House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Immigration and Border Protection, the Honourable Peter Dutton MP)

Outline

The purpose of Customs Amendment (Fees and Charges) Bill 2015 (the Amendment Bill) is to amend the Customs Act 1901 (the Customs Act) to implement certain recommendations from the Joint Review Of Border Fees, Charges And Taxes (the Joint Review). In particular, the Amendment Bill:

(a)

amends the amount of warehoused goods declaration fee payable under section 71BA of the Customs Act;

(b)

sets out the circumstances in which new warehouse licence application charge and warehouse licence variation charge are payable, and the warehouse licence grant and renewal charges, are payable. These charges will be imposed under the Customs Depot Licensing Charges Amendment Bill 2015; and

(c)

sets out the circumstances in which the new customs broker licence application charge, and the customs broker licence grant and renewal charges, are payable. These charges will also be imposed under the Customs Depot Licensing Charges Amendment Bill 2015;

(d)

introduces a new head of power to enable the charging of fees for service in respect of matters under the Customs Act.

The Joint Review was commissioned prior to the 2015-16 Budget to identify and recommend to Government how charging arrangements could be improved to better support future border operations and industry outcomes. The scope of the Joint Review included changes to current fees, charges and taxes, as well as new approaches to charges levied by the Department of Immigration and Border Protection (DIBP).

For the licensing programme, the Joint Review identified that;

(a)

current customs broker charges only recover approximately 30% of the total expenditure base;

(b)

the charging framework does not support DIBP business outcomes as best as it could;

(c)

the opportunity exists to better align charges with the Australian Government Cost Recover Guidelines (AGCRG's); and

(d)

licensing business processes are very manual and require updating to make best use of electronic media.

To improve on the licensing charging arrangements, it was recommended that broker charges be increased to recover two thirds of the expenditure base, and that new broker and warehouse application charges and a new warehouse variation application charge be introduced to recover the costs associated with processing the relevant applications.

The Amendment Bill supports the implementation of these recommendations.

Financial impact statement

The measures in the Amendment Bill, together with the measures in the Customs Depot Licensing Charges Amendment Bill 2015, will generate an estimated $1.1 million across the forward estimates from 2015-16. A delay in introducing this legislation will have a financial impact on the Budget balance of an estimated $27,000 per month as this revenue has already been factored into the forward estimates.

Regulation Impact Statement

The changes proposed to this legislation support the implementation of the outcomes of the Joint Review. The Office of Best Practice Regulation has been consulted in relation to the proposed amendments and a Regulatory Impact Statement (RIS) has been assessed to be consistent with best practice. The RIS will be published when all recommendations have been considered and finalised.

Statement of compatibility with human rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Customs Amendment (Fees And Charges) Bill 2015

This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Customs Amendment (Fees and Charges) Bill 2015

The Customs Amendment (Fees and Charges) Bill 2015 (the Bill):

(a)

amends the amount of warehoused goods declaration fee payable under section 71BA of the Customs Act 1901 (the Customs Act);

(b)

sets out the circumstances in which new warehouse licence application charge and warehouse licence variation charge are payable, and the warehouse licence grant and renewal charges, are payable. These charges will be imposed under the Customs Depot Licensing Charges Amendment Bill 2015; and

(c)

sets out the circumstances in which the new customs broker licence application charge, and the customs broker licence grant and renewal charges, are payable. These charges will also be imposed under the Customs Depot Licensing Charges Amendment Bill 2015;

(d)

introduces a new head of power to enable the charging of fees for service in respect of matters under the Customs Act.

Human rights implication

The Bill does not raise any human rights issues. The Bill increases a fee that is currently payable for the processing of a warehoused goods declaration. The Bill also introduces the framework for the new charges for the processing of applications for a warehouse licence and a customs broker licence, and for the variation of a warehouse licence (which complement charges that already apply under these two licensing regimes). The Bill also introduces a new head of power that will allow fees for service to be charged in relation to a wider range of services provided under the Customs Act.

Conclusion

The Bill is compatible with human rights as it does not raise any human rights issues.

The Minister for Immigration and Border Protection, the Honourable Peter Dutton MP

Import Processing Charges Amendment Bill 2015

Background

Warehoused goods declaration fee

1. Under section 71BA of the Customs Act, a warehoused goods declaration fee is payable when an import declaration for warehoused goods is made under section 71A. Warehoused goods are imported goods that are in a customs warehouse and are intended to be released into home consumption.

