House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Home Affairs, the Honourable Bob Debus MP)

SCHEDULE 4 - MISSING GOODS AND GOODS DELIVERED WITHOUT AUTHORITY

Customs Act 1901

Background

38. Section 35A of the Customs Act imposes obligation on persons who have dealings with dutiable goods, which are subject to the control of Customs, to keep those goods safely and to account for those goods if requested to do so by a Collector. Where there is a failure to comply with these obligations, section 35A provides that the Collector may demand, in writing, the payment to the Commonwealth of an amount equal to the amount of duty of Customs that would have been payable on the goods, or on part of the goods not accounted for, had the goods been entered for home consumption on the day on which the demand by the Collector was made.

39. While section 35A of the Customs Act enables the recovery of duty where dutiable goods have gone missing, section 35A does not cover non-dutiable goods which are subject to the control of Customs and which cannot be accounted for by the person who had possession, custody or control over those goods. While no duty applies to these goods, the goods still need to be accounted for as the goods may be prohibited by or subject to a restriction or condition under the Customs Act or another law of the Commonwealth.

40. To ensure that goods, whether dutiable or non-dutiable, which are subject to the control of Customs and in the custody of another person, are kept safely and can be accounted for, new offences are to be included in the Customs Act for failing to keep dutiable and non-dutiable goods safely and for failing to account for the goods to the satisfaction of the Collect if required to do so.

Item 1 - At the end of paragraphs 35A(1)(b), (1A)(c) and (1B)(b)

41. This item inserts at the end of paragraphs 35A(1)(b), (1A)(c) and (1B)(b) of the Customs Act the words "in accordance with section 37". The inclusion of these words means that a person who is required to account for goods to the satisfaction of the Collector will now be required to account for those goods in accordance with new section 37 of the Customs Act.

42. New section 37, inserted by item 2 of this Schedule, provides that a person accounts for goods, or a part of the goods, to the satisfaction of a Collector only if the Collector sights the goods or, if the Collector is unable to sight the goods, the person satisfies the Collector that the goods have been dealt with in accordance with the Customs Act.

Item 2 - After section 35A

43. This item inserts after section 35A of the Customs Act new section 36. New section 36 creates new offences for failing to keep goods safely and for failing to account for goods.

New offences for failing to keep goods safely

44. New subsections 36(1) and (2) create two new offences for failing to keep good, which are subject to the control of Customs, safely.

45. New subsection 36(1) provides that a person will commit an offence if the person has or has been entrusted with the possession, custody or control of goods which are subject to the control of Customs and the person fails to keep the goods safely.

46. The new offence in subsection 36(1) is a mens rea offence which is punishable by a penalty of 500 penalty units.

47. New subsection 36(2) provides that a person will commit an offence if the person has or has been entrusted with the possession, custody or control of goods which are subject to the control of Customs and the person fails to keep the goods safely. This new offence is punishable by a penalty of 60 penalty units.

48. New subsection 36(3) provides that the offence contained in subsection 36(2) is an offence of strict liability. In imposing strict liability, consideration was given to both the Senate Standing Committee for the Scrutiny of Bills Sixth Report of 2002 on Application of Absolute and Strict Liability Offences in Commonwealth Legislation and the Guide to Framing Commonwealth Offences, Civil Penalties and Enforcement Powers . It is considered that imposing strict liability to the new offence contained in subsection 36(2) will ensure the integrity of the regulatory regime which exists so that goods which are being imported or exported from Australia are available to be inspected or examined and dealt with in accordance with the Customs Act and other legislation.

New offences for failing to account for goods

49. New subsections 36(4), (5), (6) and (7) create four new offences for failing to, if required by a Collector, to account for goods which are subject to the control of Customs.

50. New subsection 36(4) provides that a person will commit an offence if the person has or has been entrusted with the possession, custody or control of goods which are subject to the control of Customs and the person, when requested by a Collector, does not account for the goods to the satisfaction of the Collector in accordance with new section 37. This new offence is punishable by a penalty of 500 penalty units.

51. New subsection 36(5) provides that a person who has failed to deliver goods that are subject to the control of Customs, or part of those goods, in accordance with an authority to deal or a permission given under section 71E of the Customs Act, will commit an offence if the person fails to account for the goods, if required, to the satisfaction of the Collector in accordance with new section 37. This new offence is punishable by a penalty of 500 penalty units.

52. The new offences contained in subsections 36(4) and (5) are mens rea offences.

53. New subsection 36(6) provides that a person will commit an offence if the person has or has been entrusted with the possession, custody or control of goods which are subject to the control of Customs and the person, when requested by a Collector, does not account for the goods to the satisfaction of the Collector in accordance with new section 37. This new offence is punishable by a penalty of 60 penalty units.

54. New subsection 36(7) provides that a person who has failed to deliver goods that are subject to the control of Customs, or part of those goods, in accordance with an authority to deal or a permission given under section 71E of the Customs Act, will commit an offence if the person fails to account for the goods, if required, to the satisfaction of the Collector in accordance with new section 37. This new offence is punishable by a penalty of 60 penalty units.

55. New subsection 36(8) provides that the offences created by new subsections 36(6) and (7) are both offences of strict liability. In imposing strict liability, consideration was given to both the Senate Standing Committee for the Scrutiny of Bills Sixth Report of 2002 on Application of Absolute and Strict Liability Offences in Commonwealth Legislation and the Guide to Framing Commonwealth Offences, Civil Penalties and Enforcement Powers . It is considered that imposing strict liability to the new offences in subsections 36(6) and (7) will ensure the integrity of the regulatory regime which exists so that goods which are being imported or exported from Australia remain available to inspected or examined and dealt with in accordance with the Customs Act and other legislation.

Removal of goods by authority of section 71E permission

56. New subsection 36(9) provides that if the goods are removed to a place other than a warehouse by authority of a permission given to a person under section 71E of the Customs Act, the person is taken to have, or have been entrusted with the possession, custody or control of the goods for the purposes of new paragraphs 36(1)(b), (2)(b), (4)(b) and (6)(b).

57. New subsection 36(9) has the effect that it deems the person who has been given permission to move goods under section 71E of the Customs Act to have possession, custody or control of those goods for the purposes of the new offences contained in subsections 36(1), (2), (4) and (6).

Other liabilities not affected

58. New subsection 36(10) provides that the new offences created in section 36 do not affect the liability of a person arising under or by virtue of any other provision of the Customs Act or a security given under the Customs Act.

Accounting for goods

59. New section 37 specifies how a person, if requested, is to account for goods to the satisfaction of a Collector.

60. New section 37 provides that a person accounts for goods or part of goods to the satisfaction of the Collector only if the Collector sights the goods or, if the Collector is unable to sight the goods, the person satisfies the Collected that the goods have been dealt with in accordance with the Customs Act.

Item 3 - Subsection 243X(1)

61. This item inserts in subsection 243X(1) after the references to subsections 33(3), (3) or (6) a reference to new subsections 36(2), (6) or (7). The inclusion of the new subsections 36(2), (6) and (7) in subsection 243X(1) means that Division 5 of Part XIII of the Customs Act, which provides for infringement notices to be issued in lieu of prosecution, applies to these new offences.