House of Representatives

Explanatory Memorandum

Circulated By Authority of the Minister For Home Affairs, the Honourable Bob Debus MP

SCHEDULE 1 - IMPORT CONTROLS

Customs Act 1901

Items 1 to 5 - Consequential amendments

11. Items 1 to 5 amend subsections 64AB(12) and 119B(2A), and paragraphs 71AAAR(2)(a), 71H(2)(a) and 203(3)(e) of the Customs Act to insert the words "Subdivision A of" before the words "Division 5". This will reflect the new heading given to the provisions under current Division 5 of Part XIII (see item 19 of this Schedule).

Items 6 to 13 - Consequential amendments to seizure provisions

12. Where Customs seizes prohibited imports without warrant, the Customs Act contains provisions that oblige Customs to, among other things, issue a seizure notice to the owner of the goods, provide the owner with an opportunity to make a claim for return of the goods and, except in specified circumstances, return the goods to the owner who has made such a claim.

13. When Customs issues the seizure notice, Customs may also issue an infringement notice at the same time on the owner of the goods in respect of importing prohibited imports, under new Subdivision B of Division 5 of Part XIII (as inserted by item 36 of this Schedule). In that event, the provisions of the new infringement notice scheme operate concurrently with the provisions relating to seizure.

14. Under new section 243ZK in new Subdivision B, the goods are taken to be condemned as forfeited to the Crown if the following conditions (the section 243ZK conditions) are satisfied:

a)

an infringement notice for an offence in relation to the importation of the goods has been served with the seizure notice; and

b)

the penalty specified in the infringement notice is paid within the period that, or by the time by which, the penalty is required to be paid; and

c)

the infringement notice is not withdrawn.

This result requires the operation of certain seizure provisions to be ceased or modified.

15. Items 6 to 8 amend section 205A of the Customs Act, which deals with matters to be included in a seizure notice. Item 7 will require a new statement to be included in a seizure notice that a claim for the return of the goods cannot be made if the section 234ZK conditions are satisfied.

16. Items 6 and 8 will amend the existing matters to be included in a seizure notice to account for the circumstance where the section 243ZK conditions are satisfied and a claim for the return of goods cannot be made.

17. Items 9 and 10 amend section 205B of the Customs Act, which relates to making a claim for the return of goods seized. Item 10 inserts new subsection (1A) to provide that a claim may not be made for the return of goods that have been taken to be condemned as forfeited under new section 243ZK. Item 9 amends subsection (1) so that subsection (1), which provides for an owner of seized goods to make a claim for return, is subject to new subsection (1A).

18. Item 11 inserts a new paragraph (ba) into section 205C of the Customs Act, which relates to the treatment of seized goods where no claim of return is made. The new paragraph accounts for the circumstance where the section 243ZK conditions are satisfied and a claim for return of the goods cannot be made. In that event, section 205C will cease to apply.

19. Items 12 and 13 amend section 205D of the Customs Act, which deals with the treatment of seized goods for which a claim for return is made. Item 12 inserts new paragraph (aa) into subsection 205D(1) to account for the circumstance where the section 243ZK conditions are satisfied and a claim for return of the goods cannot be made. In that event and where the owner has not made a claim for return, section 205D will cease to apply.

20. Item 13 inserts new paragraph (aa) into subsection 205D(2), which provides for the return of the seized goods to the owner except in specified circumstances. The effect of new paragraph (aa) is that goods seized do not have to be returned if they have been condemned as forfeited to the Crown under section 243ZK, that is, the section 243ZK conditions have been satisfied. This applies to the situation where a person makes a claim for return of goods before the section 243ZK conditions are satisfied.

Item 14 - After Subdivision GA of Division 1 of Part XII

21. This item amends the Customs Act by inserting new Subdivisions GB and GC into Division 1 of Part XII.

22. The new regimes in these two Subdivisions, along with the new infringement notice scheme in new Subdivision B of Division 5 of Part XIII (see item 36 of the Schedule below), are designed to reduce the administrative burden involved in seizing prohibited imports that are low value and low risk.

23. Presently, Customs must seize all prohibited imports under section 203B of the Customs Act to prevent the entry of these goods into the community, which is a time-consuming and resource intensive process. The proposed amendments to the Customs Act will establish a tiered response allowing for the voluntary surrender of the goods (new Subdivision GB), the seeking of a post-importation permission (new Subdivision GC) or payment of a penalty under the new infringement notice scheme, rather than automatic seizure of the goods.

24. Seizure of goods (as opposed to surrender or the seeking of a post-importation permission) will, of course, remain as an option in relation to the more serious contraventions of the Customs Act that relate to the importation of prohibited imports. This is an efficient and effective use of resources.

NEW SUBDIVISION GB - SURRENDER OF PRESCRIBED PROHIBITED IMPORTS

25. New Subdivision GB will insert a new regime which will allow for the surrender of certain prohibited imports to Customs in specified circumstances. The decision to allow such goods to be surrendered will be exercised in lieu of seizing the goods without a warrant. The consequences of surrendering such goods will be that a person will not be able to be prosecuted for an offence against the Customs Act in relation to the importation of the goods, and the title to the goods will immediately vest in the Crown.

26. The new surrender regime will not apply to all prohibited imports but only to those prescribed by regulations. However, all prohibited imports, regardless of how they are dealt with, will not be released into the community. The importation of prohibited imports is prohibited under the Customs Act, and this position is not altered by the introduction of these additional measures.

