House of Representatives

Taxation Laws Amendment (Excise Arrangements) Bill 2000

Explanatory Memorandum

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

Chapter 3 - Officers' powers

Outline of chapter

3.1 This chapter explains the amendments to the Excise Act relating to the powers and obligations of authorised officers who perform certain functions under an excise law.

Summary of the amendments

3.2 The search and seizure provisions that apply to the excise legislation currently exist in the Customs Act. The amendments transfer, from the Customs Act to the Excise Act, the legislative authority for officers to exercise search and seizure powers. These powers are currently exercised under delegation from the CEO of Customs. The amendments do not confer any additional powers. The powers are exercised in accordance with a warrant issued by a magistrate, to search for and seize evidential material relating to offences under an excise law, or to seize goods forfeited under the Excise Act, the Distillation Act, the Spirits Act or the Coal Excise Act.

3.3 Additionally, the amendments will provide for forfeited goods seized by police officers, or by persons assisting the officer executing the warrant, to be dealt with in the same way as forfeited goods seized by the executing officers.

3.4 The search and seizure provisions do not affect the law relating to legal professional privilege. [Schedule 1, item 1, section 107AB]

Detailed explanation of the amendments

Powers and obligations transferred from the Customs Act

3.5 Provisions governing search and seizure powers are modelled on those in the Crimes Act, and reflect the current standard on the use of those powers. The powers are generally subject to judicial scrutiny by the requirement that the powers be exercised under warrant.

3.6 Warrants may be issued to an authorised officer exercising excise functions either to:

·
search for and seize material that is relevant to the prosecution of an offence against any of the Excise Acts; or
·
seize goods that are forfeited under a provision of any of the Excise Acts.

The term Excise Acts is defined in section 4 of the Excise Act to mean any Act, and instruments under such an Act, relating to excise in force within the Commonwealth.

When can a search warrant to search for evidential material be issued?

3.7 A warrant to search premises can be issued if a judicial officer is satisfied by information on oath that there are reasonable grounds for suspecting that there is evidential material (other than forfeited goods) at the premises. A warrant can be issued if evidential material will be at the premises within the next 72 hours. This permits a warrant to be obtained in advance of a delivery that, according to information held, is expected. [Schedule 1, item 1, subsection 107BA(1)]

3.8 An applicant for a search warrant must note in the application whether the premises have been the subject of previous search or seizure applications. The premises need not be noted in the application if they are an excise place, being premises specified in a producer, dealer, manufacturer or storage licence issued under the Excise Act, as these are ordinarily subject to regulatory inspection. [Schedule 1, item 1, subsection 107BA(2)]

3.9 Matters that must be stated in a warrant include:

·
the relevant offence;
·
a description of the premises;
·
the kind of evidential material to be searched for;
·
the name of the executing officer;
·
the period (not exceeding 7 days) during which the warrant remains in force; and
·
the time of day when the warrant may be executed.

[Schedule 1, item 1, subsection 107BA(3)]

3.10 Other matters which must be stated in a warrant are:

·
whether it authorises the seizure of evidential material relating to any other excise-related offence; and
·
whether it authorises the search of persons at or near the premises.

[Schedule 1, item 1, subsection 107BA(4)]

3.11 The 7-day limit that applies to a particular warrant does not preclude the issuing of successive warrants for the same premises. [Schedule 1, item 1, subsection 107BA(5)]

3.12 For a warrant arranged by telephone, the period during which evidential material must be expected to be on the premises is reduced to 48 hours, and the period during which the warrant can remain in force is also limited to 48 hours. [Schedule 1, item 1, subsection 107BA(6)]

3.13 In recognition of the national character of the excise function, a judicial officer of a particular State or Territory may issue a warrant for the search of premises in another State or Territory. [Schedule 1, item 1, subsection 107BA(7)]

3.14 The power to search under warrant does not limit or derogate from existing search powers that apply under the Excise Acts for regulatory purposes. [Schedule 1, item 1, subsection 107BA(8)]

What does a search warrant authorise?

3.15 A warrant to search for evidential material (other than forfeited goods) authorises:

·
entry onto the specified premises to search for and seize the evidential material;
·
the search and recording of fingerprints or other forensic material; and
·
the search of a person, if provided for in the warrant.