2. The amount of warehoused goods declaration fee is currently $23.20 for an electronic import declaration and $60.00 for a documentary import declaration. The Amendment Bill changes these amounts to $23.00 and $63.00 respectively which gives effect to one of the recommendations of the Joint Review.

Warehouse licences

3. Under Part V of the Customs Act, a person or partnership can be licensed to operate a warehouse. Licensed warehouses are used to store imported goods in respect of which customs duty has not been paid. Such goods remain subject to customs control until the duty is paid and the goods are delivered into home consumption. The main difference between a customs depot (licensed under Part IV of the Customs Act) and a warehouse is that warehouses are used for longer term storage of goods. These goods have been entered for warehousing and detailed information on the goods including value, origin and classification has been communicated to the Department of Immigration and Border Protection. Warehoused goods remain subject to customs control until such time as they are entered for home consumption and the duty is paid.

4. Under Part IVA of the Customs Act, a person or partnership can be licensed to operate a depot. Such licensed depots are used to store imported goods and goods for export subject to customs control until the goods are entered for home consumption and the duty is paid or the goods are exported. Storage of goods in depots is short term only without requiring a declaration to be made. Depots can be used for the unpacking and deconsolidation of imported goods while still under customs control. They are also used to consolidate goods for export.

5. There are many similarities in the administration of licensed warehouses and depots. However, currently there are differences in the types of fees that are payable in relation to the licences under each regime.

6. In relation to depot licences, charges are payable in relation to the application for the granting or variation to, and the granting and renewal of, a depot licence. However, in relation to a warehouse licence, a fee is payable only in respect of the granting and renewal of a warehouse licence. The Amendment Bill, in conjunction with the Customs Depot Licensing Charges Amendment Bill 2015, amends the regime governing warehouse licence fees, including introducing new charges for an application for the granting, and an application for the variation, of a warehouse licence. This gives effect to recommendations of the Joint Review.

Customs broker licences

7. Under Part XI of the Customs Act, a person can be licensed to act as a customs broker. Under section 181 of the Customs Act, an owner of goods may authorise a licensed customs broker to act as his or her agent for the purposes of the Customs Act. The only other person that can be authorised to act as an agent is a natural person who is an employee of the owner of the goods (and not the employee of anyone else).

8. A fee is currently payable only in respect of the granting and renewal of a customs broker licence. The Amendment Bill, in conjunction with the Customs Depot Licensing Charges Amendment Bill 2015, amends the regime governing customs broker licence fees, including introducing a new charge for an application for the granting of a customs broker licence. This also gives effect to a recommendation of the Joint Review.

Notes on clauses

Clause 1 - Short title

1. This clause provides for the Bill, when enacted, to be cited as the Customs Amendment (Fees and Charges) Bill 2015.

Clause 2 - Commencement

2. This clause provides that clauses 1 to 3 commence on the day on which the Bill receives the Royal Assent, and that Schedule 1 commences at the same time as Schedule 1 to the Customs Depot Licensing Charges Amendment Act 2015. That Schedule is expressed to commence on 1 January 2016.

Clause 3 - Schedule(s)

3. 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. This Bill amends the Customs Act 1901.

4. 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 - Amendments

Customs Act 1901

Items 1 to 4 - Amendments to section 71BA

5. Under section 71BA of the Customs Act, a warehoused goods declaration fee is payable when an import declaration for warehoused goods is made under section 71A. Warehoused goods are imported goods that are in a customs warehouse and are intended to be released into home consumption.

6. The amount of warehoused goods declaration fee is currently $23.20 for an electronic import declaration and $60.00 for a documentary import declaration. These items change these amounts to $23.00 and $63.00 respectively.

Items 5 to 8 - Amendments to sections 77F and 77W

7. Sections 77F and 77W of the Customs Act are related to the depot licensing provisions. The relevant provisions currently all refer to the Customs Depot Licensing Charges Act 1997. However, as the charges associated with warehouse licences and customs broker licences are to be moved into the Customs Depot Licensing Charges Act 1997, this Act is to be renamed the Customs Licensing Charges Act 1997 by the Customs Depot Licensing Charges Amendment Bill 2015. Therefore, all of the provisions referred to in these items are amended to remove the reference to "Depot" in the title of the Act.

Item 9 - Subsection 78(1)

8. Subsection 78(1) of the Customs Act sets out the definitions for the purposes of Part V of the Customs Act (warehouse licences). This item inserts three new definitions into subsection 78(1) being "warehouse licence application charge, warehouse licence charge and warehouse licence variation charge". Each of these charges is explained below.

