House of Representatives

Explanatory Memorandum

(Circulated by authority of the Assistant Minister for Competition, Charities and Treasury, the Hon Dr Andrew Leigh MP)

Glossary

This Explanatory Memorandum uses the following abbreviations and acronyms.

General outline and financial impact

Streamlining Excise Administration for Fuel and Alcohol

Outline

This Bill amends the Excise Act to streamline licence application and renewal requirements for excise licences to store or manufacture excisable goods (other than tobacco goods). Additionally, the Bill amends the Customs Act to streamline licence application and renewal requirements for customs warehouse licences that authorise the warehousing of EEGs. The Bill also establishes a public register of entities that hold such licences.

Date of effect

The Bill commences on the later of 1 July 2024 and the day after Royal Assent.

Proposal announced

The Bill implements the 'Commonwealth's Deregulation Agenda' measure which was announced in the former Government's 2022-23 Budget dated 29 March 2022. On 9 May 2023, the Government announced in Budget 2023-24 that the commencement date of this package of measures would be delayed from 1 July 2023 to 1 July 2024.

Financial impact

The Bill is expected to have a negative impact on the underlying cash balance of $3.3 million over the 4 years from 2023-24. This is due to the removal of licence charges for customs warehouse licences authorised to store excise-equivalent goods.

All figures in this table represent amounts in $m.

Human rights implications

The Bill raises human rights issues. See Statement of Compatibility with Human Rights — Chapter 2.

Compliance cost impact

This proposal is part of a broader deregulatory package ('Streamlining excise administration for fuel and alcohol') which provides ongoing compliance savings by removing unnecessary regulatory barriers related to licensing, reducing administrative costs and supporting compliance for small, medium and large business in the fuel and alcohol industries across Australia.

Chapter 1: Streamlining excise administration for fuel and alcohol

Outline of chapter

1.1 This Bill amends the Excise Act and Customs Act to streamline and align licence application fees and renewal requirements for entities who hold, or seek to hold, excise licences to manufacture or store alcohol and fuel and customs warehouse licences to warehouse EEGs (whether or not other customable goods are held within the warehouse) by:

•

removing the renewal requirements so that the licences are ongoing until they are cancelled;

•

removing the fees associated with applying for, renewing and varying these licences;

•

enabling a licence to be granted in relation to more than one premises or warehouse;

•

providing 'blanket' movement permission for excisable goods and EEGs: by default where the relevant licence is granted or varied to cover more than one premises or warehouse, or on application including where the relevant licence covers a single premises or warehouse;

•

establishing a public register, published on an ATO website, of current licences including the licence holder's name and ABN, and the Act under which the licence was granted; and

•

removing the requirement for onshore producers of crude oil and condensate to hold a licence where the cumulative production threshold from a particular field is less than 30 million barrels over the life of the field.

Context of amendments

1.2 On 22 December 2020, a Deregulation Taskforce was commissioned to conduct a review into Australia's excise and excise equivalent regulatory framework for fuel and alcohol. The Taskforce found various areas where the regulatory framework had duplicative and disproportionate regulatory burdens.

1.3 The Taskforce provided recommendations to streamline regulatory requirements across the excise and customs systems. These amendments implement the 2022/23 March Budget measure 'Streamlining excise administration for fuel and alcohol'.

1.4 These amendments seek to alleviate the administrative burden on businesses in the excise and customs systems by streamlining licence application and renewal requirements, removing unnecessary fees and charges related to licences and providing for default 'blanket' movement permissions between licensed entities (by default on grant or variation of an entity's licence covering more than one premises or warehouse, or on application by a licence holder including an entity whose licence covers a single premises or warehouse). Additionally, these amendments make information about licensed entities readily available on a public register.

What goods and licences are affected by these changes?

1.5 The amendments in this Bill apply only to fuel and alcohol and do not apply to tobacco.

1.6 The amendments to the Excise Act apply only to manufacturer licences (other than manufacturer licences that authorise the production of tobacco goods) and storage licences under the Excise Act. In this Chapter, unless otherwise stated, a reference to an 'excise licence' is a reference to such a licence. Manufacturer licences that authorise the manufacture of tobacco goods, producer licences and dealer licences are not affected by these amendments.

1.7 The amendments to the Customs Act in this Bill apply only to warehouse licences granted under section 79 of that Act that authorise the warehousing of EEGs (other than duty-free stores, providores and catering bonds, i.e. warehouses authorised to store goods other than fuel to be supplied to aircraft or ships as stores). In this Chapter, unless otherwise stated, a reference to an 'excise-equivalent warehouse licence' is a reference to such a licence. This licence can also authorise the warehousing of imported goods that are not EEGs stored with EEGs. However, licences issued under section 79 that only authorise the warehousing of "non-EEGs" are not affected by these changes.

1.8 In this Chapter, the term 'entity level' licence is used to refer to either an 'excise licence' covering multiple premises or an 'excise-equivalent warehouse licence' covering multiple places as the context requires.

Licence renewals

1.9 Under the Excise Act prior to the amendments, excise licence holders were required to renew their licences every three years. A licence holder who had multiple licensed premises was required to renew each licence separately.

1.10 Under the Customs Act prior to the amendments, excise-equivalent warehouse licence holders were required to renew each of their licences annually. Licence holders who have multiple licensed places or warehouses were required to renew each licence separately.

1.11 Prior to the amendments, the renewal process imposed a regulatory burden as businesses expend time, effort, and resources, particularly those entities who renew multiple licences for multiple sites, sometimes at different times.

1.12 The intended outcome of these amendments is to reduce this regulatory burden by providing that these licences affected by these amendments remain in force until they are cancelled. The ability for the CEO and the Comptroller-General to manage integrity risks around the licensing of premises and warehouses is, however, retained.

Removal of fees and charges

1.13 Prior to the amendments, no fees were charged for an application for a licence issued under the Excise Act. However, the Excise Act provided for a fee for an application for a manufacturer licence to be prescribed by regulations.

1.14 In contrast, under the Customs Act prior to the amendments, there were charges associated with customs warehouse licences including for licences authorising the warehousing of EEGs. This created an inconsistency between how the Excise Act and the Customs Act treated equivalent goods, depending on whether they were domestically-manufactured or imported.

1.15 The intended outcome of the amendments is to align the two systems by removing the ability to charge licence fees for relevant licences under both the Excise Act and the Customs Act.

Entity level licensing and movement permissions

Entity level licensing

1.16 Under the Excise Act prior to the amendments, a separate licence was required for each premises where excisable goods are manufactured or stored. Similarly, under the Customs Act prior to the amendments, a separate licence was granted for each warehouse authorised to store EEGs. Often these premises and warehouses were under the same operational control and management. This means there was a duplication of administrative work for excise licence holders and excise-equivalent warehouse licence holders who control multiple licensed premises or warehouses.

1.17 To address these issues, the intended outcome of these amendments is to allow an applicant to apply for one licence in relation to multiple premises or warehouses under each of these Acts, if sought by the applicant. The policy intention is to enable a licence holder to consolidate the various premises or warehouses in their control under a single licence under the relevant Acts. Further flexibility is provided by allowing entities, with approval, to vary their licence to add or remove premises or warehouses as necessary. An applicant may still apply for a licence in relation to a single premises or warehouse if they choose. The applicant will still be required to provide information on each of their premises or warehouses but would no longer be required to lodge separate applications for each premises or warehouse.

1.18 The Collector and the Comptroller-General retain for integrity purposes and to address changing circumstances the ability to vary, suspend and cancel an entity level licence, or vary the licence to remove particular premises or warehouses covered by the licence.

Movement permissions

1.19 Generally, businesses cannot move excisable goods or EEGs which are subject to the control of the Collector or Comptroller-General (colloquially referred to as 'underbond' until either the goods are delivered for home consumption or for exportation to a place outside Australia, whichever occurs first) between licensed premises or warehouses without specific permission from the Collector or Comptroller-General. This has meant that, to move these goods underbond, businesses were required to seek permission and be approved, either on an ongoing basis from one specific place to another, or each time a movement happened. The Taskforce found that these permissions were very rarely refused in practice.

1.20 The policy is to provide for 'blanket' movement permissions between licensed entities (by default on grant or variation of an entity's licence covering more than one premises or warehouse, or on application by a licence holder including an entity whose licence covers a single premises or warehouse). This will allow for excisable goods to move between licensed premises, or EEGs to move between licensed warehouses, without specific permissions, unless that blanket permission is revoked. As such, if a licence is granted in relation to multiple premises, the policy intention is to allow the licence holder to, by default, have permission to move underbond goods between premises or warehouses covered by a licence held by them or another entity, where those premises or warehouses are authorised to store underbond goods of the kind to be moved. In the case of excise-equivalent warehouse licences, the blanket movement permission applies to the movement of EEGs only.

1.21 The intended outcome of these amendments is to reduce the need for single or continuing movement permissions in respect of specific licensed premises or warehouses.

1.22 To ensure necessary and appropriate regulatory oversight, the Collector and Comptroller-General will retain the ability to impose movement permission conditions on the removal of goods where there is an identified integrity risk associated with a licence holder or a particular premises or warehouse. The existing controls over movement of goods to unlicensed premises or to a place of export remain unchanged. Movement permissions for customs warehouses that are not authorised to store EEGs, duty free stores, catering bonds and providores also remain unchanged.

Licence register

1.23 Businesses in the excise and customs systems often need to confirm the licence status of trading partners, for example, to store, sell and move goods underbond. Currently, this can only be done by contacting the Collector or by contacting trading partners directly to confirm information, which potentially delays business movements and diverts regulator resources.

1.24 The intended outcome of the amendments is to assist businesses by making certain information about excise licences and excise-equivalent warehouse licences that are in force publicly available on an ATO website to reduce unnecessary engagement with the ATO and ABF.

Licences for onshore crude petroleum oil and condensate producers

1.25 The Australian excise system imposes duty on domestically produced crude petroleum oil and condensate. However, excise duty is payable only once the relevant oil and gas fields surpass cumulative production of 4767.3 megalitres of stabilised crude petroleum oil and condensate (which is equivalent to 30 million barrels) over the life of the fields. There are a limited number of areas that have reached this level of production, located offshore.

1.26 Offshore producers and onshore producers are treated differently in one respect; for offshore producers, cumulative production below the first 4767.3 megalitre threshold in a particular field is exempt from excise duty and for onshore producers, a 'free rate' of excise duty applies for production below this threshold.

