Customs (Australian Trusted Trader Programme) Rule 2025

EXPLANATORY STATEMENT

Issued by the Comptroller‑General of Customs

Customs Act 1901

Customs (Australian Trusted Trader Programme) Rule 2025

Legislative authority

Section 179 of the Customs Act 1901 (the Act) allows the Comptroller‑General of Customs to prescribe rules, by legislative instrument, for and in relation to, the Australian Trusted Trader Programme (ATT Programme).

Purpose

The Customs (Australian Trusted Trader Programme) Rule 2025 (the Rule) repeals and replace the Customs (Australian Trusted Trader Programme) Rule 2015 (the 2015 Rule). The 2015 Rule is anticipated to sunset on 1 October 2025, meaning it will be automatically repealed by the operation of subsection 50(1) of the Legislation Act 2003 and cease to be in force.

The Rule is a remake the 2015 Rule, with minor amendments to ensure the effective administration of the ATT Programme. The Department reviewed and assessed the necessity and performance of the 2015 Rule and found that it was largely achieving its objectives efficiently and effectively. The Department determined that the 2015 Rule should be remade.

The Rule prescribes the following matters for the purposes of section 179 of the Act:

• the qualification criteria that an entity must satisfy in order to enter into a trusted trader agreement (see paragraph 179(1)(a) the Act);
• the matters that the Comptroller‑General of Customs (Comptroller‑General) must consider when deciding whether to enter into a trusted trader agreement (see paragraph 179(1)(b) of the Act);
• the conditions on which an entity participates in the Australian Trusted Trader Programme (see paragraph 179(1)(c) of the Act);
• other conditions to which a trusted trader agreement may be subject (see paragraph 179(1)(g) of the Act);
• the kind of obligations under the Act that an entity may be released from or may be required to satisfy in a different way (see paragraph 179(1)(d) of the Act);
• the kind of benefits that an entity may receive under a trusted trader agreement (see paragraph 179(e) of the Act);
• procedures that the Comptroller‑General must follow when varying, suspending or terminating a trusted trader agreement (see paragraph 179(1)(h) of the Act);
• the matters the Comptroller‑General must follow when deciding whether to vary, suspend, or terminate a trusted trader agreement (see paragraph 179(1)(i) of the Act);
• the kinds of information that may be published on the Register of Trusted Trader Agreements for each agreement entered into (see paragraph 179(1)(j) of the Act).

Background

The ATT Programme is a customs initiative of the Australian Government. The ATT Programme was established by the Customs Amendment (Australian Trusted Trader Programme) Act 2015 on 1 July 2015. The ATT Programme introduces a differentiated trust-based framework at the border for entities that meet or exceed international supply chain security and trade compliance standards. Entities that meet these standards and qualify for participation in the Programme will be assessed as low-risk and benefit from reduced regulatory burden and streamlined customs processes.

The ATT Programme is consistent with the World Customs Organization SAFE Framework of Standards to Secure and Facilitate Global Trade 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 ATT Programme is voluntary and allows 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 provides the heads of power to implement the ATT Programme;
• the Rule is a legislative instrument, which prescribes matters for and in relation to the operation of the ATT Programme including, for example, the qualification criteria, trade facilitation benefits, conditions of participation; and
• the Trusted Trader Agreements entered into with each qualifying entity provide further detail on the benefits that an entity receives, how these benefits apply, and tailor conditions specific to that entity’s participation in the ATT Programme.

The regulatory framework has been designed to balance stability and transparency of the Programme, allow reasonable flexibility to take account of the dynamic international trade environment and ensure the continued relevance of the Programme to participating entities.

Consultation

Public consultation was undertaken as necessary and appropriate on the approach to remaking the 2015 Rule, specifically with currently accredited Australian Trusted Traders, through forums such as the Australian Trusted Trader Industry Advisory Group.

Details of the Rule are set out in Attachment A.

A Statement of Compatibility with Human Rights for the Rule has been prepared and is at Attachment B.

The Office of Impact Analysis advised that the Australian Border Force was able to self-assess and certify the 2015 Rule as operating effectively and efficiently, in lieu of an Impact Analysis for remaking the 2015 Rule with only minor amendments. That certification letter will be published on the website of the Office of Impact Analysis (https://oia.pmc.gov.au/), consistent with the Government's requirements for Sunsetting Legislative Instruments. 

The Rule is a disallowable legislative instrument for the purposes of the Legislation Act 2003.

ATTACHMENT A

Details of the Customs (Australian Trusted Trader Programme) Rule 2025

Part 1—Preliminary

This Part contains sections 1 to 5, which set out preliminary matters for the purposes of the Rule.

Section 1 – Name

This section provides that the title of the Rule is the Customs (Australian Trusted Trader Programme) Rule 2025.

Section 2 – Commencement

This section provides for the commencement of the Rule. The Rule commences on the day after the instrument is registered on the Federal Register of Legislation.

Section 3 – Authority

This section provides that the Rule is made under section 179 of the Customs Act 1901.

Section 4 – Definitions

The note in this section clarifies that a number of expressions used in the Rule are defined in the Act, including the following:

• Container;
• Customs-related law;
• trusted trader agreement;
• unmanufactured raw products.

This section inserts the following definitions for the purposes of the Rule:

• ABN has the meaning given by section 41 of the A New Tax System (Australian Business Number) Act 1999;
• Act means the Customs Act 1901
• Immigration and Border Protection worker has the same meaning given by the Australian Border Force Act 2015;
• international supply chain is defined in relation to an entity in section 5; and
• risk is defined in the context of an entity’s international supply chain.

As the concept of ‘risk’ is a broad term, this ‘open’ definition is intended to provide the reader with examples of what is meant by ‘risk’ when it is referred to in the Rule. It is not intended to be an exhaustive definition.

Section 5 – Definition of international supply chain

This section defines the concept of international supply chain for the purposes of the Rule.

The note in subsection 5(2) clarifies that the entity mentioned in paragraph 5(2)(b) may or may not be the entity first mentioned in subsection (1).

The definition in subsection 5(1) is generally consistent with guidance developed by the World Customs Organization (WCO) on supply chain management and international practice in the administration of Authorised Economic Operator (AEO[1]) Programmes. For example, the Customs Guidelines on Integrated Supply Chain Management, June 2004, published by the WCO, defines the international supply chain as covering:

“all stages following the recognition of need by a Customer for a product or service to the fulfilment of an order by a Supplier and the resulting financial settlement. It incorporates any necessary activities carried out by intermediaries and authorities.”

In addition, the European Commission defined the international supply chain as representing the process from manufacturing goods destined for export until delivery of the goods to the party to whom they are consigned to in another customs territory. For example, iron ore is mined in Russia and processed into iron bars. An order is received from Japan and the iron bars are shipped to Japan where they then undergo further processing to form the final product. That final product is then imported from Japan into the European Union. Under the European Commission definition, the international supply chain would commence from the processing to form the final product, until the goods are delivered to the party to who they were consigned in the European Commission. That is, if the goods were consigned to a distribution site, and then subsequently onto retail sites, the supply chain ends when the goods are received, checked and entered into the records at the distribution site.

For the purposes of the Australian Trusted Trader Programme (the Programme), the beginning of an international supply chain is dependent on when activities start to be undertaken and where those activities start to be undertaken. The activities referred to in subsection 5(1) may be undertaken by, or for the purposes of, the entity. The kinds of activities may include the manufacture, production, handling, movement, storage, reporting and transport of goods that are imported into Australia or exported from Australia. As the concept of an international supply chain is dependent on the goods that are being imported or exported, an entity may have more than one international supply chain.

For unmanufactured raw products that are imported into Australia or exported from Australia (whether by the entity or another person), an international supply chain begins when activities start to be undertaken where the product first comes into existence in a form in which it is to be supplied. For example, if the goods imported into Australia are fresh tomatoes, the international supply chain begins where the tomatoes are grown.

If the goods are subject to manufacturing or production (that is, are not unmanufactured raw products), an international supply chain begins where the first significant process in the manufacture or production of the goods is performed. For a manufacture or production process to be considered ‘significant’ it must add an essential or vital quality or character to the imported or exported goods. Processes such as dividing, sorting, labelling, packing or colouring would not be considered ‘significant’.

Example: An entity in Australia, imports cars that are produced in Thailand, with the engine block of each car originally produced in Korea and the engine of each car originally produced in Japan. Once the car is produced, it is shipped to Indonesia for spray painting before it is shipped to Australia:

• the first significant manufacturing or production process would occur at the factory in Thailand as this is where all components of the car are transformed into the imported goods. Therefore, the entity’s international supply chain would begin at the factory in Thailand.
• the international supply chain would not begin at the factory that produces the engine blocks in Korea even though those engine blocks are an input into the production of the imported cars from Thailand. This is because the engine blocks are not the goods that are imported into Australia. Similarly, the international supply chain would not commence at the factory in Japan.
• the international supply chain would also not begin at the factory in Indonesia as the spray painting occurs after the cars are assembled in Thailand. The shipment to Indonesia, spray painting in Indonesia and the activities to then ship the car to Australia would be part of the entity’s international supply chain in relation to those goods.

The scope of an entity’s international supply chain is dependent on the activities that are undertaken by the entity, or for the purposes of the entity between the beginning and end points provided in paragraphs 5(1)(a) and 5(1)(b).

• Example: an entity who has made a nomination to participate in the Programme is a transport company. The activities undertaken by the transport company between the beginning and end points of an international supply chain (as provided in paragraphs 5(1)(a) and 5(1)(b)) are limited to transporting goods. No other activities are undertaken for the purposes of the transport company between the start and end point. Therefore, the transport company’s international supply chain is limited to those activities that they undertake relating to the transportation of goods.
• Example: an entity who has made a nomination to participate in the Programme is an importer of goods. The importer purchases goods from a manufacturer in Thailand. The activities undertaken by, or for the purposes of the importer, between the beginning and end point (as provided in paragraphs 5(1)(a) and 5(1)(b)) extends to the manufacture of the goods, handling, movement, storage, reporting and transport of goods. Therefore, the importer’s international supply chain includes all of those activities.

