House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Justice and Customs, Senator the Honourable Christopher Martin Ellison)

Outline and financial impact statement

Outline

The purpose of this Bill is to amend the Customs Act 1901 (the Customs Act) and the Passenger Movement Charge Collection Act 1978 to:

•

introduce new provisions for determining the normal value of goods in countries with an economy in transition (ie. countries moving towards a market economy) (Schedule 1);

•

amend the anti-dumping provisions in the Customs Act to ensure that the legislation is consistent with the WTO Agreement on the Implementation of Article VI of the GATT (General Agreement on Tariffs and Trade 1994) and to make minor technical amendments and corrections to the anti-dumping provisions (Schedule 1);

•

exempt air security officers (who provide security for civilian aircraft) from the passenger movement charge; (Schedule 2); and

•

make minor amendments to the Customs Act as a result of the commencement of certain provisions of the Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001 (Schedule 3).

Financial impact statement

The Bill has no financial impact.

Notes on clauses

Clause - 1 Short title

This clause provides for the Act, when enacted, to be cited as the Customs Legislation Amendment Act (No. 2) 2002.

Clause 2 - Commencement

Subclause (1) provides that each provision of this Act specified in column 1 of the table in that subclause commences or is taken to have commenced on the day or at the time specified in column 2 of the table.

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

Item 2 of the table provides that Part 1 of Schedule 1 commences on a single day to be fixed by Proclamation. Schedule 1 introduces new provisions to deal with ascertaining whether dumping has occurred from countries with an economy in transition, that is those countries which are moving from centrally-planned economies to market-based economies.

Item 3 of the table provides that Parts 2 and 3 of Schedule 1 commence on the day on which this Act receives the Royal Assent.

Part 2 of Schedule 1 amends the provisions which set out the circumstances under which the Minister may consider the cumulative effect of exports to Australia for the purpose of determining whether material injury has been caused to the Australian industry. Part 3 of Schedule 1 replaces two references to domestic industry with the term Australian industry which is used generally in Part XVB of the Act.

Item 4 of the table provides that Part 4 of Schedule 1 commences on a single day to be fixed by Proclamation. Part 4 clarifies what must be contained in an application for duty assessment and allows the CEO to reject an application which does not meet the requirements and to terminate an examination of an application where the CEO does not have sufficient information.

Item 5 of the table provides that Parts 5, 6 and 7 of Schedule 1 commence on the day on which this Act receives the Royal Assent. Part 5 amends the provisions dealing with who may apply for accelerated review of anti-dumping measures. Part 6 amends the provisions setting out who may apply for a continuation of anti-dumping measures. Part 7 clarifies what is meant by a reinvestigation of a finding or findings.

Item 6 of the table provides that Schedule 2 commences on 1 December 2002. Schedule 2 amends the Passenger Movement Charge Collection Act 1978 to exempt from the charge, air security officers who are providing security to an aircraft. It is anticipated that air security officers will commence duties on international flights some time in December 2002 (and therefore would incur passenger movement charge in relation to those departures). This date of commencement will ensure that when those officers commence flying on international flights, they will not incur the charge.

Item 7 of the table provides that Part 1 of Schedule 3 commences on the day on which this Act receives the Royal Assent. This part inserts a new definition into the Customs Act and sets out another factor that a judicial officer has to take into account when deciding whether to grant a warrant to seize goods.

Item 8 of the table provides that items 4 to 7 of Schedule 3 commence on the day on which this Act receives the Royal Assent. However, if item 39 of Schedule 3 to the Customs Legislations Amendment and Repeal (International Trade Modernisation) Act 2001 (the Trade Modernisation Act) has already commenced, the amendments in items 4 to 7 of Schedule 3 to the Act will not commence at all (subclause 2(4) refers). Items 4 to 7 amend section 71H of the Customs Act (with application provisions). Item 39 of Schedule 3 to the Trade Modernisation Act will replace section 71H of the Customs Act. Item 39 will commence in mid July 2004 unless it is proclaimed to commence earlier. If it commences before items 4 to 7 of Schedule 3 to the Act, the amendments in items 4 to 7 will be unnecessary.

Item 9 of the table provides that items 8 and 9 of Schedule 3 commence on the day on which this Act receives the Royal Assent. However, if item 62 of Schedule 3 to the Trade Modernisation Act has already commenced, the amendments in items 8 and 9 of Schedule 3 to the Act will not commence at all (subclause 2(5) refers). Items 8 and 9 amend section 119B of the Customs Act (with an application provision). Item 62 of Schedule 3 to the Trade Modernisation Act will replace section 119B of the Customs Act. Item 62 will commence in mid July 2004 unless it is proclaimed to commence earlier. If it commences before items 8 and 9 of Schedule 3 to the Act, the amendments in items 8 and 9 will be unnecessary.

Item 10 of the table provides that Part 3 of Schedule 3 commences on 1 July 2003. This item repeals one factor that a judicial officer may take into account when deciding whether to grant a warrant to seize goods. This factor will no longer be relevant from 1 July 2003.

Item 11 of the table provides that Part 4 of Schedule 3 commences on the later of:

•

the start of the day on which this Act receives the Royal Assent; and

•

immediately after the commencement of item 62 of Schedule 3 to the Trade Modernisation Act.

