Senate

Replacement Explanatory Memorandum

(Circulated by authority of the Minister for Health and Aged Care, the Hon Mark Butler MP)

NOTES ON CLAUSES

Clause 1 – Short Title

The clause provides for the short title of the TG Act, once enacted, to be the Therapeutic Goods and Other Legislation Amendment (Vaping Reforms) Act 2024.

Clause 2 – Commencement

This clause provides the timetable for the commencement of various provisions contained in the Bill as follows:

•

Sections 1 to 3 commence on the day that the Bill receives the Royal Assent;

•

Schedule 1 commences the later of 1 July 2024 and the day after the Bill receives Royal Assent;

•

Schedule 2 commences the day after the Bill receives the Royal Assent; and

•

Schedule 3 commences at the same time as Schedule 1.

Clause 3 – Schedules

This clause provides that each Act that is specified in a Schedule to this Bill is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item has effect according to its terms.

This is a technical provision which gives operational effect to the amendments contained in the Schedules.

Schedule 1 amends the Therapeutic Goods Act 1989 (the TG Act).

Schedule 2 amends the Customs Act 1901 (the Customs Act).

Schedule 3 amends other Acts, including the Industrial Chemicals Act 2019 and the Public Health (Tobacco and Other Products) Act 2023.

SCHEDULE 1 — Amendment of the Therapeutic Goods Act 1989

Background

On 2 May 2023, the Minister for Health and Aged Care announced the Government's intention to address the significant generational harms posed by vaping in Australia by implementing a ban on all vaping goods, except vaping goods imported, manufactured, or supplied in accordance with the TG Act, and to strengthen the controls for therapeutic vapes, including by requiring therapeutic vapes to be supplied to patients through pharmacy settings.

At a general level, a 'therapeutic vape' is a shorthand expression for therapeutic vaping goods which are 'therapeutic goods' within the meaning of the TG Act and supplied within the existing (lawful) pharmaceutical supply chain.

The amendments in this Schedule will implement these measures by expanding the TG Act to regulate vaping goods that are not simply 'therapeutic goods'. This is intended to achieve a comprehensive, and nationally consistent, approach to the regulation of vapes by relying on the federal cooperative scheme for therapeutic goods. All states and territories have enacted corresponding laws to adopt the Commonwealth TG Act as amended from time, with Western Australia recently progressing their own corresponding law. The corresponding laws are designed to fill the gap in the Commonwealth's constitutional power to ensure appropriate coverage for the regulation of therapeutic goods.

Specifically, the measures in this Schedule are intended to:

•

introduce key definitions, and related powers including the power for the Minister to, by legislative instrument, determine that specified goods are therapeutic goods, including when used, advertised or presented for supply in a particular way;

•

prohibit the importation, manufacture, supply and commercial possession of vaping goods, with specified exceptions that are designed to reflect lawful dealings with therapeutic vaping goods and which include an exception for personal use in relation to the offences and civil penalties relating to the possession of less than a commercial quantity of vaping goods;

•

enable the Secretary to consent to the manufacture, supply or commercial possession of vaping goods, with the effect that a person to whom such a consent is granted would be covered by an exception in relation to the relevant offences and civil penalties for such conduct – this measure is designed to ensure that persons who lawfully deal in therapeutic vaping goods will not be subjected to sanction for such dealings;

•

introduce a new, tailored advertising framework for vaping goods, with requirements, and offences and civil penalties, designed to protect consumers from the advertising of vaping goods, including vulnerable audiences such as young Australians. Consistent with the existing advertising framework for therapeutic goods, the new framework will not apply to advertisements directed exclusively at health practitioners and other specified kinds of persons such as practice managers for health practitioners;

•

introduce a number of new measures to enhance the compliance and enforcement framework for both vaping goods and therapeutic goods, principally through powers for the Secretary to give enforceable directions to persons requiring them to do specified things in relation to particular products, such as to relabel the goods to bring them into compliance with the TG Act, or to deliver the goods for destruction or disposal, and through the introduction of new arrangements relating to the forfeiture and retention of products;

•

allow for the delegation of certain powers of the Secretary to an officer of a Department of State of a state, a Department or administrative unit of the Public Service of a territory or an authority of a state or territory, in order to empower state and territory officials to carry out enforcement powers under the new vaping reforms, as part of measures to ensure a comprehensive and consistent approach to addressing unlawful vaping goods;

•

ensure that the Secretary may release information about vaping goods to the public and to specified persons, bodies or authorities or kinds of persons, bodies or authorities, such as state and territory health departments and law enforcement bodies to support compliance and enforcement efforts and inform the public in relation to risks posed by particular vaping goods; and

•

make a small number of more minor amendments, including updating the offences and civil penalties in the Act for breaching a condition of an exemption or approval for therapeutic goods. This will help ensure that therapeutic vapes supplied in Australia meet minimum benchmarks including the requirement for sponsors to notify the Secretary in relation to the compliance of their products with applicable quality standards.

The amendments complement the recent amendments to:

•

the CPI Regulations to ban the importation of non-therapeutic and disposable single use vapes (subject to certain exceptions) and to require a licence and permit to import non-disposable therapeutic vapes; and

•

the TG Regulations and MD Regulations to strengthen the regulatory controls for therapeutic vapes that are exempt from the requirement to be included in the Australian Register of Therapeutic Goods (the Register).

Part 1—Definitions and objects of Act

Therapeutic Goods Act 1989

Item 1 – Subsection 3(1) (after paragraph (b) of the definition of therapeutic goods)

This item amends the definition of 'therapeutic goods' in subsection 3(1) of the TG Act to insert new subparagraph 3(1)(ba), consequential to the introduction of new section 7AAA.

New subparagraph 3(1)(ba) has the effect that the definition of 'therapeutic goods' in subsection 3(1) of the TG Act includes goods determined to be therapeutic goods under new section 7AAA.

Item 2 - Subsection 3(1) (paragraphs (e) and (f) of the definition of therapeutic goods)

This item makes a minor amendment to paragraphs (e) and (f) of the definition of 'therapeutic goods' in subsection 3(1) of the TG Act consequential to the introduction of new section 7AAA.

Item 3 – At the end of subsection 4(1)

This item amends subsection 4(1) of the TG Act to include the regulation of vaping goods. The amendment makes it clear that the objects of the TG Act include the establishment and maintenance of a national system of controls relating to the regulation of vaping goods that are imported, manufactured, supplied in Australia or exported from Australia.

Item 4 - After section 7

This item inserts new subsections 7AAA(1) and (2) into the TG Act.

New subsection 7AAA(1) provides that the Minister may, by legislative instrument, determine that, for the purposes of this Act, specified goods (other than goods declared not to be therapeutic goods under an order in force under section 7 and goods covered by a determination under subsection 7AA(1) or (2) (excluded goods)):

(a)

are therapeutic goods; or

(b)

when used, advertised, or presented for supply in a particular way, are therapeutic goods.

New paragraph 7AAA(2)(a) sets out the matters that the Minister must have regard to before making a determination under new subsection 7AAA(1). These matters include whether:

(a)

it is likely that the specified goods, if not regulated under this Act, might harm the health of members of the public;

(b)

it is appropriate in all the circumstances to apply the national system of controls relating to the quality, safety, efficacy and performance of therapeutic goods established by this Act to regulate the specified goods;

(c)

the kinds of risks from the specified goods to which members of the public might be exposed could be more appropriately dealt with under another regulatory scheme.

New paragraph 7AAA(2)(b) provides that the Minister may have regard to any other relevant matter before making a determination under new subsection 7AAA(1).

Allowing the definition of therapeutic goods to be broadened in delegated legislation will enable rapid amendments to cater for novel and unanticipated products that it is desired should be regulated as therapeutic goods. Despite the broad definition of therapeutic goods, the importation, manufacture, supply, export and advertising of goods in novel and unanticipated forms that should be regulated as 'therapeutic goods' may not readily fit within the current definition is still a possibility and may pose a risk to public health. This is intended to be a broad power for the Minister to specify any good to be a therapeutic good.

Allowing the Minister to determine specified goods to be therapeutic goods through delegated legislation is important, as that definition could be readily amended to capture a new range of goods that for public health reasons should be regulated as therapeutic goods under the TG Act.

Subsection 57(1) of the TG Act allows the Minister to delegate this power to a broad class of delegates. This ensures that those with the most relevant expertise in regulating new and emerging therapeutic goods can participate in the decision-making process. It is also important to note that any amendments to the defined term in delegated legislation would be subject to Parliamentary scrutiny and disallowance.

Item 5 - After paragraph 8(1)(b)

This item amends subsection 8(1) of the TG Act to insert new paragraph 8(1)(ba). In effect, this amendment broadens the classes of person from whom the Secretary may, by giving written notice, request information under subsection 8(1).

The amendment broadens the classes of person to include a person who has imported into Australia, or supplied in Australia, goods in relation to which the Minister is considering making a determination under the new section 7AAA(1) (goods that are therapeutic goods).

This will allow the Secretary to collect relevant information of the kind referred to

above which can then be provided to the Minister for the purposes of making such a

determination.

Part 2—Regulation of vaping goods

Division 1—Main amendments

Therapeutic Goods Act 1989

Item 6 – Subsection 3(1)

This item inserts two definitions in subsection 3(1) of the TG Act. The definitions provide that 'commercial quantity' of a kind of vaping goods means the quantity of that kind of vaping goods prescribed by the regulations, and 'evidential burden', in relation to a matter means the burden of adducing or pointing to evidence that suggests a reasonable possibility that the matter exists or does not exist. The definition of 'evidential burden' reflects the definition in section 13.3 of the Commonwealth Criminal Code.

Definition of commercial quantity

It is necessary and appropriate for a quantity of a kind of vaping goods that would amount to a commercial quantity (item 6 of Schedule 1) to be prescribed in delegated legislation, noting the importance of this definition to the offence provisions proposed to be inserted by the Bill.

This definition applies to both the offence and civil penalty provisions proposed to be inserted by the Bill relating to possession. However, the definition has greater significance to the offence provisions due to the cascading maximum penalties that apply under clause 41QC (possession of a commercial quantity of vaping goods). This is because the applicable offence provision and maximum penalty depends on the quantity of vaping goods found in a person's possession.

Necessary and appropriate

It is necessary and appropriate for a quantity of a kind of vaping goods that would amount to a commercial quantity to be prescribed in regulations to:

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ensure flexibility to change the quantity in line with prescribing practices of health professionals with respect to therapeutic vapes for personal use;

•

ensure the commercial quantity is adaptive to new and emerging design specification, which could affect the types of vaping substance used, the delivery of vaping substance, the volume and concentration capacity of the vaping device and the number and types of vaping accessories available for use with vaping devices and substances;

•

allow quantities to be amended efficiently, if necessary, in response to illicit trade of vapes to ensure that the criminal offences continue to act as a sufficient deterrent; and

•

maintain a workable connection between a commercial quantity of vaping goods and acceptable or legitimate volumes or quantities of therapeutic vaping goods.

The vaping reforms are not intended to prohibit the possession of vaping goods for personal use, provided the vapes in a person's possession are appropriately less than a commercial quantity. Accordingly, the phrase 'commercial quantity' serves as a marked distinction between commercial possession and possession for personal use.

The medical advice as to the appropriate quantity of vaping goods for personal use is evolving and differs significantly depending on the patient's individual circumstances. This makes it difficult to specify with certainty where the relevant line is between a quantity that could reasonably be for personal use, and where that line is clearly crossed, and the possession is for commercial purposes.

By allowing for the quantities to be prescribed in the regulations, the government can more easily and quickly respond as the medical and public health advice evolves. Flexibility will be important in ensuring that by the prohibitions on commercial possession by unlawful actors in Australia are fit for purpose and achieve the regulatory objective of these measures.

The reasoning behind the proposed approach with respect to the meaning of a commercial quantity would, of course, be included in the explanatory statement to the regulations and would be based on expert public health and medical advice and the broader compliance and enforcement experience.

Analogous approach – commercial quantity of serious drugs and precursors

An example of an analogous approach where a commercial quantity of a substance has been prescribed in regulations made under primary legislation is the commercial quantity of a serious drug, controlled precursor or border-controlled precursors in the Criminal Code Act 1995.

Section 301.10 of the Criminal Code Act 1995 provides that the quantity of a serious drug, controlled precursor or border-controlled precursor is prescribed. These quantities are set out in the Criminal Code Regulations 2019 (the Criminal Code Regulations 2002 at the time the provision was introduced).

The reason provided for this approach similarly related to the need for flexibility in the face of evolving markets and emerging products. It was felt that any delay in updating quantities would be exploited by 'entrepreneurial criminals and organised crime groups'. The same arguments apply in relation to vaping goods. Further, the regulations would remain subject to parliamentary scrutiny and disallowance.

Item 7 – Section 3(1) (definition of manufacture )

This item amends the definition of 'manufacture' in the TG Act to provide that the term relates to the manufacture of vaping goods, as well as therapeutic goods.

Item 8 – Subsection 3(1)

This item inserts three definitions in section 3(1) of the TG Act, for 'medical practitioner', 'nurse practitioner', and 'pharmacist'. These terms are defined as meaning a person who is registered, licensed or authorised (as relevant) under a law of a state or internal territory that provides for such registration, licensing or authorisation.

Item 9 – Subsection 3(1) (paragraph (c) of the definition of supply )

This item amends the definition of 'supply' in subsection 3(1) of the TG Act to provide that the term also relates to vaping goods.

Item 10 – Subsection 3(1)

This item inserts new definitions in subsection 3(1) of the TG Act. It inserts the new definition of 'unit' of vaping goods, which has the meaning prescribed by the regulations.

This item also inserts new definitions for 'vaping accessory', 'vaping device', 'vaping goods' and 'vaping substance', all of which are defined in new section 41P of the TG Act. The scope of each of these definitions are discussed in relation to the operation of section 41P.

Definition of a "unit" of vaping goods

The concept of a 'unit' of vaping goods has no application to the criminal offence provisions proposed to be inserted by the Bill. Rather, it is a matter central only to the enforceability, and application, of the civil penalty provisions in the proposed new Chapter 4A relating to the importation, manufacture, supply and commercial possession of vaping goods in subclauses 41Q(3), 41QA(3), 41QB(3), 41QC(10) and 41QD(4).

The concept is intended to provide an appropriate mechanism for calculating the number of contraventions of a civil penalty provision, as an alternative to the prosecution of corresponding criminal conduct.

As a public health measure directed to discourage unlawful conduct relating to vaping goods to ultimately discourage the uptake of vaping, the definition of a 'unit' needs to be flexible and adaptable as appropriate in the circumstances. It is proposed that a unit of vaping goods is prescribed in regulations made under the TG Act.

The regulations would be subject to appropriate parliamentary scrutiny and disallowance. This supports an approach that is adaptive to evolving public health issues, contemporary clinical and scientific evidence and changes in technology and the market more generally.

Necessary and appropriate

The intention of the new offences and civil penalty provisions is to deter unlawful conduct, arrest the alarming increase in the use of vapes in Australia, particularly among youth and young adults, and to prevent a new generation of persons being exposed to dangerous chemicals and developing nicotine dependence.

It is necessary and appropriate for the definition of a 'unit' of vaping goods (in item 10 of Schedule 1) to be prescribed by regulations having regard to:

•

the design, development and marketing of unlawful vaping goods, which will continue to evolve following the vaping reforms; this is because the market has consistently sought to evade compliance efforts in recent years through product design and concealment; successful regulation must remain responsive to industry changes;

•

the scientific, medical and public health understanding in relation to vaping goods, which will continue to mature, as the health impact of unlawful vapes is determined particularly with reference to nicotine concentrations and toxicities;

•

matters specified in other delegated legislation made under the Therapeutic Goods Act 1989 (TG Act), such as standards, which may change from time to time and materially impact the determination of a 'unit' of vaping goods.

Given the need for adaptability, it is appropriate for a 'unit' of vaping goods to be prescribed in the regulations having regard to changing scientific, medical, and public health understanding. Any incongruence with acceptable or legitimate volumes or quantities of therapeutic vaping goods would create serious difficulties for compliance and enforcement efforts.

Prescribing a 'unit' of vaping goods in delegated legislation would provide for necessary flexibility and agility to ensure that the public health risks from vaping are expeditiously managed and enforced in response to an aggressive and changing illicit market. The public health risks are significant and are explained at pages 3 to 5 of the explanatory memorandum to the Bill.

The reasoning behind the proposed approach with respect to a 'unit' of vaping goods would be included in explanatory material to the regulations. and based on further consultation, medical advice and the broader compliance and enforcement experience.

Responsive to the evolution of the illicit market

The government's experience in enforcing the existing regulatory framework has demonstrated that the illicit market is quick to adapt to the changing regulatory settings, including making alterations to the manufacturing of vaping goods.

Examples include the removal of all references to nicotine on the label of vaping goods being imported and subsequently supplied in Australia, and the deliberate mischaracterisation of vaping goods as perfume atomisers or the like.

Such steps significantly frustrate the ability for the Australian Border Force and the Therapeutic Goods Administration (TGA) to take appropriate regulatory action to prevent these goods entering Australia and making their way to retailer stores for the purpose of direct supply to the public.

Flexibility in determining a unit of vaping goods will ensure that any changes to the way that vaping goods are designed, manufactured, promoted or characterised can be appropriately responded to by ensuring that a unit of vaping goods reflects the reality of the evolving illicit market.

Responsive for public health reasons

Clause 41P provides that vaping goods are to be defined as including all their various permutations: vaping accessories, devices, and vaping substances. Vaping goods can be one, or a combination of these different permutations, and there can be different characteristics, which distinguish the goods from each other, and the objective harm of each permutation of the goods themselves.

Flexibility in determining a unit of vaping goods is critical in ensuring that the harms of the different permutations of vaping goods are internally consistent and correspond to the objective harms of each kind of vaping good.

For example, the objective harm of 20 vaping accessories could be said to correspond to the objective harm of 200ml of vaping substance. However, this assessment may change as over time, and require amendment to ensure consistency, depending on the relevant concentration or toxicity.

There may be circumstances where the objective harm may be linked to the nicotine concentration in the vaping substance, rather than the volume itself. Determining a 'unit' of each of the permutations may be complex and is anticipated to evolve as the scientific and medical knowledge about, vaping goods develops and matures.

Relevance of other delegated legislation

Standards, which are disallowable legislative instruments, made under the TG Act set maximum volumes for vaping substances. These volumes are subject to change from time to time and will be relevant to determining a 'unit' of vaping goods. Prescribing 'units' in the regulations allows flexibility to amend this concept if maximum volumes in the standards are changed.

Example – traveller's exemption

An example of an analogous approach, which has been specified in delegated legislation, is the prescription of the quantity allowable under the traveller's exemption in regulation 5A of the Customs (Prohibited Imports) Regulations 1956.

This exemption allows a person travelling to Australia to bring a small quantity of vaping goods with them for use in their treatment, or someone they are caring for, who is entering Australia on the same ship or aircraft. The current maximum allowable quantity is no more than 2 vapes, 20 vaping cartridges and 200 ml of vaping liquid.

While no explanation was provided in the explanatory statement for the Customs Legislation Amendment (Vaping Goods) Regulations 2023, the volumes and quantities specified in the traveller's exemption are relatively modest and considered to be reasonable in the circumstances for the personal use of a traveller to Australia.

Item 11 – After Chapter 4

This item inserts new Chapter 4A in the TG Act. This Chapter is titled 'Vaping goods' and principally deals with the regulation of vaping goods under the TG Act.

Division 1 in Part 4A-1 deals with introductory matters. Division 1 contains new section 41N which provides the simplified outline of this Chapter.

New section 41NA provides that an offence provision or civil penalty provision in Chapter 4A does not limit the generality of an offence provision or civil penalty provision in any other Chapter, and those provisions in other Chapters do not limit the generality of offence provisions or civil penalty provisions in Chapter 4A.

Division 2—Interpretation

Therapeutic Goods Act 1989

Division 2 in Part 4A-1 provides definitions for relevant terms.

Division 2 contains new subsection 41P(1) which provides a definition for vaping accessory, vaping device, vaping goods and vaping substance. These definitions would broadly mirror the definitions inserted into the CPI Regulations by the Customs Legislation Amendment (Vaping Goods) Regulations 2023. Where the proposed definitions materially differ from those already present in the CPI Regulations, explanation of this difference is provided below.

The term vaping goods is defined to mean a vaping substance, vaping accessory or vaping device, as well as goods the presentation of which includes an express or implied representation that the goods are such goods, or that they are included in a class of goods that are determined to be vaping goods under subsection (3). This definition captures goods in relation to which the name, labelling, packaging, or any advertising or informational material associated with the goods, includes an express or implied representation that the goods are either a vaping substance, vaping accessory or vaping device. In relation to a vaping device, one example where this may arise would include a good that is included in the same package as a vaping substance and/or vaping accessory, making it apparent that it is intended to be used as a vaping device. Similarly, a substance may be characterised as a vaping substance where it is labelled as an 'e-juice' or an 'e-liquid', as it will be apparent that it is for use in, or with, a vaping device.

Paragraph (e) of the definition of vaping goods would also have the effect that the definition of vaping goods would include goods that are, or are included in a class of goods that are, determined to be vaping goods by the Minister under subsection 41P(3). This is a broad power that allows the Minister to determine any good to be a vaping good where regulation under Chapter 4A is desirable.

The term vaping device is defined to mean:

(a)

a device (whether or not filled with a vaping substance) that generates or releases, or is designed or intended to generate or release, using a heating element and by electronic means, an aerosol, vapour or mist for direct inhalation by its user; or

(b)

a device to which paragraph (a) would apply if the device were not temporarily or permanently inoperable, incomplete, damaged, or unfinished.

The note to the definition of vaping device provides that humidifiers, diffusers, nebulisers and inhalers are not vaping devices.

Devices that release vapour or mist into the air, including devices such as humidifiers, diffusers and some steam inhalers, do not meet the definition of a vaping device because the vapour or mist is not for direct inhalation by the user. Devices that release vapour, aerosol or mist into the air, and direct that air towards the user through a mask, such as some inhalers and nebulisers do not meet the definition of a vape. Devices that do not produce vapour or mist using a heating element, such as nebulisers and most inhalers, do not meet the definition of a vape because they do not generate the vapour or mist using a heating element.

