1 Trade agreements
1.1 Which bilateral, regional and multilateral trade agreements have effect in your jurisdiction?
At present, there are 12 bilateral trade agreements and four regional trade agreements in force in Australia. The bilateral trade agreements are:
- the Australia-Chile Free Trade Agreement (FTA);
- the Australia-Hong Kong FTA;
- the Australia-New Zealand Closer Economic Relations Trade Agreement;
- the Australia-USA FTA;
- the China-Australia FTA;
- the Indonesia-Australia Comprehensive Economic Partnership Agreement;
- the Japan-Australia Economic Partnership Agreement;
- the Korean-Australia FTA;
- the Malaysia-Australia FTA;
- the Peru-Australia FTA;
- the Singapore-Australia FTA; and
- the Thailand-Australia FTA.
The Australia-UK FTA was signed on 17 December 2021 but has yet to come into force.
The regional trade agreements that have effect in Australia are:
- the Association of Southeast Asian Nations-Australia–New Zealand FTA;
- the Comprehensive and Progressive Agreement for Trans-Pacific Partnership;
- the Pacific Agreement on Closer Economic Relations Plus; and
- the Regional Comprehensive Economic Partnership.
Australia is a member of the World Trade Organization and has signed:
- the Government Procurement Agreement;
- the Information Technology Agreement; and
- the Trade Facilitation Agreement.
1.2 Which authorities are responsible for the negotiation of trade agreements? What does this process typically involve and how long does it take?
FTA negotiation is undertaken by the minister for trade, tourism and investment and the Department of Foreign Affairs and Trade, according to the following process:
- The minister seeks a mandate from either the minister for foreign affairs or the Cabinet to negotiate the treaty.
- The parties negotiate and eventually finalise the treaty text.
- The minister seeks agreement from the minister for foreign affairs, the attorney general, and any other relevant portfolio ministers to submit the treaty text to the Federal Executive Council (FXC) for approval.
- Upon FXC approval, the treaty can be signed by Australia's representative.
- The treaty will be tabled before both houses of Parliament for consideration by the Joint Standing Committee on Treaties.
- The committee will report on the treaty and recommend whether it should be implemented domestically.
- The treaty will generally be implemented in Australia via the passage of legislation to that effect.
- Once the implementing legislation has passed both houses of Parliament, the treaty can enter into force. For bilateral agreements, this will usually be effected by an exchange of diplomatic notes confirming that all required domestic procedures have been completed to enable the entry into force of the treaty. For multilateral agreements, FXC approval must be granted before the instrument of ratification can be deposited.
It is difficult to provide a general timeline for this process, as the timeframes for negotiation vary significantly. Australia has been negotiating an FTA with India since 2011, whereas the negotiations for Australia-UK Agreement began in 17 June 2020.
1.3 Do interim provisions apply while new trade agreements are under negotiation?
2 Customs and imports
2.1 What laws and regulations govern customs in your jurisdiction?
Australia's customs and imports regime is governed by a myriad of laws, regulations, and policy materials. At the centre of these is the Customs Act 1901, which covers the logistical and practical aspect of customs, including import controls, examination, securities, licensing, penalties and enforcement. The duty and tariff aspects of customs are covered by the Customs Tariff Act 1995, which sets out the applicable duty types and lists the applicable product tariff rates.
Related subordinate legislation that provides direction and detail on the administration of issues of custom concern includes:
- the Customs Regulation 2015; and
- the Customs (International Obligations) Regulation 2015.
Finally, limitations and prohibitions on the importation of certain goods are provided for in the Customs (Prohibited Imports) Regulation 1956.
2.2 Which authority is responsible for enforcing the customs regulations? What powers does it have?
Responsibility for enforcing Australia's custom laws is primarily vested with the comptroller-general of customs. As of 2015, the function of the comptroller-general lies with the Australian Border Force (ABF) commissioner, so the ABF enforces Australia's customs laws. The ABF is an operationally independent body within the Department of Home Affairs.
The ABF was established by the Australian Border Force Act 2015, which authorises it to exercise powers under the Customs Act 1901 and the Maritime Powers Act 2013, among others. The consequence is that the ABF's powers are wide ranging and far reaching, including the power to:
- search and seize goods being imported into or exported from Australia;
- board and search ships and aircraft;
- detain and search incoming international passengers;
- examine documents; and
- issue fines for non-compliance or prosecute repeat offenders.
The ABF can also prosecute certain customs offences and seek to recover unpaid duty.
The Commonwealth Department of Public Prosecutions may also prosecute serious breaches of customs laws.
2.3 What is the authority's general approach to enforcing the customs regulations? How vigorously are the rules enforced?
