House of Representatives

Customs Legislation Amendment Bill (No. 1) 2002

Second Reading Speech

Mr Slipper (Parliamentary Secretary to the Minister for Finance and Administration)

I move

That this bill be now read a second time.

The Customs Legislation Amendment Bill (No. 1) 2002 contains amendments to the Customs Act 1901, the Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001 and the Passenger Movement Charge Collection Act 1978.

The bill continues the process of harmonising customs offences with the Criminal Code; restores the way imported goods are valued to make it consistent with Australia's international trade obligations; improves customs border security measures by allowing seizure of certain goods in the Torres Strait and providing for simplified reporting of re-mail; and makes a number of amendments as a result of the Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001.

The bill also makes minor changes to the exemptions available under the Passenger Movement Charge Collection Act.

First, the bill contains amendments to offence provisions in the Customs Act to make them consistent with amendments to other customs offences made by the Law and Justice Amendment (Application of the Criminal Code) Act 2001.

The amendments will ensure that, where a fault element is not required, offences are expressly described as strict liability offences.

The amendments will also redraft some offences to clarify that an exception to the offence is not an element of the offence to be proved but can be raised as a defence.

The bill also provides for amendments to ensure consistency in the way financial penalties are expressed in the Customs Act by replacing references to dollar amounts with the equivalent penalty units.

The next set of amendments deals with the provisions for determining the customs value of imported goods for the purposes of assessing the duty payable.

The full Federal Court in CEO of Customs v. AMI Toyota Ltd held in September 2000 that the warranty component of the price paid for imported vehicles should be deducted from the customs value for the purpose of assessing duty.

The government considers that decision to be inconsistent with the World Trade Organisation Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, to which Australia is a party.

The WTO valuation agreement requires the customs value of imported goods to be the total of payments made for the goods, with specific exceptions.

Those exceptions do not cover payments for warranty costs.

The reasoning of the full Federal Court is potentially applicable to the valuation of a wide variety of goods.

The amendments will align the government's policy objective with the WTO valuation agreement by clarifying that the warranty component of the price paid for imported goods is included in the customs value.

A transitional provision included in the bill ensures that these amendments affect only the valuation of goods entered for home consumption after the date of commencement of the amendments.

The next set of amendments will insert a power to seize without warrant prohibited imports and prohibited exports found on board certain vessels in the Torres Strait Protected Zone established under the Torres Strait Treaty 1978.

Traditional inhabitants of the Torres Strait using vessels in the conduct of traditional activities in the Torres Strait Protected Zone do not have to comply with the normal customs reporting requirements when travelling between Papua New Guinea and Australia.

However, to maintain control over the movement of prohibited imports and prohibited exports into and out of Australia, Customs officers intercept and board these vessels.

Under current legislation, if prohibited goods are found on a vessel, an application for a seizure warrant must first be made to a magistrate.

This poses considerable operational and safety problems until the warrant is obtained.

The amendments will allow for the seizure of prohibited imports and exports without a warrant in these circumstances.

Customs has consulted with and received support from the Torres Strait Regional Authority for this proposal.

The bill also proposes to amend the cargo reporting provisions for simplified arrangements for the reporting of cargo known as `re-mail'.

Re-mail relates to bulk business mail such as periodic newsletters, bank statements and subscription publications.

The nature of re-mail items, as defined, is such that the potential for them to harbour prohibited goods is low.

To require standard customs reporting of detailed data for this class of mail is considered unnecessary.

It is therefore proposed to amend the act to enable a person who registers as a re-mail reporter to provide fewer details for the report of re-mail cargo.

The bill also contains amendments to the Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001.

The provisions of that act are to commence by proclamation within a two-year period dating from royal assent.

The trade modernisation act received royal assent on 20 July 2000; therefore all provisions must commence by 20 July 2003.

Many provisions of the trade modernisation act depend directly or indirectly on the introduction of Customs's new cargo management computer system-the integrated cargo system.

The two-year 'proclamation period' was to allow sufficient time for the trading community to be ready for the procedural and computer system changes that the amendments support.

However, since enactment it has become apparent that the trading community may not be ready to use the integrated cargo system by July 2003.

To avoid uncertainty for industry, the bill therefore allows up to a further one year (until 20 July 2004) for the relevant provisions to commence.

The bill also amends the trade modernisation act to allow the repeal of the provisions in the Customs Act that govern the operation of Customs's current cargo management computer systems to commence on different days.

Currently the trade modernisation act requires all those provisions to be repealed on the same day.

Given the scale of change involved in the replacement of the current systems with the integrated cargo system, Customs intends, in consultation with industry, to introduce the new system in a phased manner.

The bill also includes some minor and technical amendments to the trade modernisation act, the majority of which are to more closely align some of the provisions to the development of the new computer systems.

Finally, the bill clarifies an existing exemption to the passenger movement charge as it applies to persons making more than one departure from Australia while on a journey that incorporates both air and sea legs.

The bill also extends the exemption from the passenger movement charge to the small number of persons covered under the Overseas Missions (Privileges and Immunities) Act 1995.

I commend the bill to the chamber and present the explanatory memorandum.

Debate (on motion by Dr Lawrence) adjourned.