2002

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

HOUSE OF REPRESENTATIVES

CUSTOMS LEGISLATION AMENDMENT BILL (NO. 1) 2002

EXPLANATORY MEMORANDUM

(Circulated by authority of the Minister for Justice and Customs,
Senator the Honourable Christopher Martin Ellison)

CUSTOMS LEGISLATION AMENDMENT BILL (NO. 1) 2002

OUTLINE

The purpose of this Bill is to amend the Customs Act 1901 (the Customs Act), the Passenger Movement Charge Collection Act 1978, the A New Tax System (Goods and Services Tax) Act 1999, the A New Tax System (Wine Equalisation Tax) Act 1999 and the Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001 (the Trade Modernisation Act) to:

•	amend Customs offences to ensure consistency with the Criminal Code and ensure consistency in the presentation of financial penalties in the Customs Act (Schedule 1);
•	amend the valuation provisions in the Customs Act to ensure that the legislation is consistent with the Agreement on the Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (Schedule 2);
•	make minor amendments to the Trade Modernisation Act and to the provisions that will be introduced by that Act (Schedule 3);
•	allow the seizure without warrant of special forfeited goods in the Protected Zone in certain circumstances (Schedule 4); and
•	create a system under which re-mail reporters may be registered and may provide less information in respect of re-mail items in their cargo reports (Schedule 5);
•	clarify existing circumstances in which passenger movement charge is not payable and include a new group of people who do not have to pay that charge (Schedule 6).
FINANCIAL IMPACT STATEMENT

In relation to the amendment of the valuation provisions, a number of motor vehicle importers are seeking to deduct warranty costs from the customs value of their imports.  To date, the revenue losses resulting from the deduction of warranty costs from the customs value of imported motor vehicles are estimated to be of the order of around $15 million.  Failure to introduce the proposed amendments is likely to result in further revenue losses of $300,000 per month for motor vehicles.   

In relation to the passenger movement charge amendments, the proposed amendments are the result of a recommendation from an Australian National Audit Office follow-up audit of the Passenger Movement Charge.  The particular recommendation is for Customs to provide a clear understanding of the exemption categories to its clients.

The approximate value of all exemptions to the Passenger Movement Charge is $18.2 million per annum.  Of this amount more than 80% is accounted for by children and diplomats.  The extension of the Passenger Movement Charge exemption to persons covered by the Overseas Missions (Privileges and Immunities) Act 1995 will result in a very small loss of revenue.  This will be more than offset by clarifying the status of passengers who undertake both air and sea legs within their itinerary, which should result in an increase in revenue. 

In the absence of accurate information it is difficult to estimate the financial impact of the proposed amendments, however, the nett increased revenue is not anticipated to exceed $100,000 per annum and may be considerably less than that figure.

The other amendments in this Bill have no financial impact.   
CUSTOMS LEGISLATION AMENDMENT BILL (NO. 1) 2002

NOTES ON CLAUSES

Clause 1 – Short title

This clause provides for the Act, when enacted, to be cited as the Customs Legislation Amendment Act (No. 1) 2002.

Clause 2 - Commencement 

Subclause (1) provides that each provision of this Act specified in column 1 of the table in that subclause commences or is taken to have commenced on the day or at the time specified in column 2 of the table.

Item 1 of the table provides that sections 1 to 4 and anything in this Act not elsewhere covered by this table commence on the day on which this Act receives the Royal Assent.

Item 2 of the table provides that Schedules 1 and 2 to the Bill commence on the day on which the Act receives the Royal Assent.  Schedule 1 harmonises a number of Customs offences.  Schedule 2 contains amendments to the valuation provisions of the Customs Act 1901 (“the Customs Act”).

Many of the items in Schedule 3 to the Bill commence on the later of the day on which an item in the Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001 (“the Trade Modernisation Act”) commences or the day on which this Act receives the Royal Assent.  This is because many of the provisions in Schedule 3 to the Bill amend the Customs Act as it will be amended by the Trade Modernisation Act and hence the amendments in this Bill cannot commence until the relevant item of the Trade Modernisation Act has commenced.  However, it is possible that some of the items of the Trade Modernisation Act may commence prior to the amendments in Schedule 3 to this Bill, if this is the case, the amendments in this Bill will commence on the Royal Assent of this Bill.

Item 3 of the table provides that items 1 to 5 of Schedule 3 to the Bill commence on the later of:
_	immediately after item 118 of Schedule 3 to the Trade Modernisation Act commences; and
_	the day on which this Act receives the Royal Assent.
Items 1 to 5 of Schedule 3 to the Bill amend the reporting requirements that will be inserted into the Customs Act by the Trade Modernisation Act.
Item 4 of the table provides that items 6 and 7of Schedule 3 to the Bill commence on the later of:
_	immediately after item 118 of Schedule 3 to the Trade Modernisation Act commences; and
_	if the Border Security Legislation Amendment Act 2002 has been enacted - immediately after the commencement of Part 1 of Schedule 6 to that Act; and
_	the day on which this Act receives the Royal Assent.
Items 6 and 7 amend section 64AE of the Customs Act to reflect the different people who have to report to Customs once the Trade Modernisation Act commences.
Item 5 of the table provides that item 8 of Schedule 3 to the Bill commences on the later of:
_	immediately after item 81 of Schedule 3 to the Trade Modernisation Act commences; and
_	the day on which this Act receives the Royal Assent.
Item 8 of Schedule 3 to the Bill amends the A New Tax System (Goods and Services Tax) Act 1999 as a consequence of the COMPILE contingency arrangements being repealed by the Trade Modernisation Act.
Item 6 of the table provides that items 9 to 21 of Schedule 3 to the Bill commence on the later of:
_	immediately after item 38 of Schedule 3 to the Trade Modernisation Act commences; and
_	the day on which this Act receives the Royal Assent.
Items 9 and 10 of Schedule 3 to the Bill amend the A New Tax System (Wine Equalisation Tax) Act 1999 as consequence of amendments that will be made by the Trade Modernisation Act to section 71A of the Customs Act.  Items 11 to 21 of Schedule 3 to the Bill amend the import provisions of the Customs Act that are being replaced or amended by the Trade Modernisation Act.
Item 7 of the table provides that items 22 and 23 of Schedule 3 to the Bill commence on the later of:
_	immediately after item 138 of Schedule 3 to the Trade Modernisation Act commences; and
_	the day on which this Act received the Royal Assent.
Items 22 and 23 of Schedule 3 to the Bill amend section 71E of the Customs Act as it will be amended by the Trade Modernisation Act.
Item 8 of the table provides that items 24 and 25 of Schedule 3 to the Bill commence on the day on which this Act receives the Royal Assent. Items 24 and 25 of Schedule 3 to the Bill repeal the offence provisions from section 71E of the Customs Act.
Item 9 of the table provides that item 26 of Schedule 3 to the Bill commences on the later of:
_	immediately after item 38 of Schedule 3 to the Trade Modernisation Act commences; and
_	the day on which this Act received the Royal Assent.
Item 26 of Schedule 3 to the Bill inserts a new requirement to provide signatures on electronic communications sent to Customs.  
Item 10 of the table provides that item 27 of Schedule 3 to the Bill commences on the day on which this Act receives the Royal Assent.  Item 27 of Schedule 3 to the Bill amends section 33 of the Customs Act to clarify its operation.
Item 11 of the table provides that item 28 of Schedule 3 to the Bill commences on the later of:
_	immediately after item 62 of Schedule 3 to the Trade Modernisation Act commences; and
_	the day on which this Act received the Royal Assent.
Item 28 of Schedule 3 to the Bill inserts a note into the Customs Act as a consequence of this Act inserting new section 119AA into the Customs Act.
Item 12 of the table provides that item 29 of Schedule 3 to the Bill commences on the day on which this Act receives the Royal Assent.  Item 29 of Schedule 3 to the Bill makes a technical correction to subsection 114B(7).
Item 13 of the table provides that items 30 to 43 of Schedule 3 to the Bill commence on the later of:
_	immediately after item 62 of Schedule 3 to the Trade Modernisation Act commences; and
_	the day on which this Act received the Royal Assent.
Items 30 to 43 of Schedule 3 to the Bill amend the new export provisions of the Customs Act that will be amended or replaced by the Trade Modernisation Act.
Item 14 of the table provides that item 44 of Schedule 3 to the Bill commences on the later of:
_	immediately after item 17 of Schedule 3 to the Trade Modernisation Act commences; and
_	the day on which this Act received the Royal Assent.
Item 44 of Schedule 3 to the Bill inserts a new definition of screening charge into the Customs Act after the Import Processing Charges Act 2001 commences.
Item 15 of the table provides that items 45 to 47 of Schedule 3 to the Bill commence on the later of:
_	immediately after item 97A of Schedule 3 to the Trade Modernisation Act commences; and
_	the day on which this Act received the Royal Assent.
Items 45 to 47 of Schedule 3 to the Bill amend new section 102A of the Customs Act as inserted by the Trade Modernisation Act.
Item 16 of the table provides that item 48 of Schedule 3 to the Bill commences on the later of:
_	immediately after item 5 of Schedule 1 to the Trade Modernisation Act commences; and
_	the day on which this Act received the Royal Assent.
Item 48 of Schedule 3 to the Bill amends new section 122F of the Customs Act as inserted by the Trade Modernisation Act.
Item 17 of the table provides that item 49 of Schedule 3 commences on the later of:
_	immediately after item 1 of Schedule 3 to the Trade Modernisation Act commences; and
_	the day on which this Act received the Royal Assent.
Item 49 of Schedule 3 to the Bill amends new section 126DA of the Customs Act as inserted by the Trade Modernisation Act.
Item 18 of the table provides that item 50 and 51 of Schedule 3 to the Bill commence on the later of:
_	immediately after item 13 of Schedule 1 to the Trade Modernisation Act commences; and
_	the day on which this Act received the Royal Assent.
Items 50 and 51 of Schedule 3 to the Bill amend new section 214AH of the Customs Act as inserted by the Trade Modernisation Act.
Item 19 of the table provides that items 52 to 54 of Schedule 3 to the Bill commence on the later of:
_	immediately after item 5 of Schedule 2 to the Trade Modernisation Act commences; and
_	the day on which this Act received the Royal Assent.
Items 52 to 54 of Schedule 3 to the Bill amend sections 243SA and 243X of the Customs Act as inserted by the Trade Modernisation Act.
Item 20 of the table provides that item 55 of Schedule 3 to the Bill commences on the later of:
_	immediately after item 101 of Schedule 3 to the Trade Modernisation Act commences; and
_	the day on which this Act received the Royal Assent.
Item 55 of Schedule 3 to the Bill amends new section 273EB of the Customs Act as inserted by the Trade Modernisation Act.
Item 21 of the table provides that item 56 to 65 of Schedule 3 to the Bill commence on the day on which this Act receives the Royal Assent.  Item 56 to 65 of Schedule 3 to the Bill amend the commencement of the Trade Modernisation Act.
Item 22 of the table provides that item 66 of Schedule 3 commences at the same time as item 118 of Schedule 3 to the Trade Modernisation Act commences.  Item 68 inserts a transitional provision into the Trade Modernisation Act.
Item 23 of the table provides that items 67 and 68 of Schedule 3 commence immediately before Part 2 of Schedule 3 to the Trade Modernisation Act commences.  Items 69 and 70 of Schedule 3 to the Bill repeal and replace items of the Trade Modernisation Act.
Item 24 of the table provides that item 691 of Schedule 3 commences at the same time as item 30 of Schedule 3 to the Trade Modernisation Act commences.  Item 71 inserts new item 30A into the Trade Modernisation Act.
Item 25 of the table provides that items 70 and 71 of Schedule 3 commence at the same time as item 82 of Schedule 3 to the Trade Modernisation Act commences.  Items 72 and 73 amend the transitional provisions of the Trade Modernisation Act.
Item 26 of the table provides that item 72 of Schedule 3 to the Bill commences immediately before item 110 of Schedule 3 to the Trade Modernisation Act commences.  Item 74 repeals and substitutes item 111 of the TMA.
Item 27 of the table provides that item 73 of Schedule 3 to the Bill commences immediately before item 117 of Schedule 3 to the Trade Modernisation Act commences.  Item 75 repeals and substitutes item 116 of the Trade Modernisation Act.
Item 28 of the table provides that Schedule 4 to the Bill commences on the day on which this Act receives the Royal Assent.  Schedule 4 introduces new powers of seizure without warrant for certain goods in the Protected Zone.
Item 29 of the table provides that Part 1 of Schedule 5 to the Bill commences on a single day to be fixed by Proclamation, subject to subsection (3).  Schedule 5 creates a system under which re-mail reporters may be registered and may provide less information in respect of re-mail items in their cargo reports.
Item 30 of the table provides that Part 2 of Schedule 5 to the Bill commences immediately after item 118 of Schedule 3 to the Trade Modernisation Act commences.  This will ensure that the amendments made to current section 64AB in respect of re-mail will not be repealed when section 64AB is replaced by the Trade Modernisation Act.
Item 31 of the table provides that Schedule 6 to the Bill commences on the day on which this Act receives the Royal Assent.  Schedule 6 relates to passenger movement charge.
Subclause (2) provides that column 3 of the table is for additional information that is not part of this Act.  This information may be included in any published version of this Act.

