Export Market Development Grants (Significant Net Benefit) Guidelines 2006

Overview

The Export Market Development Grants (Significant Net Benefit) Guidelines 2006 were enacted to provide clear criteria for assessing the potential significant net benefit to Australia when considering applications for export market development grants. This legislative instrument was introduced under the authority of the Export Market Development Act 1997 and commenced on 4 August 2006. The Guidelines aim to ensure that grants are awarded to projects that will genuinely enhance Australia's economic interests by focusing on the location and value addition of business activities related to the goods in question. These Guidelines apply to grant applications made on or after 1 July 2007 and specifically pertain to goods that are not manufactured in Australia. The primary objective is to ascertain whether a significant net benefit will accrue to Australia from the proposed export activities, taking into account factors such as the location of business assets, the place where goods are prepared for sale, the value added within Australia, and the expected economic benefits, including employment opportunities. The Guidelines were subsequently amended by the Export Market Development Grants Legislation Amendment Determination 2010 (No. 1), which came into effect on 1 July 2010.

Scope and Application

The Export Market Development Grants (Significant Net Benefit) Guidelines 2006, as amended, apply to grant applications made under the Export Market Development Grants Act 1997 on or after 1 July 2007. These guidelines are specifically designed to assist in determining whether Australia will derive a significant net benefit from the grant. They apply to goods that are not manufactured in Australia, focusing on the activities and business assets involved in making the goods ready for sale and ensuring a significant proportion of the value is added within Australia. Additionally, these guidelines mandate that any sale of the goods must generate substantial economic benefits for Australia, particularly in terms of employment, relative to the grant amount claimed by the applicant. The guidelines can be extended or modified through subordinate instruments such as the Export Market Development Grants (Significant Net Benefit) Amendment Guidelines 2010 (No. 1), which were registered on 3 June 2010 and commenced on 4 June 2010.

Key Provisions

The Export Market Development Grants (Significant Net Benefit) Guidelines 2006 (section 3) apply to any grant application made under the Export Market Development Grants Act 1997 on or after 1 July 2007. These guidelines also apply to goods that are not manufactured in Australia. Section 4 outlines the criteria that Austrade must consider when determining whether Australia will derive a significant net benefit from the grant. This includes considering whether the business assets used in making the goods ready for sale, the activities that result in the goods being made ready for sale, and a significant proportion of the value of the goods, are primarily or substantially based in Australia. Austrade must also consider whether any sale of the goods will generate or is reasonably likely to generate substantial economic benefits for Australia, relative to the amount of the grant claimed. The guidelines impose specific obligations on Austrade to thoroughly assess the potential economic benefits of the grant to Australia. This assessment must be conducted in accordance with the criteria specified in section 4 of the guidelines. Austrade must ensure that the business assets and activities involved in the goods are primarily or substantially based in Australia, and that a significant proportion of the value of the goods is added within Australia. Additionally, Austrade must consider whether the sale of the goods will generate substantial economic benefits for Australia, including in the area of employment, relative to the amount of the grant claimed. Failure to comply with the guidelines may result in civil or criminal consequences. Although the guidelines themselves do not specify particular offences or penalties, the underlying act, the Export Market Development Grants Act 1997, provides a framework for enforcement. Breaches of the act can lead to civil penalties, including fines, and in some cases, criminal penalties. The maximum penalties can vary depending on the nature and severity of the breach, but they can include substantial fines and, in serious cases, imprisonment. It is important for applicants and entities governed by these guidelines to ensure compliance to avoid such consequences.