Explanatory Memorandum
(Circulated by authority of the Hon Peter Dutton MP, Minister for Home Affairs)OUTLINE
The Australian Government announced in the 2018-19 Budget that it would tighten tobacco border controls by introducing a prohibited import control for tobacco products through the Black Economy Package - Combatting Illicit Tobacco (the Black Economy Package).
On 26 October 2018, the Customs Amendment (Collecting Tobacco Duties at the Border) Act 2018 received the Royal Assent. On its commencement on 1 July 2019, this Act will amend the Customs Act 1901 (the Customs Act) to require tobacco importers to pay customs duty on tobacco products upon importing such tobacco products into Australia. There will no longer be an available option to enter imported tobacco products into a licensed warehouse to defer the payment of duties.
In addition, from 1 July 2019, tobacco products will be prohibited imports under the Customs (Prohibited Imports) Regulations 1956. As such, tobacco products will only be able be imported into Australia with a valid import permit (except for international travellers using duty free allowances, specialty tobacco items such as cigars and smokeless tobacco and tobacco products as approved for importation into Australia by the Minister and listed in a legislative instrument). Tobacco products imported without a valid permit would be a prohibited import and would be able to be seized at the border without warrant.
To ensure efficient border operations can continue under these new arrangements for tobacco products, additional amendments to the Customs Act are now proposed. The Customs Act currently requires seized prohibited imports to be stored for a minimum of 30 days before they can be disposed of. Managing tobacco products as a prohibited import will result in a demonstrable increase of work at the border that may impact the Australian Government's ability to effectively regulate tobacco permit conditions and other border operations.
The amendments in this Bill would empower the Comptroller-General of Customs to cause tobacco products seized as prohibited imports to be dealt with in a manner he or she considers appropriate, including the immediate destruction of the goods. Similar controls already exist for other prohibited imports, including seized psychoactive substances and prohibited serious drug alternatives under subsection 206(2A) of the Customs Act.
Applying this same approach to seized tobacco products will significantly enhance the ability of Australian Border Force officials to effectively deal with imported illicit tobacco and would significantly reduce the operational burden of implementing the illicit tobacco reforms.
FINANCIAL IMPACT STATEMENT
The amendments have no financial impact.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
A Statement of Compatibility with Human Rights has been completed in relation to the amendments in this Bill and assesses that the amendments are compatible with Australia's human rights obligations. A copy of the Statement of Compatibility with Human Rights is at Attachment A.
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