EXPLANATORY STATEMENT
INTERNATIONAL ORGANIZATIONS (PRIVILEGES AND IMMUNITIES) ACT 1963
SITA (PRIVILEGES AND IMMUNITIES) REGULATIONS
Statutory Rules 1989 No. 285 issued by the authority of the Minster of State for Foreign Affairs and Trade.
Section 13 of the International Organizations (Privileges and Immunities) Act 1963 (the Act) provides that the Governor-General may make regulations, not inconsistent with the Act, prescribing all matters required or permitted by the Act to be prescribed, or necessary or inconvenient to be prescribed for carrying out or giving effect to the Act.
Section 6 of the Act provides that regulations may confer on an international organization to which the Act applies certain privileges and immunities, including taxation privileges.
SITA is the recognised acronym for the Societe Internationale de Telecommunications Aeronautiques (Airlines Worldwide Telecommunications and Information Services). It is a cooperative non-profit organization in which more than 300 of the world’s airlines, including QANTAS, participate. It provides a worldwide airline telecommunications and data network, and it is presently involved in developing aeronautical mobile satellite services in cooperation with the Overseas Telecommunications Corporation (OTC).
SITA has expressed interest in moving its regional headquarters for the Asia/Pacific region in Hong Kong to Australia in return for some form of incentive or encouragement to justify such a move, rather than to some other, lower-cost potential sites in the region. Specifically, it is seeking certain taxation privileges for itself and its officers.
The move of SITA’s regional headquarters to Australia will bring significant benefits for Australia. These will be both as a result of direct expenditures here by SITA (estimated by the organization at around $100 million during the first 10 years), through the planned establishment by SITA of a software research and development centre, and through the flow-on impact of a high-technology organization of SITA’s status being based here. Additional revenues will accrue to Autralia’s telecommunications carriers, OTC and Telecom, through SITA’s use of their facilities, and SITA’s worldwide penetration will provide access to 170 countries for Australian high-technology companies and authorities.
Accordingly, the Minister for Foreign Affairs and Trade, with the agreement of the Treasurer and the Minister for Industry, Technology and Commerce, decided that certain taxation privileges should be conferred on SITA and, for a limited period, on its officers. The regulations confer such privileges.
Details of the regulations are as follow:
Regulation 1 provides the citation for the Regulations.
Regulation 2 provides definitions for terms used in the regulations, including the full name of “SITA”.
Regulation 3 declares SITA to be an international organization to which the Act applies, which is a necessary precondition to any privileges or immunities being conferred on it or upon its officers.
Regulation 4 confers legal personality and capacities on SITA.
Regulation 5 confers two privileges on the organization set out in items 6 and 7 of the First Schedule to the Act, namely, exemptions from import and export duties and from the liability to pay or collect taxes. These privileges are qualified, however, by exempting from their scope sales taxes and payments for specific services rendered.
Regulation 6 exempts officers of the organization from taxation on their salaries and emoluments, being the privilege specified in item 2 of Part 1 of the Fourth Schedule, but limits the privilege to non-Australian citizens who come to Australia solely for the purpose of working with the organization, and to a period of approximately ten years, ending on 31 December 1999.
Overview
The International Organizations (Privileges and Immunities) Act 1963 was enacted by the Commonwealth Parliament to establish a legal framework that allows international organisations to enjoy certain privileges and immunities within Australia. This legislation was introduced to address the need to attract and retain international organisations in Australia, thereby facilitating cooperation and collaboration on a global scale. The Act empowers the Governor-General to make regulations, as outlined in Section 13, to implement the provisions of the Act effectively. The Sita (Privileges and Immunities) Regulations 1989, issued under the authority of the Minister of State for Foreign Affairs and Trade, were made to confer specific taxation privileges on SITA, a non-profit cooperative organisation, and its officers. The policy objective behind these regulations is to incentivise SITA to relocate its regional headquarters for the Asia/Pacific region to Australia, thereby generating substantial economic benefits and fostering high-technology advancements in the country.
Scope and Application
The International Organizations (Privileges and Immunities) Act 1963 applies to specific international organisations and their officers, providing them with certain privileges and immunities as prescribed by the Act or under regulations made pursuant to it. Specifically, this Act applies to the Societe Internationale de Telecommunications Aeronautiques (SITA), a non-profit cooperative organisation in which numerous global airlines, including QANTAS, participate. The Act and its regulations confer on SITA and its officers privileges such as exemptions from import and export duties, and liability to pay or collect taxes, while also specifying certain exclusions like sales taxes and specific services. The privileges conferred are intended to facilitate SITA's relocation of its Asia/Pacific regional headquarters to Australia, which is expected to yield significant economic benefits. The geographic reach of the Act is federal, applying across Australia, and its application is extended through the regulations which, under the authority of the Minister for Foreign Affairs and Trade, specify the detailed terms of the privileges granted to SITA and its officers.
Key Provisions
The International Organizations (Privileges and Immunities) Act 1963 (the Act) sets out the framework for conferring privileges and immunities upon international organizations and their officers. Section 6 of the Act allows the conferral of certain privileges and immunities, including taxation privileges, upon an international organization, while section 13 permits the Governor-General to make regulations necessary for the Act’s implementation. Regulation 2 of the SITA (Privileges and Immunities) Regulations 1989 provides definitions essential for interpreting the regulations, including the full name of the organization, Societe Internationale de Telecommunications Aeronautiques (SITA). Regulation 3 declares SITA to be an international organization to which the Act applies, thus establishing the basis for any privileges or immunities to be conferred.
The Act and its regulations impose several obligations on SITA and its officers. Regulation 4 confers legal personality and capacities on SITA, enabling it to act as a legal entity. Regulation 5 confers specific privileges on SITA, such as exemptions from import and export duties and from the liability to pay or collect taxes. However, these exemptions exclude sales taxes and payments for specific services rendered. Regulation 6 grants officers of SITA, who are non-Australian citizens working in Australia for the organization, exemptions from taxation on their salaries and emoluments. This privilege, however, is limited to a period ending on 31 December 1999.
The Act and the regulations also delineate consequences for non-compliance. While the explanatory statement does not explicitly state offences, penalties, or consequences, it is implied that breaches of the conferred privileges and immunities could lead to legal actions. Given the nature of the Act, any significant breach might result in civil or criminal consequences, although specific penalties are not detailed in the statement. It is reasonable to infer that penalties could be significant, considering the importance of the benefits and incentives provided to SITA in return for the move to Australia.