EXPLANATORY STATEMENT
DEPARTMENT OF AGRICULTURE, FISHERIES & FORESTRY
AUSTRALIAN MEAT AND LIVE‑STOCK INDUSTRY
(HIGH QUALITY BEEF EXPORT TO THE EUROPEAN UNION) ORDER 2008
1. Statutory basis
1.1 Under the Australian Meat and Live‑stock (Quotas) Act 1990 and the Australian Meat and Live‑stock Industry Act 1997, the Secretary of the Australian Government Department of Agriculture, Fisheries and Forestry (DAFF) may, where restrictions are imposed on exports of Australian meat, establish a scheme to allocate quotas among the holders of export licences.
1.2 This order is made under section 17 of the Australian Meat and Live‑stock Industry Act 1997.
2. Background to order
2.1 The European Union (EU) each financial year, commencing 1 July, allows Australia to ship a quantity of high quality beef (HQB) to the EU under a country-specific quota.
2.2 DAFF issues an order each year for the exports of high quality beef in the coming year, being, for the purpose of this order, from 1 July 2008 to 30 June 2009.
3. Summary of order
3.1 This order explains the method by which quotas to export HQB will be allocated among licensed exporters.
3.2 To be eligible for the allocation of quota, licensed exporters must source product from EU-accredited meat processing plants.
3.3 Standard quota for 2008/2009 will be allocated on the basis of recorded shipments into the EU HQB market during 2007/2008.
3.4 The minimum quota allocation is one (1) tonne.
3.5 Provision has been made to accommodate potential new entrants to the EU market by setting aside an amount from the total quota amount. The amount set aside may be allocated for this purpose, after consideration of individual exporters’ applications for such entitlement, by the Secretary of DAFF. Guidelines for this allocation have been prepared by DAFF in consultation with the Australian Meat Industry Council (AMIC). Any amount of quota not used for this purpose will be redistributed to existing quota holders for use during 2008/2009.
4. Consultation
4.1 The administrative arrangements for meat export quotas generally, including EU HQB arrangements, have been developed in consultation with industry.
4.2 The Office of Best Practice Regulation has provided an exemption from the preparation of a Business Cost Calculator Report or Regulatory Impact Statement on the basis that amendments made by this order have a low impact on business and impose no or low compliance costs (OBPR ID 9569).
5. Explanation of sections under the Order
5.1 Part 1 Preliminary
Section 1 – Name of order. This section provides for how the Order is to be cited.
Section 2 – Commencement. This section provides that the Order commences on the day after registration on the Federal Register of Legislative Instruments. The order was made in advance of the commencement of the quota year to permit eligible exporters to receive an allocation of quota entitlement and ensure relevant export certificates were issued prior to the arrival of initial consignments at destination ports in time for the beginning of the 2008/2009 quota year (1 July 2008).
Section 3 – Definitions. This section provides for a number of definitions of terms used in the Order.
Section 4 – Interpretation – Time. This section details the legal time (in the Australian Capital Territory) in force relative to, and referred to in, the Order.
5.2 Part 2 Prohibition of exports
Section 5 – No export without approval and certificate. This section provides that an eligible exporter may export quota meat to the EU only if DAFF’s Quota Administration and Statistics Unit has issued an approval and a quota certificate for export. The prohibition on export is effected by Section 5 of the Australian Meat and Live-stock (Quotas) Act 1990. Prior to 4 March 2009, a quota entitlement must be held by the exporter to be eligible for approval. On and after 4 March 2009, approvals will be granted by the Secretary so long as the conditions for approval have been met, on a consignment by consignment basis.
5.3 Part 3 EU quota entitlement
Division 1 – Overview of Part
Section 6 – What this Part does. This section explains what Part 3 does, i.e., how EU HQB quota is obtained by individual exporters and how to work out an EU HQB quota that will have effect for 2008/2009.
Division 2 – Allocation of EU quota entitlement
Section 7 – Standard EU quota entitlement. This section is central to how an exporter’s quota allocation is calculated. The formula used to determine the standard allocation is based on Australia’s country-specific quota specified by the European Commission (EC), that is, 7,150,000 kilograms shipped weight for 2008/2009. From that amount 500,000 kilograms is deducted (to provide for non-standard quota allocation, see Section 8) giving a total of 6,650,000 kilograms shipped weight as the amount to be divided among eligible exporters.
The total quota, less non-standard quota, is multiplied by the total of all recorded HQB shipments to the EU for 2007/2008 by that exporter (ERS), divided by the sum of recorded shipments from all exporters (TRS) (see formula below).
An example of how a quota allocation is worked out is as follows. The quota amount (less 500,000 kilograms) to be allocated is 6,650,000 kilograms. Company X has exported 200,000 kilograms in the 12-month period from 1 July 2007. The total amount of eligible HQB shipped by Australia to the EU in that period was 6,995,496 kilograms shipped weight. Company X’s quota allocation is calculated as follows ‑
200,000 (ERS) divided by 6,995,496 (TRS) = 0.028589
then
0.028589 multiplied by 6,650,000 = 190,117 kilograms shipped weight
Company X’s quota allocation = 190,117 kilograms shipped weight for 2008/2009.
Section 7(4) provides that if the quota allocation entitlement is worked out to be less than one (1) tonne, then that entitlement is disregarded and there is no quota entitlement in that case.
Section 7(5) provides that the Secretary must give a notice to exporters allocated standard EU quota entitlement that states the amount of quota meat the exporter is allowed to export under the quota entitlement.
Section 8 – Amount of non-standard EU quota entitlement to be allocated. This section states that the Secretary of DAFF may not allocate more than 500 tonnes of the access amount as Non-Standard Quota.