Section 6 – Schedules

This section is the enabling provision for the Schedule to the Regulations and provides that each instrument that is specified in a Schedule to the Regulations is amended or repealed as set out in the applicable items in the Schedule concerned, and that any other item in a Schedules to this instrument has effect according to its terms. The instrument repealed by operation of this section in Schedule 1 is the Customs (Australian Trusted Trader Programme) Rule 2015 (the 2015 Rule). As noted previously, the 2015 Rule would otherwise sunset on 1 October 2025; as this instrument replaces the 2015 Rule, it is appropriate and necessary to ensure that the 2015 Rules is repealed when this instrument commences.

Part 2—Qualification criteria

This Part sets out the qualification criteria for the purposes of paragraph 179(1)(a) of the Act.

Under subsection 176A(1) of the Act, the Comptroller‑General of Customs may enter into a trusted trader agreement with an entity if:

• the entity nominates itself to participate in the Australian Trusted Trader Programme; and
• the Comptroller‑General of Customs is satisfied that the entity satisfies the qualification criteria set out in the rule.

Subdivision A of Division 2 of Part XA provides for the assessment of qualification criteria based on documentary evidence, and Subdivision B of that Division provides for the validation of qualification criteria based on physical inspection and audit.

An entity may nominate itself to participate in the Programme under section 176B of the Act by document (in an approved form) or electronically (by communicating such information as is set out in an approved statement). The nomination is a self-assessment questionnaire, which contains questions addressing the qualification criteria set out in the Rule. It also contains general information questions to allow the Comptroller-General of Customs to gather sufficient information to form a comprehensive view of the entity and identify any risks in its international supply chain.

Entities are able to nominate themselves electronically by accessing, completing and submitting a self-assessment questionnaire through a web interface. Information required by the self-assessment questionnaire has been approved by the Comptroller‑General of Customs as an approved statement for the purposes of communicating an electronic nomination under subsection 176B(3) of the Act to participate in the Programme.

Where possible, the self-assessment questionnaire is tailored to the entity depending on its role in the international supply chain. This is facilitated through an administrative expression of interest (EOI) process before the entity formally nominates itself to participate in the Programme. The EOI process requires the entity to identify itself and describe its business operations. This information is then used to identify relevant parts of the self-assessment questionnaire that will require completion. For example, a freight forwarder that never accepts physical possession of goods is be required to answer questions relating to cargo security. Guidance is provided to the entity on the type of information that will need to be included in the self-assessment questionnaire and the level of detail required in their responses. This will include guidance to assist the entity understand the scope of their international supply chain.

The qualification criteria are consistent with the World Customs Organization SAFE Framework of Standards to Secure and Facilitate Global Trade Framework (WCO SAFE Framework). In particular, Annex III of the WCO SAFE Framework provides the standards, practices and procedures which members of the trade business community aspiring to AEO status are expected to adopt into routine usage, based on risk assessment and AEO business models.

The qualification criteria are ‘outcomes focussed’ rather than a prescriptive set of processes and controls. ‘Outcomes focussed’ criteria specify the outcome that needs to be met by the entity and enable the variability in business models in the international trade environment to be taken into account. This approach will ensure consistency with clause 7.2 of the World Trade Organization’s Agreement on Trade Facilitation (WTO ATF) which requires that the criteria not:

• be designed or applied so as to afford or create arbitrary or unjustifiable discrimination between operators where the same conditions prevail; and
• to the extent possible, restrict the participation of small and medium-sized enterprises.

The qualification criteria support participation in the Programme by Small and Medium Enterprises (SMEs) as:

• there is no entity size, or trade volume or value threshold;
• the trade compliant history requirement does not favour entities of any size over those of another;
• the qualification criteria do not specify particular processes and controls;
• the ‘outcomes focussed’ approach to the qualification criteria enable consideration of the business practice of participants and adapt to entities of varying size and complexity;
• investment required to satisfy the qualification criteria is relative to the size and complexity of the entity.

The ‘outcomes focussed’ approach to the qualification criteria is also consistent with the WCO SAFE Framework, which requires that alternative means to compliance be permitted to satisfy specific security requirements where not practical or compatible with a particular business model to the extent the alternative means provide the same or equivalent security benefits.

Section 7 – Simplified outline for Part 2

Paragraphs 179(1)(a) and (i) of the Act allows the Rule to prescribe the qualification criteria in relation to which a trusted trader agreement may be entered into under section 176A or varied under section 178A.

Section 7 provides a simplified outline of the qualification criteria prescribed in Part 2 of the Rule for the purposes of paragraph 179(1)(a) of the Act.

Section 8 – Meaning of entity

This section requires an entity to:

• be an entity within the meaning of the A New Tax System (Goods and Services Tax) Act 1999;
• have an ABN; and
• have been undertaking an activity or activities (which need not have been the same activity or activities) that form part of an international supply chain for at least 2 years before the entity’s nomination under section 176B of the Act.

The requirement in paragraph 8(c) will provide the Department with sufficient information to assess whether an entity has satisfactorily complied with Customs-related laws in accordance with section 14.

Section 9 – Standard of compliance with certain qualification criteria

Section 9 provides that an entity must satisfy the criteria in sections 11 to 13 to a standard that adequately addresses the relevant risks in relation to the entity’s international supply chain. Sections 11 to 13 provide criteria in relation to operating systems capability, communication and information quality and international supply chain security.

This provides a flexible approach as it allows matters such as the role of the entity, the operations of the entity, the types of goods handled, the location of the operations, the size of the entity and the number of entities that are involved in the international supply chain to be taken into account when deciding if the entity satisfies the relevant criteria. For example, it would be expected that an importer who imports “dangerous goods” would have different physical security measures to an entity that produces avocadoes. This flexibility is required due to the outcomes focussed nature of the qualification criteria.

Section 10 – Financial criterion

This section sets out the financial criterion and requires the entity to be able to pay all its debts as and when they become due and payable.

For example, if the entity is a company, the entity must not:

• have a receiver appointed in relation to property, or part of the property, of the company; or
• be under administration within the meaning of the Corporations Act 2001; or
• have executed, under Part 5.3A of the Corporations Act 2001, a deed of company arrangement that has not yet been terminated; or
• be in the process of being wound up.

Financial viability of the entity is an important indicator of an ability to maintain and improve upon measures to secure their supply chain. This is consistent with criterion C in Annex III of the WCO SAFE Framework which requires an AEO have good financial standing, which is sufficient to fulfil its commitments with due regard to the characteristics of the type of business activity. The financial criterion in section 10 also aligns with subparagraph 7.2(a)(iii) of the WTO ATF which notes that the specified criterion in relation to authorized operators may include financial solvency, including, where appropriate, provision of a sufficient security or guarantee.

Section 11 – Operating systems capability

Subsection 11(1) provides that this section prescribes the qualification criterion for the entity’s operating systems (whether manual or electronic). The entity’s operating systems may include information technology systems or physical recordkeeping systems. Processes and procedures may also form part of the entity’s operating systems. The requirements in section 11 are consistent with criteria B in Annex III of the WCO SAFE Framework which:

• requires the maintenance of timely, accurate, complete and verifiable records relating to import and export; and
• sets out requirements relating to the maintenance of record keeping systems, production of records, access and control measures relating to records including measures to protect against access by unauthorised persons.

Section 11 also aligns with subparagraph 7.2(a)(ii) of the WTO ATF, which notes that the specified criteria in relation to authorized operators may include a system of managing records to allow for necessary internal controls.

Subsection 11(2) requires that the electronic or manual operating systems used by the entity are able to accurately record and generate information to enable an Immigration and Border Protection worker to do all of the following:

1.    assess the correctness of information in relation to the entity’s international supply chain that is provided by the entity to the Commonwealth (whether the information is provided to the Comptroller-General of Customs, an Immigration and Border Protection worker, the Department or another agency);
2.    assess whether the entity is complying with Customs-related laws, this instrument, and a trusted trader agreement entered into by the entity;
3.    identify the source of any information provided to the Commonwealth as referred to in paragraph (a);
4.    obtain an audit trail of transactions, and of the entity’s international supply chain, that can be readily traced from the record or information.

The requirement to accurately record and generate information that can be verified and traced to its source is an essential element in the security of the international supply chain and to providing an assurance of compliance with Customs-related laws that the entity must comply with, the Rule and a trusted trader agreement.

The entity’s operating system is required to enable an Immigration and Border Protection worker to obtain an audit trail of transactions and of the entity’s international supply chain that can be readily traced from the record or information. This is necessary to enable the Department to:

• trace information to its source;
• provide visibility of the transactions and activities that occur in the entity’s international supply chain; and
• enable the Comptroller-General of Customs to be satisfied of the security of the entity’s international supply chain and the entity’s compliance with their obligations under Customs-related laws.

Subsection 11(3) requires that the electronic or manual operating systems used by the entity clearly record all of the following:

1.    financial transactions in relation to the entity’s international supply chain;

1.    the identity of other persons undertaking activities that form part of the entity’s international supply chain at any particular time;
2.    the identity of any person from which information recorded or reported is sourced.

Subsection 11(3) enables the activities that form part of an entity’s international supply chain to be identifiable and understood.

Subsection 11(4) requires the entity’s records to be in English, or readily translatable into English. The purpose of this requirement is to ensure that the records are in a form that can be readily understood by an Immigration and Border Protection worker.

Subsection 11(5) requires the electronic or manual operating systems used by the entity to be secured against misuse, loss and unauthorised access. This may be achieved through access control measures, physical security, disaster recovery and back-up procedures in the event of loss of information, and connectivity between different systems to reduce duplication of data and minimise the possibility of inconsistent data across systems.

Section 12 – Communication and information quality

This section sets out quality assurance measures for the entity’s information and communications. The requirements in this section are consistent with criterion F in Annex III of the WCO SAFE Framework. Criterion F relates to information exchange, access and confidentiality and requires the appropriate procedures to be in place to ensure all information communicated in relation to the clearance and reporting of the goods is legible, complete and accurate and protected against the exchange, loss or introduction of erroneous information. Criterion F also sets out requirements for information security including procedures to protect information from misuse, loss and authorised access.

Subsection 12(2) requires the entity to take measures to ensure the following:

• information in relation to the entity’s international supply chain entered into, or provided from, the electronic or manual operating systems used by the entity is accurate; and
• information provided by the entity to the Commonwealth (whether to the Comptroller General of Customs, an Immigration and Border Protection worker, the Department or another agency) complies with any requirements under Customs-related laws, this instrument or a trusted trader agreement entered into by the entity.

