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CUSTOMS (PROHIBITED EXPORTS) AMENDMENT REGULATIONS 2004 (NO. 3) 2004 NO. 141
STATUTORY RULES 2004 NO. 141
Issued by the Authority of the Minister for Justice and Customs
Customs Act 1901
Customs (Prohibited Exports) Amendment Regulations 2004 (No. 3)
Subsection 270(1) of the Customs Act 1901 (the Act) provides in part that the Governor-General may make regulations not inconsistent with the Act prescribing all matters which by the Act are required or permitted to be prescribed or as may be necessary or convenient to be prescribed for giving effect to the Act or for the conduct of any other business relating to the Customs.
Section 112 of the Act provides in part that the Governor-General may, by regulation, prohibit the exportation of goods from Australia and that the power may be exercised by prohibiting the exportation of goods absolutely or by prohibiting the exportation of goods unless specified conditions or restrictions are complied with.
The Customs (Prohibited Exports) Regulations 1958 (the PE Regulations) control the exportation of specified goods for the purposes of the Act.
In response to representations from the Humane Society International, supported by a broad section of the Australian community, concerning the disturbing trade in the fur of cats and dogs, the Government has decided to control the importation into, and exportation from, Australia of cat and dog fur products.
The purpose of the amending Regulations is to introduce new export restrictions on cat fur and dog fur, and goods made wholly or partially from such fur. The restrictions are intended to cover the exportation of raw, dressed or tanned cat or dog furs and goods incorporating such cat or dog fur or both. Corresponding amendments have been made to the Customs (Prohibition Imports) Regulations 1956 to introduce import restrictions on these goods.
The amending Regulations add a new regulation to the PE Regulations to prohibit the exportation of:
(a) cat fur;
(b) dog fur; and
(c) goods consisting, in whole or in part, of cat fur or dog fur or both,
unless the Minister for Justice and Customs (the Minister) or a person authorised by the Minister has given permission in writing to do so.
The amending Regulations also introduce other provisions with respect to:
• applications for a relevant permission;
• factors that may be considered in the decision on whether to grant a permission;
• the imposition of conditions on a permission;
• the revocation of a permission under certain circumstances;
• the notification of decisions made under the new regulations; and
• the review of adverse decisions made under the new regulations.
Details of the amending Regulations are in Attachment A. A Regulation Impact Statement is set out in Attachment B.
The amending Regulations commenced on the date of their notification in the Gazette.
0405080A
ATTACHMENT A
DETAILS OF THE CUSTOMS (PROHIBITED EXPORTS) AMENDMENT REGULATION 2004 (No. 3)
Regulation 1 - Name of Regulations
Regulation 1 provides that the Regulations are the Customs (Prohibited Exports) Amendment Regulations 2004 (No. 3).
Regulation 2 - Commencement
Regulation 2 provides that the Regulations commence on the date of their notification in the Gazette.
Regulation 3 - Amendment of Customs (Prohibited Exports) Regulations 1958
Regulation 3 provides that Schedule 1 amends the Customs (Prohibited Exports) Regulations 1958 (the PE Regulations).
SCHEDULE 1 - AMENDMENTS
Item 1 - Regulation 9AB
Item 1 inserts new regulation 9AB.
Subregulation 9AB(1) defines:
(a) 'authorised person' to mean a person authorised in writing by the Minister for regulation 9AB;
(b) 'cat fur' to mean the pelt or hair of an animal of the species Felis catus;
(c) 'dog fur' to mean the pelt or hair of an animal of the species Canis familiaris; and
(d) 'cat or dog fur product' to mean a product or other thing that consists, wholly or partly, of cat fur or dog fur.
Subregulation 9AB(2) prohibits the exportation of cat fur, dog fur or a cat or dog fur product unless a permission to export the goods has been granted and is in force and the permission is produced to the Collector. 'Collector' is defined in subsection 8(1) of the Customs Act 1901 to mean the Chief Executive Officer of Customs, the Regional Director of a State of Territory or any officer doing duty in the matter in relation to which the expression is used.
Subregulation 9AB(3) allows the Minister or an authorised person to grant a permission in writing for the exportation of cat fur, dog fur or a cat or dog fur product.
Subregulation 9AB(4) requires that an application for a permission be in writing and be lodged with the Minister or an authorised person.
Subregulation 9AB(5) allows the Minister or an authorised person to ask an applicant for any information the Minister or authorised person may reasonably require for the purpose of making a decision in relation to the application.
