptroller-General of Customs under subsection 80A which an applicant for a warehouse licence fails to provide within a period specified under that section, but supplies at a subsequent time, must not be taken into account in determining whether to grant the warehouse licence.

Item 18 Paragraph 80A(3)(b)

32. This item adds the words "or documents" after the word information" in paragraph 80A(3)(b). In conjunction with items [16], [17] and [19], the effect of this provision is that documents required by the Comptroller-General of Customs under subsection 80A which an applicant for a warehouse licence fails to provide within a period specified under that section, but supplies at a subsequent time, must not be taken into account in determining whether to grant the warehouse licence.

Item 19 Subsection 80A(3)

33. This item adds the words "or documents" after the words "take the information" in subsection 80A(3). In conjunction with items [16], [17] and [18], the effect of this provision is that documents required by the Comptroller-General of Customs under subsection 80A which an applicant for a warehouse licence fails to provide within a period specified under that section, but supplies at a subsequent time, must not be taken into account in determining whether to grant the warehouse licence.

Item 20 Paragraph 81A(1)(b)

34. This item replaces the words "further information in relation to the application and the applicant supplies the information in accordance with that section—the receipt of the information" in paragraph 81A(1)(b) with "further information or documents in relation to the application and the applicant supplies the information or documents in accordance with that section—the receipt of the information or documents". Subsection 81A(1) sets out the time in which the Comptroller-General of Customs must decide whether or not to grant a warehouse licence. The effect of this item is that a decision must be made within 60 days of receipt of the information or documents that have been requested under section 80A.

Item 21 Subsection 183CA(1)

35. This item repeals subsection 183CA(1) and replaces it with new subsections 183CA(1), 183CA(1A) and 183CA(1B). Current section 183CA sets out the requirements for an application for a broker's licence.

Subsection 183CA(1)

36. New subsection 183CA(1) permits an application to be made by document or electronically.

Subsection 183CA(1A)

37. If the application is made by document, it must be in writing in an approved form, contain such information as the form requires, be accompanied by any documents required by the form accompanied by that form, and be accompanied by the Customs broker licence application charge.

Subsection 183CA(1B)

38. If the application is made as an electronic application, it must communicate such information as is set out in an approved statement, be accompanied by any documents required by the approved statement, and be accompanied by the customs broker licence application charge.

Item 22 Subsection 183CA(2)

39. This item replaces the words "shall not" with the words "must not, in the application," in subsection 183CA(2). Amended subsection 183CA(2) will require that an applicant for a broker's licence must not propose a person as his or her nominee at a place in their application for a customs broker's licence unless that person is eligible, or intends to take all necessary actions to be eligible, to be a nominee of the applicant at that place if the licence were granted.

Item 23 Subsection 183CA(3)

40. This item replaces the words "shall not be proposed under paragraph (1)(c)" with the words "must, not, in an application, be proposed as a nominee," in subsection 183CA(3). Amended subsection 183CA(3) will require that a person proposed as a nominee in an application for a broker's licence must consent, in writing, to the proposal to be a nominee. This item is also a consequential amendment to cater for the amendment by item [21] which repeals paragraph 183CA(1)(c).

Item 24 Paragraph 273GA(1)(aar)

41. This item replaces the words "further information concerning a depot licence application is" with the words "further information or documents concerning a depot licence application is or are," in subsection 273GA(1)(aar). This item will permit an application to be made to the Administrative Appeals Tribunal to review a decision made by the Comptroller-General of Customs under section 77J not to extend the period within which further information or documents concerning a depot licence application is to be supplied.

42. This item is a consequential amendment to cater for the amendment effected by item [7] to subsection 77J(1), read with existing subsection 77J(2), and which will allow the Comptroller-General make a decision to extend the time period for the applicant to supply further documents in respect of a depot licence application.

Item 25 Application provision

43. This item stipulates that the amendments made by this Part apply on or after the day on which the items commence.

Part 2 Notice of decisions etc.

Customs Act 1901

Item 26 At the end of subsection 77J(1)

44. This item inserts a note at the end of subsection 77J(1) directing a reader to section 77ZA, as effected by item [42], which sets out how notices issued under Part IVA of the Customs Act may be given. Amended subsection 77J(1) provides that the Comptroller-General of Customs may give written notice seeking further information or documents from an applicant for a depot licence.

Item 27 At the end of subsection 77LA(3)

45. This item inserts a note at the end of subsection 77LA(3) directing a reader to new section 77ZA, as effected by item [42], which sets out how notices issued under Part IVA of the Customs Act may be given. Amended subsection 77LA(3) requires the Comptroller-General to given written notice to the applicant for the variation of a depot licence if further information or documents are required in relation to the application.

Item 28 At the end of subsections 77Q(1B) and (2)

46. This item inserts a note at the end of subsections 77Q(1B) and (2) directing a reader to new section 77ZA, as effected by item [42], which sets out how notices issued under Part IVA of the Customs Act may be given.

47. Subsection 77Q(1B) requires the Comptroller-General of Customs to give notice if conditions are imposed on a depot licence after the grant of the licence. Subsection 77Q(2) permits the Comptroller-General of Customs to vary conditions imposed on a depot licence by written notice given to a depot licence holder.

Item 29 At the end of subsection 77V(1)

48. This item inserts a note at the end of subsections 77V(1) directing a reader to new section 77ZA, as effected by item [42], which sets out how notices issued under Part IVA of the Customs Act may be given. Section 77V is concerned with notices given to a licence holder if the Comptroller-General of Customs is satisfied that a depot licence should be cancelled.

Item 30 Subsection 77V(4)

49. This item repeals subsection 77V(4) to remove the requirement that a notice of intended cancellation of a depot licence must be served either personally or by post.

50. A notice given under section 77V will be required to be given by a method set out in new section 77ZA, as effected by item [42], which expands the methods for the giving of notices beyond the service of notices personally or by post.

Item 31 Paragraph 77V(5)(a)

51. This item replaces the word "served" in paragraph 77V(5)(a) with the word "given". This is a consequential amendment that caters for new section 77ZA, as effected by item [42], which expands the methods for the giving of notices beyond the service of notices personally or by post.

Item 32 Subsection 77V(6)

52. This item replaces the word "served" in subsection 77V(6) with the word "given". This is a consequential amendment that caters for new section 77ZA, as effected by item [42], which expands the methods for the giving of notices beyond the service of notices personally or by post.

Item 33 Paragraph 77VA(2)(d)

53. This item replaces the words "by notice in a prescribed manner" in paragraph 77VA(2)(d) with the words "by notice given". This is a consequential amendment that caters for new section 77ZA, as effected by item [42], which expands the methods for the giving of notices beyond the service of notices personally or by post.

Item 34 Subsection 77VA(2) (note)

54. This item replaces the word "Note" in subsection 77VA(2) with the words "Note 1". This is a consequential amendment that caters for an additional note to subsection 77VA(2) as inserted by item [35].

Item 35 At the end of subsection 77VA(2) (after the note)

55. This item inserts a second note at the end of subsection 77VA(2) directing a reader to new section 77ZA, as effected by item [42], which sets out how notices issued under Part IVA of the Customs Act may be given. Section 77VA provides for notices to be given to the holder of a suspended depot licence by a Collector requiring them to do certain things.

Item 36 Subsection 77VC(1)

56. This item replaces the words "by notice in writing, cancel a depot licence' in subsection 77VC(1) with the words "by notice in writing given to the holder of a depot licence, cancel the licence". This clarifies that the notice is given to the holder of the licence.

Item 37 At the end of subsection 77VC(1)

57. This item inserts a note at the end of subsection 77VC(1) directing a reader to new section 77ZA, as effected by item [42], which sets out how notices issued under Part IVA of the Customs Act may be given. Section 77VC is concerned with the cancellation of depot licences.

Item 38 Subsection 77VC(2)

58. This item replaces the words "by notice in writing, cancel a depot licence' in subsection 77VC(2) with the words "by notice in writing given to the holder of a depot licence, cancel the licence". This clarifies that the notice is given to the holder of the licence.

Item 39 At the end of subsection 77VC(2)

59. This item inserts a note at the end of subsection 77VC(2) directing a reader to new section 77ZA, as effected by item [42], which sets out how notices issued under Part IVA of the Customs Act may be given. Subsection 77VC(2) requires the Comptroller-General of Customs to give a notice in writing to cancel a depot licence.

Item 40 Subsection 77VC(3)

60. This item repeals subsection 77VC(3) to remove the requirement that a notice to cancel a depot licence must be served either personally or by post.

61. A notice given under section 77VC will be required to be given by a method set out in new section 77ZA, as effected by item [42], which expands the methods for the giving of notices beyond the requirement that notices be served personally.

Item 41 At the end of subsection 77X(2)

62. This item inserts a note at the end of subsection 77X(2) directing a reader to new section 77ZA, as effected by item [42], which sets out how notices issued under Part IVA of the Customs Act may be given. Subsection 77X(2) empowers a Collector to manage goods at a place when that place ceases to be covered by a depot licence and requires the Collector to give notice in writing in relation to certain powers.

Item 42 Section 77ZA

63. This item repeals current section 77ZA and substitutes it with new section 77ZA. Current section 77ZA sets out when a notice is deemed to be properly addressed to a person or partnership for the purposes of Part IVA.

64. The purpose of this amendment is to co-locate the provisions setting out the methods by which notice may be given to a person or partnership for the purposes of Part IVA. New subsections 77ZA(1) and (2) provide methods for the giving of notices to persons and partnerships respectively. Current section 77ZA is replicated under new subsection 77ZA(3).

65. These amendments facilitate the electronic giving of notices under Part IVA of the Customs Act by providing for different methods for giving a notice. Notices may now be given, rather than served, by email or any other electronic means to the relevant person, in addition to the existing methods currently provided for under Part IVA.

Item 43 At the end of subsection 80A(1)

66. This item inserts a note at the end of subsection 80A(1) directing a reader to new section 102AA, as inserted by item [66], which sets out how notices issued under Part V of the Customs Act may be given. Part V is concerned with warehouse licences, and section 80A empowers the Comptroller-General of Customs to seek further information from an applicant for a warehouse licence.

Item 44 At the end of subsection 81B(3)

67. This item inserts a note at the end of subsection 81B(3) directing a reader to new section 102AA, as inserted by item [66], setting out how notices issued under Part V of the Customs Act may be given. Part V is concerned with warehouse licences, and section 81B is concerned with variations of a place covered by a warehouse licence.

Item 45 Subsection 82(5)

68. This item repeals subsection 82(5) and replaces it with a new subsection (5) requiring the Comptroller-General of Customs to assess an application by the holder of a warehouse licence for a variation of conditions imposed upon the warehouse licence, and record in writing whether the conditions are varied or not.

69. The purpose of this amendment is to remove the requirement under current subsection 82(5) requiring the Comptroller-General of Customs to vary the licence by making an alteration to, or an endorsement on, the licence. With the digitisation of licences, licences no longer need to be produced and varied through alteration or endorsement.

70. This amendment also obliges the Comptroller-General of Customs to assess the application.

Item 46 At the end of section 82

71. This item inserts subsections (7) to (11) at the end of section 82. The amendments made by this item provide for the ways in which an application to vary the conditions specified on the licence may be made; and for the notification of the decision about the variation of conditions to the licence holder. These amendments enable such an application to be made electronically, whereas previously an application could only be made by document.

Subsection 82(7), (8) and (9)

72. Subsections (7) to (9) provide that applications under subsection (5) may be made by document or electronically, and set out the requirements for each of a documentary application and electronic application.

Subsection 82(10) and (11), and note

73. Where the Comptroller-General of Customs decides to vary a warehouse licence on application under subsection (5), subsection (10) requires the Comptroller-General of Customs to provide the applicant a copy of the variation. Where the Comptroller-General of Customs decides not to vary a warehouse licence on application under subsection (5), subsection (11) requires the Comptroller-General of Customs to give the applicant a notice of the refusal and reasons for the refusal. Subsections 82(10) and (11) relocate the requirements in section 273GAA(1) and paragraph (2)(b).

74. A note is included at the end of new subsection (11) directing a reader to new section 102AA, inserted by item [66], which sets out the ways in which a notice under section 82 may be given.

Item 47 At the end of subsection 82A(2)

75. This item inserts a note at the end of subsection 82A(2) directing a reader to new section 102AA, inserted by item [66], setting out how notices issued under Part V of the Customs Act may be given. Part V is concerned with warehouse licences, and section 82A empowers the Comptroller-General of Customs to impose additional conditions on a warehouse licence. Any such imposition of additional conditions must be notified to the holder of the warehouse licence.

Item 48 At the end of subsection 82B(1)

76. This item inserts a note at the of subsection 82B(1) directing a reader to new section 102AA, inserted by item [66], setting out how notices issued under Part V of the Customs Act may be given. Part V is concerned with warehouse licences, and section 82B empowers the Comptroller-General of Customs to vary the conditions to which a warehouse licence is subject. Any such variation to the conditions must be notified to the holder of the warehouse licence.

Item 49 At the end of subsection 83(2)

77. This item inserts a note at the end of subsection 83(2) directing a reader to new section 102AA, inserted by item [66], setting out how notices issued under Part V of the Customs Act may be given. Part V is concerned with warehouse licences, and section 83 provides for the period of time a warehouse licence remains in force.

78. Subsection 83(2) empowers a Collector to do certain things regardless of whether a warehouse licence has not been renewed, a number of which require a notice to be given to the last holder of the licence covering the particular warehouse.

Item 50 Paragraph 86(7)(d)

79. This item replaces the words "by notice in a prescribed manner" in paragraph 86(7)(d) with the words "by notice given". This is a consequential amendment that caters for new section 102AA, inserted by item [66], which expands the methods for the giving of notices beyond the service of notices personally or by post.

Item 51 At the end of the subsection 86(7)

80. This item inserts a note at the end of subsection 86(7) directing a reader to new section 102AA, inserted by item [66], setting out how notices issued under Part V of the Customs Act may be given. Part V is concerned with warehouse licences, and section 86 is concerned with the intended cancellation of warehouse licences.

Item 52 Subsection 90(2)

81. This item replaces the words "served, either personally or by post, on the holder of the licence" in subsection 90(2) and replaces them with the words "given to the holder of the licence". This is a consequential amendment that caters for new section 102AA, inserted by item [66], which expands the methods for the giving of notices beyond the service of notices personally or by post.

Item 53 At the end of subsection 90(2)

82. This item inserts a note at the end of subsection 90(2) directing a reader to new section 102AA, inserted by item [66], setting out how notices issued under Part V of the Customs Act may be given. Part V is concerned with warehouse licences, and section 90 is concerned with the obligations of holders of warehouse licences. A Collector imposing an obligation under paragraph 90(2)(c) on the holder of a warehouse licence must set out the obligation in a notice to the licence holder.

Item 54 Subsection 96A(8)

83. This item replaces the words "served on" in subsection 96A(8) with the words "given to". This is a consequential amendment that caters for new section 102AA, inserted by item [66], which expands the methods for the giving of notices beyond the service of notices personally or by post.

Item 55 Subsection 96A(8)

84. This item replaces the words "was served" in subsection 96A(8) with the words "was given". This is a consequential amendment that caters for new section 102AA, inserted by item [66], which expands the methods for the giving of notices beyond the service of notices personally or by post.

Item 56 At the end of subsection 96A(8)

85. This item inserts a note at the end of subsection 96A(8) directing a reader to section 102AA, inserted by item [66], setting out how notices issued under Part V of the Customs Act may be given. Part V is concerned with warehouse licences, and section 96A is concerned with outwards duty free shops.

86. An outwards duty free shop is defined under the section as "a warehouse in respect of which the relevant warehouse licence authorises the sale in the warehouse of goods to relevant travellers". Subsection 96A(8) requires a Collector to give the holder of a warehouse licence a notice if the Collector exercises a power in relation to conditions imposed on the warehouse licence under subsection 96A(6).

Item 57 Subsection 96A(14)

87. This item replaces the words "he or she shall cause to be served, either personally or by post, on the proprietor of the shop, a notice in writing setting out the Collector's findings on material questions of fact, referring to the evidence or other material on which those findings were based and giving the reasons for the decision" in subsection 96A(14) with the words "the Collector must give the proprietor of the shop written notice of the decision and of the reasons for the decision".

88. This is a consequential amendment that caters for new section 102AA, inserted by item [66], which expands the methods for the giving of notices beyond the service of notices personally or by post.

89. This amendment also simplifies the language of the subsection. It does not change the Collector's obligations in respect of the information to be included in the notice, as the giving of reasons requires an exposition of the findings based on the fact based evidence and other material made available to the decision maker, including how the decision was formed.

Item 58 At the end of subsection 96A(14)

90. This item inserts a note at the end of subsection 96A(14) directing a reader to new section 102AA, inserted by item [66], setting out how notices issued under Part V of the Customs Act may be given. Part V is concerned with warehouse licences, and section 96A is concerned with outwards duty free shops.

91. An outwards duty free shop is defined under the section as "a warehouse in respect of which the relevant warehouse licence authorises the sale in the warehouse of goods to relevant travellers". Subsection 96A(14) requires a Collector to give a warehouse licence holder notification of a refusal or revocation of a permission under subsection (2).

Item 59 Subsection 96B(8)

92. This item replaces the words "served on" in subsection 96B(8) with the words "given to". This is a consequential amendment that caters for new section 102AA, inserted by item [66], which expands the methods for the giving of notices beyond the service of notices personally or by post.

Item 60 Subsection 96B(8)

93. This item replaces the words "was served" in subsection 96B(8) with the words "was given". This is a consequential amendment that caters for new section 102AA, inserted by item [66], which expands the methods for the giving of notices beyond the service of notices personally or by post.

Item 61 At the end of subsection 96B(8)

94. This item inserts a note at the end of subsection 96B(8) directing a reader to new section 102AA, inserted by item [66], setting out how notices issued under Part V of the Customs Act may be given. Part V is concerned with warehouse licences, and section 96B is concerned with inwards duty free shops.

95. Subsection 96B(8) requires a Collector to give notice to a warehouse licence holder if the Collector imposes conditions, or revokes, suspends or varies such a condition imposed on a permission granted under subsection 96B(3).

Item 62 Subsection 96B(13)

96. This item replaces the words "the Collector shall cause to be served, either personally or by post, on the proprietor of the shop, a notice in writing setting out the Collector's findings on material questions of fact, referring to the evidence or other material on which those findings were based and giving the reasons for the decision" in subsection 96B(13) with the words "the Collector must give the proprietor of the shop written notice of the decision and of the reasons for the decision".

97. This item is a consequential amendment that caters for new section 102AA, inserted by item [66], which expands the methods for the giving of notices beyond the service of notices personally or by post.

98. This amendment also simplifies the language of the subsection. It does not change the Collector's obligations in respect of the information to be included in the notice, as the giving of reasons requires an exposition of the findings based on the fact based evidence and other material made available to the decision maker, including how the decision was formed

Item 63 At the end of subsection 96B(13)

99. This item inserts a note at the end of subsection 96B(8) directing a reader to new section 102AA, inserted by item [66], setting out how notices issued under Part V of the Customs Act may be given. Part V is concerned with warehouse licences, and section 96B is concerned with inwards duty free shops.

100. Subsection 96B(13) requires a Collector to give a warehouse licence holder a notice setting out the reasons for a refusal under subsection 96B(3), or a revocation under subsection 96B(12) of permission for the licence holder to sell airport shop goods to a relevant traveller.

Item 64 Subsection 100(6)

101. This item inserts the words "given to the person" after the words "notice in writing" in subsection 100(6). This item is a consequential amendment that caters for new section 102AA, inserted by item [66], which expands the methods for the giving of notices beyond the service of notices personally or by post.

Item 65 At the end of subsection 100(6)

102. This item inserts the a note at the end of subsection 100(6) directing a reader to new section 102AA, inserted by item [66], setting out how notices issued under Part V of the Customs Act may be given. Part V is concerned with warehouse licences, and section 96B is concerned with inwards duty free shops.

Item 66 After subsection 102A

103. This item inserts new section 102AA after section 102A. The purpose of this amendment is to co-locate the provisions setting out the methods by which notice may be given to a person or partnership for the purposes of Part V. New subsections 102AA(1) and (2) provide methods for the giving of notices to persons and partnerships respectively. New subsection 102AA(3) deems that if the notice is posted as a letter addressed to the person or partnership at the address of a place that is or was covered by the licence, the notice is taken to be properly addressed.

104. These amendments facilitate the electronic giving of notices under Part V of the Customs Act by providing for different methods for giving a notice. Notices may now be given, rather than served, by email or any other electronic means to the relevant person, in addition to the existing methods currently provided for under Part V.

Item 67 Subsection 183C(1)

105. This item repeals subsection 183C(1) and replaces it with a new subsection 183C(1) which obliges the Comptroller-General of Customs to assess an application for a customs broker's licence, and decide to either grant or refuse the application in writing.

Item 68 After subsection 183CC

106. This item inserts new section 183CCA after section 183CC requiring the Comptroller-General of Customs to give to an applicant for a customs broker's licence written notice of a refusal to grant the licence, including reasons for the refusal.

Item 69 Subsections 183CF(1) and (2)

107. This item repeals current subsections 183CF(1) and (2) and replaces them with new subsections (1), (2), (2A), (2B), and (2C). The amendments made by this item provide for the types of matters that an application to vary a broker's licence can be about; and the ways in which an application can be made. These amendments enable such an application to be made electronically.

Subsections 183CF(1) and (2)

108. These amendments clarify the provisions about applications for variation of a broker's licence. An application under subsection (1) is to vary a place at which the applicant may act as a customs broker, and an application under subsection (2) is to vary who is specified as an applicant's nominees.

Subsections 183CF(2A), (2B) and (2C)

109. Amended subsection 183CF contains new subsections (2A), (2B) and (2C), which introduce the capability to make electronic applications to vary a broker's licence, whereas currently an applicant is required to produce their licence to the Comptroller-General of Customs in order to have a variation recorded on their licence. New subsection 183CF(2A) provides that an application for a variation may be made either by document or electronically, and subsections (2B) and (2C) respectively set out the requirements for a valid application.

