House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Home Affairs, the Honourable Clare O'Neil MP)

GENERAL OUTLINE

Customs Amendment (Strengthening and Modernising Licensing and Other Measures) Bill 2024

The Customs Amendment (Strengthening and Modernising Licensing and Other Measures) Bill 2024 (the Bill) amends the Customs Act 1901 (Customs Act) to modernise and strengthen the customs licensing regime and makes amendments to streamline administrative processes including digitisation of forms. The customs licensing regime encompasses depot, warehouse and customs broker's licences. The Bill also amends the AusCheck Act 2007 to support these reforms by allowing for the disclosure of security identity card information to an officer of Customs for the purposes of the Customs Act.

The Bill is part of the Government's Simplified Trade System (STS) agenda which aims to deliver a simpler, more effective and sustainable cross-border trade environment that will ensure Australia remains a globally competitive trading nation. The STS reforms are designed to roll out progressive benefits for business and government, with regulatory reform the first step toward investment in larger digital reforms.

In conjunction with amendments to modernise and streamline aspects of the licence administration, the amendments strengthen the eligibility to hold a licence and maintain a licence that ensures the integrity of goods under customs control and the applicant is adequately able to report, store and move goods under customs control in line with the obligations of a licence.

The amendments in the Bill are set out thematically according to each Part of Schedule 1 to the Bill.

Part 1 enables the digital transformation of depot, warehouse and customs broker's forms through permitting electronic applications in respect of licences.

Part 2 modernises provisions in respect of serving notices for the customs licencing regime.

Part 3 modernises the publishing of notices by the Comptroller-General of Customs.

Part 4 streamlines the disciplinary and licence cancellation process for licensed customs brokers.

Part 5 removes restrictions on the eligibility of contractors to be a nominee of a customs broker that is a company or a partnership.

Part 6 facilitates the disclosure of information by AusCheck for a purpose or function under the Customs Act.

Part 7 strengthens the fit and proper person test in the customs licensing regime including updating and ensuring that 'management or control' has the same meaning with regards to depots and warehouses.

Part 8 strengthens the criteria for the grant and cancellation of depot and warehouse licences; and strengthens integrity controls such as by extending the powers of authorised Australian Border Force (ABF) officers to give directions to persons operating in a customs licensed place and matters relating to the conditions attached to depot and warehouse licences.

Part 9 streamlines and strengthens licence fee compliance by aligning payment and renewal requirements and enhancing suspension and cancellation provisions for non-payments.

Part 10 facilitates the surrender of a licence upon request and removes the requirement to return or surrender licences after, or when they are in the process, of being cancelled.

Part 11 provides for the refund of licence charges only where the licence has been voluntarily surrendered.

Part 12 enables digitised forms relating to the loading, unloading and use of aircraft's and ship's stores and for these stores to be taken on board an aircraft or ship.

Part 13 enables digitised forms relating to claims for the return of seized goods.

Part 14 makes amendments in respect of provisions for warehouses licenced under Part V of the Customs Act, and which are contingent on the commencement of the Excise and Customs Legislation Amendment (Streamlining Administration) Act 2024 which updates the drafting of those provisions.

Streamlining processes and aligning requirements between customs licence types will reduce regulatory burden and provide clearer requirements for business, supporting business to be better equipped in complying with their obligations under customs legislation. The provisions to strengthen existing customs licensing requirements provide an equal playing field for businesses as it ensures that those who comply with their obligations are not being undercut by entities who seek to circumvent controls.

The reforms benefit government by reducing the administrative burden associated with managing the customs licensing regime and strengthening the Australian Border Force's ability to effectively manage threats of criminal organisation infiltration in the supply chain. The integrity of Australia's international supply chain is a vital component of a prosperous, secure and safe Australia.

The Bill is informed by the recommendations of the Review of Customs Licensing Regimes (the Review) conducted by the then Department of Immigration and Border Protection in 2015. The scope of the Review was to assess all licensing regimes under the Customs Act, including the licensing of customs brokers, depots and warehouses.

The Review of Customs Licensing Regimes Final Report (the Report) was formally submitted to the Comptroller-General of Customs on the 31 March 2017. The Report is available at
https://www.homeaffairs.gov.au/reports-and-pubs/files/review-customs-licensing.pdf .

The Report noted that the Review's recommendations, among other things, are intended to strengthen and streamline the current licensing regimes, with a primary purpose of implementing savings and efficiencies for the Department and industry. The Report also considered that the focus on the integrity of the licensing regime would only grow in importance in the future and that strengthening the integrity of the system will better protect the community.

The Bill is informed by the ABF's Operation JARDENA which was established in November 2021 to bolster and coordinate ABF efforts in combatting organised crime in Australia's international supply chains – and identify supply chain vulnerabilities to inform longer term supply chain reform. The measures in the Bill address some of the identified vulnerabilities that are related to the customs licencing regime.

Consultation

The provisions in the Bill are informed by the outcomes of industry consultation conducted by the Department during February and March 2024. This was undertaken through the ABF's Compliance Advisory Group which is a collaborative forum for Government and industry to co-design solutions for trade and goods compliance issues. Membership of this group includes legal firms, importers, exporters, key industry associations and service providers.

The Bill is informed by the Review of Customs Licensing Regimes outlined above. During the Review, stakeholders, including industry, importers and exporters, non-government stakeholders, and relevant Government agencies were consulted. A total of 37 submissions for the review were received and are tabled publically.

The Department has also undertaken consultation with the Attorney-General's Department and the Office of Impact Analysis.

Customs Licensing Charges Amendment Bill 2024

The purpose of the Customs Licensing Charges Amendment Bill 2024 (Charges Bill) is to modernise, streamline and strengthen the calculation of depot licence charges.

Alongside the primary changes to the Customs Act via the Bill, amendments to the Customs Licensing Charges Act 1997 will strengthen licence fee compliance by aligning licence renewal payment requirements and calculations across the customs licensing regime, where appropriate. In addition, the Charges Bill will rectify deficiencies found in calculating depot licence renewal fees.

Streamlining licence fee processes and aligning payment requirements between customs licence types will support businesses to be better equipped in complying with their obligations under customs legislation.

The reforms also benefits government by reducing the administrative burden associated with managing the customs licensing regime.

The necessary legislative amendments have been in pursuant of modernising and strengthening the customs licensing regime, and were consulted with industry.

The Department has also undertaken consultation with the Office of Impact Analysis on the Charges Bill.

FINANCIAL IMPACT STATEMENT

The amendments in the Bill and the Charges Bill have a low financial impact.

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

The Bill and the Charges Bill are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. Statements of compatibility with human rights have been prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 for the Bill and the Charges Bill, and are at Attachments A and B, respectively.