Senate

Replacement Explanatory Memorandum

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

Schedule 5 - Re-mail items

Customs Act 1901

Couriers and freight forwarders have began to offer new services, mainly in competition with traditional postal services. These involve couriers and freight forwarders entering into contracts with overseas organisations (including postal organisations) to distribute those organisations' mail in Australia. This typically involves periodic news letters, bank statements, other bulk business mail and subscription publications. The courier or freight forwarder will import the mail and then place it into the domestic mail system in Australia or deliver the mail articles themselves (this process/service is known as re-mail).

Currently under section 64AB of the Customs Act a detailed report of those items must be included in a cargo report when they are imported into Australia. The information contained in cargo reports is used to assess whether the goods may contain prohibited imports and whether they are being imported in contravention of other Commonwealth laws. Due to the nature of re-mail items (being documents and magazines) Customs considers that it is less likely that they will be imported in contravention of Commonwealth laws. Further it is difficult for the people who organise for the importation of those goods to ascertain all of the details of the goods which would enable them to make a detailed cargo report in respect of them. The proposed amendments will allow registered re-mail reporters to provide Customs with less details in respect of re-mail items (that is they will not be required to provide information at a level of specificity below the level of a submaster air waybill or an ocean bill of lading, as the case requires).

Part 1 - Amendments commencing first

Customs Act 1901

Item 1 - Section 63A

This item inserts a definition of 're-mail item' into section 63A for the purposes of Division 3 of Part IV of the Customs Act (that division relates in part to the reporting of cargo to Customs). The definition limits the size and nature of a re-mail item. A re-mail item means an item, in respect of which all of the matters set out in paragraphs (a) to (h) apply.

Paragraph (a) relates to the packaging of the item. The item must be packaged in an addressed envelope whose length plus width does not exceed 80cm. This envelope can be made of paper or any other material (for example, plastic). This includes foolscap envelopes.

Paragraph (b) provides that the item must consist only of paper (for example bank statements, magazines).

Paragraph (c) provides that the item plus its packaging must weigh no more than one kilogram. Any items that weigh more than this must be reported in the same way as other cargo.

Paragraph (d) provides that the item must either have no commercial value (for example, bank statements) or if it is a subscription publication:

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it must be sent from overseas to the addressee as a subscriber to the publication;

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the subscription must be made by a direct dealing between the consignor and either the addressee or another person arranging a gift subscription for the addressee;

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it must have a value that does not exceed $250 (or such other amount as is prescribed for the purposes of subparagraph 68(1)(f)(iii)); and

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the total liability for import duty and GST for the item must not exceed $50, or such other amount, not exceeding $75, as is from time to time prescribed for the purposes of this definition.

Paragraph (e) provides that the item must not be mail. A definition of the term 'mail' will be inserted into the Customs Act by the Border Security Legislation Amendment Bill 2002.

Paragraph (f) provides that the item must not be or contain, goods covered by paragraphs (a) or (b) of the definition of prohibited goods in subsection 4(1) of the Customs Act.

Paragraph (a) of this definition covers goods whose importation or exportation is prohibited by the Customs Act or any other law of the Commonwealth. For example regulation 4A of the Customs (Prohibited Imports) Regulations 1956 prohibits the importation of certain objectionable publications. These types of publications are not re-mail items. Paragraph (b) of the definition covers goods whose importation or exportation is subject to restrictions or conditions under the Customs Act or any other law of the Commonwealth.

Paragraph (g) provides that there must be no individual document of carriage for the item. If there is an individual document of carriage for the item, the item must be reported in the same way as all other cargo.

Paragraph (h) provides that the item must have been consigned on the ship or aircraft by the consignor, with other re-mail items, to different consignees. This does not prohibit a number of consignors having re-mail items on board the ship or aircraft. For example, there may be 100 magazines from one publisher being sent to 100 subscribers in Australia on board as well as 200 bank statements from one bank being sent to 200 customers in Australia.

Item 2 - Section 63A

This item inserts into section 63A a definition of re-mail reporter, being a person or partnership that is registered under new Subdivision E as a re-mail reporter.

Item 3 - After subsection 64AB(3D)

This item inserts new subsections 64AB(3E) and (3F) into the Customs Act. New subsection 64AB(3E) ensures that re-mail reporters will not have to provide the full details of the re-mail items that they have organised to be imported into Australia. The approved form or approved statement in relation to re-mail items cannot require the reporter to include information relating to re-mail items at a level of specificity below the level of a submaster air waybill or an ocean bill of lading, as the case requires.