The accuracy of information communicated to an entity in relation to goods in the entity’s international supply chain and the accuracy of information communicated by the entity to the Commonwealth is essential to support a secure international supply chain and provide an assurance of the entity’s compliance with their obligations under Customs-related laws. In addition, the provision of information to the Commonwealth in accordance with any requirements under Customs-related laws (for example, the timeframe the information must be communicated by or the way in which that information is communicated), the Rule or a trusted trader agreement is necessary to provide an assurance of an entity’s compliance behaviour.

For example, where the entity is a customs broker, and that customs broker makes an import declaration on behalf of an owner of goods, measures the customs broker may take to ensure information to be communicated in the import declaration is accurate may include:

• procedures for the customs broker to ensure that sufficient and reliable information is obtained from the owner to verify the details of the consignment and correctly report or declare the goods;
• periodically reviewing tariff list files and other databases to ensure that obsolete items are not available for use, and that details such as tariff classifications and concessional items are still correct, current and applicable, to reduce the chance of systemic errors that can occur and have significant far reaching impacts when incorrect database details are available for repeated use on an ongoing basis;
• periodically auditing or reviewing a sample of declarations/reports and reporting any anomalies as soon as practicable to the Department, or other similar quality assurance processes which may occur at the time of lodgement or post-transaction; and
• arrangements between an owner and the customs broker acting on behalf of the owner to notify the customs broker of changes that may impact on the accuracy of reports or declarations. For example, changes in suppliers which may affect the declared origin of the goods, changes in products that may affect the tariff classification of the goods or changes in business models that may affect the value of the goods.

Subsection 12(3) requires the entity to take measures to secure the following communications against misuse, loss and unauthorised access:

1.    communications between the entity and persons doing anything for the purposes of, or incidental to, an activity that forms part of the entity’s international supply chain; and

1.    communications between the entity and the Commonwealth (whether the communication is to or from the Comptroller‑General of Customs, an Immigration and Border Protection worker, the Department or another agency) in relation to the entity’s international supply chain.

Measures to secure those kinds of communications against misuse, loss and unauthorised access may include:

• processes and access requirements to ensure the confidentiality of information and to ensure that the information is used for the purposes for which it was provided;
• procedures and back-up capabilities to protect against the loss of information;
• the use of firewalls, passwords or physical security measures to protect the information from unauthorised access.

Subsection 12(4) requires the entity to comply with the measures mentioned in subsections (2) and (3).

Section 13 – International supply chain security

This section sets out the security criterion for the entity’s international supply chain. The criterion is consistent with several criteria in Annex III of the WCO SAFE Framework and also aligns with subparagraph 7.2(d) of the WTO ATF which notes that criteria for authorised operators may include supply chain security.

Subsection 13(2) requires the entity to:

1.    have security risk assessments that identify risks specific to the entity’s international supply chain; and

1.    take measures to ensure that those risks are mitigated; and
2.    comply with those measures.

The requirement in subsection 13(2) is consistent with criterion M in Annex III of the WCO SAFE Framework which relates to measurement, analyses and improvement processes. Criterion M requires the entity to undertake regular assessments of the security risks in its operations and to take appropriate measures to mitigate those risks.

Subsection 13(3) requires the entity to satisfy each criterion set out in subsections (4) to (8), but only to the extent that the criterion is relevant to activities undertaken by the entity that form part of the entity’s international supply chain. This is necessary as not all qualification criteria in subsections 13(4) to 13(8) will be relevant to all entities that nominate themselves to participate in Programme.

For example, if the role of an entity is limited to the manufacture of goods, the criterion related to transport security may not be relevant to that entity and, as such, it would not be necessary for that entity to satisfy that criterion. However, in accordance with section 15, the entity must take reasonable measures to ensure that any other person undertaking a role in relation to the transportation of the goods as part of the entity’s international supply chain, satisfies the criterion in relation to transport security to a standard that adequately addresses the relevant risks to the entity’s international supply chain and complies with those measures.

Subsection 13(4) relates to personnel security and requires the entity to take personnel security measures to ensure the following:

1.    screening of current and prospective employees and contractors engaged (or to be engaged) by the entity to identify any risk of such engagement for the entity’s international supply chain;

1.    relevant training for employees and contractors involved in compliance with Customs-related laws or the security of goods, including training in such compliance;
2.    the denial of access for the entity’s former employees and contractors to the entity’s premises or systems, unless permitted by the entity; and
3.    comply with those measures.

The requirement in subsection 13(4) is consistent with criterion J in Annex III of the WCO SAFE Framework which relates to personnel security. Criterion J requires reasonable precautions to be taken when recruiting staff to verify that they are not previously convicted of security-related, Customs or other offences, background checks of employees working in security sensitive positions (to be conducted periodically or for cause), and procedures to remove identification, premises and information systems access for employees whose employment has been terminated.

Screening processes may include:

• pre-employment verification – for example, verifying the employment history (including performance of duties) of a prospective employee or contractor prior to making an offer of employment or contract. A pre-employment verification may also include seeking character references for the prospective employee or contractor; and
• background checks – for example, a National Police History Check, which may be used to assess the suitability of people applying for employment.

The requirement in subsection 13(4) is also consistent with criterion E in Annex III of the WCO SAFE Framework which relates to education, training and awareness. Criterion E requires the development of mechanisms for the education and training of personnel regarding security policies, recognition of deviations from those policies and understanding what actions must be taken in response to security lapses. Relevant training may relate to the security measures, procedures and policies an entity has in place to ensure the integrity of the international supply chain. Relevant training may be delivered by a range of educational methods and matters including the risks relating to the activity and level of supervision.

Relevant training may include:

• training for transport operators in relation to maintaining the security of a transport conveyance and the goods while in the custody of the transport operator;
• training in the procedures the entity has in place to manage a security incident and how to report any unusual, suspicious or actual breach of security requirements or a requirement under Customs-related laws;
• training to identify risks in suspicious goods, potential internal threats to security and to assist employees and contractors protect access controls; and
• training on requirements under Customs-related laws (for example, the tariff classification and valuation of goods).

Subsection 13(5) relates to physical security at premises and requires the entity to take physical security measures at the entity’s premises including, but not limited to:

1.    measures to control access to the premises and to goods on the premises, with entry limited to authorised persons;

1.    measures to secure goods against unlawful or unauthorised movement, alteration or interference during movement of the goods into or out of the premises, and while the goods are stored in those premises; and
2.    comply with those measures.

This requirement is consistent with criterion G, I and J in Annex III of the WCO SAFE Framework. In particular:

• criterion G requires:
  • security and control procedures to be maintained to ensure it is difficult for unauthorised persons to gain access to cargo or for authorised persons to move, alter or interfere with cargo improperly; and
  • procedures to manage, secure and control cargo during transportation, while loading into or unloading from a transport conveyance and during storage.
• criterion I requires security measures and procedures to be implemented to secure buildings, as well as monitor and control exterior and interior perimeters and prohibit unauthorised access to facilities, transport conveyances, loading docks, and cargo areas that may reasonably affect the security of its areas of responsibility in the supply chain.
• criterion J requires employee identification procedures, procedures to identify, record and deal with unauthorised or unidentified persons and sign-in registers for visitors and vendors at points of entry.

Physical security measures may include fencing, gates, lighting, alarm systems, video surveillance systems, locking devices, the structure of buildings on the premises, procedures for parking, etc.

Measures to control access to premises and any goods on the premises may include:

• measures to positively identify employees, visitors and vendors;
• measures to ensure access to secure areas is limited to persons who require access for the performance of their duties; and
• procedures relating to the use of vehicles on an entity’s premises to prevent the vehicle from being used in a manner that could impact the security of goods or containers.

Procedures to ensure that goods are secure against unlawful or unauthorised movement, alteration or interference during movement of the goods into or out of the premises, and while the goods are stored in those premises may include:

• where the goods are to be stored, for example, a clear assignment of a location for the storage of goods, and any criteria for separate storage for dangerous goods or high-value goods; and
• stocktaking or inventory procedures.

Subsection 13(6) relates to transport security and requires the entity to take security measures in relation to the transportation of goods including, but not limited to, the following:

1.    measures to keep goods secure and prevent unlawful or unauthorised movement, alteration or interference during transportation;

1.    measures to reconcile goods moved into or out of the entity’s premises with commercial or other documentation in respect of the goods; and
2.    comply with those measures.

This requirement is consistent with criterion G and H in Annex III of WCO SAFE Framework.

Relevant to the transportation of goods, criterion G requires and entity to:

• detail procedures to be followed to preserve the integrity of cargo while in its custody;
• compare the cargo with its description on the document or electronic information for consistency;
• establish procedures to positively control all cargo being removed from the storage facility; and
• establish procedures to manage, secure and control all cargo in its custody during transport and while loading into or unloading from a transport conveyance.

Criterion H requires:

• all transport conveyances used for the transportation of cargo within an entity’s supply chain, to the extent and scope of its authority and responsibility, be effectively secured; and
• all transport conveyances to be checked for security breaches if left unattended.

In practice, procedures to keep goods secure and prevent the unlawful or unauthorised movement, alteration or interference with the goods during transportation in the course of the entity’s international supply chain may include:

• procedures for the selection of carriers/freight forwarders; and
• procedures to check the integrity and number of a container seal when goods leave / arrive at their premises.

Procedures to reconcile goods moved into or out of the entity’s premises with commercial or other documentation in respect of the goods may include:

• procedures for receiving, loading, releasing, or unloading goods;
• procedures for the reconciliation between commercial documentation or other documentation, the goods received and payment of the goods;
• procedures for the management of mismatches in the goods received into or removed from the entity’s premises with commercial or other documentation in respect of the goods, including the reporting of short and over shipments;
• procedures for returning or rejecting goods; and
• procedures for identifying and amending incorrect entries in the stock record.

Subsection 13(7) relates to container security and requires the entity to take security measures to ensure that containers are secure from unlawful or unauthorised, alteration or interference including, but not limited to:

1.    measures to ensure that the containers are secure before goods are packed and during transportation;

1.    measures to ensure that the containers are properly sealed to maintain security during transportation; and
2.    comply with those measures.

