EXPLANATORY STATEMENT
Comptroller-General of Customs Instrument of Approval No. 1 of 2015
Customs Act 1901
Background
New Part XA of the Customs Act 1901 (the Act) establishes the regulatory framework for the Australian Trusted Trader Programme (Programme). A pilot phase of the Programme commenced on 1 July 2015 and is intended to test and refine processes with a limited number of participants for a period of 12 months. From 1 July 2016, it is intended that the Programme will be fully operational and open to all participants in the international supply chain.
The Programme introduces a differentiated trust-based framework to streamline border clearance processes for entities that meet or exceed international supply chain security and trade compliance standards. This is consistent with the World Customs Organization Standards to Secure and Facilitate Global Trade (WCO SAFE Framework) which promotes:
- supply chain security and trade facilitation at a global level to allow certainty and predictability of trade moving across international borders; and
- standards that enable a harmonised and integrated approach to supply chain management for all participants in the international supply chain.
Participation in the Programme is voluntary and will allow entities such as importers, exporters, customs brokers, freight forwarders and transport companies to nominate themselves to participate in the Programme and become an Australian Trusted Trader.
The regulatory framework for the Programme consists of three elements:
- The Act – which establishes the Programme and provides the necessary heads of power to implement key principles of the Programme;
- Rules – a legislative instrument which will set out details for and in relation to the operation of the Programme (including, amongst other things, qualification criteria, conditions of participation and benefits that may be made available to an entity); and
- Agreements – which will set out further detail of the benefits that the entity qualifies for, detail how certain benefits will apply to that entity and any terms and conditions specific to that entity’s participation in the Programme.
Pursuant to section 176A of the Act, the Comptroller-General of Customs (C-G) may enter into a trusted trader agreement with an entity if:
(a) the entity nominates itself to participate in the Programme; and
(b) the C-G considers that it is reasonably likely that the entity will satisfy the qualification criteria set out in the rules.
In accordance with section 176B of the Act, a nomination to participate in the Programme may be made by an entity by document or electronically. Subsection 176B(3) provides that an electronic nomination must communicate such information as is set out in an approved statement. In accordance with subsection 4A(1A) of the Act, an approved statement is a statement that is approved, by instrument in writing, by the C-G.
Instrument
Comptroller-General of Customs Instrument of Approval No. 1 of 2015 approves the “SELF-ASSESSMENT QUESTIONNAIRE” as an approved statement for the purposes of communicating to the C-G an electronic nomination under subsection 176B(3) of the Act to participate in the Programme.
The instrument requires information relating to the entity’s business structure and operations, international supply chain activities, control environment, trade compliance record, financial viability, records management, information and communication technology environment, security standards relating to the handling, movement and storage of goods and measures relating to personnel security.
This will be assessed by the C-G to consider whether it is reasonably likely that the entity will satisfy the qualification criteria set out in the rules.
Consultation
Members of the Trusted Trader Industry Advisory Group (IAG) have been consulted on the development of the Self-Assessment Questionnaire. The IAG consists of importers, exporters, service providers and industry sector representatives. The IAG also consists of representatives from the Australian Trade Commission, Department of Agriculture, Department of Foreign Affairs and Trade, Department of Industry and Department of Infrastructure and Regional Development (Office of Transport Security). Entities who will be participating in the first stage of the pilot Programme have also been consulted on the Self-Assessment Questionnaire.
Assistance will be provided to an entity to complete the Self-Assessment Questionnaire to ensure the entity provides information relevant to the entity’s business role that is necessary to consider whether it is reasonably likely that the entity will satisfy the qualification criteria set out in the rules. The kind of information required will depend on the entity’s business role. For example, a freight forwarder that never accepts physical possession of goods will not be required to provide information relating to cargo security. Explanatory notes will be available to an entity to ensure that all necessary and relevant information is provided. Key stakeholders have supported this approach.
Consultation with key stakeholders has indicated general support for the scope and nature of the information required by the Self-Assessment Questionnaire. Some key stakeholders have expressed a concern that some of the information required may present a significant burden to certain entities. For example, the information relating to personnel could be particularly burdensome for large multinational corporations. In addition, it has been noted that some of the information that is requested on the Self-Assessment Questionnaire may be information that is already available to the Comptroller-General of Customs.
This will be tested during the pilot phase and further work will be undertaken to analyse how information requirements for the purposes of the Programme may be reduced (for example, by recognising information that has been provided for other purposes). This instrument will be reviewed on completion of that analysis.
Commencement
The instrument commences on the day after it is registered on the Federal Register of Legislative Instruments.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011
Comptroller-General of Customs Instrument of Approval No. 1 of 2015
This legislative instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in the definition of human rights in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview
This instrument approves the “SELF-ASSESSMENT QUESTIONNAIRE” as an approved statement for the purposes of communicating to the Comptroller-General of Customs an electronic nomination under subsection 176B(3) of the Act to participate in the Australian Trusted Trader Programme (the Programme).
Human Rights implications
Right to Privacy
The nomination to participate in the Programme engages the right to privacy contained in Article 17 of the International Covenant on Civil and Political Rights (ICCPR).
Article 17 of the ICCPR prohibits unlawful or arbitrary interferences with a person’s privacy. It also prohibits unlawful attacks on a person’s honour or reputation. It provides that persons have the right to protection of the law against such interference or attacks. An interference with privacy will not be arbitrary if it is authorised by law or consistent with the provisions, aims and objectives of the ICCPR and reasonable in the circumstances. Reasonableness, in this context, incorporates notions of proportionality, appropriateness and necessity. In essence, this will require that limitations:
- serve a legitimate objective
- adopt a means that is rationally connected to that objective, and
- the means adopted are not more restrictive than they need to be to achieve that objective.
Information provided by an entity in the Self-Assessment Questionnaire will be assessed by the Comptroller-General of Customs to consider whether it is reasonably likely that the entity will satisfy the qualification criteria set out in the rules. If so, then the Comptroller-General of Customs may enter into a trusted trader agreement with the entity.
This instrument engages the right to privacy contained in Article 17 of the ICCPR because it requires the collection, use and disclosure of personal and commercial information. For example, an entity may need to disclose personal information such as personnel records to demonstrate who has access to the goods, or commercial in confidence information such as financial records to demonstrate the entity’s financial viability. If relevant, the information provided by the entity in the Self-Assessment Questionnaire may need to be disclosed to other government agencies for the purposes of assessing the risk associated with the entity being an interim or ongoing trusted trader.
This is necessary as the basis of the Programme is for an entity to demonstrate how they meet specified supply chain security and trade compliance standards in their activities in the international supply chain.
Participation in the Programme is voluntary and in all circumstances, the collection, use and disclosure of information provided in an entity’s nomination will be done in accordance with the Privacy Act 1988 and the Australian Privacy Principles.
To the extent that an entity’s right to privacy is affected by this instrument, the impact is not arbitrary. The information to be communicated in a nomination to participate in the Programme as set out in this instrument is reasonable, necessary and proportionate to achieving the legitimate aim of the Programme and will ensure proper governance of the Programme.
Conclusion
This legislative instrument is compatible with human rights as, although it engages the right to privacy, it maintains all existing protections contained in Australian law and does not seek to limit this right in any way.
Comptroller-General of Customs