1.27 Broadly, a person must hold an excise licence in order to manufacture excisable goods, as defined under the Act. This means that onshore producers are required to hold an excise licence even if no duty is payable. The requirements prior to the amendments imposed an unnecessary regulatory burden on onshore producers where no revenue was collected.

1.28 The intended outcome of the amendments is to align the requirements for onshore and offshore producers by requiring onshore producers to hold a licence and pay excise duty only when they have cumulatively produced over 4767.3 megalitres of stabilised crude petroleum oil and condensate from a particular field.

Comparison of key features of new law and current law

Table 1.1 Comparison of new law and current law

Detailed explanation of new law

1.29 The Bill builds on existing concepts within the relevant legislative framework in the Excise Act and the Customs Act. To achieve the intended policy outcomes, consequential amendments are made to ensure that the amendments fit in with the legislative framework.

1.30 The purpose of these amendments is to:

•

remove renewal requirements so that licences to which these amendments apply are ongoing until they are cancelled;

•

remove the fees associated with applying for, renewing and varying these licences;

•

enable licences to be granted in relation to one or more premises or warehouses;

•

providing 'blanket' movement permission between premises or warehouses: by default where the relevant licence covers more than one premises or warehouse and on application where the relevant licence covers a single premises or warehouse;

•

establish a public register, published on an ATO website, of current licences including the licence holder's name and ABN, and the Act under which the licence was granted; and

•

remove the requirement for onshore producers of crude oil and condensate to hold a licence where the cumulative production threshold from a particular field is less than the threshold of 30 million barrels.

Licensing—excise licences and excise-equivalent warehouse licences

1.31 The amendments to the Customs Act in this Bill apply only to warehouse licences granted under section 79 of that Act that authorise the warehousing of EEGs (with certain exceptions) and such warehouses may also be authorised to warehouse non-EEGs, i.e. imported goods that are not EEGs. The amendments insert a new definition of 'excise-equivalent warehouse licence' into the Customs Act to give effect to this. [Items 1 and 3, definition of excise equivalent warehouse in subsections 4(1), and 78(1) of the Customs Act]

1.32 Warehouses that are excluded from being an 'excise-equivalent warehouse licence' are outwards duty free shops, inwards duty free shops, and providores and catering bonds. Providores and catering bonds are warehouses authorised to store goods (other than fuel) to be supplied to aircraft or ships as stores, as those terms are defined in section 130C of the Customs Act. [Item 3, subsection 78(1) (definition of excise-equivalent warehouse licence) of the Customs Act]

1.33 To support the amendments, a signpost to the meaning of 'Collector' has been inserted into the definitions section of the Customs Act, and the existing definition of 'warehouse' has been updated to clarify that it is a place authorised by a warehouse licence to warehouse goods. There is no substantive change to the definitions of 'Collector' or 'warehouse'. [Items 1 and 2, subsection 4(1) of the Customs Act]

1.34 A licence that is in force when the amendments commence that satisfies the new definition will be an excise-equivalent warehouse licence for the Customs Act and will continue in operation and will not need to be reissued.

1.35 The amendments to the Excise Act apply only to manufacturer licences (other than manufacturer licences that authorise the production of tobacco goods) and storage licences under the Excise Act. The Bill includes a number of amendments to the definitions in the Excise Act to clarify the different kinds of licences under the Excise Act and to support these changes in relation to licences affected by these amendments. [Items 72 to 80 and 82, subsection 4(1), definitions of approved place, dealer licence, paragraph (c) of the definition of excise place, definitions of factory, licence, manufacturer licence, producer licence, proprietor and storage licence and sections 38 and 38A of the Excise Act]

Ceasing renewal requirements

Removing requirement for excise licences to be renewed

1.36 Excise licences affected by these amendments will remain in force until they are cancelled. [Item 100, subsection 39E(4) of the Excise Act]

1.37 This means that manufacturer licences (other than manufacturer licences that authorise the production of tobacco goods) and storage licences under the Excise Act will only cease to be in force if they are cancelled, either by the Collector or at the request of the licence holder. The circumstances prior to the amendments in which an excise licence may be suspended or cancelled, as outlined in Division 4 of the Excise Act, remain unchanged and continue to apply to all licences under the Excise Act.

1.38 As tobacco or tobacco goods are out of scope of this measure, the duration of licences related to these goods is unchanged. Such a licence will remain in force until the end of the next 30 September after the second anniversary of the day on which the licence is granted. These licences can be renewed under existing section 39F. Additionally, paragraph 39E(3)(b) continues to set out the circumstances for expiration of licences that have been renewed.

1.39 For completeness, section 39F dealing with licence renewals does not apply to the licences in scope of this measure. If entities comply with the Excise Act and any conditions imposed, it is intended that the entities only apply once for their manufacturer or storage licence. If a licence is cancelled, and the relevant entity wishes to have a manufacturer or storage licence for the same premises, they will need to apply for a new licence under section 39 of the Excise Act. [Items 100 to 103, subsections 39E(2) and (3), 39F heading and subsections (1) and (7) of the Excise Act]

Suspending dormant licences

1.40 As the requirement to renew a licence has ceased, to manage dormant licences, a new ground for suspending a licence is added so that a licence that is inactive does not remain in the excise system while potentially using up regulatory resources. Where a licence holder has not conducted any activities authorised by the licence at any premises covered by the licence for a period of at least three years, the licence (including an entity level licence) may be suspended. This ground for suspension is also a ground for cancellation. This provision relates to all licences that do not require renewal. [Items 109, 110 and 129, paragraph 39G(1)(o), paragraphs 39G(1A)(d) and 39L(1)(a) of the Excise Act]

1.41 However, for an entity level licence covering multiple premises, the Collector has the power to suspend a licence in relation to particular premises rather than the licence in its entirety. The grounds for suspending a licence in relation to a particular premises covered by an entity level licence are contained in subsection 39G(1A) of the Excise Act and include:

•

existing grounds such as:

-

the fit and proper person test;

-

the physical security of the premises;

-

the adequacy of the plant and equipment; and

-

breach of conditions imposed on the licence in relation to the premises.

•

an additional ground for suspension in relation to a particular premises where there has been no authorised activity for a period of at least three years.

1.42 As such, these amendments repeal paragraphs 39G(1)(d), (g) and (i) to move them under subsection 39G(1A). These are the existing grounds for suspension in relation to the fit and proper test, physical security of the premises and the adequacy of the plant and equipment referred to above, which were initially grounds for suspension of licences in their entirety.

[Items 105, 107, 110 and 111, paragraphs 39G(1)(d), (g) and (i), subsection 39G(1A) and section 39H of the Excise Act]

1.43 The Collector can still cancel a licence in its entirety if the Collector has reasonable grounds for believing that any of the grounds under subsection 39G(1A) exist for each of the premises covered by the licence. Paragraphs 39G(1A)(b) and (c) regarding the physical security of, and the plant and equipment used at, the premises covered by the licence are only relevant to manufacturer and storage licences. The grounds for suspension do not have to be the same for each premises for the Collector to exercise this power. [Item 109, paragraph 39G(1)(p) of the Excise Act]

1.44 Furthermore, paragraph 39G(1)(k) is amended to clarify that it applies only in relation to a condition that relates to the licence as a whole, whereas paragraph 39G(1A)(e) relates to conditions in relation to particular premises covered by the licence. [Items 108 and 110, paragraphs 39G(1)(k) and 39G(1A)(e) of the Excise Act]

Excise manufacturer and storage licences in force on 1 July 2024

1.45 Excise licences affected by these amendments will not be required to be renewed if they are granted on or after 1 July 2024. Additionally, excise licences that are in force on 1 July 2024, will also benefit from these amendments and those licences will not be subject to the renewal requirement and remain ongoing until suspended or cancelled. [Subitem 172]

Removing requirement for excise-equivalent warehouse licences to be renewed

1.46 Similarly, an excise-equivalent warehouse licence remains in force from when it is granted until it is suspended or cancelled by the Comptroller-General, or cancelled at the request of the licence holder. The circumstances in which such a licence can be suspended or cancelled under Part V of the Customs Act remain unchanged and apply to all section 79 customs warehouse licences. To put beyond doubt, a customs warehouse licence that does not authorise the warehousing of EEGs is not affected by these amendments. Such a licence ceases to be in force and is to be renewed in accordance with Part V of the Customs Act.

1.47 The amendments provide that an excise-equivalent warehouse licence is ongoing and remains in force until it is cancelled. All other warehouse licences retain their existing duration, that is, they expire on 30 June and if they are renewed, they are in force for one year and can be further renewed. [Items 27, 29, 30 and 31, subsections 83(1), (1A), (1B) and (1C), subsections 84(1) and (4) of the Customs Act]

Excise-equivalent warehouse licences in force when the Bill commences

1.48 Generally, the amendments of the Customs Act in relation to warehouse licences apply in relation to any warehouse licence that is granted on or after commencement of the Bill (the later of 1 July 2024 or the day after Royal Assent) if the application for the licence was made on or after that commencement time, and to an excise-equivalent warehouse licence that is varied on or after that commencement time. [Subitem 170(1)]

1.49 The amendments relating to application and grant of a licence apply to an application made on or after the commencement of the Bill. [Subitem 170(2)]

1.50 However, where an application for an excise-equivalent warehouse licence is made before the commencement, but has not yet been decided, the requirement for the application to be accompanied by the warehouse licence application charge does not apply to the application. [Subitem 170(3)]

1.51 Where an application to vary a warehouse licence to add or remove a place from coverage of the licence is made on or after the commencement of the Bill, the application must be dealt with as if the amendments had commenced whether the licence is granted before, on or after the commencement time. [Subitem 170(4)]

1.52 However, where an application to vary an excise-equivalent warehouse to add or remove a place from coverage of the licence is made before the Bill commences, but has not yet been decided, the requirement for the application to be accompanied by the warehouse licence variation charge does not apply to the application. [Subitem 170(5)]

1.53 A warehouse licence (other than an excise-equivalent warehouse licence) that is in force on or after commencement of the Bill remains in force until cancelation or expiry of the licence regardless of whether it was granted before, on or after that commencement time. An excise-equivalent warehouse licence remains in force until it is cancelled, regardless of whether it was granted before, or after that commencement time. The Comptroller-General will continue to be able to renew, or further renew, a warehouse licence other than an excise-equivalent warehouse licence that is in force on or after commencement. [Subitem 170(6)]

1.54 After commencement, the Comptroller-General can also take the following new actions, discussed in substance below, in respect of licences first granted after commencement covering more than one warehouse, or in force before commencement but varied after commencement to cover more than one warehouse:

•

suspend the licence in relation to particular warehouses (new subsections 86(1AC) and (1AD));

•

vary the licence so it no longer covers particular warehouses (new section 87B); or

•

cancel the licence on certain grounds, for example because the licence holder has not, for a period of at least three years, warehoused excise-equivalent goods at a warehouse covered by the licence (section 87 as amended).