Item 10 - At the end of section 80

9. Section 80 of the Customs Act sets out the requirement for an application for a warehouse licence. This item introduces a new paragraph (g) which states that an application must be accompanied by a warehouse licence application charge. This is a new charge in relation to the licensing of warehouses and is imposed by new section 6B of the Customs Licensing Charges Act 1997, which is to be inserted by item 6 of Schedule 1 to the Customs Depot Licensing Charges Amendment Bill 2015. The amount of warehouse licence application charge is set out in new section 6C of the Customs Licensing Charges Act 1997, which is also to be inserted by item 6 of Schedule 1 to the Customs Depot Licensing Charges Amendment Bill 2015.

Item 11 - At the end of subsection 81B(2)

10. Section 81B of the Customs Act sets out the requirement for an application for a variation to a warehouse licence. This item introduces a new paragraph (e) which states that an application must be accompanied by a warehouse licence variation charge. This is also a new charge in relation to the licensing of warehouses and is imposed under new section 6B of the Customs Licensing Charges Act 1997, which is to be inserted by item 6 of Schedule 1 to the Customs Depot Licensing Charges Amendment Bill 2015. The amount of warehouse licence variation charge is set out in new section 6F of the Customs Licensing Charges Act 1997, which is also to be inserted by item 6 of Schedule 1 to the Customs Depot Licensing Charges Amendment Bill 2015.

11.

Item 12 - Section 85

12. Section 80 of the Customs Act currently contains the head of power under which the fees in respect of warehouse licences can be prescribed and the circumstances in which the fees are payable or refundable.

13. As all of the current and new fees in relation to warehouse licences are proposed to be imposed as charges under the Customs Licensing Charges Act 1997, this head of power to make regulations is no longer required. Section 85 is therefore to be repealed and substituted. Amendments will be made to the Customs Regulation 2015 (the Customs Regulation) to remove the amounts of the current fees from the face of that Regulation.

New section 85

14. New subsection 85(1) provides that a warehouse licence charge is payable in respect of the grant of a warehouse licence by the person or partnership seeking the grant. Warehouse licence charge in respect of the grant of a licence is imposed under new section 6B of the Customs Licensing Charges Act 1997, which is to be inserted by item 6 of Schedule 1 to the Customs Depot Licensing Charges Amendment Bill 2015. The amount of warehouse licence charge for the grant of a licence is set out in new section 6D of the Customs Licensing Charges Act 1997, which is to be inserted by item 6 of Schedule 1 to the Customs Depot Licensing Charges Amendment Bill 2015.

15. New subsection 85(2) provides that the person or partnership must pay the warehouse licence charge in respect of the grant of a licence in accordance with section 85A of the Customs Act. New section 85A is also inserted by this item and is explained below.

16. New subsection 85(3) provides that a warehouse licence charge is payable in respect of the renewal of a warehouse licence by the licence holder. Warehouse licence charge in respect of the renewal of a licence is imposed under new section 6B of the Customs Licensing Charges Act 1997. The amount of warehouse licence charge for the renewal of a licence is also set out in new section 6D of the Customs Licensing Charges Act 1997.

17. New subsection 85(4) provides that the licence holder must pay the warehouse licence charge in respect of the renewal of a licence in accordance with section 85A of the Customs Act.

New section 85A

18. New section 85A(1) provides that a warehouse charge in respect of the grant, or the renewal, of a warehouse licence must be paid in accordance with the regulations. New subsection 85A(2) provides that regulations may make provision for and in relation to:

(a)

the payment of the charge in instalments;

(b)

the days, or days on which the charge, or instalments of the charge, must be paid.

19. Sections 35 and 37 in the Customs Regulation currently set out these matters in relation to warehouse licence fees. It is proposed that the requirements set out in these sections be retained for the warehouse charges payable for the grant or renewal of a warehouse licence.

20.

Item 13 - Paragraph 86(1)(h)

21. Section 86 of the Customs Act sets out the circumstances in which the Comptroller-General may issue a notice to a warehouse licence holder about possible suspension or cancellation action. One circumstance is where a fee in relation to the licence remains unpaid after 28 days. As a consequence of the fees associated with warehouses becoming charges, this amendment changes the references to "fee" to "warehouse licence charge".

Item 14 - After section 87

22. This item inserts new section 87A, which inserts a head of power to deal with the refund of warehouse licence charge where a warehouse licence is cancelled during its term.