Self-assessment is fundamental to Australia's customs system. Importers must lodge import declarations on most goods before they can be entered for home consumption. Among other things, this requires reporting the tariff classification and customs value of the goods from which import duty liability can be assessed.
The ABF engages in spot checks and audits to ensure that imports are correctly reported. Importers must keep their records in relation to imports for a period of five years, to facilitate audits. The ABF may identify an industry that it will focus on. Where this occurs, it will be detailed in the ABF's quarterly Goods Compliance Update newsletter.
The ABF can demand payment of any unpaid duty. This demand must generally be made within four years of importation. If the importer does not pay the duty, the ABF may institute court proceedings to recover the debt. Such a demand may also be made in connection with other enforcement actions.
The ABF can issue infringement notices. This gives the recipient the opportunity to resolve the matter by paying the penalty specified or otherwise to challenge the notice. Payment of an infringement notice discharges any liability for the offence but is not legally an admission of guilt.
The use of infringement notices is discretionary. The ABF may opt for prosecution instead. Factors that may weigh in this decision include whether:
- the importer has a substantial record of non-compliance and recidivism;
- the alleged offence is serious in nature; or
- the alleged offence is detrimental to other parties.
2.4 What customs import tariffs and duties apply in your jurisdiction? How are they levied?
A range of tariffs, duties and special taxes may apply to imports, with the specific amount depending on the type of product and the source country.
Duties are levied at the point of import clearance. The importer may also be liable to pay an import processing charge if the value of the imported goods exceeds A$1,000. The rate of customs duty payable depends on the classification of the good being imported and the country of origin – the applicable rates can be found in Schedules 3 to 11 of the Customs Tariff Act 1995. The duty rate differs by product, with certain countries afforded preferential rates from free trade agreements (FTAs) with Australia or based on developing nation status. Certain products may also attract anti-dumping or countervailing duties, payable in the same manner as customs duty.
Certain goods may be exempt from import duties if they are subject to a tariff concession order.
Generally, importers will also need to pay goods and services tax (GST) on imported goods. GST is paid at the same time and in the same manner as customs duty but can be deferred subject to approval by the Australian Taxation Office. GST is charged at a rate of 10% on the value of the taxable importation.
Certain products are also subject to specific taxes, such as the luxury car tax and the wine equalisation tax, which are calculated to differing levels based on the specific product involved.
2.5 What types of preferential tariffs are available in your jurisdiction? What are the criteria for eligibility?
Preferential tariffs are available under two broad banners:
- those arising under FTAs; and
- those based on developing nation status of the country of origin.
Australia is presently party to 16 trade agreements – both bilateral and multilateral (see question 1.1). The preferential rates specified in these agreements are implemented via the Customs Tariff Act 1995 and its schedules. The key criterion for eligibility for these preferential tariff rates is whether the goods originated within the jurisdiction of a member to an FTA. This is to be determined under Division 1A of the Customs Act 1901, which includes different rules for different FTAs.
Developing countries are entitled to preferential treatment under two subcategories:
- ‘developing countries'; and
- ‘least developed countries'.
Countries or places categorised as ‘least developed countries' are entitled to completely duty and quota-free imports; whereas countries or places categorised as ‘developing countries' are entitled to preferential rates of customs duty. For a country to be eligible for one of the several agreements, it must be listed as an eligible country for that specific agreement in the Customs Tariff Regulations 2004. For example, for an importer to take advantage of the preferential tariffs available to least developed countries, it must be from a country listed in Part 2, Division 1 of the Customs Tariff Regulations 2004.
2.6 Are tariffs applied to safeguard national security?
No, Australia has nothing akin to the United States' ‘Section 232' national security tariffs. Occasionally, political actors will cite a nebulous concern for national security as a reason to pursue tough anti-dumping measures to protect local industry, but this has not bled through into any official policy or law.
2.7 What import controls and restrictions apply in your jurisdiction? What exemptions are available?
The Customs (Prohibited Imports) Regulations 1956 list specific categories of goods whose import is either absolutely prohibited or prohibited unless certain criteria are met. The criteria that are met are very much product dependent.
These classes of goods include:
- chemicals such as ammonium nitrate; and
- import sanctioned goods.
The ABF provides a searchable database of prohibited goods, which explains the required conditions of import and the authority required for permission. These are also set out in the Customs (Prohibited Imports) Regulations 1956. As an example, the import of rough diamonds requires, among other things, that:
- the source country be party to the Kimberly Process (aimed at reducing the flow of conflict diamonds);
- a Kimberly Process certificate have been issued; and
- the goods be imported in a tamper-resistant container.
Additionally, there may be quarantine requirements for certain goods.
2.8 How are customs and import decisions challenged in your jurisdiction? What does this process typically involve and how long does it take?