A ‘Container’ is defined in section 4 of the Act to mean a container within the meaning of the Customs Convention on Containers, 1972 signed in Geneva on 2 December 1972, as affected by any amendment of the Convention that has come into force. In summary, the Customs Convention on Containers, 1972 defines a container as an article of transport equipment (lift-van, movable tank or other similar structure):

• fully or partially enclosed to constitute a compartment intended for containing goods;
• of a permanent character and accordingly strong enough to be suitable for repeated use;
• specifically designed to facilitate the carriage of goods, by one or more modes of transport, without immediate reloading;
• designed for ready handling, particularly when being transferred from one mode of transport to another;
• designed to be easy to fill and to empty; and
• having an internal volume of one cubic metre or more.

The term “container” does not include vehicles, accessories or spare parts of vehicles or packaging.

This requirement is consistent with criterion G and H in Annex III of the WCO SAFE Framework. In particular:

• criterion G requires procedures to be maintained regarding the use of container seals and procedures for inspecting the structure of the container; and
• criterion H requires the entity to undertake inspection of containers to consider potential places of concealment of illegal goods and secure all internal and external compartments and panels, as appropriate.

Procedures to ensure containers are secure before goods are packed and during transportation may include:

• inspection procedures (such as inspection of the locking mechanisms or a ‘seven-point’ inspection, that is, inspection of the front wall, left side, right side, floor, ceiling/roof, inside/outside doors and outside/undercarriage); and
• access control procedures relating to containers and procedures for the repair of containers.

Procedures relating to the use of container seals may refer to how seals are to be controlled and affixed to containers, procedures for recognising and reporting compromised container seals and who may distribute container seals.

Subsection 13(8) relates to security for goods and requires the entity to take security measures for goods including, but not limited to:

• measures to secure the goods against unlawful or unauthorised movement, alteration or interference;
• measures to secure any goods that are subject to customs control against movement, alteration or interference except as permitted or authorised under a Customs-related law; and
• comply with those measures.

This requirement is consistent with criterion G of Annex III of the WCO SAFE Framework which requires measures to ensure the integrity of goods is maintained and that access controls are at the highest appropriate level. It also requires the establishment of procedures that contribute to the security of goods while in the custody of the entity.

Security measures for the purposes of subsection 13(8) may include procedures for monitoring the processing of goods and control measures to prevent unauthorised persons gaining access to the goods or for authorised persons to manipulate, move or handle the goods improperly.

Section 14 – Compliance with Customs-related laws

Subsection 14(1) prescribes the qualification criterion that the entity satisfactorily complies with Customs-related laws.

In considering whether the entity satisfactorily complies with Customs-related laws, subsection 14(2) provides that the Comptroller‑General of Customs must consider the following:

1.    any action taken by the entity to ensure compliance with Customs-related laws;

1.    the extent and frequency of the activities that form part of the entity’s international supply chain;
2.    the extent and degree of any non-compliance with Customs-related laws;
3.    any disclosure by the entity to the Commonwealth (whether to the Department or another agency) of any non-compliance with Customs-related laws in the course of the entity’s international supply chain;
4.    if there has been non-compliance with those laws in the course of the entity’s international supply chain:

1.      whether that non-compliance was for reasons beyond the control of the entity; and
2.   any action taken by the entity to ensure future compliance or to prevent any non-compliance with those laws;

1.     the effectiveness of any action referred to in subparagraph (e)(ii).

This requirement is consistent with criterion A of Annex III of the WCO SAFE Framework. Criterion A requires the compliance history of an entity to be taken into account and requires the entity to not have committed (over a specified period) an infringement or offence that would preclude designation as an AEO. The requirement is also consistent with subparagraph 7.2(a)(i) of the WTO ATF which relates to an appropriate record of compliance with customs and other related laws and regulations.

Customs-related law is defined in section 4B of the Act to mean:

• the Act;
• the Excise Act 1901 and regulations made under that Act;
• section 72.13 of the Criminal Code;
• division 307 of the Criminal Code; and
• any other Act, or any regulations made under any other Act, in so far as the Act or regulations relate to the importation or exportation of goods, where the importation or exportation is subject to compliance with any condition or restriction or is subject to any tax, duty, levy or charge (however described).

Consideration of the matters in subsection 14(2) enables a holistic assessment of whether an entity has a satisfactorily complied with Customs-related laws. These factors are intended to operate to put any history of any non-compliance into context by considering the elements that may be regarded as mitigating factors and assist in determining the seriousness of any previous non-compliance.

For example, when considering the extent and degree of any non-compliance, the Comptroller-General of Customs may consider matters such as whether the non-compliance was an isolated incident or an ongoing pattern of systemic non-compliance, the materiality of the non-compliance (which may be determined by having regard to the seriousness of the consequences of the non-compliance) and the frequency of non-compliance having regard to the entity’s volume of trade.

Subsection 14(3) provides that ‘Commonwealth’ means the Comptroller‑General of Customs, an Immigration and Border Protection worker, the Department of Home Affairs, or another agency within the meaning of section 7 of the Public Service Act 1999. This definition acknowledges the role of other Commonwealth agencies in the regulation of imported or exported goods, for example, the Department of Agriculture, the Australian Taxation Office and other permit issuing agencies.

Section 15 – Entity’s responsibilities in relation to other persons

This section sets out the criteria in relation to the entity’s responsibilities for other persons and requires the entity to:

1.    take reasonable measures to ensure that all persons doing anything for the purposes of, or incidental to, an activity that forms part of the entity’s international supply chain, in doing such a thing:

1.      satisfy the criteria set out in sections 11 to 13 to a standard that adequately addresses the relevant risks to the entity’s international supply chain; and
2.   comply with Customs-related laws; and

1.    comply with those measures.

This section recognises that within an entity’s international supply chain, a number of other persons may be involved in undertaking different roles and activities. These other persons may be engaged or contracted by an entity to participate directly in the entity’s international supply chain (for example, service providers, intermediaries or agents that are authorised to act on behalf of the entity) or may have an indirect role in, or access to, the entity’s international supply chain (for example, cleaners or security guards). This section is necessary to provide assurance of the security of the entity’s international supply chain and trade compliance practices where all activities that form part of the entity’s international supply chain are not undertaken by the entity.

Examples of measures that an entity may take for the purposes of section 13 may include:

• procedures for the screening and selection of business partners – for example, an entity engaging the services of a customs broker may undertake screening to assess the broker’s compliance with Customs-related laws;
• procedures for the notification of any unusual, suspicious or actual breach of security requirements or a requirement under Customs-related laws;
• incorporation of security and trade compliance requirements within the terms and conditions of contract with the business partner or third party;
• engaging with other entities that have entered into a trusted trader agreement;
• engaging with other entities that participate in an AEO (or similar programme) in another country, where Australia has entered into a Mutual Recognition Arrangement (MRA) with that country; and
• engaging with other entities that participate in another programme or scheme that has been recognised by the Department for the purposes of the Programme.

Part 3—Trusted trader agreements

Section 16 – Simplified outline

The simplified outline under section 16 provides that Part 3 prescribes the matters that the Comptroller‑General of Customs must consider when deciding whether to enter into a trusted trader agreement with an entity under section 176A.

Section 17 – Entering into a trusted agreement

Subparagraph 179(1)(b) of the Act allows the Rule to prescribe matters that the Comptroller‑General of Customs must consider when deciding whether to enter into a trusted trader agreement under section 176A of the Act. Section 16 of the Rule prescribes matters for that purpose.

In particular, subsection 17(2) relates to risk and requires the Comptroller-General of Customs to consider the risks associated with entering into a trusted trader agreement with the entity, including any risks to the following:

1.    the Commonwealth;
2.    the security of the entity’s international supply chain;
3.    the objectives or the administration of the Australian Trusted Trader Programme.

The objectives of the Programme are to:

• enhance economic competitiveness;
• reduce regulatory burden;
• increase supply chain security;
• enhance risk management of goods at the Australian border; and
• accelerate trade resumption following an international security incident.

Examples of risks associated with entering into a trusted trader agreement include the risk of criminal infiltration, risks posed by the nature of the goods that the entity may handle (for example, if the goods are subject to controls administered by other Commonwealth, State or Territory agencies), risks due to the location of the entity’s premises and the location of the various points of activity in the international supply chain.

When considering the risks posed by the entity becoming a trusted trader, factors such as whether the entity promotes a transparent and secure control environment, the integrity and ethical values of the entity, the management of security incidents in the entity’s international supply chain and whether the entity takes part in a foreign country that substantially corresponds to the Programme would be relevant and may act as mitigating factors against any risks considered by the Comptroller‑General of Customs. These factors may be considered by the Comptroller‑General of Customs in accordance with paragraph 176A(2)(b) of the Act, as any other matter that he or she considers relevant.

If the entity has had a trusted trader agreement terminated under section 178A of the Act in the 3 years before the entity’s current nomination under section 176B of the Act, then subsection 17(3) requires the Comptroller‑General of Customs to consider the reasons for the termination.

Subsection 17(4) relates to compliance with Customs-related laws and requires the Comptroller‑General of Customs to:

• consider whether the entity has satisfactorily complied with Customs-related laws at all times from the time that is 2 years before the entity’s nomination under section 176B of the Act; and
• in so doing, consider the matters mentioned in subsection 14(2) in relation to such compliance.

Subsection 17(5) relates to offence history and provides that if a person covered by subsection (6) has been, in the previous 10 years, convicted of an offence against a Customs-related law, or against another law of the Commonwealth, or a law of a State or Territory, the Comptroller‑General of Customs must consider whether there may be a risk to the following arising from the actions for which the person was convicted:

• the entity’s international supply chain; or
• the ability of a person having a role in relation to the management or control of the entity’s international supply chain to effectively undertake that role.

Subsection 17(6) lists the following persons who are covered by the subsection, being:

• the entity;
• if the entity is a body corporate—each director;
• if the entity is a partnership—each partner;
• if the entity is a trust, or a trustee of a trust—each trustee of the trust;
• each person employed or contracted by the entity (or by a contractor of the entity) to undertake an activity that forms part of the entity’s international supply chain, if the Comptroller‑General of Customs considers that the person ought to be covered by this subsection in consideration of the risks to which subsection (2) applies.

Subsection 17(7) relates to financial management and requires the Comptroller‑General of Customs to consider the risks associated with any person involved in the management or control of the entity who has been:

• insolvent; or
• involved in the management or control of an entity that was at any time insolvent.

