Australian customs brokers are worried about the recent focus
on importations potentially containing asbestos. The concern
highlights the difficult position of customs brokers. With every
piece of information provided to the Department of Immigration and
Border Protection (Department/Customs), there is potential broker
liability if that information is false and that liability does not
depend on whether the false information is deliberately given.
Below we set out what steps will provide the customs broker a
defence to an alleged breach of the law.
The law against false statements
The Customs Act is relatively simple – if you make a false
statement to Customs you breach the Act. When a customs broker
lodges an import declaration it is making a statement.
The relevant sections of the Customs Act do not require that the
giving of false information was deliberate, negligent or even
reckless – the offence is committed by the mere giving of
Just to underscore the seriousness of this, infringement notices
of $8,100 (corporations) and $2,700 (individuals) can be issued for
each breach. Infringement notices are no longer a mere theoretical
penalty. Between July 2015 and October 2015 there were 54
infringement notices issued for making false statements to
Reasonable mistake of fact
Strict liability can lead to unfair results, so there are defences
provided. A key defence is reasonable mistake of fact. Generally,
for an individual, a defence of mistake of fact exists if at the
time of, or before, making the false statement, the person
considered the relevant facts and was under a mistaken, but
reasonable belief, as to those facts. Crucially, you must actually
consider the relevant facts – ignorance of, or a mere
assumption about, the relevant facts is not sufficient.
In the asbestos context, if you simply assumed that the goods did
not contain asbestos without asking the question of the importer,
it would be hard to maintain the mistake of fact defence.
If there are positive facts on which you have relied (such as
statements from the supplier/importer), the next question is
whether that mistaken belief was reasonable. Again in the asbestos
context, if you have a long relationship with your importer, have
informed them of Australia's asbestos requirements and the
products are low risk, your belief in an importer/manufacturer
declaration that the goods do not contain asbestos will be more
likely to be reasonable.
Reasonable mistake of fact –
The rules for corporations are more onerous. Firstly, it must be
shown that the relevant employee who made the statement was under a
mistaken but reasonable belief about the relevant facts. Secondly,
the company must prove that it exercised due
diligence to prevent the making of the false
In the asbestos context, corporate customs brokers need to ask
What systems are in place to ensure staff are aware of
Australia's asbestos legislation?
What steps are staff taking to form a reasonable belief that
the goods do not contain asbestos?
How is the corporation supervising that the relevant systems
are being carried out?
The term 'due diligence' is incapable of a fixed
meaning. 'Due diligence' requires more than good
intentions, you must also take all reasonable steps to prevent the
false statement being made.
Do I have to ask the question about every single
No client likes being asked the same question repetitively,
especially if the answer is always the same. As a general rule, the
legislation does not require repetitious examination of the same
facts. If you have considered the facts on one occasion, and the
circumstances of each subsequent import are the same, the
legislation does not require reconsideration of the facts. However,
at a minimum, the subsequent consignment would need to be the same
goods with the same importer, manufacturer and exporter.
Don't just aim for the bare minimum
The above guidance is about qualifying for the defence of
reasonable mistake of fact. Your goal might not be to simply avoid
personal liability, but rather, having the information demanded by
the Department on hand if the goods are selected for inspection.
This may require a certificate from an accredited laboratory, even
if this is not a requirement to satisfy the reasonable mistake of
Have you received an infringement notice
The Department should only issue an infringement notice if it
believes that an offence was committed. Assuming the infringement
notice relates to the giving of false information, it should be
the false information was given due to a reasonable mistake of
if the fine is against a corporation, the corporation had
exercised due diligence.
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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PNG has domestic arbitration legislation, but does not provide for the enforcement of foreign arbitral awards.
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