1998 - 99

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

HOUSE OF REPRESENTATIVES

CUSTOMS LEGISLATION AMENDMENT BILL (No. 2) 1999

EXPLANATORY MEMORANDUM

(Circulated by authority of the Minister for Justice and Customs,
Senator the Hon Amanda Vanstone)

ISBN:  0642 405417

CUSTOMS LEGISLATION AMENDMENT BILL ( No. 2) 1999

OUTLINE

The purpose of this Bill is to amend the Customs Act 1901 (the Act) in three particular areas, as follows:

.	Schedule 1 of the Bill proposes amendments to the Act to introduce a legislative option for an electronic lodgement and payments system for refunds of Customs duty.  In particular, the amendments amplify the existing refund, rebate and remission section of the Act to provide  sufficiently broad heads of power so that the desired electronic lodgement and payments system for refunds of Customs duty may be prescribed in the Customs Regulations;

.	Schedule 2 of the Bill proposes amendments to the Act which will clarify the time when the payment of Customs duty is required, as well as providing a mechanism for the deferral of payment of Customs duty by enabling Regulations to prescribe later times; and

.	Schedule 3 of the Bill proposes amendments to the Customs Brokers Licensing System which is contained in the Act.  In particular, the amendments propose to: 

-	extend the length of customs agents and corporate customs agents licences from 1 year to 3 years;
-	change the time when licences have to be renewed from 31 December to 30 June; and
-	replace the word “agent” with “broker” in the numerous references in which that word appears throughout the Act.

REGULATION IMPACT STATEMENT

.	Electronic lodgement and payments system for refunds of Customs duty

1.	Background

Electronic lodgement of import entries was introduced in 1991 as part of a move towards a total electronic import clearance environment.  This was made possible with an enhancement of the Customs (COMPILE) computer system. It represented an electronic option for the communication to Customs of information relating to imported or excisable goods intended for home consumption, to complement the existing documentary or manual entry facilities.

The Electronic Lodgement of Refunds (ELOR) is a further enhancement of the COMPILE system which will overcome the requirement to physically lodge refund applications for the majority of applicants.   

A refund involves a return to the owner of some or all of the Customs duty paid on the imported goods at the time of their importation.  For financial year 1997-98 $200 million of Customs duty and $6 million of Sales tax was refunded, and $10.6 million of Customs duty and $1.8 million of Sales Tax was rejected.

When COMPILE was enhanced in 1991, Customs decided not to include the electronic option of refunding Customs duty until further examination and necessary computer enhancements had taken place.  That has now occurred and to continue the move towards paperless procedures Customs is automating the refund system.  The ELOR system will facilitate the processing of refund applications by reducing the time taken to process them and speed up the payment of refunds due.  Currently there are two thousand three hundred Customs Brokers and Importers who have access to the COMPILE system.  It is envisaged that these brokers will use ELOR to process their refund applications, not only because of the convenience the system will provide, but also as a result of funding provided for the project by an Industry based fund, the Cargo Automation Development Fund (CADF).  

CADF was established with a view to enhancing and developing relevant Customs and other related integrated electronic systems to benefit both industry and Customs, particularly in the area of trade facilitation.

As with the other electronic reporting systems, ELOR will provide an electronic option only; the current documentary and manual lodgement system will still be available for private individuals who are not linked to the COMPILE system. 

Through the implementation of the electronic lodgement and payment option for refunds, the importer will receive a faster refund payment with less manual effort. 

As a result, there will not be any requirement for Industry to purchase new software as they are already registered users of the COMPILE system. Using a green-line/red-line system to process refund applications, the majority of refunds are expected to be processed and paid without documentation being submitted to the Customs.  However, where refund applications meet profiles, they will be processed red-line and documentation will be required to be submitted to the Customs.  Either way, a refund applicant will be required to maintain all commercial documentation relating to the five year period currently prescribed in the Customs Act, to enable Customs to verify particulars of the claim in its post transaction commercial audits.

2.	Problem or issue identification

The current procedures for applying for a refund of Customs duty and sales tax are based on manual processes.  Refund applicants (who are also COMPILE users), are required to create a refund application on the COMPILE system, print the application, then physically lodge the application and supporting documentation with their nearest Customs office for processing. This process is cumbersome and time-consuming, particularly requiring staff to physically attend a Customs Office.  Furthermore, even if their application is “green-lined”, (ie. no further documentation required), it could be as long as 30 days (in larger regions), before Customs staff are able to process this request.

Upon lodgement of a refund application, Customs is required to manually check and process all applications (there were approximately 60,000 applications lodged over the last 2 years), using risk management techniques.  After the processing of the refunds and decisions on whether or not payment is due, an application is either rejected (an appropriate message is transmitted to the applicant), or accepted whereby the refund is paid into the nominated account.  The current manual process is clearly resource intensive for Customs staff, as well as somewhat slower than the proposed electronic version.

3.	Policy objectives

The proposed objectives are:

a)	the implementation of an electronic system for the processing and payment of refund applications using the facilities of the current COMPILE system;
b)	to incorporate risk management procedures in the processing of refunds;
c)	to provide an appropriate legislative framework for an electronic processing regime to operate with respect to refunds.

4.	Options

1)	The introduction of ELOR proposes to overcome the requirement for physical delivery of documents and will enable the introduction of self assessment principally as well as facilitate the processing of refund applications by reducing processing time and speeding up the payment of refunds due.

2)	No specific action.
For no action to be taken with regard to the ELOR facility, the manual process would need to continue as described earlier.  