A heat not burn device, which heats, using a heating element and by electronic means, processed tobacco without combustion and produces a vapour for direct inhalation, meets the definition of a vaping device. An e-hookah device that vaporises vaping substances for direct inhalation will meet the definition of a vaping device, but a traditional non-electronic shisha device will not be a vaping device because it does not use electronic means.

A vaping device includes both a finished a device (such as a fully assembled device that is either pre-filled with a vaping substance or simply requires the addition of a vaping substance or vaping accessory in order to be operable) and a device that is incomplete, damaged, temporarily or permanently inoperable or unfinished. It should be noted that the words 'incomplete, damaged, temporarily or permanently inoperable, or unfinished' refer to goods that are not yet in full working order, but which could be converted to full working order with some additional parts or by assembly of the parts. This would include goods such as mouthpieces, coils and casements that are intended to be attached to other parts, whether as part of further manufacture or for self-assembly by a consumer. It would also include parts that are intended to be attached to vape accessories, such as batteries intended for use with vape cartridges. Other than the CPI Regulations referring to a vape, rather than a vaping device, the definition of vaping device to be inserted in the TG Act is not materially different to that definition in the CPI Regulations.

The term vaping accessory is defined to mean a cartridge, capsule, pod or other vessel that is for use in, or with, a vaping device, and whether or not the cartridge, capsule, pod or other vessel contains a vaping substance or is designed or intended to be refilled. This definition would not include a good that would meet the definition of a vaping device. In practice this definition intends to capture goods that are vape cartridges, whether or not they are filled with a vaping substance or are refillable. A vaping accessory would also include a vape cartridge that is integrated with components that would otherwise be considered parts of a vaping device, such as a mouthpiece and heating coil. It is not uncommon that vape cartridges are supplied already integrated with both mouthpieces and coils. It is intended that these goods would be captured by the definition for a vaping accessory.

The primary difference between this definition of vaping accessory and the definition of vape accessory in the CPI Regulations is that this definition is limited in scope to vape cartridges and other vessels that are intended to be used with, or in, vaping devices. By contrast, the definition of vape accessory in the CPI Regulations is broader and is designed to capture any container of vaping substances, including dripper bottles of e-liquid. This proposed definitional difference is attributable to the differing purposes of the TG Act and the CPI Regulations. The CPI Regulations seek to provide definitions which are most readily identifiable and enforceable by border officials.

In the context of vaping goods, having a definition that captures any small or handheld containers of vaping substances (rather than large vats of liquid for further manufacture) enables border officials to readily identify a class of vaping goods. The definition of vaping accessory, as inserted by the new 41P definition into the TG Act, needs to be able to effectively interact with the therapeutic goods framework maintained under the TG Act. As such, the proposed definitions would need to account for the qualitative difference between a filled vape cartridge and filled dripper bottle despite being similar in size and containing vaping substances. Due to the potential inclusion of medical device-like elements, such as a heating coil, in a vape cartridge, it would be regulated differently to a therapeutic good that is (for example) a dripper bottle containing a vaping substance.

The term vaping substance is defined to mean nicotine in solution in any concentration (including in a salt or base form) or any liquid or other substance for use in, or with, a vaping device, and includes a container, or part of a container (other than a vaping accessory or vaping device), in which such a liquid or other substance is present.

Vaping substance means a liquid or other substance for use in, or with, a vaping device or nicotine in solution in any concentration, including in salt or base form. This definition would extend to the container holding the vaping substance unless the container is a vaping accessory or vaping device. In practice this means a dripper bottle containing e-liquid would be considered a vaping substance. The substances referred to in this definition would include, but are not limited to, a liquid, gel, solid or salt that is intended for use in a vaping device. This also applies to bulk vaping substances, irrespective of the quantity.

It should be noted that there is no unique chemical or substance that is used only in vaping liquids, gels, solids. Vaping substances can vary greatly in their component ingredients, and may include ingredients that are dangerous chemicals in their own right, as well as ingredients that have a significant range of 'ordinary' uses such as in the manufacture of cosmetics, pharmaceuticals, foods and industrial goods (for example, glycerine, propylene glycol, essential oils and vitamins). Where these ingredients that are in widespread use in the community for ordinary purposes are not intended or presented for use for vaping, they will not be affected by this definition.

Finished goods that contain nicotine as an ingredient, but are not nicotine in solution, and are not for use in or with a vaping device, such as nicotine patches and nicotine gum, do not meet the definition of a vaping substance. However, nicotine in solution, including as a raw material or finished good, will meet the definition of a vaping substance even if the solution is not for use with a vaping device. All substances for use with a vaping device that contain nicotine (as well as substances for use with a vaping device that do not contain nicotine in solution), will meet the definition of a vaping substance.

Substances made from dried plants, including but not limited to heat-sticks made of tobacco intended for use in a heat not burn vaping device, meet the definition of vaping substance. Substances for use with e-hookah devices will meet the definition of vaping substance, but shisha tobacco is not generally considered to be for use with an electronic shisha device and therefore will not ordinarily meet the definition of a vaping substance.

New subsection 41P(2) provides that for paragraph (d) of the definition of 'vaping goods' in subsection (1), the presentation of goods includes matters relating to the name of the goods, labelling and packaging of the goods, and any advertising or informational material associated with the use or supply of the goods. New subsection 41P(2) also provides that the goods are taken to be presented as being a particular kind of goods even if the presentation is capable of being misleading or confusing as to the content or proper use or identification of the goods, or suggests that the goods have ingredients, components or characteristics that they do not have.

In practice, subsection 41P(2) will enable the offences in the new Chapter 4A to operate even if goods have inaccurate claims or are the subject of misleading marketing. Subsection 41P(2) is intended to prevent persons from evading the regulatory controls in Chapter 4A by:

•

modifying the components or ingredients of vaping goods; or

•

designing the vaping goods to make them difficult to identify or detect; or

•

describing the goods in a way that conceals their purpose to an uninformed observer but signals the intended use to the user.

Marketing can make individuals believe these goods are safe for human consumption when they are not. Vaping goods are frequently designed to look like other ubiquitous objects such as pens, USB devices, toys, lip glosses and sippy cups, reinforcing the idea that vaping goods are safe for children when this is not the case. For adults using vaping goods, the variability in concentration of the ingredients and potential toxicity of the goods, increases the risk of harm, particularly when the label is misleading.

The effect of subsection 41P(2) would be that there is no requirement for testing or identification by an expert to determine whether a good is a vaping good. Goods can be vaping goods solely on the basis of express or implied representations made through the presentation of the goods, including the name, labelling, packaging and any advertising or informational material associated with the goods.

Examples of terms that, when used in the presentation of goods, would ordinarily have the effect that those goods are taken to be vaping goods include: vapes, e-cigarettes, e-cigs, e-smoke, e-pens, e-sticks, vape pens, vape sticks, pv (personal vaporiser), ENDS (electronic nicotine delivery system), doubler, shortfills, e-liquid and e-juice.

Examples of terms that may, in particular contexts, imply that a good is for vaping include tanks, pods, capsules, cartridges, doubler, shortfills, flavour or cloud, as well as references to nicotine and derivatives of the word nicotine, such as nic, and reference to the type of nicotine such as salt or freebase.

Some vaping goods are designed with colours and cartoons to be attractive to children and their presentation does not include terms commonly associated with vaping. Similarly, vaping goods aimed at adults may have no terms on the label or packaging that explicitly relate to vaping and may have associated informational material and advertising that is explicitly designed to avoid references to vaping. These may nonetheless be vaping goods if they are designed or intended for vaping, or the overall presentation indicates that they are a vaping substance, a vaping accessory, a vaping device, or a good determined to be a vaping good under subsection 41P(3).

New subsection 41P(3) provides that the Minister may, by legislative instrument, determine that, for the purposes of this Act, specified goods or a specified class of goods are or are not vaping goods or, when used, advertised, or presented for use or supply in a particular way, are or are not vaping goods. This power will enable the Minister to respond to a rapidly evolving market that has repeatedly sought to evade regulation since the Commonwealth Government first regulated nicotine vaping products in 2021.

The ability to determine that things are not vaping goods is broadly analogous to section 7AA of the TG Act. Section 7AA enables the Minister to exclude goods that would otherwise be therapeutic goods from the therapeutic goods regulatory framework. This power also enables exclusion based on how goods are used, advertised or presented for supply. Determining that goods are not vaping goods would have a similar effect to section 7AA in that it would exclude those goods from the regulatory framework for vaping in the new Chapter 4A. Goods excluded from the new Chapter 4A under subsection 41P(3), would, however, still be subject to the other Chapters of the TG Act (as applicable) if they are therapeutic goods.

The power to exclude vaping goods from the operation of the new Chapter 4A is also similar to the power found in subregulation 5A(5) of the CPI Regulations. This subregulation enables the Minister to approve, by legislative instrument, the importation of vaping goods without an import licence or permit. Like the 7AA power, this in effect excludes certain goods from the operation of regulation 5A of the CPI Regulations.

The subsection 41P(3) is intended to allow the Minister to determine that goods are vaping goods despite those goods not otherwise meeting the definition of vaping goods provided in 41P(1). Such a power is crucial if the Government is to maintain parity with an ever-evolving market.

A principal purpose of subsection 41P(3) will be to capture vape-like products. In 2021, when the Commonwealth Government first addressed the growing vaping problem by changing the scheduling status of nicotine found in vapes in the Poisons Standard, the market immediately pivoted to supplying vaping goods that were silent on their nicotine content. This hampered enforcement efforts domestically, as well as at the border, as officers were unable to ascertain the lawfulness of goods in the absence of lab testing for nicotine content.

With respect to the present reforms, a sufficiently precise definition for vaping goods is needed so as to avoid inadvertent capture of unrelated goods such as nebulisers or humidifiers. The Government is already aware of products that are being branded as non-vape, but vape-like, alternatives to vaping. These goods may have systems of direct inhalation but do not heat substances by electronic means and may technically evade the definition of vaping goods. Subsection 41P(3) will enable the Minister to determine such goods to be vaping goods. However, the power is not limited to including vape-like goods. It is a broad power to include or exclude any goods from the definition of a vaping good.

Part 4A-2—Offences and civil penalty provisions relating to vaping goods

Division 1 – General

Division 1 in Part 4A-2 creates a number of offences and civil penalties for importing, manufacturing, supplying and commercially possessing vaping goods. Division 1 contains new sections 41Q to 41QD.

These provisions ban certain activities unless permitted by the TG Act, the Customs Act and by state and territory medicine and poisons laws, as the case may be.

In relation to possession, the intent is not to criminalise or otherwise prohibit the personal possession of vaping goods. It is only commercial possession that is intended to be prohibited or possession other than for personal use.

The sponsor defence will not be available for these offences and civil penalty provisions. This is because the bans are intended to apply to all persons in the supply chain and ensure that supply is through the legitimate pathways.

The intent of the bans is to ensure that vaping goods are only supplied through the same supply chains that apply to goods containing substances included in Schedule 4 to the Poisons Standard (prescription medicines). This will give effect to the policy intention of ensuring that nicotine vapes are only supplied to consumers under medical supervision with a prescription at a pharmacy, subject to very limited exceptions.

Overview of penalties for the prohibitions

The TG Act includes a tiered penalty regime for most offences, with two fault-based offences (one with an aggravated factor) and a strict liability offence. There is also usually a corresponding section which makes the relevant physical conduct a contravention of a civil penalty provision.

This is an example of dual track regulation where the legislation gives regulators a choice of responses in respect of the same physical conduct and a range of enforcement options. Examples include sections 19B and 19D of the TG Act. Providing these options will enable the utilisation of a range of regulatory tools, including the issuing of an infringement notice, commencing civil penalty proceedings or criminal prosecution with a view to specifically and generally deterring the proscribed conduct.

Criminal offences

A criminal offence conviction is considered to be the ultimate sanction for breaching the law. According to the Australian Law Reform Committee Report No 95 – Principled Regulation at paragraph 2.9:

The main purpose of criminal law is traditionally considered to be deterrence and punishment. Central to the concept of criminality is the notation of individual culpability and the criminal intention for one's actions.

Where the proscribed conduct involves considerable harm to the public health of Australians and requisite mental elements relating to the conduct can be established, the TGA will generally pursue criminal prosecutions through the Director of Public Prosecutions. This is particular the case where the level of culpability of the person warrants criminal sanction.

Conviction of a crime however carries with it a range of serious consequences beyond the immediate penalty, whether the conviction results in imprisonment or a pecuniary penalty, including ineligibility to hold public office or be a director, principal officer or auditor of a company, or to travel to certain countries, and disqualification from being accredited under various legislation. Therefore, the TGA would generally elect to deal with breaches by way of a criminal prosecution where there is an element of culpability. This is particularly so where there is an organised crime element to the offending. Where culpability and criminality of the conduct are not apparent but there is a need to address breaches of the Act and deter future non-compliance, it would be appropriate for the TGA to opt for a civil penalty fine, or other enforcement mechanism such as the giving of an infringement notice, accepting an enforceable undertaking or issuing a forfeiture direction.

A criminal prosecution is considered to be a more appropriate sanction where a contravention is deliberate, where fraud may be involved, where the conduct demonstrates recklessness, where there is a serious pattern of continuous intentional contraventions, or where conduct has endangered lives or has caused death or serious injury.

For the vaping offences, it is proposed that there would be a single fault and strict liability offences, with the fault-based offence considered similar to the existing counterfeit provisions in s 42E of the TG Act. This is because:

•

the health risks of vaping are substantial. The widespread supply of vaping goods in the community represents a serious risk of harm to the health of the population, especially among youth and young adults; and

•

vape use is increasing, with research undertaken by Cancer Council Victoria showing that 77,200 Victorians who had previously never smoked had used e-cigarettes in the past year. ^[14]

The Guide to Framing Commonwealth Offences at page 39 provides that '[a] penalty should be consistent with penalties for existing offences of a similar kind or of a similar seriousness. This should include a consideration of existing offences within the legislative scheme and other comparable offences in Commonwealth legislation such as the Criminal Code'.

Set out below is a table of maximum penalties for comparable offences relating to therapeutic goods and illicit tobacco which serve as a helpful comparator which determined the appropriate maximum penalties for vaping goods.

In this context, the maximum penalties for offences relating to the importation, manufacture and supply of vaping goods are considered appropriate, being 7 years imprisonment for fault-based offences and 200 penalty units for strict liability offences. Equally, the sliding scale maximum penalties for offences relating to the possession of vaping goods are also appropriate. Depending on the quantity of vaping goods possessed, a maximum penalty of 7 years, 5 years, 2 years or 12 months will apply for fault-based offences and 420 penalty units, 240 penalty units, 120 penalty units or 60 penalty units will apply for strict liability offences.

Civil penalty provisions

A civil penalty is a punitive sanction of a financial nature, with no aggravating element and no-fault element, imposed through civil court proceedings rather than through the criminal prosecution process. It takes the form of a monetary penalty only and does not result in any criminal conviction.

The focus of a civil penalty is generally the regulation of commercial activity and is directed against corporate or white collar wrongdoing. Therefore, civil penalties are appropriate in regulating commercial activities involving the importation, manufacture, supply and possession of a commercial quantity of vaping goods. This is particularly so where the relevant activities are undertaken by incorporated bodies, including subsidiaries of multinational companies engaged in commercial operations in Australia. The financial disincentive that a civil penalty regime provides to address and deter breaches of the TG Act is likely to be more effect than criminal sanctions in appropriate circumstances.

A civil penalty regime is intended to strengthen the TGA's enforcement options to deter non-compliance with the bans with respect to vaping goods designed to protect public health and safety. A civil penalty is an appropriate measure where other sanctions may not be as effective or appropriate in the circumstances.

For the civil penalty provisions relating to the import, manufacture, supply and possession of vaping goods, consistent with existing approaches to framing commonwealth civil penalty provisions, each unit of vaping good will constitute a separate contravention. A unit of vaping goods will be prescribed in the regulations. This will ensure that there is clarity in the proscribed conduct in these provisions and avoid ambiguity and unintended consequences such as the treating of a 500000ML gallon of vaping liquid as a single contravention in the same way as 100ML would be. The conduct in each case is not equal and the penalty that is warranted to deter such conduct differs significantly.

As an example, the importation of 1000 unlawful vaping goods may attract a theoretical maximum penalty in the hundreds of millions, or even over a billion dollars. However, the penalty imposed by the court will very likely be much lower than this amount. There are well established principles applied by the courts to ensure that penalties imposed are proportionate to the conduct in such circumstances, without being overly oppressive. While the per unit approach could result in significant theoretical penalty maximum amounts, on a mathematical basis, it is important to note that the court takes several factors into account to ensure that the total penalty does not exceed what is proper for deterrence for the entire contravening conduct.

It is not unusual for civil penalty provisions to attract very significant numbers of contraventions. For example, section 81 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 attracts contraventions for each designated service provided by a reporting entity during the period a risk management program is not compliant. The number of contraventions is often unquantifiable. Similarly, civil penalty provisions involving false or misleading conduct under the Australian Consumer Law can also attract large or unquantifiable contraventions. In the Act itself, the advertising prohibitions, such as section 42DLB can attract thousands of contraventions as can the prohibitions relating to supply of therapeutic goods in section 19D.

Framing the civil penalty contraventions in this way, on a per unit approach will also allow the Secretary to give a person an infringement notice(s) as an alternative to having the penalty determined by the court and provides greater flexibility for the Secretary to decide an appropriate penalty amount.

Higher civil penalties than the existing penalties in the TG Act are also warranted for the same reasons as provided for above in relation to criminal penalties. It is anticipated that the level of civil penalties will act as an effective financial disincentive against non-compliance with regulatory requirements, especially for corporations for whom imprisonment is not available.

The current civil penalty provisions in the TG Act for importation, manufacture and supply of unlawful therapeutic goods provide for a corporate multiplier of 10 times the penalty for the individual. That is the 5,000 penalty units for an individual and 50,000 for a body corporate. The new civil penalty provisions relating to vaping goods adopt the same approach due to the seriousness of the conduct and the public health harms associated with vaping goods. However, given the need to curb a large black-market in vapes and to effectively deter non-compliance given high profit margins associated with illicit vape supply, a higher maximum penalty of 7,000 penalty units for an individual and 70,000 for a body corporate is considered appropriate and proportionate to the proscribed conduct.

A summary table of the new offences and civil penalty provisions is provided below with the relevant maximum penalties.

Banning the importation of unlawful vaping goods

Section 41Q establishes offences and a civil penalty provision for importing vaping goods into Australia, with exceptions in certain circumstances. Importation is not defined and will be given its ordinary meaning.

Subsection 41Q(1) provides that a person commits an offence if the person imports vaping goods into Australia, with an associated maximum penalty of imprisonment for 7 years or 5,000 penalty units, or both. The note to this subsection references sections 54B and 54BA in relation to liability of an executive officer of a body corporate.

Section 54B is intended to apply to executive officers, such as managing directors or Chief Executive Officers, who are directly involved in or participate in the management of a company, and who should be made accountable for the actions of their company where such officers are in a position to influence the company and are aware of breaches by the company of the TG Act but fail to take reasonable action to prevent the breaches. There is significant public harm from the importation of vaping goods into Australia caused by corporate offending and the liability of the corporation is not likely on its own to sufficiently promote compliance and have the desired deterrence effect.

Subsection 41Q(2) provides an offence of strict liability for importing vaping goods into Australia, with an associated maximum penalty of 200 penalty units. Section 9.2 of the Criminal Code provides that a person will not be criminally responsible if the person was under a mistaken but reasonable belief about those facts and if those facts had existed, the conduct would not have constituted an offence.

A strict liability offence has been included to ensure that this conduct is criminalised to protect consumers from vaping goods even where fault is not established. The inclusion of an offence of strict liability will also provide the option for the giving of an infringement notice as an alternative to criminal prosecution.

Subsection 41Q(3) provides a civil penalty for importing vaping goods into Australia, with a maximum civil penalty of 7,000 penalty units for an individual and 70,000 penalty units for a body corporate.

Subsection 41Q(4) provides that a person who contravenes the civil penalty provision in subsection (3) commits a separate contravention of that subsection in respect of each unit of vaping goods imported by the person into Australia. The note to this subsection references subsection 3(1) for the definition of unit of vaping goods.

Subsection 41Q(5) provides an exception to the application of these offence and civil penalty provisions if the importation would not be prohibited under the Customs Act. The note to subsection 41Q(5) provides that the person bears an evidential burden in relation to the matter in subsection (5), in accordance with section 13.3(3) of the Criminal Code and section 41QE of the TG Act. Section 13.3 of the Criminal Code provides that evidential burden, in relation to a matter, means the burden of adducing or pointing to evidence that suggests a reasonable possibility that the matter exists or does not exist.

The import offences and civil penalty provisions in this part are intended to complement the Customs Act.

Explanation of exception

A licence and permit would likely be the evidence a person would need to produce to avail themselves of the exception. Whether a person has an import licence and permit is a matter peculiarly within their knowledge.

There is also a traveller's exemption for persons bringing vaping goods into the country in connection with their visit to Australia. Whether the person has in their possession vaping goods under the maximum allowable traveller's limit is a matter peculiarly within their knowledge and control and would be easily produced.

It would be significantly more difficult, costly and burdensome for the prosecution, or the Secretary in civil penalty proceedings to disprove this element than for the defendant to establish the matter. Whether a person is relying on a traveller's exemption will be a matter peculiarly within their knowledge.

The burden on the defendant is evidential only, meaning that the defendant must adduce or point to evidence that suggests a reasonable possibility that the matter exists or does not exist. If that burden is discharged, the prosecution must disprove the matters in the exception beyond reasonable doubt, or in civil penalty proceedings on the balance of probabilities.

Reversing the burden of proof is justified because of the public interest in the effective regulation of vaping goods, noting the seriousness of the public health harms associated with vaping in Australia. It would be significantly more difficult, costly and burdensome for the prosecution, or the Secretary in civil penalty proceedings, to prove these matters in their totality as an element of the offence or civil penalty provision rather than the defendant to establish the reasonable possibility of the exception applying.

Licence and permit

The importation of vaping goods is subject to regulation 5A of the CPI Regulations which requires the importer to hold a licence and permit. The importer will need to meet certain criteria to be granted a licence or a permit to import vaping goods into Australia. A permit to import each specific type of vaping good is required.