New section 209M - Application of Subdivision

27. New section 209M provides that new Subdivision GB applies to goods that are prohibited imports of a kind prescribed by regulations made for the purposes of this section.

28. Section 50 of the Customs Act provides, in part, that the Governor-General may, by regulation, prohibit the importation of goods into Australia and that the power may be exercised by prohibiting the importation of goods absolutely or by prohibiting the importation of goods unless specified conditions or restrictions are complied with. Section 51 of the Customs Act provides that goods, the importation of which is prohibited under section 50, are prohibited imports.

29. The Customs (Prohibited Imports) Regulations 1956 (the PI Regulations) control the importation of the goods specified in the various regulations and the Schedules to the PI Regulations, by prohibiting importation absolutely, or by making importation subject to a permission or licence. However, the new surrender regime will not apply to all of the prohibited imports specified in the PI Regulations as it is not considered appropriate that the importation of all prohibited imports should be subject to the regime. The new regime will only apply to those prohibited imports that are prescribed for its purposes. For example, it is anticipated that electronic fly swatters, whose importation is prohibited under regulation 4 and Schedule 2 to the PI Regulations, will be prescribed. Other appropriate prohibited imports will be prescribed, balancing the threat posed to the community against the administrative burden that the seizure regime places on Customs.

New section 209N - Surrender of goods

30. New section 209N sets out the circumstances when the prescribed prohibited imports would be able to be surrendered to an officer of Customs. Subsection 209N(1) provides that an officer of Customs may, instead of seizing the goods under section 203B of the Act, permit the person to surrender the goods to the officer in a section 234AA place if:

a)

the officer has reasonable grounds to believe that the goods:

(i)

have been imported by the person;

(ii)

have not been concealed from Customs by the person;

(iii)

are accompanied personal or household effects of the person; and

b)

the person has been informed, by the officer in writing, of the available options for dealing with the goods and the consequences of exercising each of these options; and

c)

the person has indicated to Customs, in writing, that he or she intends to surrender the goods; and

d)

the officer has indicated to the person that the goods may be surrendered to the officer.

31. It is proposed that this regime will only apply in a section 234AA place. These are the places at airports and ports that are set aside for the questioning of passengers and the examination of their personal baggage. As previously stated, this regime is designed to reduce the administration associated with the processing of minor contraventions of the PI Regulations and the airports and ports are the places where most of these minor contraventions occur.

32. It is also proposed that the permission to surrender prescribed prohibited imports will be granted entirely at the discretion of the officer of Customs. If the officer decides that the circumstances of the importation require different action to be taken in respect of the person and the goods, he or she may refuse to permit the goods to be surrendered. For example, it may be appropriate to permit the goods to be surrendered for a one-off contravention of the PI Regulations. However, if a person regularly imports prescribed prohibited imports in contravention of the PI Regulations, the officer may decide that other action, such as the seizure of the goods, may be more appropriate.

33. It is also proposed that the permission to surrender the goods can only be given if the goods have not been concealed from Customs. If, for example, the person indicated on their Incoming Passenger Card (IPC) that they were bringing into Australia a prohibited import and the IPC was presented to Customs, they would not be considered as having concealed the goods from Customs. If, however, they failed to indicate this on the IPC, they would be considered as having concealed the goods from Customs and would not be permitted to surrender the goods. In that circumstance, the goods could either be the subject of an infringement notice under the new regime or be seized by Customs.

34. It is important that a person is fully aware of the options available to them. Under new Subdivision GC (discussed below), a person may also be given the option, at the discretion of the officer of Customs, of seeking a post-importation permission in respect of the goods. It is also important that a person is aware of the consequences of surrendering the goods and that the person's intention to surrender the goods is clearly indicated. In order to ensure this, all of these actions must be in writing.

35. Subsection 209N(2) provides that without limiting the meaning of concealed in subparagraph (1)(a)(ii), a person is taken to have concealed goods from Customs if the person was required to give information about the goods to Custom in accordance with section 71, 71K or 71L of the Customs Act and the person failed to do so. The purpose of this provision is to make it clear that concealment of goods extends beyond physical concealment to, for example, the failure to declare to Customs in an IPC the fact that a person is bringing into Australia prohibited goods. The information in an IPC is required to be given to Customs in accordance with section 71 of the Customs Act.

New section 209P - Effect of surrender

36. New section 209P sets out the effects of the surrender under section 209N on the goods and in relation to the person. This section provides that if the goods are surrendered under section 209N:

a)

proceedings cannot be brought for an offence against this Act in relation to the importation of the goods; and

b)

the goods are taken as condemned as forfeited to the Crown, such that title to the goods immediately vests in the Commonwealth to the exclusion of all other interests in the goods and the title cannot be called into question.

Therefore, a person will not be able to be prosecuted for the offence of importing a prohibited import and they will also lose all title to the goods. The person will not be able to make a claim for the return of the goods.

New section 209Q - Right of compensation in certain circumstances for goods disposed of or destroyed .

37. New section 209Q sets out the compensation provisions if surrendered goods were not prohibited imports but have been disposed or destroyed before this is established.

38. Subsection 209Q(1) provides that despite the disposal or destruction of the goods taken to be condemned as forfeited to the Crown because the goods have been surrendered under section 209N, a person may apply to a court of competent jurisdiction under this section for compensation.

