New legislation sets agenda for Customs & Trade, and Transport industries in 2023

18 January 2023

The Australian Federal Parliament has been busy with several critical issues since coming into office in the second half of 2022, including the introduction of new legislation which will be of interest to many in the Customs & Trade, and Transport industries.

A version of this article was first published by The DCN in January 2023.

In several instances this has included the re-introduction of legislation which was before the previous Parliament but lapsed as it had not passed before that Parliament was dissolved prior to the last federal election.

A rise in the value of penalty units

The rise in the cost of living is not confined to the consumer price index. Legislation has recently passed through Federal Parliament increasing the value of a ‘penalty unit’ from $222 to $275 per unit from 1 January 2023. Many of the offences to which those in industry are exposed (including infringement notices) are levied by way of multiples of penalty units. Those holding insurances against such liabilities should check with their insurers that their coverage is unaffected by this increase. Further, those providing services in industry should also advise clients that the value of penalty units has increased which affects their liability and the extent of the indemnity they will be providing to the service providers will also increase.

The ‘controlled trials’ legislation

One of the fundamental problems associated with the ‘trade modernisation agenda’ is where modernisation proposals cannot be tested, as they would require parties to operate outside of the terms of the Customs Act 1901 (the Act). The question arose as to how to properly test those proposals without compromising the essential aims of the Act to preserve border security and not compromise the collection of revenue.

A method to overcome this limitation was the creation of new ‘controlled trials’ legislation. The legislation would allow approved or invited parties to engage in trials of revised procedures outside of the terms of certain parts of the Act. Legislation to permit such controlled trials was introduced into the previous Federal Parliament but lapsed as the Parliament was dissolved.

The new Federal Government has re-introduced the former Customs Amendment (Controlled Trials) Bill 2021, which is now called the Customs Legislation Amendment (Controlled Trials and Other Measures) Bill 2022 (the Bill) and will move through the parliamentary process. Once enacted the Bill will include a new ‘Part XB – Controlled Trials’ comprising sections 179A to section 179L of the Act together with several other amendments to the Act, the Customs Tariff Act 1995 and the Customs Regulation 2015. Essentially, the new arrangements will allow the Comptroller-General of Customs (and not a delegate) to make rules for the establishment of a controlled trial, the term of the rule (no more than 12 months) and the qualifications for parties to be involved in the controlled trial.

The industry remains interested to see the passage of the Bill and the way in which it will be implemented in relation to each of the relevant provisions. The relevant government agencies are yet to determine which areas may benefit from the controlled trials, who may be allowed to undertake the trial and which of the controlled trials are moved forward for use. This new process will allow some trade modernisation advances to be tested and adopted.

The ‘forced labour’ legislation

Andrew Hudson, Customs & Trade Partner, has previously written about legislation introduced into the previous Federal Parliament seeking to ban goods which are the product, in part or in whole, of forced labour. The final iteration of those movements was the introduction of the Customs Amendment (Banning Goods Produced by Forced Labour) Bill 2021 (Forced Labour Bill 2021) before the Senate to create a new Section 50A to the Act as follows: “The importation into Australia of goods produced or manufactured, in whole or in part, through the use of forced labour (within the meaning of the Criminal Code) is prohibited absolutely.”

That legislation did not provide detail on the process, including whether the Australian Border Force would be given powers like those held by the US Customs and Border Protection to seize items believed to be in breach of the provision. Additionally, it did not set out whether a ‘community protection question’ would be added to a full import declaration stating whether the goods were (or were not) the product of forced labour, in part or in whole.

The legislation has been introduced into the Senate again as Customs Amendment (Banning Goods Produced by Forced Labour) Bill 2022 (Forced Labour Bill 2022). The legislation replicates the provisions of the previous Forced Labour Bill 2021 and contains similar commentary on its rationale in the associated explanatory memorandum. However, as before, it does not address the wider issue of the regulatory framework which would support the imposition of the new provision. The question remains whether the current Federal Government will move the Forced Labour Bill 2022 into the House of Representatives for further consideration and movement, or will wait the completion of the current review of our Modern Slavery Act 2018, which included reference to the need to consider reporting and handling of imported goods.

On the basis that the review may have an impact on the clearance of goods at the border, the International Freight Forwarders and Customs Brokers Association of Australia (IFCBAA) made a submission to the review that if there are any border implications, freight forwarders and licensed customs brokers should bear no responsibility should the goods prove to be the product of forced labour. The exception to this would be if the freight forwarder or licensed customs broker has acted recklessly or deliberately in allowing offending goods to be imported.

The outcome of the issue is far from clear. However, it is instructive that the US has current legislation on the issue, the EU is moving on the issue and Australia has previously been at the forefront of the modern slavery/forced labour debate. Based on what has been represented by the current federal government before taking office, the better view is that we are likely to see some form of import controls on goods believed to be the product, in part or in whole, of forced labour. Additionally, there should also be controls on the export of goods which have been found to include products of forced labour.

Increase in biosecurity penalties

Late in September 2022, the Biosecurity Amendment (Strengthening Biosecurity) Bill 2022 (Strengthening Biosecurity Bill 2022) was introduced into the Senate to make amendments to the Federal Biosecurity Act 2015 to “manage the risk of pests and diseases entering, emerging, establishing or spreading in Australian territory and causing harm to animal, plant and human health, the environment and the economy”. The Strengthening Biosecurity Bill 2022 has now passed through the Federal Parliament and received Royal Assent and is now Act 76 of 2022.

The Act has several impacts, including:

  • increasing protection from disease and pests by setting additional requirements for persons entering Australia, and imposing additional controls on the entry of goods including restricting behaviours and reporting requirements;
  • expanding requirements for pre-arrival reporting of vessels and aircraft;
  • enabling broader information handling and sharing in government; and
  •  increasing significantly civil and criminal penalties for non-compliance up to 1000 penalty units.

This increases obligations and associated risks for those in the supply chain, including for service providers arranging the movement of cargo. Those in industry already subject to the current provisions will need to review the changes, adjust their compliance management processes, advise clients of the increased risks and consult their insurance providers that coverage will increase to cover the increased liabilities.

Legislative and other developments on the horizon for 2023

There are also legislative and other developments likely to take place later in 2023. These include:

  • the commencement of the Australia-UK Free Trade Agreement;
  • the anticipated reform of the anti-dumping regime including the availability of ‘advices’ to clarify uncertainty on whether goods are subject to dumping or countervailing duties;
  • the outcome of the Productivity Commission review of the maritime logistics system and the response from the federal government including any new powers to the Australian Competition and Consumer Commission (or other agency) considering submissions to the Productivity Commission and the ACCC Container Stevedoring Monitoring Report 2021-22;
  • the commencement of recent amendments to the Unfair Contracts Act including rendering such contracts both unenforceable and illegal; and
  • the outcome of the promised review of the tariff concession system.

Andrew Hudson and the Customs & Trade team look forward to engaging with industry on these and other developments throughout 2023.

Contact us

To discuss issues relating to Customs legislation or assistance in addressing any current trade or transport issues your business is facing, please contact our Customs & Trade team.