Before an import permit can be granted under a vaping good import licence, the vaping good must either be entered on the Register, or a notice must be given to the Secretary which complies with applicable requirements under the TG Act (sponsor notice). Exceptions to this requirement apply to vaping goods imported for medical or scientific research, and vaping goods of a kind or for a purpose specified in a legislative instrument made by the Secretary. No such legislative instrument has been made at this time.

A sponsor notice (other than a sponsor notice for a vaping device used to administer medicinal cannabis) requires a sponsor to state that a vaping good complies with applicable standards and that the only indications of the vaping good are for smoking cessation or the management of nicotine dependence. If a sponsor notice is required but cannot be given because the goods do not comply with applicable standards or the indications are broader than smoking cessation or the management of nicotine dependence, importation and supply of the goods will be unlawful.

A sponsor notice for a vaping device used to administer medicinal cannabis requires a sponsor to state that the vaping device complies with the essential principles or is imported with the consent of the Secretary under section 41MA or 41MAA of the Act. This notice is required for a vaping device or vaping device accessory that is

intended to be used only to contain or administer medicinal cannabis. If a sponsor notice is required but cannot be given because the goods do not comply with the essential principles and consent has not been granted, or the goods are not intended to be used only to contain or administer medicinal cannabis, importation and supply of the goods will be unlawful.

A sponsor notice is not required for a vaping good in relation to which a licence and permit under regulation 5 of the CPI Regulations has been granted, for example, a disposable single use vape or a pod or cartridge containing medicinal cannabis that has been imported in accordance with a permit given under regulation 5 of those regulations.

The TGA will publish a list of vaping goods in relation to which sponsor notices have been given (other than sponsor notices for cannabis vaping devices) and that can be made available for lawful supply.

Traveller's exemption

Under regulation 5A of the CPI Regulations, there is also traveller's exemption which allows persons entering Australia to carry no more than 2 vapes, 20 vape accessories and 200mL of vaping substance in liquid form. This exemption gives effect to the intention not to criminalise possession of vaping goods for personal use.

Banning the manufacture of unlawful vaping goods

Section 41QA establishes offences and a civil penalty provision for manufacturing vaping goods in Australia, where the manufacturer does not have a relevant licence, certificate, exemption or consent in certain circumstances.

Subsection 41QA(1) provides that a person commits an offence if the person manufactures, or carries out a step in the manufacture of, vaping goods in Australia, with an associated maximum penalty of imprisonment for 7 years or 5,000 penalty units, or both. The note to this subsection references sections 54B and 54BA in relation to liability of an executive officer of a body corporate.

Section 54B is intended to apply to executive officers, such as managing directors or Chief Executive Officers, who are directly involved in or participate in the management of a company, and who should be made accountable for the actions of their company where such officers are in a position to influence the company and are aware of breaches by the company of the TG Act but fail to take reasonable action to prevent the breaches. There is significant public harm from the manufacture of vaping goods in Australia caused by corporate offending and the liability of the corporation is not likely on its own to sufficiently promote compliance and have the desired deterrence effect.

Manufacture, in relation to vaping goods, will have the same meaning as subsection 3(1) or section 41BG depending on the nature of the vaping goods.

Subsection 41QA(2) provides an offence of strict liability for manufacturing, or carrying out a step in the manufacture of, vaping goods in Australia, with an associated maximum penalty of 200 penalty units. Section 9.2 of the Criminal Code provides that a person will not be criminally responsible if the person was under a mistaken but reasonable belief about those facts and if those facts had existed, the conduct would not have constituted an offence.

An offence of strict liability has been included to ensure that this conduct is criminalised to protect consumers from vaping goods even where fault is not established. The inclusion of an offence of strict liability will also provide the option for the giving of an infringement notice(s) as an alternative to criminal prosecution.

Subsection 41QA(3) provides a civil penalty for manufacturing vaping goods in Australia with a maximum civil penalty of 7,000 penalty units for an individual and 70,000 penalty units for a body corporate.

Subsection 41QA(4) provides that a person who contravenes the civil penalty provision in subsection (3) commits a separate contravention of that subsection in respect of the manufacture, or the carrying out of the step in the manufacture, by the person of each unit of vaping goods manufactured in Australia. The note to this subsection references subsection 3(1) for the definition of unit of vaping goods.

Subsection 41QA(5) provides an exception to the application of these offence and civil penalty provisions if the vaping goods are therapeutic goods and one of the following applies:

(i)

the person is the holder of a licence in force under Part 3-3 that authorises the manufacture of the vaping goods, or the carrying out of the step in the manufacture of the vaping goods, at the manufacturing site where the manufacture, or the step, was carried out;

(ii)

the person is the holder of a conformity assessment document that applies to the vaping goods;

(iii)

the Secretary has given the person a consent under subsection 41RC(1) to manufacture the vaping goods, or carry out a step in the manufacture of the vaping goods and the manufacture, or the step, is carried out in accordance with the consent.

The note to subsection 41QA(5) provides that the person bears an evidential burden in relation to the matter in subsection (5), in accordance with subsection 13.3(3) of the Criminal Code and section 41QE of the TG Act. Subsection 13.3 of the Criminal Code provides that evidential burden, in relation to a matter, means the burden of adducing or pointing to evidence that suggests a reasonable possibility that the matter exists or does not exist.

Explanation of exception

Australian manufacturers of vaping goods must obtain a Part 3-3 licence from the TGA, unless a relevant exemption applies. In relation to vaping devices they may also hold a conformity assessment document under Chapter 4 of the TG Act, that relates to the manufacture of vaping goods.

The investigation and enforcement of these offences and civil penalty provisions will be undertaken by a combination of Commonwealth, state and territory agencies and may involve federal and state police. For this reason, the evidence to substantiate the lawful status of the goods, or the specified activity will not rest with any one agency and is very likely to be split across many.

Whether a manufacturer has a relevant licence, consent, exemption or certificate, and whether the vaping good is covered by the exception, is a matter within the person's knowledge. That evidence will be able readily accessible to persons who can avail themselves of the exception.

The burden on the defendant is evidential only, meaning that the defendant must adduce or point to evidence that suggests a reasonable possibility that the matter exists or does not exist. If that burden is discharged, the prosecution must disprove the matters in the exception beyond reasonable doubt, or in civil penalty proceedings on the balance of probabilities.

Reversing the burden of proof is justified because of the public interest in the efficient regulation of vaping goods, noting the seriousness of the public health harms associated with vaping in Australia.

Banning the supply of unlawful vaping goods

Section 41QB establishes offences and a civil penalty provision for supplying vaping goods in Australia, with exceptions in certain circumstances.

Subsection 41QB(1) provides that a person commits an offence if the person supplies vaping goods in Australia, with an associated maximum penalty of imprisonment for 7 years or 5,000 penalty units, or both. The note to this subsection references sections 54B and 54BA in relation to liability of an executive officer of a body corporate.

Section 54B is intended to apply to executive officers, such as managing directors or Chief Executive Officers, who are directly involved in or participate in the management of a company, and who should be made accountable for the actions of their company where such officers are in a position to influence the company and are aware of breaches by the company of the TG Act but fail to take reasonable action to prevent the breaches. There is significant public harm from the supply of vaping goods in Australia caused by corporate offending and the liability of the corporation is not likely on its own to sufficiently promote compliance and have the desired deterrence effect.

Subsection 41QB(2) provides an offence of strict liability for supplying vaping goods in Australia, with an associated maximum penalty of 200 penalty units. Section 9.2 of the Criminal Code provides that a person will not be criminally responsible if the person was under a mistaken but reasonable belief about those facts and if those facts had existed, the conduct would not have constituted an offence.

An offence of strict liability has been included to ensure that this conduct is criminalised to protect consumers from vaping goods even where fault is not established. The inclusion of an offence of strict liability will also provide the option for the giving of an infringement notice as an alternative to criminal prosecution.

Subsection 41QB(3) provides a civil penalty for supplying vaping goods, with a maximum civil penalty of 7,000 penalty units for an individual and 70,000 penalty units for a body corporate.

Subsection 41QB(4) provides that a person who contravenes the civil penalty provision in subsection (3) commits a separate contravention of that subsection in respect of each unit of vaping goods supplied by the person in Australia. The note to this subsection references subsection 3(1) for the definition of unit of vaping goods.

Subsection 41QB(5) provides exceptions to the application of these offence and civil penalty provisions if subsections (6) to (8) or subsections (9) to (11) apply to the supply of the vaping goods by the person. The note to subsection 41QB(5) provides that the person bears an evidential burden in relation to the matters in subsections (6) to (8) or (9) to (11), in accordance with section 13.3(3) of the Criminal Code and section 41QE of the TG Act. Section 13.3 of the Criminal Code provides that evidential burden, in relation to a matter, means the burden of adducing or pointing to evidence that suggests a reasonable possibility that the matter exists or does not exist.

Wholesale supply exception

Subsections (6), (7) and (8) have the effect of providing an exception to these offences and civil penalty provisions for supply if the supply was part of the wholesale supply chain for prescription medicines. The wholesale supply chain for prescription medicines is intended to be the primary lawful pathway for the supply of vaping goods in Australia. This supply chain is made up of controls at both the Commonwealth and state and territory levels.

The investigation and enforcement of these offences and civil penalty provisions will be undertaken by a combination of Commonwealth, state and territory agencies and may involve federal and state police. For this reason, the evidence to substantiate the lawful status of the goods, or the specified activity will not rest with any one agency and is very likely to be split across many.

The exception in subsections (6), (7) and (8) is directed to persons who are supplying vaping goods to persons who are not the ultimate consumer of the goods. For a person to avail themselves of the exception they must adduce or point to evidence that suggests a reasonable possibility that the relevant matter in each subsection exists, or does not exist, as the case may be. Whether the person has a relevant licence, consent, exemption or certificate, and whether the vaping good is covered by the exception, is a matter within the person's knowledge. That evidence will be able readily accessible to persons who can avail themselves of the exception.

The burden on the defendant is evidential only, meaning that the defendant must adduce or point to evidence that suggests a reasonable possibility that the matter exists or does not exist. If that burden is discharged, the prosecution must disprove the matters in the exception beyond reasonable doubt, or in civil penalty proceedings on the balance of probabilities.

Reversing the burden of proof is justified because of the public interest in the effective regulation of vaping goods, noting the seriousness of the public health harms associated with vaping in Australia. It would be significantly more difficult, costly and burdensome for the prosecution, or the Secretary in civil penalty proceedings, to prove these matters in their totality as an element of the offence or civil penalty provision rather than the defendant to establish the reasonable possibility of the exception applying.

Subsection (6) is directed to the status of the vaping goods. Subsection (7) is directed to the identity of the person supplying the vaping goods. Subsection (8) is directed to the identity of the person receiving the vaping goods.

Subsection 41QB(6) provides that this subsection applies in relation to the supply of the vaping goods by the person if the vaping goods are:

(a)

therapeutic goods that are entered on the Register; or

(b)

both:

(i)

exempt under subsection 18(1) or 41HA(1) of the TG Act and the sponsor has given a notice in compliance with the exemption; and

(ii)

the vaping goods are not the subject of a determination by the Secretary, published on the Department's website, that the supply of the goods be stopped or should cease because the Secretary is satisfied that the supply of the goods compromises public health and safety or the goods do not conform with a standard applicable to the goods; or

(c)

covered by a determination made by the Minister under section 41R.

Medicinal cannabis vapes are not generally subject to an exemption requiring a sponsor notice, and as such would not meet the exception in paragraph 41QB(6)(b). It is anticipated that a determination would be made by the Minister under section 41R that would apply to medicinal cannabis vapes as appropriate.

The type of evidence that a person is likely to produce to make out this subsection includes a current certificate of registration of the vaping goods on the Register, a sponsor notification provided to the Secretary, evidence from the Department's website that the vaping good is not the subject of a determination or a current determination applicable to the vaping goods made by the Minister.

These are all matters that can be easily produced by a person if required to substantiate the nature of the vaping goods. It would be significantly more difficult, costly and burdensome for the prosecution, or the Secretary in civil penalty proceedings to disprove this if it was an element than for the defendant to establish the matter. Further, given the seriousness of the public health harms associated with vaping in Australia, the reversal of onus in this regard is justified.

Subsection 41QB(7) provides that this subsection applies in relation to the supply of vaping goods by the person if:

(a)

the person holds a licence or a permission granted under regulations made for the purpose of section 50 of the Customs Act, to import the vaping goods, or is otherwise approved to import the vaping goods under those regulations; or

(b)

the person is the holder of a licence in force under Part 3-3 of the TG Act that authorises a step in the manufacture of the vaping goods; or

(c)

the person is a holder of a conformity assessment document that applies to the vaping goods; or

(d)

the person is a wholesaler who is the holder of a licence or is otherwise authorised to supply one or more substances included in Schedule 4 to the current Poisons Standard under a law of the state or territory in which the supply occurs, and the supply occurs in accordance with the licence or authority;

(e)

the Secretary has given the person a consent under subsection 41RC(1) to supply the vaping goods, and the supply is in accordance with the consent; or

(f)

where the goods are covered by a determination made under section 41R—the person is specified in the determination, or is included in a class of persons specified in the determination, in relation to those goods, and the supply occurs in accordance with the determination.

The type of evidence that a person is likely to produce to make out this subsection includes the relevant licence, permission, authority, consent or determination. These are all matters that can be easily produced by a person if required to substantiate the nature of the vaping goods and are matters within the persons' knowledge.

Subsection 41QB(8) provides that this subsection applies in relation to the supply of the vaping goods by the person if:

(a)

the person to whom the vaping goods are supplied, i.e. the recipient, is the holder of a Part 3-3 licence in force under the TG Act that authorises a step in the manufacture of the vaping goods; or

(b)

the recipient is a wholesaler, pharmacist, medical practitioner or nurse practitioner who is the holder of a licence or is otherwise authorised to supply one or more substances in Schedule 4 to the current Poisons Standard under a law of the state or territory in which the recipient carries on a business, practises or is employed; or

(c)

the Secretary has given the recipient a consent under subsection 41RC(1) to supply the vaping goods; or

(d)

in the case of vaping goods covered by a determination made under section 41R—the recipient is specified in the determination, or is included in a class of persons specified in the determination, in relation to those goods.

The type of evidence that a person is likely to produce to make out this subsection includes the relevant licence, permission, authority, consent or determination. These are all matters that can be easily produced by a person if required to substantiate the nature of the vaping goods and are matters within the persons' knowledge.

It would be significantly more difficult, costly and burdensome for the prosecution, or the Secretary in civil penalty proceedings to disprove this if it was an element than for the defendant to establish the matter. Further, given the seriousness of the public health harms associated with vaping in Australia, the reversal of onus in this regard is justified.

Retail supply exception

Subsections (9), (10) and (11) have the effect of providing an exception to these offences and civil penalty provisions for supply as part of a retail supply chain.

The exception in subsections (9), (10) and (11) is directed to persons who are supplying vaping goods to persons who are the ultimate consumer of the goods. For a person to avail themselves of the exception, they must adduce or point to evidence that suggests a reasonable possibility that the relevant matter in each subsection exists, or does not exist, as the case may be.

Subsection (9) is directed to the status of the vaping goods. Subsection (10) is directed to the identity of the person supplying the vaping goods. Subsection (11) is directed to the identity of the person receiving the vaping goods.

Subsection 41QB(9) provides that this subsection applies in relation to the supply of the vaping goods by the person if:

(a)

the vaping goods are therapeutic goods that are entered on the Register; or

(b)

both the following apply:

(i)

the vaping goods are therapeutic goods that are exempt goods under regulations made for the purposes of subsection 18(1) or an exempt device under regulations made for the purposes of subsection 41HA(1), and the sponsor has given the Secretary a notice in compliance with the exemption; and

(ii)

the vaping goods are not the subject of a determination by the Secretary, published on the Department's website, that the supply of the goods be stopped or should cease because the Secretary is satisfied that the supply of the goods compromises public health and safety or the goods do not conform with a standard applicable to the goods; or

(c)

the vaping goods are covered by a determination under section 41R.

Medicinal cannabis vapes are not generally subject to an exemption requiring a sponsor notice, and as such would not meet the exception in paragraph 41QB(9)(b). It is anticipated that a determination would be made by the Minister under section 41R that would apply to medicinal cannabis vapes as appropriate.

The type of evidence that a person is likely to produce to make out this subsection includes a current certificate of registration of the vaping goods on the Register, a sponsor notification provided to the Secretary, evidence from the Department's website that the vaping good is not the subject of a determination or a current determination applicable to the vaping goods made by the Minister.

These are all matters that can be easily produced by a person if required to substantiate the nature of the vaping goods. It would be significantly more difficult, costly and burdensome for the prosecution, or the Secretary in civil penalty proceedings to disprove this if it was an element than for the defendant to establish the matter. Further, given the seriousness of the public health harms associated with vaping in Australia, the reversal of onus in this regard is justified.

Subsection 41QB(10) provides that this subsection applies in relation to the supply of the vaping goods by the person if the person is a:

(a)

pharmacist; or

(b)

medical practitioner or nurse practitioner who is the holder of a licence or is otherwise authorised to supply one or more substances in Schedule 4 to the current Poisons Standard under a law of the state or territory in which the supply occurs.

The type of evidence that a person is likely to produce to make out this subsection includes evidence of current registration as a pharmacist, medical practitioner or nurse practitioner and, if applicable, their authorisation or licence. These are all matters that can be easily produced by a person if required and are matters within the persons' knowledge.

It would be significantly more difficult, costly and burdensome for the prosecution, or the Secretary in civil penalty proceedings to disprove this if it was an element than for the defendant to establish the matter. Further, given the seriousness of the public health harms associated with vaping in Australia, the reversal of onus in this regard is justified.

Subsection 41QB(11) provides that this subsection applies in relation to the supply of the vaping goods by the person if:

(a)

the supply is:

(i)

to another person for use by that person for smoking cessation or management of nicotine dependence, or for another indication determined by the Minister under section 41RA; or

(ii)

to another person, who is the carer of a third person, for use by the third person for smoking cessation or management of nicotine dependence, or for another indication determined by the Minister under section 41RA; and

(b)

if the vaping goods are, or contain, a vaping substance—the vaping substance is in final dosage form; and

(c)

the supply is:

(i)

in accordance with this Act (apart from this section); and

(ii)

consistent with the person's authority to supply the vaping goods under a law of the state or territory in which the supply occurs.

It is anticipated that a determination would be made by the Minister under section 41RA that would determine indications appropriate for medicinal cannabis vapes.

The type of evidence that a person is likely to produce to make out this subsection includes a prescription for the supplied vaping good, a tax invoice and product specification or some other material which indicates that the good is in final dosage form. These are all matters that can be easily produced by a person if required to substantiate the nature of the vaping goods and are matters peculiarly within the persons' knowledge.

It would be significantly more difficult, costly and burdensome for the prosecution, or the Secretary in civil penalty proceedings to disprove this if it was an element than for the defendant to establish the matter. Further, given the seriousness of the public health harms associated with vaping in Australia, the reversal of onus in this regard is justified.

Subsection 41QB(12) provides that for the purposes of paragraph (11)(b), a vaping substance is in final dosage form if the vaping substance is in a form that can be administered to a person without any change or modification (other than vaporisation).

Banning the possession of at least a commercial quantity of unlawful vaping goods

Section 41QC establishes offences and civil penalties for possessing commercial quantities of a kind of vaping goods, with exceptions in certain circumstances.

Subsection 3(1) provides that 'commercial quantity' of a kind of vaping goods means the quantity of that kind of vaping goods prescribed by the regulations.

Subsections (1), (2) and (3) relate to commercial quantities that are less than 100 times the commercial quantity, subsections (4), (5) and (6) relate to quantities of 100 times the commercial quantity but less than 1,000 times the commercial quantity, and subsections (7), (8) and (9) relate to 1,000 times the commercial quantity or more.

Subsection 41QC(1) provides that a person commits an offence if the person possesses a quantity of a kind of vaping goods in Australia and the quantity is at least the commercial quantity, but less than 100 times the commercial quantity, of that kind of vaping goods. The maximum penalty for this offence is imprisonment for 2 years or 1,000 penalty units, or both. The note to this subsection references sections 54B and 54BA in relation to liability of an executive officer of a body corporate.

Section 54B is intended to apply to executive officers, such as managing directors or Chief Executive Officers, who are directly involved in or participate in the management of a company, and who should be made accountable for the actions of their company where such officers are in a position to influence the company and are aware of breaches by the company of the TG Act but fail to take reasonable action to prevent the breaches. There is significant public harm from the possession of a commercial quantity of vaping goods in Australia caused by corporate offending and the liability of the corporation is not likely on its own to sufficiently promote compliance and have the desired deterrence effect.

Subsection 41QC(2) provides that absolute liability applies to paragraph (1)(b), that is that the quantity is at least the commercial quantity, but less than 100 times the commercial quantity, of that kind of vaping goods. This applies to a physical element of the offence. Subsection 6.2(2) of the Criminal Code provides that there are no fault elements for this physical element and the defence of mistake of fact under section 9.2 is unavailable in relation to this physical element.

Applying absolute liability to the element of quantity will ensure the enforceability of these offences in circumstances where it may be difficult to establish a person's state of mind with respect to the quantity of vaping goods possessed.

Subsection 41QC(3) provides an offence of strict liability for the same conduct, with an associated maximum penalty of 120 penalty units. Section 9.2 of the Criminal Code provides that a person will not be criminally responsible if the person was under a mistaken but reasonable belief about those facts and if those facts had existed, the conduct would not have constituted an offence.

An offence of strict liability has been included to ensure that this conduct is criminalised to protect consumers from vaping goods even where fault is not established. The inclusion of an offence of strict liability will also provide the option for the giving of an infringement notice as an alternative to criminal prosecution.

Subsection 41QC(4) provides that a person commits an offence if the person possesses a quantity of a kind of vaping goods in Australia and the quantity is at least 100 times the commercial quantity, but less than 1000 times the commercial quantity, of that kind of vaping goods. The maximum penalty for this offence is imprisonment for 4 years or 3,000 penalty units, or both. The note to this subsection references sections 54B and 54BA in relation to liability of an executive officer of a body corporate.