Item 70 Before subsection 183CF(3)

110. This item inserts the signpost heading "Limitations" before subsection 183CF(3) to maintain the internal consistency of amended section 183CF.

Item 71 Subsection 183CF(3)

111. This item replaces the words "shall not vary the endorsements on a licence" in subsection 183CF(3) with the words "must not vary the licence". Subsection 183CF(3) requires a person to have consented to being a nominee before a licence can be varied to specify them as a nominee. With the digitisation of licences, licences no longer need to be produced. making the reference to endorsements redundant.

Item 72 Subsection 183CF(4)

112. This item replaces the words "shall not be endorsed" in subsection 183CF(4) with the words "must not be specified". With the digitisation of licences, licences no longer need to be produced and varied through alteration or endorsement.

Item 73 Subsection 183CF(4)

113. This item replaces the word "endorsement" in subsection 183CF(4) with the word "specification". With the digitisation of licences, licences no longer need to be produced and varied through alteration or endorsement.

Item 74 At the end of section 183CF

114. This item inserts new subsections (5) and (6) at the end of section 183CF, including the signpost heading "Notification of decisions". These amendments make explicit the obligation on the Comptroller-General of Customs to:

•

In the case of a decision to vary a licence, give the applicant a copy of the variation of a broker's licence under new subsection (5); or

•

In the case of a decision to refuse to vary a licence, give the applicant written notice of the refusal of the application for a variation of a broker's licence, together with the reasons for the refusal under new subsection (6).

115. This item also inserts a note at the end of new subsection 183CF(6) directing a reader to new section 183UAA, as inserted by item [103], setting out the ways notices or summons may be given under Part XI of the Customs Act.

Item 75 Subsection 183CG(7)

116. This item repeals subsection 183CG(7) and replaces it with a new subsection 183CG(7) providing for an application to be made by a customs broker to the Comptroller-General of Customs to vary the conditions specified in the broker's licence. Current subsection 183C(7) requires the production of the licence held by the customs broker and the Comptroller-General to vary the conditions specified in the licence by making an alteration to, or an endorsement on, the licence. With the digitisation of licences, licences no longer need to be produced and varied through alteration or endorsement.

Item 76 After subsection 183CG(7A)

117. This item inserts new subsections (7B) to (7F) after subsection 183CG(7A), including the signpost headings "Kind of application" before new subsection 183CG(7B) and "Notification of decisions" before new subsection 183CG(7E).

New subsections 183CG(7B), (7C) and (7D)

118. New subsection 183CG(7B) provides that an application to vary conditions specified in a broker's licence may be made by document or electronically. New subsections 183CG(7C) and (7D) set out the respective requirements of a valid documentary and electronic application under amended section 183CG.

New subsections 183CG(7E) and (7F)

119. New subsections 183CG(7E) and (7F) oblige the Comptroller-General of Customs to:

•

In the case of a decision to vary the conditions specified in a broker's licence, give the applicant a copy of the variation under new subsection (7E); and

•

In the case of a decision to refuse to vary the conditions specified in a broker's licence, give the applicant written notice of the refusal decision, including the reasons for the refusal under new subsection (7F).

120. This item also inserts a note at the end of new subsection 183CG(7F) directing a reader to new section 183UAA, as inserted by item [103], setting out the ways notices may be given under Part XI of the Customs Act .

Item 77 At the end of subsection 183CGA(2)

121. This item inserts a note at the end of subsection 183CGA(2) directing a reader to new section 183UAA, as inserted by item [103], setting out the ways notices may be given under Part XI of the Customs Act. Section 183CGA is concerned with the imposition of additional conditions on a customs broker's licence if the Comptroller-General of Customs considers it necessary or desirable to do so.

Item 78 At the end of subsection 183CGB(1)

122. This item inserts a note at the end of subsection 183CGB(1) directing a reader to new section 183UAA, as inserted by item [103], setting out the ways notices may be given under Part XI of the Customs Act. Section 183CGB is concerned with variations to the conditions specified in a customs broker's licence made at the discretion of the Comptroller-General of Customs.

Item 79 Subsection 183CK(1)

123. This item replaces the words "served on" in subsection 183CK(1) with the words "given to". This is a consequential amendment that caters for new section 183UAA, as inserted by item [103] setting out the ways notices and summons may be given under Part XI of the Customs Act, which expands the methods for the giving of notices beyond the service of notices personally or by post.

124. Section 183CK is concerned with the giving of security when required by the Comptroller-General of Customs for compliance by a broker's licence holder with the Customs Acts, and for compliance with the conditions or requirements to which the importation or exportation of goods is subject.

Item 80 At the end of subsection 183CK(1)

125. This item inserts a note at the end of subsection 183CK(1) directing a reader to new section 183UAA inserted by item [103] setting out the ways notices and summons may be given under Part XI of the Customs Act.

Item 81 At the end of subsection 183CK(2)

126. This item inserts a note at the end of subsection 183CK(2) directing a reader to new section 183UAA, as inserted by item [103], setting out the ways notices and summons may be given under Part XI of the Customs Act.

Item 82 Subsection 183CK(3)

127. This item inserts the words "under subsection 183C(1)" after the word "may" in subsection 183CK(3). This amendment aids the interpretation of section 183CK(3) by referencing the source of the Comptroller-General of Customs' power to grant or refuse a customs broker's licences.

Item 83 Section 183CP

128. This item replaces the words "served on" in section 183CP with the words "given to". This is a consequential amendment that caters for new section 183UAA, as inserted by item [103], setting out the ways notices and summons may be given under Part XI of the Customs Act, which expands the methods for the giving of notices beyond the service of notices personally or by post.

Item 84 Section 183CP

129. This item removes the words "the endorsements on" from section 183CP. With the digitisation of licences, licences no longer need to be produced and varied through alteration or endorsement.

Item 85 At the end of section 183CP

130. This item inserts a note at the end of subsection 183CK(2) directing a reader to new section 183UAA, as inserted by item [103], setting out the ways notices and summons may be given under Part XI of the Customs Act.

131. Section 183CP is concerned with a notice given to a broker's licence holder by the Comptroller-General of Customs requiring the licence holder to apply to vary the licence so that it complies with subsection 183C(2). Subsection 183C(2) requires a nominee of a licence holder to be eligible to become a nominee, or to intend to take all necessary action to ensure they are eligible when a broker's licence is granted.

Item 86 Subsection 183CQ(1)

132. This item removes the words "in accordance with this section" from subsection 183CQ(1). This amendment removes the requirement to give a notice under subsection 183CQ(1) in accordance with current subsection 183CQ(3) which sets out that a notice shall be in writing and served either personally or by post.

133. A notice given under section 183CQ will be required to be given by a method set out in new section 183UAA, as inserted by item [103], which expands the methods for the giving of notices and summons beyond the service of notices and summons personally or by post.

Item 87 At the end of subsection 183CQ(1)

134. This item inserts a note at the end of subsection 183CQ(1) directing a reader to new section 183UAA inserted by item [103] setting out the ways notices and summons may be given under Part XI of the Customs Act. Section 183CQ is concerned with the investigation of matters relating to a broker's licence where the Comptroller-General of Customs has reasonable grounds to believe the existence of certain facts inimical to the maintenance of a broker's licence.

Item 88 Subsection 183CQ(3)

135. This item repeals subsection 183CQ(3), to remove the requirement that a notice in respect of investigations relating to a broker's licence must be served either personally or by post.

136. A notice given under section 183CQ will be required to be given by a method set out in new section 183UAA, as inserted by item [103], which expands the methods for the giving of notices beyond the service of notices personally or by post.

Item 89 Subsection 183CR(1)

137. This item replaces the words "notice in accordance with" in subsection 183CR(1) with the words "a notice under". This amendment removes the requirement to give a notice under subsection 183CR(1) in accordance with current subsection 183CQ(3), which sets out that a notice shall be in writing and served either personally or by post.

138. Section 183CR is concerned with the suspension of a broker's licence pending an investigation under section 183CQ if the Comptroller-General of Customs considers it necessary to do so.

Item 90 At the end of subsection 183CR(2)

139. This item inserts a note at the end of subsection 183CR(2) directing a reader to new section 183UAA, as inserted by item [103], setting out the ways notices or summons may be given under Part XI of the Customs Act.

Item 91 At the end of subsection 183CS(1)

140. This item inserts a note at the end of subsection 183CS(1) directing a reader to new section 183UAA, as inserted by item [103], setting out the ways notices or summons may be given under Part XI of the Customs Act. Section 183CS empowers the Comptroller-General of Customs to do certain things in relation to a broker's licence after considering a report prepared by the Committee under subsection 183CQ(7). The 'Committee' is defined under section 180 as the National Customs Brokers Licensing Advisory Committee.

Item 92 After subsection 183CS(1)

141. This item inserts a new subsection (1A) after subsection 183CS(1) requiring the Comptroller-General of Customs to provide a licence holder with the reasons a notice was given under subsection 183CS(1). The provision of reasons is a fundamental aspect of procedural fairness, allowing a person to know why a course of action affecting their interests has been taken, to allow for an informed response.

142. The requirement to set out grounds for the decision is currently provided by existing subsection 273GAA(9) which will be repealed by item [105].

143. This item is a consequential amendment to align with the requirements for notification of decisions under new section 183UAAas inserted by item [103].

Item 93 At the end of subsection 183CS(2)

144. This item inserts a note at the end of subsection 183CS(2) directing a reader to new section 183UAA, as inserted by item [103], setting out the ways notices may be given under Part XI of the Customs Act.

Item 94 Subsection 183CS(3)

145. This item repeals subsection 183CS(3), to remove the requirement that a notice arising from a report under section 183CS must be in writing and served either personally or by post.

146. A notice given under section 183CS will be required to be given by a method set out in new section 183UAA, as inserted by item [103], which expands the methods for the giving of notices and summons beyond the service of notices personally or by post.

Item 95 Section 183CU

147. This item repeals section 183CU, which is redundant as a result of new section 183UAA, as inserted by item [103], setting out the ways in which a notice or summons may be given under Part XI of the Customs Act.

Item 96 Subsection 183J(1)

148. This item replaces the words "served on" in subsection 183J(1) with the words "given to". This is a consequential amendment that caters for new section 183UAA, as inserted by item [103], setting out the ways notices and summons may be given under Part XI of the Customs Act, which expands the methods for the giving of notices beyond the service of notices personally or by post.

149. Section 183J is concerned with notices given to a customs broker by the NCBLAC where an application has been referred under section 183CB, or a question has been referred under section 183CQ.

Item 97 At the end of subsection 183J(1)

150. This item inserts a note at the end of subsection 183J(1) directing a reader to new section 183UAA, as inserted by item [103], setting out the ways in which notices may be given under Part XI of the Customs Act.

Item 98 Subsections 183J(2) and (3)

151. This item replaces the words "served in pursuance of" in subsections 183J(2) and (3) with the words "given under". This is a consequential amendment that caters for new section 183UAA, as inserted by item [103], setting out the ways notices and summons may be given under Part XI of the Customs Act, which expands the methods for the giving of notices beyond the service of notices personally or by post.

Item 99 Subsection 183J(4)

152. This item replaces the words "served on" in subsection 183J(4) with the words "given to". This is a consequential amendment that caters for new section 183UAA, as inserted by item [103], setting out the ways notices and summons may be given under Part XI of the Customs Act, which expands the methods for the giving of notices beyond the service of notices personally or by post.

Item 100 At the end of subsection 183J(4)

153. This item inserts a note at the end of subsection 183J(4) directing a reader to new section 183UAA, as inserted by item [103], setting out the ways in which notices may be given under Part XI of the Customs Act.

Item 101 At the end of subsection 183K(1)

154. This item inserts a note at the end of subsection 183K(1) directing a reader to new section 183UAA, as inserted by item [103], setting out the ways in which summons may be given under Part XI of the Customs Act. The requirements for the giving of summons are identical under new section 183UAA to those applicable to the giving of notices under Part XI generally, and so may be given electronically rather than served personally or by post.

155. Section 183K empowers the NCBLAC to summon a person to attend the Committee to give evidence as a witness.

Item 102 Section 183L

156. This item repeals section 183L. This section is redundant as a result of new section 183UAA, as inserted by item [103], setting out the ways in which notices and summonses may be given under Part XI of the Customs Act.

Item 103 At the end of Part XI

157. This item inserts a new Division 6 with the title "Giving of notices or summons" at the end of Part XI. This is intended to distinguish between this Division and the other Divisions of Part XI to indicate that new Division 6 is relevant to notices and summons given under Part XI unless there is a clear exception.

158. This item inserts new section 183UAA into new Division 6, which sets out the ways in which notices and summons must be given. Notices and summons are presently required to be served either personally or by post, which causes delay and is administratively burdensome. New section 183UAA permits notices and summons to be given to persons and partnerships electronically under new paragraphs 183UAA(a) and (b), or to be delivered to a person personally or by post under new paragraphs 183UAA(c) or (d). Paragraph 183UAA(e) permits notices or summons to be left at a person's last known place of residence or business with a person apparently resident or employed at the place who appears at least 16 years of age. This aligns with the methods by which notices and summons can be given for matters in respect of Part IVA and Part V of the Customs Act.

159. All notices and summons given under Part XI are given by either the Comptroller-General of Customs or the Chair of NCBLAC.

Item 104 Paragraphs 273GAA(2)(b), (d), (e) and (f)

160. This items repeals paragraphs 273GAA(2)(b), (d), (e) and (f) to reflect that the amendments made by the Schedule to the Bill make these paragraphs redundant. Section 273GAA is concerned with the giving of notices, and notification of decisions referenced by the paragraphs repealed by this item are now given in accordance with new sections inserted into Parts V (section 102AA) and XI (section 183UAA) of the Customs Act by the amendments introduced in the Schedule to the Bill.

Item 105 Subsection 273GAA(9)

161. This item repeals subsection 273GAA(9), which is redundant as a result of the amendments introduced by item [92]. Item [92] inserts a new subsection (1A) after subsection 183CS(1) requiring the Comptroller-General of Customs to provide a licence holder with the reasons a notice was given under subsection 183CS(1).

Item 106 Application provisions

162. The amendments made by this Part apply in relation to a notice or summons given on or after the day on which this item commences.

163. The amendments of sections 82, 183C, 183CF and 183CG of the Customs Act made by this Part (items [45] and [46], item [67], items [70] to [74] inclusive, and items [75] and [76] respectively) apply in relation to an application made on or after the day on which this item commences.

Part 3 Streamlined publication requirements

Customs Act 1901

Item 107 Subsection 77VC(4)

164. This item repeals current subsection 77VC(4), and substitutes a new subsection (4) which provides that if the Comptroller General of Customs cancels a depot licence under section 77VC, and goods remain in the former depot, the Comptroller General must publish a notice, by any means the Comptroller General considers appropriate, informing owners of goods in that former depot of the cancellation and the date of the cancellation.

165. Current subsection 77VC(4) of the Customs Act requires that if a depot licence is cancelled the Comptroller-General of Customs must inform the owners of the goods in the depot of the cancellation of the date of the cancellation by a notice published in a newspaper circulating in the locality in which the depot is situated.

166. The amendment made by item [107] removes the requirement that a notification of the cancellation of a depot or warehouse licence must be placed in a locally circulated newspaper or gazette. This amendment will allow the Comptroller-General of Customs to determine the means of notification as appropriate.

Item 108 Subsections 83(3) and (4)

167. The amendments made by item [108] remove the requirement that a notification of the cancellation of a depot or warehouse licence must be placed in a locally circulated newspaper or gazette. This amendment will allow the Comptroller-General of Customs to determine the means of notification as appropriate.

Subsection 83(3)

168. Current subsection 83(3) imposes the requirement that a notice to the owners of goods in a warehouse which has had its licence cancelled must be published on the Department's website and in the Gazette and in a newspaper circulating in the locality in which the warehouse is situated. If such a notice is published and the owners of the goods fail to comply with the requirement to either remove the goods or pay the duty payable on the goods, those goods may be sold.

169. This item repeals current subsection 83(3) and substitutes new subsection (3) which will permit the Comptroller-General of Customs to determine the means of notification of the cancellation of a warehouse licence as appropriate. New subsection (3) mirrors the existing obligation that if such a notice is published, and the owners of the goods fail to comply with the requirement to either remove the goods or pay the duty payable on the goods, those goods may be sold.

Subsection 83(4)

170. Current subsection 83(4) requires that a notice under subsection 83(3) be served either in person or by post if the Comptroller-General of Customs is satisfied that all the goods in a former warehouse (where the licence has not been renewed) are the property of the person who held the licence. The notice may be served to either that person or a person who, at the time of the expiration of the licence, apparently participated in the management or control of the former warehouse. If such a notice is served and the owners of the goods fail to comply with the requirement to either remove the goods or pay the duty payable on the goods, those goods may be sold.

171. This item also repeals current subsection 83(4), and substitutes new subsection (4), which other than removing the obligation on the Comptroller-General of Customs to publish a notice under subsection (3), mirrors the existing obligation that if such a notice is given to the owner of the goods by the Comptroller-General of Customs, and the owners of the goods fail to comply with the requirement to either remove the goods or pay the duty payable on the goods, those goods may be sold.

172. This amendment has the effect of streamlining the notification process by removing the existing obligation that the notice be published, and permits the Comptroller-General of Customs to give such a notice in accordance with new section 102AA, as inserted by item [66], to the owner of the goods.

Item 109 Subsections 83(5)

173. This item inserts "or (4)" after "subsection (3)" in subsection 83(5) to cater for the amendment made by item [108]. Subsection 83(5) sets out the consequences where the owner of goods to which a notice under new subsections (3) and (4) applies, fails to comply with the requirements of the notice.

Item 110 Application provision

174. This item makes clear that the amendments made by this Part only apply in relation to a notice published or given on or after the day on which this item commences.

Part 4 Streamlined disciplinary process for customs brokers

Customs Act 1901

Item 111 Subsection 183CG(8)

176. This item repeals subsection 183CG(8).

177. Current subsection 183CG(8) provides that where a customs broker fails to comply with a condition of his or her licence the Comptroller-General of Customs may, by notice in writing served on the customs broker, require the customs broker to comply with that condition within the time specified in the notice. The notice in current subsection 183CG(8) is a precondition to the Comptroller-General of Customs being empowered to send a notice of cancellation and refer to NCBLAC under section 183CQ(1)(h).

178. This amendment removes this notification requirement under subsection 183CG(8) to standardise the natural justice process for non-compliance with licence conditions for depots, warehouses and customs brokers. Removing this step would not deprive a customs broker as the broker is still afforded an opportunity to respond once issued with a notice under paragraph 183CQ(1)(h).

Item 112 Paragraph 183CQ(1)(h)

179. This item amends paragraph 183CQ(1)(h) to omit the words "and, having been served with a notice under subsection 183CG(8) in relation to the non-compliance with that condition, the customs broker has not, within the time specified in the notice, complied with that condition". This amendment is consequential to the amendment made by item [111], which removes the requirement for the Comptroller-General of Customs to serve the notice under section 183CG in writing.

Item 113 Subsection 183CQ(4)

180. This item repeals subsection 183CQ(4), replaces it with a new subsection (4) and inserts a new subsection (4A). Both new subsections deal with the mandatory contents of section 183CQ notices if given by the Comptroller-General to a customs broker in certain circumstances.

181. The purpose of this amendment is to establish a streamlined natural justice process where the Comptroller-General of Customs is empowered to take action in certain circumstances without referring the matter to NCBLAC. This is only permitted where relevant facts are objectively established, such as where a company is in liquidation, the customs broker is convicted of a prescribed offence, or a licence charge remains unpaid. This statutory procedural fairness process aligns with the process for cancellations in the depot and warehouse licence regimes. This process removes a benign administrative layer to the decision making process.

182. This item implements and extends on recommendation 11 of the Final Report of the Review of Customs Licensing Regimes which provides that:

The Customs Act 1901 should be amended:

to allow disciplinary decisions to be made by the Comptroller-General without the necessity for reference to NCBLAC where a broker has been prosecuted and found by a court (whether after a trial or following a plea of guilty) to have committed an offence against the Customs laws or against other laws in relation to an importation of goods and the elements of that offence require guilty intent.

New subsection 183CQ(4) - without referral to the Committee

183. New subsection 183CQ(4) provides that in circumstances where the Comptroller-General of Customs gives a customs broker a notice because of paragraph 183CQ(1)(a), (c) or (f), without referral to the Committee, the notice must:

•

state the grounds on which the notice is given, and

•

state the things the Comptroller-General may do in relation to that licence under subsection 183CS(1), and

•

invite the broker to make a written submission to the Comptroller-General in relation to the matter within the period specified in the notice. The period specified in the notice must be at least 14 days after the day the notice is given.

New subsection 183CQ(4A) - with referral to the Committee

184. This item also inserts a new subsection (4A) which has the effect that in circumstances where the Comptroller-General of Customs gives a customs broker a notice, and subsection (4) as amended by this item does not apply, the notice must:

•

state the grounds on which the notice is given; and

•

state that the Comptroller-General is going to refer the question whether the Comptroller-General should take action in relation to the broker's licence under subsection 183CS(1) to the Committee; and

•

state the things the Comptroller-General may do in relation to that licence under subsection 183CS(1); and

•

state the rights of the customs broker under sections 183J and 183S to take part in the proceedings before the Committee.

Item 114 Subsection 183CQ(5)

185. This item amends subsection 183CQ(5) to omit the words "notice in accordance with this section to a customs broker", and substitutes the words "a notice under this section to a customs broker where subsection (4A) applies".