New subsection 64AB(3F) makes it clear that re-mail reporters cannot use that approved form or statement for an item if the reporter has information about the item that would allow them to provide information below the level of specificity of the submaster air waybill or ocean bill of lading.

Item 4 - At the end of Division 3 of Part IV

This item inserts new Subdivision E into Division 3 of Part IV of the Customs Act. This subdivision relates to the registration of re-mail reporters.

New section 67F provides that a person or partnership may apply to Customs to be registered as a re-mail reporter. That application must be in writing, be in an approved form, contain the information that the form requires, be accompanied by any other documents that the form requires, be signed in the manner indicated by the form and be lodged with an authorised officer.

New subsection 67G(1) sets out when the CEO must register a person (or partnership) as a re-mail reporter. A person (or partnership) must be registered as a re-mail reporter if the person (or partnership) applies to become a re-mail reporter, and the CEO is satisfied that:

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the applicant would be unlikely to have information, or access to information, about re-mail items that would allow the applicant to make a cargo report below the level of submaster air waybill or ocean bill of lading (if the applicant has this information they should provide a detailed cargo report in respect of the items); and

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the applicant meets the fit and proper person test under section 67H.

New subsection 67G(2) provides that the CEO may request the applicant to provide additional information. This request should be in writing, set out the additional information required and specify how long the applicant has to supply the information.

New subsection 67G(3) provides that the CEO must decide whether to register the applicant within 60 days of the lodgement of the application (if no additional information is requested) or if additional information is requested within 60 days of receiving that information.

Under new subsection 67G(4) the CEO must notify the applicant in writing of his or her decision and the notice must specify the day from which the re-mail reporter is registered.

New subsection 67G(5) provides that the registration may be subject to any conditions as notified.

New section 67H sets out the fit and proper person test to be used by the CEO in determining whether to register an applicant as a re-mail reporter. Under subsection 67H(1) an applicant meets the fit and proper person test if the CEO is satisfied:

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if the applicant is a natural person - the applicant is a fit and proper person to be registered as a re-mail reporter;

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if the applicant is a partnership - all of the partners are fit and proper persons;

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if the applicant is a company - all of the company's directors, officers and shareholders who would participate in managing the affairs of the company are fit and proper persons and the company is a fit and proper company; and

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each employee who would participate in making cargo reports in respect of re-mail items is a fit and proper person.

New subsection 67H(2) sets out the matters to which the CEO must have regard in deciding whether a person is a fit and proper person for the purposes of paragraphs 67H(1)(a), (b), (c) or (d). These matters are:

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whether the person has been convicted of an offence against the Customs Act in the previous 10 years - new paragraph 67H(2)(a);

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whether the person has been convicted of any offence against another law of the Commonwealth or a State or Territory in the previous 10 years, being an offence that is punishable by imprisonment for 1 year or longer - new paragraph 67H(2)(b);

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whether the person is an insolvent under administration - new paragraph 67H(2)(c);

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whether the person was, in the 2 years immediately before that decision, a director of, or concerned in the management of, a company that:

(i)

had been, or is being, wound up - new subparagraph 67H(2)(d)(i); or

(ii)

had had its registration as a re-mail reporter cancelled under paragraph 67K(1)(a), (b) or (d) - new subparagraph 67H(2)(d)(ii);

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whether any misleading information or document has been provided in relation to the person by the applicant under subsection 67F(2) or 67G(2) - new paragraph 67H(2)(e);

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if any information or document furnished by or in relation to the person was false - whether the applicant knew that the information or document was false - new paragraph 67H(2)(f).

New subsection 67H(3) sets out the matters to which the CEO must have regard in deciding whether a company is a fit and proper company to be registered as a re-mail reporter. These matters are:

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whether the company has been convicted of an offence against the Customs Act, a Commonwealth, State or Territory law (punishable by a fine of $5,000 or more) in the previous 10 years, at a time when any current director, officer or shareholder of a kind referred to in paragraph (1)(c), was such a director, officer or shareholder of the company - paragraph 67H(3)(a);

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whether a receiver of the property or part of the property of the company has been appointed - paragraph 67H(3)(b);

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whether the company is under administration within the meaning of the Corporations Act 2001 - paragraph 67H(3)(c);

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whether the company has executed under Part 5.3A of the Corporations Act 2001 a deed of company arrangement that has not yet terminated - paragraph 67H(3)(d);

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whether the company has been placed under official management -paragraph 67H(3)(e); and

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whether the company is being wound up - paragraph 67H(3)(f).