[Subitem 170(6)]

1.55 Where a warehouse licence in force immediately before commencement of the amendments specified or described a place, the place is taken to be covered by the licence for all purposes on and after that commencement time, subject to any variation of the licence on or after that time. This ensures continuity of obligations by preserving the legal effect of licences with respect to a place where amendments have replaced a legislative reference to that place being "specified in" a licence with a reference to that place being "covered by" a licence (or a similar form of words in the context of the reference). [Subitem 170(8)]

1.56 The Comptroller-General is able to use compliance measures to address situations where entities seek to take advantage of the removal of renewal requirements associated with excise-equivalent warehouse licences. Existing powers under the Customs Act, include powers to:

•

issue a notice of intent to cancel a licence that also allows the suspension of a warehouse licence under section 86;

•

cancel a warehouse licence under section 87;

•

impose additional conditions to which a warehouse licence is subject under section 82A; and

•

vary the conditions to which a warehouse licence is subject.

Removing certain licence fees

Removing power to prescribe licence fees under the Excise Act

1.57 The Bill amends the Excise Act to ensure that there are no application fees for excise manufacturer or storage licences. This is achieved by removing the existing power in the Act to prescribe fees in relation to an application for a manufacturer licence. Prior to the amendments, there were no prescribed fees for these applications. [Item 85, paragraph 39(2)(f) of the Excise Act]

Removing excise-equivalent warehouse licence fees under the Customs Act

1.58 To align the treatment of excise licences and excise-equivalent warehouse licences, the Customs Act is amended so that no fees are payable for the application, grant, or variation of an excise-equivalent warehouse licence. This is achieved by excluding excise-equivalent warehouse licences from the charges payable under:

•

section 85 of the Customs Act for the grant and renewal of such a licence; and

•

subsection 81B(2) for an application to vary a licence. [Items 7, 17, 32 and 33, paragraphs 80(1A)(g) and 81B(2)(e) and subsections 85(1) and (2A) of the Customs Act]

1.59 The Comptroller-General retains the ability to impose conditions on, suspend or cancel licences where it appears necessary for the protection of the revenue or for the purpose of ensuring compliance with the Customs Act. This will allow the Comptroller-General to use compliance measures to address situations where entities seek to take advantage of the removal of requirements for renewal associated with excise-equivalent warehouse licences.

1.60 In respect of applications for a warehouse licence under the Customs Act, the application charge would not be required to be submitted with the application if the application seeks to store EEGs at the warehouse specified in the application or all warehouses in the application. An application that seeks to only store non-EEGs at a warehouse must include an application charge. Where an application is made to store EEGs at more than one warehouse (whether or not they will also contain non-EEGs) it would be at the Comptroller-General's discretion to grant the licence to cover one or more, or all of the places, or to refuse the application in full.

1.61 The charge imposed under section 85 of the Customs Act to renew a licence will apply to licences that are in force before 30 June 2024. Under section 85A of the Act and section 36 of the Customs Regulation 2015, if a licence is renewed before 1 July, generally the licence is in force from 1 July with the associated charge for renewing a licence being due on 1 July unless other arrangements are in place. Under these amendments, such a licence will not be subject to a renewal fee. Additionally, any new licences granted on or after 1 July 2024 will not be subject to a charge for the application or grant of the licence.

1.62 If before commencement of these amendments, a licence holder has applied to renew their licence or applied for a new licence that would come into force on or after 1 July 2024 and paid the renewal charge or application charge, the licence holder is entitled to a refund. [Item 171)]

Transitional arrangements and refund provisions

1.63 A warehouse licence charge is not payable for the grant of an excise-equivalent warehouse licence on or after commencement of the Bill (the later of 1 July 2024 and the day after Royal Assent), even if the licence was applied for before that time. [Subitem 170(7)]

1.64 Since excise-equivalent warehouse licences in force on or after commencement are, from that date, no longer required to be renewed (discussed above), the current obligation to pay the relevant warehouse licence charge under subsection 85(3) for their renewal will also be removed from commencement. [Subitem 170(6)]

1.65 Where charges become payable in respect of periods that overlap commencement, the Bill also creates two refund obligations on the Commonwealth, where persons have paid application or renewal charges respectively before commencement but in respect of periods after commencement. The amendments made by the Bill remove the requirement to pay those charges in whole or in part.

1.66 The first refund obligation applies to warehouse application charges, where:

•

a person or partnership has applied for an excise-equivalent warehouse licence; and

•

the licence is granted before, on or after commencement, but does not come into force until on or after commencement.

1.67 In this situation, the Comptroller-General must then, on behalf of the Commonwealth, refund to the person or partnership an amount equal to so much of any warehouse licence application charge, and warehouse licence charge, as has been paid for the grant of the licence. Any amount of warehouse licence charge that has not been paid in respect of the grant of the licence on or after commencement is also taken to no longer be payable. [Subitem 171(1)]

1.68 Similarly, the second refund obligation applies to warehouse renewal charges, where:

•

a person or partnership applies to renew an excise-equivalent warehouse licence before commencement; and

•

the licence is renewed before 1 July 2024 but in respect of the 2024-25 financial year (specifically, the 12-month period during which under current law excise-equivalent warehouse licences remain in force, that would have ended on 30 June 2025).

1.69 In this situation, the Comptroller-General must then, on behalf of the Commonwealth, refund to the person or partnership an amount equal to so much of any warehouse licence charge as has been paid for the renewal of the licence. So much of any warehouse licence charge as has not been paid in respect of the renewal before commencement in respect of the period on and after commencement is also taken to no longer be payable. [Subitem 171(2)]

1.70 As no fee was prescribed prior to the amendments for applications for manufacturer licences for the purposes of paragraph 39(2)(f) the Excise Act, transitional arrangements or refund provisions similar to the Customs Act provisions are not required for excise purposes. Paragraph 39(2)(f) is repealed in respect of applications for these licences made on or after commencement. [Item 85 and subitem 172(2), paragraph 39(2)(f) of the Excise Act]

Entity level licences—manufacturer and storage licences under the Excise Act

1.71 These amendments allow entities to apply for a manufacturer or storage licence in relation to multiple premises or places under one licence. Subject to the CEO imposing conditions on the licence in relation to any premises covered by the licence, this provides flexibility for businesses to structure their licence in a manner that suits their business needs.

1.72 The amended definitions of manufacturer licence and storage licence make it clear that:

•

a manufacturer licence can be granted to cover one or more premises;

•

a manufacturer licence in relation to tobacco goods, a dealer licence or a producer licence can only be granted to cover one premises; and

•

a storage licence may authorise activities that can be carried out at each of the premises covered by the licence.

[Item 82, sections 38 and 38A of the Excise Act]

1.73 To help with the readability of provisions and to clarify how they operate, the Excise Act is amended throughout to change references to premises 'specified in' a licence to premises 'covered by' a licence, and to refer to licences as 'authorising' activities in relation to goods, with minor consequential amendments to the drafting of some provisions necessary to preserve their effect after commencement. These amendments:

•

place the focus on what a licence does rather than its form;

•

address situations where the licence is varied by notice to include additional premises and those premises would not be 'specified' in the licence;

•

clarify the interaction between various things that can be authorised under a licence, that licences can cover multiple premises, for example, certain conditions can apply to particular activities in relation to specified goods at specified premises; and

•

ensure that provisions continue to operate as they did prior to the amendments for the excise licences that relate to a single premises.

[Items 74, 81, 96, 97, 98, 99, 106, 115, 120, 123, 127, 130, 131, 132, 137, 141, 146, 149, 150, 151, 158, and 160 to 163, paragraph 4(1)(c), sections 27, 30, 31, 35, 36, paragraphs 39D(1)(a),(d),(g), (h) and (j), subparagraph 39DA(3)(c)(ii), paragraph 36G(1)(h), paragraph 39J(2)(b), paragraphs 39K(1)(b), 39K(4)(b), 39K(6)(a)-(c), 39L(3)(b), subsection 39L(4), paragraph 39L(5)(b), section 39P, subsections 39M(1) and(3), paragraph 39N(1)(a), subsection 44(2), paragraphs 51(a)-(b), section 77E and subsections 77F(1), paragraph 77HB(a), subsection 86(3) and paragraph 116(1)(bc) of the Excise Act]

Application for an entity level licence

1.74 The Collector can allow an entity level licence to authorise different kinds of goods for different premises. Conditions on the entity level licence in relation to each premises would allow the Collector to regulate what occurs at each premises including allowing, or not allowing, for manufacture and storage of completely different goods at a premises. In practice, it is not anticipated that consolidation of existing manufacturer licences would change existing arrangements or conditions on individual premises covered by this entity level licence.

1.75 An entity may apply for a manufacturer or storage licence in relation to one or more premises which is permissible under the definition of those licences under subsections 38(2), 38(3) and 38A(1) of the Excise Act. The application may contain descriptions of multiple premises if an entity is applying for an entity level licence. [Items 82 and 84, sections 38 and 38A, and paragraph 39(2)(d) of the Excise Act]

1.76 The amendments do not specify the type of information that must be included in the application about the kinds of goods to be stored, or activities to be undertaken, at each premises. A licence application falls within scope of the CEO's approved form framework, which empowers the CEO to approve necessary requirements and has broad discretion to determine the form and manner in which information is given. If anything further is required, paragraph 39(2)(g) of the Excise Act allows further information to be prescribed for this purpose.