186. This is a consequential amendment that caters for the insertion of new section (4A) effected by item [113].

Item 115 Subsection 183CR(1)

187. This item replaces the words "investigation and report of the Committee" with the words "making of a submission (if any) under paragraph 183CQ(4)(c) by the customs broker or pending the investigation and report of the Committee under subsection 183CQ(7) in relation to the custom broker" in subsection 183CR(1).

188. This is a consequential amendment that caters for new paragraph 183CQ(4)(c) as inserted by item [113], which specifies that the notice must invite the broker to make a written submission to the Comptroller-General in relation to the matter within the period specified in the notice. The period specified in the notice must be at least 14 days after the day the notice is given.

Item 116 Subsection 183CS(1)

189. This item replaces the words "Where the Comptroller-General of Customs, after considering a report under subsection 183CQ(7) in relation to a broker's licence, is" with the words "If the Comptroller-General of Customs, after considering a submission (if any) under paragraph 183CQ(4)(c) by a customs broker, or after considering a report of the Committee under subsection 183CQ(7) in relation to a custom broker, is" in subsection 183CS(1).

190. This is a consequential amendment that caters for new paragraph 183CQ(4)(c) as inserted by item [113], which specifies that the notice must invite the broker to make a written submission to the Comptroller-General in relation to the matter within the period specified in the notice. The period specified in the notice must be at least 14 days after the day the notice is given.

Item 117 Subsection 183CS(2)

191. This item replaces the words "considering a report under subsection 183CQ(7) in relation to a broker's licence" with the words "considering a submission (if any) under paragraph 183CQ(4)(c) by a customs broker or after considering a report of the Committee under subsection 183CQ(7) in relation to a custom broker" in subsection 183CS(2).

192. This is a consequential amendment that caters for new paragraph 183CQ(4)(c) as inserted by item [113], which specifies that the notice must invite the broker to make a written submission to the Comptroller-General in relation to the matter within the period specified in the notice. The period specified in the notice must be at least 14 days after the day the notice is given.

Item 118 Application provisions

Subsection 183CG(8) and paragraph 183CQ(1)(h)

193. Subsection (1) of this item deals with the application of the repeal of subsection 183CG(8), and the amendment of paragraph 183CQ(1)(h) made by items [111] and [112], by providing that the amendments apply in relation to a failure to comply with a condition, where the failure occurs on or after the day on which this item commences (whether the condition was imposed before, on or after that day).

Section 183CQ

194. Subsection (2) of this item deals with the application of the amendments of section 183CQ made by items [113] and [114] by providing that the amendments apply in relation to a section 183CQ notice given on or after the day on which this item commences, whether the broker's licence was granted before, on or after that day.

Subsection 183CQ(4)

195. Subsection (3) of this item deals with the application of subsection 183CQ(4) as amended by item [113] by providing that subsection 183CQ(4) applies in relation to the following:

•

a conviction for a prescribed offence that occurs on or after the day on which this item commences;

•

a company that goes into liquidation on or after the day on which this item commences;

•

customs broker licence charge that becomes payable on or after the day on which this item commences.

Part 5 Nominees of customs brokers

Customs Act 1901

Item 119 Paragraphs 183CD(d) and (e)

196. This item repeals paragraphs 183CD(d) and (e). Current paragraphs 183CD(d) and (e) provide that a person is eligible to be the nominee of a customs broker if, and only if:

•

the person is a director or an employee of the company if the customs broker is a company; and

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the person is a member or an employee of the partnership if the customs broker is a partnership.

197. This amendment is designed to remove restrictions on the eligibility to be a nominee of a customs broker that is a company or a partnership. Paragraphs 183CD(d) and (e) currently require that a nominee must be an "employee" of a customs broker that is a company or a partnership. No such requirement applies to nominees of customs brokers that are natural persons. The amendment will bring the eligibility requirements in the Customs Act in line with industry practice and will allow a broader range of people to meet the requirements to be a customs broker nominee.

Item 120 Application provision

198. This item provides that the repeal of paragraphs 183CD(d) and (e) applies in relation to an application for a broker's licence that is made on or after the day on which this item commences.

Part 6 Disclosure of information about Transport Security Identification Cards

AusCheck Act 2007

Item 121 At the end of subsection 15(2) (before the note)

199. This item inserts a new paragraph (e) at the end of subsection 15(2) of the AusCheck Act 2007 (AusCheck Act) which provides a further exception to the offence provisions under subsection 15(1) of that Act where the disclosure of information is of AusCheck scheme personal information to an officer of customs to assist them in the performance of duties and the exercise of functions.

200. AusCheck scheme personal information is defined under the AusCheck Act as information obtained under or relating to the administration of the AusCheck scheme. The AusCheck scheme itself relates to the conduct and coordination of background checks of individuals. The addition of paragraph (e) will allow the disclosure by AusCheck staff members to an officer of customs of information pertaining to the refusal, cancellation or suspension of a "transport security identification card" held by an individual. This will align the Department of Home Affairs' fit and proper person checks for the purposes of licensing with that of other agencies.

201. Whilst this item would authorise the disclosure of personal information, and thus trespass somewhat on a person's right to privacy, the disclosure is appropriate and necessary for maintaining the integrity of Australia's customs operations.

Protection of privacy

202. Personal information collected by the Secretary of the Department of Home Affairs (Home Affairs) (and more generally by the discrete area within the Department that performs the AusCheck function (AusCheck)), including the outcome of a background check for the transport security identification card schemes, is protected under the AusCheck Act and AusCheck Regulations 2017 (Auscheck Regulations).

203. Sections 13 and 14 of the AusCheck Act are relevant to how information is collected, retained, used and disclosed, with section 15 of the AusCheck Act covering the protection of information. These sections of the AusCheck Act have been designed and developed to ensure that the acts and practices of the Secretary, AusCheck and delegates in relation to the disclosure of personal information, are consistent with the Australian Privacy Principles (APP), which are the cornerstone of the Australian Privacy Act 1988 (Privacy Act).

Privacy Act and AusCheck Act

204. The Privacy Act applies in relation to the amendment made by this item. However, the effect of this amendment is that disclosure of personal information by the Secretary (or AusCheck) to an officer of customs in those particular circumstances will be required by law.

205. APP 6 of Part 3 of Schedule 1 to the Privacy Act generally governs the use and disclosure of personal information by an APP entity, such as the Department (and by extension, AusCheck by virtue of being a discrete area within the Department). In particular, subclause 6.1 provides that an APP entity must not use or disclose personal information about an individual that was collected for a particular purpose for another purpose, unless the individual has consented or an exception applies. Paragraph (b) of subclause 6.2 provides an exception to the prohibition on use or disclosure where a disclosure is required or authorised by or under Australian law. In effect, this means the amendment made to section 15 by this item has the consequence that the required disclosures will be an exception to APP 6.

206. However, as noted above, the personal information the Secretary must disclose to officers of customs under the amendment made to section 15 by this item will also be AusCheck scheme personal information (as defined in subsection 4(1) of the AusCheck Act). The use and disclosure of AusCheck scheme personal information is subject to even more stringent safeguards under sections 13, 14 and 15 of the AusCheck Act.

207. In particular, subsection 15(1A) of the AusCheck Act provides that it is a criminal offence punishable by two years' imprisonment if a person obtains information that is AusCheck scheme personal information and the person discloses that information to someone else, unless an exception under subsection 15(2) applies. Importantly, the offence in subsection 15(1A) continues to apply to the on-disclosure of AusCheck scheme personal information.

208. The effect of this is that, where AusCheck scheme personal information is disclosed to an officer of customs in accordance with the amendment made to section 15 it will be an offence for the officer of customs to disclose the AusCheck scheme personal information unless an exception in subsection 15(2) applies. The exceptions in subsection 15(2) include:

•

with consent;

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where disclosure is to the individual to whom the AusCheck scheme personal information relates;

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disclosure that is taken to be authorised by section 13, authorised under section 14 or required or authorised by another law; or

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a disclosure to Australian Federal Police for the purposes of the AusCheck scheme.

209. Disclosures (and use) authorised by section 14 are generally for the purposes of, or in connection with, the AusCheck scheme, or for specific purposes, such as for the purposes of the performance of functions relating to law enforcement or national security by the Commonwealth, a State or Territory (or an authority of Commonwealth, a State or Territory).

210. Therefore whilst the amendment made to section 15 by this item will have the effect that the disclosure of information in the circumstances is an exception to APP 6, given the more limited purposes for which AusCheck scheme personal information can be used and disclosed under the AusCheck Act and the offence provision in subsection 15(1A) of the AusCheck Act, the information disclosed is subject to more rigorous safeguards.

Other safeguards

211. Section 13 of the AusCheck Regulations specifies what information must be shared and with whom, when the Secretary or AusCheck provides advice about a background check for an individual for aviation and maritime security purposes. Subsections 13(2), 13(3) and 13(4) specifically set out what advice relating to criminal history must be given; for example, only the advice that the individual has an unfavourable criminal history, or that an adverse security assessment has been given in relation to the person must be given to an officer of customs, thereby providing the relevant safeguards.

212. In effect, all that the Secretary is required to provide is advice that there is or is not an unfavourable criminal history, or an adverse security assessment in relation to the applicant or transport security identification card holder. For example, there is no requirement that the Secretary must set out the offences described in the criminal history.

213. Therefore, subsection 13(4) operates as an effective safeguard to protect an individual's privacy in relation to their criminal history, security assessment and criminal intelligence assessment by providing that if the Secretary advises the officer of customs under subsection 13(2) that the individual has an unfavourable criminal history, or an adverse security assessment the Secretary must inform the individual of that advice and the reasons for that advice. For example, the individual would receive a list of criminal offences that are the 'reasons' for the unfavourable criminal history advice given to the issuing body, but the issuing body would not receive the list of offences.

Item 122 Application provision

214. This item provides that the amendments of subsection 15(2) by item [121] applies in relation to the disclosure of information on or after the day on which this item commences, whether the information was obtained or generated before, on or after that day.

215. This would permit the disclosure of Auscheck scheme personal information to an officer of customs on and from the date this item comes into effect, irrespective of when the information was obtained or generated by AusCheck.

216.

Part 7 Fit and Proper Person Test

Customs Act 1901

217. Part 7 extends and strengthens the existing fit and proper person test to ensure that licence holders who are natural persons, partnerships and companies participating in the management or control of places under the licence, have the integrity, capacity and competence to manage a depot or warehouse premise.

218. The fit and proper person test includes consideration of an individual natural person, members of a partnership or a company's history of compliance with Commonwealth, State or Territory legislation, whether they or it have previously held a licence that has been cancelled, and whether the company's directors are undischarged bankrupts. These are not the only matters that may be considered. It is important to ensure that a broad range of matters can be considered to inform a holistic assessment, as a potential licence holder may be involved in the movement, storage or manufacture of a wide range of goods, with varying degrees of risk.

219. The granting of a licence confers significant responsibility on the licence holder in relation to goods, and the granting of a depot or warehouse licence confers significant responsibility on the licence holder in relation to the relevant goods. The extension of these provisions to additional persons is therefore proportionate to manage the risks of non-compliance and to the broader collection of excise duty and equivalent customs duty, by ensuring persons who hold such responsibilities have the capacity and integrity to discharge them appropriately.

220. The amendments to the Customs Act made by Part 7 of Schedule 1 to this Bill are therefore necessary, reasonable and proportionate to the legitimate aim of ensuring that natural persons, members of partnerships or companies responsible for, or involved in, the reporting, movement and storage of customs controlled goods and manufacture or storage of excise-equivalent goods are suitable to do so. The amendments to the Customs Act made by Part 7 of Schedule 1 to this Bill safeguard the integrity of Australia's customs control systems.

Item 123 At the end of section 77F

221. This item adds a new subsection (4) to the interpretation section of Part IVA of the Customs Act. It sets out the scope of what is meant under that Part when a person is said to participate in the management or control of a depot by providing that a person is taken to participate in the management or control of a depot if the person has authority to:

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direct the operations, or an important or substantial part of the operations of the depot; or

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direct the activities of the depot; or

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remove goods from the depot.

222. This provision aligns with current section 78 in Part V relating to warehouses in defining a person who is taken to participate in the management or control of a depot. Previously, only Part V specifies the relevant characteristics of a person occupying a position of management or control. These were not specified in Part IVA, despite the references in Part IVA to management or control.

223. This will ensure a consistent approach in applying the fit and proper person assessment across both depot and warehouse regimes. In practice, the provision provides clarity for applicants regarding the roles and responsibilities of persons who hold positions of management or control. Subsequently, this will inform the applicant for a licence of their obligations in relation to persons participating in the management or control of a depot.

224. This item also assists with distinguishing between a person participating in the management or control of a depot and a person who participates in the operations of the depot.

Item 124 Paragraphs 77K(1)(a) to (g)

225. This item repeals paragraphs 77K(1)(a) to (g), which are concerned with fit and proper person assessments of personnel in respect of a depot the subject of a depot licence application; and inserts new paragraphs 77K(1)(a) to (c).

226. New paragraph 77K(1)(a) provides for the considerations where the applicant is a natural person. It requires that the Comptroller-General of Customs must not grant a depot licence if, in the Comptroller-General's opinion:

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the applicant is not a fit and proper person to hold the depot licence; or

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the applicant would not be in a position to occupy and control the place if the licence were granted; or

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a person who would participate in the management or control of, or in the operations carried out at, the place (whether or not the person would be present at the place) is not a fit and proper person to so participate.

227. New paragraph 77K(1)(b) provides for the considerations where the applicant is a partnership. It requires that the Comptroller-General of Customs must not grant a depot licence if, in the Comptroller-General's opinion:

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any of the partners in the partnership is not a fit and proper person to be a member of a partnership holding a depot licence; or

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none of the partners would be in a position to occupy and control the place if the licence were granted; or

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a person who would participate in the management or control of, or in the operations carried out at, the place (whether or not the person would be present at the place) is not a fit and proper person to so participate.

228. New paragraph 77K(1)(c) provides for the considerations where the applicant is a company. It requires that the Comptroller-General must not grant a depot licence if, in the Comptroller-General's opinion:

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any of the directors of the company is not a fit and proper person to be a director of a company holding a depot licence; or

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the company would not be in a position to occupy and control the place if the licence were granted; or

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a person who would participate in the management or control of, or in the operations carried out at, the place (whether or not the person would be present at the place) is not a fit and proper person to so participate; or

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the company is not a fit and proper company to hold a depot licence.

229. At present section 77K(1) provides that a natural person, partnership or company will not be granted a depot licence if, in the Comptroller-General of Customs' opinion, the applicant, any partners in the partnership, company directors, officers or shareholders of the company, and employees who would participate in the management or control of the proposed depot is not a fit and proper person. This limits the application of the fit and proper person test with respect to the granting of a depot licence to individuals who meet this description, and does not reflect commercial reality in which operating models now include the regular use of sub-contractors, third party entities and other service providers.

230. Transnational Serious Organised Crime groups are increasingly exploiting trusted insiders within the supply chain to facilitate cross border crimes. A 'trusted insider' is a person who uses their legitimate employment at the border, or in the supply chain, to facilitate illicit imports and exports. All transnational crime has a border nexus. The Australian Criminal Intelligence Commission estimate that over eight tonnes of methamphetamine is consumed within Australia each year, with over 70% being imported from international locations as final product. Sophisticated criminal entities have a strong understanding of trade and border systems, methodologies and presence, enabling them to increasingly target weaknesses in the supply chain.

231. The ABF's primary effort to support the fight against transnational, serious and organised crime has been centred on Operation JARDENA. Operation JARDENA addressed systemic border weaknesses that are being targeted by an increasing number of domestic and foreign criminal groups. Under the operation, the ABF identified vulnerabilities being exploited and considered potential solutions, particularly those that are customs related, to address the gaps in Australia's border security.

232. Trusted insiders include employees working for licensed depots and warehouses, customs brokers, shipping companies, airlines, freight forwarders, transport companies, stevedores, law enforcement and agencies that regulate the border. They have access to restricted areas and systems, possess an intimate knowledge of border clearance processes, understand the vulnerabilities of our supply chain and know how to exploit them.

233. To address this increasing risk, this item introduces the notion of a person who participates in the operations of the depot, thus bringing more persons involved in the business within the scope of the fit and proper person assessment. This provides the ABF with a control to mitigate the threat of trusted insiders occupying positions that fall outside of the current scope of the fit and proper person assessment.

234. Currently, prior to the grant of a licence, only the applicant and their employees who occupy a position of management or control are subject to the fit and proper person test. Assessments of persons outside of those roles can be undertaken for current licence holders through the imposition of additional licence conditions, but is not applicable prior to the grant of a licence. This creates a situation where the Comptroller-General of Customs is unable to reject a licence application if the applicant, for example, prior to the grant of the licence, employs persons convicted of offences that may justify refusal of the application. The applicant would be granted the licence, and after the imposition of the additional licence conditions, steps would then be taken to cancel the licence. Making this change enables a more consistent and administratively efficient approach to ensuring the integrity of persons operating in the supply chain.

235. This item also provides that a depot licence must not be granted to an individual, partnership or company if a person who would participate in the operations of the depot is not a fit and proper person. As stated above, this expands the scope of operation of the section to encompass any person who would participate in the general operation of the depot. In particular, the person does not need to be present at the proposed depot. The expanded scope reflects the broader risks with the modern supply chain and seeks to be in line with new and emerging threats such as cybercrime where persons can access and influence remotely.

Item 125 Subsection 77K(2)

236. This item replaces ", (c) or (d)" with "or (c) (other than subparagraph (1)(c)(iv))" in subsection 77K(2), to ensure that subsection 77K(2) correctly references the relevant paragraphs of proposed subsection 77K(1).

Item 126 Subsection 77K(3)

237. This item replaces "paragraph (1)(e)" with "subparagraph (1)(c)(iv)", to ensure that subsection 77K(3) correctly references the relevant subparagraph of proposed subsection 77K(1).

Item 127 Paragraph 77N(2)(d)

238. This item inserts the words "or in the operations carried out at" after the words "control of" into paragraph 77N(2)(d), to require the holder of a depot licence to give the Comptroller-General of Customs particulars in writing that a person who participates in the operations carried out at the depot is subject to the matters under 77N(2)(d)(i) to (iii).

Item 128 Subparagraphs 77V(1)(a)(ii) to (vi)

239. This item repeals the subparagraphs 77V(1)(a)(ii) to (vi). This is a consequential amendment to cater for the new provisions inserted by item [129].

Item 129 After paragraph 77V(1)(a)

240. This item inserts new provisions concerned with fit and proper person assessments of personnel in respect of a depot licence the subject of a notice of intended cancellation etc. This aligns the fit and proper person test under section 77V with the assessment required when considering grant of a licence under amended section 77K (as inserted by item [124]).

241. New paragraph 77V(1)(aa) provides for the considerations in circumstances if the licence is held by a natural person, and requires that the Comptroller-General must give a notice in accordance with section 77V, if the Comptroller-General is satisfied that the applicant is not a fit and proper person to hold the depot licence; or a person participating in the management or control of, or in the operations carried out at, the depot (whether or not the person is present at the depot) is not a fit and proper person to so participate.

242. New paragraph 77V(1)(ab) provides for the considerations in circumstances if the licence is held by a partnership, and requires that the Comptroller-General must give a notice in accordance with section 77V, if the Comptroller-General is satisfied that a member of the partnership is not a fit and proper person to be a member of a partnership holding a depot licence; or a person participating in the management or control of, or in the operations carried out at, the depot (whether or not the person is present at the depot) is not a fit and proper person to so participate.

243. New paragraph 77V(1)(ac) provides for the considerations in circumstances if the licence is held by a company, and requires that the Comptroller-General must give a notice in accordance with section 77V, if the Comptroller-General is satisfied that a director of the company is not a fit and proper person to be a director of a company holding a depot licence; or a person participating in the management or control of, or in the operations carried out at, the depot (whether or not the person is present at the depot) is not a fit and proper person to so participate; or the company is not a fit and proper company to hold a depot licence.

Item 130 Subsection 77V(2)

244. This item ensures that subsection 77V(2) correctly references the relevant paragraphs of subsection 77V(1) as amended by item [129] for the purposes of a decision by the Comptroller-General of Customs whether a natural person is a fit and proper person.

Item 131 Subsection 77V(3)

245. This item ensures that subsection 77V(3) correctly references the relevant subparagraph of subsection 77V(1) as amended by item [129] for the purposes of a decision by the Comptroller-General of Customs whether a company is a fit and proper company.

Item 132 Subsection 77VC(1)

246. This item ensures that subsection 77VC(1) correctly references the relevant matters the Comptroller-General of Customs may be satisfied of under subsection 77V(1) as amended by item [129] when deciding whether to cancel a depot licence.

Item 133 Subsection 78(3)

247. This item repeals subsection 78(3) and replaces it with a new subsection (3) of the interpretation section of Part V of the Customs Act. It would set out the scope of what is meant under that Part when a person is said to participate in the management or control of a warehouse by providing that a person is taken to participate in the management or control of a warehouse if the person has authority to:

•

Direct the operations, or an important or substantial part of the operations of the warehouse; or

•

Direct the activities of the warehouse; or

•

Remove goods from the warehouse.

248. A person with the authority to direct a person covered by the above paragraph is also taken to participate in the management or control of the warehouse.

249. This definition assists with distinguishing between a person participating in the management or control of a warehouse and a person who participates in the operations of the warehouse. This distinction is important for understanding the amendments in relation to the application of fit and proper person tests under the Customs Act that would be made by Schedule 1 to the Bill.

Item 134 Section 82 (heading)

250. This item replaces the existing heading to section 82 with the new heading "82 Conditions of a warehouse licence—general" for improved clarity.

Item 135 Paragraph 82(1)(c)

251. This item inserts the words "or in the operations carried out at" after the words "control of" in paragraph 82(1)(c).