Subclause (3) provides that if a provision covered by item 29 of the table does not commence within the period of 6 months on the day on which this Act receives the Royal Assent, it commences on the first day after the end of that period.  This is the standard provision that applies to commencement by Proclamation.

Clause 3 - Schedule(s)

This clause is the formal enabling provision for the Schedule to the Bill, providing that each Act specified in a Schedule is amended in accordance with the applicable items of the Schedule.  In this Bill the Customs Act 1901, the Passenger Movement Charge Collection Act 1978, the A New Tax System (Goods and Services Tax) Act 1999, the A New Tax System (Wine Equalisation Tax) Act 1999, the Import Processing Charges Act 2001 and the Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001 are being amended.

The clause also provides that the other items of the Schedules have effect according to their terms.  This is a standard enabling clause for transitional, savings and application items in amending legislation.  

Clause 4 – Application of certain amendments

This is the application provision for the amendments relating to the harmonisation of Customs offences with the Criminal Code. 

Schedule 1 – Harmonisation of Customs offences

Customs Act 1901

Items 1 to 5, 7 to 21, 23, 25, 27 to 31, 37, 39 to 41, 43, 49 to 59, 61, 62, 64 to 75, 76 to 83, 86, 88 to 98

There is inconsistency in the presentation of financial penalties in the Customs Act.  Monetary penalties and fines are expressed in either penalty units or dollar amounts.  It is therefore proposed that the dollar amounts for Customs offences be changed to references to their equivalent number of penalty units.

The amendments contained in each of these items amend those offence provisions in the Customs Act that refer to dollar amounts by deleting the reference to dollar amounts and substituting a reference to the equivalent penalty unit amount.

Items 6, 22, 24, 26, 36, 38, 42, 44, 46, 48, 60, 63, and 87

The Law and Justice Amendment (Application of Criminal Code) Act 2000 ("Application Act") applies:

(a)	Chapter 2 of the Criminal Code to criminal offences in the Customs Act; and 

(b)	Parts 2.1, 2.2 and 2.3 of Chapter 2 to offences in the Customs Act that are the subject of Customs prosecutions under Part XIV of the Customs Act.
 
As a consequence of the application of the Criminal Code, it is also necessary to ensure that provisions creating offences of strict liability expressly provide that an offence is a strict liability offence.  A number of offences in Customs legislation that are strict liability offences are not expressly stated to be strict liability offences.  The Application Act also amends these offences to expressly state that they are strict liability offences.

There are however, a number of strict liability offences in the Customs Act that have not been amended by the Application Act where further analysis of the offences suggests that they are strict liability offences.  It is proposed that these offences be appropriately amended to ensure that after the application of the Criminal Code they continue to be strict liability offences.

The offences being amended are:

(i) 	section 19 (failure to provide suitable office accommodation to a Customs officer) – item 6
(ii) 	section 64 (failure to provide an impending arrival report)  - item 22
(iii)	section 64AA (failure to provide an arrival report) – item 24
(iv)`	section 64AC (failure to provide a passenger and crew report) – item 26
(v)	section 67ET (failure to provide reasonable assistance upon request) – item 36
(vi)	section 69 (failure to provide return for like customable goods) – item 38
(vii)	section 71G (communicating further import entry) – item 42	
(viii) 	section 74(1) (unship goods contrary to Collector’s permit) – item 44
(ix) 	section 77D(5) (failure to provide return when COMPILE down) – item 46	
(x)	section 77E(5) (failure to provide return when COMPILE down) – item 48
(xi)	section 116 (failure to withdraw or amend export entry) – item 60
(xii)	section 122D (failure to withdraw computer export entry) – item 63
(xiii)	section 234A (Unauthorised entry to places and on ships, aircraft or wharves) – item 87

The standard note referring to section 6.1 of the Criminal Code, which governs strict liability, is also added to each of these sections.

Item 32 - Subsection 67ES(4)

This item amends subsection 67ES(4) by deleting the phrase “without reasonable excuse”.

Item 33 - After subsection 67ES(4)

This item inserts a new subsection 67ES(4A) which provides that subsection (4) does not apply in relation to a failure to comply with subsection 67ES(2) or (3) if a person has a reasonable excuse for the failure.

In combination with the amendment in item 32, this amendment will prevent future interpretation that the current exception is an element of the offence in subsection 67ES(2) or (3).  It puts it beyond doubt that it is an exception to the offence.  This amendment harmonises this offence with the general principles of criminal responsibility as codified in Chapter 2 of the Criminal Code.

Item 34 - Subsection 67ES(6)

This item amends subsection 67ES(6) by deleting the reference to “knowingly or recklessly” and substituting “intentionally”.

Presently, this offence applies the fault element of knowledge or recklessness to the physical element of conduct of making a statement or presenting a document.  Following the application of the Criminal Code it will not be possible to apply these fault elements to a physical element consisting of conduct.  The only fault element that may be applied to a physical element consisting of conduct is intention.  This amendment replaces the present fault elements with the appropriate fault element of intention.

Item 35 – Subsection 67ET(2)

This item amends subsection 67ET(2) by deleting the phrase “without reasonable excuse”.

Item 36 – At the end of section 67ET

This item inserts a new subsection 67ET(3) which provides that subsection (2) does not apply if a person has a reasonable excuse.

In combination with the amendment in item 35, this amendment will prevent future interpretation that the current exception is an element of the offence in subsection 67ET(2).  It puts it beyond doubt that it is an exception to the offence.  This amendment harmonises this offence with the general principles of criminal responsibility as codified in Chapter 2 of the Criminal Code.

Item 45 – Subsection 77D(5)

This item amends subsection 77D(5) by deleting the phrase “without reasonable excuse”.

Item 46 – After subsection 77D(5)

This item inserts a new subsection 77D(5A) which provides that subsection (5) does not apply if a person has a reasonable excuse.

In combination with the amendment in item 45, this amendment will prevent future interpretation that the current exception is an element of the offence in subsection 77D(5).  It puts it beyond doubt that it is an exception to the offence.  This amendment harmonises this offence with the general principles of criminal responsibility as codified in Chapter 2 of the Criminal Code.

Item 47 – Subsection 77E(5)

This item amends subsection 77E(5) by deleting the phrase “without reasonable excuse”.

Item 48 – After subsection 77E(5)

This item inserts a new subsection 77E(5A) which provides that subsection (5) does not apply if a person has a reasonable excuse.

In combination with the amendment in item 47, this amendment will prevent future interpretation that the current exception is an element of the offence in subsection 77E(5).  It puts it beyond doubt that it is an exception to the offence.  This amendment harmonises this offence with the general principles of criminal responsibility as codified in Chapter 2 of the Criminal Code.

Items 84 and 85

These items effect technical amendments to renumber existing provisions of section 234 of the Customs Act. 

Schedule 2 — The valuation of imported goods

Customs Act 1901

Item 1 – subsection 154(1) (definition of price)

This item replaces the words “value unrelated matters” in the definition of price in subsection 154(1) of the Customs Act with the word “rebates”, consequent upon the repeal of the value unrelated matter definition (see item 3 below).

