Nomad Tackle PTY LTD and Australian Trade and Investment Commission (AUSTRADE)

The Administrative Appeals Tribunal heard reviews concerning applications for export market development grants made by Nomad Tackle Pty Ltd (Nomad) against decisions of the Australian Trade and Investment Commission (AUSTRADE). The dispute centred on Nomad's eligibility for grants under the *Export Market Development Grants Act 1997* (Cth) for marketing expenses incurred in relation to its fishing lures, which were manufactured in China. Nomad had established a wholly-owned United States subsidiary, Nomad Design Tackle Incorporated (Nomad USA), to import its products into the US and avoid import duties.

The primary legal issues before the Tribunal were whether the expenses claimed by Nomad were eligible for grant funding, specifically considering section 46 of the *Export Market Development Grants Act 1997*. This section provides that a grant is not payable if the applicant has been paid or is entitled to be paid the expenses by another party. The Tribunal was required to determine if the service fees charged by Nomad to Nomad USA, which were designed to repatriate profits to Australia, constituted a reimbursement or entitlement to be paid, thereby disqualifying Nomad from receiving the grant.

The Tribunal reasoned that the arrangement between Nomad and Nomad USA, where Nomad charged its subsidiary a service fee at "cost plus 2%" which precisely matched the expenses claimed for the EMDG grants, indicated that Nomad had effectively been reimbursed. The Tribunal found that the amounts invoiced and received from Nomad USA exactly corresponded to the EMDG claimed expenses, and that these were not genuine licence fees as argued by Nomad. Consequently, the Tribunal concluded that Nomad had been paid or was entitled to be paid these expenses by its subsidiary, meaning the conditions of section 46 of the Act were met.

The Tribunal affirmed Austrade's decision that no grant was payable to Nomad for the 2018/2019 and 2019/2020 grant years. The Tribunal found that the expenses claimed by Nomad were effectively recharged to its US subsidiary, Nomad USA, and therefore Nomad had been reimbursed or was entitled to be reimbursed for these expenses, rendering them ineligible for an export market development grant.