Item 62 will replace section 119B of the Customs Act. Item 15 will amend section 119B as replaced by the Trade Modernisation Act. If item 62 has commenced at the time that the Act receives the Royal Assent, Part 4 will commence at the start of the day on which the Act receives the Royal Assent.

Subclause (2) provides that column 3 of the table is for additional information that is not part of this Act. This information may be included in any published version of this Act.

Subclause (3) provides that if a provision covered by items 2 or 4 of the table does not commence within 6 months beginning on the day on which this Act receives the Royal Assent, it commences on the first day after the end of that period.

Subclauses (4) and (5) affect the operation of items 8 and 9 of the table and are explained above.

Clause 3 - Schedule(s)

This clause is the formal enabling provision for the Schedule to the Bill, providing that each Act specified in a Schedule is amended in accordance with the applicable items of the Schedule. In this Bill, the Customs Act 1901 and the Passenger Movement Charge Collection Act 1978 are being amended.

The clause also provides that the other items of the Schedules have effect according to their terms. This is a standard enabling clause for transitional, savings and application items in amending legislation.

Schedule 1 - Anti-dumping measures

Part 1 - Economies in transition

Customs Act 1901

Item 1 - Subsection 269T(1)

This item amends subsection 269T(1) to include a definition of economy in transition and provides that this term has the meaning given by new subsection 269T(5C).

Item 2 - After subsection 269T(5B)

This item inserts new subsection 269T(5C) which sets out when a country is to be taken to have an economy in transition. This question is relevant to determining how the normal value of goods is to be calculated. A country has an economy in transition at a time if:

(a)

the time, the Government of the country had a monopoly, or a substantial monopoly, of the trade of that country and determined, or substantially influenced, the domestic price of goods in that country; and

(b)

at the time, this situation no longer exists.

The countries which have economies in transition are those countries which previously had centrally-planned economies and which are moving towards market-based economies in which the price of goods is basically determined by supply and demand.

Item 3 - Subsections 269TAC(5D) and (5E)

This item repeals existing subsections 269TAC(5D) and (5E). These provisions set out the circumstances in which a price control situation can be found to exist and are to deal with the circumstances where the normal value of goods in the country of export is distorted because of the role of government in the economy.

Generally, the normal value of any goods exported to Australia is the price paid or payable for like goods sold in the ordinary course of trade for home consumption in the country of export (subsection 269TAC(1)). In certain circumstances, this general rule does not apply.

One of these circumstances is where there is government control or substantial control of the domestic selling price of goods. The test which is applied (under s.269TAC(5E)) is that the domestic selling price of those like goods is controlled, or substantially controlled, by a government (at whatever level) of that country. If this situation is found to exist, the normal value is the amount determined by the Minister having regard to all relevant information.

It is unclear whether the current test of price control covers indirect government interference. The amendments recognise that something less than actual control may still result in significant distortion in the calculation of normal value. Therefore, the test of price control is being replaced with a test of price influence.

Proposed new section 269TAC(5D) will provide that the normal value of goods is the amount determined by the Minister having regard to all relevant information. The Minister may make such a determination if:

(a)

the Minister is satisfied that the country of export has an economy in transition; and

(b)

at least one of four situations applies.

These four situations are:

•

the exporter of the exported goods sells like goods in the country of export and the domestic selling price of those like goods is significantly affected by a government at any level of that country; or

•

the exporter of the exported goods does not sell like goods in the country of export but others do and the domestic selling price of those like goods is significantly affected by a government at any level of that country; or

•

the exporter does not answer questions in a questionnaire sent to the exporter by the CEO within the time allowed; or

•

the answers given by the exporter in the questionnaire do not enable the Minister to determine whether the domestic selling price of the goods has been significantly affected by government.

The first and second situations deal with a case in which the domestic selling price of goods is significantly affected by government and therefore it is not appropriate that normal value be the price paid for the goods.

The third and fourth situations recognise that the ability of the Minister (and therefore the CEO in making his recommendations to the Minister) to work out the normal value of goods is dependent on the information provided by the exporter of those goods. If information is not provided by the exporter or insufficient information is provided, the Minister is not in a position to be able to accurately calculate the normal value of goods exported to Australia and therefore cannot determine whether or not dumping has occurred. If the exporter of goods (from an economy in transition) does not provide the information requested by the questionnaire, then the normal value of the goods will be determined by the Minister having regard to all relevant information. In other words, the presumption, in the absence of the necessary information, will be that the domestic selling price has been significantly affected by government.

Item 4 - Subsections 269TAC(5G) and (5H)

This item repeals subsections 269TAC(5G) and (5H).

Subsection 269TAC(5G) provides an additional methodology for determining the normal value of allegedly dumped goods from economies in transition where the raw material input into the goods that accounts for more than 10% of the costs of producing or manufacturing the goods is supplied by a State owned enterprise.

Subsection 269TAC(5H) provides for a range of surrogate country methodologies (modelled on paragraphs 269TAC(5)(c) - (f) for establishing the normal value of whole goods) that the Minister may use for the purpose of determining the substitute value for the cost of the State supplied raw materials that exceed the 10% threshold in subsection 269TAC(5G).

The new test of price influence introduced by item 3 above will mean that these additional methodologies are no longer required.

Item 5 - Subsections 269TAC(5J) and (7A)

This item is a consequential amendment to remove a cross-reference to subsection 269TAC(5G) which is being repealed by item 4.

