Recent amendments to Australia’s customs laws have made significant changes to who can work in licensed premises — such as warehouses, depots and bond stores — with a strong focus on bolstering supply chain security.
The Customs Amendment (Strengthening and Modernising Licensing and Other Measures) Act 2024 (Customs Amendment Act), which was passed last year and came into effect on 5 March 2025, introduced significant changes to the Customs Act 1901 (Customs Act), bringing reform to areas such as supply chain security, trade digitalisation and licensee obligations.
Our latest Transport & Logistics alert examines the enhanced ‘fit and proper person’ test and the stricter licensing criteria that have been introduced for licensed premises such as warehouses and depots. Readers should keep in mind that, while there is some overlap, the licensing requirements for licensed premises are separate from those that regulate licensed customs brokers (LCBs).
These reforms, informed by the Federal Government’s earlier Review of Customs Licensing Regimes report, aim to modernise trade operations, streamline compliance, and combat criminal infiltration in Australia’s international supply chain.
What is a ‘licensed premises’?
Under the Customs Act, a ‘licensed premises’ is a place approved and licensed by the Australian Border Force (ABF) where imported or exported goods can be lawfully stored, examined, or processed while remaining under customs control.
Enhanced ‘fit and proper person’ test
A cornerstone of the Customs Amendment Act is the strengthened ‘fit and proper person’ test, detailed in amendments to Section 86 of the Act, which now applies more rigorous and wide-ranging restrictions upon individuals and entities involved in warehouse operations.
The updated test applies to not only licence holders, but also those participating in the management, control, or operations of licensed warehouses, whether or not they are physically present at the facility. While LCBs are prohibited under their licence conditions from lodging import declarations while overseas, there appears to be no direct restriction on operators of licensed premises directing such operations while overseas. It remains to be seen whether the ABF will move to restrict such activities.
Under the Customs Amendment Act, a person is deemed to be participating in the management of control of the licensed premises if the person has authority to:
- direct the operations, or an important or substantial part of the operations of the depot/warehouse;
- direct the activities of the depot/warehouse; or
- remove the goods from the depot/warehouse.
The Comptroller-General of Customs must now consider the following broader range of factors when assessing whether a person or company is fit to operate in a licensed warehouse:
- Criminal convictions ― individuals must disclose convictions for offenses under the Customs Act or other Commonwealth, State, or Territory laws punishable by imprisonment for one year or more, committed within 10 years before the latest licence renewal or application.
- Transport security identification ― the updated test includes whether a person has been refused a transport security identification card or had such a card suspended or cancelled within the same 10-year period.
- Company integrity ― for companies holding warehouse licences, the test evaluates the company’s compliance history, including convictions for offenses against the Customs Act or other laws punishable by fines of $5,000 or more, as well as the fitness of directors
- Operational experience ― the amendments introduce a new requirement to assess the experience of licence holders, partners, company directors, and other personnel in managing or performing operations related to goods under customs control. This ensures that those involved have the competence to maintain compliance and security.
These measures aim to prevent risks such as organised crime or other nefarious elements infiltrating the supply chain.
Impact on who can work in licensed premises
The expanded ‘fit and proper person’ test directly affects who can work in licensed warehouses, particularly in roles involving management, control, or operations. While the amendments do not impose blanket restrictions on worker categories, they introduce the following stringent eligibility criteria:
- Background checks ― the legislative reforms facilitate checks on whether individuals have failed security assessments, which could bar them from roles in licensed warehouses.
- Labour hire and contractors ― the inclusion of ‘persons participating in operations’ extends the fit and proper test to labour hire workers and contractors. This is a direct response to vulnerabilities identified by Operation JARDENA, which highlighted risks of criminal infiltration through temporary or third-party staff.
- Experience requirements ― new provisions require that licensed premises personnel have relevant experience in warehouse operations, such as handling goods under customs control or using digital systems like the Integrated Cargo System (ICS). This may exclude inexperienced workers from key roles unless they receive adequate training.
- Document requirements ― under these reforms employees at licensed premises must provide their employer and the ABF with identity verification, a completed Fit and Proper consent form (Form B1555), police and work eligibility checks, and security identification documentation within specified timeframes.
These changes mean that warehouse operators must carefully vet all staff, from directors to casual workers, to ensure compliance with the updated legislation and ABF requirements.
Other ABF powers
The Customs Amendment Act also strengthens the ABF’s authority to enforce compliance in licensed warehouses. The reforms allow the ABF to issue directions related to processes, commercial documentation, and licensing boundaries for goods under customs control. Failure to comply with these directions is an offense, with penalties of up to 120 penalty units for intentional non-compliance and 60 penalty units for a strict liability offence.
This places additional pressure on warehouse operators to employ staff who can adhere to these directives and implement internal policy and standard operating procedures to ensure compliance.
The ABF can also suspend or cancel a warehouse licence if a person involved in operations is deemed unfit under the renewed test. For licences covering multiple warehouses, the ABF may vary the licence to exclude a specific facility if compliance issues arise, without cancelling the entire licence This flexibility ensures that non-compliant personnel or operations at one site do not disrupt broader operations. The changes also give the power to the ABF to at any time, gain access to and enter, if necessary, by force, any place covered by a depot licence and examine any goods at the place.
While already a requirement under existing licence conditions, it is worth highlighting that licensed premises must also retain all commercial and customs-related records relating to goods received into the depot for a minimum of five years.
Clearly, legislators have expressed a strong intent to give the ABF all the powers necessary to combat criminality in the supply chain, including measures that some operators of licensed premises may potentially view as heavy-handed.
Key takeaway
Businesses and individuals in the transport and logistics industry dealing with licensed premises should make sure that their processes are reviewed and updated to comply with the changes introduced in the Customs Amendment Act. This may include seeking background information for employees and developing procedures to hold such information and preserve the privacy in that information. Unfortunately, such information may be subject to cyber attack.
Further information with respect to these legislative reforms can be found in Australian Customs Notice No. 2025/07 which can be downloaded here.
We had previously written about proposed changes to the licensed premises regime in an article from 2022 which readers can view here.
Contact us
If you are a transport and logistics company or individual and need more information about the recent reforms, including the ‘fit and proper person’ test and the stricter licensing criteria that have been introduced for licensed premises, please contact a member of our Transport & Logistics group.
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