1.77 Once an application for a licence has been submitted, the Collector has a discretion to grant or refuse to grant the licence. The Collector is required to provide written notice of the decision. Additionally, if an application is made in relation to more than one premises, the Collector may grant a licence covering all or only one, or some of the premises. This is to ensure that if the Collector determines that a particular premises should not be licensed, the entity may still be granted a licence in relation to the other premises. [Items 86 and 87, subsections 39A(1) and 39A(1A) of the Excise Act]

1.78 Amendments are made to subparagraph 39B(c)(i) and paragraph 39C(c) of the Excise Act so that the Collector may consider whether the person has held a licence that has been varied by the Collector to no longer cover a premises, or participated in the management or control of a company that has had its licence revoked or whether a company has held a licence that has been revoked. This is to ensure that the revocation or variation of a licence is taken into account because prior to the amendments such a revocation or variation may have been the equivalent of a cancelled licence. [Items 92, 94 and 95, subparagraphs 39B(c)(ia) and (iii) and paragraph 39C(caa) of the Excise Act]

1.79 Further, in relation to manufacturer and storage licences, the Collector may consider the physical security of the premises covered by the licence or the suitability of plant and equipment. This ground is inserted to allow the consideration of these grounds in relation to one or more premises that may be covered in the licence. Paragraphs 39A(2)(d),(g) and (i) are repealed and the new ground refers to new subsection 39A(2A). [Items 88, 89, 90, paragraphs 39A(2)(d), (g), (i) and 39A(2)(n) and subsection 39A(2A) of the Excise Act]

1.80 Paragraph 39A(2)(n) refers to new paragraph 39A(2A)(a) which is a ground for the Collector to refuse to grant a licence in relation to a particular premises if a natural person who would participate in the management or control of that particular premises is not a fit and proper person. Paragraph 39A(2)(n) allows the Collector to refuse to grant a licence in its entirety if the Collector is of this opinion for each of the premises described in the application. Importantly, this ground applies to all licence applications including the tobacco licences that are not otherwise in scope of this measure. It is made clear in subsection 39A(3) that paragraph 39A(2A)(a) is a relevant ground to consider for those licences. For completeness, no substantive amendments are made to the provisions (sections 39B and 39C) related to how the Collector is to determine whether a natural person or a company is fit and proper. [Items 83, 89, 90 and 91, paragraphs 39(2)(c), 39A(2)(n) and 39A(2A)(a) and subsection 39A(3) of the Excise Act]

Variation of licences to include additional premises

1.81 The Bill inserts a new Division 3A into the Excise Act to deal with variation of licences to include additional premises. Some entities hold multiple storage or manufacturer licences for multiple premises. These entities can apply to the Collector to consolidate their licences in a manner they see fit and to add additional premises to their licences. [Item 104, Division 3A and subsection 39FA(1) of the Excise Act]

1.82 The application must include the minimum information required to allow the Collector to be able to identify the relevant premises and licences and to consider any unlicensed premises proposed to be added to a licence. The application must:

•

be in a form (if any) approved by the CEO; and

•

set out the name and address of the licence holder; and

•

identify the licence to be varied (to include additional premises); and

•

identify the additional premises covered by another licence or licences held by the entity and identify that other licence; and

•

if the additional premises are not covered by another licence held by the licence holder (new additional premises), it must contain a description of the additional premises and set out particulars that the Collector is required to consider for the purposes of 39A, 39B and 39C of the Excise Act (which includes information related to the fit and proper person tests as well as the adequacy of the physical security and equipment at the premises).

1.83 Importantly, the application makes a distinction between varying a licence to add premises already covered by another licence and new premises that are not covered by another licence. In relation to the latter, instead of applying for a licence under section 39 of the Excise Act, paragraph 39FA(2)(e) allows entities to vary an existing licence. However, the requirements that would ordinarily need to be satisfied if an entity was applying for a single premises licence still apply in relation to those premises. In certain circumstances, an entity may not need to provide information as required by subsection 39(2) of the Excise Act. [Item 104, subsection 39FA(2) of the Excise Act]

1.84 On application by a licence holder, the Collector may, by written notice, vary a licence to cover additional licensed premises. When varying the licence, the Collector must also vary the licence that had previously covered the premises (the first licence) to no longer cover those premises. If the first licence had covered one premises only, then on variation the Collector must cancel the first licence. [Item 104, subsections 39FB(1) and (2) of the Excise Act]

1.85 The Bill allows multiple licences to be consolidated by variation of one licence and the cancellation of the other licences. Broadly, if a storage licence and manufacturer licence are consolidated, then given the broader scope of a manufacturer licence, the varied licence would be a manufacturer licence and the storage licence would be cancelled. This is because by limitation of the definition of the two licences, an entity cannot have manufacture authorised on a storage licence, whereas a manufacturer licence can cover the storage of excisable goods. Ordinarily, premises that are licensed for storage would be subject to a condition that limits the activities under the licence to storage. The amendments are broad enough to allow entities to arrange premises on licences as they prefer. That is, entities could choose to consolidate all their premises onto one licence (which would be an entity level manufacturer licence) or have two licences by consolidating manufacturing premises on the first licence and consolidating storage premises on the second licence, or any other arrangement that would be available to them within the definitions of licence types. [Item 82, subsections 38(2) and (3) of the Excise Act]

Suspension and cancellation of licences

Method of suspension

1.86 Section 39J dealing with the method of suspension is amended to ensure that the provisions cover suspensions under subsections 39G(1) and 39G(1A) including the new ground of suspension where a licence holder has not conducted any activities authorised by the licence at any premises covered by the licence for a period of at least three years. Subsection 39J(4A) deals with the giving notice related to a licence suspended under subsection 39G(1A) (which deals with particular premises covered by an entity level licence).

1.87 In particular:

•

the notice given to the licence holder must state that if the licence holder wants the licence to continue to cover particular premises, the licence holder may within seven days after the day on which the notice was served, give to the Collector at an address specified in the notice a written statement showing cause why the premises should continue to be covered by the licence;

•

the notice may state that the licence is suspended in relation to particular premises if the Collector considers it is necessary for the protection of revenue or for ensuring compliance with the Excise Act;

•

the suspension takes effect on and from the service of the notice; and

•

if the Collector has not varied a licence to remove a premises from the licence that was suspended, the Collector must revoke the suspension within 28 days after the day the Collector suspended the licence in relation to the premises. [Items 114 to 118, subsections 39J(1), paragraph 39J(2)(b), subsections 39J(3), 39J(4A) and (4B) and 39J(5) of the Excise Act]

Activities that are prohibited during suspension

1.88 Provisions in section 39K dealing with activities that are prohibited during suspension are amended so that the provisions apply to a suspended entity level licence or a suspended licence in relation to a particular premises. [Items 119, 120, 122, 125 and 126, subsections 39K(1), paragraph 39K(1)(b) and subsections 39K(4), (5), (6) of the Excise Act]

1.89 Subsection 31K(1A) is inserted to mirror the existing subsection 39K(1) so that during the period in which a licence is suspended relying on subsection 39G(1A) (dealing with the suspension of particular premises), the licence holder must not engage in activities that are prohibited during suspension, in particular manufacture goods that are excisable or store excisable goods. The same penalty that applies under subsection 39K(1) applies to subsection 39K(1A). [Item 121, subsection 39K(1A) of the Excise Act]

1.90 Additionally, during a period in which a licence is suspended relying on subsection 39G(1A) of the Excise Act, the licence holder is prohibited from manufacturing excisable goods or storing excisable goods at the premises in relation to which the licence was suspended. [Item 124, subsection 39K(4A) of the Excise Act]

1.91 During a period in which the licence is suspended, the Collector has the power to take control of premises specified in a licence and require the licence holder to remove goods to another place approved by the Collector. The amendments make it clear that the Collector has such power in relation to a licence suspension or a suspension in relation to a particular premises. [Item 128, paragraphs 39K(6)(d) and (e) of the Excise Act]

Variation of licence to remove premises

1.92 The amendments outline when a licence may be varied to remove particular premises from coverage of a licence that covers more than one premises. [Item 133, section 39LA of the Excise Act] .

1.93 Similar to the cancellation of a licence, the Collector may vary an entity level licence so that the licence no longer covers particular premises where the Collector is entitled to suspend the licence in relation to those premises relying on subsection 39G(1A) of the Excise Act. However, the Collector must not so vary the licence if the effect of the variation is that there is no premises or no factory (as applicable) covered by the licence. In this case the Collector may cancel the licence. [Items 129 and 133, paragraph 39L(1)(b) and subsections 39LA(1) and (3)]

1.94 Additionally, if the licence holder requests the Collector to vary the licence to no longer cover a premises, the Collector must vary the licence unless the effect of the variation is that there is no premises or no factory (as applicable) covered by the licence (in which case the Collector may cancel the licence). [Items 129 and 133, paragraph 39L(1)(b) and subsection 39LA(2) and (3)]

1.95 The variation must be made by way of written notice, served in a particular way on the licence holder including on any person who apparently participates in the management and control of premises covered by the licence. [Item 133, subsections 39LA(4) of the Excise Act]

1.96 The Collector must, in writing, inform the owner of excisable goods at premises no longer covered by the licence that the owner is required to pay duty payable in respect of the goods or remove the goods at the premises to another place and that the owner must comply with the notice, otherwise the goods may be sold or otherwise disposed of. [Item 133, subsections 39LA(5) and (7) of the Excise Act]

1.97 The amendments create a new penalty where if a licence has been varied to no longer cover a premises, a person, without permission, intentionally removes from the premises any underbond goods and the person knew or was reckless as to whether the goods were underbond goods. [Item 139, subsection 39M(2) of the Excise Act]

1.98 The Collector may, when a licence has been varied, cause any excisable goods on which duty has not been paid that are at the formerly covered premises to be removed to such other place as the Collector thinks fit. This is in addition to such a power if a licence has been cancelled under subsection 39N(1). [Items 147 and 148, subsections 39N(1A) and (2) of the Excise Act]

Transitional arrangements – new licences

1.99 Amendments above relating to applications for grants of new licences under Divisions 1 and 2 of the Excise Act apply in relation to applications made on or after commencement of the Bill (the later of 1 July 2024 or the day after Royal Assent). This means, on or after commencement, applications for new licences:

•

can relate to more than one premise, if the application is for a storage licence or manufacturer licence not authorising manufacture of tobacco goods;

•

must satisfy the new requirements set out in subsection 39(2) of the Excise Act as amended; and

•

will be assessed by the Collector using the amended criteria in Division 2 of the Excise Act as amended.

[Subitem 172(2)]

1.100 This does not apply to existing licence holders. Existing licence holders who wish to take advantage of new arrangements for storage and manufacturer licences and to add premises to an existing licence, whether or not those premises are currently specified in a licence, are expected to do so by applying to the Collector to have an existing licence varied under new section 39FA of the Excise Act.