Where a party is dissatisfied with the issuance of an infringement notice or other decision, there are two ways to challenge the decision. The first is where the decision allows for the matter to be reconsidered by the ABF commissioner. In such cases the parties have 28 days from the decision to apply for review. The application must be made in writing and must include the grounds by which the party objects to the decision. The ABF commissioner will consider all relevant information and decide within 90 days whether to affirm the original decision or to substitute any other decision.
If dissatisfied with the outcome of this review, certain decisions can be appealed to the Administrative Appeals Tribunal (AAT). Again, this must occur within 28 days of the review decision. The timeframe required for an AAT review varies significantly depending on the matter in question and its complexity, with customs matters taking longer than standard AAT disputes.
In circumstances where the ABF has made a decision regarding the amount of duty payable at import (eg, an adverse classification decision), the importer can make payment under process. This enlivens the right to appeal the payment to the AAT, in the hope of changing the ABF's position.
If a party is dissatisfied with the AAT's decision, an appeal may be brought before the Federal Court. The Federal Court will only consider appeals based on interpretation of the law in question.
2.9 What penalties are imposed for breach of the customs rules?
The penalties imposed vary depending on:
- the type of offence involved; and
- whether it is addressed through the issuance of an infringement notice or prosecution in court.
Where the offence is addressed through an infringement notice, the penalty is generally in the form of a fine; and where the offence relates to the import of prohibited goods, it may also be accompanied by forfeiture of the prohibited goods. The offences for which an infringement notice may be issued are contained in Schedule 8 of the Customs Regulation 2015, with the penalty limits specified by the Customs Act 1901. The specific penalty amounts are listed by the ABF and are subject to change in line with scheduled increases to the designated penalty value.
Where the offence is prosecuted in a court:
- the penalty rates are higher;
- forfeiture is more likely; and
- depending on the severity of the offence, the offending party may face imprisonment.
The applicable penalty amounts and periods of imprisonment are detailed in Divisions 1 and 2 of Part XIII, Volume 2 of the Customs Act 1901.
3.1 What export controls and restrictions apply in your jurisdiction? What exemptions are available?
This question focuses on strategic export controls, rather than broader export controls (eg, Australia prohibits the export of toothfish).
Australia controls the export of goods and the cross-border supply of technologies listed in the Defence Strategic Goods List (DSGL). The DSGL implements the controls specified by:
- the Wassessnar Arrangement;
- the Nuclear Suppliers Group;
- the Australia Group; and
- the Missile Technology Control Regime.
Additional goods outside of these multilateral export controls regimes, including controls on particular firearms and particular explosives, are also listed on the DSGL.
The DSGL consists of:
- the Munitions List (Part 1); and
- the Dual-Use List (Part 2).
The Customs (Prohibited Exports) Regulations 1958 prohibit the export of any goods specified on the DSGL, unless the defence minister has granted a permission. Among other things, the Defence Trade Controls Act 2012 (DTCA) prohibits the cross-border supply of technology listed on the DSGL to a person outside Australia (eg, emails, shared cloud services).
Goods not listed on the DSGL may still be subject to export controls. The defence minister may prohibit the export of non-controlled goods via the issuance of a notice, where the minister suspects that they:
- may support or contribute to a military end use that could prejudice the security, defence or international relations of Australia (Section 112BA of the Customs Act); or
- would or might be used in a weapons of mass destruction programme (Section 14 of the Weapons of Mass Destruction (Prevention of Proliferation) Act 1995 (‘WMD Act')).
These are referred to as the ‘catch-all' provisions.
3.2 Which authority is responsible for enforcing the export controls? What powers does it have?
The enforcement of Australia's export controls is shared by Defence Export Control (DEC), a division of the Department of Defence and the Australian Border Force (ABF).
DEC is responsible for regulating the export of DSGL goods and technology and the application of the catch-all provisions. This includes assessing permit applications and granting permits (although only the defence minister can deny an export permit). The secretary of defence has broad powers to require the provision or information of documents that he considers "relevant to the operation of the Act". The DTCA also includes provisions for the seizure and forfeiture of goods.
Australia's export system requires an exporter to complete an export declaration, reporting information on the goods and export transaction. The ABF will review the information provided by the exporter and either issue an approval for the export or refer the export to DEC for further assessment and consideration. The ABF's powers are discussed above.
3.3 What is the authority's general approach to enforcing the export controls? How vigorously are the rules enforced?
DEC acknowledges the complexity of export control law and recognises that even parties that attempt to comply with those laws in good faith may make mistakes. This underpins its approach to enforcement.
