First published in BNA International's Indirect Taxes Journal, June 2008
The new Australian Federal Government has been busy introducing a variety of new legislation. This includes two news Customs "amendment" Bills all containing provisions which had been before the last Parliament but which had lapsed when the last Federal Parliament was dissolved. In addition the Federal Government has also introduced a new Bill to implement the Montreal Convention on liability for air transport of passengers and cargo. The new Customs Bills and the Bill to implement the Montreal Convention were only introduced on 20 March 2008.
The new Customs Bills are the
- Customs Legislation Amendment (Modernising) Bill 2008
- Customs Legislation Amendment (Strengthening Border Controls) Bill 2008.
Customs Legislation Amendment (Modernising) Bill 2008:
The new Bill is intended to cover the following aspects.
- Update the licensing provisions for customs brokers so that a "nominee" customs broker will be able to work for more than one licensed corporate broker and lodge reports on their behalf. This will formalise the role of the "locum customs broker" who at the moment, prepares reports for a variety of corporate customs brokers but who cannot lodge those reports. This will place a focus on practices for contracting such "nominee" customs brokers who work for more than one licensed corporate broker in terms of working for competing entities confidentiality of contacts and propriety information.
- Modernise revenue collection provisions in the Customs Act and provide an ability to offset refund and drawback entitlements against duty liability. Put simply this will include provisions to formalise Customs general right to recover customs duty for a period of 4 years in most cases – unless the CEO of Customs believes that the underpayment is due to fraud or evasion in which case Customs has an ability to go beyond 4 years to recover underpaid duty. This overcomes some uncertainty regarding Customs ability to recovery customs duty where no prescribed time limits have been set in the relevant legislation.
The provisions of this Bill will clearly have significant potential impact on those in industry.
Customs Legislation Amendment (Strengthening Border Controls) Bill 2008:
The general intention of the Bill is said to be to amend the Customs Act 1901 to strengthen Customs investigation and enforcement capabilities and make other amendments.
More specifically the purpose of the Bill is to amend the Customs Act to:
- allow a person to surrender certain prohibited imports that have not been concealed;
- allow for the granting of post-importation permissions for certain prohibited imports;
- allow Infringement Notices to be served for certain offences including importing certain prohibited imports and border security related offences;
- enable Customs officers boarding a ship or aircraft to conduct personal searches for, and take possession of, weapons and evidence of specified offences.
The provisions regarding the importation of certain prohibited imports are intended to create a new regime to give Customs flexibility when dealing with "prohibited imports". It will not remove the ability to seize prohibited items and prosecute for prohibited imports. However, it will provide alternative mechanisms to deal with certain (presumably low risk) items which are prohibited or for which required licences or permits have not or could not have been secured before importation. Customs will identify the relevant goods by way of regulation.
Future of both Customs Bills
As stated above, both Bills contain provisions which were in previous Bills. Those Bills had been before Senate Inquiries and both sides of Parliament largely supported the provisions so it could be anticipated that they should pass without much further review and debate. Those in industry will need to take care to watch the progress of both Bills and ensure that they are ready to implement them and to make clients aware of their provisions.
Implementation of the Montreal Convention
The Civil Aviation Legislation Amendment (1999 Montreal Convention and other measures) Bill 2008 was also introduced into Federal Parliament on 20 March 2008. As some may be aware, Australia is not a party to the Montreal Convention governing liability for international air carriers even though most of our international trading partners are parties to the Montreal Convention. This has created an inconsistency between the use of the two Conventions especially given that the Warsaw Convention uses some out of date terminology. Even though many parties have voluntarily agreed to be bound by the Montreal Convention and our Carriers Liability Act provides for higher liability limits for Australian international carriers than those provided under the Warsaw Convention, that inconsistency remains. Having considered the various options, the new Government has resolved to accede to the Montreal Convention. This will have the impact of prescribing new limits for injury or death to passengers or for damage or loss to baggage or air cargo or damage caused by delay in the scheduled arrival of a passenger, baggage and freight which occurs in the course of international air carriage.
The adoption of the Montreal Convention would also provide for a "fifth jurisdiction" in which Australian citizens will have access to Australian courts to pursue claims in relation to flights to which the Montreal Convention applies.
The legislation will allow for the limits to increase automatically as the limits are increased under the Montreal Convention. This will require parties involved in international carriage of persons or cargo into Australia and to consider their insurance cover and trading conditions.
International Trade Integrity Act (2007)
This Act was passed by the previous Federal Parliament and has now come into effect. The Act was one of the responses of the Federal Government to the Cole Royal Commission into the "Wheat for Oil" issues associated with the Australian Wheat Board. The intention of the Act is to place more focus on trade in goods whose trade is prohibited or regulated by UN Conventions to ensure that no such goods are imported or exported from Australia. To this effect, the Act includes new provisions which penalise parties involved in the import or export of goods subject to UN prohibitions without approvals or where the approvals have been secured by fraud or misleading deceptive comments. Those subject to the Act will include importers and exporters involved with the relevant goods, but also those who assist in procuring the import and export of the goods which may bring in such parties as freight forwarders and customs brokers. This will mean that freight forwarders and customs brokers will need to acquaint themselves with the terms of UN Conventions to ensure that they are aware of the trade in which goods is prohibited by UN Conventions and to seek appropriate warranties from their customers that appropriate licences have been secured.
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.