Of recent time, various Federal Government agencies have
commented that levels of compliance with Federal legislation have
dropped and that perhaps it was time to increase penalties
associated with various offences. The aim would be to encourage
repeat offenders to comply, properly, penalise properly those who
offend, give cause for parties to think hard on the risks of
proposed actions and to encourage voluntary disclosure of breaches
which removes the prospect of penalties being payable at all. Of
course that also creates the potential for increased revenue from
penalties as well!
As anticipated, the Federal Government has now moved to increase
penalties by way of increasing the value of a "penalty
unit" in Commonwealth legislation from $110 to $170 per
However, it is worthwhile to recall that this increase in
penalties applies not just to penalties under the Customs Act
1901 but to all penalties under Commonwealth whether related
to criminal prosecutions, Customs prosecutions, actions by DAFF,
actions by DECO or any Government agency which has the capacity to
impose penalties. Under the Customs Act 1901 it will cause
new complexities as penalties are often expressed as multiples of
duties underpaid or numbers of penalty units.
It is also worthwhile to note that penalties are only part of
the story – in matters affecting revenue, where there is a
breach then the underpaid revenue will also need to pay back.
It has the consequential effect that penalties payable under the
Infringement Notice Scheme (expressed as a percentage of liability
under the Customs Act 1901 as in other legislation such as
the Corporations Act) will increase accordingly.
As a result, in relation to offences committed on or after 28
December 2012, the financial risk increases significantly.
Accordingly, should there be any potential liabilities or actions
of which you are aware whether in relation to your own operation or
in relation to the business of your clients, it may well be prudent
to disclose those particular liabilities now to try and reduce the
prospect of increased penalties taking effect should the relevant
proceedings commence after 28 December 2012.
As always, we will be pleased to assist in any area in which you
or your clients face potential exposure to penalties under Federal
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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