252. Section 82 sets out conditions imposed on warehouse licences. Paragraph 82(1)(c) requires notification to the Comptroller-General of Customs particulars in writing if a person who participates in the management or control of the warehouse, the holder of the licence or, in the case of a licence held by a partnership, a member of the partnership:

•

is convicted of an offence referred to in paragraph 81(2)(a) or (b) of the Customs Act; or

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becomes bankrupt; or

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has been refused a transport security identification card, or has had such a card suspended or cancelled, within the applicable period referred to in paragraph 86(1A)(d) of the Customs Act.

253. The effect of this item is to require notification to the Comptroller-General of Customs the same set of events if they occur to a person who participates in the operations carried out at the warehouse.

Item 136 Paragraphs 183B(2)(a) and (b)

254. This item replaces the words "he or she" in paragraphs 183B(2)(a) and (b) with the words "the person" to reflect the fact that a company may participate in the work of a customs broker where it has authority as a nominee or agent of a customs broker.

Item 137 At the end of subsection 183B(2)

255. This item adds a new paragraph (c) to subsection 183B(2) to provide that a person who has authority to do any act or thing on behalf of the customs broker shall be taken to participate in the work of a customs broker.

Item 138 Subparagraph 183CC(1)(a)(iii)

256. This item repeals existing subparagraph 183CC(1)(a)(iii) and replaces it with a new subparagraph which provides that where an applicant for a customs broker's licence is a natural person, a broker's licence will not be granted if a person who would participate in the work of the applicant is not a fit and proper person. This expands the fit and proper person assessment regime beyond employees, as are currently engaged by the subparagraph, to encompass the variety of entities, including employees, which may be involved in the work of the applicant to reflect current operating models.

Item 139 Subparagraphs 183CC(1)(b)(i) and (ii)

257. This item repeals existing subparagraphs 183CC(1)(b)(i) and (ii) and replaces them with:

•

a new subparagraph (i) which stipulates that a broker's licence shall not be granted to a company applying for the licence if a director of the company is not a fit and proper person; and

•

a new subparagraph (ii) which stipulates that a broker's licence will not be granted if a person who would participate in the work of the company is not a fit and proper person.

258. Whereas at present subparagraph 183CC(1)(b)(i) requires a director to participate in the work of the company to be engaged by the provision, this item ensures that if any director is not a fit and proper person, a customs broker's licence shall not be granted to the company.

259. New subparagraph 183CC(1)(b)(ii) expands the fit and proper person assessment regime beyond employees and officers, as are currently engaged by the subparagraph, to encompass the variety of entities, including contractors, compilers, classifiers and third party entities, which may be involved in the work of the company if it were a customs broker to reflect current operating models.

Item 140 Subparagraph 183CC(1)(c)(ii)

260. This item repeals existing subparagraph 183CC(1)(c)(ii) and replaces it with a new subparagraph which provides that where an applicant for a customs broker's licence is a partnership, a broker's licence will not be granted if a person who would participate in the work of the partnership (if it were a customs broker) is not a fit and proper person.

261. This expands the fit and proper person assessment regime beyond employees, as are currently engaged by the subparagraph, to encompass the variety of entities, including contractors, compilers, classifiers and third party entities, which may be involved in the work of the company if it were a customs broker to reflect current operating models.

Item 141 Subsection 183CC(4)

262. This item replaces the reference to "subsection (1)" in subsection 183CC(4) with a reference to "paragraph (1)(a) or (b) or (c) (other than subparagraph (1)(b)(iii))". This reflects the fact that, for the purpose of the fit and proper person assessment, subsection 183CC(4) is concerned with conduct that may only be attributable to a natural person whereas subparagraph 183CC(1)(b)(iii) is concerned with companies.

Item 142 After paragraph 183CG(4)(a)

263. This item inserts a new paragraph (aa) after paragraph 183CG(4)(a) to stipulate that a customs broker's licence held by a company is subject to the condition that all directors of the company are fit and proper persons.

Item 143 Application provisions

264. This item makes provision for the application of various amendments made by this Part.

Depot licences

265. Subitem 143(1) provides that the amendments made by items [124] to [126] of this Part, to the extent that it relates to section 77K, apply in relation to an application for a depot licence that is made on or after the day on which this item commences.

266. Subitem 143(2) provides that the amendments made by item [127] of this Part, to the extent that it relates to paragraph 77N(2)(d) applies in relation to a matter referred to in subparagraph 77N(2)(d)(i), (ii) or (iii) of the Customs Act that occurs on or after the day on which this item commences in relation to a person who participates in the operations carried out at a depot.

267. Subitem 143(3) provides that the amendments made by items [127] to [131] of this Part to the extent that it relates to section 77V apply in relation to a notice given under subsection 77V(1) of the Customs Act on or after the day on which this item commences, whether the depot licence was granted before, on or after that day.

268. Subitem 143(4) provides that the amendments made by item [132] of this Part, to the extent that it relates to subsection 77VC(1) of the Customs Act applies in relation to a notice given under that subsection on or after the day on which this item commences, whether the depot licence was granted before, on or after that day.

Warehouse licences

269. Subitem 143(5) provides that the amendments made by item [135] of this Part, to the extent that it relates to paragraph 82(1)(c) of the Customs Act applies in relation to a matter referred to in subparagraph 82(1)(c)(i), (ii) or (iii) of the Customs Act that occurs on or after the day on which this item commences in relation to a person who participates in the operations carried out at a warehouse.

Broker's licences

270. Subitem 143(6) provides that the amendments made by items [138] to [141] of this Part, to the extent that it relates to section 183CC of the Customs Act apply in relation to an application for a broker's licence that is made on or after the day on which this item commences.

271. Subitem 143(7) provides that the amendments made by item [142] of this Part, to the extent that it relates to paragraph 183CG(4)(aa) of the Customs Act as inserted, applies on and after the day on which this item commences in relation to a broker's licence granted before, on or after that day.

Part 8 Strengthening integrity controls

Customs Act 1901

Item 144 At the end of subsection 77K(1)

272. This item adds new paragraph (j) to the end of subsection 77K(1).

273. Subsection 77K sets out the requirements for grant of a depot licence. Subsection 77K(1) provides criteria for circumstances where the Comptroller-General of Customs must not grant a depot licence. The purpose of this item is to provide an additional criterion where the Comptroller-General of Customs forms an opinion not to grant the licence.

274. The new criterion provided by new paragraph (j) requires the Comptroller-General of Customs to not grant the licence where it is inappropriate in all the circumstances to do so, having regard to the matters in new subsection 77K(3A) (inserted by item [145] of this Part).

275. The matters in new subsection 77K(3A) relate to:

•

the experience of an applicant (whether natural person, partnership or company) for a depot licence, and those participating in the management or control, or in operations that would be performed at the depot; and

•

the applicant's (whether natural person, partnership or company) operating procedures and processes that would be conducted at the proposed depot.

276. The current requirements do not explicitly account for whether the applicant has experience or effective processes, a risk management framework or robust governance. The lack of this requirement is currently being exploited by applicants with no experience or plagiarised processes in order to establish a presence in the supply chain to solely facilitate the unlawful importation and exportation of prohibited and illicit goods once granted a licence.

Item 145 After subsection 77K(3)

277. This item inserts new subsection (3A) after subsection 77K(3) to provide for the matters the Comptroller-General of Customs is to consider for the purposes of forming an opinion in deciding whether not to grant the licence in respect of new paragraph 77K(1)(j) (inserted by item [144] of this Part).

278. The current requirements for grant of a depot licence do not explicitly account for whether the applicant has experience or effective processes, a risk management framework or robust governance. The matters in new subsection 77K(3A) relate to:

•

the experience of an applicant (whether natural person, partnership or company) for a depot licence, and those participating in the management or control, or in operations that would be performed at the depot; and

•

the applicant's (whether natural person, partnership or company) operating procedures and processes that would be conducted at the proposed depot.

Item 146 Before subsection 77LA(1)

279. This item inserts new heading "Variation on application" before subsection 77LA(1).

280. Current section 77LA only empowers variation of the description of the place covered by the licence on request of the licence holder.

281. This is a consequential amendment to distinguish the current variation power with that in new subsection 77LA(8) (inserted by item [148] of this Part) to allow for variation of the description of the place covered by the licence on the Comptroller-General of Custom's own initiative.

Item 147 At the end of subsection 77LA(1)

282. This item adds a new note at the end of subsection 77LA(1). As subsection 77LA(1) only relates to variation of the description of the place covered by the licence on request by a licence holder, this note directs the reader's attention to the variation power on the Comptroller-General's own initiative set out in new subsection 77LA(8) (inserted by item [148] of this Part).

Item 148 At the end of section 77LA

283. This item inserts new subsection (8) at the end of section 77LA to empower the Comptroller-General of Customs to vary a depot licence on his or her own initiative by omitting and replacing, or altering the description of the place that is currently described in the licence.

284. If the Comptroller-General of Customs varies the licence on their own volition, they must give the holder of the depot licence a copy of the variation. The variation takes effect at the time the copy of the notice is given to the licence holder.

285. This amendment will not impact natural justice procedures as the applicant is able to seek a review of the decision in the Administrative Appeals Tribunal – see new paragraph 273GA(1)(aarc) as inserted by item [170] of this Part.

286. In order to maintain or secure goods under customs control, the amendment allows the Comptroller-General of Customs to vary a depot licence to ensure the security and integrity of the place covered by the licence. Previously, the variation of the licence could only be taken to occur upon application from the applicant. This limits variations of the place covered by the licence to when the applicant submits the application and the information in the application.

287. The new amendment provides the ability for the Comptroller-General of Customs to vary the licence on their own volition to allow a change to the licence boundary to adequately cover goods under customs control or change the class of licence to respond to risks. This allows a responsive and flexible approach to secure goods under customs control. Furthermore, this provides an appropriate treatment tool to manage the risk of goods under customs control being stored outside of the licensed place, or to manage the change in volumes, operating model and type of goods stored in a licensed place.

288. There is no change to the applicant's ability to submit an application to vary the licence based on the needs or change in operating procedures and this new amendment is reserved to be utilised in appropriate situations where there is a need for the Comptroller-General of Customs to treat the risk in a timely manner without applying an additional administrative layer to the variation of the licence.

Item 149 After paragraph 77N(2)(a)

289. This item inserts new paragraph (aa) after paragraph 77N(2)(a) which subjects the depot licence to an additional general condition. This condition requires the holder of a licence to give the Comptroller-General of Customs particulars in writing of the cessation of participation in the management or control of the depot by a person described as such in the application for the depot licence.

290. This provision mirrors new paragraph 82(1)(aa) (as inserted by item [163] of this Part) which provides for the same condition in respect of a warehouse licence.

291. This amendment protects the integrity of the supply chain by combating the scenario where once an applicant is granted a licence, based on the assessment of the applicant's operational procedures, personnel and practices, the applicant make a complete overhaul of personnel and practices.

Item 150 Subsection 77N(2A)

292. This item replaces the words "made in" in subsection 77N(2A) with the word "made". Items [150], [151] and [152] are to be read together to make minor editorial amendments.

Item 151 Paragraph 77N(2A)(a)

293. This item inserts the word "to" before the word "a" in paragraph 77N(2A)(a). Items [150], [151] and [152] are to be read together to make minor editorial amendments.

Item 152 Paragraph 77N(2A)(b)

294. This item inserts the word "to" before the words "the keeping" in paragraph 77N(2A)(b). Items [150], [151] and [152] are to be read together to make minor editorial amendments.

Item 153 After paragraph 77N(2A)(b)

295. This item inserts new paragraph (c) after paragraph 77N(2A)(b) requiring a depot licence holder not to permit a substantial change to be made to the holder's operating procedures or processes conducted in relation to goods at the depot unless 30 days' notice of the change is provided to the Comptroller-General of Customs.

296. This amendment protects the integrity of the supply chain by combating the scenario where once an applicant is granted a licence, based on the assessment of the applicant's operational procedures, personnel and practices, the applicant then makes a complete overhaul of personnel and practices.

Item 154 Subparagraph 77V(1)(a)(viii)

297. This item replaces the words "a licence charge payable in respect of the grant of the depot" in subparagraph 77V(1)(a)(viii) with the words "the depot licence charge payable in respect of the grant of the licence". This is a minor editorial amendment.

Item 155 Before paragraph 77V(1)(b)

298. This item inserts new paragraph (ad) before paragraph 77V(1)(b).

299. New paragraph 77V(1)(ad) provides an additional criterion upon which the Comptroller-General of Customs is to reach a state of satisfaction before deciding to give a notice under subsection 77V(1) of an intention to cancel a depot licence. The additional criterion requires having regard to the matters introduced by new subsection 77V(3A) (inserted by item [156] in this Part).

300. These matters are concerned with:

•

the experience of a depot licence holder (whether natural person, partnership or company), and those participating in the management or control, in operations that would be carried out at the depot; and

•

the depot licence holder's (whether natural person, partnership or company) operating procedures and processes which would be conducted at the depot in relation to goods there.

301. This amendment protects the integrity of the supply chain by combating the scenario where once an applicant is granted a licence, based on the assessment of the applicant's operational procedures, personnel and practices, and then the applicant make a complete overhaul of personnel and practices.

Item 156 After subsection 77V(3)

302. This item inserts new subsection (3A) after subsection 77V(3). New subsection 77V(3A) sets out the matters the Comptroller-General of Customs is to consider for the purposes of reaching a state of satisfaction regarding the criterion under new paragraph 77V(1)(ad) (inserted by item [155] of this Part), before deciding to give a notice of an intention to cancel a depot licence.

303. These matters are concerned with:

•

the experience of a depot licence holder (whether natural person, partnership or company), and those participating in the management or control, in operations that would be carried out at the depot; and

•

the depot licence holder's (whether natural person, partnership or company) operating procedures and processes which would be conducted at the depot in relation to goods there.

Item 157 Paragraph 77V(5)(b)

304. This item repeals existing paragraph 77V(5)(b) and replaces it with new paragraph (b).

305. The purpose of new paragraph (b) retains the existing purpose of subsection 77V(5)(b) to provide a discretion for the Comptroller-General of Customs to state on the notice given to the licence holder under 77V(1) that the licence is suspended.

306. However, the reasons for the suspension are by operation of:

•

paragraph 77V(1)(b) which relates to the Comptroller-General of Customs being satisfied on any other grounds that it is necessary to cancel the licence for the protection of the revenue or for the purpose of ensuring compliance with the Customs Acts, any other law of the Commonwealth prescribed by the regulations or a law of a State or Territory prescribed by the regulations. This operates in the same manner as repealed paragraph 77V(5)(b).

•

new paragraph 77V(1)(ad) (inserted by item [155]) which relates to matters concerned with the experience of a depot licence holder (whether natural person, partnership or company), and those participating in the management or control, in operations that would be carried out at the depot; and the depot licence holder's (whether natural person, partnership or company) operating procedures and processes which would be conducted at the depot in relation to goods there.

Item 158 Section 77Y (heading)

307. This item inserts the words "depot or" after the words "relation to" in the heading to section 77Y. This is a consequential amendment to accommodate the amendments to section 77Y made by item [160] of this Part

Item 159 Subsection 77Y(1)

308. This item inserts the words "the depot or to" after the words "in relation to" into subsection 77Y(1). This is a consequential amendment to accommodate the amendments to section 77Y made by item [160] of this Part.

Item 160 At the end of subsection 77Y(2)

309. This item inserts new paragraphs 77Y(2)(f), (g), (h) and (i) to empower a Collector to give written directions to a depot licence holder in relation to the matters set out in those paragraphs.

310. Subsection 77Y(1) provides that the Collector may give written directions in relation to goods subject to customs control for the purposes of the protection of the revenue or for the purpose of ensuring compliance with the Customs Acts, any other law of the Commonwealth prescribed by the regulations or a law of a State or Territory prescribed by the regulations. Customs Acts is defined under section 4 of the Customs Act to mean the Customs Act and any instruments (including rules, regulations or by-laws) made under the Customs Act and any other Act, and any instruments (including rules, regulations or by - laws) made under any other Act, relating to customs in force within the Commonwealth or any part of the Commonwealth.

311. Subsection 77Y(2) sets out the matters the direction must relate to.

312. The purpose of this item is to empower a Collector to give a written direction (for the protection of the revenue or for the purpose of ensuring compliance with the Customs Acts, any other law of the Commonwealth prescribed by the regulations or a law of a State or Territory prescribed by the regulations):

•

about the physical security of the depot;

•

to give to the Collector specified information in relation to the management of controlled goods;

•

to produce to the Collector specified documents in relation to the management of controlled goods;

•

to make specified changes to specified information, or specified documents, in relation to the management of controlled goods

313. Outcomes from the ABF's Operation JARDENA identified that part of maintaining the integrity of the handling of goods requires directions to relate to documents and information related to the movement of goods, which is sometimes circulated via industry applications or other electronic means. Maintaining the integrity of the supply chain includes processes related to how the goods under customs control are reported, stored and accounted for (including in the accounting for the cargo whether by paper or electronically) and not just the physical control of the goods.

314. This amendment will provide a mechanism for the ABF to guide licence holders to make changes that are required to maintain the integrity of the supply chain or to correct information that is inaccurate. It will also assist the ABF to obtain important documents and information regarding cargo movements, and respond to industry now communicating through various applications and IT platforms.

315. In treating serious non-compliance, this amendment provides the Comptroller-General of Customs appropriate powers to direct the security of the licensed place, obtain important information pertaining to goods under customs control and make amendments to accurately reflect either the true nature of the goods or the correct reporting of the goods.

Item 161 After subsection 77Y(2)

316. This item inserts new subsection (2A) after subsection 77Y(2). This item provides a minimum period of 7 days that a person must be given to comply with a written direction given by a Comptroller under new paragraphs 77Y(2)(g), (h) or (i) inserted by item [160].

317. This period is to be specified in the notice, and may be greater than 7 days. This period recognises that it may take a licence holder time to comply with a direction under these paragraphs.

Item 162 After section 77Z

318. This item inserts new section 77ZAA empowering a Collector to enter at any time, including by the use of force, any place covered by a depot licence to examine goods kept there.

319. A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers (the Guide) has been considered in relation to the power given to a Collector by new section 77ZAA. Goods at a depot are there temporarily awaiting clearance for export, warehousing, entry into home consumption or for examination.

320. The general position is that the informed consent of an occupier is preferable before an entry onto private premises is permitted. However, it is considered appropriate for the holder of a licence, granted under a regulatory regime which confers a benefit on the holder, to be subject to entry without consent of a business premises operating within that regime by officers of the administering authority for the purpose of monitoring compliance with that regime.

321. The operators of places licensed as depots under the Customs Act play an integral role in the efficient, lawful and secure importation and exportation of goods into and out of Australia. The opportunities for depot licence holders to take an untoward and arbitrary action when, for example, the licence holder contributes to the import of illicit substances into Australia, or the export of diseased produce, for the purpose of personal gain and to the prejudice of others, are significant.

322. There is no requirement under new section 77ZAA for a Collector to first obtain a warrant for the entry and examination of goods at a place licensed as a depot. This is appropriate in principle, and is consistent with those declared in the Guide, where the purpose of entry is to access or examine goods under customs control or to monitor compliance rather than to seek and collect evidence of an offence, and it is impracticable to obtain a warrant to carry out the day to day compliance monitoring activities. However, it has been suggested that where there is no requirement for obtaining a warrant to enter premises without consent, a reasonable period of notice should be given.

323. In the context of the regulation of customs functions it would defeat the purpose of granting powers of entry and examination if a reasonable period of notice were given to licence holders. The purpose of entry under proposed section 77ZAA is for an audit of goods in a place covered by a depot licence to be undertaken to monitor compliance by a licence holder with their obligations in order to maintain the integrity of the customs regulatory regime, and thus to facilitate legitimate trade and cross-border movements. Were a period of notice mandated, it would provide non-compliant licence holders the opportunity to conceal their non-compliance and thus continue to engage in potentially criminal activities to the detriment of Australian industry, the community and the revenue of the Commonwealth.

324. This also serves as justification of the availability under proposed section 77ZAA to use force to enter premises at any time. Denial of entry would frustrate the regulation of an activity with tremendous potential for adverse consequences within Australia's supply chain, affecting national security and the Commonwealth revenue. The language of the provision makes it apparent that only the force necessary to gain access and enter particular premises is authorised.

325. Subsection 8(1) of the Customs Act provides that a reference to the Collector or a Collector is a reference to the Comptroller-General of Customs or any officer doing duty in the matter in relation to which the expression is used. In the case of new section 77ZAA, this matter is the entry and examination of goods held in a licensed depot for the purpose of compliance monitoring. An officer is defined as an officer of Customs, which in turn means, among other things, an APS employee in the Department of Home Affairs. In this instance it is appropriate that powers under new section 77ZAA be granted to a wide class of persons due to the extensive nature of the monitoring requirements demanded to ensure the integrity of the customs regulatory regime. This ranges from the examination of goods, monitoring compliance and having an overt presence within the supply chain to deter criminal activity. In practice, officers exercising these powers are highly trained and subject to rigorous integrity checks for these roles that are defined at the organisational level.

326. The power for a Collector to enter a place covered by the depot licence to examine goods applies in relation to a depot licence granted before, on or after the day on which the application provision commences (see subitem [171(7)]). This aligns with the Comptroller-General of Custom's existing power under section 77Q of the Customs Act to add or vary the conditions attached to a depot licence after it is granted i.e. conditions are not fixed to those at the time of grant of the licence.

327. The ABF will consult with businesses about the changes made by the Bill, including through existing business forums such as the National Committee for Trade Facilitation and its working groups. This will ensure that licence holders are aware of any additional obligations for holding a licence.

Item 163 After paragraph 82(1)(a)

328. This item inserts new paragraph (aa) after paragraph 82(1)(a) to provide that a warehouse licence is subject to the additional condition that, where a person described in the application for the licence as participating in the management or control of a warehouse covered by the licence ceases to do so, the holder of the licence will give the Comptroller-General of Customs written particulars in writing of the event.

329. This provision mirrors new paragraph 77N(2)(aa) (as inserted by item [149] of this Part) which provides for the same condition in respect of a depot licence.