5.	 Impact analysis

Impact group Identification

•	Industry (Customs brokers, importers)

•	Government agencies 

Assessment of costs and benefits

Benefits to Industry

The current procedures for providing Customs Duty and Sales Tax refunds are based on manual processes. By providing an electronic refund processing regime the following benefits will be achieved:

	a full electronic lodgement of refunds will be possible in a familiar systems environment;
	more efficiencies for industry in the preparation and lodgement of refund applications;
	instantaneous status of refund applications;
	90% of applications will not require any physical documentation to be lodged;
	an improvement in turnaround of processing time;
•	a reduction in the time taken to process refunds and consequently instantaneous payment to the majority of applicants.

Costs to Industry

There are no further perceived costs to Industry, as the establishment cost of the new system has already been funded through the Cargo Automation Development Fund (CADF), an industry fund.

The further system enhancement cost of $276,000 includes the design development and implementation of system requirements, industry consultation, a pilot program, testing, training, the preparation of a manual, and provision for a post-implementation review.  It is not envisaged that there will be any compliance costs for industry with the ELOR proposal.

Benefits to Government

The current refunds system is based on a manual processing system. The introduction of an electronic lodgement option will introduce a more efficient system of processing and paying refund applications by Customs, by eliminating time spent on manual processing and thereby better utilising staffing resources and ultimately leading to greater client satisfaction.

The streamlining of the refunds process through the use of electronic lodgement will reduce the paper burden and also increase the transparency of the process by providing instantaneous information on the status of refund applications. The development of the new system is in line with the self-assessment environment in which Customs compliance management now operates. 

Cost to Government

The ELOR system will not require additional funding by Customs as all costs associated with its development and implementation have been included in
funding provided by the Cargo Automation Development Fund.

6. 	Consultation
All major stakeholders involved in the development of the new system have been consulted and all supported the proposal of an electronic lodgement and payments of refunds system, via the further enhancement of the existing COMPILE computer system for import entries. The major stakeholders consulted included the following; Customs Brokers Council of Australia, Department of Finance, Australian National Audit Office  and the Australian Taxation Office.

7. Conclusion and Recommended Option

ELOR will facilitate the processing of applications for refunds by reducing the time taken to process them and accelerating payments.  In addition, the streamlining of applications through the use of electronic lodgement will reduce the paper burden as well as the staffing resources required to process the application.  

The ELOR system has been developed as a further enhancement of the current COMPILE system.  ELOR will have a positive effect on Customs staff as it will reduce the bulk of manual profiling/checking that is required.  Similarly, it is envisaged that overall, industry will benefit from the proposed efficiencies of this system, ie. the majority of refunds will be processed immediately and payment made directly by EFT into accounts nominated by  the COMPILE user.

In conclusion, it is recommended that Option (1), which proposes to introduce an electronic facility for the lodgement of refund applications within the existing COMPILE system, be considered as the primary means of achieving the desired policy objectives.  

8.  Implementation and review

It is proposed to introduce the full ELOR system on or as soon as practical after the passage of the Customs Legislation Amendment Bill (No. 2) 1999 through Parliament.  However, until the legislation is passed, it is proposed to operate a dual system where claimants will be required to manually lodge the documents with Customs, whilst ensuring an opportunity for familiarisation with ELOR in providing the facility. This will ensure that the claimant will have the immediate benefit of a quicker turnaround, as veracity checks will be performed by the ELOR system.  Extensive training will be conducted which will incorporate an explanation of the new procedures, legislation and policy requirements.

The ELOR system will be subject to ongoing monitoring by Customs to ensure a high level of service delivery to clients.

Under ELOR a registered user will send a standard electronic message to Customs containing the prescribed information in relation to an application for a refund on an earlier import consignment.  Customs will apply certain checks for completeness of detail and any necessary checks for control purposes. If there are no impediments to processing a return message will inform the user of the status of the application.

It is considered the majority of applications are low risk and are to be speedily processed down the “green line” with minimum checks. The remaining applications are considered to be high risk and are sent “red line” (which are the result of risk management profiling) and directed to an appropriate area for further scrutiny.

A post-implementation review of ELOR will be undertaken twelve months after commencement of operations.

FINANCIAL IMPACT STATEMENT

.	Schedule 1 of the Bill [Electronic lodgement and payments system for refunds of Customs duty (ELOR)]
	
The measures proposed in this part of the Bill have no direct financial impact, as the development cost of the ELOR system has been funded by Industry through the Cargo Automation Development Fund (CADF).

.	Schedule 2 of the Bill (Customs duty deferral mechanism)

The measures proposed in this part of the Bill have no direct financial impact, as they simply provide a legislative head of power for Regulations to prescribe times for the payment of Customs duty which are later than the times specified in the Act.

.	Schedule 3 of the Bill (Customs Brokers Licensing System)

The measures proposed in this part of the Bill have no direct financial impact.

CUSTOMS LEGISLATION AMENDMENT BILL (No. 2 ) 1999

NOTES ON CLAUSES

Clause 1 – Short title

This clause provides for the Bill when enacted, to be cited as the Customs Legislation Amendment Act (No.2 ) 1999 (Amendment Act).
Clause 2 - Commencement

Sub-clause (1) provides that subject to subclauses (2) to (4), the Amendment Act commences on the day on which it receives the Royal Assent.