The matters in subsection 17(7) may indicate illegal phoenix activity designed to avoid liabilities by shutting down the original indebted company (for example, by placing it into liquidation), transferring some or all of the assets to another company and then using that newly established company to conduct the same types of business. In addition to severely disadvantaging creditors and giving an unfair competitive business advantage, it impacts on the ability for the Comptroller‑General of Customs to be assured of the financial viability of an entity. Illegal phoenix activity also presents a risk to the collection of duties, taxes and other charges and has previously been associated with non-compliance with Customs-related laws.

Part 4—Trade facilitation benefits

Section 18 – Simplified outline

Section 18 provides a simplified outline for Part 4 as prescribing the kinds of benefits that an entity may receive under a trusted trader agreement and summarising what those benefits are.

Section 19 – Trusted trader benefits

Subsection 176A(4) of the Act provides that, if a trusted trader agreement is entered into with an entity the entity may receive benefits of a kind prescribed by the rules and specified in the agreement.

Paragraph 179(1)(e) of the Act allows the Rule to prescribe the kinds of benefits that an entity may receive under a trusted trader agreement. This section prescribes the kinds of benefits that may be received by an entity under an agreement. Further detail on the kinds of benefits that an entity may receive under a trusted trader agreement will be included in the entity’s trusted trader agreement.

Subsection 19(2) provides that the entity may receive direct contact with an Immigration and Border Protection worker, who may provide:

1.    liaison assistance with relevant Commonwealth agencies:

1.      to resolve an issue the entity has in relation to the entity’s international supply chain; or
2.   to facilitate technical support in relation to an issue with Commonwealth systems the entity uses in relation to the entity’s international supply chain; and

1.    information in relation to compliance with Customs-related laws in the entity’s international supply chain.

The direct contact will be with an Immigration and Border Protection worker who is identified in the trusted trader agreement as the Account Manager. The entity will be notified of any changes to the details of that person. The role of the Account Manager is significant in managing the relationship between the Department and the entity that has entered into a trusted trader agreement.

Subsection 19(3) provides that the entity may receive priority processing for the following:

• a request for an advance ruling in relation to the tariff, valuation, or origin of imported goods, or any request for a review by the Department of an advance ruling;
• a claim for a drawback of duty made in accordance with the condition in item 3 or 4 of section 37 of the Customs (International Obligations) Regulation 2015;
• an application for a refund, rebate or remission of duty made in accordance with section 107 of the Customs Regulation 2015 or section 26 of the Customs (International Obligations) Regulation 2015.

The Department has three forms of advance rulings – Tariff Advices, Valuation Advices and Origin Advices. This administrative service is provided to an importer of goods or their representative. Advance rulings are a binding ruling, made in writing and applicable only to the importer that has requested the ruling. The Department endeavours to provide rulings within 30 days of receiving a request completed correctly. If an applicant for a ruling is dissatisfied with an advance ruling, the applicant may request the Department to review the original decision. The Department endeavours to provide the review decision within 30 days for valuation and origin rulings and 60 days for tariff classification rulings. It should be noted however that the processing of a request or claim under this benefit, or any request for a review of an advance ruling by the Department will not be given a priority above any other claim or request that has exceeded the relevant service standard of 30 days or 60 days (as applicable).

Priority processing of a request for an advance ruling, claim for a drawback of duty or application for a refund, rebate or remission of customs duty will:

• provide an entity that has entered into an agreement with greater certainty as to the correct customs treatment of goods; and
• provide a cash flow benefit to an entity that has entered into an agreement as they may be paid a refund or duty drawback within a shorter processing timeframe.

Subsection 19(4) provides that the entity may be entitled to use:

• a logo, known as the Australian Trusted Trader logo; and
• the name “Australian Trusted Trader”.

Subsection 19(5) provides that the entity may receive priority examination of its goods while the goods are subject to customs control.

The note under 19(5) provides that a trusted trader agreement may require the entity to comply with specified conditions relating to the benefits that the entity receives (see subsection 24(4)).

Part 5—Variation of or release from obligations

Section 20 – Simplified outline

Section 20 is a simplified outline that Part 5 prescribes the kinds of obligations that an entity may satisfy in another way or be released from performing under Part IV of the Act (which deals with the importation of goods) and Part VI of the Act (which deals with the exportation of goods).

At the time of remaking the Rule, only one obligation under Part IV has been prescribed for the purposes of paragraph 179(1)(d) of the Act.

Section 21 – Obligation to pay import processing charge under Part IV of the Act

For the purposes of subparagraph 179(1)(d)(ii) of the Customs Act, this section prescribes that the obligation to pay import processing charge under Part IV of that Act may be performed in a different way.

This provision facilitates the Comptroller‑General exercising the power under paragraph 176A(3)(b) of the Customs Act to specify in trusted trader agreements that import declaration processing charges must be paid on or before the 21st day after the end of the month in which the goods were entered for home consumption.

This provision streamlines accounting for trusted trader importers and allows one combined payment of customs duty and import declaration processing charge in the month after the goods are entered for home consumption, rather than individual payments in relation to each consignment of goods.

Part 6—Conditions

Section 22 – Simplified outline

This section provides a simplified outline that Part 6 prescribes conditions of participation in the Programme and other conditions to which trusted trader agreements may be subject.

Section 23 – Conditions of participation in the Australian Trusted Trader Programme

Paragraph 179(1)(c) of the Act allows the Rule to prescribe the conditions on which an entity participates in the Programme. In accordance with subsection 23(1), this section prescribes conditions for that purpose.

Subsection 23(2) requires the entity to:

• continue to satisfy the qualification criteria; and
• satisfy the qualification criteria to the standard (if any) specified in the trusted trader agreement.

Ongoing satisfaction of the qualification criteria is a key principle of the Programme. Ongoing monitoring will be undertaken to ensure an entity that has entered into a trusted trader agreement continues to satisfy the qualification criteria. The trusted trader agreement will specify the standard the entity is to continue to satisfy the qualification criteria as that provides the flexibility to specify the standard taking into account the specific entity’s circumstances.

Subsection 23(3) requires the entity to ensure that all practicable assistance is given to Immigration and Border Protection workers to enable such workers to undertake assessments of whether the entity is continuing to comply with the qualification criteria and the agreement. The operation of the Programme is dependent on mutual cooperation and a partnership approach. Practicable assistance may be in the form of preparing for the assessment, explaining, demonstrating and providing appropriate documentation or information of how the entity is complying with the qualification criteria and the agreement.

The note at the end of subsection 23(3) clarifies that the agreement may require such assessments to be undertaken in circumstances, and in the manner, provided by the agreement.

Subsection 23(4) provides that a person covered by subsection (5) must not be convicted of an offence against a Customs-related law, or against another law of the Commonwealth, or a law of a State or Territory, for actions that may present a risk to the following:

• the entity’s international supply chain;
• the ability of a person having a function in relation to the management or control of the entity’s international supply chain to effectively perform that function.

Subsection 23(5) lists the following persons who are covered by the subsection, being:

• the entity;
• if the entity is a body corporate—each director;
• if the entity is a partnership—each partner;
• if the entity is a trust, or a trustee of a trust—each trustee of the trust;
• each person employed or contracted by the entity (or by a contractor of the entity) to undertake an activity that forms part of the entity’s international supply chain.

Subsection 23(6) provides that the entity must, in accordance with the trusted trader agreement:

• from time to time, nominate a person as the entity’s primary contact person; and
• notify the Department of the contact details of the person currently nominated as the entity’s primary contact person.

The trusted trader agreement will specify further detail of how and when an entity is to nominate a contact person, and the notification of any changes. It should also be noted that an entity may choose to nominate more than one person to be a primary contact. The requirement in subsection 23(6) is intended to be a baseline requirement, to ensure that an entity has at least one nominated person to be the primary contact at any given time.

Subsection 23(7) provides that the entity must, in accordance with the agreement, notify the Department as soon as practicable after becoming aware of any of the following:

• any change to the circumstances on the basis of which the agreement is entered into;
• any matters that may affect compliance by any person undertaking activities for the purposes of, or incidental to, the entity’s international supply chain with a Customs-related law, this instrument or the agreement;
• any non-compliance by such a person with a Customs-related law, this instrument or the agreement;
• a conviction for an offence in relation to which subsection (4) applies.

For example, if there is a change in the ability of an entity to satisfy the qualification criteria, or the entity becomes aware of any unusual, suspicious or actual security incidences, the entity must notify the Department as soon as practicable after becoming aware of those matters. An entity’s trusted trader agreement will specify further detail of how an entity is to notify the Department of such matters.

The condition in subsection 23(7) is consistent with several criteria in Annex III of the WCO SAFE Framework. For example, criterion D requires the entity to engage in open and continuing mutual exchange of information, to notify of any unusual or suspicious cargo documentation, abnormal requests for information on shipments and to provide timely notification to relevant authorities when illegal, suspicious or unaccounted for cargo is discovered. In addition, criterion H of Annex III of the WCO SAFE Framework requires the entity to report any actual or suspicious incidents to the relevant authority, including any unusual, suspicious or actual breach of transport security.

Subsection 23(8) requires that the entity must not provide information to the Commonwealth that is false or misleading in a material particular in relation to:

• the entity’s entry into the trusted trader agreement; or
• compliance with these conditions, or any other conditions to which the agreement is subject.

Subsection 23(8) is to be read with subsection 23(11), which provides that ‘Commonwealth’ includes the Comptroller‑General of Customs, an Immigration and Border Protection worker, the Department of Home Affairs, or another agency within the meaning of the Public Service Act 1999. This definition acknowledges the role of other Commonwealth agencies in the regulation of imported or exported goods, for example, the Department of Agriculture, the Australian Taxation Office and other permit issuing agencies.

Subsection 23(9) requires that the entity provide information in relation to persons covered by subsection 23(10) upon request by an Immigration and Border Protection worker, for conducting periodic police checks. This is the only new condition that has been included in the remake of the Rule. The information is requested to be provided within the specified period in the notice, and in the manner and form (if any) specified in the notice. Trusted Traders are already required to provide this information as part of the electronic nomination to be an Australian Trusted Trader under s 176B of the Customs Act. This information is already periodically requested by Australian Border Force officers as a matter of practice for the purposes of conducting periodic police checks. The obligation on Trusted Traders to provide this information upon request by an Immigration and Border Protection worker is limited to this purpose of conducting periodic police checks.