Item 2 – subsection 154(1)

This item inserts a new definition of rebate in subsection 154(1) of the Customs Act which has similar wording to paragraph (a) of the current definition of value unrelated matter.

Item 3 – subsection 154(1) (definition of value unrelated matter)

This item repeals the definition of value unrelated matter in subsection 154(1) of the Customs Act.  

The purpose of this amendment is to ensure that, under the valuation provisions of the Customs Act, components of the price of imported goods cannot be deducted from the customs value for duty purposes contrary to the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (the Valuation Agreement).  Australia, as a member of the World Trade Organization, is obliged to ensure that its customs valuation legislation is consistent with the Valuation Agreement.  

The Full Federal Court in CEO of Customs v AMI Toyota Ltd (2000) 102 FCR 578 found that the warranty component of the price paid for imported vehicles fell within paragraph (b) of the current definition of value unrelated matter in the Customs Act, and therefore should be deducted from the price paid and the customs value for duty purposes.  While the warranty component was the average warranty cost incurred by the seller, the Court found that the warranty component was also a cost related to the importer’s warranty activities.

The High Court refused an application for special leave to appeal the Full Federal Court’s decision.

Paragraph (b) of value unrelated matter was intended to reflect a Note in the Valuation Agreement that the costs of activities undertaken by the buyer on the buyer’s own account are not considered an indirect payment to the seller, and therefore should not be added to the price paid in determining customs value.  The paragraph was not intended to allow the deduction of the seller’s warranty costs from a price which is inclusive of warranty, as the Full Federal Court found in the Toyota decision.  The Valuation Agreement requires the customs value of imported goods to be the total of payments made for the goods, with certain allowed adjustments.  It does not allow the deduction of warranty costs from the customs value.

The reasoning of the Full Federal Court is potentially applicable to the valuation of a wide variety of goods which are imported subject to a warranty from the seller.  Moreover, importers may seek to deduct other components of the price of imported goods, besides warranty costs, from the customs value.

In light of the Full Federal Court’s decision, it is considered that paragraph (b) is unnecessary, and ambiguous.  Therefore the Bill proposes to delete paragraph (b) by deleting the whole definition of value unrelated matter, to end the uncertainty as to the valuation of goods imported with a price inclusive of warranty.  This amendment would bring Australia’s valuation legislation into accordance with the Valuation Agreement, and would end the uncertainty as to the valuation of goods that are imported subject to a warranty from the seller.  

Paragraph (a) of this definition will be retained in the new definition of rebate (item 2 above).  

Item 4 – Transitional provision

This transitional provision provides that the amendments of the Act made by this Bill do not apply in respect of the valuation of goods that are entered for home consumption before the date of commencement.  

Schedule 3 — International trade modernisation amendments

The Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001 (the Trade Modernisation Act) contains substantial amendments to the Customs Act 1901 (the Customs Act) and will repeal the Import Processing Charges Act 1997 (to be replaced by the Import Processing Charges Act 2001).  Most of these amendments have not yet commenced.  Most of the amendments to the Customs Act 1901 (“the Customs Act”) contained in the Schedule are to those provisions as they will be introduced or amended by the Trade Modernisation Act.  References to ‘new’ provisions are to the provisions as inserted, replaced or amended by the Trade Modernisation Act.

Part 1 - Reporting requirements

Customs Act 1901

Item 1 - Subsection 64AAC(4)

Under new section 64AAC operators of ships will have to report to Customs who they have engaged to unload the cargo from their ship.  The operators of aircraft have to report the depot operator who will first receive the cargo after it has been unloaded.  In respect of ships that report must be made during the period within which the operator must report the impending arrival of the ship.  However there is no such period in which operators of aircraft must report the relevant depot operator.

This item will ensure that reports of depot operators, also have to be made during the period within which the operator must report the impending arrival of the aircraft.

Item 2 - After subsection 64AB(4)

New section 64AB will require that cargo reporters who have arranged for goods to be carried on a ship or aircraft must report those goods to Customs.  Except during an initial statutory moratorium period those reports must be made electronically.  During the moratorium periods they may be made by document.  However, new section 64AB does not set out how those reports must be made and what information they should include.

This item inserts new subsection 64AB(4A) which provides that a documentary cargo report must be in writing, be in an approved form, be communicated to Customs in certain ways, contain such information as is required by the form and be signed in a manner specified in the form.

This item also inserts new subsection 64AB(4B) which provides that an electronic cargo report must communicate such information as is set out in an approved statement.

New subsections 64AB(4A) and (4B) mirror other reporting requirements that are contained in Subdivision A of Division 3 of Part IV of the Customs Act.

Items 3 and 4 - Subsection 64ABAA(4)

New section 64ABAA provides that certain people have to provide outturn reports to Customs (these reports confirm what goods have been unloaded from a ship or aircraft and what goods are subsequently unpacked).  In particular when cargo is moved, under a permission given to the operator of a ship or aircraft or to a cargo reporter, to a Customs place other than a warehouse, the person in charge of the Customs place must make an outturn report.

However, there are circumstances in which Customs wants an outturn report but the permission to move the goods will be given to a person other than the operator or cargo reporter.

These items ensure that outturn reports have to be provided whenever goods are moved to a Customs place under a permission (no matter who has the permission).

Item 5 - After section 64AD

Under the Customs Act as amended by the Trade Modernisation Act certain communications to Customs will either have to be made electronically or may be made electronically.  New paragraph 162DA(1)(c) provides that the Chief Executive Officer must determine, and cause to be published in the Gazette, the information technology requirements that have to be met to satisfy a requirement that a person’s signature be given to Customs in connection with information when the information is communicated electronically.

However, once the Trade Modernisation Act commences there will not be any requirements that a person sign their electronic communications and hence new paragraph 126DA(1)(c) will have no effect.

Further, new subsection 126DA(1) requires the CEO to determine other information technology requirements but it is unclear from the amendments that will be made by the Trade Modernisation Act that these requirements must be complied with when electronic communications are sent to Customs.

This item inserts into Subdivision A of Division 3 of Part IV new section 64ADAA which would require electronic communications be signed by the person who makes them and provides that the other information technology requirements determined under section 126DA must be met.

Items 6 and 7- Subsection 64AE(1) and subsection 64AE(2)

Section 64AE of the Customs Act provides that the master and owner of a ship to which section 64, 64AA, 64AB or 64AC apply and pilot and owner of aircraft to which section 64, 64AA, 64AB or 64AC apply must answer certain questions and produce certain documents.  Whilst section 64AE is being amended by the Trade Modernisation Act to ensure that the references to the reporting sections are correct, the requirement to answer and produce will remain with masters, pilots and owners.  However, under the Trade Modernisation Act the requirement to provide reports will be placed on operators and cargo reporters.

Further, the Border Security Legislation Amendment Act 2002 would insert new reporting requirements into the Customs Act and cross references to those provisions need to be included in section 64AE.  These items ensure that section 64AE refers to those new provisions.

These items also amend section 64AE so that the requirements to answer and produce are placed on the people who are required to provide reports to Customs.  Relevant operators will have to answer questions and produce documents relating to their ship or aircraft and its cargo, crew, passenger, stores or voyage.  Cargo reporters will have those same obligations in respect of the cargo that they have arranged to be carried on a relevant ship or aircraft.

Part 2 - Importation of goods

A New Tax System (Goods and Services Tax) Act 1999

Item 8 - Subsection 114-5(1) (table item 14)

Section 114 of the A New Tax System (Goods and Services Tax) Act 1999 sets out when a taxable importation is made in respect of imported goods that are not entered after importation.  In particular item 14 of the table provides that when COMPILE contingency arrangements are in place a taxable importation will take place when the goods are taken into home consumption in accordance with a permission granted under section 77D of the Customs Act.

The Trade Modernisation Act will repeal section 77D of the Customs Act and hence item 14 of the table in subsection 114-5(1) will no longer be necessary.

A New Tax System (Wine Equalisation Tax) Act 1999

Items 9 and 10

Currently section 71A provides in part that an import entry concerns goods intended to be entered for home consumption, for warehousing, and for transhipment, and warehoused goods that are intended to be entered for home consumption.  

After the Trade Modernisation Act commences an entry of goods for home consumption will be able to be made by communicating an import declaration or an RCR (request for cargo release) and an entry of goods for warehousing will be able to be made by communicating to Customs a warehouse declaration.

Section 71A will be replaced in part by new section 71A (import declarations) and 71DB (request for cargo releases).  In particular current subsection 71A(6) will be replaced by subsections 71A(7) and 71DB(7) and subsection 71A(7) will be replaced by subsections 71A(8) and 71DB(8).

These items make consequential amendments to the A New Tax System (Wine Equalisation Tax) Act 1999 to reflect the changes being made to section 71A by the Trade Modernisation Act.

Customs Act 1901

Item 11 - Subparagraph 71(2)(a)(i)

Section 68 of the Customs Act sets out those imported goods that need to be entered.  Under paragraph 68(1)(f) certain goods whose value does not exceed $250 do not have to be entered.  Those goods that do not have to be entered must be reported and cleared in accordance with section 71.  

Section 71 will be replaced by the Trade Modernisation Act.  Under new subsection 71(2) the owner of goods of a kind referred to in paragraph 68(1)(e), (f) or (i), or the person acting on behalf of the owner, must communicate to Customs a declaration stating whether the value of the goods is less than $250.  The requirement to report the goods under section 71 (does not exceed $250) does not match the declaration requirement (less than $250).

This item will amend new subsection 71(2) to ensure it is consistent with section 68.

Item 12 - Subsection 71A(3)

New subsection 71A(3) provides that a documentary import declaration must be made by the owner of the goods.  This item removes that requirement as there are other people who may make documentary import declarations on behalf of owners (eg Customs brokers).

Item 13 - Subsection 71A(4)

New subsection 71A(4) provides that an electronic import declaration can be communicated only by the owner of the goods concerned.  This item repeals subsection 71A(4) to remove that requirement.  Again it is possible for other people to make electronic import declarations on behalf of owners.  

Item 14 - Subsections 71DC(1) and (2)

New subsection 71DB(3) provides that a RCR (request for cargo release) can only be made by a person who has entered into an import information contract or by a customs broker nominated in the contract to make communications to Customs on behalf of the person.