[Schedule 1, item 1, section 107BB]

Use of testing equipment

3.16 The executing officer or a person assisting may bring equipment reasonably necessary to examine or process things found on the premises to determine whether they may be seized. [Schedule 1, item 1, subsection 107BC(1)]

3.17 Things may be moved from the premises for testing only with the consent of the occupier. [Schedule 1, item 1, subsection 107BC(2)]

3.18 If things are moved for testing, the occupier must be informed of the place and time at which testing is to occur and be permitted to be present for the testing. [Schedule 1, item 1, subsection 107BC(3)]

3.19 Equipment already on the premises may be used by the officer or a person assisting to determine whether the thing is liable for seizure. [Schedule 1, item 1, subsection 107BC(4)]

3.20 Compensation is payable if any damage is caused during the examination or processing of things on the premises. [Schedule 1, item 1, section 107BE]

Use of computers and other electronic equipment

3.21 The executing officer or a person assisting may use computer or other electronic equipment to access evidential material providing it can reasonably be used without damaging it. [Schedule 1, item 1, subsection 107BD(1)]

3.22 Evidential material that is accessed may be reproduced in printed form or copied onto disk, tape or other storage device. [Schedule 1, item 1, subsection 107BD(2)]

3.23 If it is impracticable to reproduce or copy the material, the equipment and storage devices may be seized. [Schedule 1, item 1, subsection 107BD(3)]

3.24 If expert assistance is required to operate the equipment, the executing officer may safeguard the equipment to prevent the risk of destruction or interference with the evidential material. Notice of that course of action must be given to the occupier. [Schedule 1, item 1, subsections 107BD(4) and (5)]

3.25 The expert assistance must be obtained within 24 hours unless an extension of that time is obtained from a judicial officer. [Schedule 1, item 1, subsections 107BD(6) and (7)]

3.26 Compensation is payable if any damage is caused to the computer or other electronic equipment. [Schedule 1, item 1, section 107BE]

3.27 In determining the amount of any compensation, any warnings or guidance given or that should have been given by the occupier of the premises, or employees or agents of the occupier, will be taken into account. [Schedule 1, item 1, subsection 107BE(4)]

Copies of seized documents given to the occupier

3.28 Copies of seized documents, in printed or electronic form, must be provided on request to the occupier, or their representative at the time the warrant is executed, if they can readily be copied, as soon as practicable after the seizure. [Schedule 1, item 1, section 107BF]

When can a seizure warrant for forfeited goods be issued?

3.29 A warrant to seize goods can be issued if a judicial officer is satisfied by information on oath that there are reasonable grounds for suspecting that forfeited goods are at the premises, and that the necessity for seizure has been demonstrated. A warrant can be issued if the goods will be at the premises within the next 72 hours. This permits a warrant to be obtained in advance of a delivery that, according to information held, is expected. [Schedule 1, item 1, subsection 107CA(1)]

3.30 The necessity for seizure may be demonstrated by reference to:

·
the seriousness of the relevant offence;
·
the circumstances surrounding the offence;
·
the penalty for the offence;
·
the nature and value of the goods; and
·
the inconvenience and cost of seizure to the owner of the goods.

[Schedule 1, item 1, subsection 107CA(2)]

3.31 An applicant for a search warrant must note in the application whether the premises have been the subject of previous search or seizure applications. The premises need not be noted in the application if they are an excise place, being premises specified in a producer, dealer, manufacturer or storage licence issued under the Excise Act, as these are ordinarily subject to regulatory inspection. [Schedule 1, item 1, subsection 107CA(3)]

3.32 Matters that must be stated in a warrant include:

·
a description of the relevant goods;
·
a description of the premises;
·
the name of the executing officer;
·
the period (not exceeding 7 days) during which the warrant remains in force; and
·
the time of day when the warrant may be executed.

[Schedule 1, item 1, subsection 107CA(4)]

3.33 A warrant must also state whether it authorises the search of persons at or near the premises. [Schedule 1, item 1, subsection 107CA(5)]

3.34 The 7-day limit that applies to a particular warrant does not preclude the issuing of successive warrants for the same premises. [Schedule 1, item 1, subsection 107CA(6)]

3.35 For warrants arranged by telephone, the period during which evidential material must be expected to be on the premises is reduced to 48 hours, and the period during which the warrant can remain in force is also limited to 48 hours. [Schedule 1, item 1, subsection 107CA(7)]

3.36 In recognition of the national character of the excise function, a judicial officer of a particular State or Territory may issue a warrant for the seizure of goods at premises in another State or Territory. [Schedule 1, item 1, subsection 107CA(8)]

What does a seizure warrant authorise?

3.37 A warrant to seize forfeited goods authorises:

·
entry onto the specified premises to search for and seize the goods reasonably suspected to be forfeit; and
·
the search of a person, if provided for in the warrant.