Where a breach is not serious, DEC will seek to help the exporter to identify the gaps in its systems that caused the breach with the intent that the exporter will rectify those issues. Repeated breaches, or breaches arising from perceived recklessness or purposeful contravention, will be met with harsh consequences, including fines and imprisonment. Ultimately, the vigour with which DEC seeks to enforce the controls in any given scenario will depend on a number of factors, including:
- whether the exporter voluntarily disclosed the breach;
- whether the breach was caused by deliberate intent, negligence or lack of understanding;
- the consequences of the breach in terms of Australia's national interest and international obligations;
- whether the breach is a recurring issue; and
- the exporter's cooperation with DEC.
3.4 How are export decisions challenged in your jurisdiction? What does this process typically involve and how long does it take?
Both the DTCA and the Prohibited Export Regulations provide for a process of internal review for various decisions, including a decision to deny a permit. The minister must personally undertake the internal review.
Requests for internal review must be made in writing within 30 days of the making of the reviewable decision. Due to the private nature of an internal review, gauging a typical timeframe is difficult; however, the minister is deemed to have affirmed the decision if no outcome is notified within 90 days of the request being made.
The minister's review can be appealed to the Administrative Appeals Tribunal (AAT), a merits review body tasked with assessing whether the appealed decision was "correct or preferable". Applications to the AAT must be made within 28 days of the making of the appealed decision.
The parties to an AAT proceeding can appeal the decision to the Federal Court of Australia. This must occur within 28 days of the making of the decision. There has not been any judicial review litigation of export control decisions. Typically, such litigation will involve lodgement of an originating application, written submissions, affidavit evidence, a tender bundle and a hearing – all following a timeline ordered by the responsible justice. Timeframes vary, but typically a hearing will occur within six to eight months of lodgement of the application, with a judgment released within six months thereafter.
3.5 What penalties are imposed for breach of export controls?
Offences under the Customs Act 1901 carry the following maximum penalties:
- Exporting prohibited goods: Three times the value of the goods or 1,000 penalty units;
- Unlawfully conveying or possessing prohibited exports: Three times the value of the goods or 1,000 penalty units;
- Contravening the conditions or requirement of a licence or permit: 100 penalty units;
- Contravening a Section 112BA notice: Imprisonment for 10 years or 2,500 penalty units, or both; and
- Exporting DSGL goods without authorisation: Imprisonment for 10 years or 2,500 penalty units, or both.
Offences under the DTCA carry the following maximum penalties:
- Supplying DSGL technology to a person outside Australia: Imprisonment for 10 years or 2,500 penalty units, or both; and
- Breaching permit conditions: 60 penalty units.
Offences under the WMD Act carry the following maximum penalties:
- Supplying goods to a WMD programme: Up to eight years' imprisonment;
- Exporting goods to a WMD programme: Up to eight years' imprisonment; and
- Supplying services to a WMD programme: Up to eight years' imprisonment.
4 Trade remedies
4.1 What laws and regulations govern trade remedies in your jurisdiction?
Australia is famously an enthusiastic adopter of anti-dumping measures. The investigative processes required to be undertaken to impose these measures (as countervailing measures) are governed by the Customs Act 1901 and the Customs (International Obligations) Regulations 2015. These statutes establish the relevant investigating authority – the Anti-dumping Commission – and specify the processes and timelines that anti-dumping, countervailing and anti-circumvention investigations must follow. Due to a quirk of Australian constitutional law, the imposition of anti-dumping and countervailing tariffs must be actioned under separate legislation: the Customs Tariff (Anti-Dumping) Act 1975. Methods for collecting interim dumping duty and countervailing duty are provided for in the Customs Tariff (Anti-Dumping) Regulation 2013.
Ministerial directions issued under the Customs Act 1901 further direct the commissioner on the general principles to be applied when carrying out his or her powers. Currently active directions include:
- the Ministerial Direction on Material Injury 2012;
- the Customs (Extension of Time and Non-cooperation) Direction 2015; and
- the Customs (Preliminary Affirmative Determinations) Direction 2015.
Safeguard measures are governed separately from other trade remedies. The Procedures for Safeguards Investigations (Gazette S 297 of June 1998), issued under the Productivity Commission Act 1998, govern investigations into whether safeguard measures should be applied. The Customs Act 1901 provides the mechanism for the imposition of safeguard measures through the introduction of quotas or increases to tariffs. Some bilateral or multilateral treaties also contain safeguard clauses. Since the turn of the millennium, there have only been three safeguard investigations, none of which resulted in the imposition of measures.
4.2 Which authority is responsible for enforcing the trade remedy regulations? What powers does it have?
Anti-dumping and countervailing measures fall under the remit of the Department of Industry, Science and Resources, with formal decisions executed by the minister for industry and science. The substantive conduct of the inquiry and recommendation is handled by the Anti-dumping Commission.