39. Subsection 209Q(2) provides that a right to compensation exists if:

a)

the goods were not prohibited imports; and

b)

the goods were not used or otherwise involved in the commission of an offence; and

c)

the person establishes, to the satisfaction of the court, that he or she is the rightful owner of the goods.

40. Subsection 209Q(3) provides that if a right to compensation exists under subsection (2), the court must order the payment by the Commonwealth to the person of an amount equal to the market value of the goods at the time of their disposal or destruction.

41. These provisions are similar to other compensation arrangements in the Customs Act in relation to seized goods that have been disposed of or destroyed, for example, section 205F.

New section 209R - Disposal of surrendered goods

42. New section 209R provides that all goods surrendered under section 209N must be dealt with and disposed of in accordance with the directions of the Chief Executive Officer of Customs. This provision is similar to other provisions dealing with the disposal of goods that have been seized by Customs, for example, section 208D.

NEW SUBDIVISION GC - POST-IMPORTATION PERMISSION

43. New Subdivision GC of Division 1 of Part XII of the Customs Act will insert a new regime which will allow for the granting or giving of post-importation permissions, licences or other documents in respect of certain goods whose importation is prohibited under the PI Regulations in specified circumstances.

44. As previously referred to, the importation of most goods in the PI Regulations is prohibited unless a licence or permission to import the goods is obtained. In some cases, other conditions or restrictions must also be complied with. For example, in relation to the importation of certain firearms, a written confirmation is required from the police of the State or Territory in which the firearm will be used, to the effect that the importer holds a licence or authorisation according to the law of the State or Territory to possess the firearm.

45. The licence or permission or other document must be obtained prior to the importation of the goods. If it has not been obtained prior to importation, the goods will be prohibited imports in accordance with section 51 of the Customs Act. Prohibited imports are special forfeited goods under the Customs Act and will become subject to the provisions of the Customs Act that apply to such goods, which include the power to seize the goods without a warrant when they are in a Customs place. There are also offences in the Customs Act that apply to the importation of prohibited imports.

46. For a variety of reasons, it is not always possible to obtain a licence or permission to import goods before their importation. In some cases, a permit would also likely have been granted had the importer been aware of the control prior to importing the goods. Where the importer is acting in good faith, seizure and forfeiture of the goods in these circumstances without an opportunity to apply for a permission appears unreasonable.

47. Therefore, it is proposed to introduce a new regime whereby, in specified circumstances, the owner of prohibited imports may apply for, and the decision maker may in the exercise of their discretion grant or give, the required permission to import the goods after the goods have been imported. The relevant goods will remain in the custody of Customs at all times until the required permission is granted or given.

48. If the required permission is not subsequently granted or given within the specified period, the goods are taken to be seized and the normal seizure process will follow.

New section 209S - Definitions

49. New section 209S inserts definitions for the purposes of new Subdivision GC.

50. Subsection 209S(1) inserts the following definitions:

application period which for goods that have been detained under new section 209U means the period that, in accordance with new subparagraph 209X(2)(d)(i), is specified in the detention notice identifying the goods.

detention notice which means a notice of a kind mentioned in new section 209X.

grant period which for goods that have been detained under new section 209U means the period that, in accordance with new subparagraph 209X(2)(d)(ii), is specified in the detention notice identifying the goods.

51. New subsection 209S(2) provides that if regulations made under section 50 of the Customs Act provide that the importation of goods is prohibited unless a licence, permission, consent, approval or other document (however described) is granted or given, then the licence, permission, consent, approval or other document is a required permission to import the goods . This provision will eliminate the need to list all of the different types of licences etc each time they are referred to in Subdivision GC - instead this phrase will be used.

New section 209T - Application of Subdivision

52. New section 209T sets out the goods to which new Subdivision GC applies. Similar to new Subdivision GB, Subdivision GC will only apply to goods that are prohibited imports of a kind prescribed by regulations made for the purposes of this section.

53. Goods to be prescribed for the purposes of this Subdivision are only those determined by the agency responsible for the permission or control as being suitable for post-importation consideration.

New section 209U - Power to detain goods

54. New section 209U sets out the circumstances in which an officer of Customs may allow a person to apply for a required permission to import the goods after the goods have been imported, in lieu of immediately seizing the goods.

55. Subsection 209U(1) provides that an officer of Customs may, instead of seizing goods under section 203B, detain the goods if:

a)

the goods are imported without one or more required permissions to import the goods having been granted or given; and

b)

any other conditions or restrictions specified in the regulations made under section 50 in respect of the importation have been complied with; and

c)

the officer has reasonable grounds to believe that:

(i)

the goods have not been concealed from Customs by the person who imported them; and

(ii)

no application for any of the required permissions to import the goods has previously been refused; and

d)

if the goods are accompanied personal effects or household effects of the person - the person:

(i)

has been informed, by the officer in writing, of the available options for dealing with the goods and the consequences of exercising each of those options; and

(ii)

has indicated to Customs, in writing, that he or she has applied, or intends to apply, for each of the required permissions to import the goods that have not already been granted.

56. Under paragraph 209U(1)(b), if there are any other conditions or restrictions which must be complied with prior to the importation of the goods, other than obtaining the required permission to import the goods, and these have not been complied with, the new regime will not apply to the goods. For example, under regulation 4MA of the PI Regulations, the importation of rough diamonds is prohibited unless the diamonds are imported in a tamper resistant container. If this condition is not complied with at the point of importation, the new regime will not apply to the goods.