330. The amendment also provides assurances to the Comptroller-General that the holder of the licence has taken the required steps to decouple from the departing person and remove accesses and controls to mitigate the threat of the trusted insider. The trusted insider threat has shown that previous employees will utilise active access cards or systems access to infiltrate the supply chain to either gain critical information or facilitate the movement of unlawful goods through the border.

331. Furthermore, this amendment protects the integrity of the supply chain by combating the scenario where once an applicant is granted a licence, based on the assessment of the applicant's originally submitted operational procedures, personnel and practices, then the applicant makes a complete overhaul of personnel and practices in order to circumvent law enforcement scrutiny and facilitate unlawful activity. The amendment provides the process in which a fit and proper person assessment can be undertaken in a timely manner to ensure all persons operating at the depot are fit and proper and to avoid persons circumventing the original scrutiny of the licence application.

Item 164 Subparagraph 82(1)(c)(iii)

332. This item removes the word "or" where it last occurs in subparagraph 82(1)(c)(iii). This is a consequential amendment to the repeals of paragraphs 82(1)(d) to (f) by item [165].

Item 165 Paragraphs 82(1)(d) to (f)

333. This item repeals paragraphs 82(1)(d) to (f). The matters in these paragraphs are covered by new subsection 82(1A) inserted by item [166].

Item 166 After subsection 82(1)

334. This item inserts new subsection (1A) after subsection 82(1) to provide for conditions attached to the warehouse licence that require the licence holder to give the Comptroller-General of Customs 30 days' notice to cause or permit a substantial change to be made to the matters set out in the provision.

335. These matters are:

•

a matter affecting the physical security of a warehouse covered by the licence; or

•

plant or equipment used in relation to goods in a warehouse covered by the licence; or

•

the keeping of accounts or records in relation to a warehouse covered by the licence; or

•

the licence holder's operating procedures or processes that apply at a warehouse covered by the licence in relation to goods at the warehouse.

336. While matters in paragraphs (a) to (c) are the same as the matters under repealed paragraphs 82(1)(d) to (f) (see [item 165]), this condition requires licence holders to report prospective changes, whilst the repealed provisions required the licence holder to report the change to the Comptroller-General of Customs after the event has occurred.

337. Moving to a prospective notification as opposed to a retrospective one, provides the Comptroller-General of Customs the ability to assess the change and determine whether it is suitable for the licensed place and type of goods being stored. This also allows the holder of the licence to have clarity around the suitability of the proposed change prior to any investment or physical change. This avoids the situation where the holder of the licence makes a change to a matter affecting the physical security of the warehouse covered by the licence, only to have the change be deemed unsuitable by the Comptroller-General of Customs after the fact.

Item 167 Before section 88

338. This item inserts new section 87C before section 88 to empower a Collector to give written directions in relation to a warehouse or to goods in a warehouse subject to customs control.

339. New section 87C mirrors section 77Y (as amended by this Part) and aligns the Collector's powers in respect of warehouses with the power under section 77Y in respect of depots.

Directions

340. New subsection 87C(1) provides that the Collector may give directions in relation to a warehouse or to goods subject to customs control. This would be for the protection of the revenue or for the purpose of ensuring compliance with the Customs Acts, any other law of the Commonwealth prescribed by the regulations or a law of a State or Territory prescribed by the regulations. Customs Acts is defined under section 4 of the Customs Act to mean the Customs Act and any instruments (including rules, regulations or by-laws) made under the Customs Act and any other Act, and any instruments (including rules, regulations or by-laws) made under any other Act, relating to customs in force within the Commonwealth or any part of the Commonwealth.

341. The direction can be given to the holder of the warehouse licence; or a person participating in the management or control of a warehouse covered by the warehouse licence.

342. New subsection 87C(2) sets out the types of direction than can be given or the matters to which the direction must relate. These are:

(a)

to move, or not to move, controlled goods within the warehouse; or

(b)

about the storage of controlled goods in the warehouse; or

(c)

to move controlled goods to another warehouse or a depot; or

(d)

about the unpacking from receptacles of controlled goods; or

(e)

about the packing into receptacles of controlled goods; or

(f)

about the physical security of the warehouse; or

(g)

about plant or equipment used in relation to controlled goods; or

(h)

to give to the Collector, within the specified period and in the specified manner, specified information in relation to the management of controlled goods; or

(i)

to produce to the Collector, within the specified period and in the specified manner, specified documents in relation to the management of controlled goods; or

(j)

to make specified changes, within the specified period, to specified information, or specified documents, in relation to the management of controlled goods.

343. New subsection 87C(3) provides a minimum period of 7 days for a person to comply with a written direction given by a Comptroller under paragraphs 87C(2)(h), (i) or (j), where the direction specifies a period. The period may be greater than 7 days. This period recognises that it may take a licence holder time to comply with a direction under these paragraphs.

344. New subsection 87C(4) allows the Collector to give directions to any person at a warehouse, in relation to controlled goods, for the purpose of:

•

preventing interference with controlled goods in a warehouse covered by a warehouse licence; or

•

preventing interference with the exercise of the powers or the performance of the functions of a Collector in respect of a warehouse covered by a warehouse licence or of controlled goods at the warehouse.

345. Currently, there is a misalignment between the Collector's powers in licensed depots compared to those in licensed warehouses. The amendments will align those powers.

346. In particular, outcomes from the ABF's Operation JARDENA identified that part of maintaining the integrity of the handling of goods requires directions to relate to documents and information related to the movement of goods, which is sometimes circulated via industry applications or other electronic means. Maintaining the integrity of the supply chain includes processes related to how the goods under customs control are reported, stored and accounted for (including in the accounting for the cargo whether by paper or electronically) and not just the physical control of the goods.

347. This amendment will provide a mechanism for the ABF to guide licence holders to make changes that are required to maintain the integrity of the supply chain or to correct information that is inaccurate. It will also assist the ABF to obtain important documents and information regarding cargo movements, and respond to industry now communicating through various applications and IT platforms.

348. In treating serious non-compliance, this amendment provides the Comptroller-General of Customs appropriate powers to direct the security of the licensed place, obtain important information pertaining to goods under customs control and make amendments to accurately reflect either the true nature of the goods or the correct reporting of the goods.

Offences and penalties

349. New subsection 87C(5) provides that it is an offence if a person fails to comply with a direction under subsection 87C(1) or (4). The penalty is 120 penalty units.

350. New subsection 87C(6) provides that it is an offence of strict liability if a person fails to comply with a direction under subsection 87C(1) or (4). The penalty is 60 penalty units.

Offence under subsection 87C(5)

351. The principles outlined in A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers (the Guide) have been considered in framing the penalty provisions, including the strict liability offence under new subsection 87C(6).

352. Subsection 87C(5) creates an offence where a person is given a direction under subsection (1) or (4) and that person refuses or fails to comply with that direction. The default fault elements found in section 5.6 of the Criminal Code would apply to this offence provision since no fault elements are specified. As paragraph 87C(5)(a) refers to a circumstance rather than conduct, recklessness would be the appropriate fault element as per subsection 5.6(2) of the Criminal Code. As paragraph 87C(5)(b) refers to conduct, intention is the fault element for that physical element.

353. The culpability attendant on an intentional or reckless contravention justifies a maximum penalty of 120 penalty units. It is also consistent with the existing penalty imposed for contravention of equivalent subsection 77Y(3A) of the Customs Act in respect of depot licences.

354. The holder of the licence holds a trusted and privileged role in the supply chain, where the security of the goods is reliant on their processes and procedures to which they are licensed for. In instances where the holder of the licence refuses directions to maintain the security of the goods or provide information on goods under customs control, the intent of the licence is in question. Holders of licences have exclusive access to goods under customs control and have obligations to work in partnership with the regulator to secure the goods and prevent harmful or unlawful goods entering the Australian community. Contravention of this by failing to comply with directions generates risks to the security of the goods and harm to the Australian community.

Strict liability offence under subsection 87C(6)

355. The creation of a strict liability offence under subsection 87C(6) in relation to a refusal or failure by a warehouse licence holder to heed the direction of a Collector is appropriate under the circumstances, as it is consistent with equivalent offences imposed in relation to directions given by a Collector to depot licence holders under section 77Y in Part IVA of the Customs Act.

356. It also operates to put existing and prospective licence holders on notice that they are expected to comply with any lawful direction issued by a Collector, and to implement processes and procedures to effectively guard against inadvertent contravention. A Collector is empowered to give directions to a warehouse licence holder in order to maintain the integrity of Australia's customs and trade apparatus. The existence of a strict liability offence will act as a deterrent to failing to fulfil the licence holder's obligations through non-compliance with a Collector's directions.

357. Warehouse licence holders occupy a position of privilege in Australia's supply chain, and instances of non-compliance therefore have the potential to cause significant harm to Australian industry and the community at large in a variety of ways. As such the imposition of a strict liability offence also protects the general revenue.

358. The consequences of strict liability for the offence of non-compliance with a direction are tempered by appropriate defences and adequate checks and balances.

359. The general defence of mistake of fact for strict liability offences with its lower evidentiary burden, to the extent that it needs to be proved by the accused only on the balance of probability, addresses concerns which might otherwise exist about the fairness of strict liability for an offence.

360. For example, a direction under section 87C will stipulate affected activities or affected goods (such as a direction to move or not to move specified goods). The stipulation of activities or goods in the direction will act as a limit on the number of potential compliance failures, and the offence for non-compliance will affect a limited number of "persons", rather than the public at large.

361. The general defence of mistake of fact is therefore a substantial safeguard for those affected by strict liability, and is available to a person charged with an offence under section 87C(6). This defence would enable the person to produce evidence that they were under the mistaken, but reasonable, belief about facts that, had they existed, would have meant the conduct would not have constituted an offence.

362. Warehouse licence holders are also in the best position to provide information on the controlled goods they report, move and store in their licensed place. The licence holder is able to provide evidence on how the offence occurred and whether there are any reasonable defences obtained from interrogating their systems or processes.

363. There are also comprehensive internal checks and balances in the administration of Customs Act strict liability offences. Enforcement action is not taken lightly by the Collector. There are also additional broader safeguards in that strict liability is regarded as a serious matter, which would be prosecuted only after careful consideration on a case-by-case individual basis.

364. It is important to note that the need for efficient prosecution by strict liability is balanced by the provision of a broad based defence for circumstances where the contravention appears reasonable, and alleged offenders have the safeguard of final determination by a court if they dispute liability.

365. The penalty is set at 60 penalty units, which is consistent with the position taken in the Guide in respect of strict liability offences. It is also consistent with the penalty imposed for contravention of subsection 77Y(4) of the Customs Act in respect of depot licences.

366. Under subsection 4AA(1) of the Crimes Act 1914, in a law of the Commonwealth or a Territory Ordinance, a penalty unit means the amount of $275. This amount is subject to indexation under subsection 4AA(3). At the time this explanatory memorandum was prepared, the amount of a penalty unit is $313. As new section 87C is a law of the Commonwealth, section 4AA of the Crimes Act 1914 prescribes the dollar value of any penalty imposed for a contravention of that section. Section 5 of the Customs Act provides that a penalty set out at the foot of a section or subsection of that Act is a maximum penalty.

367. New subsection 87C(7) clarifies that section 87C does not limit the directions that a Collector may give under section 112C (Collector may give directions in relation to goods for export etc. that are subject to customs control).

Item 168 At the end of subsection 112C(3)

368. This item inserts the words "or 87C" at the end of subsection 112C(3) to provide that current section 112C does not limit the directions that a Collector may give under new section 87C. Section 112C provides that a Collector may give directions in relation to goods for export etc. that are subject to customs control.

Item 169 Subsection 243SB(1)

369. This item inserts "77Y, 87C" after "71DL" in subsection 243SB(1). The effect of this item is that subsection 243SB will not apply to failure by a person to produce a document required by an officer under the Customs Act under sections 77Y and 87C. This is because the offence and penalty provisions for failing to produce a document under sections 77Y and 87C are set out in each of those sections, respectively.

370. The principles outlined in A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers (the Guide) have been considered in framing the penalty provisions, including the higher penalty for the offence in subsection 87C(5) and the strict liability offence under new subsection 87C(6), in proposed new section 87C (directions in respect of warehouses); and for the existing offence and penalty provisions in subsections 77Y(3A) and 77Y(4) as they applies to new 77Y(2)(h) (inserted by item [160]) (directions to produce specified documents in relation to the management of controlled goods in a depot).

371. Discussion in relation to the offences and penalties under new subsection 87C are discussed above under item [167] (directions in respect of warehouses). That discussion applies equally to the offences in respect of amended subsection 77Y as it relates to the new direction to require a person to produce to the Collector specified documents in relation to the management of goods subject to customs control.

372. Outcomes from the ABF's Operation JARDENA identified that part of maintaining the integrity of the handling of goods requires directions to relate to documents and information related to the movement of goods, which is sometimes circulated via industry applications or other electronic means. Maintaining the integrity of the supply chain includes processes related to how the goods under customs control are reported, stored and accounted for (including in the accounting for the cargo whether by paper or electronically) and not just the physical control of the goods.

373. The holder of the licence holds a trusted and privileged role in the supply chain, where the security of the goods is reliant on their processes and procedures to which they are licensed for. In instances where the holder of the licence refuses to provide documents on goods under customs control, the intent of the licence is in question. Holders of licences have exclusive access to goods under customs control and have obligations to work in partnership with the regulator to secure the good and prevent harmful or unlawful goods entering the Australian community. Contravention of this by failing to comply with directions generates risks to the security of the goods and harm to the Australian community.

374. The existence of these offences and penalties will act as a deterrent to failing to fulfil the licence holder's obligations through non-compliance with a Collector's directions; and protects the general revenue.

Item 170 After paragraph 273GA(1)(aarb)

375. This item inserts new paragraph (aarc) after paragraph 273GA(1)(aarb) to allow an application to be made for review in the Administrative Appeals Tribunal of a decision under new subsection 77LA(8) (inserted by item [148]) to vary a depot licence on the Comptroller-General of Custom's own initiative.

Item 171 Application provisions

376. This item makes provision for the application of various amendments made by this Part.

Depot licences

377. Subitem 171(1) provides that the amendments made by items [144] and [145] of this Part, to the extent that it relates to section 77K of the Customs Act, applies in relation to a depot licence that is made on or after the day on which this amendment commences.

378. Subitem 171(2) provides that the amendments made by items [146] to [148] of this Part, to the extent that it relates to section 77LA of the Customs Act, applies in relation to a depot licence granted before, on or after the day on which this amendment commences.

379. Subitem 171(3) provides that new paragraph 77N(2)(aa) (introduced in item [149]) applies in relation to a person who ceases to participate in the management or control of a depot on or after the day on which this provision commences, whether the depot licence was granted before, on or after that day.

380. Subitem 171(4) provides that the amendments made by items [150] to [153] of this Part, to the extent that it relates to section 77N(2A) of the Customs Act, applies in relation to a substantial change to be made on or after the day on which this amendment commences, whether the depot licence was granted before, on or after that day.

381. Subitem 171(5) provides that the amendments made by items [154] to [157] of this Part, to the extent that it relates to section 77V of the Customs Act, applies in relation to a notice given under subsection 77V(1) on or after the day on which this Part commences. This is regardless of whether the depot licence was granted before, on or after that day.

382. Subitem 171(6) provides that the amendments made by items [158] to [161] of this Part, to the extent that it relates to section 77Y of the Customs Act, apply in relation to a direction given on or after the day on which this Part commences. This is regardless of whether the depot licence was granted before, on or after that day.

383. Subitem 171(7) provides that the amendments made by this Part (introduced by item [162]), to the extent that it relates to 77ZAA of the Customs Act, applies in relation to a depot licence granted before, on or after the day on which this item commences.

Warehouse licences

384. Subitem 171(8) provides that new paragraph 82(1)(aa) (introduced by item [163]), applies in relation to a person who ceases to participate in the management or control of a warehouse on or after the day on which this item commences. This is regardless of whether the warehouse licence was granted before, on or after that day.

385. Subitem 171(9) provides that the repeal of paragraphs 82(1)(d) to (f) made by item [165] of this Part, and subsection 82(1A) as inserted by item [166] of this Part, apply in relation to a substantial change to be made on or after the day on which this item commences, whether the warehouse licence was granted before, on or after that day.

386. Subitem 171(10) provides that new section 87C (introduced by item [167]), applies in relation to a direction given on or after the day on which this amendment commences. This is regardless of whether the warehouse licence was granted before, on or after that day.

Part 9 Renewal of licences

Customs Act 1901

Item 172 Section 77S (note)

388. This item removes the number "90" from the note to section 77S and replaces it with the number "30".

389. The note currently states that a depot licence may continue to be in force for a further period of 90 days after 30 June, as referred to in section 77S, under certain circumstances. This item amends the note to indicate that licences may continue to be in force for a further period of 30 days instead of 90 days in situations where the licence holder fails to pay the licence charge before the end of the financial year. This is a consequential amendment to cater for the amendment to section 77T at item [177].

Item 173 Subsection 77T(1)

390. This item inserts "(the current financial year)" after the words "a financial year" in subsection 77T(1) to clarify that the reference to "a financial year" in section 77T means the current financial year.

Item 174 Before subsection 77T(2)

391. This item inserts a new heading before subsection 77T(2).

Item 175 Subsection 77T(2)

392. This item replaces the words "a depot licence charge for the renewal of the licence before the end of the financial year" in subsection 77T(2) with the words "the depot licence charge for the renewal of the licence before the end of the current financial year".

393. This item provides clarity around which depot licence charge and which financial year is being referred to in section 77T.

Item 176 Subsection 77T(2)

394. This item replaces the words "at the end of the financial year" in subsection 77T(2) with the words "beginning on 1 July of the next financial year after the current financial year".

395. This amendment provides clarity as to when the 12 month renewal period for the licence commences when a depot licence charge is paid before the end of the financial year.

Item 177 Subsections 77T(3) to (5)

396. This item repeals subsections 77T(3) to (5) and replaces them with new subsections 77T(3) to (5).

397. Section 77T sets out the renewal process for depot licences. Subsection 77T(1) provides that the Comptroller-General of Customs notifies the licence holder by the end of the financial year of the licence holder's obligations with respect to payment of the licence renewal fee. Subsection 77T(2) provides that if the licence holder pays the licence renewal charge by the end of the financial year, the licence is renewed for another 12 months.

398. Subsections 77T(3) to (5) sets out the consequences of non-payment and of payment after the end of the financial year. The effect of these items are:

•

if the licence holder fails to pay the charge by the end of the financial year, the licence is suspended for 30 days and the Collector may, until the charge is paid or the end of the 30 days immediately following the end of the financial year (whichever occurs first), refuse to permit goods that are the subject of customs control to be received into the depot or warehouse, permit the removal of goods that are the subject of customs control from the depot or warehouse to another licensed depot or warehouse;

•

if the licence holder pays the charge within 30 days immediately following the end of the financial year, the licence is taken to have been renewed;

•

if the licence holder fails to pay the charge within 30 days immediately following the end of the financial year, the licence expires at the end of that period of 30 days; and

399. This will align the process for depot licence renewal with that for the warehouse licence renewal regime.

400. This item also inserts headings between subsections to provide clarity for the reader.

Item 178 Subsections 77VA(1) and (2)

401. This item inserts the words "77T or" after the words "under section" in subsections 77VA(1) and (2).

402. Section 77VA sets out matters relating to when a depot must not be used if the depot licence is suspended.

403. Subsection 77VA(1) makes it an offence to use a depot for a purpose set out in subsection 77G(1) (the uses of the depot to which the depot licence was granted) if the depot licence is suspended under 77V. The effect of this item is that it would be an offence to use a depot licence for a purpose set out in subsection 77G(1) if the licence is suspended under either section 77V or section 77T (relating to failure to pay the licence renewal charge by the end of the financial year).

404. Subsection 77VA(2) sets out matters that the Collector may permit, require or do with respect to the depot during suspension of the licence under section 77V. The effect of this item is that the Collector may permit, require or do certain things with respect to the depot during the suspension of the licence under section 77V or section 77T (relating to failure to pay the licence renewal charge by the end of the financial year).

Item 179 Application provisions

405. This item makes provision for the application of various amendments made by this Part.

Section 77T

406. Subitem 179(1) provides that the amendments made by items [173] to [177] of this Part, to the extent that it relates to section 77T apply in relation to a financial year ending on or after the day on which this item commences. It applies regardless of whether the depot licence was granted before, on or after that commencement.

Subsections 77VA(1) and (2)

407. Subitem 179(2) provides that the amendments made by item [178] of this Part, to the extent that it relates to subsections 77VA(1) and (2) apply in relation to a suspension that occurs on or after commencement of this item. It applies regardless of whether the depot licence was granted before, on or after that commencement.

Part 10 Cancellation and return of licences

Customs Act 1901

Item 180 Subsection 77VC(2)

409. This item replaces the word "must" in subsection 77VC(2) with the word "may".

410. Subsection 77VC(2) provides that the Comptroller-General of Customs must cancel a depot licence if the Comptroller-General of Customs receives a written request for cancellation of the licence from the licence holder.

411. The effect of this item is that cancellation of a depot licence is at the discretion of the Comptroller-General of Customs. The purpose of this item is to mitigate the risk of non-compliant licence holders seeking to surrender their licence with unwillingness to rectify non-compliance or intentional criminal activity, to circumvent the licence cancellation process to avoid further scrutiny, investigation or prevent the cancellation being recorded which can be used in future licensing assessments.

Item 181 Subsection 77VC(5)

412. This item repeals subsection 77VC(5).

413. Subsection 77VC(5) provides that if a depot licence is cancelled under section 77VC, the person or partnership who held the licence before the cancellation must return the licence to an officer of Customs within 30 days after the cancellation.