This item repeals and replaces new subsections 71DC(1) and (2) to make it clear that the RCR processing charge is payable by the person who has entered into the relevant import information contract and not the person who sends the RCR to Customs. As explained above a nominated broker may send an RCR on behalf of a person who has entered into the relevant import information contract.

The amendments to new subsection 71DC(2) are consequential on the changes to subsection 71DC(1).

Item 15 - Subsection 71DD(1)

This item amends subsection 71DD(1) to make it clear that RCRs may be sent by a nominated customs broker on behalf of the person who has entered into the relevant import information contract.

Item 16 - At the end of subsection 71DD(1)

Section 71DD provides that the CEO may enter into import information contracts with persons for the purposes of enabling RCRs to be made in respect of that persons’ goods.  Section 273EB provides that the CEO may make business rules that a person who wishes to enter into, or is a party to, an import information contract must comply with.

This item inserts a note into new subsection 71DD(1) that makes a reference to section 273EB.

Item 17 - Paragraph 71DD(3)(c)

This item corrects a reference to the ABN of Ericsson Australia Pty Limited which is incorrect.

Item 18 - Section 71DF

This item replaces new section 71DF to make it clear that the obligation to make periodic declarations applies both where the person makes an RCR in the previous month or an RCR is made on their behalf by a nominated Customs broker.

Item 19 - Section 71DG

This item replaces new section 71DG.  New subsection 71DG(1) makes it clear the periodic declaration processing charge is payable by the person who has entered into the relevant import information contract and not the person who sent the periodic declaration (which may be a nominated customs broker).

New subsection 71DG(2) sets out when the charge is payable.  Whilst subsection 71DC(2) sets out when RCR processing charge is payable, a similar provision in respect of periodic declaration processing charge was omitted in error.

Item 20 - Subsection 71DH(3)

New subsection 71DH(3) provides that a documentary warehouse declaration must be made by the owner of the goods.  This item removes that requirement as there are other people who can make documentary warehouse declarations on behalf of owners (eg Customs brokers).

Item 21 - Subsection 71DH(4)

New subsection 71DH(4) provides that an electronic warehouse declaration can be communicated only by the owner of the goods concerned.  This item repeals subsection 71DH(4) to remove that requirement.  Again it is possible for other people to make electronic warehouse declarations on behalf of owners.  

Item 22 - Subsection 71E(2A)

New subsection 71E(2A) provides that if goods have not been entered for home consumption or warehousing, an application to move the goods can only be made by certain people.  However, some goods do not need to be entered and these requirements should not apply to them.

This item amends subsection 71E(2A) so that it only applies to those goods that need to be entered.

Item 23 - Subsection 71E(2A)

New subsection 71E(2A) allows stevedores and depot operators who have possession of goods (amongst others) to apply for permission to move goods.  In some circumstances a stevedore or depot operator will want to apply for a movement permission even though they don’t currently have possession of the goods.

This item will allow stevedores and depot operators who intend to take possession of goods to apply for permission to move those goods.

Items 24 and 25

These items repeal the offence provisions contained in section 71E since offences that cover the same conduct are contained in section 33 of the Customs Act.  The references to subsections 71E(3AA) and (3AB) are those inserted by item 34 of Schedule 21 to the Law and Justice Legislation Amendment (Application of Criminal Code) Act 2001 not those inserted by the Trade Modernisation Act.

Item 26 - After section 71L

This item is similar to item 5 of Schedule 3 explained above, but inserts the requirement to sign electronic communications and meet information technology requirements into Division 4 of Part IV of the Customs Act.

Part 3 - Exportation of goods

Customs Act 1901

Item 27 - Paragraphs 33(1)(b), (2)(b), (3)(c), (5)(b) and (6)(b)

Section 33 makes it an offence to move, alter or interfere with goods that are subject to Customs control.  It is not an offence if the movement, alteration or interference is authorised by the Customs Act.  However, there are also provisions where movement of goods is authorised not by the direct operation of Act itself, but through a permission granted, or other process carried out, under the Act.  For example, section 71E of the Customs Act allows a person to apply for permission to move goods and an officer of Customs may grant permission to move goods. 

Whilst it has always been considered that people who move goods in accordance with such permissions are not committing an offence under section 33 this item makes it clear that it is not an offence if the goods are moved as authorised by or under the Customs Act.

 Item 28 - At the end of section 33

Section 33 makes it an offence to move, alter or interfere with goods that are subject to Customs control unless they are moved, altered or interfered as authorised by the Customs Act.

Item 41 of Schedule 3 to this Bill inserts new section 119AA into the Customs Act which allows people to apply for permission to move certain goods intended for export that are under the control of Customs.

This item inserts a note into section 33 that refers to new section 119AA.

Item 29 - Subsection 114B(7)

This item corrects a typographical error in subsection 114B(7).

Item 30 - Subsection 114BB(1)

Under new section 114BB, the CEO may enter into an export information contract with a person for the purpose of enabling ‘accredited client export approved numbers’ (ACEANs) to be used in connection with the export of the person’s goods.  These numbers are ‘accredited client export approval numbers’.

This item changes the reference to ‘approved’ to ‘approval’ to reflect the correct title.

Item 31 - At the end of subsection 114BB(1)

Section 114BB provides that the CEO may enter into export information contracts with persons for the purposes of enabling ACEANs to be made in respect of that person’s goods.  Section 273EB provides that the CEO may make business rules that a person who wishes to enter into, or is a party to, an export information contract must comply with.

This item inserts a note into new subsection 114BB(1) that makes a reference to section 273EB.

Item 32 - Paragraph 114BB(3)(c)

This item corrects a reference to the ABN of Ericsson Australia Pty Limited which is incorrect.

Item 33 - At the end of paragraph 114BC(b)

New paragraph 114BC(b) states that a person who uses ACEANS (accredited client export approval numbers) must make at least one electronic declaration no later than the first day of the month following a relevant export.  This is more restrictive than, and inconsistent with, the corresponding import provision in paragraph 71DF(b), which relates to RCRs, where it is stated that at least one electronic declaration must be made no later than the first day of the following month “or such other day of that month as is prescribed”.  (These words were inserted by amendment to the Modernisation Act in the Senate).

This item will make the same amendment to the export provisions to ensure they are consistent with the equivalent import provisions.

Item 34 - Subsection 114C(7)

This item contains technical amendments to new subsection 114C(7) to ensure that it is consistent with the other provisions in new section 114C.

New subsection 114C(6) provides the power to suspend an authority to deal with goods for export for a specified period of time if there are “reasonable grounds to suspect that the goods have been dealt with in contravention of a “Customs-related law”.  However, new subsection 114C(7) only provides the power to revoke that suspension when goods are no longer suspected to “have been dealt with in contravention of this Act”.  This item will ensure that the power of revocation can be exercised when the goods are no longer suspected to “have been dealt with in contravention of a Customs-related law”.

Item 35 - Paragraph 114D(1)(b)

New section 114D provides in part that the owner of goods in respect of which an export entry has been communicated to Customs must not remove any of the goods from the possession of the person to whom they are delivered or of any person to whom they are subsequently passed in accordance with the entry unless the entry is withdrawn, or withdrawn in so far as it applies to those goods.

However, there are circumstances where goods need to be removed from the possession of the person to whom they are delivered and it is cumbersome to withdraw all of the entries that apply to the goods.  For example, often goods are consolidated with other goods intended to be exported in one container.  If the container is delivered to the wharf and subsequently it is decided not to export the goods, the entries for all of the goods would need to be withdrawn (even though the remainder of the goods are still intended to be exported) in order to remove the container from the wharf for the purpose of unpacking and removing the goods which are no longer being exported.

It is proposed to insert new section 119AA into the Customs Act which will allow a person to apply for permission to move goods intended for export so that they do not have to unnecessarily withdraw entries in respect of goods that are still intended to be exported.

This item amends new section 114D so that the prohibition on removing goods does not apply in respect of goods for which the entry has been withdrawn nor to goods for which permission to move, alter or interfere with the goods has been given under new section 119AA.

Item 36 - Subsection 117AA(3)

Under new subsection 117AA(3) a person in charge of certain prescribed places must not permit prescribed goods for export to be released from the place unless the person has ascertained, from information made available by Customs, that the goods have been entered for export and there is an authority to deal with the goods in force.

As explained above item 41 will insert new section 119AA into the Customs Act which will allow goods for export to be moved, altered or interfered with in accordance with a permission granted by Customs.  This item inserts a new provision into section 117AA so that the person in charge of prescribed places will be able to allow goods to be released from the place if a permission to move, alter or interfere with the goods has been given under section 119AA.

Item 37 - After subsection 118(1A)

Under new section 118, the master of a ship and the pilot of an aircraft must not depart from Australia without receiving a Certificate of Clearance from a Collector.

This item inserts new subsection 118(1B) to make it clear that a Certificate of Clearance will only be granted if an application for that certificate is made under subsection 118(2) or (5).  Under subsection (2) the master or pilot can apply to the Collector for a certificate.  If a certificate has not been granted within 24 hours after the application is made under subsection (2), the master or pilot can apply to the CEO for a certificate (subsection (5)).

Item 38 - At the end of subsection 118(2)

This item inserts a note after subsection 118(2) which highlights that section 118A sets out the requirements for granting a Certificate of Clearance in respect of certain ships or aircraft.  Item 39 of Schedule 3 to this Bill inserts new section 118A into the Customs Act.

Item 39 - After section 118

Currently, before a Certificate of Clearance is granted in respect of a ship or aircraft (allowing it to leave Australia) the master or owner of the ship or the pilot or owner of the aircraft must communicate to Customs an outward manifest.  An outward manifest lists certain goods that are on board the ship or aircraft or indicates that there are no such goods on board.  The outward manifest can be communicated by computer or document.

Under the amendments that will be made by the Trade Modernisation Act outward manifests will not need to be made before the ship or aircraft leaves Australia, but must be made not later than 3 days after the day that the ship or aircraft departed.  However, they can only be made electronically.

In respect of some ships and aircraft, the requirement to report electronically after departure will not be able to be satisfied.  Hence it is proposed, that in respect of certain ships and aircraft their master, pilot or owner will be subject to the existing requirements, that is, they must provide an outward manifest before a Certificate of Clearance will be granted.