23. In relation to current warehouse licence fee, this matter is currently dealt with in section 38 of the Custom Regulation which is made under section 85 of the Customs Act. As section 85 is to be repealed and substituted (see item 12 above), this item inserts a new head of power to prescribe matters relating to the refund of warehouse licence charges. It is proposed that the circumstances set out in this section be retained for the refund of warehouse charges.

Item 15 - Subsection 180(1)

24. Subsection 180(1) of the Customs Act sets out the definitions for the purposes of Part XI of the Customs Act (customs broker licences). This item inserts two new definitions into subsection 180(1) being "customs broker licence application charge and customs broker licence charge". Each of these charges is explained below.

Item 16 - At the end of subsection 183CA(1)

25. Subsection 183CA(1) of the Customs Act sets out the requirement for an application for a customs broker licence. This item introduces a new paragraph (g) which states that an application must be accompanied by a customs broker licence application charge. This is a new charge in relation to the licensing of customs broker and is imposed by new section 6G of the Customs Licensing Charges Act 1997, which is to be inserted by item 6 of Schedule 1 to the Customs Depot Licensing Charges Amendment Bill 2015. The amount of customs broker licence application charge is set out in new section 6H of the Customs Licensing Charges Act 1997, which is also to be inserted by item 6 of Schedule 1 to the Customs Depot Licensing Charges Amendment Bill 2015.

Item 17 - After section 183CJ

26. Section 183CL of the Customs Act currently contains the head of power under which the fees in respect of customs broker licences can be prescribed and the circumstances in which the fees are payable or refundable.

27. As all of the current and new fees in relation to customs broker licences are to be imposed as charges under the Customs Licensing Charges Act 1997, this head of power to make regulations is no longer required. Section 183CL is therefore to be repealed (see item 18 below). Amendments will be made to the Customs Regulation to remove the amounts of the current fees from the face of that Regulation.

New section 183CJA

28. New subsection 183CJA(1) provides that a customs broker licence charge is payable in respect of the grant of a broker's licence by the person seeking the grant. Customs broker licence charge in respect of the grant of a licence is imposed under new section 6G of the Customs Licensing Charges Act 1997, which is to be inserted by item 6 of Schedule 1 to the Customs Depot Licensing Charges Amendment Bill 2015. The amount of customs broker licence charge for the grant of a licence is set out in new section 6J of the Customs Licensing Charges Act 1997, which is to be inserted by item 6 of Schedule 1 to the Customs Depot Licensing Charges Amendment Bill 2015.

29. New subsection 183CJA(2) provides that the person must pay the customs broker licence charge in respect of the grant of a licence before the end of the day the licence comes into force.

30. New subsection 183CJA(3) provides that a customs broker licence charge is payable in respect of the renewal of a broker's licence by the licence holder. Customs broker licence charge in respect of the renewal of a licence will be imposed under new section 6G of the Customs Licensing Charges Act 1997. The amount of customs broker charge for the renewal of a licence is also set out in new section 6J of the Customs Licensing Charges Act 1997.

31. New subsection 183CJA(4) provides that the licence holder must pay the customs broker charge in respect of the renewal of a licence on the day the renewal of the licence comes into force.

Item 18 - Section 183CL

32. As referred to above, this item repeals section 183CL of the Customs Act.

Item 19 - Paragraph 183CQ(1)(f)

33. Section 183CQ of the Customs Act sets out the circumstances in which the Comptroller-General may issue a notice to a customs broker licence holder about possible suspension or cancellation action. One circumstance is where a fee in relation to the licence remains unpaid after 28 days. As a consequence of the fees associated with customs broker becoming charges, this amendment changes the references to "fee" to "customs broker licence charge".

Item 20 - After subsection 270(1)

34. This item amends section 270 of the Customs Act to insert a new head of power to make regulations in relation to:

(a)

the charging and recovery of fees in respect of any matter under the Customs Act or the regulations;

(b)

the way, including the currency, in which fees are to be paid;

(c)

the persons who may be paid fees on behalf of the Commonwealth; and

(d)

the remission, refund or waiver of fees of a kind referred to in paragraph (a) or the exempting of persons from the payment of such fees.

35. Currently, under section 28 of the Customs Act, fees for service are payable in a limited range of circumstance. These are where: (a) officers of Customs perform functions outside the hours that are prescribed under the Customs Regulation for those functions; and (b) where officers perform functions at a place at which the function is not normally performed (such as at some regional airports).