Item 6 - Saving of regulations

Subsection 269TAC(5J) provides that for the purposes of fulfilling Australias international obligations under an international agreement, regulations may be made to disapply subsection (5D) or (5G) to a country.

Item 4 is repealing and substituting subsection 269TAC(5D) and repealing subsection 269TAC(5G). This item ensures that the regulations made under subsection 269TAC(5J) to disapply subsection (5D) or (5G) to various countries continue in force notwithstanding the amendments made to s.269TAC.

So, the regulations which disapply subsection (5D) to various countries will continue to disapply subsection (5D), as amended, to those countries.

Paragraph (3) of item 6 makes it clear that the item does not prevent the amendment or repeal of the saved regulations.

Item 7 - At the end of section 269TC

This item inserts a new subsection 269TC(8) which will impose new requirements on the CEOs consideration of dumping duty applications where the CEO is satisfied that the exporters nominated in the application are from a country with an economy in transition.

Where a person makes a dumping duty application under s.269TB, the CEO is required to make an initial assessment of the application to determine whether a prima facie case has been established. If the CEO is not satisfied that there are reasonable grounds for the imposition of dumping duty, the CEO must reject the application.

New subsection 269TC(8) will provide that where the CEO is satisfied that the exporters are from a country with an economy in transition he or she must, as soon as practicable after deciding not to reject the application:

(a)

each nominated exporter a questionnaire about whether the conditions in paragraph 269TAC(5D)(a) or (b) exist - that is, whether the domestic selling price of the goods is significantly affected by government interference;

(b)

each exporter that they have a specified period of not less than 30 days to provide answers to the questionnaire;

(c)

inform each exporter that the investigation of the application for a dumping duty notice will be conducted on the basis that subsection 269TAC(5D) applies to the normal value - that is, that normal value will be determined by the Minister having regard to all relevant information if:

(i)

the exporter does not answer the questions in the questionnaire within the time specified; or

(ii)

exporter does not provide sufficient information in their response to enable the CEO to determine whether the conditions specified in paragraph 269TAC(5D)(a) or (b) exist - that is, whether the domestic price of like goods is significantly affected by government interference.

This amendment will effectively put the obligation on an exporter from an economy in transition to show that the domestic selling price of goods is not significantly affected by government in order to have the general rule of price paid or payable for like goods sold in the ordinary course of trade apply. If, in the answers to the questionnaire, the exporter can show that the domestic selling price of like goods is not significantly affected by government then the general method for determining normal value would apply. If not, then the normal value would instead be determined having regard to all the relevant information.

Item 8 - Application

This item provides that the amendments made by Part 1 apply only in relation to:

(b)

applications for dumping duty made under section 269TB that are made or lodged after the commencement of Part 1; and

(c)

things done as a result of such an application

So, these amendments will not apply to applications which are still under investigation or review and the existing provisions relating to the determination of normal value will continue to apply.

Part 2 - Cumulative effect of exports to Australia

Customs Act 1901

Item 9 - Subsection 269TAE(2C)

This item repeals existing subsection 269TAE(2C) and substitutes a new subsection which clarifies the basis on which the Minister may consider the cumulative effect of exportations of goods to Australia from different countries of export. The amendments ensure that the provision is consistent with Article 3.3 of the WTO Agreement on the Implementation of Article VI of GATT.

Section 269TAE sets out the considerations the Minister (and the CEO) may have regard to in determining whether material injury to an Australian industry has been caused or is being caused or is threatened or would or might have been caused.

Currently, subsection 269TAE(2C) provides that in considering the effect of the exportation of like goods to Australia by different exporters from the same country of export or from different countries of export, the Minister should consider the cumulative effect of those exportations only if, having regard to:

(a)

the conditions of competition between those goods; and

(b)

the conditions of competition between those goods and like goods that are domestically produced

the Minister is satisfied that it is appropriate to do so.

Article 3.3 of the Agreement only provides for cumulation where the goods are exported from more than one country but existing subsection 269TAE(2C) applies in relation to exportation of goods to Australia by different exporters from the same country of export.

New subsection 269TAE(2C) provides that the Minister should only consider the cumulative effect of exports from different countries if he or she is satisfied that:

•

each of those exportations is the subject of a dumping investigation; and

•

all the investigations resulted from applications lodged on the same day or, if the applications were lodged on different days, the investigation periods significantly overlap;

•

the dumping margin for the exporter of each exportation is at least 2% of the export price or weighed average of export prices used to establish that dumping margin;

•

for each application, the volume of goods exported to Australia is not taken to be negligible; and

•

it is appropriate to consider the cumulative effect of those exportations having regard to:

•

the conditions of competition between those goods; and

•

the conditions of competition between those goods and like goods that are domestically produced.

Consistent with Australias WTO obligations, it will no longer be possible to cumulate exportations from the one country.

Part 3 - References to domestic industry

Customs Act 1901

Items 10 and 11

These items correct two references to domestic industry by replacing them with references to Australian industry which is the standard term used in Part XVB.

Part 4 - Assessment of duty

Customs Act 1901

Item 12 - Subsection 269V(2)

Section 269V provides that an importer of goods on which interim duty (either dumping duty or countervailing duty) has been paid may apply for an assessment of the liability of those goods to duty. Subsection 269V(2) provides that an application may be made. Subsection 269W(2) sets out how an application may be lodged. The subsequent subsections then refer, variously, to applications made or lodged. The Federal Court in Amcor Packaging Australia Pty Limited trading as Amcor Food Cans Australia v. Chief Executive Officer of Customs
[2002] FCA 1346 found that there was a distinction between when an application for duty assessment was made and when it was lodged.

