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Customs reform Bill impact very broad

Increased penalties and regulation, especially regarding information, raises the risk profile of those in supply chain

March 25, 2013

The new Customs reform Bill aimed at strengthening barriers against organised crime will increase costs, risks and obligations for those in the supply chain, law firm Hunt & Hunt has warned.

The advice relates to the Customs and AusCheck Legislation Amendment (Organised Crime and other Measures) Bill 2013, which was introduced into Parliament last Wednesday and which is expected to pass unhindered.

Measures that
Hunt & Hunt Partner Andrew Hudson believes are worth of special attention include:

  • placing statutory obligations on cargo terminal operators and those that load and unload cargo which are similar to those already imposed on holders of depot and warehouse licences. These obligations include mandatory reporting of unlawful activity, ensuring the physical security of relevant premises and cargo and fit and proper person checks on management at Customs’ request. Non-compliance is to attract criminal or administrative sanctions (the latter by way of strict liability)
  • creating new offences for using information from the Integrated Cargo System to aid a criminal organisation
  • providing the CEO of Customs can consider the refusal or cancellation of an Aviation or Maritime Maritime Security Identification Card (ASIC or MSIC) when determining whether a person is fit and proper under the Act;
  • aligning aspects of the customs broker licensing scheme with that of depots and warehouses including providing that the CEO of Customs has the power to impose new licence conditions at any time and making it an offence to breach certain licence conditions
  • adjusting other controls and sanctions to the Act including increasing penalties for certain strict liability offences and the offences in section 234 of the Act and improving the utility of the Infringement Notice Scheme by, for example, increasing the relevant penalties.

The Bill creates two new criminal offences for obtaining and using restricted information to commit an offence, and for unlawfully disclosing restricted information obtained from Customs, Hudson points out.

Given that the explanatory memorandum associated with the Bill states that the new offence is “deliberately broad in its application”, the concern is that many part of the supply chain are, perhaps unwittingly, exposed to its provisions.

“It is irrelevant as to how the “restricted information” is secured and it is not necessary for the person to have obtained the information from a Customs computer,” Hudson writes in an advisory..

“Proof of information being restricted information merely requires that the information which is obtained is stored on a Customs computer and the information does not have to be obtained from the place it is stored.

“Accordingly, those receiving such information will need to have additional measures in place to ensure it is not passed on to third parties.

“This will mean that parties who have access to Customs’ systems (such as licensed customs brokers, cargo reporters and other parties in the private supply chain) will need to be especially careful on the use to which information secured from Customs is used and who has access to that information.”

Hudson notes that the increased penalties and regulation also raises the risk profile to supply chain operators and actors, thereby raising their risk profile.

He advises them to check with their providers of professional indemnity and business insurance to ensure that the increased liabilities are able to be
recovered and in what circumstances.

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