EXPLANATORY STATEMENT
STATUTORY RULES 1987 NO. 115
ISSUED BY THE AUTHORITY OF THE MINISTER OF STATE FOR INDUSTRY, TECHNOLOGY AND COMMERCE
The United States and a number of other (mainly NATO) countries, concerned at the implications of access to militarily sensitive dual-use technology, operate through a Co-ordinating Committee for Multilateral Export Controls (“COCOM”) to restrict access to such technology to “eastern-block” countries.
Although not a member of COCOM, Australia has for some years voluntarily adhered to the COCOM objectives by restricting access to dual-use technology to the prescribed eastern-block countries; such a policy generally ensures access by Australia to the United States’ and NATO’s dual-use technology. However, notwithstanding this informal support, the absence of legislative basis for this policy tends to operate to the disadvantage of Australian firms purchasing or tendering on the US market for goods embodying that technology. In December 1985 Cabinet agreed to continue to adhere to the COCOM guidelines for the control of exports, and charged the Minister for Defence with responsibility for devising arrangements for, and administration of, these controls.
The Minister for Defence has established the administrative arrangements for implementing the controls within the Department of Defence.
In addition, in relation to cryptographic equipment, Cabinet also decided that the existing controls be extended to cover all such equipment, and not just equipment of that kind which is designed or adapted for warlike purposes.
The proposed Statutory Rule embodies the established policy in the Customs (Prohibited Exports) Regulations (“the Regulations”) to prohibit the exportation of prescribed goods unless a permission is first obtained, by inserting new regulations 13E and 13F and Schedule 15, which refer to a comprehensive list of the dual-purpose technology published by the Minister for Defence in a Periodic Gazette No. P1 dated 6 January 1987; and also extends the existing coverage of cryptographic equipment in Schedule 13 in accordance with the Cabinet decision.
The amendments provide as follows:
Regulation 1 of the Statutory Rule is a formal machinery provision, to refer to the Customs (Prohibited Exports) Regulations as the “Principal Regulations”.
Regulation 2 of the Statutory Rule inserts new regulations 13E and 13F into the Principal Regulations.
Subregulations 13E(1) and 13E(2) empower the Minister for Defence or an authorized person to grant permission to export to countries specified in Column 2 of the new Schedule 15 (as to which see regulation 4 of the Statutory Rule), goods specified in Gazette No. P1 dated 6 January 1987.
Subregulation 13E(3) provides that a permission shall be granted subject to compliance by the holder of the permission at the time the goods are exported with the following conditions:
a. that the goods are exported within 6 months of the granting of the permission, or such longer period as is specified in the permission - paragraph 13E(3)(a);
b. that the goods are exported to a person specified in the permission, to a country specified in the permission - paragraph 13E(3)(b);
c. that the holder will, if required, provide undertakings or obtain undertakings from a consignee, relating to the re-export or disposal of the goods - paragraph 13E(3)(c);
d. that the holder will, if required, specify the procedures to be followed to verify that undertakings given by a consignee have been complied with - paragraph 13E(3)(d);
d. that the holder will, if required, provide evidence that undertakings given by a consignee have been complied with - paragraph 13E(3)(e);
Subregulations 13E(4), 13E(5) and 13E(6) provide that, with the consent of the Minister for Defence or an authorized person, a permission may be surrendered in exchange for a permission to export goods of the kind to which the surrendered permission relates, and that the permission so granted may be varied or modified from the surrendered permission as the case requires.
Subregulation 13E(7) provides that the Minister for Defence or an authorized person may revoke a permission where the holder has failed to comply with a condition specified in the permission.
Regulation 13F provides that the Minister or an authorized person may, by notice published in the Gazette, declare that a permission shall cease to have force from a day specified in the notice.
Regulation 4 of the Statutory Rule inserts new Schedule 15 into the Regulations, to provide a list of countries in respect of which a permission is required to export those goods specified in Gazette No. P1 dated 6 January 1987. The countries are:
Afghanistan;
Albania;
Bulgaria;
Czechoslovakia;
Democratic People’s Republic of Korea;
German Democratic Republic;
Hungary;
Mongolian People’s Republic;
People’s Republic of China;
Poland;
Romania;
Union of the Soviet Socialist Republics;
Vietnam;
Amendments relating to cryptographic equipment
• Regulation 13B of the Regulations provides that goods specified in Schedule 13 to the Regulations shall not be exported without the permission of the Minister of State for Defence.