This amendment will remove this distinction by simply using the one term lodged so that an application must be lodged in accordance with subsection 269W(2) within the 6 month period allowed.

Item 13 and 14

Subsection 269W(1) sets out what an application for assessment of duty must contain. These items removes references to information to establish those amounts as more detailed provisions are to be included by item 15 about the content of the application.

Item 15 - After subsection 269W(1)

Subsection 269W(1) provides that the application must contain, inter alia,

•

if interim dumping duty has been imposed, a statement of the amounts that, in the opinion of the applicant, are the normal value and the export price of goods of that kind in each such consignment and information to establish those amounts; and

•

if interim countervailing duty has been imposed, a statement of the amounts that, in the opinion of the applicant, are:

•

the amount of the countervailable subsidy received on goods of that kind in each such consignment; and

•

the amount of the export price of goods of that kind in each such consignment;

and information to establish those amounts.

Item 15 inserts new subsection 269W(1A) which sets out in more detail what applications must contain and permits supporting evidence to be provided by a third party (rather than the applicant).

Proposed new subsection 269W(1A) provides that the application must also contain:

•

sufficient evidence to establish that the applicants opinion of the relevant amounts is correct (in relation to dumping duty - normal value and the export price and in relation to countervailing duty - countervailable subsidy and export price); or

•

evidence to establish that the applicants opinion of the relevant amounts is correct and a commitment that someone else will give the CEO (within a minimum of 30 days of lodgement) further evidence so that the CEO will have sufficient evidence to establish that the applicants opinion of the relevant amounts is correct.

These amendments recognise that there may be circumstances in which an applicant (who is an importer) may not have access to the necessary information to establish the amounts of normal value or countervailable subsidy as the information would usually be held by the overseas exporter who may not be willing to provide it to the importer (for commercial reasons). This amendment will allow the exporter to provide that information directly to the CEO.

While the CEO may, under subsection 269X(2), request the supply of relevant information from any person, the applicant should be required to supply all the information to establish the correctness of the applicants opinions or arrange for this to be supplied by a third party.

If an application does not meet these requirements, the CEO may reject it (see new section 269YA, item 21).

Item 15 also inserts new subsection 269W(1B). This new subsection gives effect to Article 9.3.3 of the WTO Agreement on the Implementation of Article VI of the GATT.

Generally, the export price is the price paid or payable for the goods by the importer where the goods have not been exported to Australia by the importer and the purchase of the goods by the importer was an arms length transaction (paragraph 269TAB(1)(a)).

In certain cases, the export price of goods must be constructed because the purchase was not an arms length transaction. Paragraph 269TAB(1)(b) sets out how export price is to be calculated in such a case. Export price may also be constructed under paragraph 269TAB(1)(c) or subsection 269TAB(3).

New subsection 269W(1B) clarifies what evidence must be contained in applications for assessment where the export price has been constructed. Where interim duty was calculated using a constructed export price, the application must include evidence of:

•

the price at which the importer of the goods sold them, in the condition in which they were imported to someone who was not an associate for the importer; and

•

the prescribed deductions relating to the goods.

The prescribed deductions are defined in subsection 269TAB(2) and are:

•

any duties of Customs or sales tax;

•

any costs charges or expenses arising after exportation;

•

the profit, if any on the sales by the importer.

Item 16 - At the end of subsection 269X(1)

Item 16 adds an explanatory note at the end of subsection 269X(1) which states that the CEO may be required to reject an application for duty assessment or be able to terminate the examination of it without deciding what recommendation to make to the Minister.

Item 17 - After subsection 269X(3)

Item 17 inserts new subsection 269X(3A) which sets out how the CEO is to treat information provided to him or her by an exporter of goods. Subsection 269X(3) requires that, where the CEO proposes to take into account information that was not provided by the applicant, the CEO must give the applicant a copy of the information (unless it is commercially sensitive information) and provide the applicant with an opportunity to make further submissions in relation to the information.

New subsection 269X(3A) will provide that the CEO must not give the applicant information that the exporter of goods covered by the application has given to the CEO that is relevant to working out the normal value of the goods, the countervailable subsidy relating to the goods, or the export price of the goods unless the exporter indicates to the CEO that he or she is willing for the information to be given to the applicant.

This requirement for express consent of the exporter applies whether or not the information was provided as a result of a request from the CEO for information under subsection 269X(2) or was provided as a result of a commitment in the application that the exporter would provide the information.

Item 18 - Subsection 269X(5)

This item amends subsection 269X(5) to include a reference to evidence. Subsection 269X(5) requires the CEO to:

•

provisionally ascertain each variable factor relevant to the determination of dumping duty payable of the goods to which the application relates; and

•

calculate the amount of dumping duty.

The CEO does this on the basis of the information contained in the application as well as any other relevant information. The amendment will require the CEO to also consider the evidence contained in the application (that establishes the applicants claims).