414. As a consequence of digitising licences, originals of licences will no longer be required to be held or displayed. This has the effect of rendering a number of requirements with respect to surrendering original licences redundant as it has no tangible effect on the status of the licence when returned. This amendment would remove the requirement to return cancelled depot licences as this process could be completed electronically, which renders the licence obsolete from a trading perspective.

Item 182 Subsections 87(7) and (8)

415. This item repeals subsections 87(7) and (8).

416. Section 87 relates to the cancellation of warehouse licences. Existing subsection 87(7) requires the licence holder to surrender the warehouse licence on the request of the Comptroller-General of Customs where the licence is cancelled under section 87; and sets out the penalty for non-compliance. Existing subsection 87(8) provides that subsection 87(8) is an offence of strict liability.

417. The effect of this item is to remove this requirement to surrender the warehouse licence and the related offence.

418. As a consequence of digitising licences, originals of licences will no longer be required to be held or displayed. This has the effect of rendering a number of requirements with respect to surrendering original licences redundant as it has no real world tangible effect on the status of the licence when returned. This amendment would remove the requirement to return cancelled depot licences as this process could be completed electronically, which renders the licence obsolete from a trading perspective.

Item 183 Subsection 183CN(1)

419. This item removes the subsection number "(1)" from subsection 183CN(1) as a consequential amendment to item [184] below which repeals subsection 183CN(2), leaving section 183CN with only one subsection.

Item 184 Subsection 183CN(2)

420. This item repeals subsection 183CN(2).

421. Section 183CN(2) requires the delivery to the Comptroller-General of Customs a customs broker's licence that needs deletion of the name of a nominee of the customs broker.

422. As a consequence of digitising licences, originals of licences will no longer be required to be held or displayed. This has the effect of rendering a number of requirements with respect to surrendering original licences redundant as it has no real world tangible effect on the status of the licence when returned. This amendment would remove the requirement to return cancelled depot licences as this process could be completed electronically, which renders the licence obsolete from a trading perspective.

Item 185 Division 4 of Part XI (heading)

423. This item repeals the existing heading to Division 4 of Part XI and replaces it with "Suspension, cancellation and non-renewal of licences". The new heading includes a reference to cancellation of licences.

424. This item is a consequential amendment to item [186] in this Part that inserts new section 183CSA (which is about cancellation of a broker's licence on request of the licence holder).

Item 186 After section 183CS

425. This item inserts new section 183CSA after section 183CS. This amendment allows the Comptroller-General of Customs to cancel a customs broker's licence on the written request of the customs licence broker which also specified when the licence is to be cancelled. This is done by giving a notice in writing to the licence holder.

426. New section 183CSA includes a note which informs the reader that section 183UAA provides for the ways in which the notice may be given to the holder of the licence.

427. This item aligns the surrender provision of a licence upon a request from the holder of the licence with depots and warehouses where the cancellation of a customs broker licence is at the discretion of the Comptroller-General of Customs. This mitigates the risk of non-compliant licence holders seeking to surrender their licence with unwillingness to rectify non-compliance of a breach of conditions or intentional criminal activity, to circumvent the licence cancellation process to avoid further scrutiny, investigation or having the cancellation recorded which can be used in future licensing assessments.

Item 187 Application provisions

428. This item makes provision for the application of various amendments made by this Part.

Subsection 77VC(2)

429. Subitem 187(1) provides that the amendments made by item [180] of this Part, to the extent that it relates to subsection 77VC(2) applies in relation to a request made on or after the day on which this item commences, whether the depot licence was granted before, on or after that day.

Subsection 77VC(5)

430. Subitem 187(2) provides that the repeal of subsection 77VC(5) made by item [181] of this Part applies in relation to the cancellation of a depot licence on or after the day on which this item commences.

Subsections 87(7) and (8)

431. Subitem 187(3) provides that the repeal of subsections 87(7) and (8) made by item [182] of this Part applies in relation to the cancellation of a warehouse licence on or after the day on which this item commences.

Section 183CN

432. Subitem 187(4) provides that the amendments made by items [183] and [184] of this Part, to the extent that it relates to section 183CN, apply in relation to the deletion of the name of a nominee from a broker's licence on or after the day on which this item commences.

Section 183CSA

433. Subitem 187(5) provides that section 183CSA as inserted by item [186] of this Part, applies in relation to a request made on or after the day on which this item commences, whether the broker's licence was granted before, on or after that day.

Part 11 Refund of charges

Customs Act 1901

Item 188 Section 77W (at the end of the heading)

434. This item add the words "on request" to the end of the heading to section 77W.

435. The current heading to section 77W is "Refund of depot licence charge on cancellation of a depot licence". This item is consequential to the amendments made by item [189] of this Part which amends paragraph 77W(1)(a) to ensure that a refund is only payable if the cancellation is initiated upon the written request of the licence holder.

Item 189 Paragraph 77W(1)(a)

436. This item inserts the words "under subsection 77VC(2)" after the word "cancelled" in paragraph 77W(1)(a).

437. Section 77VC(2) provides for the cancellation of a depot licence by the Comptroller-General of Customs on the written request of the licence holder. Section 77W(1) provides for the refund of the remainder of the depot licence charge, according to the formula in subsection 77W(1A)..

438. The effect of this item is that refunds of the remainder of the depot licence charge only apply where the licence has been voluntarily surrendered. In all other instances, where cancellation occurs due to non-compliance, the refund provisions will not apply.

439. This amendment is designed to ensure that licence fees are not refunded once a licence is cancelled, particularly where the licence holder has breached their licence conditions or due to offending against provisions of the Customs Act.

Item 190 Subsection 77W(2)

440. This item inserts the words "subsection (1) applies and" after the word "if" in subsection 77W(2).

441. Subsection 77W(1), as amended by item [189] of this Part, provides for the refund of the depot licence charge only in circumstances where the licence has been voluntarily surrendered. Subsection 77W(2) provides for the full refund of the depot licence charge where the former licence holder has paid the licence charge to renew the licence for the following financial year.

442. The effect of this item is that the full refund of the licence charge only applies where the licence has been voluntarily surrendered. In all other instances, where cancellation occurs due to non-compliance, the refund provisions will not apply.

443. This amendment is designed to ensure that licence fees are not refunded once a licence is cancelled, particularly where the licence holder has breached their licence conditions or due to offending against provisions of the Customs Act.

Item 191 Section 87A (heading)

444. This item repeals the existing heading to section 87A and replace it with "87A Refund of warehouse licence charge on cancellation of a warehouse licence on request".

445. This item is consequential to the amendments made by item [193] of this Part which amends paragraph 87A(a) to ensure that a refund is only payable if the cancellation is initiated upon the written request of the licence holder.

Item 192 Section 87A

446. This item inserts the subsection number "(1)" before the word "if" in section 87A, changing the existing provision into a subsection. This is a consequential amendment to the amendments made by item [194] which inserts a second subsection into section 87A.

Item 193 Paragraph 87A(a)

447. This item inserts the words "under subsection 87(1A)" after the word "cancelled" in paragraph 87A(a) to limit that section 87A applies only to a warehouse licence cancellation made at the request of the licence holder.

448. Subsection 87(1A) provides for the cancellation of a warehouse licence by the Comptroller-General of Customs on the written request of the licence holder. Section 87A provides for the refund of the warehouse licence charge for that financial year where a warehouse licence is cancelled (with the amount refunded provided by the Customs Regulation 2015).

449. The effect of this item is that refunds of the warehouse licence charge only apply where the licence has been voluntarily surrendered. In all other instances, where cancellation occurs due to non-compliance, the refund provisions will not apply.

450. This amendment is designed to ensure that licence fees are not refunded once a licence is cancelled, particularly where the licence holder has breached their licence conditions or due to offending against provisions of the Customs Act.

Item 194 At the end of section 87A

451. This item inserts new subsection (2) at the end of section 87A to provide that a warehouse licence holder, having paid the licence charge for the following financial year, is entitled to a full refund of the warehouse licence charge in respect of that year. This provision only applies where the cancellation was at the request of the former licence holder.

452. This would be in addition to any refund they are entitled to in respect of the current financial year under amended subsection 87A(1).

453. This item mirrors section 77W(2), as amended by this Part, to align the refund of warehouse licence charges with the refund for depot licence charges.

Item 195 Application provisions

Depot licences

454. Subitem 195(1) provides that the amendments made by items [188] to [190] of this Part, to the extent that it relates to section 77W, apply in relation to the cancellation of a depot licence on or after the day on which this item commences, whether the depot licence was granted before, on or after that day.

Warehouse licences

455. Subitem 195(2) provides that the amendments made by items [191] to [194] of this Part, to the extent that it relates to section 87A, apply in relation to the cancellation of a warehouse licence on or after the day on which this item commences, whether the warehouse licence was granted before, on or after that day.

Part 12 Approvals for ships' and aircraft's stores

Customs Act 1901

Item 196 After subsection 127(5)

457. This item inserts new subsection (5A) after subsection 127(5) to provide that an application for approval to unship, unload or use ships' or aircraft's stores may be made by document or electronically.

458. Current section 127 only allows for an application to be made by document. This is set out in current subsection 127(6) which provides that an application must be made in writing in an approved form. New subsection 127(6A), as inserted by item [198] of this Part, provides for the electronic lodgement of applications for approval to unship, unload or use aircraft's and ships' stores.

459. Processes related to these applications are currently paper based and are submitted by post or personally handed to regional or port based customs officers. These manual processes are out of touch with the evolving trade environment and impose additional costs on businesses to trade, and for government to administer. The introduction of a digital process will significantly reduce the manual administrative workload of ABF officers, provide efficiencies and cost reduction for industry.

460. These changes complement the amendments in Schedule 1, Part 1 of this Bill to modernise the paper based regime for customs licences; and Schedule 1, Part 13 to digitise claims for return of seized goods under section 205B of the Customs Act.

Item 197 Subsection 127(6)

461. This item replaces the words "An application" in subsection 127(6) with the words "A documentary application" to clarify that this subsection is only relevant to a documentary application to unship, unload or use ships' or aircraft's stores.

Item 198 After subsection 127(6)

462. This item inserts new subsection (6A) after subsection 127(6) to provide that the making of an electronic application is through communicating such information as is set out in an approved statement.

463. An 'approved statement' consists of data fields to facilitate information to be provided to an electronic system administered by the Comptroller-General of Customs. The data fields may then be used to support electronic applications, for example through an online portal. The authority to make approved statements is contained in subsection 4A(1A) of the Customs Act.

Item 199 Subsection 127(7)

464. This item replaces the words "different forms for applications to be made under subsection (5)" with the words "different forms for documentary applications, and different statements for electronic applications, to be made under subsection (5)" in subsection 127(7).

465. The purpose of this item is to empower the Comptroller-General of Customs to make different statements for electronic forms seeking approval to unload, unship and use aircraft's and ships' stores. This is in addition to the existing power to make different forms for documentary applications.

Item 200 Subsection 129(1) (note)

466. This item replaces the words "subsection (5)" in the note to subsection 129(1) with the words "subsections (4) to (5A)" to clarify which subsections relate to application requirements for taking on board ships' and aircraft's stores.

Item 201 After subsection 129(4)

467. This item inserts new subsection (4A) after subsection 129(4) to provide that an application under subsection 129(1) to take on board ships' or aircraft's stores may be made by document or electronically.

468. Current section 129 only allows for an application to by made by document. This is set out in current subsection 129(5) which provides that an application must be made in writing in an approved form. New subsection 129(5A), as inserted by item [203] of this Part, will provide for the electronic lodgement of applications for approval to take on board ships' and aircraft's stores.

469. Processes related to these applications are currently paper based and are submitted by post or personally handed to regional or port based customs officers. These manual processes are out of touch with the evolving trade environment and impose additional costs on businesses to trade, and for government to administer. The introduction of a digital process will significantly reduce the manual administrative workload of ABF officers, provide efficiencies and cost reduction for industry.

470. These changes complement the amendments in Schedule 1, Part 1 of this Bill to modernise the paper based regime for customs licences; and Schedule 1, Part 13 to digitise claims for return of seized goods under section 205B of the Customs Act.

Item 202 Subsection 129(5)

471. This item replaces the words "An application" in subsection 129(5) with the words "A documentary application" to clarify that this subsection is only relevant to a documentary application to take on board ships' or aircraft's stores.

Item 203 After subsection 129(5)

472. This item inserts new subsection (5A) after subsection 129(5) to provide for the making of an electronic application through communicating such information as is set out in an approved statement.

473. An 'approved statement' consist of data fields to facilitate information to be provided to an electronic system administered by the Comptroller-General of Customs. The data fields may then be used to support electronic applications, for example through an online portal. The authority to make approved statements is contained in subsection 4A(1A) of the Customs Act.

Item 204 Subsection 129(6)

474. This item replaces the words "different forms for applications to be made under subsection (1)" in subsection 129(6) with the words "different forms for documentary applications, and different statements for electronic applications, to be made under subsection (1)"

475. The purpose of this item is to empower the Comptroller-General of Customs to make different statements for electronic forms seeking approval to take on board ships' or aircraft's stores. This is in addition to the existing power to make different forms for documentary applications.

Item 205 Application provision

476. This item provides that the amendments of sections 127 and 129 by items [196] to [199] and items [200] to [204] respectively of this Part apply in relation to an application made on or after the day on which this item commences.

477. The amendment in this Part apply to application for approval to unload, unship or use, or to take on board ships' or aircraft stores, that are made after the commencement of this Part.

478. In practice, an electronic application may only be made if there is an approved statement in effect and the Department has established the information, communication and technology systems to facilitate electronic claims.

Part 13 Claims for return of goods seized

Customs Act 1901

Item 206 After subsection 205B(1B)

479. This item inserts new subsection (1C) after subsection 205(1B) to provide that a claim under subsection 205B(1) for the return of goods seized under Subdivision G of the Customs Act 1901 may be made either by document or electronically.

480. Current section 205B only allows for a claim to by made by document. This is set out in current subsection 205B(2) which provides that a claim must be made in writing in an approved form. New subsection 205B(2B), as inserted by item [208] of this Part, will provide for the electronic lodgement of applications for claims for the return of seized goods.

481. Processes related to claims for the return of seized goods are currently paper based and are submitted by post or personally handed to a customs officer or to the closest customs office. These manual processes are out of touch with the evolving trade environment and impose additional costs on businesses to trade, and for government to administer. The introduction of a digital process will significantly reduce the manual administrative workload of ABF officers, provide efficiencies and cost reduction for industry.

482. These changes complement the amendments in Schedule 1, Part 1 of this Bill to modernise the paper based regime for customs licences; and Schedule 1, Part 12 to modernise applications in respect of ship's and aircraft's stores under section 127 and 129 of the Customs Act.

Item 207 Subsection 205B(2)

483. This item would replace the words "A claim" in subsection 205B(2) with the words "A documentary claim" to clarify that subsection 205B(2) is relevant only to a documentary claim for the return of goods seized under Subdivision G.

Item 208 After subsection 205B(2)

484. This item inserts new subsection (2A) after subsection 205B(2) to stipulate the requirements of an electronic claim under subsection 205B(1) for the return of goods seized under Subdivision G.

485. An electronic claim requires the applicant to communicate the information set out in an approved statement. This differs from a documentary claim which requires the application to be in writing in an approved form.

486. An 'approved form' is a form approved by the Comptroller-General of Customs under subsection 4A(1) of the Customs Act. Similarly, an 'approved statement' consist of data fields to facilitate information to be provided to an electronic system administered by the Comptroller-General of Customs. The data fields may then be used to support electronic applications, for example through an online portal. The authority to make approved statements is contained in subsection 4A(1A) of the Customs Act.

487. Processes related to claims for the return of seized goods are currently paper based and are submitted by post or personally handed to a customs officer or to the closest customs office. These manual processes are out of touch with the evolving trade environment and impose additional costs on businesses to trade, and for government to administer. The introduction of a digital process will significantly reduce the manual administrative workload of ABF officers, provide efficiencies and cost reduction for industry.

488. These changes complement the amendments in Schedule 1, Part 1 of this Bill to modernise the paper based regime for customs licences; and Schedule 1, Part 12 to modernise applications in respect of ship's and aircraft's stores under section 127 and 129 of the Customs act.

Item 209 Application provision

489. This item provides that the amendments of section 205B made by items [206] to [208] of this Part apply in relation to a claim made on or after the day on which this item commences.

490. The amendments in this Part apply to electronic claims that are made on or after commencement of this Part.

491. In practice, an electronic claim may only be made if there is an approved statement in effect and the Department has established the information, communication and technology systems to facilitate electronic claims.

Part 14 Contingent amendments

Customs Act 1901

Item 210 Section 80 - Application for a warehouse licence

492. This item repeals section 80, and substitutes a new section 80, which sets out how an application for a warehouse licence may be made to the Comptroller-General of Customs.

493. New section 80 permits an application to be made by document or electronically.

494. If the application is made by document, it must be in writing in an approved form and contain such information as the form requires. A documentary application must be accompanied by any documents required by the form and be signed in the manner indicated in the form. In circumstances other than if the application is for an excise-equivalent warehouse licence, a documentary application must be accompanied by the warehouse licence application charge.

495. If the application is made as an electronic application, it must communicate such information as is set out in an approved statement and be accompanied by any documents required by the approved statement. As required for a documentary application, an electronic application must be accompanied by the warehouse licence application charge, except if the application is for an excise-equivalent warehouse licence.

496. New section 80 makes clear that an application cannot be made under subsection (1) to use a place described in the application to warehouse tobacco products.

Item 211 Paragraph 81(1)(da)

497. This item repeals paragraph 81(1)(da), and substitutes a new paragraph 81(1)(da), which has the effect that where the applicant is a company, the Comptroller-General of Customs shall not grant a warehouse licence if, in the Comptroller-General's opinion the company is not a fit and proper company to hold a warehouse licence; or where any of the directors of the company is not a fit and proper person to be a director of a company holding a warehouse licence.

Fit and proper

498. This item pursues the legitimate objective of ensuring that licence holders, and companies or company directors participating in the management or control of places under the licence, are fit and proper to hold or be granted a warehouse licence. Where a company or person with control of the management of the warehouse that is the subject of the licence application is not 'suitable' or fit and proper to hold a licence, it would give rise to risks to the physical security of relevant goods and the revenue, and therefore the broader integrity of Australia's customs control systems.

499. This amendment governs how it is determined whether a company or the directors of the company is fit and proper go to integrity, capacity and competence to manage a relevant premises or warehouse. These include the company's history of compliance with Commonwealth, State or Territory legislation, whether it has previously held a licence that has been cancelled, and whether the company's directors are undischarged bankrupts. These are not the only matters that may be considered. It is important to ensure that a broad range of matters can be considered to inform an holistic assessment, as a potential licence holder may be involved in the storage or manufacture of a wide range of goods, with varying degrees of risk.

500. The granting of a licence confers significant responsibility on the licence holder in relation to goods, including the granting of an excise-equivalent warehouse licence which confers significant responsibility on the licence holder in relation to the relevant excise-equivalent goods. These provisions are therefore proportionate to manage the risks and to the broader collection of excise duty and equivalent customs duty, by ensuring persons who hold such responsibilities have the capacity and integrity to exercise them appropriately.

501. The Bill's limitations on which entities may be granted or hold a licence are therefore necessary, reasonable and proportionate to the legitimate aim of ensuring that licenced entities responsible for, or involved with the warehousing of goods, including the manufacture or storage of excise-equivalent goods are suitable to do so, and therefore safeguard the integrity of Australia's customs control systems.

Item 212 Paragraphs 81(1A)(a) and (b)

502. This item repeals paragraphs 81(1A)(a) and (b), and substitutes new paragraphs 81(1A)(a), (b) and (ba).

503. New paragraph 81(1A)(a) provides for the considerations in circumstances if the applicant is a natural person, and requires that Comptroller-General must not grant a warehouse licence that covers a particular place if, in the Comptroller-General's opinion the applicant would not be in a position to occupy and control the place if the licence were granted or a person who would participate in the management or control of, or in the operations carried out at, the place (whether or not the person would be present at the place) is not a fit and proper person to so participate.

504. New paragraph 81(1A)(b) provides for the considerations in circumstances if the applicant is a partnership and requires that Comptroller-General must not grant a warehouse licence that covers a particular place if, in the Comptroller-General's opinion none of the partners in the partnership would be in a position to occupy and control the place if the licence were granted or a person who would participate in the management or control of, or in the operations carried out at, the place (whether or not the person would be present at the place) is not a fit and proper person to so participate.

505. New paragraph 81(1A)(ba) provides for the considerations in circumstances if the applicant is a company and requires that Comptroller-General must not grant a warehouse licence that covers a particular place if, in the Comptroller-General's opinion the company would not be in a position to occupy and control the place if the licence were granted or a person who would participate in the management or control of, or in the operations carried out at, the place (whether or not the person would be present at the place) is not a fit and proper person to so participate.

506. This item expands the fit and proper person test to "persons" who participates in the management or control of the place, thus bringing more persons within the scope of the fit and proper person assessment. This reflects commercial reality in which operating models now include the regular use of sub-contractors, third party entities and other service providers. The expanded scope reflects the broader risks with the modern supply chain and seeks to be in line with new and emerging threats such as cybercrime where persons can access and influence remotely.

507. This item also provides that a warehouse licence must not be granted to an individual, partnership or company if a person who would participate in the operations of the warehouse is not a fit and proper person. This brings within the scope of operation of the section any person who would participate in the general operation of the warehouse. In particular, the person does not need to be present at the proposed warehouse.

508. Transnational Serious Organised Crime groups are increasingly exploiting trusted insiders within the supply chain to facilitate cross border crimes. A 'trusted insider' is a person who uses their legitimate employment at the border, or in the supply chain, to facilitate illicit imports and exports. All transnational crime has a border nexus. The Australian Criminal Intelligence Commission estimate that over eight tonnes of methamphetamine is consumed within Australia each year, with over 70% being imported from international locations as final product. Sophisticated criminal entities have a strong understanding of trade and border systems, methodologies and presence, enabling them to increasingly target weaknesses in the supply chain.