57. Similar to new Subdivision GB, the detention of prescribed prohibited imports in lieu of seizure will be entirely at the discretion of the officer of Customs. If the officer decides that the circumstances of the importation required different action to be taken in respect of the person and the goods, he or she may refuse to detain the goods. In addition, the officer's discretion could only be exercised if no application for any of the required permissions to import the goods had previously been refused.

58. Similar also to new Subdivision GB, detention of the goods in lieu of seizure can only occur if the goods have not been concealed from Customs. If, for example, the person indicated on their Incoming Passenger Card (IPC) that they were bringing into Australia a prohibited import and the IPC was presented to Customs, they would not be considered as having concealed the goods from Customs. If, however, they failed to indicate this on the IPC, they may be considered as having concealed the goods from Customs and would not be permitted to seek the required permission to import the goods. In that circumstance, the goods would either be subject to an infringement notice or be seized by Customs.

59. Similar to new Subdivision GB, it is important that a person is fully aware of the options available to them. If the goods are in a section 234AA place and are the accompanied personal or household effects of the person, a person may also be given the option of surrendering the goods under new Subdivision GB. (The circumstances that trigger the operation of Subdivision GB are the same as those that trigger the operation of Subdivision GC in respect of goods in a section 234AA place that are the accompanied personal or household effects of the person). It is also important that a person is aware of the consequences of seeking the required permission to import the goods and that their intentions in respect of the goods are clearly indicated. In order to ensure this, all of these actions must be in writing.

60. Subsection 209U(2) provides, similar to subsection 209N(2), that without limiting the meaning of concealed in subparagraph (1)(c)(i), a person is taken to have concealed goods from Customs if the person was required to give information about the goods to Custom in accordance with section 71, 71K or 71L of the Customs Act and the person failed to do so.

New section 209V - Detained goods to be secured

61. New section 209V set out the procedures for the storage of goods detained under section 209U.

62. New subsection 209V(1) provides that in this section, approved place , in relation to goods detained under section 209U, means a place approved by a Collector as a place for the storage of goods of that kind.

63. New subsection 209V(2) provides that if an officer of Customs detains goods under section 209U, the officer must, as soon as practicable, take the goods to an approved place.

64. Depending on the types of prohibited imports that are prescribed for the purposes of new Subdivision GC, there may be more than one approved place approved under section 209V.

New section 209W - Requirement to serve detention notice

65. New section 209W sets out the requirements in relation to detention notices for goods detained under section 209U.

66. Subsection 209W(1) provides that if an officer of Customs detains goods under section 209U, the officer must serve, within 7 days after the day on which the goods were detained, a detention notice on:

a)

the owner of the goods; or

b)

if the owner cannot be identified after reasonable inquiry - the person in whose possession or under whose control the goods were when they were detained.

67. Subsection 209W(2) provides that the notice must be in writing and must be served:

a)

personally or by post; or

b)

if no person of the kind referred to in paragraph (1)(a) or (b) can be identified after reasonable enquiry - by publishing a copy of the notice in a newspaper circulating in the location in which the goods were detained.

68. Subsection 209W(3) provides that a detention notice may be served on a person who is outside Australia.

69. As the detention notice may eventually serve as a seizure notice under new subsection 209Z(3) below, it will be served in the same way that a seizure notice is served under section 205 of the Customs Act.

New section 209X - Matters to be dealt with in a detention notice

70. New section 209X sets out the matters that will need to be dealt with in a detention notice served under section 209W.

71. Subsection 209X(1) provides that a detention notice must set out the following:

a)

a statement identifying the goods;

b)

the day on which the goods were detained;

c)

the ground, or each of the grounds, on which the goods were detained;

d)

a statement that the goods will be taken to be seized if:

(i)

written evidence, of the making of an application for each required permission to import the goods that was not granted or given by the time the goods were imported, is not provided to Customs by the end of a specified period (the application period); or

(ii)

not all of the required permissions to import the goods are granted or given by the end of a specified period (the grant period); or

(ii)

during the application period or the grant period, the owner of the goods notifies Customs, in writing, that an application for a required permission to import the goods has been refused;

e)

a statement that, if the goods are taken to be seized because written evidence is not provided to Customs by the end of the application period, the goods will be taken to be seized on the day after the end of the application period;

f)

a statement that, if the goods are taken to be seized because not all of the required permissions to import the goods are granted, or given, by the end of the grant period, the goods will be taken to be seized on the day after the end of the grant period;

g)

a statement that, if the goods are taken to be seized because during the application period or the grant period the owner of the goods notifies Customs, in writing, that an application for a required permission to import the goods has been refused, the goods will be taken to be seized on the day after Customs is so notified;

h)

the ground, or each of the grounds, on which the goods will be taken to be seized;

i)

a statement that, if the goods are taken to be seized and a claim for the return of the goods has not already been made, and is not made within 30 days after the day the goods are taken to be seized, the goods will be taken to be condemned as forfeited to the Crown;

j)

if the notice is to be served in a foreign country-a statement that the person served, if that person has not yet made a claim for the return of the goods, may not make such a claim unless he or she has first appointed in writing an agent in Australia with authority to accept service of documents, including process in any proceedings arising out of the matter.

