Explanatory Statement
Issued by the Authority of the Minister for Trade
Export Market Development Grants Act 1997
Export Market Development Grants (Democratic People’s Republic of Korea Sanctions) Declaration 2009
The Export Market Development Grants Act 1997 (the Act) establishes a scheme of assistance grants to encourage Australian exporters in the creation, development and
expansion of export markets for Australian goods, services, intellectual property and
know-how. Section 44 of the Act provides that the expenses of an applicant are excluded if they were incurred in respect of an eligible promotional activity related to
trade with a country that the Minister declares, by legislative instrument, for the purposes of section 44, to be subject to trade sanctions.
The United Nations Security Council (UNSC), in Resolutions 1718 of 14 October 2006 and 1874 of 12 June 2009, has imposed sanctions on the supply, sale or transfer to, or the procurement from, the Democratic People’s Republic of Korea (DPRK) of all arms and related matériel, and all items, materials, equipment, goods and technology which could contribute to the DPRK’s ballistic missile, weapons of mass destruction or nuclear programs, the provision to or procurement from the DPRK of services associated with these goods, and the supply, sale or transfer to the DPRK of luxury goods.
In addition, paragraph 20 of Resolution 1874 (2009) calls upon Member States of the United Nations not to provide public financial support for trade with the DPRK (including the granting of export credits, guarantees or insurance to their nationals or entities involved in such trade) where such financial support could contribute to the DPRK’s nuclear-related or ballistic missile-related or other WMD-related programs or activities.
In light of the imposition by the UNSC of trade sanctions on the DPRK, and the UNSC’s call for vigilance in relation to public provided financial support for trade with the DPRK, the Minister for Trade has declared, by this instrument, the DPRK to be subject to trade sanctions for the purposes of section 44 of the Act.
Public consultation was not undertaken under section 17 of the Legislative Instruments Act 2003 before the making of this instrument as the declaration by the Minister for Trade is concomitant to decisions that the UNSC has made under Chapter VII of the Charter of the United Nations and that Article 25 of the Charter requires Australia to carry out.
Overview
The Export Market Development Grants (Democratic People’s Republic of Korea Sanctions) Declaration 2009 was enacted to address the need for compliance with United Nations Security Council resolutions imposing trade sanctions on the Democratic People’s Republic of Korea (DPRK). The Export Market Development Grants Act 1997 provides a scheme for grants to assist Australian exporters, but Section 44 excludes expenses related to trade with countries subject to trade sanctions. The declaration by the Minister for Trade, issued under the authority of the Act, identifies the DPRK as a country under such sanctions, thereby ensuring that public financial support does not contribute to the DPRK's prohibited activities, including its nuclear, ballistic missile, and other weapons of mass destruction programs. This measure aligns with the obligations under Article 25 of the Charter of the United Nations, which mandates compliance with UNSC resolutions.
Scope and Application
The Export Market Development Grants (Democratic People’s Republic of Korea Sanctions) Declaration 2009 is an instrument made under the Export Market Development Grants Act 1997. The Act itself establishes a scheme of assistance grants intended to support Australian exporters in creating, developing, and expanding markets for Australian goods, services, intellectual property, and know-how. This scheme applies to Australian entities and individuals engaged in export activities, aiming to encourage and facilitate the growth of Australian trade in various markets. The geographic reach of the Act is national, applying across Australia. However, the 2009 Declaration specifically addresses transactions and conduct related to trade with the Democratic People’s Republic of Korea (DPRK). It excludes expenses incurred in connection with eligible promotional activities related to trade with the DPRK from the scope of the grants, in alignment with United Nations Security Council sanctions against the DPRK. The exclusion is a direct response to UNSC Resolutions 1718 and 1874, which impose trade sanctions on various goods and services related to the DPRK’s weapons programs, and call for restrictions on public financial support for trade with the DPRK. This instrument does not provide for subordinate legislation to extend or restrict its application further.
Key Provisions
The Export Market Development Grants (Democratic People’s Republic of Korea Sanctions) Declaration 2009, pursuant to the Export Market Development Grants Act 1997 (the Act), declares that the Democratic People’s Republic of Korea (DPRK) is subject to trade sanctions (section 44). This declaration is in response to United Nations Security Council (UNSC) Resolutions 1718 (2006) and 1874 (2009), which impose sanctions on the DPRK related to arms, ballistic missile, weapons of mass destruction, nuclear programs, and luxury goods. Additionally, the Resolutions call for vigilance against public financial support for trade with the DPRK that could contribute to these prohibited programs or activities.
This declaration imposes specific obligations on parties and entities governed by the Act. Under section 44, any expenses incurred by an applicant in relation to promotional activities concerning trade with the DPRK are excluded from the grant eligibility. This means that Australian exporters cannot claim assistance grants for activities involving the DPRK that are sanctioned under the UNSC resolutions. The declaration is designed to align with international obligations and ensure compliance with the sanctions imposed by the UNSC.
The Act also delineates consequences for non-compliance with the declared sanctions. While the specific offences, penalties, or civil/criminal consequences are not detailed in the explanatory statement, it is implied that any breach of the declared sanctions could result in disqualification from the export market development grants. The Act, in general, provides mechanisms for enforcement and penalties for non-compliance, which could include fines, imprisonment, or other legal repercussions as stipulated under Australian law. The exclusion of expenses related to the DPRK is a clear directive to deter participation in activities that contravene the UNSC resolutions.