Explanatory Memorandum
(Circulated by authority of the Assistant Minister for Citizenship and Multicultural Affairs, the Honourable Julian Hill MP)Attachment A Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Customs Amendment (ASEAN-Australia-New Zealand Free Trade Area Second Protocol Implementation and Other Measures) Bill 2024
The Customs Amendment (ASEAN-Australia-New Zealand Free Trade Area Second Protocol Implementation and Other Measures) Bill 2024 (the Bill) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in the definition of human rights in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Bill
The purpose of the Bill is to amend the Customs Act 1901 (Customs Act) to give effect to the customs obligations arising under the Second Protocol to Amend the Agreement establishing the ASEAN-Australia-New Zealand Free Trade Area (the Second Protocol).
In particular, the Bill will:
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- replace the definition of Certificate of Origin with Proof of Origin under the Second Protocol to allow for a second type of document of origin, a Declaration of Origin, to be produced by approved exporters; and
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- insert verification and record keeping requirements for the exportation of goods to Parties to the Agreement establishing the ASEAN-Australia-New Zealand Free Trade Area (the Agreement) where those goods are claimed to be originating under the Second Protocol.
The Bill provides for the creation of an approved exporter scheme under the Second Protocol and Regional Comprehensive Economic Partnership Agreement (RCEP). The approved exporter scheme allows approved exporters to complete Declarations of Origin in order for importers to claim preferential rates of customs duty under the respective free trade agreements.
The ability for approved exporters to make a Declaration of Origin will streamline the process for Australian exporters who opt into the system and will reduce both time and financial costs related to obtaining Certificates of Origin from third party issuing bodies.
The approved exporter scheme provides administrative benefits to that entity if:
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- the entity nominates itself to participate in the approved exporter scheme; and
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- the Comptroller-General of Customs is satisfied that the entity has satisfied the qualification criteria set out in the Customs (ASEAN-Australia-New Zealand Rules of Origin) Regulations 2009 and the Customs (Regional Comprehensive Economic Partnership Rules of Origin) Regulations 2021 (the regulations).
The approved exporter scheme allows the Comptroller-General of Customs to:
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- approve an entity as an approved exporter subject to conditions prescribed by the regulations;
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- vary, suspend or terminate the approved exporter's status if he or she reasonably believes that the entity has not complied, or is not complying, with any condition prescribed by the regulations or any term or condition specified when granting approved exporter status;
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- not grant an applicant approved exporter status;
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- maintain a public register containing information of a kind prescribed by the regulations in relation to the status of an approved exporter; and
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- prescribe regulations, by legislative instrument, for and in relation to the operation of the approved exporter scheme.
Decisions to vary, suspend, terminate or not grant approved exporter status will be reviewable under by Administrative Review Tribunal (ART).
The Bill also amends the definition of Harmonized System and related provisions for several free trade agreements including the Second Protocol, RCEP, Pacific Agreement on Closer Economic Relations Plus and Malaysia-Australia Free Trade Agreement to ensure that subsequent versions of the Harmonized Commodity Description and Coding System (HS) are incorporated by reference from time to time in the Customs Act.
Human rights implications
This Bill engages:
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- the right to a fair and public hearing, including the preservation of the privilege against self-incrimination under Article 14 of the International Covenant on Civil and Political Rights (ICCPR); and
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- the right to privacy under Article 17 of the ICCPR.
Right to Privacy
Article 17 of the ICCPR prohibits unlawful or arbitrary interferences with a person's privacy. It also prohibits unlawful attacks on a person's honour or reputation. It provides that persons have the right to protection of the law against such interference or attacks. An interference with privacy will not be arbitrary if it is authorised by law or consistent with the provisions, aims and objectives of the ICCPR and reasonable in the circumstances. Reasonableness, in this context, incorporates notions of proportionality, appropriateness and necessity. In essence, this will require that limitations:
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- serve a legitimate objective
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- adopt a means that is rationally connected to that objective and
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- the means adopted are not more restrictive than they need to be to achieve that objective.