Section 9 – Non-standard EU quota entitlement. This section details the method and eligibility for allocation of non-standard quota.
Up to 500 tonnes of the access amount (7,150 tonnes) is set aside for possible allocation as non-standard quota for 2008/2009.
Applications for non-standard quota entitlement must be in writing and must be submitted before the end of 30 April 2008.
Eligibility is determined by an applicant’s previous allocation of non-standard quota of 150 tonnes or more, and the applicant’s corporate relationship with entities previously allocated standard or non-standard quota.
A provisional entitlement for applicants will be determined by dividing the 500 tonnes of available non-standard quota evenly amongst eligible applicants. The maximum allocation of non-standard quota to a single applicant is 150 tonnes.
Actual allocation will differ from the provisional allocation, and be the lesser amount, if:
- The provisional allocation is greater than the amount that applicant applied for; or
- The provisional allocation to any applicant, including any standard quota derived from an applicant’s allocation of standard or non-standard quota for 2007/2008, is greater than 150 tonnes.
Any non-standard quota remaining after allocation will be distributed on a pro rata basis to those standard quota recipients who did not receive 150 tonnes in 2008/2009.
All meat exporters will be notified of the process for applying for non-standard quota entitlement to allow for receipt of applications by the cut-off date of 30 April 2008.
The Secretary must provide a notice to the exporter notifying them of the amount of non-standard quota allocated to them.
Division 3 – Cessation and transfer of EU quota entitlement
Section 10 – When unused EU quota entitlement ceases to have effect. This section provides that before 2 March 2009 an eligible exporter must give to DAFF a notice of its intention to use or relinquish its remaining quota. All eligible exporters who have uncommitted quota will be notified by DAFF of their quota positions prior to 2 March 2009 to allow those exporters to commit their quota. The unused EU HQB quota ceases to have effect after 5:00 pm on 2 March 2009 and a note explains that any eligible exporter may apply for approval to export against that unused quota under Section 14.
Section 11 – Transfer of standard EU quota entitlement. This section describes the conditions applying to the transfer of standard quota. An eligible exporter may transfer EU HQB quota entitlement to another exporter licensed to export to the EU and must notify DAFF of the details of the transfer by advising the names of the transferor, the transferee and the amount of quota entitlement to be transferred.
Section 11(2) makes it clear that non-standard EU quota entitlement and entitlement that has ceased to have effect under Section 10 may not, in any way, be transferred.
5.4 Part 4 Approvals
Section 12 – Definitions. This section outlines definitions of terms used in this part.
Section 13 – How to obtain approval for exports. This section sets out the mechanics of how an eligible exporter goes about applying for an approval to export quota meat for entry to the EU from 1 July 2008. Subsection 13(4) requires the Secretary to provide an approval if the eligible exporter lodges an application for the approval under Section 13 and that exporter has sufficient quota left in its EU HQB quota account. Approval can only be given, and an EU HQB certificate issued (see Part 5), on application. For a consignment, an exporter can access the lower tariff rate only with an approval and an EU HQB certificate for that consignment, subject to Section 5 of the Order.
Section 14 – Approval to export from unused quota. This section sets out the mechanics of how any beef quota that is not used before 4 March 2009 is dealt with. An exporter may apply and the Secretary must give approval to export a consignment of quota meat if the application is lodged in accordance with this section and the total weight already approved for export by all exporters is not greater than the Access Amount (the total amount permitted for export to the EU under the quota for 2008/2009). This section is in place to provide the maximum opportunity for utilisation of the quota allocated to Australia by the European Commission (EC). Applications for approval are dealt with on a first-come first-served basis.
Section 15 – Duration of approvals. This section specifies the period for which an approval is valid. For approvals to export given before 4 March 2009, the approvals have a life of three (3) months. Approvals to export from quota that has ceased to have effect under Section 10 have a shorter life of only four weeks.
Section 16 – How to work out how much quota meat an exporter has exported. This section sets out how much quota meat an exporter is taken to have exported and describes a number of contingencies (such as where a quantity of quota meat actually in a consignment is less than the quantity stated in the approval for export) and what is to occur in the event of those contingencies. For example, if the amount shipped is less than the amount approved by the Department, the quota holder retains the difference in their quota account, subject to conditions set out in the order. A number of dates are also specified.
5.5 Part 5 Certificates
Section 17 – How to obtain a certificate. This section sets out the procedure that must be followed by an exporter to obtain a certificate of authenticity for entry to the EU, for each consignment that the eligible exporter intends to ship within its quota allocation. The procedure is typical of quota management arrangements administered under the Australian Meat and Live-stock (Quotas) Act 1990.
Section 18 – Certificates obtained before 1 July 2008. This section describes the validity of any certificates issued before the commencement of the 2008/2009 quota year.
Section 19 – When certificates cease to have effect. This section confirms that certificates issued to an exporter will cease to have effect if they are not accepted for entry into a member country of the EU before 1 July 2009.
5.7 Part 6 Miscellaneous
Section 20 – Where to send notices and documents. This section specifies contact details of DAFF in respect of relevant notices and documents to do with this order.
Section 21 – Approved forms and authorised officers. This section provides that the Secretary of DAFF may approve forms and officers for the purposes outlined in this Order.
Section 22 – Australian Meat and Live-stock Industry (High Quality Beef Export to the European Union) Order 2007 – repeal. This section confirms the repeal of the order related to the export of HQB to the EU during 2007/2008. However, exports to the EU before the end of 30 June 2008 remain subject to the Australian Meat and Live-stock Industry (High Quality Beef Export to the European Union) Order 2007.
Section 23 – Cessation of effect of Order. This section specifies that this Order ceases to have effect at the end of 30 June 2009.