36. This new head of power allows fees for service to be payable in relation to the performance of functions in a wider range of circumstances.

Item 21 - Application provision -warehoused goods declaration fee

37. This item sets out the application provision for the new warehoused goods declaration fee. The new amounts of this fee apply to an import declaration in relation to warehoused goods made on or after 1 January 2016.

Item 22 - Application and savings provision -warehouse licences

38. This item sets out the application provision for the amendments to the warehouse licensing regime.

39. The effect of subitem (1) is that the new warehouse licence application charge applies in relation to an application for a warehouse licence made on or after 1 January 2016.

40. The effect of subitem (2) is that the new warehouse licence variation charges applies in relation to an application for a variation of a warehouse licence made on or after 1 January 2016.

41. The effect of subitem (3) is that new subsections 85(1) and (2) (which relate to the liability and time for payment of the warehouse licence charge for the grant of a licence) apply in relation to a warehouse licence granted on or after 1 January 2016. Licences granted after that date incur the new $4,000 charge as opposed to the current $7,000 fee, even if the application is lodged before 1 January 2016.

42. The effect of subitem (4) is that new subsections 85(3) and (4) (which relate to the liability and time for payment of the warehouse licence charge for the renewal of a licence) apply in relation to the renewal of a licence where the renewal decision is made on or after 1 January 2016 (regardless of when the licence was originally granted). As the amount of the charge is the same as existing fees, and the time for payment does not change under the Customs Regulation, there is no substantive change in relation to this charge.

43. The effect of subitem (5) is that existing section 85, and regulations made for existing section 85, continue to apply on and after 1 January 2016 to the fees that were payable for the grant, or renewal, of a warehouse licence that was made before 1 January 2016. Therefore, the existing payment by instalment and refund provisions in the Customs Regulation apply to these fees.

44. The effect of subitem (6) is that the amendment to section 86 (that relates to the circumstance where the Comptroller-General may issue a notice to a warehouse licence holder when the new charge in relation to the licence remains unpaid after 28 days) applies to a licence granted on or after 1 January 2016.

45. The effect of subitem (7) is that paragraph 86(1)(h) immediately in force before 1 January 2016 continues to apply to a fee in relation to a warehouse licence that remains unpaid after 28 days.

46. The effect of subitem (8) is that regulations made under new section 87A relating to the refund of charges where a warehouse licence is cancelled apply where a warehouse licence charge has been paid. As it is proposed that the formula for calculating refunds of the charge be the same as existing fees, there is no substantive change in relation to payment of refunds.

Item 23 - Application and savings provision -customs broker licences

47. This item sets out the application provision for the amendments to the customs broker licensing regime.

48. The effect of subitem (1) is that the new customs broker licence application charge applies in relation to an application for a customs broker licence made on or after 1 January 2016.

49. The effect of subitem (2) is that new subsections 183CJA(1) and (2) (which relate to the liability and time for payment of the customs broker licence charge for the grant of a licence) apply in relation to a customs broker licence granted on or after 1 January 2016. Licences granted after that date incur the new $240 or $2,400 charge as opposed to the current $120 or $1,200 fee, even if the application is lodged before 1 January 2016.

50. The effect of subitem (3) is that new subsections 183CJA (3) and (4) (which relate to the liability and time for payment of the customs broker licence charge for the renewal of a licence) apply in relation to the renewal of a licence where the renewal decision is made on or after 1 January 2016 (regardless of when the licence was originally granted). Renewals granted after that date also incur the new $240 or $2,400 charge as opposed to the current $120 or $1,200 fee, regardless of when the original licence is granted.

51. The effect of subitem (4) is that existing section 183CL, and regulations made for existing section 183CL, continue to apply on and after 1 January 2016 to the fees that were payable for the grant, or renewal, of a customs broker licence that was made before 1 January 2016.

52. The effect of subitem (5) is that the amendment to section 183CQ(1) (that relates to the circumstance where the Comptroller-General may issue a notice to a customs broker licence holder when the new charge in relation to the licence remains unpaid after 28 days) applies to a licence granted on or after 1 January 2016.

53. The effect of subitem (6) is that paragraph 183CQ(1)(h) immediately in force before 1 January 2016 continues to apply to a fee in relation to a customs broker licence that remains unpaid after 28 days.

Circulated by authority of the Minister for Immigration and Border Protection, the Honourable Peter Dutton MP