EXPLANATORY STATEMENT
Export Market Development Grants (Change in Ownership of Business) Guidelines 2016
Authority
The Export Market Development Grants (Change in Ownership of Business) Guidelines 2016 is made by the Minister for Trade and Investment under paragraph 101(1)(d) of the Export Market Development Grants Act 1997 (the EMDG Act).
Purpose
This Legislative Instrument details guidelines to be complied with by the Chief Executive Officer (CEO) of Austrade in determining, for the purposes of subparagraph 94(1)(b)(ii) of the EMDG Act, whether a business or a part of a business that was carried on by a person is similar to a business being carried on by another person to such an extent that the new business should be treated as a continuation of the old business.
Background
The EMDG Act provides for grants to eligible Australian businesses which have incurred eligible 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.
Entitlement to a grant depends on (among other things) whether the business has been the recipient of a previous EMDG grant, or whether the business is part of a business that has been the recipient of an EMDG grant.
Section 94 ‘Change in ownership of business etc.’ of the EMDG Act allows the CEO of Austrade to ensure that a business does not become eligible for grants above the normal limit of seven simply because the business changes ownership. The section provides that if the business of the new owner is similar to the business of the previous owner, then Austrade may attach the grants history of the previous owner (including grants already paid) to the new owner.
Decisions under these guidelines are reviewable in the Administrative Appeals Tribunal.
Commencement
The Guidelines are made to repeal and replace the Export Market Development Grants (Change in Ownership of Business) Guidelines 2006, which is due to sunset on 1 October 2016.
The Guidelines are the same in substance as the Export Market Development Grants (Change in Ownership of Business) Guidelines 2006.
The Guidelines apply when working entitlement to a grant in respect a grant made on or after 1 July 2016.
Consultation
Austrade conducted extensive stakeholder consultations before remaking this instrument. All stakeholder responses supported this instrument being remade, unchanged.
Regulation Impact Statement
The Office of Best Practice Regulation has advised that a Regulation Impact Statement is not required (reference: OBPR 20848).
This Guideline is a Legislative Instrument for the purposes of the Legislation Act 2003.
This Guideline is compatible with human rights and freedoms recognised or declared under section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. A full statement of compatibility is set out in Attachment A.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Export Market Development Grants (Change in Ownership of Business) Guidelines 2016
This Legislative 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 2001.
Overview of the Legislative Instrument
The Legislative Instrument provides Guidelines for the Chief Executive Officer of Austrade to use in determining if the applicant for an EMDG grant has been the recipient of a previous EMDG grant, or whether the business is part of a business that has been the recipient of an EMDG grant.
Human rights implications
This Legislative Instrument does not engage any of the applicable rights or freedoms.
Conclusion
This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.
Overview
The Export Market Development Grants (Change in Ownership of Business) Guidelines 2016 were enacted to provide guidance on determining whether a change in ownership of an Australian business should result in the transfer of previous grant entitlements under the Export Market Development Grants Act 1997. This Act was designed to support businesses that incur expenses promoting the export of Australian goods and services by providing grants as a partial reimbursement of those expenses. The guidelines address a gap by ensuring that businesses do not gain an unfair advantage in terms of grant eligibility simply due to a change in ownership. These guidelines are issued by the Minister for Trade and Investment under the authority of the Export Market Development Grants Act 1997, with the policy objective of maintaining fairness and integrity in the grant distribution process.
Scope and Application
The Export Market Development Grants (Change in Ownership of Business) Guidelines 2016 apply to businesses that have undergone a change in ownership and are seeking Export Market Development Grants (EMDG) from Austrade. These Guidelines are instrumental in determining whether the new business is considered a continuation of the previous one, thus affecting its eligibility for further grants under the EMDG Act. This determination is crucial for businesses that have been recipients of EMDG grants and are now subject to a change in ownership. The guidelines ensure that businesses do not gain undue advantages by simply changing ownership while maintaining similar operations. The Guidelines apply across Australia, extending the reach of the EMDG Act to all eligible businesses within the Commonwealth. These Guidelines do not apply to businesses that have not previously received EMDG grants or do not fall under the criteria of a change in ownership as defined by the EMDG Act. The application of these Guidelines is further refined and extended through subordinate instruments, which may include specific rules or additional criteria to assist in the implementation of the Guidelines.
Key Provisions
The Export Market Development Grants (Change in Ownership of Business) Guidelines 2016, made under the Export Market Development Grants Act 1997 (EMDG Act), provide the Chief Executive Officer (CEO) of Austrade with the criteria to determine if a business undergoing a change in ownership should be considered a continuation of a previously grant-eligible business. This determination is crucial for assessing the eligibility of the new business for Export Market Development Grants (sections 94 and 94(1)(b)(ii)). The guidelines ensure that businesses do not exploit multiple grants by simply changing ownership, maintaining the integrity of the grant program.
The Act imposes several obligations on the CEO of Austrade. These include the requirement to assess whether the new business is substantially similar to the old one, considering factors such as the nature of the business, the goods or services provided, and the markets served (section 94(1)(b)(ii)). The CEO must also ensure that the guidelines are applied consistently and fairly to all applicants. Additionally, any decisions made under these guidelines must be documented and can be reviewed by the Administrative Appeals Tribunal if deemed necessary.
Violations of the provisions within the Export Market Development Grants Act, including the misuse of grants due to improper determination of business continuity, can lead to various consequences. Although specific offences and penalties are not detailed within the guidelines, breaches of the Act can result in civil or criminal penalties under Australian law. These penalties can include fines and, in severe cases, imprisonment, depending on the nature and extent of the breach. The maximum penalties for such offences are determined by the specific provisions of the EMDG Act and other relevant legislation.