Sub-clause (2) provides that both Schedule 1 (concerning the electronic lodgement and payments system for refunds, rebates and remissions of Customs duty) and Schedule 2 (concerning the Customs duty deferral mechanism) are to commence on Proclamation.  That is because both Schedules require Regulations to be enacted before each initiative can effectively commence.

Sub-clause (3) provides for the standard statutory commencement of Schedules (1) and (2) in the event the Proclamation of the Schedules does not occur within 6 months of this Amendment Act receiving the Royal Assent.

Sub-clause (4) provides for a 1 July 2000 commencement for Schedule 3 of the Amendment Act (concerning the Customs Brokers Licensing System amendments).

Clause 3 – Schedules

This clause is the formal enabling provision for the 3 Schedules to the Amending Act, providing that each Act specified in the Schedules is amended or repealed as set out in the applicable items of the Schedules.

The clause also provides that the other items of the Schedules have effect according to their terms.  This is a standard enabling clause for transitional, savings, and application items in amending legislation.  They appear in this Amending Act as items 9, 10 and 11 in Part 2 of Schedule 1, item 6 of Schedule 2, and items 131 and132 in Part 3 of Schedule 3.

SCHEDULE 1 – Refund, rebate and remission applications

This Schedule deals with the amendments to the Customs Act 1901 (the Customs Act) which will enable the introduction of an electronic communication and payments systems for refunds, rebates and remissions of Customs duty.  In particular, the amendments in Item 6 will amplify the existing refund, rebate and remission section of the Customs Act (section 163) to provide sufficiently broad heads of power so that the desired electronic lodgment and payments system for refunds, rebates and remissions of Customs duty may be prescribed in the Customs Regulations.

Regulations were considered the appropriate legislative mechanism for the prescription of this electronic option, given the relative frequency of Information Technology changes and the fact that refund, rebate and remission circumstances are already prescribed in the Customs Regulations.

The other Items in this Schedule effect consequential amendments to the Customs Act resulting from this electronic initiative for refunds, rebates and remissions.

Part 1 - Refund, rebate and remission applications 
Customs Act 1901
Item 1 - Subsection 4(1) (at the end of the definition of COMPILE computer system)

This Item amends section 4 of the Customs Act to expand the definition of the COMPILE computer system to expressly provide that the Customs Regulations may prescribe that computer system for the electronic communication of refund, rebate and remission applications.

The present definition of the COMPILE computer system confines the meaning of computer communications to communications relating to the importation of goods.  ELOR is the new facility on the COMPILE computer system enabling the electronic communication and payment of refunds, rebates and remissions.  Consequently, the COMPILE computer system will be prescribed under the expanded Regulation head of power in Item 6 as the relevant computer system for the electronic communication of such applications.

Item 2 - Subsection 71AA(3)

This Item effects a technical drafting change to subsection 71AA(3).

The Item inserts the new Customs Act references into the subsection as a result of new subsection 71F(1A) (Item 3 refers) and the repeal of section 71J (Item 4 refers).

Item 3 - After subsection 71F(1)

This Item inserts a new subsection 71F(1A) to replace the repealed subsection 71J of the Customs Act (Item 4 refers).

The existing subsection 71J provides that a change to an import entry is to be taken as a withdrawal of the original entry.  The present wording of the subsection does not make it clear that changes to import entries can only be made prior to dealing with the goods the subject of the entry.

The purpose of the new subsection 71F(IA) is to put beyond doubt that information on an import entry can only be changed prior to dealing with the goods the subject of the entry and that any such changes constitute a withdrawal of the original entry.  In addition, this new section is placed in section 71F which is the relevant section dealing with the withdrawal of import entries.

Item 4 - Section 71J

This Item repeals the existing section 71J and substitutes a new section.

The new section provides that annotations on an import entry made either manually or electronically by Customs to record the acceptance and payment of applications for refunds, rebates and remissions does not constitute a withdrawal of that original entry.  This consequential amendment is necessary as a result of the proposed use of the COMPILE computer system for the electronic communication of such applications to Customs.

COMPILE is the current Customs computer system used for all communications relating to the importation of goods.  A person who communicates an import entry by means of COMPILE can access that entry.  An application for a refund, rebate or remission can then be created by making a computer copy of the original entry and changing the relevant information.  COMPILE then automatically calculates the amount to be paid.  The application is then printed and manually given to Customs. 

Where an application is thus created, the amount of any refund or rebate payable can be electronically credited to the applicant's nominated account.  COMPILE electronically annotates the details of the acceptance and payment of the applications on the original import entry.  The new ELOR facility will enable such applications to be communicated electronically.  Payment will continue to be credited to the applicant's nominated account, and annotations of the details of those payments will continue to be made, electronically.

The purpose of the new section 71J is to make it clear that any annotations on an original entry in relation to refunds, rebates or remissions do not constitute a withdrawal of that entry. 

Item 5 - After subsection 163(1A)

This Item inserts five new subsections into section 163 of the Customs Act dealing with refunds, rebates and remissions of Customs duty. The new subsections will provide sufficiently broad heads of power so that regulations might introduce the necessary legislative provisions to support the ELOR facility.

New subsection 163(1AA) provides a head of power to enable the Regulations to prescribe the manner in which both documentary and electronic applications for refunds, rebates and remissions may be made and the procedures to be adopted for dealing with such applications. The purpose of this amendment is to enable all the procedures relating to refund applications to be prescribed.  The specific reference to prescribing procedures to deal with requests for further information has been included to enable Customs to introduce legislative provisions to deal with situations where an applicant does not respond to such requests.