Subregulation 9AB(6) allows the Minister or an authorised person to take into account any matter the Minister or authorised person considers relevant in deciding whether to grant a permission.
Subregulation 9AB(7) requires the Minister or authorised person to give notice of a decision to grant, or not to grant, a permission to the applicant as soon as practicable after the Minister or authorised person makes the decision.
Subregulation 9AB(8) provides that a permission granted under subregulation 9AB(3):
(a) may specify conditions or requirements to be complied with by the holder of the permission; and
(b) for any such condition or requirement, may specify the time (being a time before or after the exportation of the goods to which the permission relates) at or before which the condition or requirement shall be complied with by the holder.
Subregulation 9AB(9) allows the Minister or authorised person to revoke a permission if the Minister or authorised person is satisfied that the holder of the permission has failed to comply with a condition or requirement of the permission.
Subregulation 9AB(10) requires the Minister or authorised person to give notice of a decision to revoke a permission to the holder of the permission as soon as practicable after the Minister or authorised person makes the decision.
Subregulation 9AB(11) provides a right to apply to the Administrative Appeals Tribunal for a review of a decision of the Minister or authorised person to:
(a) not grant a permission;
(b) grant a permission subject to a condition or requirement; or
(c) revoke a permission.
Subregulation 9AB(12) requires that a notice of a decision mentioned in subregulation 9AB(7) or 9AB(10) contain a statement notifying the rights of a person affected by the decision under the Administrative Appeals Tribunal Act 1975 to apply for a review of the decision and to request a statement of reasons for the decision.
Subregulation 9AB(13) confirms that the failure to comply with subregulation 9AB(12) would not affect the validity of the decision that is the subject of a notice under subregulation 9AB(7) or 9AB(10), as the case may be.
ATTACHMENT B
GOVERNMENT ACTION IN RESPECT OF THE ALLEGED IMPORT OF PRODUCTS CONTAINING CAT AND DOG FUR
BACKGROUND
1. The Humane Society International (HSI) alleges that trade in cat and dog fur products is taking place, involving extreme cruelty to those animals. HSI has claimed that it has evidence of what it asserts is cat and dog fur in a range of products available in Australia, without the nature of that fur being made known. HSI has called for a ban on the trade and use of cat and dog fur (and associated products).
2. Media reports indicate there is a growing call internationally, centred in Europe, to ban the trade in cat and dog fur products.
3. Subject to meeting any requirements of the Australian Quarantine and Inspection Service (AQIS) there is no Australian control on the import or export of (non-CITES[1] related) cat and dog fur products. The Environment Protection and Biodiversity Conservation Act 1999, the legislation which controls the import of CITES-listed species, exempts many domestic species from the control including dogs (Canis Familiaris) and cats (Felis Catus).
4. Until the late 1980s Australia exported feral cat fur skins mainly to Austria, Germany and the United Kingdom for use in the clothing industry. The total export volume was low - about 26,000 skins in the period 1982-83 to 1988-89. No exports of raw cat fur skins have been recorded recently. However, feral cats are considered a serious pest problem in Australia mainly because of their role as predators of native wildlife.
5. The information available from the United States Customs Service and the HSI indicates that goods of likely concern include clothing and footwear, gloves, hats, toys, other accessories and fur-covered animal figurines. Cat and dog fur can also be used as a stuffing in other goods.
6. To date only a small number of countries have legislated against cat and dog fur products, for example the United States of America and Italy.
7. The USA controls the trade in cat and dog fur products under the Dog and Cat Protection Act 2000. The Act bans the import and export of cat and dog fur products and bans the manufacture, sale, transport and distribution of cat and dog fur products. It exempts 'personal pets' that have died, including pets preserved through taxidermy.
8. Italy introduced a 'precautionary measure' for the protection of domestic cats and dogs in December 2001 and affirmed the measure in late 2002. The legislation bans the use of cats and dogs in the production or manufacture of skins, furs, clothes and leather items; and makes illegal the possession and trade in cat and dog fur and skins. Also it prohibits the import of cat and dog fur and skins and the import of clothing and leather items obtained from cats or dogs.
9. The United Kingdom has also considered the matter at length but, at this stage, has concluded that controls are not warranted as sufficient evidence had not been produced to justify the imposition of a trade ban. Newspaper reports indicate that other countries in Europe have the issue under consideration.