A number of amendments in the Bill engage the right to privacy contained in Article 17 of the ICCPR because they require the collection, use and disclosure of commercial and personal information.
Nomination
Under the Bill, the Comptroller-General of Customs may grant approved exporter status if, amongst other things, the entity nominates itself to participate in the scheme. Participation in the scheme is voluntary and will require the entity to disclose information to the Comptroller-General of Customs as part of its nomination.
A nomination made by an entity must be in writing. The nomination will require the entity seeking to participate in the scheme to disclose information that may be personal information. This information will be limited to information identifying the exporter, such as their legal or trading name and business address, and information required to assess the suitability of an exporter for the approved exporter scheme, such as the exporter's prior compliance with the scheme. The collection, use and disclosure of this information will be done in accordance with the Privacy Act 1988 and the Australian Privacy Principles.
Applications for approved exporter status will be supplemented with a privacy notice listing the circumstances in which their personal information can be used, stored and disclosed. It should also be emphasised that it is an opt-in scheme and that non-disclosure methods of certifying preferential origin is also available to exporters.
As part of this nomination an entity will be required to consent to their personal information being collected and disclosed either to the other Parties to the respective agreement or through a public register established. Failure to consent to such sharing will mean they not meet the requirements of the respective agreements. The collection and disclosure of this information will allow the Parties to verify compliance with the approved exporter scheme which then entitles them to preferential rates of customs duty in the importing country.
In most cases entities applying for approved exporter status will be corporations. However, in instances in which the entity is an individual, the right privacy will be engaged in relation to the requirement to provide personal information and consent to its disclosure.
To the extent that an entity is an individual and their name is disclosed to parties to the agreement or through the public register, the right to privacy will be limited. This measure is aimed at the legitimate objective of implementing international obligations that aim to simplify and improve the rules of origin requirements. The scheme makes it easier and less costly for businesses to access the benefits under the Agreement and RCEP. Adopting this measure is rationally connected to that objective because it establishes a scheme to ensure that only exporters who have demonstrated their capacity to comply with origin requirements under the agreements are able to self-certify the originating status of their goods. The limitations this self-nomination mechanism will have on the right to privacy are reasonable, necessary and proportionate to because it is a voluntary to opt into the scheme and there is an alternative mechanism for individuals to obtain certification of the originating status of their goods should they choose not to participate.
Public Register of Approved Exporters
Amendments in the Bill allow the Comptroller-General of Customs to publish and maintain a public register containing certain information on approved exporters. This engages the right to privacy, because the public register may contain information such as:
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- the legal name and address of the exporter
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- the approved exporter authorisation code
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- the issuance date and, if applicable, the expiry date of its approved exporter authorisation and
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- a list of goods subject to the authorisation, at least at the HS Chapter level.
Disclosure of this information is necessary to ensure transparency of the scheme and is set out in Paragraph 15.5 of Annex 3A - Operational certification procedures and Paragraph 3.21.4 of RCEP. It will identify the entities who are participating the scheme so that other parties to the Agreement and RCEP will be able to identify approved exporters from Australia that have been approved as an entity meeting the conditions set out in the Agreement or RCEP.
In most cases entities applying for approved exporter status will be corporations. However, in instances in which the entity is an individual, the right to privacy will be engaged by personal information being published and maintained on the public register.
To the extent that an entity is an individual and their name is disclosed to parties to the agreement or through the public register, the right to privacy will be limited. This measure is aimed at the legitimate objective of implementing international obligations that aim to simplify and improve the rules of origin requirements. The scheme makes it easier and less costly for businesses to access the benefits under the Agreement and RCEP. Adopting this measure, particularly the public register of approved exporters, is rationally connected to that objective because it sets up a scheme to allow importing parties to the agreements to access the register to determine whether an importer has met the necessary conditions to be an approved exporter in Australia. Providing sufficient personal information on a public database is also necessary for an importing country to assess whether the importer has met the necessary conditions to access preferential rates for their goods. Only personal information that is necessary under the agreements will be made publically available on the register. The privacy notice provided to applicants during the application process will advise applicants what particular information will be made public on the register.