This item inserts section 118A into the Customs Act which will set out the requirements for ships and aircraft of a kind specified in the regulations (new subsections 118A(1) refers).

Under new subsection 118A(2) a Certificate of Clearance can not be granted in respect of a ship or aircraft unless the master or owner of the ship or the pilot or owner of the aircraft has communicated to Customs an outward manifest.  That outward manifest should specify all the goods that are on board, or will be loaded on board the ship or aircraft, other than goods prescribed for the purposes of section 120 of the Customs Act.  If there are no such goods, the outward manifest should contain a statement to that effect.

The outward manifest can be made by document or electronically (new subsection 118A(3)) and new subsections 118A(4) and (5) set out the requirements for the documentary and electronic outward manifests.

Item 40 - Subsection 119(1)

As explained above, new section 119 requires an outward manifest to be provided to Customs electronically, 3 days after a ship or aircraft leaves Australia.  This requirement will not apply to certain ships and aircraft described in new section 118A.  This item amends new section 119 so that it does not apply to those ships and aircraft to which section 118A applies.

Item 41 - After section 119

Paragraphs 30(1)(b), (c) and (d) of the Customs Act set out when goods for export are subject to the control of Customs.  Under amendments that will be made by the Trade Modernisation Act the range of goods for export that will be subject to the control of Customs will be expanded.  Under section 33 of the Customs Act it is an offence to move, alter or interfere with goods that are subject to the control of Customs unless authorised by the Customs Act.

Further, new section 114D provides in part that the owner of goods in respect of which an export entry has been communicated to Customs must not remove any of the goods from the possession of the person to whom they are delivered or of any person to whom they are subsequently passed in accordance with the entry unless the entry is withdrawn, or withdrawn in so far as it applies to those goods.

However, there are circumstances in which goods for export that are subject to the control of Customs need to be moved but that movement may not be authorised by the Customs Act.  Similarly, there may be reasons why goods need to be removed from the person to whom they have been delivered (or subsequently passed) and it would be cumbersome to withdraw all of the relevant export entries.

In respect of imported goods that are subject to Customs control, a person can apply for permission to move those goods (section 71E of the Customs Act).  However, there is no equivalent provision in respect of goods for export that are subject to the control of Customs.

This item inserts new section 119AA into the Customs Act which will allow certain goods for export to be moved, altered or interfered with in accordance with a permission granted by Customs.

New subsection 119AA(1) provides that the section applies to goods:
_	that are the subject to the control of Customs under paragraph 30(1)(b), (c) or (d);
_	that have been entered for export; and
_	in relation to which an authority to deal with the goods is in force.

A person may apply for permission to move, alter or interfere with those types of goods in a particular way and that application must be made electronically and communicate such information as is set out in an approved statement (new subsections 119AA(2) and (3)).  Otherwise (including for example, if the goods were entered for export by document) the entry must be withdrawn before the goods can be moved.

The CEO may approve different approved statements for applications made in different circumstances or by different classes of persons (new subsection 119AA(4)).

Once Customs has received an application, an officer may direct the applicant to ensure that the goods are held in the place where they are currently located until a decision is made on the application (new subsection 119AA(5)).

If a direction has not been given under new subsection 119AA(5), an officer must electronically communicate to the applicant a message that either gives permission to move, alter or interfere with the goods or refuses the application.  If a direction has been given under new subsection 119AA(5), the message must be communicated within a reasonable period after the direction was given (new subsection 119AA(6)).

If the permission is given it may be given unconditionally or subject to such conditions as are specified in the notice or message.  In the case of refusal, it must set out the reasons for the refusal.

Paragraph 229(1)(g) provides that all goods subject to the control of the Customs that are moved, altered or interfered with except as authorised by the Customs Act are forfeited to the Crown.  New subsection 119AA(7) makes it clear that if a person moves, alters or interferes with goods otherwise that in accordance with a permission, the movement of the goods is, for the purposes of paragraph 229(1)(g), taken not to have been authorised by the Customs Act (new subsection 119AA(7)).

Item 42 - At the end of section 119D

This item inserts new subsection 119D(3) which sets out when an electronic movement application made under new section 119AA is taken to have been communicated to Customs.

Item 43 - After section 119D

This item is similar to item 5 of Schedule 3 explained above, but inserts the requirement to sign electronic communications and meet information technology requirements into Division 2 of Part VI of the Customs Act.

Part 4 - Other amendments

Customs Act 1901

Item 44 - Subsection 4(1) (definition of screening charge)

This item redefines ‘screening charge’ so that it is clear that it is the charge imposed by the Import Processing Charges Act 2001 (and not the Import Processing Charges Act 1997).  When the Trade Modernisation Act was drafted it was intended that the 2001 Act would commence at the same time as the 1997 Act was repealed.  This Bill will enable both to operate at the same time (allowing some transitional charges to still operate).  Screening charge is the only charge which is imposed by both Acts.  This item makes it clear which one operates.

Items 45, 46 and 47 - Subsection 102A(2)

New subsection 102A(2) provides that if goods are released from a warehouse for export, the holder of the warehouse licence must notify Customs of that release after the goods have been released. 

Items 45 and 46 move that requirement so that Customs must be notified before the goods are released from the warehouse.

Item 47 amends subsection 102A so that such a report will have to be given during a period that begins at the prescribed time and ends at the prescribed time.  This will allow those times to be amended as necessary.

Item 48 - Subsection 122F(2)

New subsection 122F(2) specifies that the powers within Division 3A allow officers to assess whether goods meet the requirements of ‘this Act’ in relation to exports before the goods become subject to customs Control.  As well as being subject to requirements under the Act, goods for export are also required to meet requirements under other Commonwealth Acts in relation to defence, indirect tax, quarantine, strategic goods etc.  

This item amends new subsection 122F(2) to enable Customs officers to assess compliance with all export controls – not just those imposed by the Customs Act.

Item 49 - Paragraph 126DA(1)(b)

New paragraph 126DA(1)(b) provides that the CEO must determine, and cause to be published in the Gazette the action that a person has to take in order to verify the receipt of information communicated to Customs electronically.

Under the new electronic systems that Customs is developing, it is proposed that Customs will send a receipt when it receives an electronic communication and hence the sender will not have to do anything in order to verify the receipt of that information by Customs.  For this reason new paragraph 126DA(1)(b) is no longer needed, and this item repeals it.

Items 50, 51, 52 and 53

An amendment was made to new section 214AH in the Senate with the intention of protecting a person from committing an offence of failing to answer questions under section 243SA, where a monitoring officer has entered premises to exercise monitoring powers under a monitoring warrant.  The amendment was intended to protect certain employees at premises from committing an offence if they failed to answer questions.  When a monitoring officer enters premises, the occupier of the premises can nominate a representative.  It was intended that the new section 214AH would only require the occupier and representative to answer questions and that other persons (including other employees) would only be required to answer those questions if the occupier and/or representative were unavailable or not present and would not be subject to the offence in section 243SA for failure to answer questions that an officer has power to require the person to answer.  However, the amendment also had the unintended result of limiting the circumstances under which a monitoring officer can require answers to questions from ‘any person’ (including the occupier or representative) to when the occupier or representative is absent or unavailable. 

These items repeal that amendment and remake the offence in new section 243SA to give effect to the intention of that amendment.  

Item 50 omits from new subsection 214AH(2) the terms of the amendment made in the Senate.

Item 51 amends the note to subsection 214AH(2) to make it clear that it may be an offence to fail to answer a question put under this subsection.

Item 52 amends new section 243SA which makes it an offence for a person to fail to answer a question that an officer requires the person to answer pursuant to a power conferred on the officer by the Customs Act.  The amendment will exclude from subsection 234SA(1) the power under subsection 214AH(2) which requires a person on premises the subject of a monitoring warrant to answer questions.  A new offence in respect of subsection 214AH(2) is being inserted by item 53 of this Schedule.

Item 53 inserts new subsection 243SA(2) which makes it an offence to fail to answer a question asked by a monitoring officer under subsection 214AH(2) provided that the person is the occupier or a nominated representative of the occupier or the occupier or nominated representative are not present at the premises and available to answer questions.

Item 54 - Subsection 243X(2)

New subsection 243X(1) sets out those offences (by reference to the relevant subsection of the Customs Act) to which Division 5 (Penalties in lieu of prosecution for certain offences) applies.

However, new subsection 243X(2) provides in part that the Division only applies to a subsection if the subsection was inserted or substituted by the Trade Modernisation Act.

One of the subsections listed in new subsection 243X(1) is subsection 114B(7).  However, whilst subsection 114B(7) is being amended by the Trade Modernisation Act, it is not being inserted or substituted by that Act and hence although listed in new subsection 243X(1) the Division does not apply to it.

This item amends new subsection 243X(2) so that the Division also applies to those listed subsections if they have been amended by the Trade Modernisation Act.  This amendment will only make the offence in subsection 114B(7) subject to penalties in lieu of prosecution and no other offences will be affected.

Item 55 - At the end of subsection 273EB(1)

This item inserts two notes at the end of new subsection 273EB(1), which allows the CEO to make business rules, that refer to the provisions which allow the CEO to terminate an import information contract or export information contract if the business rules are not complied with.

Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001

Items 56 - Subsection 2(2)

This item changes the reference to subsection 2(6) to subsection 2(7).  This is because items 62 to 65 below will move the requirements of subsection (6) into new subsection (7).  This is a consequential change as a result of those amendments.

Item 57 - Subsection 2(3)

Again this is a consequential change as a result of the amendments being made in items 62 to 65.

Item 58 - Subsection 2(3)

This item removes the reference to Schedule 4 from subsection 2(3).  The commencement of Schedule 4 will now be governed by paragraph 2(5)(d) and subsection 2(6) (see items 62 to 65 below).

Item 59 - Subsection 2(4)

Again this is a consequential change as a result of the amendments being made in items  and 62 to 65.

Item 60 - Subsection 2(4)

This item amends subsection 2(4) of the Trade Modernisation Act so that the items in Part 4 of Schedule 3 can commence on a day or days to be fixed by Proclamation.  Currently, all of those items (other than items 79 and 81) must commence on the same day.  That Part will repeal the provisions in the Customs Act governing the operation of Customs current cargo management computer systems.  The effect of subsection 2(4) is that the provisions governing the operation of Customs current computer systems must be repealed on the same day.