Item 19 - After subsection 269X(5)

Item 19 inserts two new subsections into section 269X. These subsections deal with the situation where an application for assessment of duty has been made and the CEO proposes to ascertain the amount of duty on the basis of a constructed export price. These amendments give effect to Article 9.3.3 of the WTO Agreement on the Implementation of Article VI of the GATT.

New subsection (5A) sets out when subsection (5B) applies. Subsection (5B) applies where the CEO proposes to provisionally ascertain the export price of the goods as the difference between:

•

the price at which the importer of the goods sold them, in the condition in which they were imported, to someone who was not an associate of the importer;

•

the prescribed deductions relating to the goods.

The meaning of the term associate is set out in subsection 269TAA(4) and subsection 269TAB(2) sets out what constitute prescribed deductions.

Subsection (5B) provides that in provisionally ascertaining the export price of goods, the CEO must take into account:

•

any change in normal value;

•

any change in costs incurred between importation and resale; and

•

any movement in resale price which is duly reflected in the subsequent selling prices.

Subsection (5B) also requires that, if the CEO has conclusive evidence of these matters, export price should be ascertained with no deduction for the amount of interim duty paid. This requirement applies despite the terms of paragraph 269TAB(1)(b) which allow duties of Customs (which include dumping duties) to be deducted in calculating export price.

As this amendment is to give effect to Article 9.3.3 of the WTO Agreement on the Implementation of Article VI of the GATT, subsection (5B) makes it clear that expressions used in the subsection are to have the same meaning as they have in the Agreement.

Item 20 - Paragraph 269Y(4)(c)

This item replaces the term made with lodged and is a consequential amendment to the amendment made by item 12.

Item 21 - At the end of Division 4 of Part XVB

Item 21 inserts a new section into Division 4. New section 269YA outlines the circumstances in which the CEO may reject an application for duty assessment or terminate an examination into such an application.

New subsection 269YA(1) provides that the section has effect despite sections 269X and 269Y if an application under section 269V is lodged with Customs under section 269W. Section 269X requires the CEO to provisionally ascertain the variable factors and calculate the dumping duty payable. Section 269Y sets out the obligation of the Minister to consider the CEOs report and ascertain the dumping duty and order either that the overpaid duty be repaid, or that underpaid duty be waived. Subsection 269YA(1) makes it clear that the requirements of these sections do not prevent the CEO from rejecting an application or terminating an examination.

New subsection 269YA(2) provides that the CEO must reject an application if the CEO is satisfied that it does not contain everything it must contain under subsection 269W(1) or (1A). The CEO must make this decision within 20 days of lodgement.

New subsection 269YA(3) provides that the CEO must reject an application if:

•

the application contains a commitment that another person will provide the CEO with further evidence to establish that the applicants claims about the amounts that are the normal value and export price (or the amounts of countervailable subsidy and export price) are correct; and

•

within 20 days of the time allowed for the further evidence to be provided, the CEO is satisfied that he or she has not received from the applicant and other persons, sufficient evidence to establish the correctness of the applicants claims.

So, if an applicant provides a commitment that the exporter of the goods will provide evidence to support the applicants claims as to the amounts of normal value or export price but the exporter fails to provide this evidence (or fails to provide it within the time allowed), and the evidence provided by the applicant alone is not sufficient to establish the correctness of the applicants claims, the CEO must reject the application.

New subsection 269YA(4) provides that the CEO may terminate the examination of an application if he or she is satisfied that he or she does not have enough information to be able to provisionally ascertain each variable factor relevant to the determination of duty. The power to terminate arises after the 20 day period in which the CEO may reject the application.

The power to terminate an examination is required to ensure that the CEO is not forced to provisionally ascertain each variable factor if he or she does not have sufficient information to be able to do so. Under the existing provisions, once an application has been lodged, the CEO is required to provisionally ascertain the variable factors and provisionally calculate the duty payable whether or not he or she actually has sufficient information to do so properly.

New subsection 269YA(5) sets out the effect of a rejection or termination and the obligations on the CEO if he or she rejects an application or terminates examination of it.

The CEO must notify the applicant in writing of the rejection or termination, the reasons for the decision and the applicants right to apply for a review of the decision by the Review Officer (paragraph 269YA(5)(a)).

The CEO must not provisionally ascertain a variable factor, provisionally calculate an amount of duty in connection with the application or decide what recommendation to make to the Minister (paragraph 269YA(5)(b)).

If an application for an assessment of duty payable on goods is not made within the time allowed (6 months from when the goods were entered for home consumption), subsection 269Y(4) provides that the interim duty paid on those goods is taken to be the duty payable. If an application is rejected or the examination of it terminated, subsection 269Y(4) has effect as if the application had not been lodged. Therefore, if an importer makes an application (which is rejected), and he or she does not make a further application within the 6 month period, the interim duty paid on those goods will be taken to be the duty payable (paragraph 269YA(5)(c)).

Item 22 - Section 269ZX (paragraph (a) of the definition of interested party)

This item makes an amendment to the definition of interested party in section 269ZX and is consequential on the amendments made by items 23 and 24 to make two new decisions of the CEO reviewable by the Trade Measures Review Officer (the Review Officer).

Section 269ZZX provides that interested parties may request access to the public record kept by the Review Officer. The amendment made by this item includes an applicant in relation to applications made under section 269V (applications for duty assessment) as an interested party. This ensures that such an applicant may request access to the public record maintained by the Review Officer in relation to the application for a review.