Section 54B is intended to apply to executive officers, such as managing directors or Chief Executive Officers, who are directly involved in or participate in the management of a company, and who should be made accountable for the actions of their company where such officers are in a position to influence the company and are aware of breaches by the company of the TG Act but fail to take reasonable action to prevent the breaches. There is significant public harm from the possession of a commercial quantity of vaping goods in Australia caused by corporate offending and the liability of the corporation is not likely on its own to sufficiently promote compliance and have the desired deterrence effect.

Subsection 41QC(5) provides that absolute liability applies to paragraph (4)(b), that is that the quantity is at least 100 times the commercial quantity, but less than 1000 times the commercial quantity, of that kind of vaping goods. This applies to a physical element of the offence. Subsection 6.2(2) of the Criminal Code provides that there are no fault elements for this physical element and the defence of mistake of fact under section 9.2 is unavailable in relation to this physical element.

Applying absolute liability to the element of quantity will ensure the enforceability of these offences in circumstances where it may be difficult to establish a person's state of mind with respect to the quantity of vaping goods possessed.

Subsection 41QC(6) provides an offence of strict liability for the same conduct, with an associated penalty of 240 penalty units. Section 9.2 of the Criminal Code provides that a person will not be criminally responsible if the person was under a mistaken but reasonable belief about those facts and if those facts had existed, the conduct would not have constituted an offence.

An offence of strict liability has been included to ensure that this conduct is criminalised to protect consumers from vaping goods even where fault is not established. The inclusion of an offence of strict liability will also provide the option for the giving of an infringement notice as an alternative to criminal prosecution.

Subsection 41QC(7) provides that a person commits an offence if the person possesses a quantity of a kind of vaping goods in Australia and the quantity is at least 1,000 times the commercial quantity or more of that kind of vaping goods. The maximum penalty for this offence is imprisonment for 7 years or 5,000 penalty units, or both. The note to this subsection references sections 54B and 54BA in relation to liability of an executive officer of a body corporate.

Section 54B is intended to apply to executive officers, such as managing directors or Chief Executive Officers, who are directly involved in or participate in the management of a company, and who should be made accountable for the actions of their company where such officers are in a position to influence the company and are aware of breaches by the company of the TG Act but fail to take reasonable action to prevent the breaches. There is significant public harm from the possession of a commercial quantity of vaping goods in Australia caused by corporate offending and the liability of the corporation is not likely on its own to sufficiently promote compliance and have the desired deterrence effect.

Subsection 41QC(8) provides that absolute liability applies to paragraph (7)(b), that is that the quantity is 1,000 times the commercial quantity, or more, of that kind of vaping goods, of that kind of vaping goods. This applies to a physical element of the offence. Subsection 6.2(2) of the Criminal Code provides that there are no fault elements for this physical element and the defence of mistake of fact under section 9.2 is unavailable in relation to this physical element.

Applying absolute liability to the element of quantity will ensure the enforceability of these offences in circumstances where it may be difficult to establish a person's state of mind with respect to the quantity of vaping goods possessed.

Subsection 41QC(9) provides an offence of strict liability for the same conduct, with an associated penalty of 420 penalty units. Section 9.2 of the Criminal Code provides that a person will not be criminally responsible if the person was under a mistaken but reasonable belief about those facts and if those facts had existed, the conduct would not have constituted an offence.

An offence of strict liability has been included to ensure that this conduct is criminalised to protect consumers from vaping goods even where fault is not established. The inclusion of an offence of strict liability will also provide the option for the giving of an infringement notice as an alternative to criminal prosecution.

Subsection 41QC(10) provides a civil penalty where a person possesses a quantity of a kind of vaping goods in Australia and the quantity is at least the commercial quantity of that kind of vaping goods. The maximum civil penalty is 7,000 for an individual and 70,000 for a body corporate.

A person is only liable for a civil penalty contravention of subsection (10) if they are in possession of a kind of vaping goods of at least a commercial quantity and the exceptions do not apply to them. Each contravention also takes into consideration each kind of vaping good in the possession of a person which is at least of a commercial quantity.

Subsection 41QC(11) provides that a person who contravenes subsection (10) in relation to a kind of vaping goods commits a separate contravention of that subsection in respect of each unit of the quantity of vaping goods of that kind possessed by the person in Australia.

It is intended that the per unit is to apply to each individual unit of vaping goods in the person's possession. For example, each vaping device, accessory or substance or combination thereof, would comprise of one unit for the purposes of calculating the number of contraventions.

By way of example, if commercial quantity is 10 vaping devices, and a person is in possession of 11 vaping devices then this will be 11 contraventions of the civil penalty provision in subsection (10). If the person is in possession of 9 vaping devices, they will not contravene the civil penalty provision in subsection (10). These are only examples and for illustrative purposes. Commercial quantity for each kind of vaping goods will be prescribed in the regulations.

Another example is if a person is found in possession of a large shipment of vaping goods and the shipment contains 5,000 vaping devices, 5,000 vaping substances and 5,000 vaping accessories (each of which exceed the prescribed commercial quantity), there will be 15,000 contraventions of subsection (10) in relation to the shipment; 5,000 contraventions in respect of each kind of vaping good.

This approach to the civil penalty provision is justified to achieve consistency across the other civil penalty prohibitions for import, manufacture and supply of vaping goods.

Tiered maximum penalties for criminal offences

Tiered penalties depending on the quantity of the vaping goods involved is appropriate in circumstances where there will be a wide spectrum of conduct captured under these offences. Tiered penalty structures also appear in other legislation such as Schedule 1 to the Taxation Administration Act 1953 for possession of illicit tobacco and various offences under the Criminal Code.

Exception

Subsection 41QC(12) provides an exception to the application of the offence and civil penalty provisions in subsections (1) to (10) if subsections (13) and (14) apply to the possession of the vaping goods by the person. The note to subsection 41QC(12) provides that the person bears an evidential burden in relation to the matters in subsections (13) and (14), in accordance with subsection 13.3(3) of the Criminal Code and section 41QE of the TG Act. Section 13.3 of the Criminal Code provides that evidential burden, in relation to a matter, means the burden of adducing or pointing to evidence that suggests a reasonable possibility that the matter exists or does not exist.

Subsections (13) and (14) have the effect of providing an exception to these offences and civil penalty provision for the possession of vaping goods if the possession occurs as part of the wholesale supply chain or retail supply chain for prescription medicines. These supply chains are made up of controls at both the Commonwealth and state and territory levels. The investigation and enforcement of these offences and civil penalty provisions will be undertaken by a combination of Commonwealth, state and territory agencies and may involve federal and state police. For this reason, the evidence to substantiate the lawful status of the goods, or the specified activity will not rest with any one agency and is very likely to be split across many.

For a person to avail themselves of the exception they must adduce or point to evidence that suggests a reasonable possibility that the relevant matter in each subsection exists, or does not exist, as the case may be.

Whether the person has a relevant licence, consent, exemption or certificate, and whether the vaping good is covered by the exception, is a matter within the person's knowledge. That evidence will be able readily accessible to persons who can avail themselves of the exception.

The burden on the defendant is evidential only, meaning that the defendant must adduce or point to evidence that suggests a reasonable possibility that the matter exists or does not exist. If that burden is discharged, the prosecution must disprove the matters in the exception beyond reasonable doubt, or in civil penalty proceedings on the balance of probabilities.

Reversing the burden of proof is justified because of the public interest in the regulation of vaping goods, noting the seriousness of the public health harms associated with vaping in Australia. It would be significantly more difficult, costly and burdensome for the prosecution, or the Secretary in civil penalty proceedings, to prove these matters in their totality as an element of the offence or civil penalty provision rather than the defendant to establish the reasonable possibility of the exception applying.

Subsection (13) is directed to the status of the vaping goods. Subsection (14) is directed to the identity of the person in possession of the vaping goods.

Subsection 41QC(13) provides that this subsection applies in relation to the possession of the vaping goods by the person if:

(a)

the vaping goods are therapeutic goods that are entered on the Register; or

(b)

the vaping goods are:

(i)

therapeutic goods that are exempt goods under regulations made for the purposes of subsection 18(1) or an exempt device under regulations made for the purposes of subsection 41HA(1), and the sponsor has given the Secretary a notice in compliance with the exemption; and

(ii)

not the subject of a determination by the Secretary, published on the Department's website, that the supply of the goods be stopped or should cease because the Secretary is satisfied that the supply of the goods compromises public health and safety or the goods do not conform with a standard applicable to the goods; or

(c)

the vaping goods are covered by a determination under section 41R.

Medicinal cannabis vapes are not generally subject to an exemption requiring a sponsor notice, and as such would not meet the exception in paragraph 41QC(13)(b). It is anticipated that a determination would be made by the Minister under section 41R that would apply to medicinal cannabis vapes as appropriate.

The type of evidence that a person is likely to produce to make out this subsection includes a current certificate of registration of the vaping goods on the Register, a sponsor notification provided to the Secretary, evidence from the Department's website that the vaping good is not the subject of a determination or a current determination applicable to the vaping goods made by the Minister.

These are all matters that can be easily produced by a person if required to substantiate the nature of the vaping goods. The investigation and enforcement of these offences and civil penalty provisions will be undertaken by a combination of Commonwealth, state and territory agencies and may involve federal and state police. For this reason, the evidence to substantiate the lawful status of the goods, or the specified activity will not rest with any one agency and is very likely to be split across many.

For a person to avail themselves of the exception they must adduce or point to evidence that suggests a reasonable possibility that the relevant matter in each subsection exists, or does not exist, as the case may be.

Whether the person has a relevant licence, consent, exemption or certificate, and whether the vaping good is covered by the exception, is a matter within the person's knowledge. That evidence will be able readily accessible to persons who can avail themselves of the exception.

The burden on the defendant is evidential only, meaning that the defendant must adduce or point to evidence that suggests a reasonable possibility that the matter exists or does not exist. If that burden is discharged, the prosecution must disprove the matters in the exception beyond reasonable doubt, or in civil penalty proceedings on the balance of probabilities.

Reversing the burden of proof is justified because of the public interest in the regulation of vaping goods, noting the seriousness of the public health harms associated with vaping in Australia. It would be significantly more difficult, costly and burdensome for the prosecution, or the Secretary in civil penalty proceedings, to prove these matters in their totality as an element of the offence or civil penalty provision rather than the defendant to establish the reasonable possibility of the exception applying. The Bill provides a list of the necessary evidence that a defendant needs to produce, such as an authority to prescribe a prescription only medicine in a state or territory or otherwise deal with vaping goods.

Subsection 41QC(14) provides that this subsection applies in relation to the possession of the vaping goods by the person if:

(a)

the person is the holder of a licence and a permission granted under regulations made for the purposes of section 50 of the Customs Act to import the vaping goods or is otherwise approved under those regulations to import the vaping goods;

(b)

the person is the holder of a licence in force under Part 3-3 of this Act that authorises a step in the manufacture of the vaping goods; or

(c)

the person is the holder of a conformity assessment document that applies to the vaping goods; or

(d)

both of the following apply:

(i)

the person is a wholesaler, pharmacist, medical practitioner or nurse practitioner who is the holder of a licence, or is otherwise authorised, to supply one or more substances included in Schedule 4 to the current Poisons Standard under a law of the state or territory in which the person possesses the goods; and

(ii)

the possession of the goods is in accordance with the licence or authority; or

(e)

the Secretary has given the person a consent under subsection 41RC(1) to possess the vaping goods and the possession is in accordance with the consent; or

(f)

in the case of vaping goods that are covered by a determination made by the Minister under section 41R—the person is specified in the determination, or is included in a class of persons that is specified in the determination, in relation to those goods, the possession is in accordance with the determination.

The type of evidence that a person is likely to produce to make out this subsection includes the relevant licence, permission, authority, consent or determination, or a prescription for the supplied vaping good. These are all matters that can be easily produced by a person if required to substantiate the nature of the vaping goods and are matters peculiarly within the persons' knowledge.

It would be significantly more difficult, costly and burdensome for the prosecution, or the Secretary in civil penalty proceedings, to prove these matters in their totality as an element of the offence or civil penalty provision rather than the defendant to establish the reasonable possibility of the exception applying. Given the seriousness of the public health harms associated with vaping in Australia, the reversal of onus in this regard is justified.

Banning the possession of less than a commercial quantity of unlawful vaping goods

Section 41QD establishes offences and civil penalties for possessing a quantity of vaping goods less than the commercial quantity of that kind of vaping goods, with exceptions in certain circumstances including when the vaping goods are for personal use. The intention of these provisions is to deter persons possessing vaping goods less than a commercial quantity other than for personal use, including retailers or vendors who may be in possession of less than a commercial quantity of vaping goods in a retail setting not for personal use.

Subsection 3(1) provides that 'commercial quantity' of a kind of vaping goods means the quantity of that kind of vaping goods prescribed by the regulations.

Subsection 41QD(1) provides that a person commits an offence if the person possesses a quantity of a kind of vaping goods in Australia and the quantity is less than the commercial quantity of that kind of vaping goods.

The penalty for this offence is imprisonment for 12 months or 500 penalty units, or both. The note to this subsection references sections 54B and 54BA in relation to liability of an executive officer of a body corporate.

Subsection 41QD(2) provides that absolute liability applies to paragraph (1)(b), that is that the quantity is less than the commercial quantity of that kind of vaping goods of that kind of vaping goods. This applies to a physical element of the offence.

Subsection 6.2(2) of the Criminal Code provides that there are no fault elements for this physical element and the defence of mistake of fact under section 9.2 is unavailable in relation to this physical element.

Applying absolute liability to the element of quantity will ensure the enforceability of these offences in circumstances where it may be difficult to establish a person's state of mind with respect to the quantity of vaping goods possessed.

Subsection 41QD(3) provides an offence of strict liability for possessing a quantity of vaping goods less than the commercial quantity of that kind of vaping goods, with an associated penalty of 60 penalty units.

Section 9.2 of the Criminal Code provides that a person will not be criminally responsible if the person was under a mistaken but reasonable belief about those facts and if those facts had existed, the conduct would not have constituted an offence.

An offence of strict liability has been included to ensure that this conduct is criminalised to protect consumers from vaping goods even where fault is not established. The inclusion of an offence of strict liability will also provide the option for the giving of an infringement notice as an alternative to criminal prosecution.

Subsection 41QD(4) provides a civil penalty where a person possesses a quantity of a kind of vaping goods in Australia and the quantity is less than the commercial quantity of that kind of vaping goods. The maximum civil penalty is 1,000 for an individual and 10,000 for a body corporate.

A person is only liable for a civil penalty contravention of subsection (4) if they are in possession of a kind of vaping goods of less than a commercial quantity and the exceptions do not apply to them. The commercial quantity for each kind of vaping goods will be different depending on the kind of vaping goods in question, for example whether it is a device, accessory or substance, or combination.

Exceptions apply in relation to vaping goods possessed for personal use for smoking cessation or management of nicotine dependence, or another indication determined by the Minister under section 41RA. It is anticipated that a determination would be made by the Minister under section 41RA that would determine indications appropriate for medicinal cannabis vapes.

Subsection 41QD(5) provides that a person who contravenes subsection (4) in relation to a kind of vaping goods commits a separate contravention of that subsection in respect of each unit of the quantity of vaping goods of that kind possessed by the person in Australia. The note to this subsection references section 3(1) for the definition of unit of vaping goods.

It is intended that the per unit is to apply to each individual unit of vaping goods in the person's possession. For example, each vaping device, accessory or substance or combination thereof, would comprise of one unit for the purposes of calculating the number of contraventions.

By way of example, if commercial quantity is 10 vaping devices, and a person is in possession of 9 vaping devices then this will be 9 contraventions of the civil penalty provision in subsection (4). This is only an example and for illustrative purposes. Commercial quantity for each kind of vaping goods will be prescribed in the regulations.

This approach to the civil penalty provision is justified to achieve consistency across the other civil penalty provisions relating to the importation, manufacture and supply of vaping goods.

Exception – authorised persons

Subsection 41QD(6) provides an exception to the application of the offence and civil penalty provisions in section 41QD for authorised persons, if subsections (7) and (8), or subsection (9) apply to the possession of the vaping goods by the person. The note to subsection 41QD(6) provides that the person bears an evidential burden in relation to the matters in subsections (7) and (8), or subsection (9), in accordance with subsection 13.3(3) of the Criminal Code and section 41QE of the TG Act.

Subsection (7) is directed to the status of the vaping goods. Subsection (8) is directed to the identity of the person in possession of the vaping goods.

Subsection 41QD(7) provides that this subsection applies in relation to the possession, or custody, of the vaping goods by the person if:

(a)

the vaping goods are therapeutic goods that are entered in the Register; or

(b)

the vaping goods are:

(i)

the vaping goods are therapeutic goods that are exempt goods under regulations made for the purposes of subsection 18(1) or an exempt device under regulations made for the purposes of subsection 41HA(1), and the sponsor has given the Secretary a notice in compliance with the exemption; and

(ii)

the vaping goods are not the subject of a determination by the Secretary, published on the Department's website, that the supply of the goods be stopped or should cease because the Secretary is satisfied that the supply of the goods compromises public health and safety or the goods do not conform with a standard applicable to the goods; or

(c)

the vaping goods are covered by a determination under subsection 41R.

Medicinal cannabis vapes are not generally subject to an exemption requiring a sponsor notice, and as such would not meet the exception in paragraph 41QD(7)(b). It is anticipated that a determination would be made by the Minister under section 41R that would apply to medicinal cannabis vapes as appropriate.

Subsection 41QD(8) provides that this subsection applies in relation to the possession, or custody, of the vaping goods by the person if:

(a)

the person is the holder of a licence or a permission granted under regulations made for the purpose of section 50 of the Customs Act, or is otherwise approved to import the vaping goods under those regulations; or

(b)

the person is the holder of a licence in force under Part 3-3 of the TG Act that authorises a step in the manufacture of the vaping goods; or

(c)

the person is the holder of a conformity assessment document that applies to the vaping goods; or

(d)

the person is a wholesaler, pharmacist, medical practitioner or nurse practitioner who is the holder of a licence, or is otherwise authorised, to supply one or more substances included in Schedule 4 to the current Poisons Standard under a law of the state or territory in which the person possesses the goods, and the possession of the goods is in accordance with the licence or authority; or

(e)

the Secretary has given the person a consent under subsection 41RC(1) to possess the vaping goods, and the possession is in accordance with the consent; or

(f)

where the goods are covered by a determination made under subsection 41R—the person is specified in the determination, or is included in a class of persons specified in the determination, in relation to those goods, the possession is in accordance with the determination.

The type of evidence that a person is likely to produce to make out this subsection includes the relevant licence, permission, authority, consent or determination, or a prescription for the supplied vaping good. These are all matters that can be easily produced by a person if required to substantiate the nature of the vaping goods and are matters peculiarly within the persons' knowledge.

The investigation and enforcement of these offences and civil penalty provisions will be undertaken by a combination of Commonwealth, state and territory agencies and may involve federal and state police. For this reason, the evidence to substantiate the lawful status of the goods, or the specified activity will not rest with any one agency and is very likely to be split across many.

For a person to avail themselves of the exception, they must adduce or point to evidence that suggests a reasonable possibility that the relevant matter in each subsection exists, or does not exist, as the case may be.

Whether the person has a relevant licence, consent, exemption or certificate, and whether the vaping good is covered by the exception, is a matter within the person's knowledge. That evidence will be able readily accessible to persons who can avail themselves of the exception.

The burden on the defendant is evidential only, meaning that the defendant must adduce or point to evidence that suggests a reasonable possibility that the matter exists or does not exist. If that burden is discharged, the prosecution must disprove the matters in the exception beyond reasonable doubt, or in civil penalty proceedings on the balance of probabilities.

Reversing the burden of proof is justified because of the public interest in the regulation of vaping goods, noting the seriousness of the public health harms associated with vaping in Australia. It would be significantly more difficult, costly and burdensome for the prosecution, or the Secretary in civil penalty proceedings, to prove these matters in their totality as an element of the offence or civil penalty provision rather than the defendant to establish the reasonable possibility of the exception applying.

Exception—personal use or possession on behalf of another person

Subsection 41QD(9) provides that this subsection applies in relation to the possession, or custody, of the vaping goods by the person if:

(a)

the vaping goods are for use by the person personally; or

(b)

the person possesses the vaping goods on behalf of another person for whom the vaping goods have been lawfully supplied.

This exemption gives effect to the intention not to criminalise possession of vaping goods less than a commercial quantity for personal use. The context and surrounding circumstances in which the vaping goods are possessed will likely be the primary factor which will determine whether this exception is available, such as whether the possession is in a retail setting. The type of evidence that a person is likely to produce to make out this subsection includes, but is not limited to, a prescription or written authority to possess the vaping goods. However, such evidence is not necessary.

Subparagraph (b) has been included to protect persons who may be possessing vaping goods on behalf of someone who requires the vaping goods in connection with treatment for smoking cessation or the management of nicotine dependence, including carers and nurses in a hospital or nursing home setting.

Exception to civil penalty provisions – burden of proof

Division 2 in Part 4A-2 contains section 41QE which provides that if, in proceedings for a pecuniary penalty order against a person for contravention of a civil penalty provision in this Chapter, the person wishes to rely on any exception, exemption, excuse, qualification or justification that applies in relation to the civil penalty provision, then the person bears an evidential burden in relation to that matter.

Part 4A3—Other provisions

Division 1—Determinations by Minister

Section 41R provides that the Minister may, by legislative instrument determine that specified goods, or a specified class of vaping goods can be supplied or possessed in Australia by a specified person, or a specified class of persons, and in certain circumstances and subject to any conditions. The note to this section provides an example of the conditions that may be the imposed, for example conditions relating to the value or amount of specified vaping devices, or the manner in which specified vaping goods may be suppled.

The purpose of this provision is to provide a mechanism by which the Minister can authorise the possession or supply of specified vaping goods by certain people in circumstances where they may not be authorised under other relevant statutory provisions. The Minister does not need to receive an application to decide whether to make a determination, however, there is nothing preventing a person from requesting that the Minister consider exercising the power in a particular circumstance.

A determination made under this section is not subject to merits review. This is because determinations are not intended to be directed towards the circumstances of particular persons. Rather they are proposed to apply generally.