The limitations this Public Register of Approved Exporters will have on the right to privacy is reasonable, necessary and proportionate because it will ensure proper governance and transparency of the scheme. Disclosing particular personal information on the public register is vital for Australia to meet its international obligations and non-disclosure of particular details would result in Australia being non-compliant with its international obligations. A fundamental purpose of the approved exporter scheme is to allow importing countries to confirm, on an accessible register, that the exporter of another country has met the necessary conditions to self-certify the preferential origin themselves.
Finally, the amendments do not limit the obligations of the Department under the Privacy Act 1988 and the Australian Privacy Principles. The Department will adhere to the safeguards in the Privacy Act 1988 and Australian Privacy Principles to ensure no unlawful interference with privacy occurs.
Right to a Fair and Public Hearing
Article 14(1) of the ICCPR provides the right a fair and public hearing in civil proceedings as one of the guarantees in relation to legal proceedings. The right to a fair hearing provides that all persons are equal before courts and tribunals and guarantees a fair and public hearing before a competent, independent and impartial court or tribunal established by law.
In most cases entities applying for approved exporter status will be corporations. However, in instances in which the entity is an individual, the right to equality and non-discrimination will be engaged in relation to a decision of the Comptroller-General of Customs under the approved exporter scheme.
The Bill promotes this right because it provides for external merits review of the certain decisions by the Comptroller-General of Customs under the scheme. These include:
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- a decision of the Comptroller-General of Customs to refuse to grant approved exporter status; and
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- a decision of the Comptroller-General of Customs to vary, suspend or terminate the approved exporter status.
This supports the right to a fair hearing as entities may apply to the Administrative Review Tribunal to seek an independent review of certain decisions made by the Comptroller-General of Customs. An internal review mechanism will be available for entities to seek an initial review of these decisions.
Preservation of the privilege against self-incrimination
Article 14.3(g) of the ICCPR sets out that "Everyone shall be entitled to the following minimum guarantees, in full equality... ...not to be compelled to testify against himself or to confess guilt".
In most cases entities applying for approved exporter status will be corporations. However, in instances in which the entity is an individual, the right to equality and non-discrimination will be engaged in relation to a decision of the Comptroller-General of Customs under the approved exporter scheme.
New sections 126AKDC and 126AKDD of the Customs Act will provide that an authorised officer may require a person:
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- who is subject to record keeping obligations under regulations made for the purposes of section 126AKDB to produce to the officer such of those records as the officer requires, and
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- who is an exporter or producer of goods that are exported to a Party and claimed to be originating goods, in accordance with Chapter 3 of the Second Protocol, for the purpose of obtaining a preferential tariff in the Party to answer questions in order to verify the origin of the goods.
Sections 243SA (Failure to Answer Questions) and 243SB (Failure to produce documents or records) of the Customs Act are strict liability offences and subject to a penalty of 30 penalty units.
Section 243SC (Preservation of the privilege against self-incrimination) of the Customs Act provides that where a person would be required:
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- to answer a question under section 243SA of the Customs Act or
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- produce a document or record under section 243SB of the Customs Act
That person need not comply with the requirement if complying would tend to incriminate the person; or result in further attempts to obtain evidence that would tend to incriminate the person.
That is, the Custom Act provides protections for the preservation of the privilege against self-incrimination and this new measure does not limit these protections.
Conclusion
The Bill is compatible with human rights because it promotes the right to a fair and public hearing including the preservation of the privilege against self-incrimination and to the extent that it limits the right to privacy, those limitations are reasonable, necessary and proportionate in achieving a legitimate objective.