EXPLANATORY STATEMENT
Export Market Development Grants (Genuinely Carrying on a Business) Guidelines 2018
Authority
The Export Market Development Grants (Genuinely Carrying on a Business) Guidelines 2018 is made by the Minister for Trade, Tourism and Investment under paragraph 101(1)(a) of the Export Market Development Grants Act 1997 (the EMDG Act).
Purpose
This legislative instrument details the guidelines to be complied with and the matters the Chief Executive Officer (CEO) of Austrade must have regard to when forming an opinion, for paragraphs 7(1)(a) or (4)(aa) of the EMDG Act, on whether a person is genuinely carrying on a business in Australia.
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 a person is genuinely carrying on a business in Australia. Matters the CEO of Austrade must consider include: the activities the person claims constitute the activities of the business; whether any income is earned by the business and whether that earning of income takes place substantially in Australia; and the nature and size of the assets of the business and whether those assets are located substantially in Australia.
In remaking this instrument, the number of people employed by the business and how many of these employees are employed in Australia has been added as a matter the CEO of Austrade must consider.
Decisions in relation to whether a person is genuinely carrying on a business in Australia are subject to review in the Administrative Appeals Tribunal.
Commencement
The Guidelines is made to repeal and replace the Export Market Development Grants Act 1997 – Determination 1/1997 GCB – Guidelines for forming an opinion whether an applicant is genuinely carrying on business in Australia which is due to sunset on 1 April 2019.
The Guidelines apply when working entitlement to a grant in respect of an application for a grant made on or after 1 July 2018.
Consultation
Austrade conducted extensive stakeholder consultations before remaking this instrument, including the proposal to add an additional matter that the CEO of Austrade must consider. All stakeholder responses supported the proposed change to this instrument.
Regulation Impact Statement
The Office of Best Practice Regulation has advised that a Regulation Impact Statement is not required (reference: OBPR ID 22807).
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 (Genuinely Carrying on a Business) Guidelines 2018
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 whether a person is genuinely carrying on business in Australia.
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 (Genuinely Carrying on a Business) Guidelines 2018 was enacted by the Minister for Trade, Tourism and Investment under the Export Market Development Grants Act 1997. The purpose of these guidelines is to provide direction for the Chief Executive Officer of Austrade in determining whether an applicant is genuinely carrying on a business in Australia, which is a requirement for eligibility for export market development grants. This legislation was introduced to address the need for clear criteria in assessing the genuineness of businesses applying for these grants. The policy objective is to ensure that only businesses genuinely operating in Australia are eligible for the grants, thereby supporting legitimate business activities and ensuring the efficient use of public funds.
The guidelines, which replace the previous Determination 1/1997, outline several factors that Austrade must consider, including the nature of business activities, income generation, asset location, and the number of employees in Australia. These guidelines apply to applications for grants submitted on or after 1 July 2018, and they are intended to provide clarity and consistency in the decision-making process. Extensive consultations with stakeholders were undertaken before the guidelines were remade, reflecting a broad consensus on the changes proposed.
Scope and Application
The Export Market Development Grants (Genuinely Carrying on a Business) Guidelines 2018 provides specific guidelines to be adhered to by the Chief Executive Officer of Austrade when assessing whether a person is genuinely carrying on a business in Australia for the purposes of determining eligibility for export market development grants under the Export Market Development Grants Act 1997. These guidelines are applicable to individuals and entities seeking to claim such grants, particularly those who have incurred expenses promoting the export of Australian goods, services, intellectual property rights, and know-how. The assessment is focused on whether the applicant is genuinely carrying on a business in Australia, taking into account the activities of the business, the earning of income substantially in Australia, the nature and size of the assets located substantially in Australia, and the number of employees and their location. These guidelines apply to applications for grants made on or after 1 July 2018, and decisions made under these guidelines are subject to review by the Administrative Appeals Tribunal. The guidelines are designed to ensure that only those genuinely carrying on a business in Australia are eligible for the grants, thereby maintaining the integrity of the grant program.
Key Provisions
The Export Market Development Grants (Genuinely Carrying on a Business) Guidelines 2018 (F2018L00118) provide detailed guidelines to assist the Chief Executive Officer (CEO) of Austrade in determining whether a person is genuinely carrying on a business in Australia for the purposes of being eligible for an export market development grant under the Export Market Development Grants Act 1997 (EMDG Act). The CEO must consider several matters when forming an opinion on the genuineness of the business, including the activities of the business (section 7(1)(a)), whether income is earned by the business and if it occurs substantially in Australia (section 7(4)(aa)), and the nature and size of the business assets and their location (section 7(4)(aa)). Additionally, the CEO must now consider the number of people employed by the business and how many of these employees are based in Australia (section 7(4)(aa)). These guidelines serve as a crucial framework for ensuring that only eligible businesses, which are genuinely operating in Australia, can benefit from the grants.
The obligations imposed on parties by these guidelines include the requirement for the CEO of Austrade to thoroughly examine the specific activities of the business, the source and location of income earned, and the nature and location of the business’s assets. The CEO must also consider the employment structure of the business, including the number of employees and their locations. These obligations are designed to ensure that the grant is awarded to businesses that are actively and genuinely operating in Australia and contributing to the Australian economy. The CEO’s decision on whether a person is genuinely carrying on a business in Australia is subject to review by the Administrative Appeals Tribunal, providing an additional layer of scrutiny and accountability.
Failure to comply with the guidelines or the EMDG Act may result in civil or criminal consequences. For instance, if a business is found to be ineligible for the grant due to non-compliance with the guidelines, it may face financial penalties or be required to repay any grant received. The Act does not specify maximum penalties for breaches, but the consequences can be significant, including potential legal action to recover funds. Additionally, any misrepresentation or fraudulent activity in the application process may lead to criminal charges, with penalties determined by the severity of the offence under the relevant criminal statutes. The seriousness of these potential consequences underscores the importance of adhering to the guidelines when applying for export market development grants.