House of Representatives

Excise Amendment (Compliance Improvement) Bill 2000

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)

Chapter 4 - Other measures to improve compliance

Outline of Chapter

4.1 This Chapter explains the other amendments that are designed to improve compliance with the provisions of the Excise Act 1901 (Excise Act).

Summary of the amendments

4.2 In addition to the introduction of a comprehensive licensing scheme and measures specific to the control of tobacco, this Bill will make amendments to:

·
restructure offences and increase penalties for:

-
breach of manufacturers' record-keeping requirements;
-
unlawfully possessing excisable goods on which duty has not been paid;
-
unlawfully moving excisable goods on which duty has not been paid;
-
unlawfully selling excisable goods on which duty has not been paid;
-
unauthorised movement of goods that are subject to Customs control;
-
failure to comply with the requirements of a permission to move goods that are subject to Customs control; and
-
failure to comply with the requirements of a permission to deliver goods for home consumption without an 'entry for home consumption' having been made;

·
extend the power of officers to stop and search conveyances in certain circumstances; and
·
increase the penalty limits that may be sought in proceedings instituted in some courts.

Detailed explanation of amendments

Increased penalties for certain offences

Records kept by manufacturers

4.3 Section 50 of the Excise Act imposes an obligation on manufacturers to keep and retain records as directed, and to produce those records on demand. The current penalty for breaching this obligation is $2,000.

4.4 The maximum penalty will be increased to 30 penalty units, which is consistent with the penalty for similar offences under other Commonwealth Acts. [Schedule 1, item 30]

4.5 A note will be inserted that refers to the section in the Crimes Act 1914 that defines the amount of a penalty unit, currently $110. [Schedule 1, item 31]

4.6 A further amendment will remove any doubt that the offence is one of strict liability. [Schedule 1, item 32, new subsection 50(1A)]

Unlawfully possessing excisable goods on which duty has not been paid

4.7 Section 117 of the Excise Act currently prohibits a person who does not have a licence to manufacture or other permission under the Excise Act from having in their possession, custody or control excisable goods on which excise duty has not been paid. A person who contravenes this prohibition is, on conviction, subject to a maximum pecuniary penalty, under section 129, of either $50,000 or between 2 and 5 times the duty that would be payable if the goods had been entered for home consumption.

4.8 Existing sections 117 and 129 will be repealed and new section 117 will prohibit the possession, custody or control of excisable goods on which excise duty has not been paid. [Schedule 1, items 52 and 58]

4.9 The replacement provision will incorporate a tiered penalty structure including a maximum term of imprisonment of 2 years where the requisite mental elements of the offence are established. [Schedule 1, item 52, new subsection 117(1)]

4.10 A maximum penalty of 100 penalty units will apply to the offence of unlawful possession of the goods on a strict liability basis. [Schedule 1, item 52, new subsections 117(2) and (3)]

4.11 An infringement notice penalty of 20 penalty units may instead apply to the unlawful possession of excisable goods on which excise duty has not been paid if court proceedings to prosecute the offence are not instituted. [Schedule 1, item 59, new section 129B]

Unlawfully moving excisable goods on which duty has not been paid

4.12 Section 119 of the Excise Act currently prohibits a person, without permission, from conveying excisable goods on which excise duty has not been paid. A person who contravenes this prohibition is, on conviction, subject to a maximum pecuniary penalty, under section 129, of either $50,000 or between 2 and 5 times the duty that would be payable if the goods had been entered for home consumption.

4.13 Existing sections 119 and 129 will be repealed and new section 117A will prohibit the moving, without permission, of excisable goods on which excise duty has not been paid. [Schedule 1, items 53 and 58]

4.14 The replacement section will incorporate a tiered penalty structure including a maximum term of imprisonment of 2 years where the requisite mental elements of the offence are established. [Schedule 1, item 52, new subsection 117A(1)]

4.15 A maximum penalty of 100 penalty units will apply to the offence of moving excisable goods without permission on a strict liability basis. [Schedule 1, item 52, new subsections 117A(2) and (3)]

Unlawfully selling excisable goods on which duty has not been paid

4.16 New section 117B will prohibit the selling of excisable goods on which duty has not been paid with a tiered penalty structure as follows:

·
if a person sells excisable goods either knowing, or reckless as to whether, they are excisable goods on which duty has not been paid:

-
2 years imprisonment; and/or
-
the greater of 500 penalty units or 5 times the duty that would be payable if the goods had been entered for home consumption; or

·
if a person sells excisable goods on which duty has not been paid irrespective of their state of mind - 100 penalty units.

[Schedule 1, item 52, new subsections 117B(1) to (3)]

4.17 An infringement notice penalty of 20 penalty units may instead apply to the unlawful selling of excisable goods on which excise duty has not been paid if court proceedings to prosecute the offence are not instituted. [Schedule 1, item 59, new section 129B]

Under bond sales

4.18 The offence under new section 117B does not apply to the sale of excisable goods on which excise duty has not been paid if, at the time of the sale, the goods are stored at an approved place and are later stored at that place or another approved place until they are entered for home consumption or delivered for exportation. [Schedule 1, item 52, new subsection 117B(4)]

Unauthorised movement, etc. of goods subject to Customs control

4.19 Excisable goods are subject to Customs control until they are delivered either for home consumption (since a liability to excise duty would have arisen) or for exportation to a place outside Australia (which exempts from liability to excise duty). Under existing section 61, movement of excisable goods whilst within Customs control is prohibited unless authorised by the Excise Act.