509. The ABF's primary effort to support the fight against transnational, serious and organised crime has been centred on Operation JARDENA. Operation JARDENA addressed systemic border weaknesses that are being targeted by an increasing number of domestic and foreign criminal groups. Under the operation, the ABF identified vulnerabilities that are being exploited and considered potential solutions, particularly those that are customs related, to address the gaps in Australia's border security.

510. Trusted insiders include employees working for licensed depots and warehouses, customs brokers, shipping companies, airlines, freight forwarders, transport companies, stevedores, law enforcement and agencies that regulate the border. They have access to restricted areas and systems, possess an intimate knowledge of border clearance processes, understand the vulnerabilities of our supply chain and know how to exploit them.

511. To address this increasing risk, this item introduces the notion of a person who participates in the operations of the warehouse, thus bringing more person within the scope of the fit and proper person assessment. This provides the ABF with a control to mitigate the threat of trusted insiders occupying positions that fall outside of the current scope of the fit and proper person assessment.

512. Currently, prior to the grant of a licence, only the applicant and their employees who occupy a position of management or control are subject to the fit and proper person test. Assessments of persons outside of those roles can exist for current licence holders through the imposition of additional licence conditions but this is not applicable prior to the grant of a licence. This creates a situation where the Comptroller-General is unable to refuse grant of a licence if the applicant, prior to the grant of the licence, employs persons convicted of offences that may justify refusal. The applicant would be granted the licence, and after the imposing of the additional licence conditions, steps could then be taken to cancel the licence. Making this change enables a more consistent approach to ensuring the integrity of persons operating in the supply chain.

Item 213 At the end of subsection 81(1A)

513. This item inserts a new paragraph 81(1A)(f) which has the effect that the Comptroller-General must not grant a warehouse licence that covers a particular place if, in the Comptroller-General's opinion, it is inappropriate in all the circumstances to grant the licence covering the place, having regard to the matters covered by subsection (3A).

514. The inclusion of this item allows experience in the operations that would be performed upon or in relation to the warehouse as a consideration of the licence application.

515. This item mitigates the risk of applicants providing standardised or plagiarised material in support of their initial licence application without the experience and knowledge of implementing the material presented as part of their licence application. Instances of applicants sourcing standardised material available or 'consultants' to procure the required information in English and tailored to meet the ABF's standards or expectations have occurred, where once granted the holder of the licence is unable or unwilling to comply with the materials, processes and procedures presented as part of the original licence application and operates the licensed place in a manner not approved as part of the licence application.

516. Warehouse licence holders occupy a position of privilege in Australia's supply chain, and instances of non-compliance therefore have the potential to cause significant harm to Australian industry and the community at large in a variety of ways. Experience in operating the licensed place is a critical assurance to the Comptroller-General that the licence holder can secure the goods and maintain the integrity of the supply chain. Furthermore, warehoused goods poses a significant revenue risk where the costs of duties and taxes owing to the Commonwealth is an incentive to divert, steal or pillage the goods by criminal actors.

517. In order to operate a customs licensed warehouse, experience and appropriate operating procedures and processes are required in the reporting, movement and storage of goods under customs control. This does not result in applicants requiring extensive experience as a whole but rather ensuring there is a level of experience to operate the warehouse appropriately and in line with their obligations.

Item 214 Subsection 81(2)

518. This item omits the words "paragraph (1)(a) or (b) or (1A)(a) or (b)", and substitutes the words "paragraph (1)(a) or (b) or subparagraph (1)(da)(ii) or (1A)(a)(ii), (b)(ii) or (ba)(ii)".

519. It is important to note that subsection 81(2), as amended, specifies the matters that the Comptroller-General of Customs must have regard to, in determining whether a person is a fit and proper person for the purposes of paragraph (1)(a) or (b) or subparagraph (1)(da)(ii) or (1A)(a)(ii), (b)(ii) or (ba)(ii).

Item 215 Subsection 81(3)

520. This item omits the words "paragraph (1)(da)", and substitutes the words "subparagraph (1)(da)(i)".

521. Paragraph 81(1)(da) was amended by item [211], to expand the application of considerations the matters that the Comptroller-General of Customs must have regard to, in determining whether a company is a fit and proper company from a company to include the directors of a company. The amendment made by this item restricts those considerations to determining whether a company is a fit and proper company.

Item 216 After subsection 81(3)

522. This item inserts a new subsection 81(3A) which, for the purposes of paragraph 81(1A)(f) (as inserted by item [213]), deals with the experience of specified types of applicants as a consideration that the Comptroller-General of Customs must have regard to, in determining whether a natural person, partnership or company is fit and proper for the grant of a warehouse licence. Each paragraph of new subsection 81(3A) deals with a type of applicant.

523. New paragraph 81(3A)(a) deals with the requirements in relation to a natural person and requires that the Comptroller-General of Customs must have regard to the experience of the applicant in operations that would be performed upon, or in relation to, goods at the place. In addition, the Comptroller-General of Customs must have regard to the experience of each person, known to the Comptroller-General of Customs, who would participate in the management or control of, or in the operations carried out at, the place (whether or not the person would be present at the place).

524. New paragraph 81(3A)(b) deals with the requirements in relation to a partnership and requires that the Comptroller-General of Customs must have regard to the experience of each partner in the partnership in operations that would be performed upon, or in relation to, goods at the place. In addition, the Comptroller-General of Customs must have regard to the experience of each person, known to the Comptroller-General of Customs, who would participate in the management or control of, or in the operations carried out at, the place (whether or not the person would be present at the place).

525. New paragraph 81(3A)(c) deals with the requirements in relation to a company and requires that the Comptroller-General of Customs must have regard to the experience of the company and each director of the company in operations that would be performed upon, or in relation to, goods at the place. In addition, the Comptroller-General of Customs must have regard to the experience of each person, known to the Comptroller-General of Customs, who would participate in the management or control of, or in the operations carried out at, the place (whether or not the person would be present at the place).

526. New paragraph 81(3A)(d) deals with the requirements in relation to any other case and requires that the Comptroller-General of Customs must have regard to the applicant's operating procedures and processes that would apply at the place in relation to goods at that place.

527. This item permits an assessment of integrity risks associated with an applicant to be considered by the Comptroller-General when determining whether the applicant is fit and proper to hold a warehouse licence.

528. This item mitigates the risk of applicants providing standardised or plagiarised material in support of their initial licence application without the experience and knowledge of implementing the material presented as part of their licence application. Instances of applicants sourcing standardised material available or 'consultants' to procure the required information in English and tailored to meet the ABF's standards or expectations have occurred, where once granted the holder of the licence is unable or unwilling to comply with the materials, processes and procedures presented as part of the original licence application and operate the licensed place in a manner not approved as part of the licence application.

529. Warehouse licence holders occupy a position of privilege in Australia's supply chain, and instances of non-compliance therefore have the potential to cause significant harm to Australian industry and the community at large in a variety of ways. Experience in operating the licensed place is a critical assurance to the Comptroller-General that the licence holder can secure the goods and maintain the integrity of the supply chain. Furthermore, warehoused goods poses a significant revenue risk where the costs of duties and taxes owing to the Commonwealth is an incentive to divert, steal or pillage the goods by criminal actors.

530. In order to operate a customs licensed warehouse, experience and appropriate operating procedures and processes are required in the reporting, movement and storage of goods under customs control. This does not result in applicants requiring extensive experience as a whole but rather ensuring there is a level of experience to operate the warehouse appropriately and in line with the obligations under the law.

Item 217 After section 81A

531. This item inserts a new section 81AA to deal with giving a notice of refusal to grant a warehouse licence. New section 81AA has the effect that if the Comptroller-General of Customs refuses to grant a warehouse licence, or refuses to grant a warehouse licence in relation to a particular place, to an applicant for a warehouse licence the Comptroller-General must give the applicant written notice of the refusal and of the reasons for the refusal.

532. This item also includes a note directing the reader to section 102AA for the ways in which the notice may be given to the applicant.

533. This amendment also simplifies the language of the subsection. It does not change the Collector's obligations in respect of the information to be included in the notice, as the giving of reasons requires an exposition of the findings based on the fact based evidence and other material made available to the decision maker, including how the decision was formed.

Item 218 Before subsection 81B(1)

534. This item inserts a new subheading "Variation on application" before subsection 81B(1), to assist with readability.

Item 219 Subsection 81B(1) (note)

535. This item omits the word "Note", and substitutes "Note 1".

536. This is a consequential amendment, required to cater for the inclusion of a second note following subsection 81B(1), effected by item [220].

Item 220 At the end of subsection 81B(1)

537. This item adds a new Note 2 following subsection 81B(1), which guides the reader to refer to subsection 81B(9) for variation on the Comptroller-General's own initiative

Item 221 After subsection 81B(1)

538. This item inserts a new subsection 81B(1A), which provides that an application under subsection (1) may be made by document or electronically.

539. This amendment gives effect to the modernisation of customs systems to permit document or electronic applications to be made for a warehouse licence.

Item 222 Subsection 81B(2)

540. This item omits the words "The application", and substitutes the words "A documentary application".

541. This amendment is required to distinguish between application methods, to make clear the subsection applies in relation to a 'hard copy' or documentary application, rather than a 'soft copy' or electronic application.

Item 223 After subsection 81B(2)

542. This item inserts a new subsection 81B(2AA), which provides that an electronic application must communicate such information as is set out in an approved statement, and be accompanied by the warehouse licence variation charge, except if the application is in relation to an excise-equivalent warehouse licence.

543. This amendment has the effect of specifying the requirements for making an electronic application for a variation of the place covered by a warehouse licence.

Item 224 At the end of subsection 81B(8)

544. This item adds a new Note following subsection 81B(8), which guides the reader to refer to section 102AA for the ways in which the notice may be given to the licence holder.

Item 225 At the end of section 81B

545. This item adds new subsection 81B(9) to provide a discretion to the Comptroller-General of Customs to make a variation on their own initiative. This item also adds new subsection 81B(10) which provides for the mandatory requirements if the Comptroller-General makes a variation on their own initiative.

Subsection 81B(9) - Variation on own initiative

546. New subsection 81B(9) provides a new discretionary power for the Comptroller-General of Customs to vary a warehouse licence on their own initiative.

547. In any case, the Comptroller-General of Customs may, on the Comptroller-General's own initiative, vary a warehouse licence by removing any place covered by the licence and substituting a different place.

548. In circumstances where the licence is an excise-equivalent warehouse licence, the Comptroller-General of Customs may, on the Comptroller-General's own initiative, vary a warehouse licence by either removing a place from the places covered by the licence without substituting or adding any places, provided that after the variation there is at least one place that is covered by the licence, or by adding a place to the places covered by the licence.

549. In order to maintain or secure goods under customs control, the amendment provides the Comptroller-General of Customs the power to vary a warehouse licence or an excise-equivalent warehouse licence to ensure the security and integrity of the place covered by the licence. Previously, the variation of the licence could only be taken to occur upon application from the applicant. This limits the variation of the place covered by the licence to the application itself and when it is submitted by the applicant.

550. The new amendment provides the ability for the Comptroller-General of Customs to vary the licence on their own volition to allow a change to the licence boundary to adequately cover goods under customs control. This allows a responsive and flexible approach to secure goods under customs control and protect the revenue. This provides an appropriate treatment tool to manage the risk of goods under customs control being stored outside of the licensed place, or to manage the change in volumes, operating model and type of goods stored in a licensed place.

551. There is no change to the applicant's ability to submit an application to vary the licence based on the needs or change in operating procedures and this new amendment is reserved to be utilised in appropriate situations where there is a need for the Comptroller-General of Customs to treat the risk in a timely manner without applying an additional administrative layer to the variation of the licence.

552. The note following new subsection 81B(9) reminds the reader that to change the boundaries or other details of a place covered by a warehouse licence, the licence may be varied as mentioned in paragraph 81B(9)(a).

553. A decision under new subsection 81B(9) is merits reviewable. Paragraph 273GA(1)(b) of the Customs Act will apply and which allows for an application to be made to the Administrative Appeals Tribunal for review of a decision of the Comptroller - General of Customs for the purposes of Part V of the Customs Act.

New subsection 81B(10)

554. New subsection 81B(10) provides that the Comptroller-General of Customs must give the holder of the warehouse licence a copy of the variation under subsection (9). The variation takes effect at the time the copy is given.

555. This item provides that the Comptroller-General of Customs must notify the holder of the licence of the new licence and any respective information such as conditions, the place in which the licence covers and etc.

Item 226 Paragraph 83(1B)(b)

556. This item inserts the words "subject to that section," after the words "section 84—".

557. This is a consequential amendment required to provide for the amendments made to section 84 by item [227].

Item 227 Section 84

558. This item repeals current section 84, and substitutes a new section 84, to deal with the renewal of warehouse licences that are not excise-equivalent warehouse licences.

New subsection 84(1)

559. New subsection 84(1) inserts a mandatory obligation that requires the Comptroller-General of Customs to notify each holder of a warehouse licence that is not an excise-equivalent warehouse licence, of the terms of section 84 before the end of a financial year (the current financial year).

560. This item aligns with the renewal provisions afforded to depot licence holders where there is an obligation on the Comptroller-General of Customs to notify, before the end of a financial year, licence holders on the renewal provision. Warehouse licence holders will be notified prior to the end of the financial year on their ability to renew the licence if accompanied by the respective licence renewal fee. The note following new subsection 84(1) reminds the reader that an excise-equivalent warehouse licence remains in force unless it is cancelled.

New subsection 84(2) Licence renewed if holder pays charge before end of current financial year

561. New subsection 84(2) provides that, if the holder pays the warehouse licence charge for the renewal of the licence before the end of the current financial year, the licence is renewed for another period of 12 months beginning on 1 July of the next financial year after the current financial year.

New subsection 84(3) Consequences if charge not paid before end of current financial year

562. New subsection 84(3) provides that, if the holder fails to pay the warehouse licence charge for the renewal of the licence before the end of the current financial year, the licence is taken to be suspended for the period beginning on 1 July of the next financial year after the current financial year and ending at the earlier of the time the holder pays the charge or the end of 30 July of that next financial year.

563. This item aligns the failure to pay the renewal fee provision for depots and warehouses. Previously, depot and warehouses had two different timeframes for payment and different consequences for not paying on time. This item aligns these requirement to provide an equitable approach for both depots and warehouses. Importantly, this item enforces the validity period of a licence and where the renewal fee is not paid, the licence cannot be used in the new financial year.

564. Previous instances have shown that licence holders would not pay the renewal fee and continue to use the licence in the new financial year and then surrender the licence prior to the expiration or suspension period. Effectively obtaining a free period of the licence without any consequence. This approach creates a financial advantage for non-compliant entities and creates an unequal playing field with compliant licence holders who pay on time.

New subsection 84(4) Licence renewed if holder pays charge before 30 July of the next financial year

565. New subsection 84(4) provides that, if the holder pays the warehouse licence charge for the renewal of the licence during the period of 30 days beginning on 1 July of the next financial year after the current financial year, the licence is taken to have been renewed for another period of 12 months beginning on 1 July of that next financial year.

New subsection 84(5) Licence expires if holder does not pay charge before 30 July of the next financial year

566. New subsection 84(5) provides that, if the holder fails to pay the warehouse licence charge for the renewal of the licence before the end of 30 July of the next financial year after the current financial year, the licence expires at the end of that 30 July.

567. This item aligns the failure to pay the renewal fee provision for depots and warehouses. Previously, depot and warehouses had two different timeframes for payment and different consequences for not paying on time. This item aligns the requirement to provide an equitable approach for both depots and warehouses. Importantly, this item enforces the validity period of a licence and where the renewal fee is not paid, the licence cannot be used in the new financial year.

568. Previous instances have shown that licence holders would not pay the renewal fee and continue to use the licence in the new financial year and then surrender the licence prior to the expiration or suspension period. Effectively obtaining a free period of the licence without any consequence. This approach creates a financial advantage for non-compliant entities and creates an unequal playing field with compliant licence holders who pay on time.

569. This item now provides for an expiration to the warehouse licence and aligns with the provisions for depot licences. The alignment provides for a consistent approach and promotes an equitable playing field for both depot and warehouse licence holders.

New subsection 84(6) Multiple renewals

570. New subsection 84(6) provides that a warehouse licence that has been renewed under this section may be further renewed.

Item 228 Subsections 85(3) and (4)

571. This item repeals current subsections 85(3) and (4), and substitutes new subsection 85(3) to deal with charges related to the renewal of a warehouse licence.

572. New subsection 85(3) provides that a warehouse licence charge in respect of the renewal of a warehouse licence, that is not an excise-equivalent warehouse licence, is payable by the holder of the licence in accordance with section 84.

573. This item provides the segregation of renewal provisions for warehouses licences that do not store excise-equivalent goods where a renewal fee is payable and for warehouses licences that do store excise-equivalent goods where there is no renewal or renewal fee provision.

Item 229 Section 85A (at the end of the heading)

574. This item adds the words "in respect of grant of warehouse licence" at the end of the heading for section 85A. The heading now reads "Payment of warehouse licence charge in respect of grant of warehouse licence".

575. This is to distinguish between a charge for an application for a new licence, and the charge for renewing an existing licence for a warehouse that is not an excise-equivalent warehouse.

Item 230 Subsection 85A(1)

576. This item omits the words ", or the renewal, of a warehouse licence", and substitutes the words "of a warehouse licence, that is not an excise-equivalent warehouse licence,".

577. This is to distinguish between a charge for an application for a new licence, and the charge for renewing an existing licence for a warehouse that is not an excise-equivalent warehouse.

Item 231 Paragraph 86(1)(a)

578. This item omits the letter "f" and substitutes with the letter "g" in paragraph 86(1)(a). The effect of this item is to extend the matters under subsection 86(1) upon which the Comptroller-General of Customs may give a notice of an intention to cancel a licence or to suspend the warehouse licence, to include the matters in paragraph 86(1AC)(g) if it applies to each of the warehouses covered by the licence.

579. For a warehouse licence that only covers one warehouse, the matter under paragraph 86(1AC)(g) only needs to apply to the one warehouse.

580. New paragraph 86(1AC)(g) has the effect that, if a warehouse licence covers more than one warehouse, the Comptroller-General of Customs may give a notice under subsection 86(1AD) to the licence holder if the Comptroller-General has reasonable grounds for believing that it is appropriate in all the circumstances to vary the licence to no longer cover a particular warehouse, having regard to the matters covered by subsection 86(2).

581. New subsection 86(2) deals with the experience of specified types of applicants as a consideration that the Comptroller-General of Customs must have regard to, in determining whether a natural person, partnership or company is fit and proper.

Item 232 Paragraph 86(1)(fa)

582. This item repeals current paragraph 86(1)(fa), and substitutes a new paragraph 86(1)(fa), which has the effect that the Comptroller-General of Customs may give notice in accordance with section 86 to the holder of a warehouse licence, where the licence is held by a company.

583. The Comptroller-General may give a notice if the Comptroller-General has reasonable grounds for believing that the company is not a fit and proper company to hold a warehouse licence, or a director of the company is not a fit and proper person to be a director of a company holding a warehouse licence.

Fit and proper

584. This item pursues the legitimate objective of ensuring that licence holders, and companies participating in the management or control of places under the licence, would give rise to risks to the physical security of relevant goods and the revenue, and therefore the broader integrity of Australia's customs control systems.

585. The amendments in the Bill governing how it is determined whether a company is fit and proper go to the integrity, capacity and competence of the company to manage a relevant premises or warehouse. These include the company's history of compliance with Commonwealth, State or Territory legislation, whether it has previously held a licence that has been cancelled, and whether the company's directors are undischarged bankrupts. These are not the only matters that may be considered. It is important to ensure that a broad range of matters can be considered to inform a holistic assessment, as a potential licence holder may be involved in the storage or manufacture of a wide range of goods, with varying degrees of risk.

586. The granting of a licence confers significant responsibility on the licence holder in relation to goods, and in particular the granting of an excise-equivalent warehouse licence confers significant responsibility on the licence holder in relation to the relevant excise-equivalent goods. These provisions are therefore proportionate to manage the risks and to the broader collection of excise duty and equivalent customs duty, by ensuring persons who hold such responsibilities have the capacity and integrity to exercise them appropriately.

587. The Bill's limitations on which entities may be granted or hold a licence are therefore necessary, reasonable and proportionate to the legitimate aim of ensuring that companies responsible for, or involved in, the warehousing of goods and manufacture or storage of excise-equivalent goods are suitable to do so, and therefore safeguard the integrity of Australia's customs control systems.

Item 233 Paragraph 86(1)(h)

588. This item omits the words "a warehouse licence charge payable in respect of the licence", and substitutes the words "the warehouse licence charge payable in respect of the grant of the licence".

589. Paragraph 86(1)(h) now has the effect that the Comptroller-General of Customs may give notice in accordance with section 86 to the holder of a warehouse licence if the Comptroller-General has reasonable grounds for believing that an amount of the warehouse licence charge payable in respect of the grant of the licence unpaid more than 28 days after the day the amount was due to be paid.

Item 234 Paragraph 86(1AA)(a)

590. This item omits the word "served", and substitutes the word "given" in paragraph 86(1AA)(a).

591. This reflects the repeal of subsection 86(2) which previously required service of a notice being effected personally or by post, and would permit electronic service of the notice.

Item 235 After paragraph 86(1AA)(a)

592. This item inserts a new paragraph 86(1AA)(aa) which has the effect that a notice, given by the Comptroller-General of Customs under this subsection to the holder of a warehouse licence with respect to the suspension of a warehouse licence, must state the reasons for the giving of the notice.

593. New paragraph (aa) makes it mandatory, if the Comptroller-General exercises the discretion to give a suspension notice to the holder of a warehouse licence, that the reason for the suspension of a warehouse licence must be included in the notice.

Item 236 At the end of subsection 86(1AA)

594. This item adds a new note following subsection 86(1AA), which guides the reader to refer to section 102AA for the ways in which the notice may be given to the licence holder.

