EXPORT MARKET DEVELOPMENT GRANTS ACT 1997

Explanatory Statement

Guidelines for the approval, variation of approval and cancellation of approved trading houses

The Export Market Development Grants Act 1997 (the Act) provides non-discretionary grants to Australian businesses which have incurred specified expenses promoting the export of their Australian goods, services, intellectual property rights, and know how. The grant is a partial reimbursement of the expenses incurred.

The Act recognises that there are a number of Australian businesses which have competitive product but lack the ability and resources to undertake successful export. The approved trading house provisions of the Act facilitate the promotion of these products by allowing large well experienced organisations to undertake the promotion of these products. To assist the promotion of these products, approved trading houses are not restricted by the general eight grant limit, and are eligible for a maximum annual grant of $500,000 instead of the

$250,000 maximum which applies to all other applicants. The product promoted must be 'new' business of the trading house. To this extent an approved trading house may purchase eligible goods, intellectual property or know how from other Australian business (ie. be principle or intended principle in. any transaction), and it may promote the intellectual property or know how of other Australian business.

Organisations wishing to be approved are required to apply to Austrade for status - refer to paragraph 6(l)(t) and subsection 88(3) of the Act. Approval automatically expires after three

years, but, as indicated above, and assuming there is no reason not to renew status, the life of

an approve trading house is not restricted by the general eight grant limit. Organisations are considered for approval, variation of approval and cancellation against ministerial guidelines which are a disallowable instrument for the purposes of the Acts Interpretation Act 1901 - refer to paragraph 101(1)(c) of the Act.

The guidelines canvass such issues as resources and commitment, business record, financial strength, level of planning, and level of net benefit to Australia, and set down factors against each criteria which are to be considered in assessment. The guidelines also list circumstances where approval would generally not be granted. Cancellation of an approval is generally limited to circumstances where the conditions of approval have not been met by the approved entity.