Transitional arrangements – licences in force on or before commencement

1.101 For licences in force on or after commencement of the Bill (the later of 1 July 2024 or the day after Royal Assent), the above amendments relating to variation of licences to include additional premises apply to those licences from commencement, whether or not the licence was granted before, on or after commencement.

1.102 This means that persons who hold storage licences or manufacturer licences that do not authorise the manufacture of tobacco and that are in force on commencement can, after that date, apply to the Collector for those licences to be varied to cover additional premises under new section 39FA of the Excise Act. [Subitem 172(3)]

1.103 This also means that, after the commencement of the Bill, the Collector will be able to take the following new actions, discussed above, in respect of licences granted after commencement that cover multiple premises, or are in force before commencement but varied after commencement to cover more than one premises:

•

suspend the licence in relation to particular premises;

•

vary the licence so the licence no longer covers particular premises; or

•

cancel the licence on the amended grounds, for example because the licence holder has not, for a period of three years, conducted any activities authorised by the licence at any premises covered by the licence.

[Subitem 172(3)]

1.104 Amendments made to subsections 39M(1) and (3) and 39N(1) of the Excise Act only apply to licences that cease to be in force on or after commencement. These are technical amendments which replace references to a licence having been cancelled or expired and not been renewed, with a reference to the licence having ceased to be in force. This targeted application is required to ensure that the relevant powers under sections 39M and 39N of the Excise Act can appropriately be exercised on or after commencement of the Bill despite amendments removing expiry and renewal of certain licences. [Subitem 172(4)]

1.105 The current operation of sections 77E and 77F of the Excise Act is preserved in respect of brewery licences that are cancelled, or that expire without being renewed, before commencement, despite amendments made in the Bill to these sections by items 158, 159 and 160. These items make technical amendments to accommodate the broader amendments to the licencing framework that enable licences to cover many premises, including a brewery, and that provide certain licences no longer expire. Preserving the operation of these sections prior to amendment ensures that the previous obligations on licence holders and powers of the Collector continue to apply after commencement concerning things that happened before commencement. [Subitem 172(5)]

1.106 If a place is specified in a licence in force immediately before commencement, that place is taken to be covered by the licence for all purposes on and after commencement, subject to any variation of the licence on or after commencement. As with the similar provision concerning Customs Act changes (see paragraph 1.55 above), this ensures continuity of obligations by preserving the legal effect of licences with respect to a place. The amendments give effect to this by replacing references to that place being "specified in" a licence with a reference to that place being "covered by" a licence (or a similar form of words in the context of the reference). [Subitem 172(6)]

Entity level licences—excise-equivalent warehouse licences under the Customs Act

1.107 A key change to the customs warehouse licensing regime under Part V of the Customs Act is allowing an entity to apply for an entity level excise-equivalent warehouse licence, that is, an excise-equivalent warehouse licence to cover more than one warehouse. This is a change from the current situation which only permits one warehouse per licence. The authorisation to store EEGs at a warehouse remains at the discretion of the Comptroller-General.

1.108 Similar to amendments to the Excise Act mentioned at paragraph 1.73, amendments have been made to the Customs Act so that references to 'a warehouse to which the licence relates' are changed to 'a warehouse covered by the licence', and references to 'the warehouse to which the licence relates' are changed to 'a warehouse covered by the licence'. [Items 4, 5, 20, 21, 22, 25, 26, 49, 57 to 60, 62 and 63 to 69, subsection 78(1) (definition of warehouse), subsection 79(1) paragraphs 81B(4)(a), 81B(4)(b) and (c), subsections 81B(5), 82(1) and (2), paragraphs 82(4)(a) and (b) and 87(2)(b), section 88 and subsection 90(1), section 98, subsection 99(3), subsection 102A(3), subparagraphs105B(1)(d)(i) and (ii), 105C(1)(d)(i) and (ii), and paragraphs 105E(a) and (b) and subsection 183UA(1) (paragraph (e) of the definition of Customs place) of the Customs Act]

Application for an entity level excise-equivalent warehouse licence

1.109 The Comptroller-General may grant an excise-equivalent warehouse licence which can cover one or more warehouses. However other warehouse licences (including duty free stores, providores and catering bonds, and warehouses that are not authorised to store EEGs) under the Customs Act will still only cover one warehouse. [Items 3 and 6, subsections 78(1) and 79(2) of the Customs Act]

1.110 An application for a warehouse licence may be made to the Comptroller-General. The Bill provides for an application to contain a description of 'each place' that the licence is proposed to cover and to specify for 'each place' the kinds of goods that would be warehoused at the place, to reflect the new excise-equivalent warehouse licence that may cover more than one warehouse. The amendments also exclude application warehouse charges for excise-equivalent warehouse licences. Apart from these changes, the application criteria for all warehouse licences remain the same. [Item 7, subsections 80(1) and (1A) of the Customs Act]

1.111 The grant of a warehouse licence, including an excise-equivalent warehouse licence, continues to be at the discretion of the Comptroller-General, including the particular warehouses covered by the licence.

1.112 The provisions related to what goods a licence may authorise to be warehoused have not substantively changed. However, for a licence to be an excise-equivalent warehouse licence, it must authorise the warehousing of EEGs and may also authorise the warehousing of 'non-EEGs', i.e. imported goods that are not EEGs and particular activities related to those goods. If a warehouse is not authorised to warehouse EEGs it cannot be covered by an 'entity level' excise-equivalent warehouse licence. [Items 3 and 6, definition of excise-equivalent warehouse in subsection 78(1) and subsection 79(3) of the Customs Act]

Requirements for and grant of excise-equivalent warehouse licence

1.113 The applicant must provide the relevant information to enable the Comptroller-General to make an assessment as to whether the applicant and any persons who would participate in the management or control of a warehouse are fit and proper persons and whether each place in relation to which the licence is sought is suitable and satisfy the requirements for premises. [Item 7, subsection 80(1A) of the Customs Act]

1.114 The Comptroller-General may consider the criteria in relation to a particular warehouse under subsection 81(1A), including the security and adequacy of a particular warehouse and the persons who participate in the management and control of that particular warehouse. If the Comptroller-General makes an adverse finding in relation to any of these criteria in relation to a particular warehouse, the Comptroller-General must not grant a warehouse licence that covers that particular warehouse. [Item 9 to 13, paragraphs 81(1)(c), (d), (da), (e), (f) and (g) and subsections 81(1A) and (2) of the Customs Act]

1.115 In deciding an application to grant an excise-equivalent warehouse licence, the Comptroller-General may grant a licence that covers any or all of the places, or to refuse the application in its entirety. [Item 15, subsection 81(4) of the Customs Act]

Variation of excise-equivalent warehouse licence to add or remove warehouses

1.116 Part V of the Customs Act contains an existing power to vary the place covered by a warehouse licence to substitute a place or alter its description. The amendments allow the variation of an excise-equivalent warehouse licence to cover more than one place by providing that on application by the licence holder the Comptroller-General may vary, in writing, an excise-equivalent warehouse licence to add an additional place or to remove a place from coverage of the licence. An application for variation may also be to change the boundaries or other details covered by a warehouse licence. However, where the licence holder applies to vary a licence to remove a place from the places covered by the licence without substituting or adding any places, the Comptroller-General must vary the licence unless the variation would result in no place being covered by the licence. [Items 16 and 23, subsections 81B(1)and 81B(5A) of the Customs Act]

1.117 The licence variation charge does not apply to an application to vary an excise-equivalent warehouse licence to alter a place covered by the licence. [Item 17, paragraph 81B(2)(e) of the Customs Act]

1.118 Where a place is covered by a licence and the Comptroller-General varies another licence (held by the same licence holder) to cover that place, the Comptroller-General must vary the first licence to remove the place from its coverage, and if that results in no places being covered by the first licence the first licence must be cancelled. [Item 18, subsection 81B(2A) of the Customs Act]

1.119 In considering whether to grant the variation of an excise-equivalent warehouse licence, the Comptroller-General must have regard to those grounds in subsections 81B(4) and 81B(5) of the Customs Act including, but not limited to, the physical security of any place added to the licence or any place that would have an altered description, including where a warehouse is to be removed from one licence and added to another. [Items 20 and 21, paragraphs 81B(4)(a), (b) and (c) of the Customs Act]

1.120 These amendments allow the Comptroller-General to ensure that an excise-equivalent warehouse licence is not varied to include places in relation to which an officer of Customs would not be able to ensure compliance with the Customs Act, by providing the discretion to refuse to vary an excise-equivalent warehouse licence in such circumstances. [Item 22, subsection 81B(5) of the Customs Act]

1.121 The power of the Comptroller-General to impose conditions applies to any or all of the warehouses covered by an excise-equivalent warehouse licence including conditions in relation to specifying the person or classes of persons whose goods may be warehoused or limiting the operations that may performed upon or in relation to the goods in the warehouse. [Items 25 and 26, subsections 82(1) and (2), and paragraphs 82(4)(a) and (b) of the Customs Act]

Suspension and cancellation of an excise-equivalent warehouse licence

1.122 The Comptroller-General has the power to suspend or cancel an excise-equivalent warehouse licence in its entirety, subject to certain criteria, and is able to suspend or vary the licence to not cover a particular warehouse. These amendments ensure the suspension and cancellation provisions operate as intended in relation to an entity level licence as a whole or a particular warehouse if the licence covers more than one warehouse.