[Schedule 1, item 1, section 107CB]

How is the search of a person to be conducted?

3.38 The search of a person may be by ordinary search or by frisk search. In either case, the search must be conducted by a person of the same sex unless it is impractical to do so. [Schedule 1, item 1, section 107DA]

3.39 An ordinary search is defined to mean the search of a person or their possessions requiring the person to remove any coat, jacket, gloves, shoes or hat and examining those items. [Schedule 1, item 1, definition of ordinary search in section 107AA]

3.40 A frisk search is defined to mean the search of a person by quickly running the hands over their outer garments and examining anything worn or carried by the person that is conveniently and voluntarily removed by the person. [Schedule 1, item 1, definition of frisk search in section 107AA]

How are search and seizure warrants executed?

3.41 The executing officer must, before entry, announce that he or she is authorised to enter and give the occupier the opportunity to allow entry unless there are reasonable grounds to believe that the effective execution of the warrant may be frustrated, or that the safety of any person may be at risk, if entry is not immediate. [Schedule 1, item 1, section 107DB]

3.42 The executing officer must identify himself or herself to the person where the warrant is executed. A copy of the search or seizure warrant must be made available to the occupier of the premises, or their representative, at that time. A copy of the warrant must also be shown to any person who is searched. [Schedule 1, item 1, section 107DC]

3.43 The occupier of premises, or a representative who is present at the time the warrant is executed, is entitled to observe the search or seizure being conducted, providing they do not impede the search or seizure. [Schedule 1, item 1, section 107DD]

3.44 The executing officer may obtain such assistance, and use such force against persons or things as is necessary and reasonable in the circumstances. [Schedule 1, item 1, section 107DE]

3.45 The executing officer, or a person assisting, may:

·
take photographs or video recordings of the premises or things on the premises [Schedule 1, item 1, subsection 107DF(1)] ;
·
temporarily cease the execution of a warrant and then resume the search or seizure within one hour or such further time as is agreed in writing by the occupier [Schedule 1, item 1, subsection 107DF(2)] ; and
·
resume execution of a warrant if it had been stopped by court order which had later been revoked or reversed, providing the warrant remains in force [Schedule 1, item 1, subsection 107DF(3)] .

3.46 If execution of a warrant had been stopped by court order which had later been revoked or reversed, and the warrant had ceased to be in force, the court may reissue the warrant if it is satisfied as to the requirements for doing so. [Schedule 1, item 1, subsections 107DF(4) and (5)]

3.47 Warrants may be obtained by telephone, fax or other electronic means in urgent cases or where delay could frustrate the execution of the warrant. Before the end of the day following the execution of such a warrant, the executing officer must complete the form of the warrant and give or transmit it to the judicial officer together with the information duly sworn. [Schedule 1, item 1, section 107DG]

3.48 Receipts for things seized must be provided by the executing officer or a person assisting. [Schedule 1, item 1, section 107DH]

Offences relating to warrants

3.49 Knowingly making a false or misleading statement in an application for a warrant is an offence punishable by imprisonment for up to 2 years. [Schedule 1, item 1, section 107DI]

3.50 Offences, punishable by imprisonment for up to 2 years, are committed if:

·
a judicial officer is incorrectly named as the issuer of a telephone warrant;
·
a matter is knowingly stated on a warrant that departs materially from that for which the telephone warrant was issued;
·
a document purporting to be a telephone warrant is presented, or purported to be executed, when it is known to be false or unauthorised; or
·
a form of warrant is given to a judicial officer that is not the form of warrant the person purported to execute.

[Schedule 1, item 1, section 107DJ]

How is seized evidential material dealt with?

3.51 Things seized as evidential material can only be retained for the purpose of prosecuting the offence which justified their seizure. They must be returned if the reason for their seizure no longer exists, or if it is decided that they are not to be used in evidence. If proceedings have not been commenced within 120 days of the seizure, the seized material must be returned unless a court order is made either for further retention of the material or for its destruction or disposal. [Schedule 1, item 1, subsection 107EA(1)]

3.52 Things returned must be in as near as practicable to the condition they were in at the time they were seized. [Schedule 1, item 1, subsection 107EA(2)]

3.53 In ordering the retention of material for a period beyond the initial 120 days, or any later period previously ordered, a magistrate must be satisfied that the continued retention is necessary:

·
for investigating whether an offence has been committed; or
·
to enable evidence to be assembled for prosecution purposes.