72. As this detention notice may also serve as a seizure notice in relation to the goods under 209Z(3) below, it will contain the same details that a seizure notice must contain under section 205A of the Customs Act.

73. New subsection 209Z(2) provides that the application period specified in a detention notice under subparagraph (1)(d)(i) must be the period that:

a)

starts on the day that the notice is served; and

b)

ends 30 days, or such other period as is prescribed by the regulations, after that day.

74. New subsection 209Z(3) provides that the grant period specified in a detention notice under subparagraph (1)(d)(ii) must be the period that:

a)

starts on the day written evidence of the making of an application for a required permission to import the goods is first provided to Customs; and

b)

ends 30 days, or such other period as is prescribed by the regulations, after the first day on which written evidence, of the making of an application for all of the required permissions to import the goods that were not granted or given by the time the goods were imported, has been provided to Customs.

The effect of paragraph (a) is that if more than one required permission to import the goods is required, the grant period will commence when written evidence of one of the applications for that permission is provided to Customs. The effect of paragraph (b) is that the grant period will end 30 days after written evidence of the making of the last application for the required permission is provided to Customs. Therefore, the grant period may be more than 30 days long.

New section 209Y - Effect of detaining goods

75. New section 209Y provides that while goods are detained under section 209U:

a)

an application for a required permission to import the goods may be made; and

b)

a required permission to import the goods may be granted or given;

despite the goods having already been imported.

The effect of paragraph (b) is that the PI Regulations will be overridden to the extent that they would have otherwise prevented a decision maker granting or giving a required permission to import the goods after the goods had been imported.

New section 209Z - Evidence not provided or permission not granted or given

76. New section 209Z sets out the consequences of the failure to provide to Customs written evidence of the making of an application for a required permission to import the goods, and the failure to have the permission granted or given, in the specified timeframes.

77. Subsection 209Z(1) provides that this section applies if:

a)

goods have been detained under section 209U; and

b)

a detention notice identifying the goods has been served; and

c)

any of the following apply:

(i)

written evidence, of the making of an application for each required permission to import the goods that was not granted, or given, by the time the goods were imported, has not been provided to Customs by the end of the application period for the goods (i.e. within 30 days after the detention notice is served);

(ii)

not all of the required permissions to import the goods have been granted, or given, by the end of the grant period for the goods;

(iii)

during the application period, or the grant period, for the goods, the owner of the goods has notified Customs, in writing, that an application for a required permission to import the goods has been refused. (In this circumstance, it will not be necessary to wait until the end of the application period or the grant period for this section to operate).

78. If one of these circumstances applies, and the goods are at an approved place within the meaning of section 209V, subsection 209Z(2) provides that the goods cease to be detained under section 209U and are taken to be seized under section 203B on:

a)

if, during the application period, the owner of the goods notified Customs, in writing, that an application for a required permission to import the goods was refused-the day after Customs was so notified; or

b)

if paragraph (a) does not apply and written evidence, of the making of an application for each required permission to import the goods that was not granted or given by the time the goods were imported, was not provided by the end of the application period-the day after the end of the application period; or

c)

if paragraphs (a) and (b) do not apply and, during the grant period, the owner of the goods notified Customs, in writing, that an application for a required permission to import the goods was refused-the day after Customs was so notified; or

d)

if paragraphs (a), (b) and (c) do not apply and not all of the required permissions to import the goods were granted, or given, by the end of the grant period-the day after the end of the grant period.

Section 203B of the Act allows for the officer of Customs to seize without warrant prohibited imports in a Customs place.

79. If a person finds out, either during the application period or the grant period, that the application for a required permission to import the goods was refused, they can inform Customs at that point and the goods will be seized under section 203B on the day after the notification. However, the person may otherwise choose not to tell Customs of this occurrence and simply wait out the application period or the grant period. In that circumstance, the goods will be seized on the day after the end of the relevant period.

80. The onus at all times is on the person to provide written evidence to Customs, either of the application for the required permission or of its granting or giving, within the specified timeframes.

81. Subsection 209Z(3) provides that the detention notice is also taken to be a seizure notice that:

a)

is in accordance with section 205A; and

b)

was served:

(i)

under section 205 by the responsible person; and

(ii)

on the day the goods are taken to be seized.

The fact that goods are seized by operation of this section means that the provisions of the Customs Act that apply to goods seized under section 203B will now apply to the goods. These provisions are set out in Subdivision G of Division 1 of Part XII of the Customs Act and include the right for the owner of the goods to make a claim for the return of the goods and provisions indicating when proceedings in respect of offences involving the goods must be commenced.

New section 209ZA - Evidence provided and permission granted or given

82. New section 209ZA sets out the consequences of providing to Customs written evidence of the making of an application for a required permission to import the goods, and having the permission granted or given, in the specified timeframes.

83. Subsection 209ZA(1) provides that this section applies if:

a)

goods have been detained under section 209U; and

b)

a detention notice identifying the goods has been served; and

c)

written evidence, of the making of an application for each required permission to import the goods that was not granted, or given, by the time the goods were imported, has been provided to Customs by the end of the application period for the goods; and

d)

all the required permissions to import the goods have been granted, or given, on or before the end of the grant period for the goods.

84. Subsection 209ZA(2) provides that if all the circumstances are satisfied an officer of Customs must return the goods to the owner.

85. Subsection 209ZA(3) provides that at the time the last required permission to import the goods is granted or given, the goods cease to be prohibited imports.