At a high-level, the minister for industry, energy and emissions has the power to impose, alter, revoke and continue anti-dumping and countervailing duties. He will usually, but not always, exercise these powers based on a recommendation by the commissioner.
Safeguards are imposed by the Australian government based on the recommendation of the Productivity Commission – the body responsible for conducting safeguard inquiries. The Productivity Commission has the power to investigate:
- whether safeguard measures would be justified under the World Trade Organization (WTO) Agreement;
- what measures would be necessary to prevent or remedy serious injury; and
- whether, having regard to the government's requirements for assessing the impact of regulation which affects business, those measures should be implemented.
However, no safeguard inquiries thus far have led to the imposition of safeguard measures.
All on-the-ground enforcement of trade remedies is overseen by the Australian Border Force.
4.3 What is the authority's general approach to enforcing the trade remedy regulations? How vigorously are the rules enforced?
Australia has a high level of anti-dumping and countervailing activity, with 106 cases over the 2019–2021 period alone. The focus has tended towards steel products, with the Australian steel industry a prolific user of the anti-dumping system. With increasing levels of trade protection, the anti-dumping system is seen as a key mechanism for the protection of domestic industry and the rules have been vigorously enforced as such. Draw whatever implication you like from the fact that it is the minister for industry and science who makes anti-dumping decisions.
Safeguard measures, on the other hand, are rare; the last of these was concluded in December 2013. It is difficult to draw a general idea of the process based on these sparse data points.
4.4 How is a trade remedy action initiated in your jurisdiction and on what grounds? Can the authority initiate an action ex officio?
Generally, a trade remedy action is initiated based on an application by the domestic Australian industry producing like goods. The application must contain information establishing grounds for the requested imposition of dumping or countervailing duties, such as:
- evidence of the alleged dumping or subsidies; and
- evidence of the alleged material injury said to have occurred because of the dumping or subsidies.
The minister for industry and science has a wide degree of discretion and may also initiate an inquiry of his own accord.
Safeguard measures are also initiated by application from Australian industry to the relevant minister overseeing the concerned goods. The applicant must provide positive evidence that unforeseen or unexpected surges in imports are causing serious injury to the industry. Investigations may then be initiated by the treasurer through a reference to the Productivity Commission. Safeguard investigations may also be initiated at the treasurer's discretion.
4.5 What does the action typically involve and how long does it take?
The standard statutory timeframe for an anti-dumping or countervailing investigation is 185 days; however, this timeframe can be – and typically is – extended where the investigating authority needs further time to conduct its investigating activities. It is not uncommon for investigations to take over a year and close to the 18 months permitted by the WTO Anti-dumping Agreement.
A typical inquiry involves an application lodged by the Australian industry; the investigating authority then has 20 days to assess the investigation. Exporters must complete a questionnaire response by Day 37 from initiation, with verification of the response taking place thereafter. The authority will consider whether to impose securities and issue a preliminary affirmative determination; thereafter, it will issue its preliminary findings. Interested parties can lodge submissions throughout the investigation – in particular, 20 days after the preliminary findings are issued. Finally, the investigating authority will provide its recommendation and final report to the minister for consideration, with the decision to be made and published 30 days thereafter.
Considering previous safeguard investigations, safeguard actions typically take six to seven months from initiation of investigation to termination or action.
4.6 How can interested parties defend against a trade remedy action in your jurisdiction?
Interested parties generally have a high level of oversight of anti-dumping and countervailing actions due to the electronic public register covering all active inquiries. Interested parties must provide non-confidential versions of materials to be included on the public record, allowing for a transparent and robust exchange of ideas regarding the key issues in the investigation.
To best take advantage of that, an interested party should understand the complexity of the investigation and the underlying legislative scheme. Whether an exporter is dumping is not based on a black-and-white consideration of data; it is based on nuanced legal concepts and procedures, whose differing application can lead to drastically different outcomes. Without understanding this context, an interested party cannot make decisions strategically, which may hamper its ability to defend against a trade remedy action.
4.7 How are trade remedy decisions challenged in your jurisdiction? What does this process typically involve and how long does it take?
Decisions relating to anti-dumping or countervailing measures can generally be challenged via application to the Anti-dumping Review Panel (ADRP) and the Federal Court of Australia.
The ADRP is a merits review body, tasked with assessing whether certain anti-dumping/countervailing duty decisions were correct or preferable. This is done based on the papers, although ad hoc conferences may be held and the ADRP may request that the Anti-dumping Commission reinvestigate certain findings.
An application for an ADRP review must be made within 30 days of the decision being announced. The default timeline for a review is 60 days from initiation. However, this can (and generally will) be extended. Roughly, an ADRP review may take between six and 12 months.