3.54 The magistrate must also be satisfied that there has been no avoidable delay in conducting the investigation or in assembling the evidence. The officer who intends to make an application for further retention must take reasonable steps to find out who has interest in the material and to notify them of the intention to seek further retention of the material. [Schedule 1, item 1, section 107EB]

3.55 In making an order for further retention of evidential material a magistrate is performing an administrative function in his or her personal capacity as persona designata, rather than as a member of a court. A magistrate, nevertheless, has the same protection and immunity as if he or she were performing the function as a member of a court. [Schedule 1, item 1, section 107GA]

How are seized forfeited goods dealt with?

3.56 An officer who seizes goods reasonably believed to be forfeited under an Excise Act must take them to a storage place approved by the Collector. [Schedule 1, item 1, subsections 107FA(1) and (2)]

Seizure notice issued

3.57 A seizure notice must be served on the owner, or the person in whose possession the goods were when seized, within 7 days of the seizure. The notice must be served personally or by post, or if neither can be effected, by publishing a copy of the notice in a newspaper circulating in the location in which the goods were seized. [Schedule 1, item 1, section 107FB]

3.58 Service of the notice by post is taken to be properly addressed if it is sent to the last known address of the person. [Schedule 1, item 1, section 107FL]

3.59 The seizure notice must contain:

·
a statement identifying the goods;
·
the day on which the goods were seized;
·
the grounds on which they were seized; and
·
a statement that in the absence of a claim for return of the goods within 30 days of the notice being served, the goods will be deemed condemned as forfeited to the Crown.

[Schedule 1, item 1, section 107FC]

Claim for return of the seized goods

3.60 A claim for return of the goods may be made by the owner, in the approved form, which specifies the grounds on which the claim is made. [Schedule 1, item 1, section 107FD]

3.61 If no claim is made within 30 days of the seizure notice being served the goods are deemed condemned as forfeited to the Crown. [Schedule 1, item 1, section 107FE]

3.62 If a claim for return of the goods is made, they must be returned unless prosecution proceedings are commenced within 120 days of the making of the claim, or if the goods have been disposed of under section 107FJ (which provides for the disposal or destruction of perishable goods). If proceedings have not been commenced within 120 days of the making of the claim, the seized material must be returned unless a court order is made for further retention of the material. On completion of the proceedings a court order for condemnation of the goods as forfeited to the Crown will preclude their return. [Schedule 1, item 1, paragraphs 107FF(2)(a) to (c) and subsections 107FF(3) and (9)]

3.63 If the goods were seized as special forfeited goods (i.e. goods forfeited under the DistillationActor the SpiritsAct), proceedings may be commenced within 120 days of the making of the claim, or such further time as is ordered for further retention, for the goods to be declared as special forfeited goods. On completion of the proceedings a court order for condemnation of the goods as forfeited to the Crown will preclude their return. [Schedule 1, item 1, paragraphs 107FF(2)(d) and (e) and subsections 107FF(4) and (5)]

3.64 If a finding of a court is taken on appeal, the goods are to be retained until the completion of that appeal. [Schedule 1, item 1, subsection 107FF(7)]

3.65 Goods that are returned must be in as near as practicable to the condition they were in at the time they were seized. [Schedule 1, item 1, subsection 107FF(8)]

Order for further retention of the goods

3.66 In ordering the retention of material for a period beyond the initial 120 days, or any later period previously ordered, a magistrate must be satisfied that the continued retention is necessary for investigating whether an offence has been committed or to enable evidence to be assembled for prosecution purposes. The magistrate must also be satisfied that there has been no avoidable delay in conducting the investigation or in assembling the evidence. The officer who intends to make an application for further retention must take reasonable steps to find out who has an interest in the goods and to notify them of that intention. [Schedule 1, item 1, section 107FG]

3.67 In making an order for further retention of forfeited goods a magistrate is performing an administrative function in his or her personal capacity as persona designata , rather than as a member of a court. A magistrate, nevertheless, has the same protection and immunity as if he or she were performing the function as a member of a court. [Schedule 1, item 1, section 107GA]

Compensation in some circumstances

3.68 If goods are disposed of or destroyed because no claim for their return was made, the owner may still apply for compensation providing:

·
the goods are not special forfeited goods (i.e. goods forfeited under the DistillationActor the SpiritsAct);
·
the goods were not involved in the commission of an offence; and
·
the court is satisfied there is a reasonable excuse for the failure to claim the goods.