86. Subsection 209ZA(4) provides that proceedings cannot be brought for an offence against this Act in relation to the importation of the goods. Therefore, a person will not be able to be prosecuted for the offence of importing a prohibited import.

New section 209ZB - Service by post

87. New section 209ZB provides that for the purposes of the application of section 29 of the Acts Interpretation Act 1901 to the service by post of a detention notice under this Subdivision on a person, such a notice posted as a letter addressed to that person at the last address of that person known to the sender is taken to be properly addressed. Section 29 of the Acts Interpretation Act 1901 sets out when the service of a document that is to be served by the post is effected and the time at which the service is effected.

New section 209ZC - Liability for detention of goods

88. New section 209ZC provides that neither the Commonwealth nor an officer or other person is under any liability in relation to the detention of any goods under this Subdivision for which there was reasonable cause.

NEW SUBDIVISION B - PENALTIES IN LIEU OF PROSECUTION FOR OFFENCES RELATING TO PROHIBITED IMPORTS, RESTRICTED AREAS

Items 15 to 18 - Consequential amendments

89. Items 15 to 18 amend subparagraphs 243T(4)(c)(i) and (d)(i) and paragraphs 243T(4A)(b) and 243U(4A)(b) to insert the words "Subdivision A of" before the words "Division 5". This will reflect the new heading given to the provisions under current Division 5 of Part XIII (see item 19 of this Schedule below).

Item 19 - Before section 243X

90. The provisions of current Division 5 of Part XIII (including sections 243X to 243ZE) of the Customs Act deals with the issue of infringement notices in lieu of prosecution for offences relating to false and misleading statements, cargo reporting and the movement of goods.

91. Item 19 of Schedule 1 inserts a new Subdivision A of Division 5 of Part XIII for these provisions. This is to keep these current provisions separate from the new provisions relating to the issue of infringement notices in lieu of prosecution for offences relating to prohibited imports and restricted areas that will be located under new Subdivision B of the Division 5 of Part XIII.

Items 20 to 35 - Consequential amendments

92. Items 20 to 35 contain amendments to provisions in existing Division 5 of Part XIII as a result of the insertion of the new heading for these provisions.

93. Items 20, 21, 22, 26, 33, 34 and 35 substitute the references to "Division" in sections 243ZC and 243ZD, subsections 243X(1), 243XA(1), 243Y(1) and 243ZE(3) and paragraph 243Z(2)(a) with a reference to "Subdivision".

94. Items 23, 24, 25, 27, 28, 29, 30, 31 and 32 make amendments to clarify that the "infringement notice" mentioned in subsections 243Y(2) and (3), 243Z(1) and (3) and 243ZA(1), (2) and (3) and paragraphs 243ZA(3)(c) and 243ZB(1)(a) are served under Subdivision A of Division 5 of Part XIII, as opposed to new Subdivision B.

Item 36 - At the end of Division 5 of Part XIII

95. Item 36 inserts new Subdivision B of Division 5 of Part XIII. Subdivision B provides a new scheme to enable the issue of infringement notices in lieu of prosecution for offences relating to prohibited imports and restricted Customs areas.

New section 243ZF - Application of Subdivision B

96. New section 243ZF sets out the offences to which the new infringement notice scheme in Subdivision B applies.

Prescribed prohibited imports

97. Paragraph 243ZF(a) provides that Subdivision B will apply to the offence of importing goods that are prohibited imports of a kind prescribed for the purposes of section 243ZF. This is similar to the application of the new surrender and post-importation permissions regimes (see item 14 of this Schedule above).

98. Section 50 of the Customs Act provides, in part, that the Governor-General may, by regulation, prohibit the importation of goods into Australia and that the power may be exercised by prohibiting the importation of goods absolutely or by prohibiting the importation of goods unless specified conditions or restrictions are complied with. Section 51 of the Customs Act provides that goods, the importation of which is prohibited under section 50, are prohibited imports.

99. The PI Regulations control the importation of the goods specified in the various regulations and the Schedules to the PI Regulations, by prohibiting importation absolutely, or by making importation subject to a permission or licence.

100. Paragraph 233(1)(b) of the Customs Act prohibits the importation of any prohibited imports. A contravention of paragraph 233(1)(b) is an offence of strict liability.

101. The new Subdivision B will allow the issue of an infringement notice in lieu of prosecution for the offence of contravening paragraph 233(1)(b), if the offence relates to goods that are prohibited imports prescribed for the purposes of section 243ZF.

102. The large range of goods that are controlled under the PI Regulations means that the threat posed to the community of these goods also varies greatly. Appropriate prohibited imports will be prescribed, balancing the threat posed to the community against the administrative burden the seizure of such items places on Customs.

103. Seizure, without issuing an infringement notice, will, of course, remain as an option in relation to the more serious contraventions of the Customs Act that relate to the importation of prohibited imports. This is an efficient and effective use of resources.

104. Together with the new surrender and post-importation permissions regime, this part of the new infringement notice scheme is designed to reduce the administrative burden that is involved in seizing prohibited imports that are low value and low risk. In contrast with the new surrender and post-importation permissions regime, the new infringement notice scheme will only apply to prescribed prohibited imports that are concealed from Customs.

Restricted area offences

105. Subdivision B will also apply to an offence for a contravention of subsections 234A(1) and 234AB(3) of the Customs Act. These offences relate to restricted areas known as section 234AA places.