Suspension of an excise-equivalent warehouse licence

1.123 The amendments change 'notice' in subsection 86(1) of the Customs Act to a 'notice under subsection (1AA)', referring to a notice in relation to the suspension of an entire warehouse licence. This is to distinguish that notice from a notice in relation to the suspension of a particular warehouse for excise-equivalent warehouse licences (further explained below). These function as the Comptroller-General's notice to the licence holder that they intend to cancel the licence because of relevant factors in subsection 86(1) of the Customs Act, in relation to a warehouse licence in its entirety (including an excise-equivalent warehouse licence), and subsection 86(1AC) of the Customs Act, in relation to a particular warehouse covered by an excise-equivalent warehouse licence. The amendments do not alter the function and intended operation of section 86 of the Customs Act in place prior to the amendments. [Items 34 to 39 and 41, subsection 86(1), paragraphs 86(1)(a), (b), (e), (f), (g) and subsections 86(1A), 86(1AA) to (1AE) and 86(2) of the Customs Act]

1.124 A new ground to issue a notice of intention to cancel that allows for the suspension of a warehouse licence or an excise-equivalent warehouse licence is also included. To ensure that dormant licences do not remain in the system, where the licence holder has not, for a period of at least three years, warehoused EEGs authorised by the licence in relation to any warehouse covered by the licence, paragraph 86(1AC)(f) of the Customs Act empowers the Comptroller-General to issue a notice of intention to cancel and suspend the licence in relation to a particular warehouse covered by an excise-equivalent warehouse licence (a 'notice under subsection (1AD)'). Under paragraph 86(1)(a) of the Customs Act, the Comptroller-General can cancel an excise-equivalent warehouse licence in its entirety (a 'notice under subsection (1AA)') if each warehouse covered by the licence is dormant. This ground of suspension and cancellation does not apply to other types of warehouse licences. [Items 35 and 38, paragraph 86(1)(a) and paragraph 86(1AC)(f) of the Customs Act]

1.125 A newly inserted subsection 86(1AC) of the Customs Act enables the Comptroller-General to issue a notice of intention to cancel and allows the suspension of an excise-equivalent warehouse licence in relation to a particular warehouse (a 'notice under subsection (1AD)'), as distinguished from the suspension of the actual excise-equivalent warehouse licence itself (that is, a 'notice under subsection (1AA)'). This ground of suspension and cancellation allows the Comptroller-General to suspend and cancel an excise-equivalent warehouse licence in relation to a particular warehouse where:

•

the physical security of the warehouse is no longer adequate; or

•

the plant and equipment used in the warehouse are such that the protection of the revenue in relation to goods in the warehouse is inadequate; or

•

a director, officer or shareholder of the company who participates in the management or control of the warehouse is not a fit and proper person to participate; or

•

an employee who participates in the management or control of the warehouse is not a fit and proper person to participate; or

•

a condition of the licence has not been complied with; or

•

the licence holder has not, for a period of at least three years, conducted any activities authorised by the licence at the warehouse.

1.126 Similar to the Excise Act amendments, paragraphs 86(1)(a), (b), (e) and (f) of the Customs Act are repealed and moved to subsection 86(1AC) of the Customs Act. These grounds are the ones that relate to the physical security of a warehouse, the plant and equipment used in a warehouse and the fit and proper person test, listed above. However, the Comptroller-General can issue a notice of intention to cancel and to suspend the excise-equivalent warehouse licence in its entirety when the Comptroller-General has reasonable grounds to believe that any of the grounds in subsection 86(1AC) of the Customs Act exist in relation to each warehouse covered by the licence. The grounds for suspension do not have to be the same for each warehouse.

[Items 35, 36 and 38, paragraphs 86(1)(a), (b), (e) and (f) and subsection 86(1AC) of the Customs Act]

1.127 These amendments make it clear that the consideration of whether a person is a fit and proper person applies to each warehouse covered by the licence (whether the licence covers one or more warehouses). [Item 39, subsection 86(1A) of the Customs Act]

1.128 Subsection 86(1AD) of the Customs Act has been inserted to replicate (the now repealed) subsection 86(3) of the Customs Act so that it applies to notices in relation to licences that cover more than one warehouse and allows the licence holder to show cause within seven days after the notice was served as to why a warehouse should continue to be covered by the licence. Additionally, it makes clear that the Comptroller-General will state that the licence is suspended in relation to the warehouse if the Comptroller-General has formed the view that suspension is necessary for the protection of the revenue or ensuring compliance with the Customs acts or other laws. If the notice includes the suspension of the licence in relation to the warehouse, the licence is be suspended in relation to the warehouse on and from the service of the notice. These requirements are also replicated in subsection 86(1AA) for notices in relation to the licence in its entirety (a 'notice under subsection (1AA)'). [Items 38 and 42, subsections 86(1AA), (1AB), (1AD), (1AE) and (3) of the Customs Act]

1.129 The amendments make it clear that where an excise-equivalent warehouse licence is suspended in relation to a warehouse under the provisions dealing with 'warehouse licence notices':

•

the Comptroller-General may, at any time, revoke the suspension and, if the licence in respect of the warehouse has not been cancelled within 28 days after the day the licence was suspended, revoke the suspension (subsection 86(5) of the Customs Act);

•

a person must not use the warehouse with the intention of warehousing goods (subsection 86(6) of the Customs Act); and

•

the Comptroller-General may direct or provide permission in how goods are placed, removed, processed in the warehouse or the Comptroller-General may take control of the warehouse or require a person to pay to the Commonwealth in respect of the services of officers required as a result of the suspension (subsection 86(7) of the Customs Act).

[Items 43 to 46, paragraph 86(5)(b), subsections 86(5), (6), and (7) of the Customs Act]

1.130 The provisions mentioned in paragraphs 1.128 and 1.129 are existing provisions in the Customs Act that relate to suspension of licences which are amended to apply to circumstances where an excise-equivalent licence covers more than one warehouse and suspension of specific warehouses.

Cancellation of an excise-equivalent warehouse licence

1.131 Broadly, an excise-equivalent warehouse licence can be cancelled. However, because an excise-equivalent warehouse licence can cover more than one warehouse, these amendments ensure that a warehouse can also be removed by variation of the licence. This follows on from the situation where an excise-equivalent warehouse licence has been suspended, either the licence itself by a 'notice under subsection (1AA)' or the licence in relation to a particular warehouse by a 'notice under subsection (1AD)'.

1.132 The Comptroller-General may cancel an excise-equivalent warehouse licence if:

•

satisfied in relation to the licence if any of the matters mentioned in paragraphs 86(1)(a) to (h) exists for each warehouse covered by the licence (paragraph 87(1)(a) of the Customs Act); or

•

satisfied that the cancellation is necessary for the protection of the revenue or for the purpose of ensuring compliance with the Customs Act or any other law prescribed by the regulations (paragraph 87(1)(b)) of the Customs Act.

[Item 47, subsection 87(1) of the Customs Act]

1.133 The obligation on the Comptroller-General prior to the amendments to cancel a licence on written request from the holder of the licence that the licence be cancelled on and after a specified day is amended to add an obligation to cancel the licence where the licence holder has applied to have the licence varied under new paragraph 81(1)(a) (discussed above) but the effect of making that variation would mean no place is covered by the licence. [Item 48, subsection 87(1A) of the Customs Act]

1.134 The amendments ensure that the cancellation notice of an excise-equivalent warehouse licence covering multiple warehouses is communicated widely to allow the owners of the goods to deal with them as directed. These are existing obligations in relation to cancellation of warehouse licences that will now apply to circumstances where a licence covers more than one warehouse. The Comptroller-General must publish the notice in a newspaper or newspapers circulating in each locality in which a place that was a warehouse covered by the licence is situated. This is to inform the owners of goods in the place that was a former warehouse that:

•

they must pay to the Collector duty payable in respect of their goods in the warehouse; or

•

they must remove their goods in the warehouse to another place in accordance with a permission obtained from the Collector; and

•

if they do not comply with the requirements of the notice, their goods will be sold. [Items 51 to 54, subsection 87(4), paragraph 87(4)(c) and (e) and subparagraphs 87(4)(d)(i) and (ii) of the Customs Act]

1.135 Where the Comptroller-General is satisfied that all the goods in a former warehouse are the property of the former licence holder, then in respect of that former licence, the Comptroller-General is not required to publish the notice under subsection 87(4) of the Customs Act. However, given that an excise-equivalent warehouse licence may cover more than one warehouse, the Comptroller-General has to assess each warehouse in respect of a former licence and determine whether goods in each of the warehouses are the property of the former licence holder. For completeness, this means that there may be situations where the Comptroller-General must publish a notice in accordance with subsection 87(4) of the Customs Act in respect of some warehouses but not other warehouses of a former licence holder. [Item 55, subsections 87(5) of the Customs Act]

Variation of excise-equivalent warehouse licence to remove a warehouse

1.136 The Comptroller-General has the power to cancel an excise-equivalent warehouse licence. However, to deal with particular warehouses that do not comply with the requirement of the Customs Act or where the licence holder no longer wishes the licence to cover that warehouse, the Comptroller-General has the power to vary an excise-equivalent warehouse licence where it covers more than one warehouse. [Items 16 and 56, subsection 81B(1) and section 87B of the Customs Act]

1.137 The Comptroller-General can vary an excise-equivalent warehouse licence that covers multiple warehouses so that the licence no longer covers a particular warehouse, that is, remove a warehouse from coverage of a licence, if the Comptroller is satisfied as to any of the matters in paragraphs 86(1AC)(a) to (f) of the Customs Act related to the 'notice under subsection (1AD)'. [Item 56, subsection 87B(1) of the Customs Act]

1.138 However, where a variation would result in the excise-equivalent warehouse licence not covering any warehouses, the Comptroller-General cannot vary the licence. Instead, it is intended that the licence would be cancelled. [Item 56, subsection 87B(2) of the Customs Act]

1.139 If the Comptroller-General varies the licence under subsection 87B(1) of the Customs Act, written notice must be served either personally or by post on the licence holder or served personally on a person who, at the time of the service, apparently participates in the management or control of one or more warehouses covered by the licence. To facilitate service where there are multiple warehouses, this provision allows service to a person who apparently participates in management and control of a warehouse provided the variation relates to that particular warehouse. [Item 56, subsection 87B(3) of the Customs Act]

1.140 Similar to a cancellation of a licence, these amendments:

•

require the Comptroller-General to publish a notice in the relevant forums informing the owners of goods in each place that is no longer a warehouse as a result of the variation.

•

permit the Comptroller-General to disregard the obligation to publish provided that the Comptroller-General is satisfied that all the goods in a formerly licensed warehouse are the property of the licence holder. In that situation, the Comptroller-General must ensure that the notice is served personally, by post or on a person who at the time of the variation, apparently participated in the management or control of the former warehouse. The Comptroller-General must assess the goods in each warehouse that may no longer be covered as a result of the variation to ensure that it is permissible to dispense with the obligation to otherwise publish the notice. [Item 56, subsections 87B(5) and (6) of the Customs Act]

1.141 Where the owner of goods to which the variation notice applies fails to comply with the requirements of the notice within the time specified in the notice, the goods may be sold by the Collector. This makes clear what happens to goods when a warehouse is no longer covered by variation and the directions of the Comptroller-General are not complied with. [Item 56, subsection 87B(7) of the Customs Act]

1.142 If a warehouse licence is varied in this way to remove a place from the places covered by the licence – a 'former warehouse' – a Collector is given various powers to direct things be done to goods left in the place and do certain things to the goods directly. These are to:

•

permit goods to be placed in the former warehouse;

•

permit the removal of goods from the former warehouse, including the removal of goods to a warehouse;

•

by notice in writing to the licence holder, require the licence holder to remove all or specified goods in the former warehouse to a warehouse approved by the Collector, and if the licence holder fails to do this, remove the goods from the former warehouse to a warehouse (if the Collector decides) by written notice in writing require the licence holder to pay the Commonwealth for costs of such removal;

•

take such control of the former warehouse or all or any goods in the former warehouse as may be necessary for the protection of the revenue or for 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; and

•

by notice in writing to the licence holder, require the licence holder to pay incidental fees to the Commonwealth in respect of the services of officers required as the result of the licence being varied.