The Integrated Cargo System (ICS) will replace Customs current cargo management computer systems.  However given the scale of this change Customs intends to introduce the ICS in a phased manner.  In practice this will mean that some of the current computer systems would need to continue to operate along side the ICS until the ICS is introduced fully.

This item will ensure that phased introduction can occur.

Item 61 - Subsection 2(5)

This item contains an amendment as a result of the amendments that are being made in items 62 to 65 below.

Item 62 - At the end of subsection 2(5)

This item adds new paragraph 2(5)(d) which provides that Schedule 4 to the Trade Modernisation Act (which repeals the Import Processing Charges Act 1997) commences on a day or days to be fixed by Proclamation.  At the moment Schedule 4 must commence at the same time as Part 2 of Schedule 3.  The amendment in this item will ensure that Schedule 4 can commence at a different time than Part 2 of Schedule 3.

Items 63 and 64 - Subsection 2(6)

These items amend subsection 2(6) of the Trade Modernisation Act so that if Schedule 4 of that Act does not commence under subsection (5), that is, it is not proclaimed to commence, within the period of 2 years after the Trade Modernisation Act received the Royal Assent, then Schedule 4 commences at the end of that period.

Item 65 - At the end of section 2

Under the Trade Modernisation Act if any of the provisions that commence by proclamation have not commenced 2 years after the period on which that Act received the Royal Assent, they commence automatically at the end of that period.

This item inserts new subsection 2(7) which will provide that if any of those same provisions (except Schedule 4) do not commence within 3 years of the Trade Modernisation Act receiving the Royal Assent, they will commence at the end of that period.

Item 66 - After section 3

This item inserts a transitional provision into the Trade Modernisation Act which ensures that the cargo report processing charge is still payable under the Import Process Charges Act 1997 even though that Act will be repealed.

There are two circumstances in which the charge will be payable.  They relate to the moratorium periods that are established under new section 64AB.  Under that section cargo reporters will be required to make electronic cargo reports.  However, new subsections 64AB(12) and (13) provide that during the six month period after the section commences (the general moratorium period) reports can be made by document.  Further, under subsections 64AB(12) and (14) documentary reports can be made during the further moratorium period (not being more than 18 months), if the CEO grants a cargo reporter such a period.

Currently under section 64ABB of the Customs Act, persons who make certain documentary cargo reports become liable to pay cargo report processing charge.

Since documentary cargo reports will only be able to be made for a maximum of 2 years after the commencement of new section 64AB, the Trade Modernisation Act repeals section 64ABB.  Hence under the amendments that will be made by the Trade Modernisation Act, cargo report processing charge will not be payable in respect of documentary cargo reports made during the general and further moratorium periods.

New paragraphs 4(1)(a) and (b) and new subsection 4(2) will ensure that cargo report processing charge is payable during both of those moratorium periods if cargo reporters make documentary cargo reports.

Item 67 - Item 4 of Schedule 3

This item repeals item 4 of Schedule 3 to the Trade Modernisation Act since the same amendment is being made by item 104 of Schedule 3 to that Act.

Item 68 - Item 27 of Schedule 3

Item 27 of Schedule 3 to the Trade Modernisation Act currently will amend paragraphs 30(1)(ab) and (ad) to replace the reference to ‘subsection 71(2)’ with a reference to ‘subsection 71(4) or (5)’.  This is because the provisions contained in subsection 71(2) will be moved into new subsections 71(4) and (5).  Item 111 of Schedule 3 to the Trade Modernisation Act also proposes amendments to paragraph 30(1)(ab) to remove the reference to Collector’s permits (since these will no longer exist under the Customs Act once the Trade Modernisation Act has commenced).  However, due to the possibility that the amendments to section 71 and those relating to Collector’s permits may not occur at the same time, the amendments in item 27 and 111 may be incorrect.

This item replaces item 27 of Schedule 3 to the Trade Modernisation Act with items 27 and 27A.  New items 27 and 27A will amend paragraphs 30(1)(ab) and (ad) so that the references to subsection 71(2) will be changed to section 71.  This will ensure that, when the provisions of subsection 71(2) are moved to subsections 71(4) and (5), paragraphs 30(1)(ab) and (ad) will continue to operate correctly.

Item 69 - After item 30 of Schedule 3

Section 63A of the Customs Act defines ‘low value cargo’ as cargo of one of the following kinds:
_	cargo (other than reportable documents) consigned from a particular mail-order house; 
_	cargo comprising reportable documents; 
_	cargo comprising other goods of a kind prescribed by the regulations; 
being cargo in relation to each single consignment of which:
_	section 68 does not apply because of paragraph 68(1)(f); and 
_	the total liability for import duty and sales tax does not exceed $50 or such other amount, not exceeding $75, as is from time to time prescribed for the purposes of this definition. 

Item 116 of Schedule 3 to the Trade Modernisation Act will amend the definition removing two parts of the current definition being:
_	cargo comprising reportable documents; and
_	the import duty and tax liability.

However, it is possible that these two amendments will need to be made at different times.  The removal of the import duty and sales tax liability should occur at the same time as items in Part 3 of Schedule 3 to the Trade Modernisation Act and the reportable documents amendments should occur at the same time as items in Part 6 of Schedule 3.  Item 73 will amend item 116 of the Schedule 3 to the Trade Modernisation Act so that it only contains the reportable document related amendments.  This item inserts a new item 30A into the Trade Modernisation Act which will amend the definition of low value cargo to remove the import duty and sales tax liability part of the definition.

Item 70 - Subitem 82(1) of Schedule 3

Item 82 of Schedule 3 to the Trade Modernisation Act contains a savings provision in respect of certain communications to Customs of information referred to in subsection 71A(1) of the Customs Act, that is entries for home consumption, warehousing and transhipment.  Item 82 provides that those communications will be taken to be import declarations for the purposes of the Customs Act following the commencement of Part 2 of Schedule 3 to the Trade Modernisation Act.  Whilst import declarations will be one way in which an entry for home consumption may be made after Part 2 commences, entries for warehousing should become warehouse declarations (not import declarations).

This item ensures that import entries that relate to goods intended to be entered for warehousing, are taken to be warehouse declarations for the purposes of the Customs Act as amended by the Trade Modernisation Act.

Item 71 - Subitem 82(2) of Schedule 3

This item makes a consequential amendment as a result of the amendments that are being made by item 70.  Under item 70, item 82 of the Schedule 3 to the Trade Modernisation Act will apply to import entries (not just communications).  This item makes the same change to subitem 82(2).

Item 72 - Item 111 of Schedule 3
 
As explained above at item 68 subparagraph 30(1)(ab)(i) is being amended by the Trade Modernisation Act for two purposes.  Since those amendments may need to commence at different times the amendments are being done in two stages.

This item repeals and substitutes item 111 so that it only omits the reference to Collector’s permits in subparagraph 30(1)(ab)(i).

Item 73 - Item 116 of Schedule 3

As explained above at item 68, the Trade Modernisation Act will amend the definition of low value cargo in section 63A of the Customs Act for two purposes.  Again, these amendments may need to commence at different times.

This item repeals item 116 of Schedule 3 to the Trade Modernisation Act and replaces it with items 116, 116A, 116B and 116C which amend the definition of low value cargo so that it no longer applies to reportable documents.

Schedule 4 — Seizure of goods in the Protected Zone

Under the Customs Act customs officers can only seize special forfeited goods (prohibited imports and prohibited exports) without a warrant if they are at, or in a container at a Customs place, or in, on or in a container on a conveyance at a Customs place (see section 203B).  Customs place is defined in subsection 183UA(1) to mean certain limited places.  In all other places, officers can only seize such goods with a warrant - this includes where an officer is on board a ship at sea (except narcotics).

Under section 30A of the Customs Act the CEO can, by notice published in the Gazette, exempt certain ships in the Torres Strait from the provisions in the Customs Act.  Under that provision traditional inhabitants undertaking traditional activities are not required to comply with Customs reporting requirements, allowing such persons free movement between islands within the Protected Zone (the relevant part of the Torres Strait), Papua New Guinea and Australia.  In particular, vessels are not required to enter an appointed port (as required by section 58) and are not required to have a Certificate of Clearance nor to be brought to a boarding station prior to departure (as required by sections 118 and 123).  This deprives Customs the opportunity to search those types of vessels in an appointed port.  If Customs officers were able to search those vessels at an appointed port, that is a Customs place for the purposes of section 183UA, those officers would be able to seize any special forfeited goods found on board without a warrant.

Whilst they are exempt from complying with the reporting requirements contained in the Customs Act, vessels in those areas can still be boarded and searched by Customs officers pursuant to sections 184A and 185 of the Customs Act.  Where prohibited imports and prohibited exports are found on board those vessels, Customs is required to get a warrant in order to seize those goods.  This poses considerable operational and safety problems for the officers concerned.

Similarly, where those vessels come ashore in the Torres Strait (not at an appointed port) a warrant must be obtained in order to be able to seize any special forfeited goods.

The amendments in this Schedule will allow officers to seize special forfeited goods and evidential material without a warrant on board exempt ships and in limited circumstances on land in the Protected Zone.

Customs Act 1901

Item 1 - Subsection 183UA(1) (at the end of the definition of authorised person)

This item amends the definition of authorised person in subsection 183UA(1) for the purposes of new sections 203CA and 203CB.  These new sections relate to the seizure of goods in the Torres Strait.  The people who are officers for the purposes of subsection 185(5) will be able to seize goods under these new provisions.  These people are:

_	officers of Customs;
_	persons who are in command or the crew of Commonwealth ships or aircraft that have requested to board the vessel;
_	police officers; and 
_	members of the Australian Defence Force.

Item 2 - Subsection 203(2)

This item contains a consequential amendment to subsection 203(2) to make it clear that a seizure warrant is not required in order to seize goods under new section 203CA or 203CB.

Item 3 - After section 203C

This item inserts new sections 203CA and 203CB into the Customs Act.  They give authorised officers the power to seize certain goods and evidential material in certain circumstances as described below.

New section 203CA allows certain goods to be seized on board ships if:

_	section 185 applies to the ship, that is the ship may be boarded and searched (new paragraph 203CA(1)(a)); and
_	the ship is exempt from any provision of the Customs Act under subsection 30A(3) or the voyage of the ship is exempt from any provision under subsection 30A(5) (new paragraph 203CA(1)(b)).