New subsection 163(1AB) provides a head of power to enable the Regulations to prescribe the time at which electronic applications for refunds, rebates or remissions of Customs duty are taken to have been communicated to Customs, akin to the provisions in section 71L of the Customs Act.  The purpose of this amendment is to establish a point in time when such applications are taken to have been communicated to Customs.  This is of particular importance in relation to refund applications because those applications are subject to time limits for their communication to Customs.  The time limits are prescribed in Regulation 128A of the Customs Regulations.

New section163(1AC) provides a head of power to enable the Regulations to prescribe contingency arrangements in relation to applications for refunds, rebates and remissions when the ELOR facility of COMPILE is inoperable.  The purpose of this amendment is to enable contingency arrangements similar to those applying to COMPILE in Division 4A of Part IV of the Customs Act to be prescribed.

New subsection 163(1AD) provides a head of power to enable the Regulations to prescribe the circumstances in which an application for a refund, rebate or remission and/or an application fee for a refund is not required.  The purpose of this amendment is to replace the existing note to subsection 163(1D) of the Customs Act and to prescribe with greater clarity the circumstances in which an application and/or fee is not required. 

New subsection 163(1AE) has been inserted to deal with applications for refunds, rebates and remissions which are created electronically on COMPILE but are not given to Customs within the time limits prescribed by the relevant Customs Regulations.

New paragraph 163(1AE)(a) relates to a person who creates an application for a refund, rebate or remission by taking a computer copy of the original entry he/she has made and then changing the relevant information.  New paragraph 163(1AE)(b) relates to a person creating an application for a refund, rebate or remission as previously described and then paying an application fee.  However, in either case if the person does not communicate that application manually or by computer within the time prescribed for their communication to Customs, the mere creation of the application has no effect in law.

The purpose of this amendment is to put beyond doubt that where such  applications are created but not communicated within the prescribed time limit, or where applications are created and the application fee is paid but the applications are not communicated within the prescribed time limit, these applications have no legal force or effect.  Consequently, if the time for communication has expired, the applicant can no longer claim any entitlement. 

Item 6 - Subsection 163(1B) 

This Item repeals the existing subsection and substitutes a new subsection 163(1B). 

The purpose of the existing paragraph 163(1B)(a) was to prevent the communication of refund applications in respect of more than one import entry.  For example, an applicant might aggregate a number of import entries and then communicate a refund application for the total amount of Customs duty paid in relation to the goods the subject of those entries.  This is currently not permitted by paragraph 163(1B)(b). 

This restriction will continue to be imposed by means of the Regulation head of power in paragraph 163(1)(b), which enables the Customs Regulations to prescribe that refunds, rebates and remissions of duty may be made subject to such restrictions as are prescribed. 

This Item also continues the effect of existing paragaraph 163(1B)(b) by acknowledging that a refund application fee may not be payable in respect of all refund applications (new subsection 163(1AD), Item 6 refers).

Item 7 - Subsection 163(1D) (Note)

This Item repeals the note to subsection 163(1D) as that has been made superfluous by the insertion of new subsection 163(1AD) (Item 6 refers).

Item 8 - After subsection 234(2B)

This item makes a consequential amendment to Section 234 of the Customs Act to cater for the new ELOR facility on COMPILE.  Section 234 deals with offences against the Customs Act. 

The purpose of this amendment is to ensure that when an electronic application for a refund, rebate or remission is taken to have been communicated to Customs, it is to be treated as a statement made to the Chief Executive Officer of Customs for the purpose of the offence in paragraph 234(1)(d).  That paragraph deals with the offence of knowingly or recklessly making false and misleading statements. 

Part 2 - Transitional, saving and application provisions

Item 9 - Import entries taken to have been withdrawn under section 71J of the Customs Act

This Item inserts a standard transitional provision to reflect the amendment to section 71J of the Act by Item 4.  An import entry which is taken to have been withdrawn under the existing section 71J will be taken to have been withdrawn under the new subsection 711F(1A) following the commencement of this Amendment Act.

Item 10 - Saving actions taken in reference to application for refund or rebate

This Item inserts a standard saving provision to protect the validity of applications for refunds or rebates which were created prior to the commencing day as defined in this provision (that is, the commencment of the electronic refund application provisions of this Amendment Act).  This will ensure that such applications will be treated as if they were applications created under the Customs Act as amended, with the proviso that the time for making such applications had not expired before the commencement day.

Item 11 - Application: subsection 163(1B) of the Customs Act 1901 

This Item inserts a standard application provision to ensure that the section applies to applications regardless of whether the application was made before or after the commencement of this Schedule.

Schedule 2 - Deferred payment of duty

This Schedule deals with amendments to the Customs Act to expressly provide the time when payment of Customs duty is required.  At present, Customs duty is paid before imports are released into home consumption, although there are no current provisions in the Customs Act specifying the time when duty must be paid.  It is necessary to do so, so that a deferral of duty mechanism might then be properly grounded.  The proposed amendments in Item 4 will clarify the time when payment of Customs duty is required and provide a mechanism for the deferral of payment of Customs duty by enabling Regulations to prescribe later times for the payment of such duty.

The other items in this Schedule effect consequential amendments to the Customs Act resulting from this duty deferral mechanism.

Customs Act 1901

Item 1 - Subsection 4(1)

This item amends subsection 4(1) of the Customs Act by inserting a definition of "import duty".  The purpose of this amendment is to ensure the meaning of "import duty" in the new subsection 132AA (Item 4 refers) and the existing section 132 of the Customs Act is consistent.