Item 23 - At the end of section 269ZZN

The CEOs decision to reject an application for duty assessment or to terminate an examination of it will be subject to review by the Review Officer.

Section 269ZZN sets out the CEOs decisions in Part XVB that are subject to review by the Review Officer. Item 23 adds as a reviewable decision, a decision (referred to in Division 9 as a rejection decision) :

•

by the CEO under subsection 269YA(2) or (3) to reject an application; or

•

by the CEO under subsection 269YA(4) to terminate examination of an application.

Item 24 - Section 269ZZO (at the end of the table)

The table in section 269ZZO sets out who may make an application for review of reviewable decisions. Item 24 adds new item 5 of the table and provides that in relation to a rejection decision, an application for review may be made by the applicant for assessment of duty whose application for assessment was rejected or examination of it terminated.

Item 25 - After section 269ZZUA

Item 25 inserts new section 269ZZUA into Division 9 of Part XVB and sets out the responsibilities of the Review Officer in relation to the review of a rejection decision.

New subsection 269ZZUA(1) provides that the Review Officer must either affirm the rejection decision or revoke the rejection decision.

New subsection 269ZZUA(2) provides that if the Review Officer revokes a rejection decision, subsection 269YA(5) ceases to apply in relation to the application. Subsection 269YA(5) provides, inter alia, that if the CEO rejects an application or terminates its examination, the CEO must not provisionally ascertain a variable factor or provisionally calculate an amount of duty in connection with the application or decide what recommendation to make to the Minister.

New subsection 269ZZUA(3) provides that if the Review Officer revokes a rejection decision relating to the rejection under subsection 269YA(2) or (3), the CEO is obliged to resume the examination of the application so as to provisionally ascertain the variable factors, provisionally calculate the amount of duty and make a recommendation to the Minister within 110 days of being informed of the revocation. New subsection 269ZZUA(3) also makes it clear that the Review Officers revocation of such a rejection decision does not prevent the CEO from terminating examination of the application under subsection 269YA(4).

New subsection 269ZZUA(4) provides that if the Review Officer revokes a rejection decision relating to a termination under subsection 269YA(4), the CEO must provisionally ascertain the variable factors, provisionally calculate the amount of duty, and make a recommendation to the Minister within 110 days of being informed of the revocation.

New subsection 269ZZUA(5) provides that the Review Officer, in making a decision under this section, must have regard only to the information that was before the CEO when the CEO made the rejection decision. That is, the Review Officer must only consider the application (and if further evidence was provided by a third party pursuant to a commitment, that further evidence).

New subsection 269ZZUA(6) requires the Review Officer to make his or her decision within 60 days of receipt of the application, or such longer period as the Minister allows because of special circumstances. This is the standard period allowed for the Review Officers decisions.

Item 26 - Application

Item 26 provides that the amendments made to the Customs Act by this Part only apply to applications lodged (and things done because of such lodgement) after commencement.

Part 5 - Accelerated review for new exporters only

Customs Act 1901

Item 27 - Subsection 269SM(6)

This item is consequential on the amendments made by items 34 and 35 (which limit the right to accelerated review to new exporters) and omits an indirect reference to residual exporters in the Overview of Part XVB set out in section 269SM.

Item 28 - Subsection 269T(1) (definition of residual exporter)

This item amends the definition of residual exporter in subsection 269T(1) to expressly exclude new exporters from the definition. Currently, the definition provides that residual exporter, in relation to a dumping duty notice or a countervailing duty notice in respect of goods, means an exporter of goods the subject of the application or like goods other than a selected exporter, and includes a new exporter of such goods.

A new exporter is defined as an exporter who did not export goods to Australia at any time during the period:

(a)

starting at the start of the investigation period; and

(b)

ending immediately before the CEO places the statement of essential facts on the public record.

Subsection 269TG(3B) provides:

(3B)

In ascertaining a normal value and export price for goods of the residual exporter, the Minister must ensure that:

(a)

the normal value does not exceed the weighted average of normal values for like goods of selected exporters from the same country of export; and

(b)

the export price is not less than the weighted average of export prices for like goods of selected exporters from the same country of export.

The effect of this amendment is that the requirements that normal value does not exceed the weighted average and export price is not less than the weighted average will no longer apply in relation to new exporters.

The amendment will have a similar effect in relation to ascertaining normal value and export price for third country dumping duties (under subsection 269TH(5)).

Item 29 - Section 269ZDC

This item is consequential on the amendment of the definition of residual exporter made by item 28 and omits an indirect reference to residual exporters in the explanation of Division 6.

Items 30 and 31

Division 6 of Part XVB provides for accelerated review of dumping duty notices or countervailing duty notices on application of certain exporters of goods covered by the notice. Article 9.5 of the WTO Agreement limits the right to apply for accelerated review to exporters who have not exported the goods to the importing country during the period of investigation. That is, accelerated review is to be available to new exporters only.

These items replace the references to residual exporter in subsection 269ZE(1) with references to new exporter.

Item 32 - Application

Item 32 provides that the amendments made to the Customs Act by this Part only apply to applications for dumping duty notices (under section 269TB), applications for accelerated review (under section 269ZE) lodged after commencement and to things done because of such applications.

Part 6 - Applying to continue anti-dumping measures

Customs Act 1901

Item 33 - Paragraph 269ZHB(1)(b)

This item amends paragraph 269ZHB(1)(b) to clarify who may apply to continue anti-dumping measures.