That section also allows certain goods to be seized on board aircraft if:
_	section 185 applies to the aircraft, that is an aircraft that has landed in Australia for boarding as result of a request made under section 184D (new paragraph 203CA(2)(a)); and
_	the flight of the aircraft is exempt from any provision of the Customs Act under subsection 30A(5) (new paragraph 203CA(2)(b)).

Under section 30A there is an area established under the Torres Strait Treaty, known as the Protected Zone.  Subsection 30A(3) provides that the CEO can exempt Protected Zone ships, being ships owned or operated by a traditional inhabitant of the Torres Strait, from so many of the provisions of the Customs Acts as are specified in a Gazette notice.  That exemption only applies when those ships are on a voyages between places in Papua New Guinea and Australia that are in the Protected Zone or in an area in the vicinity of the Protected Zone.  Under subsection 30A(5) the CEO can also make the same exemption in respect of other ships and aircraft that enter or depart Australia where the voyage or flight is being undertaken by at least one person who is a traditional inhabitant for the purposes connected with the performance of traditional activities in the Protected Zone.  These ships may not be Protected Zone ships.

New subsections 203CA(3) and (4) set out what can be seized without warrant, being:
_	goods that the authorised person reasonably believes are special forfeited goods, that is, prohibited imports and prohibited exports (other than narcotics which can currently be seized without warrant under paragraph 185(2)(e));
_	things that the authorised person reasonably believes are evidential material relating to an offence in respect of special forfeited goods (which are found in the course of searching the ship or aircraft under section 185).

New subsection 203CA(5) provides that the authorised person must exercise his or her powers subject to section 203D which relates to necessary and reasonable detention of a conveyance and the use of necessary and reasonable force.

New section 203CB relates to the seizure of certain goods that are found at a place that is near a ship or aircraft that is exempt under section 30A from the requirements of the Customs Act.

Under subsection 203CB(1) goods that an authorised person suspects on reasonable grounds are special forfeited goods can be seized if the goods are:
_	at, or in a container at, a place that is near an exempt ship or aircraft; or
_	in, on, or in a container on, a conveyance at such a place; or
_	in a container in the immediate physical possession of, but not carried on the body of, a person at such a place.

Further the person must suspect on reasonable grounds that in the case of an arriving ship or aircraft the goods have been unloaded from that ship or aircraft or in the case of a leaving ship or aircraft the goods will be loaded onto that ship or aircraft.

Under subsection 203CB(2) the authorised person may, without warrant:
_	search the place for special forfeited goods (other than narcotic goods);
_	search any container at the place for special forfeited goods (other than narcotic goods);
_	stop and detain the conveyance about to leave the place, and search it and any container on it for such goods;
_	search the container in the immediate physical possession of the person for such goods;
as the case requires.

Narcotic goods can be seized without warrant under section 203C of the Customs Act.

If the authorised person finds goods that he or she reasonably suspects are special forfeited goods they can be seized.

Subsection 203CB(3) allows an authorised officer to seize without warrant things that they believe are evidential material relating to an offence committed in respect of special forfeited goods that are found in the course of a search conducted under subsection (2).

Under subsection 203CB(4) the authorised person may as part of the search ask the person apparently in charge of the place, conveyance or container about any goods or thing at the place, in or on the conveyance, or in the container.

Again these powers are subject to section 203D which relates to necessary and reasonable detention of a conveyance and the use of necessary and reasonable force.

Items 4, 5, 6, 7, 8 and 9

These items make consequential amendments to section 203D as a result of the insertion of new sections 203CA and 203CB into the Customs Act.  This will ensure that when exercising the powers contained in those sections they can only be exercised in accordance with section 203D.

Item 10 - Subdivision F of Division 1 of Part XII

This item omits from the heading to Subdivision F of Division 1 of Part XII the references to “under a search warrant or under subsections 203B(3) and 203C(3)” as the provisions of that subdivision will also relate to evidential material seized under new sections 203CA and 203CB.

Items 11 and 12

These items amend subsections 203R(1) and 203S(1) so that they also apply to evidential material seized under subsections 203CA(4) and 203CB(3).

Item 13 - Subdivision G of Division 1 of Part XII

This item omits from the heading to Subdivision G of Division 1 of Part XII the references to “under a seizure warrant or under subsections 203B(2) or (2A) and 203C(2)” as the provisions of that subdivision will also relate to forfeited goods  seized under new sections 203CA and 203CB.

Items 14 to 29

These items make consequential amendments to the provisions of Subdivision G of Division 1 of Part XII to refer to goods seized under section 203CA or 203CB.  Any special forfeited goods that are seized under those provisions are to be treated in the same manner as other forfeited goods that are seized under the Customs Act.

Item 30 - Subparagraph 219A(2)(c)(i)

This item inserts a reference to subsections 203CA(3) and 203CB(2) into subparagraph 219A(2)(c)(i).  It also corrects a previous drafting error.

Items 31 and 32

These items make consequential changes to section 219NA to make it clear that special forfeited goods that can be seized under section 203CA can still be seized without warrant even if they are found in the course of carrying out a frisk search of a person under subsection 219L(1B) or (1C).

Schedule 5 - Re-mail items

Customs Act 1901

Couriers and freight forwarders have began to offer new services, mainly in competition with traditional postal services.  These involve couriers and freight forwarders entering into contracts with overseas organisations (including postal organisations) to distribute those organisations’ mail in Australia.  This typically involves periodic news letters, bank statements, other bulk business mail and subscription publications.  The courier or freight forwarder will import the mail and then place it into the domestic mail system in Australia or deliver the mail articles themselves (this process/service is known as re-mail).

Currently under section 64AB of the Customs Act a detailed report of those items must be included in a cargo report when they are imported into Australia.  The information contained in cargo reports is used to assess whether the goods may contain prohibited imports and whether they are being imported in contravention of other Commonwealth laws.  Due to the nature of re-mail items (being documents and magazines) Customs considers that it is less likely that they will be imported in contravention of Commonwealth laws.  Further it is difficult for the people who organise for the importation of those goods to ascertain all of the details of the goods which would enable them to make a detailed cargo report in respect of them.  The proposed amendments will allow registered re-mail reporters to provide Customs with less details in respect of re-mail items (that is they will not be required to provide information at a level of specificity below the level of a submaster air waybill or an ocean bill of lading, as the case requires).

Part 1 - Amendments commencing first

Customs Act 1901

Item 1 - Section 63A

This item inserts a definition of ‘re-mail item’ into section 63A for the purposes of Division 3 of Part IV of the Customs Act (that division relates in part to the reporting of cargo to Customs).  The definition limits the size and nature of a re-mail item.  A re-mail item means an item, in respect of which all of the matters set out in paragraphs (a) to (h) apply.

Paragraph (a) relates to the packaging of the item.  The item must be packaged in an addressed envelope whose length plus width does not exceed 80cm.  This envelope can be made of paper or any other material (for example, plastic).  This includes foolscap envelopes.

Paragraph (b) provides that the item must consist only of paper (for example bank statements, magazines).

Paragraph (c) provides that the item plus its packaging must weigh no more than one kilogram.  Any items that weigh more than this must be reported in the same way as other cargo.

Paragraph (d) provides that the item must either have no commercial value (for example, bank statements) or if it is a subscription publication:

_	it must be sent from overseas to the addressee as a subscriber to the publication;
_	the subscription must be made by a direct dealing between the consignor and either the addressee or another person arranging a gift subscription for the addressee;
_	it must have a value that does not exceed $250 (or such other amount as is prescribed for the purposes of subparagraph 68(1)(f)(iii)); and
_	the total liability for import duty and GST for the item must not exceed $50, or such other amount, not exceeding $75, as is from time to time prescribed for the purposes of this definition.

Paragraph (e) provides that the item must not be mail.  A definition of the term ‘mail’ will be inserted into the Customs Act by the Border Security Legislation Amendment Bill 2002.

Paragraph (f) provides that the item must not be or contain, goods covered by paragraphs (a) or (b) of the definition of prohibited goods in subsection 4(1) of the Customs Act. 
Paragraph (a) of this definition covers goods whose importation or exportation is prohibited by the Customs Act or any other law of the Commonwealth.  For example regulation 4A of the Customs (Prohibited Imports) Regulations 1956 prohibits the importation of certain objectionable publications.  These types of publications are not re-mail items.  Paragraph (b) of the definition covers goods whose importation or exportation is subject to restrictions or conditions under the Customs Act or any other law of the Commonwealth.

Paragraph (g) provides that there must be no individual document of carriage for the item.  If there is an individual document of carriage for the item, the item must be reported in the same way as all other cargo.

Paragraph (h) provides that the item must have been consigned on the ship or aircraft by the consignor, with other re-mail items, to different consignees.  This does not prohibit a number of consignors having re-mail items on board the ship or aircraft.  For example, there may be 100 magazines from one publisher being sent to 100 subscribers in Australia on board as well as 200 bank statements from one bank being sent to 200 customers in Australia.

Item 2 - Section 63A

This item inserts into section 63A a definition of re-mail reporter, being a person or partnership that is registered under new Subdivision E as a re-mail reporter.

Item 3 - After subsection 64AB(3D)

This item inserts new subsections 64AB(3E) and (3F) into the Customs Act.  New subsection 64AB(3E) ensures that re-mail reporters will not have to provide the full details of the re-mail items that they have organised to be imported into Australia.  The approved form or approved statement in relation to re-mail items cannot require the reporter to include information relating to re-mail items at a level of specificity below the level of a submaster air waybill or an ocean bill of lading, as the case requires.

New subsection 64AB(3F) makes it clear that re-mail reporters cannot use that approved form or statement for an item if the reporter has information about the item that would allow them to provide information below the level of specificity of the submaster air waybill or ocean bill of lading.

Item 4 - At the end of Division 3 of Part IV

This item inserts new Subdivision E into Division 3 of Part IV of the Customs Act.  This subdivision relates to the registration of re-mail reporters.

New section 67F provides that a person or partnership may apply to Customs to be registered as a re-mail reporter.  That application must be in writing, be in an approved form, contain the information that the form requires, be accompanied by any other documents that the form requires, be signed in the manner indicated by the form and be lodged with an authorised officer.