[Items 24 and 56, subsections 81B(8) and 87B(4) of the Customs Act]

1.143 The above reflects powers already available to a Collector under subsection 83(3) of the Customs Act when warehouse licences have not been renewed, but which under the Bill would not otherwise be available given other amendments removing the requirement to renew excise-equivalent warehouse licences.

Movement permissions

Permission to remove excisable goods from and to licensed places

1.144 On granting an entity level licence, or on the variation of a licence to cover more than one premises, the Collector must give permission in writing to the licence holder to remove goods that are subject to the CEO's control from premises covered by the licence to other premises covered by that licence or another licence that authorises goods of that kind to be kept at the other premises. This permission is ongoing until revoked in writing. [Items 179 to 185, subsections 61A(1), (2AAA) to (2AAD), (2AA), (2C), (3) and (4) of the Excise Act]

1.145 It is the policy intention that goods should be able to be removed from and to any licensed premises that is authorised to store goods of that kind. There is no requirement that the premises be covered by a licence held by the same licence holder, however, goods cannot be removed from premises to another premises where the licence for those latter premises authorises the storage of goods of a different kind. For example, goods should only be able to be removed from and sent to premises covered by a licence that allows the storage of those goods, if the goods are of one or more of the kinds specified in the licence for the premises to which they are being removed.

1.146 The default granting of movement permissions that allow movement of goods underbond between licensed entities and premises, including to licensed premises of other entities, is not intended to impact the capacity to revoke or to impose conditions on such movement permissions (for example where a risk to revenue is identified). The default movement permission is also subject to any conditions to which the licence that covers the premises from which the goods are removed is subject.

1.147 Where a movement permission granted under subsection 61A(2AAA) of the Excise Act is revoked in writing, the Collector may grant a movement permission to an entity under subsection 61A(1) of the Excise Act.

1.148 The power in subsection 61A(2AAA) of the Excise Act is exercisable by the Collector when granting an entity level licence or a variation for a licence to cover more than one premises. Additionally, the Collector has the discretion provide this movement permission to an existing licence holder that has an entity level licence or to a licence holder with a single premise, on application. This is intended to allow for greater flexibility in providing movement permission between premises covered by a licence.

1.149 To avoid doubt, the movement permissions under subsection 61A(3) of the Excise Act (goods for exportation) are not intended to be covered by subsection 61A(2AAA) of the Excise Act. The policy is directed at underbond movement of goods between licensed premises, and not related to the exportation of goods. Any movement permissions to a place of export are covered by the existing provisions in subsections 61A(2A) and 61A(2B) of the Excise Act.

Permission to remove EEGs from and to specified places

1.150 The policy intention is for movement of excise-equivalent goods between licensed warehouses to be permitted and this includes any warehouse that is licensed to warehouse EEGs (other than duty-free stores, providores and catering bonds, i.e. warehouses authorised to store goods other than fuel to be supplied to aircraft or ships as stores) even if it warehouses other imported goods that are not EEGs, that is, mixed goods.

1.151 On the granting of an excise-equivalent warehouse licence or on the variation of an excise-equivalent warehouse licence to cover more than one premises, the Comptroller-General must give permission in writing to the licence holder to remove goods that are subject to customs control from any warehouse covered by the licence to another warehouse covered by that or another excise-equivalent warehouse licence that authorises goods of that kind to be kept at the other premises. The Comptroller-General also has the discretion to provide this movement permission to an existing entity level licence holder or to a licence holder with a single warehouse, on application. This permission is ongoing until revoked in writing. [Items 173 to 175, section 71E (heading), subsections 71E(1), (3AC), (3AD), (3AE) and (3AF) of the Customs Act]

1.152 The movement permission is not limited to EEGs being moved between warehouses specified in the same licence. However, EEGs cannot be removed from and sent to warehouses where the licence for those places is not for the warehousing of EEGs. Similarly, goods that are not EEGs are excluded from the movement permission.

1.153 The ability prior to these amendments to impose conditions, including conditions dealing with movement of EEGs is be retained. This enables any integrity risks associated with a licence holder or a particular place to be addressed.

Transitional arrangements

1.154 The above amendments in relation to movement permissions apply in relation to a licence granted before, on or after commencement of the Bill, which is the later of 1 July 2024 and the day after Royal Assent. [Item 186]

1.155 In relation to the Excise Act, this means that after commencement the Collector:

•

may give the relevant movement permission to any storage licence or any manufacturer licence that does not authorise the manufacture of any tobacco goods, regardless of whether that licence was granted before or after commencement; and

•

must give the relevant movement permission to a licence that is varied to cover more than one premises or as granted covers more than one premise, unless the Collector specifically revokes this permission under the new subsection 61A(2C) of the Excise Act.

1.156 Similarly, in relation to the Customs Act, this means that after commencement the Comptroller-General of Customs:

•

may give the relevant movement permission to the holder of any excise-equivalent warehouse licence (as defined by the Bill)), regardless of whether that licence was granted before or after commencement; and

•

must give the relevant movement permission to the holder of an excise-equivalent warehouse licence that is varied to cover more than one warehouse or as granted covers more than one warehouse premise, unless the Comptroller-General specifically imposes conditions to the contrary.

Establishing the Excise and Excise-Equivalent Warehouse Licences Register

1.157 The Bill provides for the establishment of a public register to be known as the Excise and Excise-Equivalent Warehouse Licences Register that is published on a website maintained by the ATO. The public register contains information relating to entities who hold a storage licence, a manufacturer licence, or an excise-equivalent warehouse licence that is currently in force. The intention of publicising this information is to provide businesses with a simple way of viewing current licensing information thereby reducing administrative burden by avoiding unnecessary interactions with the ATO and the ABF. [Item 188, subsections 40(1) and (4) of the Excise Act]

1.158 In respect of each storage licence, manufacturer licence, and excise-equivalent warehouse licence, the CEO must publish the following information on the public register:

•

name of the licence holder;

•

the licence holder's ABN (if any);

•

the name of the Act under which the licence was granted; and

•

any additional information that is prescribed by regulations.

[Item 188, subsection 40(2) of the Excise Act]

1.159 In limited circumstances, a licence holder may be an individual. Names of licence holders who are individuals are considered personal information under the Privacy Act 1988. The disclosure of this information is reasonable, necessary and proportionate to achieving the policy objective of assisting businesses by reducing unnecessary engagement with the ATO and ABF and removing delays. Entities operating in the excise and customs systems often need to confirm the licence status of trading partners, for example, to store, sell and move goods that are still subject to the CEO's or customs control. These entities ordinarily deal with each other and require access to this information to ensure they comply with their obligations under the Excise and Customs Acts. Prior to the amendments, this could only be done by contacting the Collector or by contacting trading partners directly to confirm information, which potentially delayed business movements and diverted regulator resources.

1.160 The register will include any additional information prescribed by regulation for publication on the register. This allows the publication requirements to be expanded, if necessary, in response to changing requirements of businesses and the information they require access to, for example, the name and location of premises covered by the licence and the kinds of goods stored. In prescribing any additional matters, the privacy implication of any additional information will be considered to ensure the publication of additional information would be reasonably, necessary and proportionate having regard to the policy objectives of the legislation. Public consultation would also be undertaken in the making of such regulations which would enable stakeholder views to be provided on the privacy impacts of any changes affecting individuals. Finally, any regulations that are made would be disallowable by Parliament to ensure that appropriate Parliamentary scrutiny exists of any exercise of this regulation making power.

1.161 The register will contain information about licences that are currently in force. The requirement to include the specified information about a licence on the register applies to a licence granted on or after the commencement of the provisions, and to a licence granted before that time if it is still in force at the commencement of the Bill. [Item 190]

1.162 However, the CEO need not comply with the obligation to ensure that the register is made publicly available until 30 days after the Bill commences. This will allow a reasonable time for the register to be established and made available on a website maintained by the ATO. [Item 191]

1.163 The CEO may update the register by adjusting information on the register if satisfied that the information is incorrect and has access to the correct information. [Item 188, subsections 40(3) of the Excise Act]

1.164 An officer of Customs must disclose information relating to excise-equivalent warehouse licences to the ATO, where the officer of Customs reasonably believes that the disclosure is necessary for the purposes of the CEO performing a function or exercising a power in relation to the public register. [Item 187, section 102AB of the Customs Act]

1.165 To avoid doubt, a note is inserted to subsection 355-50(1) in Schedule 1 to the Taxation Administration Act 1953 to make clear that a disclosure for the purposes of the register is a disclosure in performing duties such that taxation officers are not committing an offence of making records or disclosing information that is protected information. [Item 189, note 2 to subsection 355-50(1) in Schedule 1 of the Taxation Administration Act 1953]

1.166 The CEO may issue a document containing the details of a matter taken from the public register. Such a document is admissible in any proceedings as prima facie evidence of the matter. This does not limit the manner in which evidence is adduced, or the admissibility of evidence under the Evidence Act 1995. [Item 188, subsections 40(6), (7) and (8) of the Excise Act]

1.167 The register is not a legislative instrument for the purposes of the Legislation Act 2003. This is not intended to prescribe a substantive exemption from the requirements of the Legislation Act 2003, however, it is intended to be declaratory of the law. The register is administrative in character and is not intended to determine or alter the law having regard to the definition in subsection 8(4) of the Legislation Act 2003. [Item 188, subsection 40(5) of the Excise Act]

Excise Tariff Act—removing licence requirement for onshore producers of crude oil and condensate below threshold

1.168 The Bill also includes amendments to the Excise Tariff Act to align the treatment of onshore producers of stabilised crude petroleum oil and condensate with offshore producers of stabilised crude petroleum oil and condensate.