Currently subsection 269ZHB(1) provides for the CEO to invite interested parties to apply for a continuation of particular anti-dumping measures. The term interested parties (which is used in a number of other sections in Part XVB) is defined in subsection 269T(1) to include

•

any person who is or is likely to be directly concerned with the importation or exportation into Australia of the goods the subject of the application or who has been or is likely to be directly concerned with the importation or exportation into Australia of like goods (paragraph (c) of the definition).

It does not make sense that a person who imports the goods to which dumping duty has been applied would apply for the continuation of those measures.

Therefore, item 33 repeals the existing paragraph 269ZHB(1)(b) and substitutes a new paragraph to provide that the CEO is to invite:

(a)

the person whose application under section 269TB resulted in the anti-dumping measures; and

(b)

persons representing the whole or a portion of the Australian industry producing like goods;

to apply for a continuation of the measures.

Item 34 - Application

This item provides that the amendment to paragraph 269ZHB(1)(b) applies only to notices published by the CEO after the commencement of Part 6 of this Schedule.

Part 7 - Reinvestigation by the CEO

Customs Act 1901

Item 35 - Subparagraph 269ZZL(2)(a)(i)

When the Review Officer reviews a decision made by the Minister, he may recommend to the Minister that the Minister direct the CEO to reinvestigate a finding or findings that formed the basis of the reviewable decision (section 269ZZK).

If the Minister accepts the Review Officers recommendation for the CEO to reinvestigate a finding, the Minister must direct the CEO in writing to make further investigation of a finding and report the result of the further investigation to the Minister (subsection 269ZZL(2)).

Item 35 amends subsection 269ZZL(2) to clarify what is meant by a reinvestigation of the finding or findings, by providing that in conducting the further investigation the CEO is to have regard only to the information and conclusions to which the Review Officer was permitted to have regard. Subsection 269ZZK(4) sets out the information to which the Review Officer is permitted to have regard.

A reinvestigation is not an investigation de novo. It is a reconsideration of the finding or findings which the CEO made on the basis of the information before the Review Officer.

Item 36 - Paragraph 269ZZL(4)(a)

This item corrects an incorrect reference to the Review Officer in paragraph 269ZZL(4)(a). The reference should be to the CEO.

Item 37 - Application

This item provides that the amendments made to the Customs Act by this Part of the Schedule apply to things done as a result of recommendations made by the Review Officer whether before, on, or after the commencement of the Part.

Schedule 2 - Air security officers

Passenger Movement Charge Collection Act 1978

Item 1 - At the end of section 5

Section 5 of the Passenger Movement Charge Act 1978 provides that passenger movement charge (PMC) is imposed on persons departing Australia for another country.

Section 5 of the Passenger Movement Charge Collection Act 1978 (the Collection Act) exempts certain persons from the requirement to pay PMC.

Item 1 inserts a new class of persons into section 5 of the Collection Act that will be exempt from paying PMC. New paragraph 5(m) will exempt protective service officers who are on an aircraft for the purpose of enhancing the security of aircraft from paying PMC. The term protective service officer has the same meaning as in the Australian Protective Service Act 1987, that is, the Director of the Australian Protective Service or a person occupying a position in the Australian Protective Service.

The officers to whom the exemption is to apply will be performing duties in connection with the Commonwealth Air Security Officers Program which is administered by the Attorney-Generals Department and is part of the Governments anti-terrorism measures.

Airlines will provide seats free of charge to those officers performing the air security function. Formal arrangements between the Commonwealth and individual airlines empower the airlines to collect PMC on behalf of the Commonwealth at the time of ticket sale. They then remit PMC according to the number of passengers who have departed Australia for whom exemptions do not apply. Airlines would be liable to pay PMC if an exemption was not in place.

Schedule 3 - Technical amendments relating to trade modernisation

On 1 July 2002, certain provisions of the Trade Modernisation Act were proclaimed to commence. In particular, Part 5 of Schedule 1 to the Trade Modernisation Act replaced the existing auditing provisions with provisions that allow Customs officers to exercise monitoring powers.

In addition, item 6 in Schedule 2 to the Trade Modernisation Act inserted new Division 5 into Part XIII of the Customs Act. That Division provides that the CEO may serve infringement notices in respect of certain specified offences in the Customs Act. If a person who receives an infringement notice pays the penalty set out in the notice, any liability of the person for the offence is taken to be discharged, further proceedings cannot be taken against the person for the offence and the person is not regarded as having been convicted of the offence.

The items in this Schedule make minor amendments to provisions in the Customs Act as a consequence of the monitoring powers and infringement notice scheme commencing.

Part 1 - Amendments commencing on Royal Assent

Customs Act 1901

Item 1 - Subsection 4(1)

Section 214AB of the Customs Act defines what are monitoring powers. However, there are references throughout the Customs Act to monitoring powers.

This item inserts a definition of monitoring powers into section 4 of the Customs Act so that it is defined for the whole of the Act. The term monitoring powers has the same meaning as given by section 214AB.

Item 2 - After paragraph 203(3)(e)

Section 203 of the Customs Act allows a judicial officer to issue a warrant to seize goods in certain circumstances. Subsection 203(3) sets out a list of things that a judicial officer may have regard to in considering whether the person who applied for the warrant has demonstrated the necessity to seize the goods. Paragraph 203(3)(e) provides that one of those factors is whether administrative penalties might be imposed in respect of the goods. These administrative penalties relate to false or misleading statements that result in Customs duty being underpaid.