Subsection 23(10) outlines the persons who must provide personal identifying details for the purposes of subsection 23(9) as:

• the entity;
• if the entity is a body corporate —each director;
• if the entity is a partnership —each partner;
• if the entity is a trust, or a trustee of a trust —each trustee of the trust;
• each person employed or contracted by the entity (or by a contractor of the entity) to undertake an activity that forms part of the entity’s international supply chain.

Section 24 – Other conditions for trusted trader agreements

Paragraph 179(1)(g) of the Act allows the Rule to prescribe other conditions to which a trusted trader agreement may be subject. In accordance with subsection 23(1), this section prescribes those ‘other conditions’.

Subsection 24(2) provides that the trusted trader agreement may be subject to the condition that the entity must, in the circumstances, and in the manner, provided by the agreement, give the Comptroller‑General of Customs self-assessment reports about the entity’s continuing compliance with the qualification criteria and the agreement.

This condition is consistent with criterion M of Annex III of the WCO SAFE Framework which requires the entity to establish and conduct regular self-assessments of its security management system and fully document the self-assessment procedure and the responsible parties.

Subsection 24(3) provides that the agreement may be subject to the condition that assessments for the purposes of the condition in subsection 23(3) are to be undertaken in circumstances, and in the manner, provided by the agreement. For example, the agreement may specify that an assessment of whether the entity is continuing to comply with the qualification criteria and agreement must be undertaken by the Department, by physical inspection, within 12 months of entering into the agreement. The agreement may also specify that an assessment is to be undertaken by the Department in response to any risks identified in relation to the entity’s international supply chain, or on a periodic basis.

Subsection 24(4) provides that the trusted trader agreement may be subject to the condition that the entity must comply with any conditions specified in the agreement relating to the benefits the entity receives in accordance with section 19.

Subsection 24(5) provides that the trusted trader agreement may be subject to the condition that the entity may make a record of, disclose or otherwise use information, of a kind specified in the agreement that relates to the agreement and the administration of the Australian Trusted Trader Programme only:

• if authorised by the agreement; and
• in the circumstances, and in the manner, provided by the agreement.

This condition is necessary as an entity will be provided with certain information that is necessary for their participation in the Programme. The trusted trader agreement will specify the circumstances (such as to who it may be disclosed to and when) and the manner in which the specified information may be disclosed. Unauthorised disclosure or use of that information may present a risk to the Commonwealth, the security of the entity’s international supply chain or the objectives or the administration of the Programme.

Subsection 24(6) provides that the trusted trader agreement may be subject to the condition that it may, by mutual consent, and in the circumstances, and in the manner, provided by the agreement, be:

• varied, or suspended, with the effect agreed between the entity and the Comptroller‑General of Customs; or
• terminated.

This condition makes it clear that, despite the unilateral power of the Comptroller‑General of Customs in section 178A of the Customs Act, the agreement may also be varied, suspended or terminated by mutual consent.

Part 7—Variation, termination, or suspension of trusted trader agreements

Section 25 – Simplified outline

Section 25 provides a simplified outline of Part 7. Subsection 178A(1) of the Act provides that the Comptroller‑General of Customs may vary, suspend or terminate a trusted trader agreement if the Comptroller‑General of Customs reasonably believes that the entity to which the agreement relates has not complied, or is not complying, with any condition prescribed by the rules or any term or condition specified in the agreement. This part prescribes the procedures the Comptroller‑General of Customs must follow and the matters that the Comptroller‑General of Customs must consider before exercising their powers under s 178A of the Customs Act.

In deciding whether to vary, suspend or terminate a trusted trader agreement, paragraph 178A(2)(a) requires the Comptroller‑General of Customs to consider any matter set out in the rules. Subsection 178A(3) of the Customs Act requires the variation, suspension or termination to be done in accordance with the procedure prescribed by the rules.

Paragraph 179(1)(h) allows the Rule to prescribe procedures that the Comptroller‑General of Customs must follow when varying, suspending or terminating a trusted trader agreement under section 178A. Similarly, paragraph 179(1)(i) allows the Rule to prescribe the matters that the Comptroller‑General of Customs must consider when deciding whether to vary, suspend or terminate a trusted trader agreement under section 178A.

Section 26 – Variation or termination

Subsection 26(1) provides that this section applies if the Comptroller‑General of Customs proposes to make a decision to vary or terminate an entity’s trusted trader agreement under subsection 178A(1) of the Act because the Comptroller‑General reasonably believes that the entity has not complied, or is not complying, with:

• a condition prescribed by this instrument; or
• any term or condition specified in the agreement.

The note under this subsection clarifies that the Comptroller-General of Customs may also suspend the agreement, with immediate effect, under section 25 of this Rule.

Before making the decision to vary or terminate an agreement under subsection 178A(1) of the Act, subsection 26(2) requires, for the purposes of paragraph 179(1)(h) of the Customs Act, the Comptroller‑General of Customs to give the entity a written notice (a show cause notice) that:

• states that the Comptroller-General of Customs proposes to vary or terminate the entity’s trusted trader agreement under subsection 178A(1) of the Act; and
• states the reasons for the proposed decision; and
• invites the entity to respond in writing within 10 business days after the notice is issued, or a longer period stated in the notice, to show cause why the agreement should not be varied or terminated as proposed; and
• includes a summary of the effect of section 178A of the Act and of this section.

In deciding whether to vary or terminate the agreement after the show cause notice has been given and for the purposes of paragraph 179(1)(i) of the Customs Act, subsection 26(3) requires the Comptroller‑General of Customs to consider matters including (but not limited to) the following:

• any response by the entity to the show cause notice received within the period stated in the notice;
• the extent and degree of the non-compliance referred to in subsection (1);
• any disclosure by the entity to the Department of that non-compliance;
• whether that non-compliance was for reasons beyond the entity’s control;
• any action taken, or proposed to be taken, by the entity to prevent or remedy that non-compliance;
• any action taken, or proposed to be taken, by the entity to prevent further non-compliance of a similar nature.

Consideration of the matters in subsection 26(3) enables a holistic assessment of the non-compliance. These factors are intended to operate to put any non-compliance into context by considering the elements that may be regarded as mitigating factors and assist in determining the seriousness of any the non-compliance.

For example, as part of considering the extent and degree of any non-compliance, the Comptroller‑General of Customs may consider matters such as whether the non-compliance was an isolated incident or an ongoing pattern of systemic non-compliance and the materiality of the non-compliance (which may be determined by having regard to the seriousness of the consequences of the non-compliance).

Subsection 26(4) provides that within the applicable period under subsection (5), the Comptroller‑General of Customs must give the entity:

• written notice of a decision to vary or terminate the agreement, and the reasons for the decision; or
• written notice of a decision not to vary or terminate the agreement.

The note under subsection 26(4) confirms that:

• a decision to vary or terminate a trusted trader agreement is reviewable by the Administrative Review Tribunal (see paragraph 273GA(1)(je) of the Act); and
• the notice under paragraph (a) must include information about review of the decision by the Administrative Review Tribunal (see section 273K of the Act).

Subsection 26(5) provides that for the purposes of subsection (4), the applicable period is:

1.    if the entity responds to the show cause notice within the period specified under paragraph (2)(c):

1.      30 calendar days after the response is received by the Comptroller‑General of Customs; or
2.   another period after the response is received that is agreed between the Comptroller‑General of Customs and the entity; or

1.    in any other case:

1.      30 calendar days after the end of the period specified in the show cause notice under paragraph (2)(c); or
2.   another period after the end of that specified period that is agreed between the Comptroller‑General of Customs and the entity.

The procedures in section 26 of the Rule is consistent with the principles in the Draft Model Appeal Procedures annexed to the WCO SAFE Framework. The Draft Model Appeal Procedures sets out draft voluntary provisions which support consultation with an entity before denying, suspending or terminating an AEO authorisation to determine if resolution other than denial, suspension or termination is appropriate. The draft Model AEO Appeal Procedures support the provision of a notice of the proposed action in writing setting out the grounds for the proposed action.

The draft Model AEO Appeal Procedures note that the proposed action would become final and conclusive unless a written notice of appeal is given and proposes an approach for an internal appeal mechanism. This has been reflected in section 26 by providing the opportunity for an entity to respond to a proposed decision to vary or terminate a trusted trader agreement before the decision becomes effective. In addition, once a decision is effective, an entity will be able to seek review of a decision through an internal review mechanism, in addition to any review by the Administrative Review Tribunal as set out in paragraphs 273GA(1)(jc), (jd) and (je) of the Act. In addition, the procedure in section 26 is consistent with the draft Model AEO Appeal Procedure which recommends a written notice of a decision to vary or terminate a trusted trader agreement together with reasons for the decision.

Section 27 – Immediate suspension

Subsection 27(1) provides that this section applies if the Comptroller‑General of Customs proposes to make a decision to suspend, with immediate effect, an entity’s trusted trader agreement under subsection 178A(1) of the Act because the Comptroller‑General of Customs reasonably believes that the entity has not complied, or is not complying, with:

1.    a condition prescribed by this instrument; or
2.    any term or condition specified in the agreement.

In deciding whether to suspend the agreement with immediate effect, subsection 27(2) requires the Comptroller‑General of Customs to consider whether the entity’s non-compliance referred to in subsection (1) presents an immediate serious risk to any of the following:

1.    the Commonwealth;
2.    the security of the entity’s international supply chain;
3.    the objectives or the administration of the Australian Trusted Trader Programme.

Circumstances that may present an immediate serious risk include where the non-compliance presents a risk to national security, where the entity’s international supply chain is involved in illicit activities and matters that would compromise the ongoing mutual recognition of the Programme.

Subsection 27(3) provides that if the Comptroller‑General of Customs makes a decision to suspend the agreement with immediate effect and for the purposes of paragraph 179(1)(h) of the Customs Act, the Comptroller‑General of Customs must give the entity written notice of the decision that:

1.    states that the agreement is suspended with immediate effect; and
2.    states the reasons for the suspension; and
3.    states the period of the suspension, and the effect of subsections (5) and (6); and
4.    includes a summary of the effect of section 178A of the Act and of this section.