Item 2 - After subsection 71B(4)

This Item inserts a new subsection 71B(4A) after the existing section 71B of the Customs Act.

Subsection 71B(4), in so far as is relevant, currently provides that where a payment of Customs duty is made after an import entry has been communicated to Customs, Customs must give an authority to take the goods into home consumption.

The new section 132AA(1) (Item 4 refers) will insert a head of power to enable the Regulations to prescribe the circumstances in which payment of import duty may be made at a time other than at the time of entry of the goods for home consumption [Item 2 of the table in the new subsection 132AA(1)].

The purpose of this new subsection 71B(4A) is to ensure that where import duty must be paid at a time other than at the time of entry of the goods for home consumption pursuant to Item 2 of the table in the new subsection 132AA(1), and where there has been compliance with paragraph 71B(4)(a) of the Customs Act, Customs must grant an authority to deal with the goods in accordance with paragraphs 71B(4)(c) and (d) (that is, allow people to take delivery of their goods.)

This will ensure that in situations where import duty deferral has been authorised under the new duty deferral mechanism proposed in Item 4, importers will be able to take delivery of their goods following compliance with the reporting requirements of the Customs Act, but without having to pay any import duty owing on the goods at that time.

Item 3 - Paragraph 71F(6)(b)

This Item repeals the existing paragraph 71F(6)(b) and inserts a new paragraph as a consequence of the duty deferral mechanism proposed in Item 4.

The existing paragraph 71F(6)(b), in so far as is relevant, provides that if an import entry is communicated to Customs but the duty remains unpaid for a period of 30 days starting on day on which an import entry advice in respect of the goods is communicated and, the Collector gives a written notice requiring duty to be paid within a specified period, but the duty is still not paid, then the import entry is taken to have been withdrawn.

The purpose of this amendment is to enable duty to remain unpaid during a deferral period which may be prescribed by Regulation pursuant to Item 2 of the Table in the new subsection 132AA(1). (Item 4 refers).

Item 4 - After Section 132AA

Section 132AA - When import duty must be paid

This Item inserts a new section 132AA into the Customs Act specifying the time by which import duty on goods must be paid.

There are no current provisions in the Customs Act specifying when payment of import duty must be made; rather it is a condition precedent to a delivery authority permitting the removal of goods from Customs control [paragraph 71B(4)(b) refers]. 

New subsection 132AA(1) provides for the general rules for the payment of import duty, in three items, as follows.

New Item 1 provides that for goods which must be entered for home consumption, the time by which duty must be paid is to be time of entry of the goods for home consumption (which is the same time that the rate of import duty payable on such goods is determined under section 132 of the Customs Act).  The time of entry for home consumption is taken to be the time when Customs communicates an import entry advice pursuant to sections 71B  and 71L of the Customs Act, acknowledging the receipt of an import entry. 

The purpose of this Item is to establish the general rule for the payment of import duty, which is followed in Item 2 by a head of power to enable duty deferral at a time prescribed in regulations. 
New Item 2 provides a head of power to enable the Customs Regulations to prescribe the time when import duty must be paid on goods which are required to be entered for home consumption.  The purpose of this amendment is to enable duty to be paid at a time other than at the time of entry for home consumption.  This will enable the time for payment of duty to be deferred to a time after the entry of goods for home consumption.

New Item 3 deals with those goods which are not required to be entered for home consumption; that is, goods exempted from entry under section 68 of the Customs Act.  The time by which duty on these goods must be paid is the time when information in relation to the goods is provided under section 71 of the Customs Act or at the time when the goods arrive in Australia, whichever is the later, as reflected in the new subsection 71(2A) of the Customs Act as inserted by the Customs Amendment Act (No 1) 1999.

A duty deferral facility is not proposed for these goods.

New subsection 132AA(2) is intended to address the breadth of the Regulation making power for the duty deferral circumstances countenanced by Item 2 of the table in the new subsection 132AA(1).  In particular, duty deferral in respect of goods can include Regulations which prescribe the goods by reference to the class of persons who import them.  Those persons may be identified by reference to their characteristics (for example, persons who import goods to the value of x per annum) or actions they might take in relation to the importation of particular goods.

New subsection 132AA(3) equally amplifies the breadth of the Regulation making power for the duty deferral circumstances countenanced by Item 2 of the table in the new subsection 132AA(1). In particular, this subsection permits Regulations to prescribe the duty deferral time to be a time specified by the Chief Executive Officer of Customs.  

New subsection 132AA(4) makes provision for the exceptions to the times when import duty must be paid, as provided in the new subsection 132AA(1).

New Item 1 provides that the time for payment of duty in respect of goods delivered into home consumption without entry in paragraphs 69(5)(d) of the Customs Act (dealing with like customable goods) and paragraph 70(7)(b) of the Customs Act (dealing with special clearance goods) will not be affected by this new provision.  Duty will continue to be payable according to the terms of those respective sections. 

New Item 2 provides that the time for payment of duty in respect of goods taken into home consumption pursuant to a permission granted by Customs under paragraph 77D(5)(b) of the Customs Act or paragraph 77E(5)(b) of the Customs Act (relating to contingency arrangements when COMPILE is down) will not be affected by this new provision.  Duty will continue to be payable according to the terms of those respective sections. 

New Item 3 provides that the time for payment of duty in respect of goods imported temporarily under section 162A of the Customs Act will not be affected by this new provision. Duty will continue to be payable according to the terms of that section. 