Following the review, the ADRP will make a recommendation to the minister. The minister will issue a decision 30 days thereafter.
The minister's decision may be subjected to judicial review before the Federal Court. Judicial review focuses on whether the decision was legally correct, so an applicant must establish that there was a legal error underlying the decision, such as a denial of procedural fairness or failure to apply the terms of the underlying legislation. The timeline for completion varies depending on the complexity of the case and the caseload of the judge whose docket it ends up on. Recent cases suggest a timeline of nine to 18 months from filing to judgment. There is also the prospect that a proceeding may be settled prior to hearing.
4.8 What strategies should be considered to ensure compliance with a trade remedy decision? What penalties are imposed for non-compliance?
If the goods are covered by the measures, interim duty will be payable at the time of import. The Australian Border Force (ABF) generally does not release goods for home consumption unless the duty liability is discharged. There could be compliance issues around the classification of the goods – for example, in some instances an importer may claim a duty exemption on the basis that the goods fall outside the scope of the measures. However, it will want to ensure that it is on good footing to do so – either through legal advice or through a ruling from the ABF – because a number of customs penalties/offences may arise from incorrectly entering import details.
In a broader sense, the ADC can undertake ‘circumvention inquiries' in relation to specific activities, including:
- the assembly of parts in Australia or a third country;
- arrangements between exporters;
- transshipment through third countries; and
- slight modification of goods.
These are tailored to address instances where the intent of the measures is being flouted. Where a circumvention activity is found to have occurred, the minister has broad powers to alter the measures to redress it.
In terms of living with the measures, importers can apply for duty assessments to secure a refund of the interim duty they have paid. Refunds will be granted if it is established that the relevant consignments were not dumped or were dumped to a lesser margin than that at which the interim duty was assessed. Affected parties may also request variable factor reviews 12 months after the measures were imposed, which can result in a lower import duty at the border.
Lastly, affected parties may seek an exemption from a trade remedy decision on a number of bases, including the following:
- Like or directly competitive goods are not offered for sale to all purchasers on equal terms; or
- There is a tariff concession order in respect of the goods.
This can be done either during an ongoing investigation or after measures have been instituted. There is no prescribed application form to seek an exemption, but the application must be in writing and contain details of, among other things:
- the details of the applicant and other interested parties;
- the grounds on which the exemption is being sought; and
- a detailed statement setting out the reasons for seeking the exemption.
5 Trade barriers
5.1 What laws and regulations govern trade barriers in your jurisdiction?
Australia has no specific laws or regulations that govern trade barriers.
5.2 Which authority is responsible for enforcing the trade barrier regulations? What powers does it have?
The Australian government has set up a website through which Australian exporters can raise concerns regarding perceived non-tariff trade barriers. These concerns are then provided to the non-tariff trade barriers team in the Department of Foreign Affairs and Trade to coordinate action to address non-tariff barrier.
5.3 What is the authority's general approach to enforcing the trade barrier regulations? How vigorously are the rules enforced?
It is difficult to say. The website referred to above arose out of the 2018 Non-Tariff Barrier Action Plan. This was something of a pilot scheme, "testing new ways of working to address non-tariff barriers". There have been limited public updates since it was launched.
5.4 How is a trade barrier action initiated in your jurisdiction and on what grounds?
Australia does not have legal trade barrier actions per se.
5.5 What does the action typically involve and how long does it take?
Australia does not have legal trade barrier actions per se.
5.6 What measures can the authority take against a foreign trade barrier?
Australia does not have legal trade barrier actions per se.
5.7 What non-tariff trade barriers are imposed in your jurisdiction?
Australia enforces its quarantine laws rigorously to protect the nation's unique flora and fauna, which can pose difficulties for importers.
Australia's quarantine system is regulated by the Department of Agriculture, Fisheries and Forestry (DAFF) in accordance with the Biosecurity Act 2015. The Biosecurity (Conditional Non-prohibited Goods) Determination 2021 outlines specific classes of goods that cannot be imported without meeting specific criteria and without an import permit. These include biological matter and goods containing biological matter such as animals, plants and soil. Goods which arrive without a required permit will be either exported or destroyed.
DAFF also regulates food standards and labelling requirements under the Imported Food Control Act 1992. Food importers must submit a full import declaration; and food imports may be inspected and tested for compliance with the Australia New Zealand Food Standards Code and country of origin food labelling requirements. Importers with a documented food safety management system may enter into a food import compliance agreement with DAFF to avoid delays and charges relating to inspection and testing. However, this is subject to audits.
All goods that are subject to these import controls can be searched on the electronic Biosecurity Import Conditions System, which:
- identifies whether imports are permitted and the conditions that must be met (including packaging); and
- facilitates import permit applications.