Regulation 3 of the Statutory Rule extends Schedule 13 to the Regulations to prevent the export of any cryptographic equipment without the consent of the Minister for Defence, regardless of whether such equipment is designed or adapted for warlike purposes.
Overview
The Customs (Prohibited Exports) Amendment Statutory Rule 1987 (Statutory Rule 1987 No. 115) was enacted to formalise Australia's adherence to the Coordinating Committee for Multilateral Export Controls (COCOM) guidelines for the export of dual-use technology, particularly to Eastern Bloc countries. Although not a member of COCOM, Australia voluntarily followed COCOM's objectives to restrict access to such technology, ensuring access to allied countries' dual-use technology. The legislation addresses the absence of a legislative basis for this policy, which previously disadvantaged Australian firms in the United States market. The rule was issued under the authority of the Minister of State for Industry, Technology and Commerce and was intended to provide a legislative foundation for these export controls, thus facilitating trade with allies while maintaining national security interests.
The policy objective, as outlined in the explanatory statement, was to continue adhering to COCOM guidelines and to extend the existing controls to cover all cryptographic equipment, not just those designed or adapted for warlike purposes. The statutory rule was enacted by the Parliament of Australia and aimed to implement the Cabinet's decision from December 1985, which charged the Minister for Defence with the responsibility for devising and administering these controls. This legislative measure ensures that Australia's export restrictions on dual-use technology are legally grounded, thus providing clarity and legal certainty for both domestic firms and international trade partners.
Scope and Application
The Statutory Rules 1987 No. 115, issued under the authority of the Minister of State for Industry, Technology and Commerce, formalises Australia's adherence to the Co-ordinating Committee for Multilateral Export Controls (COCOM) guidelines regarding the export of dual-use technology to certain countries, including those in the eastern bloc. This legislation applies to entities and individuals involved in the export of prescribed dual-use technology and cryptographic equipment, thereby ensuring compliance with the broader international export control regime. The scope of the Act is national, applying across Australia, and it extends to cover all cryptographic equipment, not just those designed or adapted for warlike purposes. The Act does not explicitly outline exclusions or exemptions, but the permissions required for exporting controlled goods are subject to specific conditions, such as the time frame for export and the end-use of the goods. The regulations are enforced through the Customs (Prohibited Exports) Regulations, which are supplemented by Schedule 15 detailing the countries requiring export permissions. The Act can be further refined through subordinate instruments, allowing for adjustments to the list of controlled goods or countries as international circumstances evolve.
Key Provisions
The key operative sections of the Statutory Rule revolve around the new regulations 13E and 13F (section 2) and the new Schedule 15 (section 4). Regulation 13E (section 2(2)) empowers the Minister for Defence or an authorized person to grant permission for the export of specified dual-use technology to certain countries, as listed in the new Schedule 15 (section 4). This permission is subject to specific conditions, including time limits for export, named consignees, and countries of destination (section 2(3)). Regulation 13F (section 2(4)) allows the Minister or an authorized person to declare that a permission shall cease to have effect from a specified date, providing flexibility in managing export permissions. The Statutory Rule also extends the prohibition on the export of cryptographic equipment (section 3), ensuring that any such equipment requires consent from the Minister for Defence, irrespective of its intended use.
The obligations imposed by the Statutory Rule on parties seeking to export dual-use technology or cryptographic equipment are substantial. Firstly, any exporter must obtain a permission from the Minister for Defence or an authorized person before exporting the specified goods (section 2(2)). This permission is conditional and must be adhered to strictly, including compliance with the export timeline, consignee specifications, and country of destination (section 2(3)). Exporters must also be prepared to provide undertakings or obtain them from consignees concerning the re-export or disposal of the goods, and demonstrate compliance with these undertakings if required (section 2(3)(c), (d), (e)). Furthermore, the permission may be revoked if the holder fails to comply with any of its conditions, and it can be surrendered or modified with the consent of the Minister for Defence or an authorized person (section 2(4)-(6)). Exporters must remain vigilant and proactive in managing these permissions to avoid any breaches.
The Statutory Rule imposes stringent consequences for any breach of its provisions. Firstly, the failure to obtain the necessary permission before exporting dual-use technology or cryptographic equipment can lead to significant legal repercussions. Section 2(7) allows for the revocation of permissions where the holder has not complied with the conditions set forth in the permission. Moreover, any exporter found in breach of the Statutory Rule's conditions may face civil or criminal penalties, although specific penalties are not detailed within the provided text. The potential consequences underscore the importance of strict adherence to the regulations and the need for careful management of export permissions to avoid legal and financial ramifications.