Item 5 - Subsection 149(2)

This Item makes a technical drafting amendment by omitting the reference to section 132 in subsection 149(2) of the Customs Act and substituting a reference to sections 132 and the new section 132AA.

This is a consequential amendment resulting from the insertion of the new subsection 132AA.

Item 6 - Application

This a standard application provision to ensure that the new section 132AA only applies to goods imported after the commencement of the section, which is to be by Proclamation. 

SCHEDULE 3 - Customs brokers (formerly customs agents)

Part 1 - Customs agents to be called customs brokers

Customs Act 1901

The amendments proposed in this Part of Schedule 3 relate to the renaming of “customs agents” as “customs brokers”.  

In 1991 the Customs Agents Federation of Australia and the Customs Agents Institute amalgamated into a single industry body named the Customs Brokers Council of Australia Inc.  It was agreed between Customs and the Customs Brokers Council of Australia Inc at that time that the term “broker” would be used when dealing with the industry.  The proposed amendments reflect this change in terminology.

As a consequence it is proposed that the terms “corporate customs agents”, “agents licence” and “National Customs Agents Licensing Advisory Committee” will be replaced by the terms “corporate customs broker”, “broker’s licence” and “National Customs Brokers Licensing Advisory Committee" respectively.

Item 1 - Subsection 77A(10)

Item 2 - Subsection 154(1) (definition of deductible administrative costs)

These items amend those provisions of the Customs Act 1901 (“the Act”) to replace the word “agent” with “broker”.

Item 3 - Part XI (heading)

This item replaces the heading to Part XI of the Act to reflect the proposed replacement of the term “customs agent” with “customs broker”.  The Part of the Act regulates the operation of “customs brokers” and certain people authorised to act as an owner’s agent.

Item 4 - Subsection 180(1) (definition of agents licence)

This item repeals the definition of “agents licence”.  This definition will be replaced by the definition of “broker’s licence” in item 5.

Item 5 - Subsection 180(1)

This item inserts a definition of “broker’s licence”.  This term is defined to mean a licence to act as a customs broker granted under section 183C of the Act, including a licence renewed under section 183CJ.  This is substantially the same as the definition of “agents licence” which will be repealed.

Item 6 - Subsection 180(1) (definition of Committee)

This item repeals the definition of “Committee”.  This term is defined to mean the National Customs Brokers Licensing Advisory Committee continued in existence by subsection 183D(1) of the Act.

Item 7 - Subsection 1801(1) (definition of corporate customs agent)

This item repeals the definition of “corporate customs agent”.  This term will be replaced by the term “corporate customs broker” in item 8.

Item 8 - Subsection 180(1)

This item inserts a definition of “corporate customs broker”.  This term is defined to mean a customs broker that is a company or partnership.

Item 9 - Subsection 180(1) (definition of customs agent)

This item repeals the definition of “customs agent”.  This term will be replaced by the term “customs broker” in item 10.

Item 10 - Subsection 180(1)

This item inserts a definition of “customs broker”.  This term is defined to mean a person who holds a broker’s licence that is in force, and in relation to a place, means a person who holds a broker’s licence to act as a customs broker at the place.

Item 11 - Subsection 180(1) (definition of nominee)

Item 12 - Subsection 180(1) (definition of nominee)

Item 13 - Subsection 180(1) (definition of nominee)

Item 14 - Paragraph 181(2)(b)

Item 15 - Paragraphs 181(3)(a) and (b)

Item 16 - Subsections 182(2), 183(2) and (3) and 183A(1)

Item 17 – Division 3 of Part XI (heading)

Item 18 - Subsection 183B(2)

Item 19 - Subsection 183C(1)

Item 20 - Subsection 183C(1)

Item 21 - Subsection 183C(2)

Item 22 - Subsection 183C(2)

Item 23 - Subsection 183CA(1)

These 13 items amend various provisions of the Act to change the word “agent” to “broker” wherever it is used.

Item 24 - At the end of paragraph 183CA(1)(a)

This item inserts the word “and” at the end of paragraph 183CA(1)(a) of the Act in accordance with current drafting style.  This clarifies that the all conditions contained in those paragraphs must be satisfied.

Item 25 - Paragraph 183CA(1)(b)

This item amends paragraph 183CA(1)(b) of the Act to change the word “agent” to “broker”.

Item 26 - At the end of paragraphs 183CA(1)(b), (c) and (d)

This item inserts the word “and” at the end of paragraphs 183CA(1)(b), (c) and (d) of the Act.  This clarifies that all the conditions contained in those paragraphs must be satisfied.

Item 27 - Subsections 183CA(2), 183CB(1) and 183CC(1)

This item amends subsections 183CA(2), 183CB(1) and 183CC(1) of the Act to change the word “agent” to “broker”.

Item 28 - At the end of subparagraph 183CC(1)(a)(i)

This item inserts the word “or” at the end of subparagraph 183CC(a)(i) of the Act.  This clarifies that the conditions found in paragraph 183CC(1)(a) of the Act are alternatives.

Item 29 - Subparagraphs 183CC(1)(a)(ii) and (iii)

This item amends subparagraphs 183CC(1)(a)(ii) and (iii) of the Act to change the word “agent” to “broker”.

Item 30 - At the end of subparagraph 183CC(1)(a)(iii)

This item inserts the word “or” at the end of subparagraph 183CC(1)(a)(iii) of the Act.  This clarifies that the conditions found in subsections 183CC(1) of the Act are alternatives.

Item 31 - Subparagraph 183CC(1)(b)(i)

This item amends subparagraph 183CC(1)(b)(i) of the Act to change the word “agent” to “broker”.