6.1 What laws and regulations govern sanctions in your jurisdiction?
Under Australian law, there are two bodies of law for the implementation of sanctions. The first is the Charter of the United Nations Act 1945, through which United Nations Security Council (UNSC) sanctions are implemented under Australian law. The second is the Autonomous Sanctions Act 2011, through which Australia can impose its own independent sanctions.
Each of these acts creates the legal framework through which legal instruments – generally in the form of regulations – can be created. These regulations specify the content of any sanctions. Regulations are a form of ‘delegated' legislation, which allows for the relatively quick imposition, amendment or repeal of sanctions as circumstances require. The acts also specify the legal consequences of breach of a sanctions law.
The regulations specifically define which activities are prohibited in dealing with a sanctioned state or entity. In the case of autonomous sanctions, the Autonomous Sanctions Regulations 2011 deal relatively comprehensively with the various sanctions imposed under each autonomous sanctions regime. However, a number of other instruments may be relevant in this regard. For example, the Autonomous Sanctions Regulations 2011 outline the sanctions that relate to Myanmar, including the prohibition on dealing with designated people and entities. Who or what is ‘designated' for this purpose is informed by the Autonomous Sanctions (Designated and Declared Persons – Myanmar) List 2018.
In the case of UNSC sanctions, there are individual regulations for each regime. For instance, the Charter of the United Nations (Sanctions – Mali) Regulations 2018 relate to the sanctions imposed pursuant to UNSC Resolution 2374 (2017).
6.2 Which authority is responsible for enforcing the sanctions regulations? What powers does it have?
The Australian Sanctions Office (ASO) is responsible for administering and regulating both forms of sanctions. It sits within the Department of Foreign Affairs and Trade (DFAT) in the Legal Division in International Security, Humanitarian and Consular Group.
To enforce these laws, ASO works with multiple federal bodies, including:
- the Commonwealth director of public prosecutions;
- the Department of Defence;
- the Australian Transaction Reports and Analysis Centre, which regulates Australia's anti-money laundering laws;
- the Department of Home Affairs;
- the Australian Federal Police;
- the Australian Securities and Investment Commission; and
- the Reserve Bank of Australia.
Enforcement powers provided by the Charter of the United Nations Act 1945 include:
- the ability to seek an injunction to restrain contraventions of sanctions law; and
- the power to direct parties to provide information or documents.
The Autonomous Sanctions Act 2011 provides for similar enforcement powers.
6.3 What is the authority's general approach to enforcing the sanctions regulations? How vigorously are the rules enforced?
Generally, the onus is on individuals and entities to undertake due diligence to ensure compliance with sanctions regulations.
ASO has a number of resources to assist with this. Foremost is the online platform PAX, which is administered by DFAT to facilitate communications and enquiries about Australian sanctions regimes and the making of applications for sanctions permits. Registered users may use PAX to:
- apply for a sanctions permit;
- request an indicative assessment; or
- submit a more general enquiry.
Users can also track the progress of their application and access outcomes.
While the rules are vigorously enforced and contraventions are deemed serious criminal offences, application may be made via PAX for a sanctions permit. This authorises an activity that would otherwise contravene Australian sanctions law. The granting of a sanctions permit is made by the minister for foreign affairs or the minister's delegate. Different sanctions regimes impose different criteria which must be satisfied before a sanctions permit may be granted, and further conditions may be attached to a permit if it is granted.
6.4 What countries are currently subject to sanctions in your jurisdiction?
At present, the following countries are subject to UNSC sanctions:
- the Central African Republic;
- the Democratic People's Republic of Korea (DPRK);
- the Democratic Republic of the Congo;
- South Sudan;
- Syria; and
In addition, Australia maintains the UNSC sanctions relating to the Taliban, ISIL and Al Qaida, as well the counterterrorism measures it has passed.
Australia presently maintains autonomous sanctions in relation to:
- Zimbabwe; and
- the Former Federal Republic of Yugoslavia.
Australia also uses additional autonomous sanctions to supplement the UNSC regimes on:
- the DPRK;
- Libya; and
6.5 Are individuals or companies subject to sanctions in your jurisdiction?
Yes, under both the Charter of the United Nations Act and the Autonomous Sanctions Act, individuals and entities can be subject to targeted financial sanctions and travel bans.
ASO maintains the Consolidated List, which lists all people and entities that are subject to targeted financial sanctions. This is regularly updated.
While generally these targeted sanctions relate to broader country-specific regimes, recent amendments to the Autonomous Sanctions Act allow for further flexibility. The Autonomous Sanctions Amendment (Magnitsky-style and Other Thematic Sanctions) Act 2021 has introduced new thematic sanctions targeting serious human rights violations and abuses, and serious corruption. This enables the imposition of targeted financial sanctions and travel bans on all entities, including natural persons, corporate entities and state and non-state organisations.