Section 41RA provides that the Minister may, by legislative instrument, determine for the purposes of paragraph 41QB(11)(a), other indications for which vaping goods may be used. It is anticipated that a determination would be made by the Minister under section 41RA that would determine indications appropriate for medicinal cannabis vapes.

Division 2—Consent of Secretary

Section 41RB creates an application provision to allow the Secretary to provide consent to the manufacture, supply or possession of vaping goods.

Subsection 41RB(1) provides that a person may apply to the Secretary for consent to manufacture, supply or possess vaping goods.

Subsection 41RB(2) provides that an application under subsection (1) must be in accordance with a form approved by the Secretary.

Subsection 41RB(3) provides that the Secretary may, by notice in writing given to the applicant, require the applicant to give to the Secretary, within such reasonable time as is specified in the notice, such further information concerning the application as is specified in the notice.

Subsection 41RB(4) provides that an approval of a form referred to in subsection (2), or a notice referred to in subsection (3), may require or permit an application or information to be given in accordance with specified software requirements including on a specified kind of data processing device or by way of a specified kind of electronic transmission.

Section 41RC provides that the Secretary may give consent in certain circumstances.

Subsection 41RC(1) provides that the Secretary must decide whether to give, or refuse to give the consent if the person has applied to the Secretary under section 41RB, and the applicant has complied with any requirements made by the Secretary under subsection 41RB(3) in relation to the application.

Subsection 41RC(2) provides that the Secretary may give consent under subsection (1) unconditionally or subject to conditions or in respect of particular vaping goods or classes of vaping goods. The note to this subsection provides that a person may commit an offence or be liable to a civil penalty if the person does an act or omits to do an act and the act or omission breaches a condition of consent given under subsection (1). The note further directs to section 41RD in this regard.

Subsection 41RC(3) requires the Secretary to cause particulars of the decision to be published on the Department's website as soon as practicable after making a decision to give consent under subsection (1).

Subsection 41RC(4) provides that if the Secretary decides to refuse to give consent under subsection (1), the Secretary must, within 28 days after making the decision, notify the applicant in writing of the decision and the reasons for the decision.

Section 41RD creates offences and civil penalty provisions for breaching a condition of a consent given under subsection 41RC(1).

Subsection 41RD(1) creates a fault-based offence with an aggravating element. The subsection provides that a person commits an offence if the person does an act or omits to do an act and the act or omission breaches a condition of a consent given to the person under subsection 41RC(1) and the act or omission has resulted in, will result in, or is likely to result in, harm or injury to any person.

The maximum penalty is 2,000 penalty units.. The note to this subsection refers to section 54AB and 54BA with respect to the liability of an executive officer of a body corporate.

Section 54B is intended to apply to executive officers, such as managing directors or Chief Executive Officers, who are directly involved in or participate in the management of a company, and who should be made accountable for the actions of their company where such officers are in a position to influence the company and are aware of breaches by the company of the TG Act but fail to take reasonable action to prevent the breaches. There is significant public harm from breaching a condition of consent to undertake activity in relation to vaping goods in Australia caused by corporate offending and the liability of the corporation is not likely on its own to sufficiently promote compliance and have the desired deterrence effect.

Subsection 41RD(2) creates a fault based offence and provides that a person commits an offence if the person does an act or omits to do an act and the act or omission breaches a condition of a consent given to the person under subsection 41RC(1). The maximum penalty is 500 penalty units.

Subsection 41RD(3) creates an offence of strict liability and provides that a person commits an offence if the person does an act or omits to do an act and the act or omission breaches a condition of a consent given to the person under subsection 41RC(1). The maximum penalty is 100 penalty units.

An offence of strict liability has been included to ensure that this conduct is criminalised to protect consumers from vaping goods even where fault is not established. The inclusion of an offence of strict liability will also provide the option for the giving of an infringement notice as an alternative to criminal prosecution.

Subsection 41RD(4) creates a civil penalty provision and provides that a person contravenes this subsection if the person does an act or omits to do an act and the act or omission breaches a condition of a consent given to the person under subsection 41RC(1). The maximum penalty for an individual is 3,000 penalty units and 30,000 penalty units for a body corporate.

Division 2—Other amendments

Therapeutic Goods Act 1989

Item 12 – Paragraph 14B(a)

This item amends paragraph 14B(a) to add a reference to subsections 41Q(1) or (2).

Item 13 – Paragraph 14B(a)

This item amends paragraph 14B(a) to add a reference to subsection 41Q(3).

Item 14 – Subsection 19(9)

This item repeals subsection 19(9) of the TG Act.

Item 15 – Subsection 30EK(6)

This item repeals subsection 30EK(6) of the TG Act.

Item 16 – Subsection 30EL(1)

This item omits the subsection number for subsection (1) in section 30EL(1).

Item 17 – Subsection 30EL(2)

This item repeals subsection 30EL(2) of the TG Act.

Item 18 – Subsection 32CM(8)

This item repeals subsection 32CM(8) of the TG Act.

Item 19 – At the end of section 41BG

This item adds a note to section 41BG to provide that this section applies in relation to vaping goods that are a medical device.

Item 20 – Subsection 41HC(7)

This item repeals subsection 41HC(7) of the TG Act.

Item 21 – Section 53A (after table item 33)

This item introduces item 33AA in the table in section 53A to include reference to subsection 41RD(1) and subsection 41RD(2).

Item 22 – Section 54BA (after table item 43)

This item adds new items 43AA to 43AF to the table in section 54BA.

Item 23 – After subsection 56A(4A)

This item introduces subsection 56A(4B) to provide that, in proceedings for an offence against section 41QA, 41QB, 41QC or 41QD, or the contravention of subsection 41QA(3), 41QB(3), 41QC(10) or 41QD(4), which are civil penalty provisions, a certificate by the Secretary to the effect that the Secretary did not consent to the manufacture, supply or possession that is the subject of the proceedings, or consented to that manufacture, supply or possession subject to conditions specified in the certificate, is prima facie evidence of the matters specified in the certificate.

Although this power, in effect, reverses the onus of proof, this reversal is considered reasonable in the circumstances. The existence of a consent is a matter of fact, that, outside of the Secretary's belief as expressed in a certificate, is peculiarly within the knowledge of the defendant. If the Secretary is of belief that the consent did, or did not exist, it is reasonable that only the defendant would be aware of the counter position. Adducing evidence to that effect would be most easily adduced by the defendant and would likely exist in the form of documentary evidence. The defendant need only meet an evidential burden of proof to rebut the certificate issued under 56A.

Item 24 – Subsection 57(10)

This item amends subsection 57(10) to include a reference to subsection 41P(3). Subsection 57(10) limits the power of the Minister to be delegated to:

•

the Secretary;

•

an SES employee, who holds or performs the duties of, an SES Band 3 position in the Department; or

•

a person who is registered, in a state or internal territory, as a medical practitioner and who holds or performs the duties of, a position that is equivalent to or higher than, an SES Band 2 position in the Department.

The making of these instruments under 41P(3) may be time-critical, to respond to a rapidly evolving market that has repeatedly sought to evade regulation since the Commonwealth Government first regulated nicotine vaping products in 2021. As such, it is important to have a sufficient number of delegates, at a senior level available to make such an instrument.

Item 25 – Subsection 60(1) (after paragraph (k) of the definition of initial decision )

This item amends subsection 60(1) to introduce paragraph 60(1)(ka), which provides that refusing to give a consent under subsection 41RC(1), or giving such a consent subject to conditions under subsection 41RC(2), is an initial decision.

Division 3—Application and transitional provisions

Item 26 – Application of amendments

This item provides that the amendments of the TG Act made by this Part apply in relation to acts or omissions that occur on or after the commencement of this Part.

Part 3—Advertising relating to vaping goods

Division 1—Main amendments

Therapeutic Goods Act 1989

Item 27 – After Part 5-1

This item introduces new Part 5-1A to Chapter 5 of the TG Act. Part 5-1A sets out the requirements relating to advertising of vaping goods.

Part 5-1A—Vaping Goods

Division 1—Preliminary

This Part not to apply to advertisements directed at health professions etc. (new section 42DZ)

New subsection 42DZ(1) provides that Part 5-1A does not apply to advertisements directed exclusively to:

(a)

health practitioners included in a class of health practitioners specified for the purposes of this paragraph under subsection (2); or

(b)

persons who are practice managers for a health practitioner covered by paragraph (a); or

(c)

persons who are engaged in the business of wholesaling vaping goods and are included in a class of persons specified for the purposes of this paragraph under subsection (2); or

(d)

a class of persons specified for the purposes of this paragraph under subsection (2).

New subsection 42DZ(2) provides that the Minster may, by legislative instrument, specify any or all of the following:

(a)

a class of health practitioners for the purposes of paragraph (1)(a);

(b)

a class of persons who are engaged in the business of wholesaling vaping goods for the purposes of paragraph (1)(c);

(c)

a class of persons for the paragraph (1)(d).

New subsection 42DZ(3) provides that Part 5-1A does not apply to advice or information given directly to a patient by a health practitioner covered by paragraph (1)(a) in the course of treatment of that patient.

This Part not to apply to certain advertisements for exported goods (new section 42DZA)

New section 42DZA provides that Part 5-1A does not apply to advertisements that are solely for vaping goods that have been exported, or are intended exclusively for export, if the advertisements are not available to consumers in Australia.

Definitions (new section 42DZB)

New section 42DZB introduces a definition of 'generic information' for the purposes of new Part 5-1A.

The term generic information in relation to vaping goods, includes any statement, pictorial representation or design, however made, about the composition, properties or other characteristics of the vaping goods, but does not include:

(a)

an advertisement about the goods;

(b)

generic information included in an advertisement about the goods; or

(c)

bona fide news.

Division 2—General provisions about advertising vaping goods

Authorised advertisement etc (new section 42DZC)

This section provides for authorisation of advertising of vaping goods.

Secretary may authorise advertising—general

Advertising of vaping goods are absolutely prohibited in view of the health risks associated with vaping and the significant increase in the uptake of vaping in the last few years, in particular, by young people. However, there may legitimate reasons where advertising may in limited circumstances could be justified. For example, advertising for participants in a possible clinical trial, or advertising to discourage the use of vaping goods due to particular presence of an additive. The authorisation is not intended to be granted to a particular individual and there is no application process.

New subsection 42DZC(1) provides that the Secretary may, by writing, authorise the advertising, or a class of advertising, of specified vaping goods.

New subsection 42DZC(2) provides that an authorisation under subsection (1) may authorise specified representations or information to be included in an advertisement of specified vaping goods.

Secretary may authorise specified representation on label or package etc.

New subsection 42DZC(3) provides that the Secretary may, by writing, authorise the use of specified representations:

(a)

on the label of specified vaping goods; or

(b)

on the package in which specified vaping goods are contained; or

(c)

on any material included with the package in which specified vaping goods are contained;

if the Secretary is satisfied that the representations are necessary for the appropriate use of the vaping goods.

Conditions

New subsection 42DZC(4) provides that an authorisation under this section may be subject to conditions specified in the authorisation.

Authorisation not a legislative instrument

New subsection 42DZC(5) provides that an authorisation under this section is not a legislative instrument. The authorisation deals with the administrative matter of specifying representations that may be authorised as part of the advertisement and does not determine or alter the law.

Publication

New subsection 42DZC(6) provides that as soon as practicable after giving the authorisation under this section, the Secretary must cause the authorisation to be published on the Department's website.

Division 3—Offences and civil penalty provisions

Offences—no authorisation or conditions of authorisation not complied with (new section 42DZD)

New section 42DZD provides offences for unauthorised advertising of vaping goods. A person will commit an offence if the person advertises by any means, or causes the advertising, by any means, of vaping goods and there is no authorisation under section 42DZC in relation to the advertising, or where an authorisation is in force, the advertisement is not in accordance with that authorisation.

New subsection 42DZD(1) provides that a person commits an offence if:

(a)

the person:

(i)

advertises, by any means, vaping goods; or

(ii)

causes the advertising, by any means, of vaping goods; and

(b)

either:

(i)

no authorisation under section 42DZC is in force in relation to the advertising; or

(ii)

an authorisation under section 42DZC is in force in relation to the advertising, but the advertising does not include representation or information as specified in the authorisation, or the advertising is not otherwise in accordance with the authorisation, or the advertising does not comply with a condition to which the authorisation is subject.

The maximum penalty for an offence under subsection 42DZD(1) is imprisonment for 7 years or 5,000 penalty units, or both. As supply and access of vaping goods are significantly influenced by advertising (including online advertising) and prohibition of advertising is an effective way of curbing and stopping supply, the high penalties are justified and are consistent with the maximum civil penalties in relation the supply, importation, manufacture and possession of vaping goods. In assessing the level of penalties to be imposed it is considered that advertisements directed to minors (under 18's), advertisements of vaping goods close to schools and facilities, and advertisements indicating safety of vaping goods would attract the maximum penalty.

The note to subsection (1) references sections 54B and 54BA for the liability of an executive officer of a body corporate. Section 54B is intended to apply to executive officers, such as managing directors or Chief Executive Officers, who are directly involved in or participate in the management of a company, and who should be made accountable for the actions of their company where such officers are in a position to influence the company and are aware of breaches by the company of the TG Act but fail to take reasonable action to prevent the breaches. There is significant public harm from breaching a condition of consent to undertake activity in relation to vaping goods in Australia caused by corporate offending and the liability of the corporation is not likely on its own to sufficiently promote compliance and have the desired deterrence effect.

New subsection 42DZD(2) provides that a person commits an offence of strict liability if:

(a)

the person:

(i)

advertises, by any means, vaping goods; or

(ii)

causes the advertising, by any means, of vaping goods; and

(b)

either:

(i)

no authorisation under section 42DZC is in force in relation to the advertising; or

(ii)

an authorisation under section 42DZC is in force in relation to the advertising, but the advertising does not include representation or information as specified in the authorisation, or the advertising is not otherwise in accordance with the authorisation, or the advertising does not comply with a condition to which the authorisation is subject.

The maximum penalty for an offence under subsection 42DZD(2) is 200 penalty units.

Continuing offences

New subsection 42DZD(3) provides that a person who contravenes subsection (1) or (2) commits a separate offence in respect of each day (including a day of conviction for the offence or any later day) during which the contravention continues.

New subsection 42DZD(4) provides that the maximum penalty for each day that an offence against subsection (1) or (2) continues is 10% of the maximum pecuniary penalty that can be imposed in respect of that offence.

Civil penalty—no authorisation of conditions of authorisation not complied with (new section 42DZE)

New section 42DZE sets out corresponding civil penalty provision for unauthorised advertising of vaping goods.

New subsection 42DZE(1) provides that a person contravenes this subsection if:

(a)

the person:

(i)

advertises, by any means, vaping goods; or

(ii)

causes the advertising, by any means, of vaping goods; and

(b)

either:

(i)

no authorisation under section 42DZC is in force in relation to the advertising; or

(ii)

an authorisation under section 42DZC is in force in relation to the advertising, but the advertising does not include representation or information as specified in the authorisation, or the advertising is not otherwise in accordance with the authorisation, or the advertising does not comply with a condition to which the authorisation is subject.

Contravention of this provision attracts a maximum penalty of 7,000 penalty units for an individual, and 70,000 penalty units for a body corporate. These levels of penalties are consistent with the levels of penalties for the contravention of civil penalties applying to vaping goods in new Chapter 4A.

Continuing contraventions

New subsection 42DZE(2) provides that a person who contravenes subsection (1) commits a separate contravention of that subsection in respect of each day during which the contravention continues (including the day the relevant order under subsection 42Y(2) is made or any later day)

New subsection 42DZE(3) provides that the maximum civil penalty for each day that a contravention against subsection (1) continues is 10% of the maximum civil penalty that can be imposed in respect of the contravention.

Division 4—Secretary may require information or documents

Secretary may require information or documents (new section 42DZF)

Advertisements

New section 42DZF introduces a new information gathering power in relation to the advertisements of vaping goods. This notice is referred to as a 'substantiation' notice. The approach in section 42DZF is consistent with existing provisions in the TG Act, including section 42DR which relates to the advertising of therapeutic goods.

New subsection 42DZF(1) provides that the Secretary may, by written notice given to a person apparently responsible for advertising vaping goods, or for causing the advertising of vaping goods, require the person to give to the Secretary specified information, or to produce to the Secretary specified documents, relating to the advertisement.

Generic information

New subsection 42DZF(2) provides that the Secretary may, by written notice given to a person apparently responsible for disseminating, or for causing the disseminating of, generic information in relation to vaping goods to the public or a section of the public, require the person to give to the Secretary specified information, or to produce to the Secretary specified documents, relating to the dissemination.

Manner of compliance

New subsection 42DZF(3) provides the manner of compliance including that the person must give the information, or produce the documents to the Secretary within a period of not less than 14 days after the day the notice is given and in the form specified in the notice.

The note to subsection 42DZF(3) makes it clear that a person may commit an offence under section 42DZG for failing to comply with the notice or giving false or misleading information or documents and may be liable to a civil penalty under section 42DZH for giving false or misleading information or documents.

New subsection 42DZF(4) provides that the form may require or permit the information to be given, or the documents to be produced, in accordance with specified software requirements:

(a)

on a specified kind of data processing device; or

(b)

by way of a specified kind of electronic transmission.

Notice not a legislative instrument

New subsection 42DZF(5) makes it clear that a notice under subsection (1) or (2) is not a legislative instrument. Notices given under subsections 42DZF(1) and (2) are administrative in character as they are directed to a specific person (that is the person apparently responsible), and have no general application.

Offences—failing to comply with a notice etc. (new section 42DZG)

New section introduces offences for failing to comply a notice under section 42DZF. The approach in section 42DZG is consistent with existing provisions in the TG Act, including section 42DS.

New subsection 42DZG(1) provides a fault-based offence if the person is given a notice under subsection 42DZF(1) or (2) and the person fails to comply with the notice.

The maximum penalty is 500 penalty units.

New subsection 42DZG(2) is the equivalent strict liability offence of subsection 42DZG(1) and attracts a maximum penalty of 100 penalty units.

New subsection 42DZG(3) provides a fault-based offence if the person is given a notice under subsection 42DZF(1) or (2) and the person gives information or produces a document in compliance or purported compliance with the notice and the information or document provide by the person is false or misleading in a material particular.

The maximum penalty is imprisonment for 12 months or 1,000 penalty units, or both.

New subsection 42DZG(4) is the equivalent strict liability offence of subsection 42DZG(3) and attracts a maximum penalty of 100 penalty units.

Civil penalty—giving false or misleading information or document in compliance with a notice (new section 42DZH)

New section 42DZH introduces a civil penalty provision for providing information or documents, in purported compliance with a notice given under subsection 42DZF(1) or (2), that are false or misleading in a material particular. The approach in section 42DZH is consistent with existing provisions in the TG Act, including section 42DT.

Contravention of this provision attracts a maximum penalty of 5,000 penalty units for an individual, and 50,000 penalty units for a body corporate.

Self-incrimination (new section 42DZJ)

New section 42DZJ abrogates the privilege against self-incrimination in relation to the giving of information or producing a document under section 42DZF. The approach in section 42DZJ is consistent with existing provisions in the TG Act, including section 42DU.

Without abrogating the privilege against self-incrimination, a person would withhold pertinent information that could seriously undermine the Secretary's power to investigate possible contraventions of the TG Act or regulations and the ability to take timely regulatory action, criminal prosecutions or civil penalty proceedings in relation to such contraventions. While in some cases it may be feasible to obtain information by other means or from other persons, there will be occasions where the relevant information is only known by that person or it is not feasible or timely to do so, which could significantly increase the risk of harm or injury to consumers particularly where the information or documents relate to unlawful vaping goods.

This information could potentially be critical to preventing a serious threat to public health or could lead to a finding of serious safety concerns that pose a significant risk to the health and wellbeing of Australian consumers. The ability to enforce and undertake effective and timely post-market monitoring of the safety of vaping goods under the therapeutic goods regulatory scheme would be compromised and this could have serious public health risks. As such, the public benefit of the abrogation of this privilege outweighs the loss of personal liability.

Any information given in response to such a notice cannot be used as evidence against the person in criminal proceedings or civil proceedings, except for the following:

(a)

proceedings for an offence against subsections 42DZG (3) or (4) due to giving false or misleading information or document in compliance with a notice; or

(b)

proceedings for a civil penalty contravention under section 42Y for a contravention of section 42DZH due to giving false or misleading information or document in compliance with a notice.

New subsection 42DZJ(1) provides that a person is not excused from giving information or producing a document under section 42DZF on the ground that the information or the production of the document might tend to incriminate the person or expose the person to a penalty.

New subsection 42DZJ(2) provides that in the case of an individual:

(a)

the information given or the document produced; and

(b)

giving the information or producing the document; and

(c)

any information, document or thing obtained as a direct or indirect consequence of giving the information or producing the document;

are not admissible in evidence against the individual:

(d)

in criminal proceedings, except proceedings for an offence against subsection 42DZG(3) or (4); or

(e)

in civil proceedings, except proceedings under section 42Y for a contravention of section 42DZH.

Division 5—Directions about advertisements or generic information

Directions about advertisements of generic information (new section 42DZK)

New section 42DZK empowers the Secretary to direct a person apparently responsible for advertising vaping goods or disseminating generic information about vaping goods to take certain actions. The approach in section 42DZK is consistent with existing provisions in the TG Act, including section 42DV.

Advertisements

New subsection 42DZK(1) empowers the Secretary to direct, in writing, a person who is apparently responsible for advertising vaping goods, or for causing the advertising of the vaping goods to do one or more of the following:

(a)

cease the advertisement;

(b)

make a retraction;

(c)

make a correction;

(d)

recover any advertisement that is still in circulation;

(e)

destroy the advertisement;

(f)

cease making a particular claim or representation made by the advertisement.

In making a decision to issue a direction, the Secretary must be satisfied that there has been a contravention of the TG Act or regulations.

Generic information

New subsection 42DZK(2) empowers the Secretary to direct, in writing, a person who is apparently responsible for the dissemination, or for causing the dissemination of generic information in relation to the vaping goods to do one or more of the following:

(a)

withdraw the generic information;

(b)

make a retraction;

(c)

make a correction;

(d)

recover any generic information that is still in circulation;

(e)

destroy the generic information;

(f)

cease making a particular claim or representation made by the generic information.