1.169 Onshore producers of stabilised crude petroleum oil and condensate will not have to hold a licence under the Excise Act (for the purpose of producing stabilised crude petroleum oil and condensate) if the particular field has cumulatively produced less than the threshold of 4767.3 megalitres of stabilised crude petroleum oil and condensate since the establishment of the field.

1.170 These amendments exempt producers of stabilised crude petroleum oil and condensate from excise duty liability when production in the particular field is below the cumulative threshold of 4767.3 megalitres of stabilised crude petroleum oil and condensate since the establishment of the field. This means that the requirement to have a licence under the Excise Act would not be applicable.

1.171 Any licences in force for onshore production of stabilised crude petroleum oil and condensate, where the onshore field has produced less than the cumulative threshold, can be cancelled at the written request of the licence holder. [Items 192 to 198, subsections 3(1) and (1A) of the Excise Tariff Act 1921 and table subitems 20.3 and 21.2 in the Schedule to that Act]

Consequential and minor amendments

1.172 This Bill makes a number of consequential and minor amendments to give effect to the policy and to improve the readability of the Acts.

1.173 Some provisions of the Acts have been amended to remove gendered language. These amendments do not have substantive effect. [Items 8, 19, 22, 34, 50, 61 and 153 to 157, subsections 81(1), 81B(4) and (5), 86(1), 87(4) and 101(1) of the Customs Act and sections 52 and 53 of the Excise Act]

1.174 Some provisions of the Acts have been amended to update language in accordance with current drafting practice, for example to replace 'shall' with 'must' and 'deemed' with 'taken'. These amendments do not have substantive effect. [Items 8, 13, 14, 39, 40, 41, 45, 57, 58, 71, 152 and 153, subsections 81(1), (2) and (3) and 86(1A), (1B), (2) and (6), section 88 and subsections 90(1) and 273GAA(7) of the Customs Act, and subsection 51(1) and section 52 of the Excise Act)

1.175 The note to subsection 39M(1) of the Excise Act has been omitted as it is inconsistent with modern drafting practices to include notes after penalties. [Item 138, note to subsection 39M(1) of the Excise Act]

1.176 Because the amendments introduce an ongoing licence, a number of references in the Excise Act to 'expire' have been substituted with 'ceases to be in force' to ensure the provision works as intended. Throughout the Excise Act where 'cancelled' is used, this has been retained where appropriate because while a licence under the Excise Act, ongoing or otherwise, can be cancelled, ongoing licences that do not need to be renewed do not necessarily 'expire'. [Items 134 and 136, 140, 144, 145, 158, 159 and 160, section 39M (heading), subsections 39M(1) and (3), section 39N (heading), subsection 39N(1), section 77E, section 77F (heading) and subsection 77F(1) of the Excise Act]

1.177 Consequential amendments have been made to the Customs Tariff Act 1995, the Excise Tariff Act 1921 and the Taxation Administration Act 1953 to change references to premises, and where relevant, factories, 'specified in' a licence to premises, and where relevant, factories, 'covered by' a licence or 'for which there is in force' (as appropriate) to reflect the changes made to the Excise Act and the Customs Act and ensure that those provisions will continue to operate as intended. [Items 166 to 169, description of goods in column 2 of subheadings 2709.00.10 and 2710.19.14 in Schedule 3 of the Customs Tariff Act 1995, item 10 in the Schedule of the Excise Tariff Act 1921 and various provisions of the Taxation Administration Act 1953]

1.178 Consequential amendments have also been made to the Customs Licensing Charges Act 1997 to repeal section 6E. This section sets out the process for determining the amount of charge payable for the grant or renewal of a warehouse licence in respect of a place that is, in effect, specified in a manufacturer licence under the Excise Act and used primarily for the manufacture of goods which are fuels specified in an instrument determined by the Comptroller-General under that section. These warehouse licences will be excise-equivalent warehouse licences as a consequence of the Bill, with no charge payable for grant or renewal. Subsection 6D(3) refers to section 6E and is also repealed. Subject to the transitional arrangements for warehouse licence charges discussed above, section 6E continues to apply in relation to the grant of a licence that came into force before 1 July 2024. [Items 164 and 165 and subitem 171(3), subsection 6D(3) and section 6E of the Customs Licensing Charges Act 1997]

Commencement, application, and transitional provisions

1.179 The Bill commences on the later of 1 July 2024 and the day after the Act receives Royal Assent

1.180 Specific application and transitional provisions with respect to the above amendments are discussed above.

1.181 Except where discussed above in relation to specific amendments, the amendments made by Part 1 of the Bill (which effects the licencing changes above to accommodate licences covering multiple premises or places) otherwise apply in relation to a licence under the Excise Act or a warehouse licence under the Customs Act that is:

•

granted on or after commencement on an application made by a person on or after that commencement; or

•

varied on or after commencement.

1.182 The balance of the amendments contained in the Bill take effect from the date of commencement.

Chapter 2: Statement of Compatibility with Human Rights

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

Excise and Customs Legislation Amendment (Streamlining Administration) Bill 2024

Overview

2.1 The 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.

2.2 The Bill makes amendments to the Excise Act 1901 and the Excise Act 1901 to:

•

remove renewal requirements and renewal fees for excise and excise-equivalent warehouse licences; and

•

confer a new discretion to issue entity level excise and excise-equivalent warehouse licences; and

•

establish a public register of excise and excise-equivalent warehouses licences and licensed premises; and

•

remove the requirement that onshore producers of crude oil and condensate hold excise licences, unless they exceed the relevant production threshold of 30 million barrels for the particular field.

Human rights implications

Right to privacy

2.3 These amendments engage the right to protection from arbitrary or unlawful interference with privacy in Article 17 of the International Covenant on Civil and Political Rights (ICCPR) because they provide for the Commissioner of Taxation to publish certain information about entities on a public register.

2.4 The right in Article 17 may be subject to permissible limitations, where these limitations are authorised by law and are not arbitrary. In order for an interference with the right to privacy to be permissible, the interference must be authorised by law, be for a reason consistent with the ICCPR and be reasonable in the particular circumstances. The UN Human Rights Committee has interpreted the requirement of 'reasonableness' to imply that any interference with privacy must be proportional to the end sought and be necessary in the circumstances of any given case.

2.5 The amendments require the Commissioner of Taxation (the CEO) to publicise certain information on entities, including individuals, who are licenced to carry out activities under certain licences granted under the Excise Act 1901 (Excise Act) or the Customs Act 1901 (Customs Act).

2.6 The Bill provides for the establishment of a public register (the Excise and Excise-Equivalent Warehouse Licences Register), published on a website maintained by the ATO. The information published will include the licence holder's name and ABN, and the Act under which the licence was granted. Some licence holders may be individuals, and the names of these licence holders are considered personal information under the Privacy Act 1988.

2.7 An officer of Customs will be required to disclose information relating to excise-equivalent warehouse licences to a taxation officer for the purpose of enabling the CEO to perform a function or exercise a power relating to the Register. This would include enabling the inclusion on the register of information about current excise-equivalent warehouse licences granted under the Customs Act. This information may include the name of a licence holder who is an individual.

2.8 The amendments provide for the register to include any additional information prescribed by regulation for publication on the register. It is appropriate to use delegated legislation to ensure the mandatory publication requirements can be expanded in response to changing requirements of businesses and the information they require access to in the future, for example, the name and location of premises covered by the licence and the kinds of goods stored. Public consultation would also be undertaken in the making of such regulations which would enable stakeholder views to be provided on the privacy impacts of any changes affecting individuals. Any regulations that are made would be disallowable by Parliament to ensure that appropriate Parliamentary scrutiny exists of any exercise of this regulation making power. It is intended that any collection, storage, use or disclosure of personal information that relates to additional information prescribed by regulations would be reasonable, necessary, and proportionate having regard to the policy objectives of the legislation and privacy obligations under the Privacy Act and Australian Privacy Principles.

2.9 Businesses in the excise and customs systems often need to confirm the licence status of trading partners, for example, to store, sell and move goods that are still subject to the CEO's or customs control. These entities would ordinarily deal with each other and would require access to this information to ensure they comply with their obligations under the Excise and Customs Acts. Currently, this can only be done by contacting the Collector or by contacting trading partners directly to confirm information, which potentially delays business movements and diverts regulator resources.

2.10 The Bill's limitations on the right to privacy are necessary, reasonable and proportionate to the legitimate aim of providing deregulatory relief for businesses by making information about licensed entities readily available and reducing touch points with the ATO and the ABF.

Right to work

2.11 The amendments also engage the right to work under Article 6 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) because they may prevent certain persons from participating in relevant commercial operations. This right must be made available in a non-discriminatory manner pursuant to Article 2(2) of the ICESCR.

2.12 The Bill extends the existing power of the Collector or Comptroller-General to suspend or cancel a licence in relation to both a single premises or warehouse, or an entity level licence. It also enables the Collector or Comptroller-General to refuse to grant an entity level licence in relation to a particular premises or warehouse if it is the Collector's or Comptroller General's opinion that a person participating in the management or control of that place is not fit and proper to participate.

2.13 These provisions pursue the legitimate objective of ensuring that licence holders, and persons participating in the management or control of places under the licence, are suitable. Activities under these licences give rise to risks to the physical security of relevant goods and the revenue, and therefore the broader integrity of Australia's excise and customs systems.

2.14 The Bill does not make substantive changes to the existing provisions governing how it is determined whether a person is fit and proper. The existing considerations are unchanged, which go to the person's integrity, capacity and competence to manage a relevant premises or warehouse. These include the person's history of compliance with Commonwealth, State or Territory legislation, whether they have previously held a licence that has been cancelled, and whether they are an undischarged bankrupt. 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.

2.15 The granting of a manufacturer or storage licence confers significant responsibility on the licence holder in relation to excisable goods, and the granting of an excise-equivalent warehouse licence confers significant responsibility on the licence holder in relation to the relevant EEGs. 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.

2.16 The Bill's limitations on the right to work are therefore necessary, reasonable and proportionate to the legitimate aim of ensuring that persons responsible for, or involved in, the manufacture or storage of excisable goods and the storage of EEGs are suitable to do so, and therefore safeguard the integrity of Australia's customs and excise systems.

Conclusion

2.17 The Bill is compatible with human rights because, to the extent that the amendments limit human rights, those limitations are reasonable, necessary and proportionate.