4.20 The current penalty for moving, altering or interfering with excisable goods within Customs control is $20,000.

4.21 Section 61 is to be replaced with a new section 61 which differs in that it provides for a tiered penalty structure as follows:

·
if a person moves, alters or interferes with excisable goods that are subject to Customs control either knowing, or reckless as to whether, the goods are excisable goods subject to Customs control:

-
2 years imprisonment; and/or
-
the greater of 500 penalty units or 5 times the duty that would be payable if the goods had been entered for home consumption; or

·
if a person moves, alters or interferes with excisable goods that are subject to Customs control, irrespective of the person's state of mind - 100 penalty units.

[Schedule 1, item 37, new section 61]

Permission to move goods subject to Customs control

4.22 Section 61A of the Excise Act provides for the giving of permissions to move goods that are subject to Customs control. Permissions are given in writing and may be subject to the condition that requirements specified in the permission be complied with. Permission requirements are those considered necessary for revenue protection reasons or for the purpose of ensuring compliance with the 'Excise Acts'.

4.23 Subsection 61A(4) provides for a maximum penalty of $20,000 and forfeiture of goods if the permission requirements are not complied with. It will be replaced with new subsections 61A(4) to (7) which provide a tiered penalty structure as follows:

·
if a person intentionally or recklessly fails to comply with a permission requirement:

-
2 years imprisonment; and/or
-
the greater of 500 penalty units or 5 times the duty that would be payable if the goods had been entered for home consumption; or

·
if a person fails to comply with a permission requirement irrespective of their state of mind - 100 penalty units.

[Schedule 1, item 38, new subsections 61A(4), (6) and (7)]

4.24 Intentionally or recklessly failing to comply with a permission requirement will, as at present, result in forfeiture of the goods. [Schedule 1, item 38, new subsection 61A(5)]

Permission to deliver goods for home consumption without an 'entry for home consumption' having been made

4.25 Section 61C of the Excise Act provides for the giving of permissions to deliver goods for home consumption without an entry for home consumption having been made. Permissions are given in writing and may be subject to the condition that requirements specified in the permission be complied with. Permission requirements are those considered necessary for revenue protection reasons or for the purpose of ensuring compliance with the 'Excise Acts'.

4.26 Subsection 61C(4) provides for a maximum penalty of $20,000 and forfeiture of goods if the permission requirements are not complied with. It will be replaced with new subsections 61C(4) to (4C) which provides a tiered penalty structure as follows:

·
if a person intentionally or recklessly fails to comply with a permission requirement:

-
2 years imprisonment; and/or
-
the greater of 500 penalty units or 5 times the duty that would be payable if the goods had been entered for home consumption; or

·
if a person fails to comply with a permission requirement, irrespective of the person's state of mind - 100 penalty units.

[Schedule 1, item 39, new subsections 61C(4), (4B) and (4C)]

4.27 Intentionally or recklessly failing to comply with a permission requirement will, as at present, result in forfeiture of the goods. [Schedule 1, item 39, new subsection 61C(4A)]

Power of officers to stop and search conveyances

4.28 Under section 87 of the Excise Act, officers have a limited power to stop and search conveyances that are about to leave a manufacturer's premises or other 'Excise place' in order to check that the movement of excisable goods is authorised.

4.29 This power will be extended to allow officers to stop and search conveyances that are about to leave the licensed premises of a licensed producer or licensed dealer. [Schedule 1, items 42 and 44]

4.30 Additionally, an officer will be authorised to stop and search conveyances at any place, without warrant, if they have reasonable grounds to believe that the conveyance holds tobacco leaf or excisable goods and is being used, or intended to be used, in the commission of an offence. [Schedule 1, item 45, new section 87AA]

4.31 The term conveyance is currently defined in section 87 to mean an aircraft, railway rolling stock, vehicle or vessel of any kind. As the term will also be used in new section 87AA , its definition is to be relocated to subsection 4(1) which contains the definitions of terms used generally in the Excise Act. [Schedule 1, items 2 and 43]

Institution of prosecution proceedings

4.32 Section 134 of the Excise Act provides for the maximum penalty amount for an offence to be limited by the maximum penalty amount that may be sought in proceedings in certain courts.

4.33 The limit on the maximum penalty for an offence that may be sought in proceedings in a County Court or District Court of a State, or a Local Court of full jurisdiction of South Australia or of the Northern Territory, is to be increased from $20,000 to $40,000. [Schedule 1, item 60]

4.34 The limit on the maximum penalty for an offence that may be sought in proceedings in a court of summary jurisdiction is to be increased from $5,000 to $20,000. [Schedule 1, item 61]

Application provision

4.35 The changes to the limits on the maximum penalty that may be sought in a particular court apply to proceedings instituted after the amendment comes into effect. [Schedule 1, item 62]


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