New subsection 67G(1) sets out when the CEO must register a person (or partnership) as a re-mail reporter.  A person (or partnership) must be registered as a re-mail reporter if the person (or partnership) applies to become a re-mail reporter, and the CEO is satisfied that:

_	the applicant would be unlikely to have information, or access to information, about re-mail items that would allow the applicant to make a cargo report below the level of submaster air waybill or ocean bill of lading (if the applicant has this information they should provide a detailed cargo report in respect of the items); and
_	the applicant meets the fit and proper person test under section 67H.

New subsection 67G(2) provides that the CEO may request the applicant to provide additional information.  This request should be in writing, set out the additional information required and specify how long the applicant has to supply the information. 

New subsection 67G(3) provides that the CEO must decide whether to register the applicant within 60 days of the lodgement of the application (if no additional information is requested) or if additional information is requested within 60 days of receiving that information.

Under new subsection 67G(4) the CEO must notify the applicant in writing of his or her decision and the notice must specify the day from which the re-mail reporter is registered.  

New subsection 67G(5) provides that the registration may be subject to any conditions as notified.

New section 67H sets out the fit and proper person test to be used by the CEO in determining whether to register an applicant as a re-mail reporter.  Under subsection 67H(1) an applicant meets the fit and proper person test if the CEO is satisfied: 

_	if the applicant is a natural person - the applicant is a fit and proper person to be registered as a re-mail reporter; 
_	if the applicant is a partnership - all of the partners are fit and proper persons;
_	if the applicant is a company - all of the company’s directors, officers and shareholders who would participate in managing the affairs of the company are fit and proper persons and the company is a fit and proper company; and
_	each employee who would participate in making cargo reports in respect of re-mail items is a fit and proper person.

New subsection 67H(2) sets out the matters to which the CEO must have regard in deciding whether a person is a fit and proper person for the purposes of paragraphs 67H(1)(a), (b), (c) or (d). These matters are: 
_	whether the person has been convicted of an offence against the Customs Act in the previous 10 years - new paragraph 67H(2)(a); 
_	whether the person has been convicted of any offence against another law of the Commonwealth or a State or Territory in the previous 10 years, being an offence that is punishable by imprisonment for 1 year or longer - new paragraph 67H(2)(b); 
_	whether the person is an insolvent under administration - new paragraph 67H(2)(c); 
_	whether the person was, in the 2 years immediately before that decision, a director of, or concerned in the management of, a company that:
(i) had been, or is being, wound up - new subparagraph 67H(2)(d)(i); or 
(ii) had had its registration as a re-mail reporter cancelled under paragraph 67K(1)(a), (b) or (d) - new subparagraph 67H(2)(d)(ii);
_	whether any misleading information or document has been provided in relation to the person by the applicant under subsection 67F(2) or 67G(2) - new paragraph 67H(2)(e); 
_	if any information or document furnished by or in relation to the person was false - whether the applicant knew that the information or document was false - new paragraph 67H(2)(f). 
New subsection 67H(3) sets out the matters to which the CEO must have regard in deciding whether a company is a fit and proper company to be registered as a re-mail reporter. These matters are: 
_	whether the company has been convicted of an offence against the Customs Act, a Commonwealth, State or Territory law (punishable by a fine of $5,000 or more) in the previous 10 years, at a time when any current director, officer or shareholder of a kind referred to in paragraph (1)(c), was such a director, officer or shareholder of the company - paragraph 67H(3)(a); 
_	whether a receiver of the property or part of the property of the company has been appointed - paragraph 67H(3)(b); 
_	whether the company is under administration within the meaning of the Corporations Act 2001 - paragraph 67H(3)(c); 
_	whether the company has executed under Part 5.3A of the Corporations Act 2001 a deed of company arrangement that has not yet terminated - paragraph 67H(3)(d); 
_	whether the company has been placed under official management -paragraph 67H(3)(e); and 
_	whether the company is being wound up - paragraph 67H(3)(f). 
New subsection 67H(4) makes it clear that new section 67H does not affect the operation of Part V11C of the Crimes Act 1914 particularly the provisions relieving persons from the requirements to disclose spent convictions and requiring persons aware of such convictions to disregard them. 
New section 67I provides that a re-mail reporter must notify the CEO if, after registration:
_	an event or circumstance occurs which the CEO would have to have regard to under section 67H (for example, if the re-mail reporter is a company and it is placed under official management); or
_	a person becomes or ceases to be:
-	a member of the partnership (where the reporter is a partnership); and
-	a director, officer or shareholder of the company who would participate in managing the affairs of the company (where the reporter is a company); and
-	an employee of the reporter who would participate in making cargo reports in respect of re-mail items under section 64AB.
This information is required to ensure that the reporter continues to meet the requirements for registration under new section 67G.
New subsection 67J(1) provides that the CEO may impose new conditions on a re-mail reporter’s registration by notifying the reporter in writing of the condition.  

New subsection 67J(2) provides that the CEO may remove or vary any conditions.  
The decision to impose and vary conditions is reviewable by the Administrative Appeals Tribunal (see item 5).

New subsection 67K(1) provides that the CEO may cancel a re-mail reporter’s registration if:

_	the reporter reports an item that is not a re-mail item using the form or statement approved for the purposes of re-mail items - new paragraph 67K(1)(a);
_	the reporter uses the approved form or statement in breach of new subsection 64AB(3F) - new paragraph 67K(1)(b); or
_	the CEO is no longer satisfied as mentioned in paragraph 67G(1)(b) or (c) (that is, the CEO is no longer satisfied that the person would be unlikely to have, or have access, to detailed information about the re-mail item and the CEO is no longer satisfied that the applicant meets the fit and proper person test under section 67H - new paragraph 67K(1)(c); or
_	the reporter has breached a condition of the reporter’s registration or section 67I, that is they fail to notify the CEO of certain events -  new paragraph 67K(1)(d).

Under new subsection 67K(2) the CEO must notify the reporter in writing that the person’s registration has been cancelled.  This decision is reviewable by the Administrative Appeals Tribunal (see item 5).

Item 5 - After paragraph 273GA(1)(aaae)

This item inserts into subsection 273GA(1) of the Customs Act four new paragraphs to ensure that the following decisions relating to re-mail reporters are reviewable by the Administrative Appeals Tribunal:

_	a decision by the CEO to refuse to register a person or partnership as a re-mail reporter - new paragraph 273GA(1)(aaaf);
_	a decision by the CEO to impose a condition on a re-mail reporter’s registration (whether at the time of registration or at some later time) - new paragraph 273GA(1)(aaag);
_	a decision by the CEO to vary a condition of a re-mail reporter’s registration - new paragraph 273GA(1)(aaah);
_	a decision by the CEO to cancel a re-mail reporter’s registration - new paragraph 273GA(1)(aaai).

Part 2 - Amendments commencing second

Item 6 - Section 63A (paragraph d(iv) of the definition of re-mail item)

Currently, there is no requirement to enter goods for home consumption where the total customs duty and tax liability of the goods does not exceed $50 and the value of the goods does not exceed $250.  Under the Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001 (the Modernisation Act), the requirement for an import declaration will be based solely on the Customs value of the goods (without reference to the duty or tax liability).  This amendment is required to ensure that the definition of re-mail item reflects the revised requirements that will apply from the same time as the Modernisation Act commences by deleting the reference to the total liability for duty and tax not exceeding $50.

Customs Act 1901

The Modernisation Act will repeal and replace section 64AB of the Customs Act (which is being amended by this Schedule).

Item 7 - After subsection 64AB(7)

This item inserts new subsections 64AB(7A) and (7B) into the Customs Act.  These are the same as subsections 64AB(3E) and (3F) as contained in Part 1.  This item will ensure that the amendments being made in Part 1 are not repealed when the relevant item of the Modernisation Act commences.

Items 8, 9 and 10

These items contain consequential amendments to sections 67F and 67K as a result of new subsections 64AB(3E) and (3F) being renumbered as (7A) and (7B) when the relevant item of the Modernisation Act commences.

Schedule 6 - Amendment of the Passenger Movement Charge Collection Act 1978

Passenger Movement Charge Collection Act 1978

Item 1 - Paragraph 5(j)

Passenger movement charge is imposed on persons departing Australia for another country (section 5, Passenger Movement Charge Act 1978).

Section 5 of the Passenger Movement Charge Collection Act 1978 (“the Collection Act”) exempts certain persons from the requirement to pay the charge.  

Paragraph 5(j) of the Collection Act provides that a person does not have to pay passenger movement charge if the person is in the course of a journey that has involved a previous departure by the person from Australia in respect of which the person paid the charge.

It was intended that this provision would only apply to a passenger on a fly/cruise type journey, which involves multiple departures from Australia.  For example, a person can fly to Australia and then depart Australia on a cruise.  He or she will pay passenger movement charge on this departure.  They may then return to Australia on the boat and then depart Australia again, this time by aircraft.  Under paragraph 5(j) the person will not have to pay passenger movement charge when they depart Australia the second time.

Whilst paragraph (j) covers the fly/cruise type journeys, it is arguable that is also applies where a person departs Australia twice by aircraft.  Paragraph (j) was not intended to cover this type of circumstance.

This item limits the operation of paragraph 5(j) to the fly/cruise type of journey.

Item 2 - At the end of paragraph 5(k)

Paragraph 5(k) of the Collection Act exempts a person who at the time of departure does not have to pay the charge because of the operation of:

_	the Consular Privileges and Immunities Act 1972;
_	the Diplomatic Privileges and Immunities Act 1967; or 
_	the International Organisations (Privileges and Immunities) Act 1963.
 
These Acts do not cover the representatives of the Taipei Economic and Cultural Office and the Hong Kong Economic and Trade Office.  It is considered that these representatives should be accorded the same treatment in relation to passenger movement charge as diplomats.

Under the Overseas Missions (Privileges and Immunities) Act 1995 (“the Overseas Missions Act”) members of those offices are exempt from paying passenger movement charge.

This item amends paragraph 5(k) of the Collection Act so that a person will not have to pay passenger movement charge if the person does not have to pay the charge because of the operation of the Overseas Missions Act.