In making a decision to issue direction the Secretary must be satisfied that there has been a contravention of the TG Act or regulations.

Conditions

New subsection 42DZK(3) provides that a direction under subsection (1) or (2) may be subject to conditions specified in the direction.

New subsection 42DZK(4) provides that without limiting subsection (3), the conditions may relate to one or more of the following:

(a)

the period for doing a thing the subject of the direction;

(b)

in relation to the making of a retraction or correction, either or both of the following:

(i)

the form and manner of the retraction or correction;

(ii)

the period for which the retraction or correction must be made publicly available;

(c)

the reporting to the Secretary of compliance with the direction.

Direction not a legislative instrument

New subsection 42DZK(5) makes it clear that a direction under subsection (1) or (2) is not a legislative instrument within the meaning of subsection 8(1) of the Legislation Act 2003. Directions given under subsections 42DZK(1) and (2) are administrative in character as they deal with the administrative matter of issuing directions to a specific person, where the Secretary is satisfied there has been a contravention of the TG Act or regulations. The direction is given to a particular person to comply with the action specified in the direction, and is not directed to the public in general. In addition, the decision to issue a direction under subsection 42DZK(1) or (2) is a reviewable decision under section 60 of the TG Act.

Publication

New subsection 42DZK(6) imposes the requirement for the Secretary to cause the direction to be published on the Department's website as soon as practicable after giving a direction.

Offences—contravening direction under section 42DZK (new section 42DZL)

New section 42DZL introduces fault-based offence (new subsections 42DZL(1) and (2) refer) and a strict liability offence (new subsection 42DZL(3)) for contravening a direction given to a person under subsection 42DZK(1) or (2) of the TG Act in relation to vaping goods. The approach in section 42DZL is consistent with existing provisions in the TG Act, including section 42DW.

New subsection 42DZL(1) provides that a person commits an offence if:

(a)

the Secretary has given a direction to the person under subsection 42DZK(1) or (2) in relation to vaping goods; and

(b)

the person does an act or omits to do an act;

(c)

and the act or omission contravenes the direction or a condition of the direction;

(d)

either:

(i)

the use of the vaping goods has resulted in, will result in, or is likely to result in, harm or injury to any person; or

(ii)

the use of the vaping goods, if the vaping goods were used, would result in, or would be likely to result in, harm or injury to any person; and

(e)

the harm or injury has resulted, will result, is likely to result, would result, or would be likely to result, because of the contravention.

The maximum penalty is imprisonment for 5 years or 4,000 penalty units, or both.

Note 1 to subsection (1) provides that a jury may acquit a person of an offence against this subsection and may convict the person of an offence against subsection (2) instead, with reference to section 53A.

Note 2 to subsection (1) references sections 54B and 54BA for the liability of an executive officer of a body corporate. Section 54B is intended to apply to executive officers, such as managing directors or Chief Executive Officers, who are directly involved in or participate in the management of a company, and who should be made accountable for the actions of their company where such officers are in a position to influence the company and are aware of breaches by the company of the TG Act but fail to take reasonable action to prevent the breaches.

There is significant public harm from breaching a condition of consent to undertake activity in relation to vaping goods in Australia caused by corporate offending and the liability of the corporation is not likely on its own to sufficiently promote compliance and have the desired deterrence effect.

New subsection 42DZL(2) provides that a person commits an offence if:

(a)

the Secretary has given a direction to the person under subsection 42DZK(1) or (2); and

(b)

the person does an act or omits to do an act; and

(c)

the act or omission contravenes the direction or a condition of the direction.

The maximum penalty is imprisonment for 12 months or 1,000 penalty units, or both.

New subsection 42DZL(3) provides that a person commits an offence of strict liability if:

(a)

a direction is given to a person under subsection 42DZK(1) or (2); and

(b)

the person does an act or omits to do an act; and

(c)

the act or omission contravenes the direction or a condition of the direction.

The maximum penalty is 100 penalty units.

Civil penalty—contravening direction under section 42DZK (new section 42DZM)

New section 42DZM introduces a civil penalty provision for contravening a direction given to a person under subsection 42DZK(1) or (2) of the TG Act in relation to vaping goods. The approach in section 42DZM is consistent with existing provisions in the TG Act, including section 42DX.

New section 42DZM provides that a person contravenes this section if:

(a)

the Secretary has given a direction to the person under subsection 42DZK(1) or (2); and

(b)

the person does an act or omits to do an act; and

(c)

the act or omission contravenes the direction or a condition of the direction.

Contravention of this provision attracts a maximum penalty of 5,000 penalty units for an individual, and 50,000 penalty units for a body corporate.

Division 6—Public warning notices

Secretary may issue a public warning notice (new section 42DZN)

New section 42DZN empowers the Secretary to issue a public warning notice. The approach in section 42DZN is consistent with existing provisions in the TG Act, including section 42DY.

New subsection 42DZN(1) provides that the Secretary may issue to the public a written notice containing a warning about vaping goods if:

(a)

the Secretary reasonably suspects that there has been a contravention of this Act or the regulations in relation to:

(i)

the advertising of the vaping goods; or

(ii)

the dissemination of generic information in relation to the vaping goods to the public or a section of the public; and

(b)

the Secretary is satisfied that it is in the public interest to issue the notice.

New subsection 42DZN(2) provides that if:

(a)

the Secretary has given a person a notice (the substantiation notice) under subsection 42DZF(1) or (2); and

(b)

the person fails to comply with the substantiation notice; and

(c)

the Secretary is satisfied that it is in the public interest to issue a notice under this subsection;

the Secretary may issue to the public a written notice containing a warning that the person has failed to comply with the substantiation notice, and specifying the matter to which the substantiation notice related.

New subsection 42DZN(3) provides that subsection (2) does not limit subsection (1).

New subsection 42DZN(4) makes it clear that a notice under subsection (1) or (2) is not a legislative instrument within the meaning of subsection 8(1) of the Legislation Act 2003. Notices given under subsections 42DZN(1) and (2) are administrative in character.

Division 2—Other amendments

Therapeutic Goods Act 1989

Item 28 – Subsection 3(1) (definition of advertise )

This item amends the definition of 'advertise' in subsection 3(1) of the TG Act to provide that term also relates to vaping goods.

Item 29 – Section 5A

This item amends section 5A of the TG Act to provide that section 15.2 of the Criminal Code applies to offences against new subsection 42DZD(1) and (2) and new sections 42DZG and 42DZL.

Item 30 – Subparagraph 25(1)(fa)(ii)

This item amends subparagraph 25(1)(fa)(ii) of the TG Act to include a reference to new Part 51A consequential to the introduction of that part above.

Item 31 – Paragraphs 30(1)(f) and (fa)

This item amends paragraphs 30(1)(f) and (fa) of the TG Act to include a reference to subsection 42DK(1).

Item 32 – Paragraph 30(1)(fb)

This item amends paragraph 30(1)(fb) of the TG Act to include a reference to new Part 51A consequential to the introduction of that part above.

Item 33 – Paragraphs 30(2)(eaa) and (eab)

This item amends paragraphs 30(2)(eaa) and (eab) of the TG Act to include a reference to subsection 42DK(1).

Items 34 to 37 (amendments to subparagraph 30(2)(ea)(ii), subparagraph 31(1)(h)(ii), subparagraph 31(2)(gaa)(ii), and subparagraph 41FD(h)(ii))

These items amend subparagraphs 30(2)(ea)(ii), 31(1)(h)(ii), 31(2)(gaa)(ii) and 41FD(h)(ii) of the TG Act to include a reference to new Part 5-1A consequential to the introduction of that part above.

Item 38 – Paragraphs 41GL(g) and (ga)

This item amends paragraphs 41GL(g) and (ga) of the TG Act to include a reference to subsection 42DK(1).

Item 39 – Paragraph 41GL(h)

This item amends paragraph 41GL(h) of the TG Act to include a reference to new Part 51A consequential to the introduction of that part above.

Item 40 – Paragraphs 41GN(1)(i) and (j)

This item amends paragraphs 41GN(1)(i) and (j) of the TG Act to include a reference to subsection 42DK(1).

Items 41 and 42 (Amendments to subparagraph 41GN(1)(k)(ii) and subparagraph 41JA(1)(h)(ii))

These items amend subparagraphs 41GN(1)(k)(ii) and 41GN(1)(k)(ii) of the TG Act to include a reference to new Part 51A consequential to the introduction of that part above.

Item 43 – After section 42AC

This item amends the TG Act to insert new section 42AD.

New subsection 42AD(1) provides that Part 5-1 of the TG Act does not apply in relation to advertisements about vaping goods.

New subsection 42AD(2) provides that new Part 5-1A applies in relation to advertisements about vaping goods.

Item 44 – After subsection 42DLB(10)

This item amends the TG Act to inset new subsections 42DLB(10A) and (10B) to provide for continuing contraventions for civil penalties relating to advertisements.

New subsection 42DLB(10A) provides that a person who contravenes subsection (1) commits a separate contravention of that subsection in respect of each of day during which the contravention continues (including the day the order under subsection 42Y(2) is made or any later day).

New subsection 42DLB(10B) provides that the maximum civil penalty for each day that a contravention against subsection (1) continues is 10% of the maximum civil penalty that can be imposed in respect of the contravention.

Item 45 – After subsection 42DMA(2)

This item amends the TG Act to insert new subsections 42DMA(2A) and (2B) to provide for continuing contraventions for civil penalties relating to non-compliance with the Therapeutic Goods Advertising Code.

New subsection 42DMA(2A) provides that a person who contravenes subsection (1) commits a separate contravention of that subsection in respect of each of day during which the contravention continues (including the day the order under subsection 42Y(2) is made or any later day).

New subsection 42DMA(2B) provides that the maximum civil penalty for each day that a contravention against subsection (1) continues is 10% of the maximum civil penalty that can be imposed in respect of the contravention.

Item 46 – Section 53A (after table item 33D)

This item inserts new table item 33E into the table in section 53A of the TG Act. Section 53A provides for alternative verdicts for various offences.

Item 47– Section 45BA (after table item 43D)

This item inserts new table items 43E and 43F into the table in section 45BA of the TG Act. Section 45BA sets out offences to which the chief executive officer of a body corporate has personal liability.

Item 48 – Subsection 60(1) (at the end of the definition of initial decision )

This item amends subsection 60(1) of the TG Act to make it clear that a decision made by the Secretary under subsection 42DZK(1) or (2) is an initial decision and therefore subject to merits review (comprising internal reconsideration and external review by the AAT) under section 60 of the TG Act.

Division 3—Application and transitional provisions

Item 49 – Application of amendments

This item provides that the amendments made by this Part apply in relation to acts or omissions that occur on or after the commencement of this Part.

Part 4—Enforceable directions and forfeiture

Forfeiture and destruction

These amendments create new forfeiture provisions which overcome the limitations of the existing forfeiture provisions in the TG Act and expand the circumstances in which forfeiture may occur. The existing forfeiture (and related) provisions are set out below:

•

under section 54 of the TG Act, forfeiture orders can only be obtained following a criminal conviction, an order under section 19B of the Crimes Act 1914, or a finding by a court that the person has contravened a civil penalty provision;

•

under section 48H of the TG Act, seized goods may be required to be returned to the owner if they are no longer needed for evidentiary purposes, regardless of whether it is lawful for the owner to possess or deal with the goods.

These enhanced forfeiture powers will enable the TGA to disrupt the trafficking of unlawful goods more efficiently, as well as address potential storage and destruction issues where large quantities of unlawful vapes are seized.

These new powers only apply where goods have been seized pursuant to a search warrant. The intention is that the Secretary would be empowered to initiate a process for the goods to be forfeited to the Commonwealth where there is a reasonable belief the goods have been unlawfully imported, manufactured, supplied or are otherwise non-compliant with the TG Act including in relation to possession.

Once the goods have been forfeited, the Secretary should have a broad power to dispose of the goods.

Enforceable directions

An emerging issue with vaping goods is that they are costly to destroy because component parts such as plastics, batteries, and hazardous nicotine need to be separated and appropriately disposed of.

To manage waste issues associated with enforcement of vaping laws, but also to give the Secretary a broad range of compliance and enforcement tools to manage unlawful vapes and therapeutic goods generally, these amendments include a new power which permits the Secretary to make directions to a person to take one or more steps, within the time specified in the notice, to comply with the TG Act if the Secretary believes, on reasonable grounds, that:

•

a person is not complying with the TG Act; and

•

it is necessary to exercise this power to protect the health and safety of humans.

This power allows directions to be made requiring one or more of the following:

•

to relabel or label goods in compliance with the requirements under the TG Act;

•

to repackage goods in compliance with the requirements under the TG Act; or

•

to destroy or dispose of goods at their own cost, including by delivering the goods to specific service providers who will dispose of the goods responsibly.

Warrants

Sections 49 and 50 of the TG Act require warrants to be issued by a magistrate. The TGA often experiences operational when seeking timely access to magistrates to issue warrants. This is problematic when there is urgency in the obtaining and execution of a warrant.

Consequently, these amendments extend the authority to issue monitoring, offence and civil penalty related warrants in relation to premises to court registrars and other legislative officers of a court of a state or territory.

Such an approach is not unprecedented, with the Crimes Act 1914 providing for the issuing of warrants by an 'issuing officer' which means:

•

a magistrate; or

•

a justice of the peace or other person employed in a court of a state or territory who is authorised to issue search warrants or warrants for arrest, as the case may be.

Amendments to sections 49 and 50 of the TG Act allow for a registrar of the court or other officers employed in a court of a state or territory to issue monitoring, offence or civil penalty related search warrants in relation to premises.

Therapeutic Goods Act 1989

Item 50 - Subsection 3(1) (paragraph (b) of the definition of authorised person )

This item amends the definition of 'authorised person' in subsection 3(1) of the TG Act to include a reference to new Part 6-2A.

Item 51 - At the end of Chapter 5A

This item introduces Part 5A-5 in Chapter 5A of the TG Act. Part 5A-5 includes provisions relating to enforceable directions.

New section 42YS provides a simplified outline for Part 5A-5 of the TG Act.

New section 42YT provides that the Secretary may give directions if the TG Act or an instrument is not being complied with. Subsection 42YT(1) provides that this section applies if the Secretary believes, on reasonable grounds, that a person is not complying with this Act or an instrument made under the TG Act in relation to particular goods and it is necessary to exercise powers under this section to protect the health and safety of humans.

The note to subsection 42YT(1) provides that paragraph 42YT(1)(b), which requires the Secretary to believe on reasonable grounds that it is necessary to exercise powers under this section to protect the health and safety of humans, covers protecting the health and safety of humans in relation to the environment.

Subsection 42YT(2) provides that the Secretary may, by written notice, give directions to the person requiring the person to do any of the following, within the period specified in the notice and at the person's own cost:

(a)

relabel, or label, the goods in compliance with this Act or the instrument;

(b)

repackage the goods in compliance with this Act or the instrument;

(c)

destroy or otherwise dispose of the goods;

(d)

deliver the goods to a specified person to be destroyed or otherwise disposed of in an appropriate manner;

(e)

any other thing prescribed by the regulations in relation to the goods.

The note to this subsection references, in relation to variation and revocation of the directions, subsection 33(3) of the Acts Interpretation Act 1901.

Subsection 42YT(3) provides that a period specified in a notice given under subsection (2) must be reasonable having regard to the circumstances.

Subsection 42YT(4) provides that a person commits an offence if the person is given a notice under subsection (2) and the person fails to comply with the notice within the period specified in the notice, with an associated penalty of imprisonment for 12 months or 1,000 penalty units, or both.

Subsection 42YT(5) provides for civil penalties for the same conduct, with the maximum civil penalty for an individual of 5,000 penalty units and for a body corporate of 50, 000 penalty units.

Item 52 - At the end of section 48H

This item introduces a note at the end of section 48H, which provides that section 48H does not apply in relation to the thing if section 52AAB applies in relation to the thing (in accordance with subsection 52AAB(2)).

Item 53 - At the end of section 48J

This item introduces a note at the end of section 48J, which provides that section 48J does not apply in relation to the thing if section 52AAB applies in relation to the thing (in accordance with subsection 52AAB(2)).

Item 54 - After Part 6-2

This item introduces Part 6-2A to the TG Act, which includes provisions relating to forfeiture of things seized.

New section 52AAA provides for the forfeiture of things seized under search warrants in certain circumstances.

Subsection 52AAA(1) provides that if an authorised person seizes a thing under a warrant issued under section 50, and the Secretary believes on reasonable grounds that the thing has been imported, manufactured or supplied, or been in the possession, custody or control of a person, in contravention of this Act or an instrument made under this Act or a requirement under this Act or such an instrument has not been complied with in relation to the thing, the thing is forfeited to the Commonwealth.

Subsection 52AAA(2) provides that the Secretary must give a written notice, i.e. a forfeiture notice, in accordance with subsection (3) to the owner of the thing or, if the owner cannot be identified after reasonable inquiry, the person who had possession, custody or control of the thing immediately before it was seized.

Subsection 52AAA(3) provides that the forfeiture notice must identify the thing, and state a number of matters, including the day it was seized, that it was seized under warrant, the grounds on which it was seized, and that the owner or person who had possession, custody or control of the thing may, within 2 months of the forfeiture notice being given, commence proceedings against the Commonwealth for a declaration that the thing is not forfeited to the Commonwealth. Subsection 52AAA(4) provides that the owner of the thing, or person who had possession, custody or control of the thing, may commence proceedings for a declaration that the thing is not forfeited to the Commonwealth. Subsection 52AAA(5) provides that proceedings may be commenced under subsection (4) even if the forfeiture notice has not been given and may only be commenced before the end of the period of 2 months beginning on the day the forfeiture notice is given.

Subsection 52AAA(6) provides that, if the owner or person who has possession custody or control of the thing does not commence such proceedings within 2 months specified in the forfeiture notice, or commences such proceedings but a court has not made a declaration, then the thing is condemned as forfeited to the Commonwealth, and the Secretary may cause notice of the forfeiture of the thing to be published on the Department's website and the Secretary may either retain the thing for the purpose of proceedings in respect of which the thing may afford evidence or cause the thing to be disposed of in such manner as the Secretary directs. The note to subsection (6) references section 54 dealing with offences and forfeiture.

Section 52AAB provides for the return or retention of a thing that is declared not to be forfeited to the Commonwealth.

Subsection 52AAB(1) provides that this section applies in relation to a thing if the thing was forfeited to the Commonwealth under subsection 52AAA(1) and a court has made a declaration that the thing is not forfeited to the Commonwealth under that subsection.

Subsection (2) provides that sections 48H and 48J do not apply in relation to the thing.

Subsection (3) provides that at the end of 120 days after a court has made a declaration that the thing is not forfeited, an authorised person mut take reasonable steps to return the thing to the person from whom it was seized unless:

(a)

proceedings in which the thing may afford evidence were commenced before the end of the 120 day period and have not been completed;

(b)

an authorised person may retain the thing because of an order under subsection (6); or

(c)

an authorised person is otherwise authorised by a law or order of a court of the Commonwealth, a state or a territory, to retain, destroy or dispose of the thing.

Subsection 52AAB(4) provides that the thing may be returned either unconditionally or on such terms and conditions as the Secretary sees fit.

Subsection 52AAB(5) provides that the secretary may apply to an issuing officer for an order that an authorised person may retain the thing for a further period. The application must be made before the end of the 120 day period or, if an order is made under subsection (6), before the end of the period specified in the most recent order.

Subsection 52AAB(6) provides that if the issuing officer is satisfied that it is necessary for an authorised person to continue to retain the thing for one of the following purposes, the issuing officer may order that an authorised person may retain the thing for a period specified in the order not exceeding 3 years:

(a)

for the purposes of an investigation as to whether an offence against this Act has been committed;

(b)

to enable evidence of an offence against this Act to be secured for the purposes of a prosecution;

(c)

for the purposes of an investigation as to whether a civil penalty provision has been contravened;

(d)

to enable evidence of a contravention of a civil penalty provision to be secured for the purposes of civil proceedings.

Subsection (7) provides that before making an application to an issuing officer for an order that an authorised person may retain the thing for a further period, the Secretary must take reasonable steps to discover who has an interest in the retention of the thing and, if it is practicable to do so, notify each person who the Secretary believes to have such an interest of the proposed application.

Item 55 – Application of Amendment

This item provides that Part 6-2A of the TG Act, as inserted by this Part, applies in relation to a thing that is seized under a warrant issued under section 50 of the TG Act on or after the commencement of this Part.

Item 56 – Subsection 54(3)

This item amends subsection 54(3) to include a reference to vaping goods.

Item 57 – At the end of section 54

This item introduces a note at the end of section 54, which provides a reference to Part 6-2A which deals with forfeiture of things seized under a warrant in certain circumstances.

Part 5—Entry, searches and warrants

Therapeutic Goods Act 1989

Background

These amendments extend the power to issue warrants and extension of time to retain seized goods to a registrar and other officers of the state or territory court who are authorised under a state or territory law to issue search warrants. These officers are not carrying out judicial powers. These amendments allow additional flexibility for authorised officers to apply for a warrant from other officers of the state or territory court or a Registrar. Thus, an authorised person can apply for a warrant even when the court is not sitting and the Magistrate is not available.

Details of the amendments

Item 58 - Subsection 3(1)

This item inserts a new definition in the TG Act for issuing officer, who is defined as a magistrate or a registrar or other officer of a state or territory court who is authorised under a state or territory law to issue search warrants.

Item 59 - Paragraphs 46A(1)(b) and (2)(b)

This item amends paragraphs 46A(1)(b) and 2(b) of the TG Act to insert "or vaping goods" after "therapeutic goods" (wherever occurring).

Item 60 - Before subparagraph 46A(4)(a)(ia)

This item inserts a new subparagraph 46A(4)(a)(iaa) in the TG Act and provides that subsection 46A(4) applies to premises of a person who is required to comply with a condition of an exemption of vaping goods under sections 18 or 41HA of the TG Act.

Item 61 - Paragraph 48(1)(b)

This item amends paragraph 48(1)(b) of the TG Act to insert "or vaping goods" after "therapeutic goods" (wherever occurring).

Item 62 – Subsection 48A(3)

This item amends subsection 48A(3) of the TG Act to omit the term "magistrate" and substitute it with "issuing officer".