Item 237 Subsection 86(1AB)

595. This item omits the word "service", and substitutes the word "giving".

596. This is a consequential amendment to cater for the modernisation of customs systems to permit both document and electronic applications to be made.

Item 238 Paragraphs 86(1AC)(c) and (d)

597. This item repeals current paragraphs 86(1AC)(c) and (d), and substitutes a new paragraph 86(1AC)(c).

598. New paragraph 86(1AC)(c) has the effect that .a person participating in the management or control of, or in the operations carried out at, a warehouse covered by the licence (whether or not the person is present at the warehouse) is not a fit and proper person to so participate; or

Item 239 At the end of subsection 86(1AC)

599. This item adds a new paragraph 86(1AC)(g), which has the effect that, if a warehouse licence covers more than one warehouse, the Comptroller-General of Customs may give a notice under subsection 86(1AD) to the licence holder if the Comptroller-General has reasonable grounds for believing that it is appropriate in all the circumstances to vary the licence to no longer cover a particular warehouse, having regard to the matters covered by new subsection 86(2) (item [253]).

600. New subsection 86(2) deals with the experience of specified types of applicants as a consideration that the Comptroller-General of Customs must have regard to, in determining whether a natural person, partnership or company is fit and proper.

601. This item provides for the instance where the matters outlined in Section 86(2) result in varying the licence to remove a place covered by the licence but not cancel the whole licence itself. The licence is subsequently varied to not cover a specific place and not taken to be cancelled. This is in response to excise-equivalent goods warehouse licences that can cover more than one place and subsequently a provision to remove places covered by the licence as required without impacting the whole of the licence or operations of the holder of the licence.

Item 240 Paragraph 86(1AD)(a)

602. This item amends paragraph 86(1AD)(a) to omit the word "served", and to substitute the word "given".

603. This is a consequential amendment to cater for the modernisation of customs systems to permit both document and electronic applications to be made.

Item 241 After paragraph 86(1AD)(a)

604. This item inserts a new paragraph 86(1AD)(aa), which has the effect that a suspension of warehouse licence notice given under subsection 86(1AD) must state the reasons for the giving of the notice.

Item 242 At the end of subsection 86(1AD)

605. This item adds a new Note following subsection 86(1AD) which reminds the reader to refer to section 102AA for the ways in which the notice may be given to the licence holder.

Item 243 Subsection 86(1AE)

606. This item omits the word "service", and substitutes the word "giving".

607. This is a consequential amendment to cater for the modernisation of customs systems to permit both document and electronic applications to be made.

Item 244 Subsection 86(1A)

608. This item omits the words "paragraph (1)(c) or (d) or (1AC)(c) or (d)", and substitutes the words "paragraph (1)(c) or (d), subparagraph (1)(fa)(ii) or paragraph (1AC)(c)".

609. This is a consequential amendment to cater for the insertion of new subparagraph 86(1)(fa)(ii) and paragraph (1AC)(c), made by items [232] and [238], respectively.

Item 245 Subparagraphs 86(1A)(a)(ii) and (iii)

610. This item repeals current subparagraphs 86(1A)(a)(ii) and (iii), and substitutes anew subparagraph 86(1A)(a)(ii).

611. New Subparagraph 86(1A)(a)(ii) has the effect that the Comptroller-General of Customs shall, in considering whether a person is a fit and proper person for the purposes of paragraph (1)(c), (d), (e) or (f), have regard to any conviction of the person of an offence against this Act committed after the latest renewal or within 10 years immediately before the latest renewal if the licence has been renewed on one or more occasions.

Item 246 Subparagraphs 86(1A)(b)(ii) and (iii)

612. This item repeals current subparagraphs 86(1A)(b)(ii) and (iii), and substitutes a new subparagraph 86(1A)(b)(ii).

613. New Subparagraph 86(1A)(b)(ii) has the effect that the Comptroller-General of Customs shall, in considering whether a person is a fit and proper person for the purposes of paragraph (1)(c), (d), (e) or (f), have regard to any conviction of the person of an offence under a law of the Commonwealth, of a State or of a Territory that is punishable by imprisonment for a period of one year or longer, being an offence committed after the latest renewal or within 10 years immediately before the latest renewal if the licence has been renewed on one or more occasions.

Item 247 Subparagraphs 86(1A)(d)(ii) and (iii)

614. This item repeals current subparagraphs 86(1A)(d)(ii) and (iii), and substitutes a new subparagraph 86(1A)(d)(ii).

615. New Subparagraph 86(1A)(d)(ii) has the effect that the Comptroller-General of Customs shall, in considering whether a person is a fit and proper person for the purposes of paragraph (1)(c), (d), (e) or (f), have regard to whether the person has been refused a transport security identification card, or has had such a card suspended or cancelled after the latest renewal or within 10 years immediately before the latest renewal if the licence has been renewed on one or more occasions.

Item 248 Subsection 86(1B)

616. This item omits "paragraph (1)(fa)", and substitutes "subparagraph (1)(fa)(i)".

Item 249 Subparagraphs 86(1B)(a)(ii) and (iii)

617. This item repeals current subparagraphs 86(1B)(a)(ii) and (iii), and substitutes a new subparagraph 86(1B)(a)(ii).

618. New subparagraph 86(1B)(a)(ii) has the effect that the Comptroller-General of Customs shall, in considering whether a company is a fit and proper company for the purposes of paragraph (1)(fa) have regard, in relation to the company, to any conviction of the company of an offence against this Act that was committed after the latest renewal if the licence has been renewed on one or more occasions.

Item 250 Sub-subparagraphs 86(1B)(a)(iv)(B) and (C)

619. This item repeals current sub-subparagraphs 86(1B)(a)(iv)(B) and (C), and substitutes a new sub-subparagraph 86(1B)(a)(iv)(B).

620. New sub-subparagraph 86(1B)(a)(iv)(B) has the effect that the Comptroller-General of Customs shall, in considering whether a company is a fit and proper company for the purposes of paragraph (1)(fa) have regard, in relation to the company, to any conviction of the company of an offence against this Act that was committed within 10 years immediately before the latest renewal if the licence has been renewed on one or more occasions.

Item 251 Subparagraphs 86(1B)(b)(ii) and (iii)

621. This item repeals current subparagraphs 86(1B)(b)(ii) and (iii), and substitutes a new subparagraph 86(1B)(b)(ii).

622. New subparagraph 86(1B)(b)(ii) has the effect that the Comptroller-General of Customs shall, in considering whether a company is a fit and proper company for the purposes of paragraph (1)(fa) have regard, in relation to the company, to any conviction of the company of an offence under a law of the Commonwealth, of a State or of a Territory that is punishable by a fine of $5,000 or more, being an offence that was committed after the latest renewal, if the licence has been renewed on one or more occasions.

Item 252 Sub-subparagraphs 86(1B)(b)(iv)(B) and (C)

623. This item repeals current sub-subparagraphs 86(1B)(b)(iv)(B) and (C), and substitutes a new sub-subparagraph 86(1B)(b)(iv)(B).

624. New sub-subparagraph 86(1B)(b)(iv)(B) has the effect that the Comptroller-General of Customs shall, in considering whether a company is a fit and proper company for the purposes of paragraph (1)(fa) have regard, in relation to the company, to any conviction of the company of an offence under a law of the Commonwealth, of a State or of a Territory that is punishable by a fine of $5,000 or more, being an offence that was committed within 10 years immediately before the latest renewal. If the licence has been renewed on one or more occasions.

Item 253 Subsection 86(2)

625. This item repeals current subsection 86(2), and substitutes a new subsection 86(2).

626. This item inserts a new subsection 86(2) which, for the purposes of paragraph 86(1AC)(g), (as inserted by item [239]), deals with the experience of specified types of persons as a consideration that the Comptroller-General of Customs must have regard to, in determining whether a natural person, partnership or company is fit and proper. Each paragraph of new subsection 86(2) deals with a type of applicant.

627. New Subsection 86(2) provides that, for the purposes of paragraph 86(1AC)(g), the matters covered by this subsection are the following.

628. New paragraph 86(2)(a) deals with the requirements in relation to a natural person and requires that the Comptroller-General of Customs must have regard to the experience of the holder of the licence in operations that would be performed upon, or in relation to, goods at the warehouse covered by the licence . In addition, the Comptroller-General of Customs must have regard to the experience of each person, known to the Comptroller-General of Customs, who would participate in the management or control of, or in the operations carried out at, the warehouse (whether or not the person would be present at the warehouse).

629. New paragraph 86(2)(b) deals with the requirements in relation to a partnership and requires that the Comptroller-General of Customs must have regard to the experience of each partner in the partnership and requires that the Comptroller-General of Customs must have regard to the experience of the holder of the licence in operations that would be performed upon, or in relation to, goods at the warehouse covered by the licence . In addition, the Comptroller-General of Customs must have regard to the experience of each person, known to the Comptroller-General of Customs, who would participate in the management or control of, or in the operations carried out at, the warehouse (whether or not the person would be present at the warehouse).

630. New paragraph 86(2)(c) deals with the requirements in relation to a company and requires that the Comptroller-General of Customs must have regard to the experience of the company and each director of the company in operations that would be performed upon, or in relation to, goods at the warehouse covered by the licence . In addition, the Comptroller-General of Customs must have regard to the experience of each person, known to the Comptroller-General of Customs, who would participate in the management or control of, or in the operations carried out at, the warehouse (whether or not the person would be present at the warehouse).

631. New paragraph 86(2)(d) deals with the requirements in relation to any other case and requires that the Comptroller-General of Customs must have regard to the holder's operating procedures and processes that would apply at a warehouse in relation to goods at the warehouse.

632. This item permits an assessment of integrity risks associated with an applicant to be considered by the Comptroller-General when determining whether the holder of a warehouse licence is fit and proper to hold a warehouse licence.

Item 254 Paragraph 87(1)(a)

633. This item amends paragraph 87(1)(a) to replace paragraph "(h)" with paragraph "(i)".

634. This amendment has the effect that the Comptroller-General of Customs may cancel a warehouse licence if they are satisfied in relation to the licence as to any of the matters mentioned in paragraphs 86(1)(a) to (i) (inclusive)

Item 255 Subsection 87(1A)

635. This item replaces the word "must" with the word "may".

636. This amendment makes clear that the Comptroller-General of Customs has a discretion to exercise a power to cancel a warehouse licence if the Comptroller-General of Customs receives a written request from the holder of the licence that the licence be cancelled on and after a specified day, but is not mandated to do so.

Item 256 Subsection 87(2)

637. This item repeals current subsection 87(2), and substitutes new subsection 87(2), which provides that the Comptroller-General of Customs must, under this section, cancel a warehouse licence by notice in writing given to the holder of the licence, and setting out the reasons for the cancellation.

638. This amendment also simplifies the language of the subsection. It does not change the Collector's obligations in respect of the information to be included in the notice, as the giving of reasons requires an exposition of the findings based on the fact based evidence and other material made available to the decision maker, including how the decision was formed.

639. The note following new subsection 87(2) reminds the reader to refer section 102AA for the ways in which the notice may be given to the holder of the licence.

Item 257 Subsections 87(4) and (5)

640. This item repeals current subsections 87(4) and (5), and substitutes new subsections 87(4) and (5).

New subsection 87(4)

641. New subsection 87(4) provides that, subject to subsection (5), if under this section the Comptroller-General of Customs cancels a warehouse licence and goods remain in a place that was a warehouse covered by the licence (a former warehouse), the Comptroller-General must publish a notice, by any means the Comptroller-General considers appropriate.

642. The notice must inform owners of goods in the former warehouse that they are required, within a time specified in the notice or any further time allowed by the Comptroller-General, to pay to the Collector duty payable in respect of their goods in the former warehouse, or remove their goods in the former warehouse to another place in accordance with permission obtained from the Collector.

643. The notice must also inform owners of goods in the former warehouse that, if they do not comply with the requirements of the notice, their goods in the former warehouse will be sold.

644. This item provides for a public announcement to notify owners of the change in circumstances and their obligations relating to their goods as they are no longer covered by a place that is licensed to hold goods under customs control. It also serves as the primary source for the licence status where non-compliant entities may seek to deceive owners around the status of their licence.

New subsection 87(5)

645. New subsection 87(5) provides that if the Comptroller-General of Customs is satisfied that all the goods in a former warehouse are the property of the person who held the licence, the Comptroller-General is not required to publish a notice under subsection (4) in relation to the former warehouse. Instead, the Comptroller-General must give a notice to the person.

646. Instead, the Comptroller-General must give a notice to the person that informs the owners of goods in the former warehouse that they are required, within a time specified in the notice or any further time allowed by the Comptroller-General, to pay to the Collector duty payable in respect of their goods in the former warehouse, or remove their goods in the former warehouse to another place in accordance with permission obtained from the Collector.

647. The notice must also inform owners of goods in the former warehouse that, if they do not comply with the requirements of the notice, their goods in the former warehouse will be sold.

648. This item provides the mechanism to notify the respective owners of the goods in the warehouse that the warehouses is no longer covered by a licence and therefore alternative arrangements must be made for the goods.

649. The first Note following new subsection 87(5) reminds the reader that the Comptroller-General of Customs will still need to publish the notice as required by subsection (4) in relation to a former warehouse in respect of which the Comptroller-General is not so satisfied.

650. The second Note following new subsection 87(5) reminds the reader to refer to section 102AA for the ways in which the notice may be given to the person.

Item 258 Subsection 87(6)

651. This item inserts "or (5)" after "subsection (4)". This is a consequential amendment that is required to cater for the insertion of new subsection 87(5), made by item [257].

Item 259 Paragraph 87B(1)(b)

652. This item omits "(f)", and substitutes "(g)".

653. This is a consequential amendment required to cater for the insertion of new paragraph 86(1AC)(g), made by item [239].

Item 260 Subsection 87B(3)

654. This item repeals current subsection 87B(3), and substitutes a new subsection 87B(3),which has the effect that the Comptroller-General must, under subsection 87B(1), vary a licence by written notice given to the licence holder.

655. The note following new subsection 87B(3), reminds the reader to refer to section 102AA for the ways in which the notice may be given to the licence holder.

Item 261 At the end of subsection 87B(4)

656. This item adds a new note after subsection 87B(4) to remind the reader to refer to section 102AA for the ways in which the notice may be given to the licence holder.

Item 262 Subsections 87B(5) and (6)

657. This item repeals current subsections 87B(5) and (6), and substitutes new subsections 87B(5) and (6).

New subsection 87B(5)

658. New subsection 87B(5) provides, that subject to subsection (6), if under subsection (1) the Comptroller-General of Customs varies a warehouse licence and goods remain in a former warehouse, the Comptroller-General must publish a notice, by any means the Comptroller-General considers appropriate. The notice must inform owners of goods in the former warehouse that they are required, within a time specified in the notice or any further time allowed by the Comptroller-General, to either pay to the Collector duty payable in respect of their goods in the former warehouse, or remove their goods in the former warehouse to another place in accordance with permission obtained from the Collector.

659. The notice must inform owners of goods in the former warehouse that, if they do not comply with the requirements of the notice, their goods in the former warehouse will be sold.

660. This item provides the mechanism to notify the respective owners of the goods in the warehouse that the warehouses is no longer covered by a licence and therefore alternative arrangements must be made.

661. New subsection 87B(5) provides, that if the Comptroller-General of Customs is satisfied that all the goods in a former warehouse are the property of the person who holds the licence, the Comptroller-General is not required to publish a notice under subsection (5) in relation to the former warehouse.

662. Instead, the Comptroller-General must give a notice to the person informing the owners of goods in the former warehouse that they are required, within a time specified in the notice or any further time allowed by the Comptroller-General, to either pay to the Collector duty payable in respect of their goods in the former warehouse, or remove their goods in the former warehouse to another place in accordance with permission obtained from the Collector.

663. The notice must inform owners of goods in the former warehouse that, if they do not comply with the requirements of the notice, their goods in the former warehouse will be sold.

664. This item provides for a public announcement to appropriately notify owners of the change in circumstances and their obligations relating to their goods. It also serves as the source of truth where non-compliant entities may seek to deceive owners around the status of their licence.

665. The first Note following new subsection 87B(6) reminds the reader that the Comptroller-General of Customs will still need to publish the notice as required by subsection (5) in relation to a former warehouse in respect of which the Comptroller-General is not so satisfied.

666. The second Note following new subsection 87B(6) refers the reader to section 102AA for the ways in which the notice may be given to the person.

Item 263 Subsection 87B(7)

667. This item inserts "or (6)" after "subsection (5)". This is a consequential amendment, required to cater for the inclusion of new subsection 87B(6), effected by item [262].

Item 264 Section 88

668. This item repeals section 88 which sets out when a notice is deemed to be properly addressed to a person who holds or held a warehouse licence, in respect of service by post.

669. The purpose of current section 88, with the addition of addressing a notice to a partnership, is set out in new subsection 102AA(3), inserted by item [66].

670. This item is a consequential amendment to new subsection 102AA(3) which co-locates the provisions setting out the methods by which notice may be given to a person or partnership for the purposes of Part V.

Item 265 Subsections 273GAA(1), (2), (7) and (8)

671. This item repeals subsections 273GAA(1), (2), (7) and (8).

672. This item repeals provisions which prescribe requirements to give notice providing written reasons for certain decisions in respect of matters relating to warehouse licences and brokers licences. The effect of these current provisions are set out in new and amended sections of the Customs Act which cater for the modernisation of the licence regimes. This is also a consequential amendment to new sections 102AA (warehouse licences) and new section 183UAA (brokers licences) which co-locates methods by which service of a notice can be given, included electronically.

673. The requirement to give reasons are given effect under the following new locations:

•

a decision refusing to grant a warehouse licence: new section 81AA (item [217])

•

a decision refusing to vary the conditions specified in a warehouse licence: new subsections 82(10) and (11) (item [46])

•

a decision under Division 3 of Part XI refusing to grant a broker's licence: new section 183CCA (item [68])

•

a decision under subsection 183CF(1) or (2) refusing to vary the endorsements on a broker's licence: new subsections 183CF(5) and (6) (item [74])

•

a decision under subsection 183CG(7) refusing to vary the conditions specified in a broker's licence: amended subsection 183CG(7) (item [75]) and new subsection 183CG(7F) (item [76]).

•

a notice in accordance with section 86 to the holder of a warehouse licence: new paragraphs 86(1AA)(aa) (item [235]) and 86(1AD)(a) (item [241])

•

a notice under subsection 87(2) of the cancellation by the Comptroller - General of Customs of a warehouse licence: amended subsection 87(2) (item [256]).

674. Notice is not required in respect of a decision under current subsection 84(3) refusing to renew a warehouse licence where the Comptroller-General of Customs is satisfied that, if the licence were renewed, they would be entitled to cancel the licence. This is because new section 84 (effected by item [227]) does not include this provision.

Item 266 Application provisions

675. This item makes provision for the application of various amendments made by this Part.

Sections 80 and 81

676. Subitem 266(1) provides that the amendments made by items [208] and by items [211] to [216] respectively of this Part, to the extent that it relates to sections 80 and 81, apply in relation to an application for a warehouse licence that is made on or after the day on which this item commences.

Section 81AA

677. Subitem 266 (2) provides that the amendments made by this Part, to the extent that it relates to section 81AA, as inserted by this Part, applies in relation to a decision made on or after the day on which this item commences.

Subsections 81B(1A), 81B(2) and 81B(2AA)

678. Subitem 266(3) provides that the amendments made by this Part, to the extent that it relates to subsections 81B(1A), 81B(2) and 81B(2AA) apply in relation to an application made on or after the day on which this item commences.

Subsections 81B(9) and 81(10)

679. Subitem 266(4) provides that the amendments made by this Part, to the extent that it relates to subsections 81B(9) and (10), apply in relation to a warehouse licence granted before, on or after the day on which this item commences.

Sections 84, 85 and 85A

680. Subitem 266(5) provides that subject to subitem (6), the repeal and substitution of section 84 made by this Part, and the amendments of sections 85 and 85A of that Act made by this Part, apply in relation to a financial year ending on or after the day on which this item commences, whether the warehouse licence was granted before, on or after that day.

681. Subitem 266(6) provides that sections 84, 85 and 85A of the Customs Act, as in force immediately before the commencement of this item, continue to apply on and after that commencement in relation to an application made under subsection 84(1) of that Act before that commencement.

Section 86

682. Subitem 266(7) provides that the amendments made by this Part, to the extent that it relates to section 86 apply in relation to a notice given under that section on or after the day on which this item commences, whether the warehouse licence was granted before, on or after that day.

Paragraph 86(1)(h)

683. Subitem 266(8) provides that the amendments made by this Part, to the extent that it relates to paragraph 86(1)(h), applies in relation to a warehouse licence charge that becomes payable on or after the day on which this item commences, whether the warehouse licence was granted before, on or after that day.

Paragraph 87(1)(a)

684. Subitem 266(9) provides that the amendments made by this Part, to the extent that it relates to paragraph 87(1)(a) applies in relation to the cancellation of a warehouse licence on or after the day on which this item commences, whether the warehouse licence was granted before, on or after that day.

Subsection 87(1A)

685. Subitem 266(10) provides that the amendments made by this Part, to the extent that it relates to subsection 87(1A) applies in relation to a request or application made on or after the day on which this item commences, whether the warehouse licence was granted before, on or after that day.

Subsections 87(2), 87(4) and 87(5), and 87(6)

686. Subitem 266(11) provides that the amendments made by this Part, to the extent that it relates to subsections 87(2), (4), (5) and (6) apply in relation to the cancellation of a warehouse licence on or after the day on which this item commences, whether the warehouse licence was granted before, on or after that day.

Section 87B

687. Subitem 266(12) provides that the amendments made by this Part, to the extent that it relates to section 87B apply in relation to the variation of a warehouse licence on or after the day on which this item commences, whether the warehouse licence was granted before, on or after that day.