6.6 How are sanction decisions challenged in your jurisdiction? What does this process typically involve and how long does it take?
What constitutes a challenge is rather broad. Designated entities and individuals may apply to be ‘delisted'; but the process for doing so differs depending on the sanctions regime under which they have been designated. The UNSC has its own processes for member states, individuals and entities to request delisting via the Focal Point for Delisting – a body established within the Secretariat (Security Council Subsidiary Organs Branch) pursuant to UNSC Resolution 1730 (2006). However, requests for delisting related to ISIL (Da'esh) and Al Qaida are made either:
- to the United Nations Office of the Ombudsman, established by UNSC Resolution 1904; or
- through the country of citizenship or residence.
With regard to challenging listings under the UNSC counterterrorism sanctions regime (UNSC Resolution 1373) and listings under Australia autonomous sanctions regimes, DFAT states: "Requests should be made through the Sanctions Contact Page." This page consists of information about registering as a user of PAX to contact the ASO. There is also information about contacting the director of the ASO by post.
More generally, Australia has a body of administrative law that allows for judicial review of certain government decisions. This extends to challenges to the validity of delegated legislation and other legislative instruments. So, it is theoretically possible that a sanctions decision could be reviewed by the Federal Court of Australia in the right circumstances.
6.7 What strategies should be considered to ensure compliance with a sanction decision? What penalties are imposed for non-compliance?
The onus is on persons/entities to comply with Australian sanction laws, so the key thing is to be aware of the scope and application of Australia's sanctions laws and to undertake due diligence to mitigate the risk of contravention.
Contravention of a sanctions law is a serious criminal offence, punishable by:
- in the case of individuals, 10 years' imprisonment and/or a fine of the greater of 2,500 penalty units (as of 1 July 2020, a single penalty unit is A$222; however, there are legal mechanisms for this to be increased) or three time the value of the transactions for individuals; or
- in the case of bodies corporate, a fine of the greater of 10,000 penalty units or three times the value of the transactions.
For bodies corporate, contraventions of sanctions measures are strict liability offences, meaning that proof of fault is unnecessary to establish the offence. However, Section 16(7) of the Autonomous Sanction Act 2011 provides that a body corporate does not commit an offence "if the body corporate proves that it took reasonable precautions, and exercised due diligence, to avoid contravening".
This due diligence can be augmented by the use of ASO's PAX platform, which enables users to submit permit applications, requests for indicative assessments or general queries at any time, free of charge. The Consolidated List should also be consulted regularly when undertaking due diligence checks.
7 Trends and predictions
7.1 How would you describe the current legal landscape and prevailing trends affecting international trade in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms or the negotiation of new trade agreements?
In May 2022, Australia's new government was sworn in. International trade was not a significant focus of its election platform. The general perception is that there has been an uptick in international engagement and the government's focus on climate action will no doubt have trade implications; but having come to power in what are quite tumultuous times internationally, its trade agenda has not yet crystallised.
That said, we do have some predictions. First, Australia has responded to Russia's invasion of Ukraine with the imposition of an unprecedented and significant volume of autonomous sanctions. The sense we get is that the Australian Sanctions Office (ASO) has been grappling with the precise scope and application of the autonomous sanctions laws, which are broadly drafted. We anticipate that this will result in some form of policy announcement that provides a clearer sense of how ASO interprets the underlying legislation.
Second, a review of Australia's export control laws in 2018 which was meant to result in amendments to the Defence Trade Controls Act. There has been no real update in that regard since late 2019. Again, we understand that Russia's invasion of Ukraine has increased the workload of Defence Export Control quite significantly, which we anticipate would create some desire to clarify the operation of Australia's export controls.
8 Tips and traps
8.1 What are your top tips for ensuring compliance with the regulatory framework for international trade and what potential sticking points would you highlight?
Australia has a robust and well-developed international trade regulatory environment. The Customs Act 1901 is a few months younger than the Commonwealth of Australia and international trade law regulations have proliferated since then; and many of these directly place the onus on the exporter/importer to ensure compliance. So, if you operate in the area, you need to be aware of your obligations and systemise them to make compliance a business-as-usual activity. It also helps to maintain good relationships with the regulators.
That said, the laws discussed in this Q&A are still laws. As such, they are subject to administrative law principles, including:
- rules of statutory interpretation;
- rules on procedural fairness; and
- rules on the lawfulness of administrative and Commonwealth decision making.
These principles are complex and sometimes not well understood, even by government regulators. While compliance is a must, what constitutes compliance in a given scenario may need to be carefully assessed and established in light of these broader principles.
Yunjin Lee contributed to this Guide.
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.