EXPLANATORY STATEMENT
Determination limiting membership of approved joint ventures and consortia
Issued in accordance with subsection 40BH(l) of the Export Market Development Grants Act 1974 (EMDG)
The Export Market Development Grants Act 1974 has established an export incentives scheme. Within certain limitations, the scheme part reimburses the export development and promotional costs of Australian residents endeavoring to export Australian goods and services.
Section 40BD of the Act provides that the Australian Trade Commission may approve a group of persons as an approved joint venture or consortium (ANC). Approval is 'project' specific and an AJVC may not undertake activities outside of the approved 'project'. An ANC has a status separate from the activities of its members, and grants paid to the ANC do not limit the right of an individual member to receive grants In its own right. Previously there was no limit to the number of ANC of which a person may be a member.
The EMDG scheme is focused on small to medium size business. It is considered that this business does not have the resources to meaningfully pursue unlimited numbers of projects. a concentration of resources in a few projects generally would lead to greater overall success.
Section 40BH of the Act provides for a limit to be placed on the number of ANC of which an individual may be a member at any one time. Subsection 40BH(l) provides that that limit be set by ministerial determination. A limit of three (3) is considered appropriate and the Minister for Trade made a written determination to this effect on 4 July 1996.
Subsection 40BH(5) provides that the determination is a disallowable instrument for the purposes of section 46A of the Acts interpretation Act 1901.
Overview
The Export Market Development Grants Act 1974 was enacted to support Australian businesses in developing and promoting their exports, particularly focusing on small to medium-sized enterprises that might otherwise lack the resources to engage in such activities. The Act established a scheme whereby export development and promotional costs for Australian goods and services could be partially reimbursed, subject to certain limitations. However, the Act recognised a potential issue where individuals could be members of an unlimited number of approved joint ventures or consortia (AJVC), which could dilute the focus and resources necessary to achieve meaningful success in specific projects. To address this, the Act was amended to include a provision that allows the Minister for Trade to limit the number of AJVCs in which an individual may participate simultaneously, with the aim of concentrating resources and improving overall project success. This legislative change was implemented through a ministerial determination, which set the limit at three AJVCs per individual.
Scope and Application
The Export Market Development Grants Act 1974 (EMDG) establishes a scheme that reimburses Australian residents for costs associated with the development and promotion of exports of Australian goods and services. Within the parameters of this scheme, the Australian Trade Commission is authorised to approve groups of persons as approved joint ventures or consortia (AJVC) on a project-specific basis. This determination, issued under subsection 40BH(1) of the Act, imposes a limit on the number of AJVC of which an individual can be a member at any given time to ensure that resources are concentrated in a limited number of projects, which is deemed beneficial for overall success, particularly for small to medium-sized businesses that may lack the resources to effectively manage multiple projects simultaneously. The limit set by the Minister for Trade on 4 July 1996 is three AJVC per individual, a restriction that is subject to disallowance under section 46A of the Acts Interpretation Act 1901. This legislation applies specifically to individuals who seek to participate in multiple AJVC within the scope of the EMDG scheme.
Key Provisions
The Export Market Development Grants Act 1974 (EMDG) sets up a scheme aimed at supporting Australian businesses in their export activities by reimbursing them for costs related to development and promotion of their goods and services in overseas markets. Section 40BD of the Act allows the Australian Trade Commission to approve groups of persons as approved joint ventures or consortia (AJVC), which can then apply for grants. Importantly, these AJVCs are limited to the scope of the specific project they are approved for, and they possess a distinct status from their individual members. This means that a grant awarded to the AJVC does not affect an individual member’s eligibility to receive a grant independently. Previously, there was no restriction on the number of AJVCs an individual could be a part of.
The Act's provisions are particularly beneficial to small to medium-sized enterprises, as they may not have the resources to engage in multiple projects simultaneously. To ensure these businesses can focus their resources effectively and improve their chances of success, Section 40BH introduces a limit on the number of AJVCs an individual can be a member of at any given time. The Minister for Trade, exercising the powers granted under Subsection 40BH(1), determined that a limit of three (3) AJVCs is appropriate and issued a written determination to this effect on 4 July 1996. This determination is subject to the disallowance provisions under Section 46A of the Acts Interpretation Act 1901, allowing for parliamentary scrutiny and potential disallowance of the decision.
Under the Act, the obligations imposed on parties involve ensuring compliance with the established limits on membership in AJVCs. Members must adhere to the specific project scopes for which they are approved and cannot engage in activities outside these approved parameters. The Australian Trade Commission must carefully review and approve applications to ensure that the participants meet the eligibility criteria and that the proposed projects align with the objectives of the EMDG scheme. Furthermore, members of an AJVC are required to provide accurate and complete information regarding their participation in other AJVCs to avoid any potential breaches of the membership limit.
Failure to comply with the membership limits or other provisions of the Act can lead to civil and criminal consequences. While the Explanatory Statement does not explicitly detail the penalties for breaches, the general legal framework in Australia allows for various sanctions, including fines and imprisonment, depending on the severity of the breach. The Act’s provisions are designed to maintain the integrity of the export incentives scheme and to ensure that the benefits are appropriately distributed to eligible businesses. Any determination by the Minister under Section 40BH(1) can be subject to disallowance, providing a safeguard against arbitrary or excessive limitations being imposed on the industry.