106. Section 234AA of the Customs Act allows a Collector of Customs to display a sign at or near a place that is to be used by officers of Customs for the questioning of ship or aircraft passengers, the examining of the personal baggage of such passengers and as a holding place for such passengers.

107. In addition, a Collector of Customs may also display signs at or near that place that indicate that the use of cameras, sound recorders and mobile phones or other electronic forms of communication at the place by unauthorized persons is prohibited. Such a place is defined as a section 234AA place.

108. It is an offence under subsection 234A(1) of the Customs Act to:

a)

enter into, or be in, a section 234AA place; or

b)

enter into, or be in, a ship, aircraft or wharf at which a ship is berthed, when the personal baggage of a disembarking or embarking passenger is being examined at or in the vicinity of the ship, aircraft or wharf.

109. It is an offence under subsection 234AB(3) of the Customs Act to fail to comply with a direction by an officer of Customs not to use a camera, sound recorder or mobile phone or other electronic forms of communication:

a)

at a section 234AA place; or

b)

at a place in a ship, aircraft or wharf at which a ship is berthed, when the personal baggage of a disembarking or embarking passenger is being examined at or in the vicinity of that place.

110. Subdivision B will allow an infringement notice to be issued in lieu of prosecution for an offence under subsections 234A(1) or 234AB(3). Both subsections are offences of strict liability and are relatively minor offences.

New section 243ZG - Guidelines for serving infringement notices

111. New section 243ZG provides that the Chief Executive Officer of Customs must make guidelines in respect of the administration of Subdivision B of Division 5 of Part XIII to which the CEO must have regard when exercising powers under Subdivision B.

New section 243ZH - When an infringement notice can be served

112. New section 243ZH sets out the circumstances under which an infringement notice can be served, and related matters.

113. Under subsection 243ZH(1), if the CEO has reasonable grounds to believe that a person has committed an offence to which Subdivision B applies, the CEO may cause an infringement notice to be served in accordance with this Subdivision. For an offence of importing prohibited imports, the CEO must also have reasonable grounds to believe that the person concealed from Customs the goods to which the offence relates.

114. Under subsection 243ZH(2), an infringement notice for the offence of importing prohibited imports does not have any effect unless it is served:

a)

if the person to be served is in a section 234AA place-before the person leaves the section 234AA place; or

b)

if the person to be served is not in a section 234AA place and the goods to which the offence relates have been seized under section 203B-with the seizure notice issued under section 205 in respect of the goods.

115. Paragraph (a) relates to where the offence is detected during the examination of the personal baggage of a passenger at the border. In this situation, the infringement notice must be served before the passenger leaves the examination area. This ensures that the offence is dealt with quickly and while the passenger is in contact with Customs.

116. Paragraph (b) relates to where an offence is detected in respect of goods imported through places other than section 234AA places. In this situation, Customs would seize the goods under section 203B and issue a seizure notice under section 205. At the same time, an infringement notice would be issued so that timeframes on the notices run concurrently. This ensures that the time periods in relation to the infringement notice process and the seizure notice process start at the same time, which will facilitate the concurrent operation of the processes and minimise the time taken to deal with the offence. Therefore, if the person fails to pay the Infringement notice, the seizure notices ensures that the goods do not enter the community and the person remains liable for the offence. While this provision is broad, the intention is that this provision would only apply in respect of unaccompanied goods and goods imported through the post.

117. Subsection 243ZH(3) provides that an infringement notice for an offence related to subsection 234A(1) or 234AB(3) does not have any effect unless it is served within one year after the day on which the offence is alleged to have been committed.

118. Subsection 243ZH(4) provides that, without limiting the meaning of concealed in paragraph 243ZH(1)(b), a person is taken to have concealed goods from Customs if the person was required to give information about the goods to Customs in accordance with section 71, 71K or 71L and the person failed to do so. For example, if a passenger fails to declare a prohibited import on the Incoming Passenger Card, he or she will be taken to have 'concealed' that prohibited good from Customs.

New section 243ZI - Matters to be included in an infringement notice

119. New section 243ZI lists the matters to be included in an infringement notice served under Subdivision B. Subsection 243ZI(1) provides that such a notice must:

a)

state the name of the person on whom it is to be served; and

b)

state that it is being served on behalf of the CEO; and

c)

state:

(i)

the nature of the alleged offence; and

(ii)

the time (if known) and date on which, and the place at which, the offence is alleged to have been committed; and

(iii)

the maximum penalty that a court could impose for the alleged offence; and

d)

specify that a penalty of 2 penalty units is payable under the notice in respect of the alleged offence; and

e)

state that, if the person on whom the notice is served does not wish the matter to be dealt with by a court, the person may pay to the CEO the amount of the penalty specified in the notice:

(i)

if the notice is served on the person in a section 234AA place and relates to an alleged offence covered by paragraph 243ZF(a)-before the person leaves the place for the first time after the notice is served; or

(ii)

in any other case-within 28 days after the date of service of the notice; and

f)

state that compliance with the notice is not an admission of guilt or liability; and

g)

if the notice relates to an alleged offence covered by paragraph 243ZF(a)-state that, if the penalty specified in the notice is paid and the notice is not withdrawn, the goods to which the offence relates will be taken to be condemned as forfeited to the Crown such that:

(i)

the title to the goods immediately vests in the Commonwealth to the exclusion of all other interests in the goods, and the title cannot be called into question; and

(ii)

a claim for the return of the goods cannot be made; and

(iii)

if the penalty is paid after a claim for the return of the goods is made, the goods cannot be returned; and

h)

state that the person may make written representations to the CEO seeking the withdrawal of the notice.

