Customs (Definition of “small-medium enterprise”) Determination 2013

Administered by Department of Industry, Science and Resources

Legislation au F2013L02171 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

Issued by the authority of the Minister for Industry

 

Subject: - Customs Act 1901

 Customs (Definition of “small-medium enterprise”) Determination 2013

 

Authority

 

Subsection 269T(1B) of the Customs Act 1901 provides that the Minister may, by legislative instrument,  prescribe kinds of enterprises for the purposes of the definition of small-medium enterprise in subsection (1).

 

Purpose and operation

 

This instrument sets out the kinds of enterprises which fall within the definition of small-medium enterprise in subsection 269T(1) of the Customs Act 1901.

 

Background

 

The purpose of the Determination is to allow the Minister to define “small-medium enterprise” for the purposes of determining if the Minister is not required to have regard to the lesser duty rule.

 

Sections 8(5B), 8(5BA), 9(5AA), 10(3C), 10(3D), 11(5)  of the Customs Tariff (Anti-Dumping)  Act 1975 require the Minister to consider the desirability of fixing a lesser amount of duty than the dumping (or subsidy) margin where the imposition of that lesser amount is adequate to remove injury. This is referred to as the “lesser duty rule”.

 

The Minister is not required to have regard to the lesser duty rule where the Minister is satisfied that certain circumstances exist as prescribed in subsections 8(5BAA), 8(5BAAA), 9(5AAA), 10(3CA), 10(3DA), 11(5A) of the Customs Tariff (Anti-Dumping) Act 1975 and subsection 269TG(5A), 269TJ(3BA) of the Customs Act 1901.  The removal of the requirement for the mandatory consideration of the lesser duty rule in particular circumstances was introduced by the Customs Amendment (Anti-dumping Measures) Act 2013 and the Customs Tariff (Anti‑Dumping) Amendment Act 2013.

 

The finding of these circumstances does not prevent the Minister from considering and applying the lesser duty rule where those specified circumstances exist and where the Minister considers it would be appropriate to do so.

 

One of the prescribed circumstances in which the Minister is not required to have regard to the lesser duty rule is where the Australian industry in respect of like goods consists of at least two small-medium enterprises.  Subsection 269T(1B) of the Customs Act 1901 allows the Minister to make a legislative instrument for the purposes of defining “small-medium enterprise”.  This Determination defines “small-medium enterprise” and provides clarity to parties engaged in Australia’s anti-dumping system.

 

This Determination will allow the Minister to not have regard to the lesser duty rule where two or more members of the Australian industry producing like goods identify themselves as “small-medium enterprises”. 

 

The definition, as provided by the Determination, is intended to exclude producers or manufacturers that are related to, or that are not at arms‑length from, other producers or manufacturers within the same industry.  For example where two entities are subsidiaries of the same enterprise, those two entities would be excluded from the definition of a “small-medium enterprise”.  Further, an enterprise would not fall within the definition where it is a division of (ie not independent from) another enterprise.

 

Commencement

 

This instrument commences on commencement of the Customs Amendment (Anti-dumping Measures) Act 2013.

 

 

Consultation

 

The Commonwealth undertook targeted consultation on the implementation of the reforms that are given effect by the Customs Amendment (Anti-dumping Measures) Act 2013 and the Customs Tariff (Anti-Dumping) Amendment Act 2013.  On 25 March 2013 the International Trade Remedies Forum, whose members consist of anti‑dumping stakeholders, was consulted on the implementation of the reforms included in the Customs Amendment (Anti-dumping Measures) Act 2013.  Following this, on 24 May 2013 members of the International Trade Remedies Forum were provided with an exposure draft of the Customs Amendment (Anti-dumping Measures) Act 2013 and the Customs Tariff (Anti‑Dumping) Amendment Act 2013.

 

The International Trade Remedies Forum brings together representatives from Australian manufacturers and producers, importers, downstream industry, industry associations, unions, and relevant Government agencies.  The International Trade Remedies Forum provides high-level strategic advice and feedback to the Government on the implementation and monitoring of reforms to Australia’s anti‑dumping system. 


