EXPLANATORY STATEMENT
STATUTORY RULES 1984 No. 350
Issued by the Authority of the Minister for Primary Industry
DAIRY PRODUCE EXPORT CONTROL (LICENCES) REGULATIONS
(AMENDMENT)
The Dairy Produce Export Control (Licences) Regulations prohibit the exportation of dairy products from the Commonwealth except in accordance with such conditions and restrictions as are prescribed in the regulations.
Australia has entered into certain treaty obligations under the General Agreement on Tariffs and Trade (GATT) International Dairy Arrangement (IDA) and, as a result, has undertaken to observe the conditions for the export of dairy products as specified by the IDA. The IDA includes the Protocol Regarding Milk Powders, the Protocol Regarding Milk Fat and the Protocol Regarding Certain Cheeses, which provide, inter alia, for minimum export prices for certain dairy products to be observed at the free on board level. Since 1 October 1981 these have been as follows:
Dairy Products | $US Per Tonne |
Skimmed milk powder | 600 |
Whole milk powder | 950 |
Buttermilk powder | 600 |
Anhydrous milk fat | 1,440 |
Butter | 1,200 |
Cheese | 1,000 |
In September 1983 an amendment to the Dairy Produce Export Control (Licences) Regulations was made which made the observance of GATT-IDA minimum prices a specific condition for the exporting of dairy products.
On 16 November 1984, at a special meeting of the International Dairy Products Council (IDPC) of the IDA held in Geneva, a resolution was passed which found that European Community butter disposal measures have threatened the trade interests of all other participants in certain markets, and which allows those participants to take action in the short term to safeguard their position by, for example, making sales at prices below the minima specified in the Protocol Regarding Milk Fat.
In order for Australia to take benefit from the IDPC resolution authorising exports at prices below the GATT-IDA minima, an amendment to Regulation 8 of the Dairy Produce Export Control (Licences) Regulations will be required as currently Regulation 8 defines the IDA as that in force at the commencement of that regulation, ie. September 1983. Accordingly, following the resolution of the IDPC, an amendment has been drafted to Regulation 8(2) defining the IDA as that in force at 1 December 1984.
The present Regulation 8 also stipulates the rate of exchange to be used for ascertaining the value in United Sates dollars of dairy produce, for the purposes of the Regulation, as the rate of exchange determined by the Reserve Bank on the day on which the produce is sold or consigned for sale. However, following the floating of the Australian dollar vis a vis other currencies, the Reserve Bank no longer determines rates of exchange. Exporters can now obtain rates of exchange from foreign exchange dealers who are authorised under Regulation 38A of the Banking (Foreign Exchange) Regulations to deal in Australia with foreign currency.
An amendment has therefore been drafted to amend Regulation 8 of the Dairy Produce Export Control (Licences) Regulations to take into account the changed method of obtaining rates of exchange for the purposes of that regulation.
Overview
The Dairy Produce Export Control (Licences) Regulations (Amendment) 1984 was enacted to address the need for updating the regulatory framework for the export of dairy products in Australia in light of international trade agreements and market conditions. This amendment was introduced by the Commonwealth Government and issued by the Minister for Primary Industry to ensure compliance with the evolving terms of the General Agreement on Tariffs and Trade (GATT) International Dairy Arrangement (IDA). The policy objective was to facilitate the export of dairy products while safeguarding Australia's trade interests, particularly in response to European Community butter disposal measures that threatened the interests of other IDA participants. The amendment aimed to align the regulatory definition of the IDA with the resolution passed by the International Dairy Products Council in November 1984 and to adjust the method of obtaining exchange rates following the floating of the Australian dollar.
Scope and Application
The Dairy Produce Export Control (Licences) Regulations (Amendment) Statutory Rules 1984 apply to all persons and entities involved in the export of dairy products from Australia. The regulation primarily serves to ensure compliance with the conditions and restrictions set forth in the regulations, which are designed to align with Australia's treaty obligations under the General Agreement on Tariffs and Trade (GATT) International Dairy Arrangement (IDA). The geographic reach of these regulations is national, governing the conduct of exporters across the Commonwealth. Excluded from the scope of these regulations are dairy products intended for export under specific conditions as prescribed, including adherence to the minimum export prices set by the IDA protocols. The amendment to the regulations also adjusts the definition of the IDA to reflect its status as of 1 December 1984, and modifies the method for determining the exchange rate of the Australian dollar for the purposes of these regulations, now allowing exporters to use rates provided by authorised foreign exchange dealers. This amendment is necessary to adapt to the changes in currency exchange practices following the floating of the Australian dollar.
Key Provisions
The Dairy Produce Export Control (Licences) Regulations (Amendment) primarily amend Regulation 8, as noted in section 1 of the statutory rules. The amendment updates the definition of the International Dairy Arrangement (IDA) to include the resolution passed on 1 December 1984 by the International Dairy Products Council (IDPC). This change is necessary to allow Australia to take advantage of the IDPC resolution which permits sales at prices below the GATT-IDA minima. Additionally, the amendment adjusts the method of determining the exchange rate for ascertaining the value of dairy produce in United States dollars. Instead of using the rate determined by the Reserve Bank, it now allows exporters to obtain rates from authorised foreign exchange dealers under Regulation 38A of the Banking (Foreign Exchange) Regulations.
The amended Regulation 8 places specific obligations on dairy product exporters. They must now ensure that their exports comply with the updated definition of the IDA, which includes the IDPC resolution. This means they can export at prices below the GATT-IDA minima when required. Furthermore, they must use the exchange rates provided by authorised foreign exchange dealers to ascertain the value of their produce in US dollars. This requirement ensures that the value calculations are based on current market conditions, reflecting the floating of the Australian dollar.
Failure to comply with the amended regulations can result in significant consequences. The primary risk is the potential for fines or other penalties imposed by the relevant authorities for non-compliance. Although the statutory rules do not specify maximum penalties, breaches of export regulations can lead to financial penalties, reputational damage, and the possibility of export bans. In severe cases, repeated or deliberate violations could result in criminal charges, potentially leading to imprisonment. These consequences underscore the importance of adhering to the updated regulatory requirements.