On 1 July 2002 the administrative penalties provisions were repealed and replaced by an infringement notice scheme (Division 5 of Part XIII).

This item inserts new paragraph 203(3)(ea) so that a judicial officer may have regard to whether action may be taken under Division 5 of Part XIII in connection with any such offence.

Whilst the administrative penalties provisions have been repealed, they continue to operate in respect of statements made before 1 July 2002. Since an administrative penalty can be imposed up to 12 months after the statement was made, penalties will be able to be imposed until 30 June 2003. Hence, it is proposed to keep paragraph 203(3)(e) until then, as it may still be a relevant consideration for a judicial officer.

Item 3 - Application

This item makes it clear that the amendment in item 2 applies in relation to both:

•

applications for a warrant made after the commencement of Part 1; and

•

applications made before the commencement of the amendment but which are being considered by a judicial officer after that commencement.

Part 2 - Amendments commencing on Royal Assent or not at all

The items in this Part amend the Customs Act as it reads at the time this Bill is introduced into Parliament. However, all of the relevant provisions in the Customs Act are being replaced by the Trade Modernisation Act. If the relevant provisions of the Trade Modernisation Act have commenced before this Bill receives the Royal Assent, these items will be unnecessary and will not commence.

Item 4 - Paragraph 71H(2)(a)

Section 71F of the Customs Act allows import entries to be withdrawn. Subsection 71H(2) provides that despite the withdrawal of an import entry a person may be prosecuted, or action taken under section 243T, in respect of the entry. Prior to 1 July 2002, section 243T allowed the Chief Executive Officer of Customs to impose an administrative penalty in respect of certain false or misleading statements. Section 243T was replaced by a strict liability offence of making a false or misleading statement to which the new infringement notice scheme applies.

This item removes from paragraph 71H(2)(a) the reference to action taken under section 243T. A corresponding amendment to allow for the possibility of action to be taken under the infringement notice scheme is dealt with in item 6.

Item 5 - Saving

This item makes it clear that despite paragraph 71H(2)(a) being amended by item 4 described above, action can still be taken under section 243T which continues to apply to statements made prior to 1 July 2002 (see item 5A of Schedule 2 to the Trade Modernisation Act). That action can be taken in respect of entries made before the repeal of section 243T that have been withdrawn (whether before or after that repeal).

Item 6 - After subsection 71H(2)

This item amends section 71H so that infringement notices can be served on a person in respect of a statement made in an entry, even if the entry is subsequently withdrawn.

Item 7 - Application

This item makes it clear that the insertion of subsection 71H(2A) made by this Part applies to an entry made after the commencement of the amendment.

Item 8 - After subsection 119B(2)

Section 119A of the Customs Act allows export entries, submanifests and outward manifests to be withdrawn. Subsection 119B(2) provides that despite the withdrawal of one of those types of communications, a person may be prosecuted in respect of the original entry, submanifest or outward manifest. Prior to 1 July 2002, administrative penalties could not be imposed in respect of export entries, submanifests or outward manifests. New section 243U which was inserted into Division 4 of Part XIII of the Customs Act on 1 July 2002, in part, provides that a person commits an offence if they make false or misleading statement in an export entry, submanifest or outward manifest. This is an offence of strict liability to which the new infringement notice scheme in Division 5 of Part XIII of the Customs Act applies.

This item amends subsection 119B(2) so that infringement notices can be served in respect of an export entry, submanifest or outward manifest, even if it has been withdrawn.

Item 9 - Application

This item makes it clear that the amendment of section 119B made by this Part applies to an entry, submanifest or manifest communicated to Customs after the commencement of the amendment.

Part 3 - Amendment commencing on 1 July 2003

Customs Act 1901

Item 10 - Paragraph 203(3)(e)

This item repeals paragraph 203(3)(e) from the Customs Act. Section 203 of the Customs Act allows a judicial officer to issue a warrant to seize goods in certain circumstances. Subsection 203(3) sets out a list of things that a judicial officer may have regard to in considering whether the person who applied for the warrant has demonstrated the necessity to seize the goods. Paragraph 203(3)(e) provides that one of those factors is whether administrative penalties might be imposed in respect of the goods. These administrative penalties relate to false or misleading statements that result in Customs duty being underpaid.

Whilst the administrative penalties provisions have been repealed, they continue to operate in respect of statements made before 1 July 2002. Since an administrative penalty can be imposed up to 12 months after the statement was made, penalties will be able to be imposed until 1 July 2003. Hence, it is proposed to keep paragraph 203(3)(e) until then, as it may still be a relevant consideration for a judicial officer.

Part 4 - Amendment commencing after Trade Modernisation Act amendment

Items 11 and 12 - After subsection 119B(2)

The Trade Modernisation Act will replace section 119B of the Customs Act (item 62 of Schedule 3 refers). If items 8 and 9 have commenced before item 62 of schedule 3 to the Trade Modernisation Act, item 62 will remove the effect of items 8 and 9. Therefore these items make the same amendment as is being made by items 8 and 9 above, but they will commence immediately after the commencement of item 62. If item 62 has commenced already, this item will commence on the Royal Assent of the this Act.