House of Representatives

Explanatory Memorandum

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

Schedule 2 - Australian Trusted Trader Programme

Customs Act 1901

24. The purpose of Schedule 2 of the Bill is to amend Part XA of the Customs Act to remove the requirement that the Comptroller-General of Customs enter into an interim trusted trader agreement with an entity.

Item 1 - Subdivision A of Division 2 of Part XA (heading)

25. This item repeals and substitutes the heading of Subdivision A of Division 2 of Part XA of the Customs Act.

26. The new heading clarifies that the purpose of Subdivision A of Division 2 of Part XA is to authorise the Comptroller-General of Customs to enter into trusted trader agreements with entities.

Item 2 - Paragraph 176A(1)(b)

27. This item repeals and substitutes paragraph 176A(1)(b) of Subdivision A of Division 2 of Part XA of the Customs Act.

28. The effect of this amendment, together with the repeal of Subdivision B of Division 2 of Part XA of the Customs Act below, is to abolish the current distinction between interim and ongoing trusted trader agreements. That is, it is no longer the case that the Comptroller-General of Customs will enter into an interim trusted trader agreement with an entity under section 176A, and subsequently vary the trusted trader agreement under subsection 177(4) to confer ongoing trusted trader status on the entity. Rather, under proposed new section 176A, the Comptroller-General will simply enter into a trusted trader agreement with an entity if satisfied that the entity satisfies the qualification criteria set out in the ATT rule.

Item 3 - Subsection 176A(3)

29. This item repeals and substitutes subsection 176A(3).

30. When the Comptroller-General of Customs varies an interim trusted trader agreement under section 177 to enter into an ongoing trusted trader agreement with an entity, he or she can vary the trusted trader agreement to release an entity from an obligation that it would otherwise be required to satisfy under Part IV or Part VI of the Customs Act, or vary the agreement to allow the entity to satisfy such an obligation in another way.

31. New subsection 176A(3) of the Customs Act essentially replicates current subsection 177(2), but reflects the fact that that the Comptroller-General of Customs can release the entity from an obligation it would otherwise be obliged to satisfy under Part IV or Part VI of the Customs Act, or specify in the trusted trader agreement an alternative way of satisfying that obligation when entering into a trusted trader agreement with an entity. The Comptroller-General of Customs no longer does this when varying the trusted trader agreement to transform an interim trusted trader agreement into an ongoing trusted trader agreement, as interim trusted trader status is abolished by the amendments made by this Schedule.

Item 4 - Subdivision B of Division 2 of Part XA

32. This item repeals Subdivision B of Division 2 of Part XA of the Customs Act.

33. New subsection 176A(3) is drafted in similar terms to current subsection 177(2). The effect of subsection 177(2) is that if the Comptroller-General of Customs varies an interim trusted trader agreement, the Comptroller-General of Customs may release the entity from obligation(s) concerning the importation or exportation of goods, or vary the agreement to allow the entity to satisfy the obligation(s) in another way.

34. With the abolition of interim trusted trader status and the authority for the Comptroller-General of Customs to enter into a trusted trader agreement being contained in section 176A alone, the ability of the Comptroller-General of Customs to specify obligations from which the entity will be released, and/or to specify an alternative way in which the entity may satisfy the obligation, is relocated to that section. Subdivision B (which only contains section 177) is no longer required and is, therefore, repealed.

Item 5 - Paragraphs 179(1)(a) and (b)

35. This amendment is consequential to the amendments made by items 1- 4 above. Specifically, it reflects the fact that section 177 of Subdivision B of Division 2 of Part XA of the Customs Act is abolished so that the Comptroller-General of Customs no longer enters into an interim trusted trader agreement with an entity. The qualification criteria that an entity must satisfy in order to enter into a trusted trader agreement, and the matters the Comptroller-General of Customs must consider in deciding whether to enter into a trusted trader agreement with an entity, are now contained in section 176A.

Item 6 - Subparagraph 179(1)(j)(ii)

36. Subparagraph 179(1)(j)(ii) of the Customs Act allows the Comptroller-General of Customs to prescribe rules for and in relation to the kinds of information that may be published on the Register of Trusted Trader Agreements, including whether the agreement confers interim or ongoing trusted trader status on the entity.

37. The repeal of this subparagraph is consequential to the amendments made by items 1 - 4 above, and reflects the abolition of interim trusted trader agreements.

Item 7 - Paragraph 273GA(1)(jd)

38. This item repeals paragraph 273GA(1)(jd) of the Customs Act.

39. This is a consequential amendment to the amendments made by items 1 - 4 above. It reflects the abolition of interim trusted trader agreements and the fact that it is no longer necessary to provide a right of merits review to the Administrative Appeals Tribunal in respect of a decision of the Comptroller-General of Customs to refuse to vary a trusted trader agreement under subsection 177(2).

Item 8 - Application provision

40. This item provides that the amendments made by this Schedule apply in relation to nominations to become an Australian trusted trader under paragraph 176A(1)(a) of the Customs Act made on or after commencement, and to a nomination made under that provision before commencement, where the Comptroller-General had not made a decision before that commencement about whether to enter into a trusted trader agreement under subsection 176A(1).

41. This means that all entities that have entered into an interim trusted trader agreement with the Comptroller-General of Customs before commencement will continue to be subject to the current legislation.