10. The extent to which cat and dog fur products are available in Australia is unknown. Such goods are not separately identified in the Customs Tariff. The Council of Textile and Fashion Industries of Australia (TFIA) is not aware of cat or dog fur being used by the textiles, clothing and footwear (TCF) industry in Australia.
11. However, assuming the HSI's allegations are correct, then Australia needs to consider how it will respond to the issue.
12. This document uses the term "cat and dog fur products" to refer to both cat and dog fur of the species Felis Catus and Canis Familiaris and products made from cat and dog fur.
PROBLEM
13. Many Australians consider that trade in cat and dog fur products is unacceptable.
14. The lack of quantitative information severely limits any study of the problem. However, based on the view of the peak body representing Australia's TCF and fashion industries, TFIA, it would appear there is no information on the extent of trade in cat and dog fur. Accordingly, the benefits of government intervention in this area need to be carefully weighed against the likely direct and indirect costs to the community by such an intervention.
OBJECTIVE
15. To introduce the least cost, most practical form of control in respect of domestic cat and dog fur products bearing in mind community opinion and the likely costs of government intervention.
OPTIONS AND IMPACT ANALYSIS
16. The groups likely to be affected by any measure to control availability of cat and dog fur products are: government, the Australian community and Australian industry (including importers and exporters of fur and fur products, and producers, importers and exporters of other animal-related products).
Option 1 Stricter labelling of goods to identify cat and dog fur products at the point of sale.
Explanation of option
17. This option would allow the import of cat and dog fur products into Australia but would require those products to be labelled at the point of sale to identify to consumers that the goods were made from cat or dog fur.
Impact on government
18. There would be direct costs for government, either federal or state/territory, in developing legislation that required the labelling and specified the detail of the labelling. That legislation would also specify what sanctions would apply if the labelling did not comply with legislative requirements. There would also be costs involved in initially informing industry and the community generally about the requirements.
19. There would also be ongoing costs in respect of staff training and developing administrative procedures, maintaining public information about the measures, for monitoring compliance with the legislated requirements and undertaking enforcement action (eg, mounting prosecutions) where breaches are detected.
20. The extent of these costs to government would depend on the nature and complexity of any legislation introduced.
21. In terms of indirect costs, the availability of cat and dog fur products in Australia would generate a negative reaction from the community and potentially lead to ongoing calls on government to replace the measures with import and export controls.
Impact on the Australian community
22. The additional information at the point of sale would allow consumers to make a better-informed choice. Offsetting this would be the likely negative community reaction about the availability for sale of such goods.
Impact on industry
23. TFIA has advised that it is not aware of cat or dog fur being used by the textiles, clothing and footwear industry in Australia. Therefore it is likely there would be little to no impact on current industry practices and associated costs for that sector. However it would be likely to hinder any future commercial activity in this area.
24. Importers may incur costs to ensure they do not breach the labelling requirements as a result of:
• testing 'unknown' fur products to identify animal species where the importer is unsure of the species through documentation or other means (however this is a minor per unit charge); or
• changing suppliers to ensure certainty of product.
25. Further, a business' reputation would be at risk if it were found to be selling cat and dog fur products without the appropriate labelling. This would be in addition to any sanction imposed by authorities for breaching the legislation, if proven, as well as the costs involved in defending the action.
26. The extent of any cost impact on industry would depend on whether the labelling requirement was quarantined to cat and dog fur products or encompassed all fur products. Given the comments by TFIA, it is considered that industry would have serious concerns with a labelling requirement that covered all fur products.
Option 2 Prohibit the import and export of cat and dog fur products
Explanation of option
27. There are two sub-options:
• the first sub-option is an absolute ban - this means that no cat and dog fur products could be imported or exported in any circumstance; or
• the second sub-option is in terms of a restriction rather than an absolute ban - in this circumstance the import or export of the goods would be banned unless a specific, written Ministerial permission had been granted for the import or export.
28. A Ministerial permission-based arrangement allows for justified exemptions such as the import or export of a person's deceased pet that had been preserved by taxidermy, or the import and export of goods for research purposes.
29. Permission-based arrangements represent the majority of import and export controls administered by the Australian Customs Service (Customs) and are well understood by the service providers (eg, Customs brokers and freight forwarders) who support the importing and exporting community.
30. Because of the clear advantages of a permission-based arrangement over an absolute prohibition, the sub-option of an absolute prohibition will not be considered further.