Item 32 - At the end of subparagraph 183CC(1)(b)(i)

This item inserts the word “or” at the end of subparagraph 183CC(1)(b)(i) of the Act.  This clarifies that the conditions found in paragraph 183CC(1)(b) of the Act are alternatives.

Item 33 - Subparagraph 183CC(1)(b)(ii)

Item 34 - Subparagraph 183CC(1)(b)(iii)

Item 35 - Subparagraph 183CC(1)(c)(ii)

Item 36 - Subsection 183CC(2)

Item 37 - Subsection 183CC(4A)

Item 38 - Subsection 183CC(5)

Item 39 - Subsection 183CD(1)

These 7 items amend various provisions of the Act to change the word “agent” to “broker” wherever it is used.

Item 40 - At the end of paragraph 183CD(1)(a)

This item inserts the word “and” at the end of paragraph 183CD(1)(a) of the Act.  This clarifies that all the conditions contained in subsection 183CD(1) of the Act must be satisfied.

Item 41 - Paragraph 183CD(1)(b)

This item amends paragraph 183CD(1)(b) of the Act to change the word “agent” to “broker”.

Item 42 - At the end of paragraph 183CD(1)(b)

This item inserts the word “and” at the end of paragraph 183CD(1)(b) of the Act.  This clarifies that all the conditions contained in subsection 183CD(1) of the Act must be satisfied.

Item 43 - Paragraph 183CD(1)(c)

This item amends paragraph 183CD(1)(c) of the Act to change the word “agent” to “broker”.

Item 44 - At the end of paragraph 183CD(1)(c)

This item inserts the word “and” at the end of paragraph 183CD(1)(c) of the Act.  This clarifies that all the conditions contained in subsection 183CD(1) of the Act must be satisfied.

Item 45 - Paragraph 183CD(1)(d)

This item amends paragraph 183CD(1)(d) of the Act to change the word “agent” to “broker”.

Item 46 - At the end of paragraph 183CD(1)(d)

This item inserts the word “and” at the end of paragraph 183CD(1)(d) of the Act.  This clarifies that all the conditions contained in subsection 183CD(1) of the Act must be satisfied.

Item 47 - Paragraph 183CD(1)(e)

This item amends paragraph 183CD(1)(e) of the Act to change the word “agent” to “broker”.

Item 48 - At the end of paragraph 183CD(1)(e)

This item inserts the word “and” at the end of paragraph 183CD(1)(e) of the Act.  This clarifies that all the conditions contained in subsection 183CD(1) of the Act must be satisfied.

Item 49 - Paragraph 183CD(1)(f)

This item amends paragraph 183CD(1)(f) of the Act to change the word “agent” to “broker”.

Item 50 - At the end of paragraphs 183CD(1)(f) and (g)

This item inserts the word “and” at the end of paragraphs 183CD(1)(f) and (g) of the Act.  This clarifies that all the conditions contained in subsection 183CD(1) of the Act must be satisfied.

Item 51 - Paragraph 183CD(1)(h)

Item 52 - Paragraph 183CD(1)(h)

Item 53 - Paragraph 183CD(1)(j)

Item 54 - Subsection 183CD(2)

Item 55 - Paragraph 183CD(2)(b)

Item 56 - Subsection 183CD(3)

Item 57 - Paragraph 183CD(3)(b)

Item 58 - Subsection 183CD(4)

Item 59 - Paragraph 183CD(4)(a)

Item 60 - Subsection 183CE(1)

Item 61 - Paragraphs 183CE(1)(a) and (b)

Item 62 - Subsection 183CE(2)

Item 63 - Subsection 183CF(1)

Item 64 - Subsection 183CF(1)

Item 65 - Subsection 183CF(1)

Item 66 - Subsection 183CF(2)

Item 67 - Subsection 183CF(2)

Item 68 - Subsection 183CF(2)

Item 69 - Subsection 183CF(4)

Item 70 - Subsections 183CG(1) and (2)

Item 71 - Subsection 183CG(2)

Item 72 - Subsection 183CG(3)

Item 73 - Subsection 183CG(3)

Item 74 - Subsection 183CG(4)

Item 75 - Subsection 183CG(4)

Item 76 - Subsections 183CG(5) and (6)

Item 77 - Subsections 183CG(7) and (8)

Item 78 - Subsection 183CH(1)

Item 79 - Subsection 183CJ(1)

Item 80 - Subsection 183CJ(1)

Item 81 - Paragraph 183CJ(1)(d)

Item 82 - Paragraph 183CJ(1)(d)

Item 83 - Subsection 183CJ(3)

Item 84 - Subsection 183CK(1)

Item 85 - Subsection 183CK(1)

Item 86 - Subsection 183CK(1)

Item 87 - Subsection 183CK(2)

Item 88 - Subsection 183CK(2)

Item 89 - Subsection 183CK(2)

Item 90 - Subsection 183CK(2)

Item 91 - Subsection 183CK(3)

Item 92 - Subsection 183CK(4)

Item 93 - Subsection 183CK(4)

Item 94 - Subsection 183CK(4)

Item 95 - Subsection 183CK(4)

Item 96 - Subsection 183CK(5)

Item 97 - Subsection CL(1)

Item 98 - Paragraph 183CL(2)(a)

Item 99 - Section 183CM

Item 100 - Subsection 183CN(1)

Item 101 - Subsection 183CN(1)

Item 102 - Subsection 183CN(1)