Item 63 - Subparagraph 48AA(2)(b)(ii)

This item amends subparagraph 48AA(2)(b)(ii) of the TG Act to omit the term "a magistrate" and substitute it with "an issuing officer".

Item 64 - Subparagraph 48AA(3)

This item amends subsection 48AA(3) of the TG Act to omit the term "a magistrate" and substitutes it with "an issuing officer".

Item 65 – Subsection 48AA(5)

This item amends subsection 48AA(5) of the TG Act to omit the term "A magistrate" and substitute it with "An issuing officer".

Item 66 - Paragraph 48AA(5)(b)

This item amends paragraph 48AA(5)(b) of the TG Act to omit the term "magistrate" and substitute it with "issuing officer".

Item 67 - Subsections 48BA(7) and 48C(7)

This item amends subsections 48BA(7) and 48C(7) of the TG Act to omit the term "a magistrate" and substitute it with "an issuing officer".

Item 68 - Section 48J (heading)

This item amends the heading in section 48J of the TG Act to omit the term "Magistrate" and substitute it with "Issuing Officer".

Item 69 - Subsection 48J(1)

This item amends subsection 48J(1) of the TG Act to omit the term "a magistrate" (wherever occurring) and substitute it with "an issuing officer".

Item 70 - Subsection 48J(2)

This item amends subsection 48J(2) of the TG Act to omit the term "a magistrate" (wherever occurring) and substitute it with "an issuing officer".

Item 71 - Subsection 49(1)

This item amends subsection 49(1) of the TG Act to omit the term "a magistrate" and substitute it with "an issuing officer".

Item 72 - Subsections 49(2) and (3)

This item amends subsections 49(2) and (3) of the TG Act to omit the term "magistrate" (wherever occurring) and substitute it with "issuing officer".

Item 73 - Subsection 50(1)

This item amends subsection 50(1) of the TG Act to omit the term "a magistrate" and substitute it with "an issuing officer".

Item 74 – Subsections 50(2) and (3)

This item amends subsection 50(2) and (3) of the TG Act to omit the term "a magistrate" (wherever occurring) and substitute it with "an issuing officer".

Item 75 – Subsection 51(1)

This item amends subsection 51(1) of the TG Act to omit the term "a magistrate" and substitute it with "an issuing officer".

Item 76 - Subsections 51(4) to (9)

This item amends subsections 51(4) to (9) of the TG Act to omit the term "magistrate" (wherever occurring) and substitute it with "issuing officer".

Item 77 - Subsection 51(10)

This item amends subsection 51(10) of the TG Act to omit the term "a magistrate" and substitute it with "an issuing officer".

Item 78 - Paragraph 51B(2)(a)

This item amends paragraph 51B(2)(a) of the TG Act to omit the term "a magistrate" and substitute it with "an issuing officer".

Item 79 - Paragraph 51B(2)(a)

This item amends paragraph 51B(2)(a) of the TG Act to omit the term "that magistrate" and substitute it with "that issuing officer".

Item 80 - Paragraph 51B(2)(b)

This item amends paragraph 51B(2)(b) of the TG Act to omit the term "magistrate" and substitute it with "issuing officer".

Item 81 - Subparagraphs 51B(2)(c)(i) and (ii)

This item amends subparagraphs 51B(2)(c)(i) and (ii) of the TG Act to omit the term "a magistrate" and substitute it with "an issuing officer".

Item 82 - Paragraph 51B(2)(d)

This item amends paragraph 51B(2)(d) of the TG Act to omit the term "a magistrate" and substitute it with "an issuing officer".

Item 83 - After section 51B

This item inserts new section 51C in the TG Act, which provides that a power conferred on an issuing officer by Part 6-2 of the TG Act is conferred on the officer in a personal capacity and not as a court or as a member or an officer of a court. An issuing officer is not required to accept the powers conferred on them by Part 6-2 of the TG Act.

Further, an issuing officer exercising a power under Part 6-2 of the TG Act has the same protection and immunity as if the officer were exercising the power as the court of which it is a member or officer, or as a member or an officer of the court of which the issuing officer is a member or an officer.

Part 6—Delegation and authorised persons

Therapeutic Goods Act 1989

Background

The vaping reforms are intended to achieve a timely and nationally consistent approach for the regulation of vaping goods by relying on the federal cooperative scheme for therapeutic goods. All states and territories have enacted corresponding laws to adopt the Commonwealth TG Act as amended from time, with Western Australia having recently progressed their own corresponding law. The corresponding laws fill the gap in the Commonwealth's constitutional power to ensure appropriate coverage for the regulation of therapeutic goods.

To empower state and territory officials to carry out enforcement powers under the new reforms, the Bill allows for the delegation of the powers of the Secretary under Chapter 5A, new section 52AA and new section 52AAB to an officer of a Department of State of a state, a Department or administrative unit of the Public Service of a territory or an authority of a state or territory. The Department, unit or authority must have functions relating to therapeutic goods, health or law enforcement. Section 7 of the TG Act already provides for the Secretary to authorise these officers to exercise powers under a specified provision of the TG Act. State and territory officers authorised by the Secretary under section 7A exercise powers and functions under Part 6-2 (Entry, searches and warrants) of Chapter 6 of the TG Act.

In practice, the Secretary only provides authorisation and delegation of powers to officers who have the relevant skills and experience in relation to enforcement powers such as entry to premises, execution of search, monitoring and investigation warrants, testing of things and samples, and the seizing of evidential materials. Current delegates and authorised officers range from APS 5 to SES officers. Although delegation and authorisation are given to APS officers, they are generally accompanied by high level APS officers, and depending on the risks associated with the search and seizure, will be accompanied by law enforcement officers. In addition, these officers are given appropriate training and must adhere to standard operating procedures developed by the Department of Health. It is intended that the same criteria will be applied by the Secretary in the making of delegation and authorisation for state and territory officers.

To ensure consistency in the application of enforcement powers under the Commonwealth therapeutic goods legislation and applied laws, authorised officers and delegates must comply with any directions of the Secretary or of the person who delegated the function or power. The binding directions could relate to compliance with standard operating procedures developed by the Department of Health.

Details of specific amendments

Item 84 - Section 7A

This item makes an editorial amendment to section 7A to provide for subsection (1)

Item 85 - At the end of section 7A

This item amends section 7A of the TG Act to introduce subsection 7A(2), which provides that in exercising a power under a provision of this Act under an authorisation under subsection (1), the authorised person must comply with any directions of the Secretary.

Item 86- After subsection 57(1)

This item inserts a new subsection 57(1A) in the TG Act, which provides that the Secretary may, in writing, delegate all or any of the Secretary's powers and functions under Chapter 5A (enforcement), section 52AAA (forfeiture of things seized under search warrant) or section 52AAB (return of retention of a thing declared not to be forfeited) to an officer of:

•

a Department of State of a state; or

•

a Department or administrative unit of the Public Service of a territory; or

•

a state or territory authority;

being a Department, unit or authority that has functions relating to therapeutic goods, health or law enforcement.

The new subsection 57(1A) does not limit the delegations set out under subsection 57(1) of the TG Act.

Delegation of powers to state and territory officers

The intended formulation of the delegation in subclause 57(1A) is to officers of a department, unit or authority that have functions relating to therapeutic goods, health or law enforcement. It is not intended that the delegation be limited to the head of the relevant departments and administrative units.

This is because it is not practical or appropriate for enforcement related functions, such as entry, search and seizure powers to be only delegated to heads of relevant departments and administrative units. It is expected that significant enforcement activities will be required by the Commonwealth, states and territories. This will require a number of persons with varying technical skills due to the significant amount of seizures of illicit goods that are likely be executed. Such powers are appropriately delegated to experienced and skilled persons who undertake investigations and related regulatory functions. It is anticipated that there may be a number of persons with different technical skills, including forensic data analysts, health officials and police officers, who will have jurisdiction to exercise powers under the applied laws.

The approach to delegation of these powers is an extension of the current regulatory framework, which enables state and territory officers to exercise the powers of authorised officers under the TG Act. The enforcement of controls on therapeutic goods (and proposed under this Bill, vaping goods) is carried out under a national system of controls; essentially, a federal cooperative scheme between the Commonwealth, states and territories. Consistent with the scheme, the Commonwealth will take responsibility for enforcing importation, manufacture, sponsor supply and advertisement. The states and territories will take responsibility for enforcing wholesale supply, retail supply and commercial possession.

The national approach to the regulation of vaping goods is a centrepiece of the vaping reforms and will be critical to the success of the measures to achieve the public health objectives. By extending the power to delegate the powers and functions of the Secretary to state and territory officers, the Bill would complement existing arrangements in relation to authorised officers and therefore further enhance the compliance and enforcement effort in Australia.

Finally, it is intended that the delegation of these powers and functions would be subject to a binding direction that officers must adhere to standard operating procedures created by the Secretary to ensure consistency for the carrying out of enforcement powers (refer to Item 87 below regarding the addition of new subsection 57(12)).

Item 87 - At the end of section 57

This item introduces new subsection 57(12), which provides that in exercising any powers or performing any functions under a delegation under section 57, the delegate must comply with any directions of the person who delegated the power or function.

Item 88 - Subsection 61A(4) (at the end of paragraph (c) of the definition of protected person)

This item amends the definition of protected person in subsection 61A(4) of the TG Act and adds "(1A)" after "subsection 57(1)".

Part 7—Release of information

Therapeutic Goods Act 1989

Section 61 of the TG Act principally provides for powers to release certain kinds of information to specified persons or the public, in certain circumstances. While these powers are not exhaustive of the ways in which the Department may use or release the kinds of information specified in section 61, they are an important mechanism by which the Department may inform the public, health departments, law enforcement bodies and others of certain information, including critical safety and regulatory information, in a timely manner and in accordance with specified requirements.

Most of the information release powers in section 61 permit the release of 'therapeutic goods information', which is defined in subsection 61(1) as being information relating to therapeutic goods that is held by the Department and that relates to the performance of the Department's functions.

The amendments contained in this Part would create new powers to release information relating to vaping goods which mirror existing information release powers relating to therapeutic goods, and make consequential amendments to expand the application of section 61 to vaping goods.

Items 89 – Subsection 61(1)

This item inserts a new definition in subsection 61(1) of the TG Act for vaping goods information, which refers to information in relation to vaping goods that is held by the Department and relates to the performance of the Department's functions.

This definition is intended to include a wide range of information concerning vaping goods and aligns with the definition of 'therapeutic goods information' contained in subsection 61(1).

Consistent with the definition of 'therapeutic goods information', the Department's functions to which information may relate in order to be within the definition of 'vaping goods information' is not limited to functions under the TG Act. It may include, for example, functions under other legislation administered by the Department, such as the National Health Act 1954.

It is anticipated that some kinds of information may be simultaneously 'vaping goods information' and 'therapeutic goods information', such as information about a vaping device included in the Register. Such information is intended to be able to be released under one or more existing information release powers relating to therapeutic goods, one or both of the information release powers relating to vaping goods proposed in Item 137, or both.

Item 90 - After subsection 61(7)

This item inserts new subsections 61(7A), (7B), (7C) and (7D) in the TG Act.

Subsection 61(7A) will permit the Secretary to release vaping goods information of a kind specified under subsection 61(7B) to one or more persons, bodies or authorities (or one or more kinds of persons, bodies or authorities) specified under that subsection, for one or more purposes specified under that subsection.

The new subsection 61(7B) of the TG Act empowers the Minister to specify, by legislative instrument, one or more of the following:

•

a person, body or authority, such as the World Health Organisation or the Department of Home Affairs;

•

kinds of persons, bodies or authorities, such as state or territory health departments, or Australian law enforcement agencies;

•

kinds of vaping goods information, such as information about enforcement action taken in relation to vaping goods, or all information within the meaning of 'vaping goods information';

•

purposes, such as to support cooperation in relation to the enforcement of border controls relating to vaping goods, to promote industry awareness, or for any purpose related to the Department's functions.

Subsections 61(7A) and (7B) reflect the existing information release powers concerning therapeutic goods contained in subsections 61(5AA) and (5AB) of the TG Act.

Subsection 61(7C) will permit the Secretary to release vaping goods information of a kind specified under subsection 61(7D) to the public. The new subsection 61(7D) of the TG Act empowers the Minister to specify, by legislative instrument, the kinds of information that the Secretary may release to the public. Subsections 61(7C) and (7D) are modelled on the existing information release powers concerning therapeutic goods contained in subsections 61(5C) and (5D) of the TG Act.

The amendments will provide flexibility for the release of a wide range of information relating to vaping goods. This may include, for example:

•

providing safety alerts to the public about the dangers associated with the use of particular vaping goods (e.g. instances of vaping goods being contaminated with high levels of toxic substances), to ensure that users are informed about such risks and are able to take steps to avoid a threat to their health by not using products for which such alerts are made;

•

informing Commonwealth, state and territory health authorities or law enforcement bodies about vaping goods which have been, or are suspected of having been, imported, manufactured or supplied in contravention of the TG Act; or

•

informing the public about decisions or actions taken under the TG Act or its regulations in relation to vaping goods, such as information about enforcement action taken against the suppliers of prohibited vaping goods.

Items 91 to 94 (Amendments to subsection 61(8), paragraphs 61(8)(a) and (b), subsection 61(8) (note) and subsection 61(9))

Subsection 61(8) of the TG Act provides that, subject to the data protection regimes for medicines in sections 25A and 26AF of the TG Act, therapeutic goods information (as defined in subsection 61(1) of the TG Act) provided to the Department in relation to a matter may be:

•

used by the Department in the consideration of another matter that relates to therapeutic goods; or

•

given to a committee appointed to advise the Minister or Secretary on matters relating to therapeutic goods.

Items 91 and 92 are principally intended to expand the operation of subsection 61(8) so that it also applies to vaping goods information (as intended to be defined in subsection 61(1) of the TG Act). Together, these items would amend subsection 61(8) so that vaping goods information or therapeutic goods information may be:

•

used by the Department in consideration of another matter that relates to therapeutic goods or vaping goods; or

•

given to a committee appointed to advise the Minister or Secretary on matters relating to therapeutic goods or vaping goods.

These amendments are primarily intended to ensure that information held by the Department in relation to a particular vaping-related matter (for example, intelligence about the kinds of prohibited vaping goods attempted to be illegally imported into Australia), may be used in relation to other functions, such as broader public health policy.

Item 91 also replaces the phrase '... information provided to the Department...' with '... information held by the Department...'. This amendment will align subsection 61(8) with the description of information being 'held by' the Department in the definition of 'therapeutic goods information' (and the proposed definition of 'vaping goods information') in subsection 61(1).

This amendment is intended to clarify, for the avoidance of doubt, that the information to which subsection 61(8) applies includes information which is created or generated by the Department, and is not limited to information 'provided to' the Department.

It is the Department's position that subsection 61(8) already applies to information created or generated by the Department. However, this amendment is intended to provide certainty about the application of the provision. For example, information provided to the TGA by a person when applying for the inclusion of a vaping device in the Register would be information 'provided to' the Department, and therefore would be within the scope of subsection 61(8). However, it may be less clear whether the TGA's report which evaluated that application is also information 'provided to' the Department.

This amendment is intended to put beyond doubt that information like an evaluation report (or the results of testing conducted by the TGA's laboratories of a vaping substance) is information to which subsection 61(8) applies.

Item 93 makes a minor amendment to the note in subsection 61(8) of the TG Act to clarify that, pursuant to section 132C of the National Health Act 1953 (the NH Act), the Secretary of the Department may disclose therapeutic goods information 'held by' the Department to the Chief Executive Medicare for the purpose of certain data matching.

Currently, the note says than information 'provided to' the Department may be disclosed for the purpose of data-matching. However, subsection 132C(1) of the NH Act does not include the words 'provided to'. That provision instead states that the Secretary may disclose 'therapeutic goods information (within the meaning of subsection 61(1)' of the TG Act, which is relevantly defined as information 'held by' the Department. Consequently, item 139AA is intended to ensure that the note to subsection 61(8) aligns more closely with subsection 132C(1) of the NH Act.

Item 94 makes a minor, technical amendment to subsection 61(9) of the TG Act, to provide that an instrument made under the proposed subsections 61(7B) or (7D) may apply, adopt or incorporate, with or without modification, any matter contained in an instrument or other writing as in force or existing from time to time. In relation to vaping goods, an instrument made under those subsections might incorporate, for example, a matter contained in a standard concerning the quality or safety of vaping devices.

The current subsection 61(9) already makes this allowance in relation to the other instrument-making powers contained in section 61, namely subsections 61(5AB) and (5D).

Item 95 - Application of amendments

This item provides that the amendments made by Part 6 of the Bill apply in relation to the release, disclosure or use of information on or after the commencement of Part 6, whether the information started to be held, or was obtained or created, before or after that commencement.

Part 8—Laboratory testing

Therapeutic Goods Act 1989

This Part contains amendments to the regulation-making powers in section 63 of the TG Act. These amendments are intended to expand existing regulation-making powers concerning the testing of therapeutic goods to include the testing of vaping goods (or any kind of goods, to ascertain whether the goods are vaping goods or therapeutic goods).

Item 96 - Paragraph 63(2)(d)

Paragraph 63(2)(d) of the TG Act provides that regulations may provide for the procedures to be followed by the Department in the sampling and testing of therapeutic goods.

This item repeals and substitutes paragraph 63(2)(d) to provide that the regulations may provide for the procedures to be followed in the sampling and testing of:

•

therapeutic goods;

•

vaping goods;

•

any kind of goods, for the purpose of ascertaining whether the goods are therapeutic goods or vaping goods.

This amendment is intended to ensure that the regulations may make appropriate provision for the procedures to be followed by the Department or others (such as commercial testing laboratories engaged by the Department) in relation to the sampling and testing of vaping goods.

The new paragraph 63(2)(d) also enables the making of regulations to prescribe procedures for the sampling and testing of any kind of goods for the purpose of ascertaining whether or not they are therapeutic goods or vaping goods (or both). The phrase 'any kind of goods' is intended to capture a broad array of things, including physical possessions and digital possessions (like software).

This amendment is intended to expressly permit the making of procedures related to obtaining and testing samples of kinds of goods where, for example, it is not apparent that the goods are therapeutic goods or vaping goods until after they have been sampled and tested, or where sampling and testing would be preferable to confirm a suspicion that the goods are therapeutic goods or vaping goods.

Consistent with the current paragraph 63(2)(d), it is not intended for paragraph 63(2)(d), or regulations made under this paragraph, to exhaustively provide for:

•

the ways that the Department may sample or test therapeutic goods, vaping goods, or any kind of goods for the purpose of determining whether the goods are vaping goods or therapeutic goods; or

•

the procedures that the Department may or must follow when sampling or testing those kinds of goods.

Item 97 – Saving of regulations

This item provides that regulations made for the purposes of paragraph 63(2)(d) of the TG Act, which are in force immediately before the commencement of this item, continue in force for the purposes of that paragraph as in force after that commencement. This will notably include regulations contained in Part 5 of the Therapeutic Goods Regulations 1990.

Item 98 – Paragraph 63(2)(g)

Paragraph 63(2)(g) of the TG Act provides that the regulations may make provision for:

•

the testing of therapeutic goods;

•

the inspection of manufacturing operations; or

•

the evaluation of data concerning therapeutic goods,

by the Department at the request of persons.

This item expands paragraph 63(2)(g) to expressly provide that the regulations may make provision for the testing of vaping goods, or the evaluation of data concerning vaping goods, by the Department at the request of persons.

Part 9—Approvals for certain Part 3-2 exempt goods

Therapeutic Goods Act 1989

Item 99 - Subsection 19(1)

This item amends subsection 19(1) of the TG Act to enable the Secretary to grant approvals under that provision—i.e., Special Access Scheme Category B ("SAS B") and clinical trial approvals—in relation to the importation, exportation or supply of exempt goods.

Under subsection 18(1) of the TG Act, the regulations may, subject to any conditions, exempt specified therapeutic goods, or a specified class of therapeutic goods, from the operation of Part 3-2 of the TG Act (save for a small number of provisions in that Part). The effect of this provision is to enable the regulations to specify therapeutic goods, or classes of therapeutic goods, that may be imported into, manufactured in, and supplied in Australia, despite the goods not being included in the Register.

Relevantly, therapeutic vaping goods are exempt from the operation of Part 3-2 of the TG Act if, among other things:

•

the only indications (i.e., therapeutic uses) of the goods are for smoking cessation or the management of nicotine dependence; and

•

the sponsor of the goods, and any other person involved in the wholesale or retail supply of the goods, intend for the goods to be supplied to the ultimate consumer in accordance with an approval or authority under section 19 of the TG Act.

However, subsection 19(1) of the TG Act currently precludes the Secretary from granting SAS B and clinical trial approvals in relation to therapeutic goods that are exempt goods. As such, sponsors wishing to import, manufacture or supply unregistered therapeutic vaping goods in Australia can only do so if they intend for the goods to be supplied to the ultimate consumer in accordance with an authority granted under the TG Act (namely, under the Authorised Prescriber Scheme, which is established by subsection 19(5) of the TG Act).

This impacts the flexibility of the exemption for therapeutic vaping goods, as it establishes a barrier to legitimate patient access to such goods for smoking cessation, and the management of nicotine dependence, under appropriate clinical supervision.

Consequently, this item amends subsection 19(1) of the TG Act by omitting "registered goods, listed goods or exempt good s" and substituting "registered goods or listed good s". This amendment ensures that the lawful supply of therapeutic vapes under the relevant exemption can operate in conjunction with SAS B and clinical trial approvals granted by the Secretary under subsection 19(1).

Part 10—Offences and civil penalty provisions for breach of condition of certain exemptions or approvals

Therapeutic Goods Act 1989

Item 100 - Section 22(5A)

This item creates a new fault-based offence with an aggravating factor if a person does an act, or omits to do an act and the act or omission results in the breach of a condition of an exemption applicable under regulations made for the purposes of subsection 18(1) or a condition of approval under section 19 or a condition applicable under regulations made for the purposes of subsection 19(4A) or a condition of an approval under section 19A and the act or omission has resulted in, will result in, or is likely to result in, harm or injury to any person.

The maximum penalty is imprisonment for 5 years or 4,000 penalty units or both. The notes for this subsection provide that a jury may acquit a person of an offence against this subsection and may convict the person of an offence against subsection (7) instead: see section 53A and refers to section 54B and 54BA in relation to the liability of an executive officer of a body corporate.