The note under subsection 27(3) confirms that:

• a decision to vary or terminate a trusted trader agreement is reviewable by the Administrative Review Tribunal (see paragraph 273GA(1)(je) of the Act); and
• the notice under this subsection must also include information about review by the Administrative Review Tribunal of the decision to suspend the agreement (see section 273K of the Act).

Subsection 27(4) provides that the notice of immediate suspension referred to in subsection (3) may be accompanied by a show cause notice under subsection 26(2).

Subsection 27(5) provides that the agreement is suspended for the period beginning on the day the decision to suspend the agreement is made, and ending on the earliest of the following days:

1.    the day after the end of the period stated in the notice under paragraph (3)(c);
2.    if, before the end of that period, the Comptroller‑General of Customs decides:

1.      to vary or terminate the agreement in accordance with section 26, or not to do so—the day that decision is made; or
2.   to end the period of suspension—the day that decision is made.

Subsection 27(6) provides that during the period of suspension:

1.    the agreement remains in force, and the entity must continue to comply with any requirements or conditions in relation to the agreement under the Act, this instrument or the agreement; but
2.    the benefits received by the entity in accordance with the agreement are not in effect.

Subsection 27(7) provides if the Comptroller‑General of Customs decides to end the period of suspension of the agreement before the end of the period stated in the notice under paragraph (3)(c), the Comptroller‑General of Customs must give the entity written notice of that decision.

Part 8—Information for Register of Trusted Trader Agreements

Section 28 – Simplified outline

Section 28 is a simplified outline providing that Part 8 prescribes the information that may be published on the Register of Trusted Trader Agreements.

Subsection 178B(1) of the Act allows the Comptroller‑General of Customs to maintain a register (to be known as the Register of Trusted Trader Agreements) containing information of a kind prescribed by the rules in relation to each trusted trader agreement entered into under Part XA of the Act.

Paragraph 179(1)(j) of the Act allows the Rule to prescribe the kinds of information that may be published on the Register of Trusted Trader Agreements, including:

• that an entity has entered into a trusted trader agreement;
• the kinds of benefits that the entity is receiving, or will receive, under the agreement;
• whether the agreement is in force;
• whether the agreement is or has been suspended; and
• whether the agreement has been suspended terminated.

Section 29 – Information for publication on Register of Trusted Trader Agreements

This section prescribes, for paragraph 179(1)(j) of the Act, the following kinds of information that may be published on the Register of Trusted Trader Agreements for each trusted trader agreement entered into with an entity:

1.    in relation to the entity:

1.      the entity’s business name, and if different, the entity’s trading name; and
2.      if the entity is an individual—the individual’s name; and
3.    the entity’s ABN;

1.    in relation to the agreement:

1.         the kinds of benefits the entity is receiving, or will receive, under the agreement; and
2.      whether the agreement is in force; and
3.    whether the agreement is currently suspended and, if so, the day the suspension started; and
4.    whether the agreement has been terminated and, if so, the day of the termination.

The Register of Trusted Trader Agreements will enable an entity to ‘link up’ with another entity that has entered into a trusted trader agreement to promote broader and stronger trade compliance and supply chain security standards. The kind of information that may be published on the Register of Trusted Trader Agreements will not include any personal or sensitive information (unless the entity is an individual, in which case, the individual’s name will be published) or any commercial in confidence information.

The kind of information prescribed for the purposes of section 29 of the Rule, is the kind of information that is necessary to enable an entity to engage with another entity that has entered into a trusted trader agreement with confidence at a particular point in time. In addition, the Register of Trusted Trader Agreements will provide transparency about the trusted trader agreements the Comptroller-General of Customs has entered into and sufficient detail on the kind of benefits an entity is receiving or may receive under a trusted trader agreement.  Where the Register includes information relating to whether an agreement is currently suspended, or has been terminated, will differentiate between a suspension or termination made by mutual consent or under subsection 178A(1) of the Act.

Schedule 1—Repeals

Operating together with section 6 of this instrument, the item in this schedule provides for the repeal of the Customs (Australian Trusted Trader Programme) Rule 2015. The effect of this clause is to proactively repeal this instrument, which is otherwise scheduled to sunset on 1 October 2025.

ATTACHMENT B

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Customs (Australian Trusted Trader Programme) Rule 2025

This Disallowable Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Disallowable Legislative Instrument

The Customs (Australian Trusted Trader Programme) Rule 2025 (the Rule) is intended to repeal and replace the Customs (Australian Trusted Trader Programme) Rule 2015 (the 2015 Rule) that is anticipated to sunset on 1 October 2025, meaning it will be automatically repealed by the operation of subsection 50(1) of the Legislation Act 2003 and cease to be in force.

The Department reviewed and assessed the necessity and performance of the 2015 Rule and found that it was achieving its objective efficiently and effectively. The Department determined that the 2015 Rule should be remade with minor amendments to ensure the Rule continues to effectively administer the Australian Trusted Trader Programme (ATT Programme).

The ATT Programme is a customs initiative of the Australian Government, which was established by the Customs Amendment (Australian Trusted Trader Programme) Act 2015. This Act amended the Customs Act 1901 (the Customs Act) on 1 July 2015 to implement the regulatory framework for the ATT Programme.

The ATT Programme introduces a differentiated trust-based framework at the border for entities that meet or exceed international supply chain security and trade compliance standards. Entities that meet these standards and qualify for participation in the ATT Programme will be assessed as low-risk and benefit from reduced regulatory burden and streamlined customs processes.

The ATT Programme is consistent with the World Customs Organization SAFE Framework of Standards to Secure and Facilitate Global Trade Framework (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 ATT Programme is voluntary and 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’. Under the Customs Act, the Comptroller-General of Customs may enter into a trusted trader agreement with an entity if the entity nominates itself to participate in the ATT Programme and the Comptroller-General of Customs is satisfied that the entity satisfies the qualification criteria set out in the rules.

The qualification criteria for the ATT Programme are based on the WCO SAFE Framework, which sets out a range of principles and standards to guide international customs administrators in facilitating global trade by assessing business operations, supply chain security, trade compliance and general best practice.

The purpose of the Rule is to prescribe rules for and in relation to the operation of the ATT Programme for the purposes of subsection 179(1) of the Customs Act. These include:

• the qualification criteria that an entity must satisfy in order to enter into a trusted trader agreement (see paragraph 179(1)(a) the Act);
• the matters that the Comptroller‑General of Customs (Comptroller‑General) must consider when deciding whether to enter into a trusted trader agreement (see paragraph 179(1)(b) of the Act);
• the conditions on which an entity participates in the ATT Programme (see paragraph 179(1)(c) of the Act);
• other conditions to which a trusted trader agreement may be subject (see paragraph 179(1)(g) of the Act);
• the kind of obligations under the Act that an entity may be released from or may be required to satisfy in a different way (see paragraph 179(1)(d) of the Act);
• the kind of benefits that an entity may receive under a trusted trader agreement (see paragraph 179(e) of the Act);
• procedures that the Comptroller‑General must follow when varying, suspending or terminating a trusted trader agreement (see paragraph 179(1)(h) of the Act;
• the matters the Comptroller‑General must follow when deciding whether to vary, suspend, or terminate a trusted trader agreement (see paragraph 179(1)(i) of the Act);
• the kinds of information that may be published on the Register of Trusted Trader Agreements for each agreement entered into (see paragraph 179(1)(j) of the Act).

Qualification criteria

The Rule sets out a number of criteria an entity must meet to qualify for entry into the ATT Programme. These include financial viability, operating systems capability, communication and information quality requirements, international supply chain security, compliance with Customs-related laws, and responsibilities in relation to other persons.

Entry into a trusted trader agreement

The Rule sets out the matters the Comptroller-General of Customs must consider when entering into a trusted trader agreement. These include assessment of the risks of entering into an agreement with an entity, an entity’s compliance with Customs-related laws, relevant offence history and financial management.

Conditions of Participation

Pursuant to paragraph 179(1)(c) of the Customs Act, section 23 of the Rule prescribes mandatory conditions of participation in the ATT Programme. In addition to continuing to satisfy the qualification criteria listed above, these include:

• the requirement to provide assistance to Immigration and Border Protection workers to enable compliance assessments;
• the requirement that entities not be convicted of certain offences that may present a risk to the entity’s international supply chain and the ability of a person having a function in relation to the management or control of the entity’s international supply chain to effectively perform that function;
• notification requirements;
• the requirement not to provide false or misleading information;
• compliance with police checks.

Subsection 23(9) requires that an entity must, upon request, provide identifying details of a person covered by subsection 23(10), including full name, date of birth and position or job title within the entity for the purposes of conducting periodic police checks.  This information must be provided by the entity when requested by an Immigration or Border Protection worker. The Department requests this information as part of the annual security risk assessments and when as required to undertake.

Subsection 23(10) outline the persons who must provide personal identifying details for the purposes of subsection 23(9) as:

1.    the entity;

1.    if the entity is a body corporate —each director;
2.    if the entity is a partnership —each partner;
3.    if the entity is a trust, or a trustee of a trust —each trustee of the trust;
4.    each person employed or contracted by the entity (or by a contractor of the entity) to undertake an activity that forms part of the entity’s international supply chain.

All participating entities in the ATT Programme will be required to supply the information requested under subsection 23(9) that can be matched against the National Police Reference System, to facilitate risk assessments of participating entities.

Subsection 23(10) is intended to cover the vast amount of business models and positions within the international supply chain. These reporting obligations allow the Comptroller-General of Customs to properly assess the risks that any person within an entity involved in activities that form part of the international supply chain may pose to the integrity of the ATT Programme.

Subsection 23(7) states that the entity must, in accordance with the agreement, notify the Department as soon as practicable after becoming aware of any of the following:

1.    any change to the circumstances on the basis of which the agreement is entered into;

1.    any matters that may affect compliance by any person undertaking activities for the purposes of, or incidental to, the entity’s international supply chain with a Customs‑related law, this instrument or the agreement;
2.    any non‑compliance by such a person with a Customs‑related law, this instrument or the agreement;
3.    a conviction for an offence in relation to which subsection (4) applies.

Subsection 23(7) is essential for the Department to maintain the integrity of the program and ensure that participating entities meet the ongoing conditions for participation in the program.

Failure to comply with these conditions under the Rule may be a basis for the Comptroller‑General to vary, suspend or terminate a trusted trader agreement under subsection 178A(1) of the Customs Act.