Item 103 - Paragraph 183CN(1)(b)

Item 104 - Paragraph 183CN(1)(c)

Item 105 - Subsection 183CN(2)

Item 106 - Section 183CP

Item 107 - Section 183CP

Item 108 - Subsections 183CQ(1) to (5) and 183CR(1)

Item 109 - Subsection 183CR(2)

Item 110 - Subsection 183CR(2)

Item 111 - Subsections 183CR(4) and 183CS(1)

Item 112 - Subsection 183CS(1)

Item 113 - Subsection 183CS(2)

Item 114 - Subsection 183CS(2)

Item 115 - Subsection 183CT(1)

Item 116 - Subsection 183CT(1)

Item 117 - Subsection 183CT(2)

Item 118 - Subsection 183CT(2)8

Item 119 - Section 183CU

Item 120 - Division 5 of Part XI (heading)

The preceding 70 items amend various provisions of the Act to change the word “agent” to “broker” wherever it is used.

Item 121 - Subsection 183D(1)

This item provides that the body known as the National Customs Agents Licensing Advisory Committee continues in existence as the National Customs Brokers Licensing Advisory Committee.

Item 122 - Paragraphs 183D(2)(d) and 183DA(1)(b)

Item 123 - subsection 183DA(4)

Item 124 - Paragraph 183R(2)(a)

Item 125 - Subsection 183S(1)

Item 126 - Subsections 273GAA(1) and (2)

These items amend various provisions of the Act to change the word “agent” to “broker” wherever it is used.

Part 2 - Term of licence extended to 3 years

Customs Act 1901

Currently people can apply for an agents licence, which allows them to act as a customs agent or a corporate customs agent.

Agents licences remain in force until 31 December of each year.  Hence agents licences have a maximum duration of 1 year.

After consultation with the Customs Brokers Council of Australia Inc and the National Customs Agents Licensing Advisory Committee it was decided to extend the duration of brokers licence from 1 year to 3 years.  This will reduce the burden on brokers, although they will still be required to notify the CEO within 30 days of certain matters, for example if the holder of the licence is convicted of a prescribed offence.

It is proposed that all licences will still be renewable on the same day.  Any licences that are granted during the three year period will be renewable on the same day as all other licences.

It is also proposed to change the date on which licences are renewable.  Currently licences remain in force until 31 December and are renewed on 1 January of each year.  It is proposed that they will continue in force until 30 June and be renewable on 1 July.  This will reduce the burden on brokers at a busy time of year.

Item 127 - Paragraph 183CH(1)(b)

Paragraph 183CH(1)(b) of the Act provides that licences remain in force until the 31 December following the granting of the licence, but such licences are renewable.

Item 127 changes the day on which licences remain in force.  They will remain in force “until the end of the licence expiry day”.  The licence expiry day is defined in new subsection 183CH(1A) (see item 128).

Item 128 - After subsection 183CH(1)

This item inserts a new subsection 128CH(1A) into the Act.  New subsection 128CH(1A) sets out what the licence expiry days are.

These amendments commence on 1 July 2000.  Any licences renewed on 1 January 2000 or granted during 2000 will continue in force until 31 December 2000 under the current provisions of the Act. The first licence expiry day is 31 December 2000, hence ensuring that when the Act is amended, that these licences will still continue in force until 31 December 2000.

The next licence expiry day is proposed to be 30 June 2003.  This means that licences renewed on 1 January 2001 and granted between 1 January 2001 and 30 June 2003 will continue in force until 30 June 2003.  Licences that are renewed on 1 January 2001 will have a duration of two and a half years (this moves the renewal date into the middle of the calendar year).

Any later licence expiry days will be three years from the previous licence expiry day.  Therefore after 30 June 2003 the next expiry day will be 30 June 2006, and so on.

Item 129 - Subsection 183CJ(5)

Subsection 183CJ(5) of the Act currently provides that a licence that is renewed continues in force for 12 months after the renewal.

Since renewed licences will be in force longer than 12 months s item ensures that licences that are renewed under the new provisions continue in force until the next licence expiry day.

Item 130 - After subsection 183CL(2)

This item inserts a new subsection 183CL(2A) into the Act.  Subsection 183CL(1) provides that the fees that are payable in respect of agents licences may be prescribed.  Subsection 183CL(2) of the Act provides that different fees may be payable for different classes of agents (currently corporate customs agents pay a different fee than customs agents) and the time within which fees are payable may be prescribed.

New subsection 183CL(2A) will allow different fees to be prescribed depending on the length of the licence. Subsection 183CL(3) provides that licence fees may include an amount with regard to the cost of the establishment, administration and operation of the Committee, it may be necessary to charge lesser fees for shorter licences. Since all licences have the same expiry day, licences granted before the expiry day will be different lengths.

Part 3 - Transitional provisions

Item 131 - Agents licences continue as broker’s licences

This item ensures that when the amendments in this Schedule commence on 1 July 2000 any existing agents licences will continue in force as a broker’s licence as if it had been granted after the commencement of these amendments.

Subitem 130(2) provides that continuation of these licences under this item does not prevent a licence from being suspended, cancelled, altered or endorsed.  Nor does it stop an endorsement on a licence being varied.

Item 132 - Continuing membership of the Committee

This item ensures that members of the existing National Customs Agents Licensing Advisory Committee continue as members of the renamed National Customs Brokers Licensing Advisory Committee when the amendments contained in this Schedule commence.

This item also ensures that the duration of a members office on the Committee remains the same when the name of the Committee is changed.