Section 54B is intended to apply to executive officers, such as managing directors or Chief Executive Officers, who are directly involved in or participate in the management of a company, and who should be made accountable for the actions of their company where such officers are in a position to influence the company and are aware of breaches by the company of the TG Act but fail to take reasonable action to prevent the breaches. There is significant public harm from the supply of unapproved therapeutic goods which do not comply with a condition of an unapproved supply pathway under the TG Act in Australia caused by corporate offending. Such unapproved therapeutic goods may include vaping goods. The liability of the corporation is not likely on its own to sufficiently promote compliance and have the desired deterrence effect.

Item 101 - At the end of subsection 22(7)

This item amends this subsection by adding that the maximum penalty is imprisonment for 12 months or 1,000 penalty units, or both.

Item 102 - Subsection 22(7AA)

This item repeals the existing subsection and substitutes with an offence of strict liability if a person does an act, or omits to do an act and the act or omission results in the breach of a condition of an exemption applicable under regulations made for the purposes of subsection 18(1) or a condition of approval under section 19 or a condition applicable under regulations made for the purposes of subsection 19(4A) or a condition of an approval under section 19A. The maximum penalty is 100 penalty units.

Item 103 – Section 22AA (heading)

This item omits "a condition of an exception" and substitutes it with "conditions".

Item 104 – Section 22AA

This item inserts "(1)" before "A person".

Item 105 – Section 22A

This item omits "this section" and substitutes it with "subsection".

Item 106 – At the ed of section 22AA

This item creates a civil penalty provision if a person does an act, or omits to do an act and the act or omission results in the breach of a condition of an exemption applicable under regulations made for the purposes of subsection 18(1) or a condition of approval under section 19 or a condition applicable under regulations made for the purposes of subsection 19(4A) or a condition of an approval under section 19A. The maximum penalty for an individual is 5,000 penalty units and 50,000 penalty units for a body corporate.

Item 107 - Subsection 41HA(2) (note)

This item omits "subsection 41MN(9)" and substitutes it with "subsections 41MN(9), (9A) and (9B)".

Item 108 - Subsection 41HB(2) (note)

This item omits "subsection 41MN(9)", substitutes it with "subsections 41MN(9), (9A) and (9B)".

Item 109 - Subsection 41HB(7) (note)

This item omits "subsection 41MN(9)", substitutes it with "subsections 41MN(9), (9A) and (9B)".

Item 110 - Subsection 41HD(7) (note)

This item omits "subsection 41MN(9)", substitute "subsections 41MN(9), (9A) and (9B)".

Item 111 - Subsection 41MN(9)

This item repeals the existing subsection, and substitutes it with offences relating to breaching a condition of an exemption or approval, or a condition applicable under regulations.

The new subsection (9) creates a fault-based offence with an aggravating factor if a person does an act or omits to do an act and the act or omission breaches a condition of an exemption applicable under regulations made for the purposes of section 41HA or a condition of an approval under section 41HB or a condition applicable under regulations made for the purposes of subsection 41HB(7) or a condition of an approval under subsection 41HD(1), (1A) or (2) and the act or omission has resulted in, will result in, or is likely to result in, harm or injury to any person.

The maximum penalty is imprisonment for 5 years or 4,000 penalty units or both. The notes for this subsection provide that a jury may acquit a person of an offence against this subsection and may convict the person of an offence against subsection (7) instead: see section 53A and refers to section 54B and 54BA in relation to the liability of an executive officer of a body corporate.

Section 54B is intended to apply to executive officers, such as managing directors or Chief Executive Officers, who are directly involved in or participate in the management of a company, and who should be made accountable for the actions of their company where such officers are in a position to influence the company and are aware of breaches by the company of the TG Act but fail to take reasonable action to prevent the breaches. There is significant public harm from the supply of unapproved therapeutic goods which do not comply with a condition of an unapproved supply pathway under the TG Act in Australia caused by corporate offending. Such unapproved therapeutic goods may include vaping goods. The liability of the corporation is not likely on its own to sufficiently promote compliance and have the desired deterrence effect.

The new subsection (9A) creates a fault-based offence if a person does an act or omits to do an act and the act or omission breaches a condition of an exemption applicable under regulations made for the purposes of section 41HA or a condition of an approval under section 41HB or a condition applicable under regulations made for the purposes of subsection 41HB(7) or a condition of an approval under subsection 41HD(1), (1A) or (2). The maximum penalty is imprisonment for 12 months or 1,000 penalty units, or both.

The new subsection (9B) creates an offence of strict liability if a person does an act or omits to do an act and the act or omission breaches a condition of an exemption applicable under regulations made for the purposes of section 41HA or a condition of an approval under section 41HB or a condition applicable under regulations made for the purposes of subsection 41HB(7) or a condition of an approval under subsection 41HD(1), (1A) or (2). The maximum penalty is 100 penalty units.

Item 112 – After subsection 41MNA(2)

This item inserts subsection (2A) after subsection (2) and creates a civil penalty provision if a person does an act or omits to do an act and the act or omission breaches a condition of an exemption applicable under regulations made for the purposes of section 41HA or a condition of an approval under section 41HB or a condition applicable under regulations made for the purposes of subsection 41HB(7) or a condition of an approval under subsection 41HD(1), (1A) or (2).

The maximum civil penalty is 5,000 penalty units for an individual and 50,000 for a body corporate.

Item 113 - Section 53A (after table item 9A)

This item inserts new table item 9B into the table in section 53A of the TG Act. Section 53 provides for alternative verdicts for various offences.

Item 114 - Section 53A (after table item 31)

This item inserts new table item 31 AA into the table in section 53A of the TG Act. Section 53A provides for alternative verdicts for various offences.

Item 115 - Section 54BA (table item 5)

This item inserts "(6)" after "22(2)" in item 5 in the table.

Item 116 - Section 54BA (table item 40)

This item inserts "(9)" after "(5)" in item 40 in the table.

Item 117 - Application of amendments

This item provides that the amendments of the Therapeutic Goods Act 1989 made by this Part apply in relation to acts or omissions that occur on or after the commencement of this Part.

Part 11—Other amendments

Therapeutic Goods Act 1989

Item 118 - After subsection 58(2)

Section 58 provides for export certifications. Subsection 58(1) provides that the Secretary may issue export certification for goods for therapeutic use in humans. Subsection 58(2) then provides that a state or territory must not issue like export certifications.

This item inserts new subsections 58(2A) and (2B), which are analogous to the existing subsections 58(1) and (2). Subsection 58(2A) will permit the Secretary to issue export certifications for vaping goods for use in humans, except goods for which export certifications may be used under subsection 58(1). Subsection 58(2B) will provide that a state or territory must not issue like export certifications.

Consequently, it is intended for export certifications concerning therapeutic vaping goods to be issued under subsection 58(1), and export certifications concerning non-therapeutic vaping goods to be issued under subsection 58(2A).

Additionally, it is intended that the existing subsection 58(3) will apply to the new subsection 58(2A). Therefore, fees may be prescribed in respect of an application for a certification under subsection 58(2A), or the inspection of a manufacturing site if necessary for the purposes of the issue of a certification under subsection 58(2A).

Items 119 and 120 (Amendments to subsection 61A(4) (after paragraph (g) of the definition of protected person and paragraph (h) of the definition of protected person )

Item 119 inserts new paragraph (ga) into the definition of 'protected person' contained in subsection 61A(4) of the TG Act, to provide that the regulations may prescribe kinds of persons who are 'protected persons' for the purposes of subsection 61A(1).

Subsection 61A(1) of the TG Act provides the Commonwealth and protected persons with immunity from civil actions or proceedings in certain circumstances. Relevantly, it provides that no civil action lies against a protected person in respect of loss, damage or injury that is suffered by another person, because of an act or omission of the protected person in connection with their performance or exercise, or purported performance or exercise, of a function, duty or power under the TG Act or regulations. An act or omission in connection with the purported performance or exercise of a relevant function, duty or power includes, for example, an act done in accordance with the purported exercise of a power under the TG Act, but where it is later determined that the decision to exercise that power was of no legal effect because it was infected by jurisdictional error.

Importantly, however, the immunity conferred by subsection 61A(1) of the TG Act does not apply in relation to an act or omission of the Commonwealth or a protected person in bad faith (subsection 61A(2)).

Subsection 61A(4) of the TG Act specifies the kinds of persons who are protected persons for the purposes of section 61A. The list includes, for example, the Minister, the Secretary, persons to whom a power of the Minister or Secretary has been delegated under the TG Act, and persons and officers that the Secretary has authorised to perform certain functions and exercise certain powers under the TG Act and its regulations.

However, the list of protected persons does not include all persons who may perform or exercise a function, duty or power under the TG Act or its regulations. For example, it does not expressly include an officer of the Department to whom powers or functions under the MD Regulations are delegated under regulation 10.5 of those regulations.

Consequently, item 119 amends subsection 61A(4) to provide flexibility to, by regulation, broaden the range of persons to whom the immunity in subsection (1) applies.

This will ensure that, for example, any new category of persons empowered to perform functions under the regulations may be subject to the immunity (by disallowable regulation), without the need for a commensurate amendment to the TG Act.

Item 120 makes a minor, consequential amendment to paragraph (h) of the definition of 'protected person'. Paragraph (h) provides that a 'protected person' includes a person assisting any person referred to in another paragraph of the definition of 'protected person' (i.e. paragraphs (a) to (g)) in certain circumstances. Item 120 expands paragraph (h) to also include a person assisting a person of a kind prescribed as a protected person under regulation made under paragraph (ga).

Items 121 to 123 (Amendments to subsection 62(1), subsection 62(2) and at the end of section 62)

These items amend section 62 of the TG Act to provide flexibility to, by regulation, broaden the range of persons that are protected from criminal responsibility when carrying out certain investigatory actions under the TG Act or its regulations.

Section 62 enables APS employees in the Department to obtain, possess or convey (or facilitate the conveyance of) goods—in circumstances where such conduct would ordinarily be an offence against a Commonwealth law or a state law (which is defined in section 3 of the TG Act as meaning a law of a state, the Australian Capital Territory, or the Northern Territory)—for the purposes of identifying whether the TG Act or its regulations have been complied with.

Enforcement of the vaping reforms will require the engagement and cooperation of state and territory officials (and Commonwealth officials outside of the Department) in assessing compliance with the TG Act and its regulations.

For example, a state or territory official may seize or purchase vaping goods within their jurisdiction, and then arrange for the same to be conveyed to the TGA for testing. As section 62 of the TG Act does not currently apply in relation to such cases, the relevant official may be prohibited from doing so (particularly if the goods contain, or are, prescription medicines).

Consequently, it is necessary to extend the protection that is provided by section 62 so that it also applies to persons other than APS employees in the Department. The amendments made by these items give effect to this measure, by providing flexibility to, by disallowable regulation, prescribe kinds of persons as protected persons.

Specifically, item 123 inserts new subsection 62(3) in the TG Act, which provides that for the purposes of section 62, a protected person means:

•

an APS employee in the Department; or

•

a person of a kind prescribed by the regulations.

Items 121 and 122 make minor, consequential amendments to subsections 62(1) and (2) of the TG Act, by omitting references to "[an] APS employee in the Department" and substituting "[a] protected person".

SCHEDULE 2 – Amendment of the Customs Act 1901

Background

The Customs Act 1901 (the Customs Act) provides for the forfeiture of a range of goods upon importation into Australia. This includes all smuggled or unlawfully imported goods and all prohibited imports. The Customs (Prohibited Imports) Regulations 1956 (the CPI Regulations) prescribe goods as prohibited imports for the purposes of the Customs Act. Since 1 January 2024, vaping goods imported without permission are prohibited imports for the purposes of the Customs Act. Prohibited imports fall within the definition of 'special forfeited goods', and can be seized with or without a warrant in certain circumstances.

Subdivision G of Division 1 of Part XII of the Customs Act sets out a process for dealing with goods which have been seized as forfeited goods. The Customs Act currently requires seized prohibited imports to be stored in an approved place for a minimum of 30 days before they can be disposed of. The Customs Act also requires that a seizure notice be served on the owner of the goods, or if the owner cannot be identified, on the person in whose possession or under whose control the goods were at the time of seizure. The owner or person in possession may make a claim for the return of seized goods. If no claim is made within 30 days after the day the seizure notice is served, the goods are taken to be condemned as forfeited to the Crown.

Existing section 206 provides that certain goods may be dealt with outside of this process. Relevantly, subsection 206(2A) states that where:

•

goods are seized under the relevant provisions of the Customs Act; and

•

the Comptroller-General of Customs is satisfied the goods are a prohibited psychoactive substance, tobacco products or a prohibited serious drug alternative;

then the Comptroller-General may cause the goods to be dealt with in such a manner as he or she considers appropriate (including the destruction of the goods). This can include the immediate destruction of the goods which provides streamlined administrative processes and reduced storage time.

Applying this approach to seized vaping goods will significantly enhance the ability of Australian Border Force officials to effectively deal with imported vaping goods and would significantly reduce the operational burden of implementing the vaping goods reforms.

Effect of the amendments

The Bill has one substantive amendment to the Customs Act that would amend section 206 of the Customs Act to extend the provision's coverage to 'vaping goods' as defined in regulation 5A of the CPI Regulations, and three consequential amendments that would give operational effect to the arrangements for vaping goods.

The substantive amendment will allow the Comptroller-General of Customs to immediately destroy (or otherwise deal with) vaping goods which have been seized as prohibited imports under the Customs Act. The term 'vaping goods' is defined in regulation 5A of the CPI Regulations to capture a vape, a vape accessory, or a vape substance.

Owners of vaping goods destroyed under subsection 206(2B) may have the right to recover the market value of the goods, if they can establish that the circumstances required to trigger the destruction did not exist. If the Comptroller-General deals with goods under subsection 206(2B), within seven days of doing so they must give or publish a notice which identifies the goods, provides details of the manner in which the goods have been dealt with and the reasons for doing so, and sets out the owner's right to seek recovery of the market value.

The amendments to the Customs Act in this Bill would have a positive impact on the Australian Government's ability to effectively regulate vaping goods by empowering the Comptroller-General of Customs to cause vaping goods seized as prohibited imports to be dealt with in a manner he or she considers appropriate, including the immediate destruction of the goods.

Customs Act 1901

The Customs Act provides for the forfeiture of a range of goods upon importation into Australia. This includes all smuggled or unlawfully imported goods and all prohibited imports. The CPI Regulations prescribe goods as prohibited imports for the purposes of the Customs Act.

Prohibited imports fall within the definition of 'special forfeited goods', and can be seized with or without a warrant in certain circumstances.

Schedule 2 to the Bill contains amendments to the Customs Act that will result in a positive impact on the Australian Government's ability to effectively regulate vaping goods by empowering the Comptroller-General of Customs to cause vaping goods seized as prohibited imports to be dealt with in a manner the Comptroller-General considers appropriate, including the immediate destruction of the goods.

Item 1 - Subsection 183UA(1)

This item inserts a new definition of 'vaping goods' into subsection 183UA(1) of Subdivision A of Division 1 of Part XII of the Customs Act, which deals with the powers of officers. Since 1 January 2024, 'vaping goods' imported without permission are prohibited imports for the purposes of the Customs Act.

This 'framework' definition provides that, in Division 1 of Part XII of the Customs Act, 'vaping goods' has the same meaning as in regulation 5A of the CPI Regulations, which currently captures a vape, a vape accessory, or a vape substance.

The reason the definition for this term is in delegated legislation rather than on the face of the Customs Act is that it is vital to have flexibility in the definition, to enable rapid amendments to cater for novel and unanticipated forms of 'vaping goods'. Despite the broad range of 'vaping goods' that are currently prohibited imports under this definition, an attempted importation of goods in novel and unanticipated forms that would be 'vaping goods' but would not readily fit within the current definition is still a possibility and may pose a risk to population health and would also threaten to disrupt the significant achievements that Australia has made in tobacco and vaping goods control to date.

Retaining the definition in delegated legislation is therefore important, as that definition could be readily amended to capture a new range of standards, codes and other international regulatory instruments that may have relevant material applying to emerging developments in the 'vaping goods' industry. It is also important to note that any future amendments to the defined term in delegated legislation would be subject to Parliamentary scrutiny and disallowance.

Item 2 - After subsection 206(2A)

Subdivision G of Division 1 of Part XII of the Customs Act sets out a process for dealing with goods which have been seized as forfeited goods. The Customs Act currently requires seized prohibited imports to be stored in an approved place for a minimum of 30 days before they can be disposed of. The Customs Act also requires that a seizure notice be served on the owner of the goods, or if the owner cannot be identified, on the person in whose possession or under whose control the goods were at the time of seizure. The owner or person in possession may make a claim for the return of seized goods. If no claim is made within 30 days after the day the seizure notice is served, the goods are taken to be condemned as forfeited to the Crown.

Section 206 of the Customs Act concerns goods that may be dealt with outside of the afore-mentioned process. By way of an example, subsection 206(2A) of the Customs Act provides that, if

(a)

goods are seized under the relevant provisions of the Customs Act; and

(b)

the Comptroller-General of Customs is satisfied the goods are a prohibited psychoactive substance, tobacco products or a prohibited serious drug alternative;

then the Comptroller-General may cause the goods to be dealt with in such a manner as the Comptroller-General considers appropriate (including the destruction of the goods).

This item amends section 206 of the Customs Act to insert a new subsection (2B), which would extend the provision's coverage to 'vaping goods'. Specifically, new subsection 206(2B) provides that, if:

(a)

goods are seized under a seizure warrant or under subsection 203B(2) or (2A), 203CA(3) or 203CB(2); and

(b)

the Comptroller-General of Customs is satisfied that the goods are vaping goods that are prohibited imports;

the Comptroller-General of Customs may cause the goods to be dealt with in such manner as the Comptroller-General considers appropriate (including the destruction of the goods).

The manner in which seized vaping goods that are prohibited imports can be dealt with can include the immediate destruction of the goods, providing streamlined administrative processing and reduced storage time.

The purpose of this amendment is to provide authority for regulating 'vaping goods' by empowering the Comptroller-General of Customs to cause 'vaping goods' seized as prohibited imports to be dealt with in a manner the Comptroller-General considers appropriate, including the immediate destruction of the goods. This amendment will significantly enhance the ability of Australian Border Force officials to effectively deal with imported vaping goods and would significantly reduce the operational burden of implementing the vaping goods reforms.

Item 3 - Subsection 206(3)

Subsection 206(3) of the Customs Act requires that, as soon as practicable, but not later than 7 days after the goods referred to in subsection (1), (1A), (2) or (2A) have been dealt with, the Comptroller-General of Customs must give or publish a notice in accordance with subsection (5).

This item makes a consequential amendment to subsection 206(3) and has the effect of extending the requirement under subsection 206(3) to goods that have been dealt with under new subsection 206(2B).

Item 4 - Paragraph 206(5)(c)

Subsection 206(5) of the Customs Act provides that the notice must:

(a)

identify the goods; and

(b)

state that the goods have been seized under a seizure warrant or under subsection 203B(2) or (2A), 203CA(3) or 203CB(2) and give the reason for the seizure; and

(c)

state that the goods have been dealt with under subsection (1), (1A), (2) or (2A) and specify the manner in which they have been so dealt with and the reason for doing so; and

(d)

set out the terms of subsection (6).

This item makes a consequential amendment to paragraph 206(5)(c) and has the effect of extending the notice requirements under that provision to goods that have been dealt with under new subsection 206(2B).

Item 5 - Subsections 206(6) and (7)

This item contains an amendment to both subsections 206(6) and (7) of the Customs Act.

Subsection 206(6) of the Customs Act provides that, if goods are dealt with in accordance with subsection (1), (1A), (2) or (2A), the owner of the goods may bring an action against the Commonwealth in a court of competent jurisdiction for the recovery of the market value of the goods at the time they were so dealt with.

This item makes a consequential amendment to subsection 206(6) to extend the right to recover the market value of seized goods that have been dealt with under new subsection 206(2B).

Subsection 206(7) of the Customs Act specifies the circumstances in which a person's right to recover the market value of seized goods that have been dealt with under section 206 is enlivened.

This item makes a consequential amendment to subsections 206(7) to apply the circumstances in which the right to recover the market value of seized goods, to goods that have been dealt with under new subsection 206(2B).

The purpose of this clause is to permit the owners of 'vaping goods' destroyed under subsection 206(2B) the right to recover the market value of the goods, if they can establish that the circumstances required to trigger the destruction did not exist. If the Comptroller-General deals with goods under subsection 206(2B), within seven days of doing so they must give or publish a notice which identifies the goods, provides details of the manner in which the goods have been dealt with and the reasons for doing so, and sets out the owner's right to seek recovery of the market value.

SCHEDULE 3 – AMENDMENTS OF OTHER ACTS

Industrial Chemicals Act 2019

Item 1 - Section 8

This item inserts the term "vaping goods" into the Simplified Outline of the Industrials Chemicals Act 2019. This ensures that vaping goods are included in the exception of chemicals that are not industrial chemicals, such as chemicals for therapeutic purposes.

Item 2 – Section 9 (after paragraph (d) of the definition of industrial use )

This item inserts new paragraph (da) in section 9 of the Industrial Chemicals Act 2019 to provide that the definition of industrial use means a use other than (or in addition to) use as a vaping good (within the meaning of the TG Act) or in the preparation of such a good.

Public Health (Tobacco and Other Products) Act 2023

Item 3 – Section 64

This item amends section 64 of the Public Health (Tobacco and Other Products) Act 2023 to add a reference to Part 5-1A of the TG Act. New Part 5-1A regulates the advertising of vaping goods, and associated information about vaping goods.

Section 64 provides for the interaction of Part 2.4, Division 1 of the Public Health (Tobacco and Other Products) Act 2023 with Part 5-1 of the TG Act.

Item 4 - Section 64

This item adds a reference to "vaping goods" to section 64 of the Public Health (Tobacco and Other Products) Act 2023. Section 64 currently provides for therapeutic goods and this amendment ensures that vaping goods are also included for the purposes of this section.

Section 64 provides for the interaction of Part 2.4, Division 1 of the Public Health (Tobacco and Other Products) Act 2023 with the TG Act.