[Schedule 1, item 1, section 107FH]

Condemnation and disposal of forfeited goods

3.69 Goods that are, or are deemed, condemned as forfeited to the Crown vest in the Commonwealth to the exclusion of all other interests in the goods. [Schedule 1, item 1, section 107FI]

3.70 Goods that are, or are deemed, condemned as forfeited to the Crown are disposed of in accordance with the CEOs directions. [Schedule 1, item 1, section 107FM]

Immediate destruction of perishable forfeited goods

3.71 If the seized forfeited goods are perishable and are considered to be a danger to public health, the CEO may deal with the goods in the manner considered appropriate, including their destruction. [Schedule 1, item 1, subsection 107FJ(1)]

3.72 Notice of the destruction of the goods must be served on the owner, or the person in whose possession the goods were when seized, within 7 days of their destruction. The notice must be served personally or by post, or if neither can be effected, by publishing a copy of the notice in a newspaper circulating in the location in which the goods were seized. [Schedule 1, item 1, subsections 107FJ(2) and (3)]

3.73 Service of the notice by post is taken to be properly addressed if it is sent to the last known address of the person. [Schedule 1, item 1, section 107FL]

3.74 The notice must:

·
identify the goods;
·
state that the goods were seized under a warrant and give the reason for the seizure;
·
state how and why the goods have been dealt with; and
·
state that, in certain circumstances, the owner is entitled to sue for recovery of the market value of the goods at the time they were dealt with.

[Schedule 1, item 1, subsection 107FJ(4)]

3.75 An owner is entitled to sue for recovery of the market value of the goods if:

·
the goods are not special forfeited goods (i.e. goods forfeited under the DistillationActor the SpiritsAct);
·
the goods were not involved in the commission of an offence; and
·
the court is satisfied that the circumstances necessary for immediate disposal or destruction of the goods did not exist.

[Schedule 1, item 1, subsections 107FJ(5) and (6)]

3.76 A court must order payment if the owner establishes a right to recover the market value of the goods. [Schedule 1, item 1, subsection 107FJ(7)]

Release of forfeited goods on security

3.77 The owner of seized forfeited goods (other than special forfeited goods) may apply to a court for an order that the goods be released, providing a security is given to the CEO by the owner of an amount determined by the court. [Schedule 1, item 1, subsections 107FK(1) and (2)]

3.78 In determining whether to order the release of the goods, a court may have regard to the impact that continued retention of the goods might have on the economic interest of third parties and similar matters. [Schedule 1, item 1, subsection 107FK(3)]

3.79 The amount of the security to be determined by the court for release of the goods must not exceed the sum of:

·
market value of the goods at the time the order is made; and
·
the cost to the CEO of storing the goods since the time the goods were seized until their release,
reduced by the amount of any duty paid on the goods.

[Schedule 1, item 1, subsection 107FK(4)]

3.80 The goods must be released on payment of the security.

[Schedule 1, item 1, subsection 107FK(5)]

Offences relating to evidential material and forfeited goods

3.81 It is an offence for a person to:

·
destroy, or render incapable of identification, documents or things that are, or might be, evidential material or forfeited goods;
·
render illegible or indecipherable such a document or thing; or
·
conceal on his or her body or clothing such a document or thing,

with the intention of preventing it from being seized during the exercise of powers by an authorised person.

[Schedule 1, item 1, section 107FN]

Forfeited goods seized by police

3.82 Police officers are authorised by section 9 of the CrimesActto seize, without warrant, articles which are forfeited, or reasonably believed to be forfeited, under any law of the Commonwealth. Under the provisions of the Crimes Act, articles that are condemned as forfeited must be transferred to the Official Trustee for disposal or destruction.

3.83 To ensure consistency in the treatment of goods forfeited under any of the Excise Acts, police officers are instead to be required to deliver seized goods into the custody of an officer performing excise functions. [Schedule 1, item 1, subsection 107FA(4)]

3.84 Forfeited goods seized by a person assisting an executing officer in the execution of a seizure warrant, such as a police officer, will also be required to deliver seized goods into the custody of an officer performing excise functions. [Schedule 1, item 1, subsection 107FA(3)]

3.85 The officer who receives forfeited goods from a police officer, or other person assisting, must store the goods at an approved storage place [Schedule 1, item 1, subsection 107FA(5)] . The notification and retention obligations that ordinarily apply to seized forfeited goods will apply to goods seized in this way.

Consequential amendments

3.86 The Customs Act will be amended, where appropriate, to remove references to excise laws from the provisions dealing with officers powers. [Schedule 3, items 85 to 88, 91 and 92]

3.87 The amendments to the Customs Act do not apply to actions already commenced at the time the amendments commence. [Schedule 3, item 90]


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