Commencement of Rule

The Rule commences on the day after it is registered on the Federal Register of Legislation.

Human rights implications

This Disallowable Legislative Instrument may engage the following rights:

• the prohibition against interference with privacy in Article 17 of the International Covenant on Civil and Political Rights (ICCPR);
• the right to a fair hearing in Article 14(1) of the ICCPR;
• the rights of equality and non-discrimination under Articles 2(1) and 26 of the ICCPR and Article 2(2) of the International Covenant on Economic, Social and Cultural Rights (ICESCR).

Right to Privacy

The ATT Programme criteria in the Rule engages the right to privacy contained in Article 17 of the 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. However, 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 is reasonable in the circumstances.

Reasonableness, in this context, incorporates notions of proportionality, appropriateness and necessity. In essence, this will require:

• that the limitations serve a legitimate objective;
• that the limitations adopt a means that is rationally connected to that objective; and
• that the means adopted are not more restrictive than they need to be to achieve that objective.

The Rule prescribes the qualification criteria for and mandatory conditions for participation in the ATT Programme. The criteria and conditions in the Rule may interfere with the right to privacy as certain sensitive commercial and personal information may have to be disclosed to the Comptroller-General of Customs. For example, before entering into a trusted trader agreement with an entity, the Comptroller-General of Customs must consider the past convictions of the entity or certain persons within the entity. This may include if the entity is a body corporate – each director; if the entity is a partnership – each partner; if the entity is a trust or trustee of a trust – each trustee; or a person employed or contracted by the entity or by a contractor of the entity, to undertake an activity that forms part of the entity’s international supply chain. This consideration by the Comptroller-General of Customs is necessary to assess the risk arising from the activities for which the person was convicted. The risk will be assessed in relation to the entity’s international supply chain or the ability of a person having a function in the management or control of the entity’s international supply chain to effectively perform that function. Past convictions for an offence committed by a person employed or contracted by the entity or by a contractor of the entity, to undertake an activity that forms part of the entity’s international supply chain will be limited by only considering those people in the international supply chain that may present a risk to the Commonwealth, the security of the entity’s international supply chain or the objectives or the administration of the ATT Programme.

To demonstrate how the entity satisfies some of the qualification criteria, the entity may need to disclose in its nomination to participate in the ATT Programme, its personnel records to demonstrate who has access to the goods or ‘commercial in confidence’ information, for example, financial records and audit trails to demonstrate its operating system capability. This restriction on the right to privacy is necessary as the commercial and personal information supplied by an entity will demonstrate the entity’s ability to meet the supply chain security and trade compliance qualification criteria to a standard that adequately addresses the risks in the entity’s international supply chain maintaining the objectives of the ATT Programme.

Additionally, the Rule imposes obligations upon all participating entities in the ATT Programme to provide the Department with personal information requested under subsection 23(9) of the Rule, including full name and date of birth of the relevant person. The measure will ensure the Department can match the information requested under subsection 23(9) against the National Policy Reference System to facilitate risk assessments of the participating entities. The information requested under subsection 23(9) will allow for criminal history checks to be conducted in relation to entities applying to join, or accredited, in the ATT Programme. This will enable the Comptroller‑General to consider the risk to the Commonwealth and Department of the participation of the entity in the ATT Programme. The objective of this measure is to respond to national security risks within the international supply chain, and employees exploiting the international supply chain to move illicit goods across the border.

Provision of the information requested under subsection 23(9) is deemed reasonable as membership of the ATT Programme is voluntary, and entities can choose to withdraw their application to join the program if they choose not to supply this information. Further, without this information criminal history checks and cross checking against internal Departmental supply chain security risk lists cannot be conducted, which exposes the ATT Programme to the risk of accrediting entities that may be a risk to security of the international supply chain and compromise the integrity of the Programme.

If relevant, the information provided by the entity may need to be disclosed to other Government agencies for the purposes of assessing the risk associated with the entity being a trusted trader. To the extent that an entity’s right to privacy is affected by this instrument, the impact is not arbitrary. The information that may be communicated by an entity to demonstrate how it meets the qualification criteria in the Rule is reasonable and proportionate to achieving the legitimate aim of the ATT Programme and is necessary to ensure proper governance of the ATT Programme. The collection, use and disclosure of this information will be done in accordance with the Privacy Act 1988 (and its Australian Privacy Principles), and the Australian Border Force Act 2015.

The right to honour and reputation is also engaged by the Rule, because it allows certain kinds of information for each trusted trader agreement entered into, to be published on a Register of Trusted Trader Agreements. This engages the right to honour and reputation because the Register of Trusted Trader Agreements may contain information such as:

• the business name or trading name of the entity that has entered into a trusted trader agreement;
• the kinds of benefits that the entity is receiving, or will receive, under the agreement;
• whether the agreement is in force;
• whether the agreement is currently suspended and, if so, the day the suspension started;
• whether the agreement has been terminated, and if so, the day of termination.

Disclosure of this information is necessary to ensure transparency of the ATT Programme, as it allows other entities in the international supply chain to make an informed decision when they are choosing business partners and want to link with other trusted traders to ensure an end to end secure international supply chain. 

To the extent that Article 17 of the ICCPR is engaged by the Rule, the interference with that right is not arbitrary. The provisions in the Rule are reasonable, necessary and proportionate to achieving the legitimate aim of the ATT Programme and will ensure proper governance and transparency of the Programme within the Department.

Right to a fair hearing

Article 14(1) of the ICCPR provides that all persons shall be equal before the courts and tribunals and all persons have the right to a fair and public hearing before a competent, independent and impartial court or tribunal established by law. The Article includes that procedures followed in a hearing should respect the principle of 'equality of arms', which requires that all parties to a proceeding must have a reasonable opportunity of presenting their case under conditions that do not disadvantage them against other parties to the proceedings.

Part 7 of the Rule promotes the right to a fair hearing by requiring the Comptroller-General of Customs to provide a show cause notice if the Comptroller-General of Customs proposes to vary or terminate an agreement under section 178A of the Customs Act. Section 178A of the Act provides that the Comptroller-General of Customs may vary, suspend or terminate a trusted trader agreement if the Comptroller-General of Customs reasonably believes that the entity to which the agreement relates has not complied, or is not complying, with any condition prescribed by the rules or any term or condition specified in the agreement.

The show cause notice must state the reasons for the proposed variation or termination and invite the entity to respond, in writing, to show cause why the agreement should not be varied or terminated as proposed. If received within the period stated in the notice, the entity’s response to the show cause notice must be considered by the Comptroller-General of Customs prior to a decision being made to vary or terminate an agreement. Additionally, when making a decision to vary or terminate an agreement, the Comptroller-General of Customs must consider the extent and degree of the non-compliance, any disclosure by the entity to the Department of that non-compliance, whether that non-compliance was for reasons beyond the entity’s control, any action taken, or proposed to be taken, by the entity to prevent or remedy that non-compliance and any action taken or proposed to be taken by the entity to prevent further non-compliance of a similar nature. The entity will also be provided with information on the review mechanisms available to them following a decision by the Comptroller-General of Customs under section 178A of the Act.

The right to a fair hearing may be seen to be limited when a decision is made by the Comptroller-General of Customs to immediately suspend an entity under section 27 of the Rule.  This is because a show cause notice is not required to be given before such a decision is made. However, when deciding whether to suspend a trusted trader agreement with immediate effect, the Comptroller-General of Customs must consider whether the entity’s non-compliance (with a condition prescribed by the Rule or a term or condition specified in the agreement) presents an immediate serious risk to the Commonwealth, the security of the entity’s international supply chain, or the objectives or the administration of the ATT Programme. 

If the Comptroller-General of Customs makes a decision to suspend the agreement with immediate effect, the Comptroller-General of Customs must give the entity a written notice of immediate suspension including reasons for the suspension; the period and effect of the immediate suspension. 

In addition, the Comptroller-General of Customs may accompany the notice of immediate suspension with a show cause notice if it is also proposed to vary or terminate the trusted trader agreement. This provides the entity with a reasonable opportunity to present any reasons or arguments to support their case prior to a decision being made by the Comptroller-General of Customs on whether to vary or terminate the agreement.

Right to Equality and Non-discrimination

Article 2(1) of the ICCPR and Article 2(2) of the ICESCR provide that the rights in both covenants are to be exercised without discrimination of any kind as to race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status. Similarly, Article 26 of the ICCPR provides that the law shall prohibit any discrimination and guarantee to all persons equal and effective protection against discrimination on any ground such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status.

A mandatory condition on which an entity participates in the ATT Programme is that a relevant person must not be convicted of certain offences (subsection 23(4)). Relevant persons under subsection 23(5) include the entity; if the entity is a body corporate – each director; if the entity is a partnership – each partner; if the entity is a trust or trustee of a trust – each trustee; or a person employed or contracted by the entity or by a contractor of the entity, to undertake an activity that forms part of the entity’s international supply chain. The differential treatment of entities participating in the ATT Programme based on convictions for particular offences may engage the rights of equality and non-discrimination on the basis of ‘other status.’

The objective of this requirement is to maintain the integrity of the ATT Programme by minimising the risks to the security of the international supply chain and the Commonwealth. To the extent this condition limits the rights to equality and non-discrimination by preventing certain entities from participating in the ATT Programme, is it reasonable, necessary and proportionate to achieving this objective. The condition only applies to persons within the entity in management positions and those undertaking activities that form part of the entity’s international supply chain. This is the least restrictive means of ensuring that entities participating in the ATT Programme do not pose a risk to the security of the international supply chain. Further, an entity nominates itself to participate in the ATT Programme and does so aware of the mandatory conditions of participation. As a result, the condition is a reasonable and appropriate limitation to ensure that only those entities with strong supply chain security are eligible to participate in and receive trade facilitation benefits under the ATT Programme.

Conclusion

This Disallowable Legislative Instrument is compatible with human rights because to the extent it may limit human rights, those limitations are reasonable, necessary and proportionate.

Gavan Reynolds AO

Comptroller-General of Customs

[1] An AEO is a party involved in the international movement of goods in whatever function that has been approved by or on behalf of a national Customs administration as complying with WCO or equivalent supply chain security standards.  In the context of the Programme, an entity would be considered to have AEO status once the Comptroller-General of Customs is satisfied that the entity satisfies the qualification criteria in Part 2 of the Rule.