Statement of Compatibility with Human Rights

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

Customs (Definition of “small-medium enterprise”) Determination 2013

This 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

The Instrument defines the term, ‘small-medium enterprise’ for the purposes of the subsection 269T(1) of the Customs Act 1901. This definition is used to determine the circumstances in which the Minister is not required to have regard to the desirability of fixing a lesser amount of duty under the Customs Act 1901.

Human rights implication

This Instrument does not engage any of the applicable rights or freedoms.

 

Conclusion

The Instrument is compatible with human rights as it does not raise any human rights issues.

 

The Minister for Industry, the Honourable Ian Macfarlane MP

 

Overview

The Customs (Definition of “small-medium enterprise”) Determination 2013 was enacted to provide clarity on the definition of “small-medium enterprise” as outlined in subsection 269T(1) of the Customs Act 1901. This determination was made under the authority granted by subsection 269T(1B) of the Customs Act 1901, allowing the Minister for Industry to prescribe kinds of enterprises for the purpose of defining small-medium enterprises. The primary objective of this determination is to ensure that the Minister is not required to consider the lesser duty rule in certain circumstances, specifically when the Australian industry in respect of like goods consists of at least two small-medium enterprises. The determination excludes enterprises that are related or not at arms-length from other producers or manufacturers within the same industry, ensuring that the definition applies only to genuinely independent small-medium enterprises. This legislative instrument came into effect on the commencement of the Customs Amendment (Anti-dumping Measures) Act 2013 and was developed following targeted consultation with stakeholders through the International Trade Remedies Forum.

Scope and Application

The Customs (Definition of “small-medium enterprise”) Determination 2013 provides a definition for the term “small-medium enterprise” under the Customs Act 1901. It applies to the Minister for Industry who, under the authority of subsection 269T(1B) of the Customs Act, is empowered to prescribe kinds of enterprises that fall within the definition of small-medium enterprise. This determination is crucial for defining the circumstances under which the Minister is not required to consider the lesser duty rule, which applies in anti-dumping duties scenarios. The determination came into effect on the commencement of the Customs Amendment (Anti-dumping Measures) Act 2013 and is designed to provide clarity to parties involved in Australia’s anti-dumping system. It excludes producers or manufacturers related to, or not at arms-length from, other producers within the same industry, and further excludes entities that are divisions of other enterprises, ensuring independent entities are classified as small-medium enterprises.

Key Provisions

The Customs (Definition of “small-medium enterprise”) Determination 2013 primarily provides a definition for the term "small-medium enterprise" (SME) under subsection 269T(1) of the Customs Act 1901 (sections 269T(1A) and 269T(1B)). This definition is crucial in determining whether the Minister for Industry is required to consider the lesser duty rule in anti-dumping proceedings. A small-medium enterprise, as defined, must be independent and not related to other enterprises in the same industry, which excludes entities such as subsidiaries or divisions of larger corporations. This Determination ensures that only genuinely independent and separate entities qualify as SMEs for the purposes of the anti-dumping duty considerations. The obligations imposed by this Determination on the entities it governs are straightforward but significant. Entities that wish to be recognised as SMEs must ensure that they meet the criteria set out in the Determination, namely that they are independent and not related to other enterprises in the industry. This means that entities must avoid any structural or ownership relationships that would disqualify them from SME status. Failure to comply with these requirements could result in the Minister considering the lesser duty rule, which might not be in the best interests of the entity if it is genuinely an SME. There are no specific offences or penalties outlined in the Determination itself. However, the broader legislative framework within which this Determination operates includes provisions that may result in civil or criminal penalties for breaches. For instance, under the Customs Act 1901, misleading or deceptive conduct in relation to customs matters can lead to significant penalties. While the Determination itself does not impose direct penalties, entities that fail to comply with its requirements may find themselves subject to the broader provisions of the Customs Act and related Acts, potentially resulting in substantial fines or other legal consequences.

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