Of recent time, the media seems to be bursting with stories of
shady deals and illegal activities. Alleged bribery here and
overseas (some including alleged misconduct by Australian
Government officers) circumvention of the most fundamental
corporate governance rules and Government security, the use of
illegal performance enhancing drugs by our sports stars and
continued examples of corporate fraud make the business world a
very dangerous environment within which to operate.
The response from the Australian Federal Government has been
extensive including the introduction of integrity testing for
Commonwealth officials, increased resources to the Australian Crime
Commission and the establishment of the Customs Reform Board among
other initiatives. The changes to the Australian Customs and Border
Protection Service ("Customs") may well
represent the "lightning rod" of changes that may take
place elsewhere. Against a backdrop of arrests and search warrants
closely related to activities allegedly involving Customs officers,
the new CEO of Customs was the first employee to take a mandatory
drug test – which testing will be rolled out to all
employees. At the same time a new blood alcohol limit was adopted
and employees encouraged to report suspicious behaviour.
That response has not been confined to Government and has also
been imposed to those in the private supply chain by way of changes
to qualifications for the issue of Aviation and Maritime Security
identification cards, changes to licensing requirements for
licensed customs brokers and those operating licensed premises.
This includes the imposition of new conditions aimed at improving
IT and physical security, ensuring that no inappropriate persons
work in those parts of the supply chain or have access to Customs
systems as well as compulsory reporting of offences.
In addition, new laws have been passed increasing controls of
goods for export including those used for defence activities or
those which would have a military end-use.
Penalties for those in the private supply chain from failure to
comply are heavy. They include significant financial penalties,
possible imprisonments as well as threats to the licences held by
parties such as licensed customs brokers and operators of licensed
premises together with the intervention in the movement of goods
through their supply chain.
Further, there are significant business risks to employers who
employ people with dubious histories or who don't observe
company policies or the law. Those risks can run from the theft of
intellectual property to fraud, to breaches of privacy and other
nasty consequences for the businesses. All of these can have
significant adverse reputational risks even if no convictions are
So it's overdue to review business practices to minimise
At the least, these should include the following steps.
Undertake proper homework before employing staff or service
providers and doing work for customers. This should include steps
to verify the identity of parties and their past experience and
history. Many customers expect your staff to have been properly
checked and Customs now has detailed expectations that customs
brokers or those operating licensed premises should be able to
verify the integrity of those working in those businesses. It is
worth reviewing Customs guidance as in ACN 2012/43. We can
recommend clients who can assist in this area.
Ask service providers for customer references.
Develop proper practices within the operation of the business
including developing and adopting manuals as to handling various
issues and making sure they are observed.
Regularly advising employees, service providers and customers
as to changes to legislative requirements and associated practices.
This is mandated by Customs requirements.
Continually monitoring operations to ensure that they are being
completed appropriately. External independent review of operations
is advisable. Early voluntary disclosure of problems is welcomed by
all Government agencies and those operating as customs brokers are
now required to advise of any apparent breaches of the law.
Be prepared to remove employees or service providers engaged in
questionable activities or to stop work for clients whose business
practices are not acceptable.
Secure and maintain appropriate insurances.
Have a plan for adverse developments at any time whether it be
fraud, financial risk or illegal activities by employees or
Have a good accountant and a good lawyer on call and don't
be afraid to involve them in all stages of the operation, not just
when things have gone wrong.
As always, we would be delighted to assist with these
Please note that an article largely in this form was
previously published by Air Cargo Magazine. I thank Air Cargo
Magazine for permission to publish this version.
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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