120. Under subsection 243ZI(2), an infringement notice served under this Subdivision may contain any other matters that the CEO considers necessary.

New section 243ZJ - Withdrawal of infringement notices

121. New section 243ZJ provides for matters related to the withdrawal of infringement notices. Subsection 243ZJ(1) enables a person on whom an infringement notice has been served under Subdivision B to make written representations to the CEO seeking the withdrawal of the notice.

122. Under subsection 243ZJ(2), the CEO may withdraw the infringement notice served on a person (whether or not the person has made representations) by causing written notice of the withdrawal to be served on the person within the time period given for the payment of the infringement notice penalty.

123. Subsection 243ZJ(3) sets out some matters the CEO may have regard to in deciding whether or not to withdraw an infringement notice served under Subdivision B, including:

a)

whether the person has previously been convicted of an offence for a contravention of this Act;

b)

the circumstances in which the offence specified in the notice is alleged to have been committed;

c)

whether the person has previously been served with an infringement notice under this Subdivision in respect of which the person paid the penalty specified in the notice; and

d)

any written representations made by the person.

124. Subsection 243ZJ(4) requires that, where an infringement notice served under Subdivision B on a person is withdrawn after that person has paid the infringement notice penalty, the CEO must refund to that person an amount equal to the amount paid.

New section 243ZK - What happens if the infringement notice penalty is paid

125. New section 243ZK deals with the consequences of paying the infringement notice penalty. Under subsection 243ZK(1), this section applies if an infringement notice is served on a person under this Subdivision, the person pays the penalty within the required time, and the notice is not withdrawn. In that event:

a)

any liability of the person for the offence specified in the notice is discharged (subsection (2));

b)

further proceedings cannot be taken against the person for the offence (subsection (3));

c)

the person is not regarded as having been convicted of the offence (subsection (4)); and

d)

if the notice is for the offence of importing prescribed prohibited imports, the goods are taken to be condemned as forfeited to the Crown, title to the goods immediately vests in the Commonwealth to the exclusion of all other interests in the goods, and the title cannot be called into question (subsection (5)).

126. In addition, the operation of the provisions relating to the seizure process will be ceased or modified as a result of the goods being taken to be condemned as forfeited to the Crown. The relevant provisions will be amended to achieve the desired outcome (see items 6 to 13 of this Schedule above).

New section 243ZL - More than one infringement notice may not be served for the same offence

127. New section 243ZL clarifies that Subdivision B does not permit the service of more than one infringement notice on a person for the same offence.

New section 243ZM - Infringement notice not required to be served

128. New section 243ZM clarifies the intended operation of Subdivision B. The section makes it clear that Subdivision B does not:

a)

require an infringement notice to be served on a person in relation to an offence; or

b)

affect the liability of a person to be prosecuted for an offence if:

(i)

an infringement notice is not served on the person in relation to the offence; or

(ii)

an infringement notice served on the person in relation to the offence has been withdrawn; or

c)

affect the liability of a person to be prosecuted for an offence if the person does not comply with an infringement notice served on the person in relation to the offence; or

d)

limit the amount of the penalty that may be imposed by a court on a person convicted of an offence.

New section 243ZN - Right of compensation in certain circumstances for goods disposed of or destroyed

129. New section 243ZN sets out the compensation provisions if goods taken to be condemned as forfeited under section 243ZK were not prohibited imports but have been disposed or destroyed before this is established.

130. Subsection 243ZN(1) provides that despite the disposal or destruction of the goods taken to be condemned as forfeited to the Crown under section 243ZK, a person may apply to a court of competent jurisdiction under this section for compensation.

131. Subsection 243ZN(2) provides that a right to compensation exists if:

a)

the goods were not prohibited imports; and

b)

the goods were not used or otherwise involved in the commission of an offence; and

c)

the person establishes, to the satisfaction of the court, that he or she is the rightful owner of the goods.

132. Subsection 243ZN(3) provides that if a right to compensation exists under subsection (2), the court must order the payment by the Commonwealth to the person of an amount equal to the market value of the goods at the time of their disposal or destruction.

133. These provisions are similar to other compensation arrangements in the Customs Act in relation to seized goods that have been disposed of or destroyed, for example, section 205F.

New section 243ZO - Disposal of forfeited goods

134. New section 243ZO provides that all goods condemned as forfeited to the Crown under Subdivision B must be dealt with and disposed of in accordance with the directions of the Chief Executive Officer of Customs. This provision is similar to other provisions dealing with the disposal of goods that have been seized by Customs, for example, section 208D.

Item 37 - Application

135. Subclause (1) of item 37 provides that the provisions of new Subdivision GB (relating to surrender of prescribed prohibited imports) and GC (relating to post-importation permissions) of Division 1 of Part XII only apply in relation to goods imported into Australia on or after the commencement of this item.

136. Subclause (2) provides that the provisions of new Subdivision B of Division 5 of Part XIII (relating to the infringement notice scheme for offences relating to prohibited imports and restricted areas) only apply to offences alleged to have been committed on or after the commencement of this item.

137. This ensures that the provisions of all three new Subdivisions do not have any retrospective effect.