New subsection 67H(4) makes it clear that new section 67H does not affect the operation of Part V11C of the Crimes Act 1914 particularly the provisions relieving persons from the requirements to disclose spent convictions and requiring persons aware of such convictions to disregard them.

New section 67I provides that a re-mail reporter must notify the CEO if, after registration:

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an event or circumstance occurs which the CEO would have to have regard to under section 67H (for example, if the re-mail reporter is a company and it is placed under official management); or

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a person becomes or ceases to be:

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a member of the partnership (where the reporter is a partnership); and

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a director, officer or shareholder of the company who would participate in managing the affairs of the company (where the reporter is a company); and

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an employee of the reporter who would participate in making cargo reports in respect of re-mail items under section 64AB.

This information is required to ensure that the reporter continues to meet the requirements for registration under new section 67G.

New subsection 67J(1) provides that the CEO may impose new conditions on a re-mail reporter's registration by notifying the reporter in writing of the condition.

New subsection 67J(2) provides that the CEO may remove or vary any conditions.

The decision to impose and vary conditions is reviewable by the Administrative Appeals Tribunal (see item 5).

New subsection 67K(1) provides that the CEO may cancel a re-mail reporter's registration if:

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the reporter reports an item that is not a re-mail item using the form or statement approved for the purposes of re-mail items - new paragraph 67K(1)(a);

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the reporter uses the approved form or statement in breach of new subsection 64AB(3F) - new paragraph 67K(1)(b); or

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the CEO is no longer satisfied as mentioned in paragraph 67G(1)(b) or (c) (that is, the CEO is no longer satisfied that the person would be unlikely to have, or have access, to detailed information about the re-mail item and the CEO is no longer satisfied that the applicant meets the fit and proper person test under section 67H - new paragraph 67K(1)(c); or

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the reporter has breached a condition of the reporter's registration or section 67I, that is they fail to notify the CEO of certain events - new paragraph 67K(1)(d).

Under new subsection 67K(2) the CEO must notify the reporter in writing that the person's registration has been cancelled. This decision is reviewable by the Administrative Appeals Tribunal (see item 5).

Item 5 - After paragraph 273GA(1)(aaae)

This item inserts into subsection 273GA(1) of the Customs Act four new paragraphs to ensure that the following decisions relating to re-mail reporters are reviewable by the Administrative Appeals Tribunal:

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a decision by the CEO to refuse to register a person or partnership as a re-mail reporter - new paragraph 273GA(1)(aaaf);

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a decision by the CEO to impose a condition on a re-mail reporter's registration (whether at the time of registration or at some later time) - new paragraph 273GA(1)(aaag);

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a decision by the CEO to vary a condition of a re-mail reporter's registration - new paragraph 273GA(1)(aaah);

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a decision by the CEO to cancel a re-mail reporter's registration - new paragraph 273GA(1)(aaai).

Part 2 - Amendments commencing second

Item 6 - Section 63A (paragraph d(iv) of the definition of re-mail item)

Currently, there is no requirement to enter goods for home consumption where the total customs duty and tax liability of the goods does not exceed $50 and the value of the goods does not exceed $250. Under the Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001 (the Modernisation Act), the requirement for an import declaration will be based solely on the Customs value of the goods (without reference to the duty or tax liability). This amendment is required to ensure that the definition of re-mail item reflects the revised requirements that will apply from the same time as the Modernisation Act commences by deleting the reference to the total liability for duty and tax not exceeding $50.

Customs Act 1901

The Modernisation Act will repeal and replace section 64AB of the Customs Act (which is being amended by this Schedule).

Item 7 - After subsection 64AB(7)

This item inserts new subsections 64AB(7A) and (7B) into the Customs Act. These are the same as subsections 64AB(3E) and (3F) as contained in Part 1. This item will ensure that the amendments being made in Part 1 are not repealed when the relevant item of the Modernisation Act commences.

Items 8, 9 and 10

These items contain consequential amendments to sections 67F and 67K as a result of new subsections 64AB(3E) and (3F) being renumbered as (7A) and (7B) when the relevant item of the Modernisation Act commences.