Impact on government
31. There would be costs incurred in amending the Customs (Prohibited Imports) Regulations 1956 and the Customs (Prohibited Exports) Regulations 1958. Ongoing costs such as developing administrative procedures, staff training, maintaining public information and undertaking enforcement action (eg, mounting prosecutions) where breaches are detected are normally absorbed as part of Customs' overall administration of border control legislation.
32. Specifically in relation to costs for testing products suspected of breaching the regulations, Customs' experience indicates there are only minor charges involved in microscopic testing of animal fibres to determine species.
33. There would be a minor cost to government in considering applications to import or export goods. Applications would be considered on a case-by-case basis which would involve research and consultation among relevant portfolios and preparation of papers for the decision-maker (who is usually the relevant Minister).
Impact on the Australian community
34. It is likely there would be widespread community acceptance of the measure. This would be offset to some degree by negative reaction to the passing on of any compliance costs through higher prices or taxation, to the extent that costs turn out to be beyond those which can be absorbed by existing budgets.
Impact on Australian industry
35. Customs interception of shipments for examination and testing may have direct and indirect cost implications for importers and exporters.
36. Importers and exporters may incur costs to ensure they do not breach the import and export control:
• costs for testing 'unknown' fur products to identify animal species where the importer is unsure of the species through documentation or other means (however this is a minor per unit charge); or
• costs associated with changing suppliers to ensure certainty of product.
37. Further, a business' reputation would be at risk if it were found to be importing or exporting cat and dog fur products.
38. Prima facie, importers/exporters that breach the regulations have committed an offence under the Customs Act 1901 and, if the offence were proven, would be subject to relevant penalties under that Act.
39. Information about prohibitions and restrictions applying to imported and exported goods is readily available to industry and the public through the Customs' website and information centre which can be contacted by e-mail or telephone (1300 number). Therefore compliance costs for industry to learn of the requirements would be minimal. Also costs associated with applying for permission to import or export would not be large as requests seeking permission to import or export are usually simply made by letter, email or facsimile.
Option 3 Introduce import and export controls as per Option 2 together with regulating the possible production and sale of goods comprising cat and dog fur.
Explanation of option
40. Introduce a permission-based import/export control (as per Option 2), supplemented by domestic market regulation in respect of local production and sale of cat and dog fur products to ensure that all commercial trade in cat and dog fur products ceases.
Impact on government
41. As per Option 2 in terms of the import and export controls.
42. In addition to the costs outlined at Option 2 there would additional costs and benefits for government as follows:
43. There would be direct costs for government, either federal or state/territory, in developing legislation relating to domestic market regulation. There would also be costs involved in initially informing industry and the community generally about the requirements. (In order to minimise costs it would be best if information about import and export controls and domestic market regulation were prepared as a single package.)
44. There would be costs in respect of staff training and developing administrative procedures, maintaining public information, for monitoring compliance with the legislated requirements and undertaking enforcement action (eg, mounting prosecutions) where breaches were detected in terms of the domestic market regulation.
45. The extent of these costs to government would depend on the nature and complexity of any legislation introduced.
Impact on the Australian community
46. It is likely there would be widespread community acceptance of the measure. This would be offset to some degree by negative reaction to the passing on of any compliance costs through higher prices or taxation, to the extent that costs turn out to be beyond those which can be absorbed by existing budgets.
Impact on industry
47. As per Option 2 in terms of compliance with import and export controls.
48. Additionally industry would incur costs in complying with domestic market regulations. This would include costs of finding out about the regulation (and any variations among states/territories), staff training, monitoring compliance and responding to government audits and inspections.
49. A business' reputation would be at risk if it were found to be in breach of the domestic market regulations. This would be in addition to any sanction imposed by authorities for breaching the legislation, if proven, as well as the costs involved in defending the action.
CONSULTATION
50. The Council of Textile and Fashion Industries of Australia (TFIA) was consulted in considering possible Government action in respect of the alleged import of cat and dog fur products. TFIA is the peak industry representative body of Australia's textiles, clothing and fashion industries - the industries which are most likely to be affected by any regulatory control. TFIA was not aware of cat or dog fur being used by the TCF industry in Australia. TFIA saw no problem with a specific ban on imports of cat and dog fur, provided enforcement of such a policy did not have unforeseen consequences for imports of other furs that are used in the industry (eg, rabbit fur).
51. The HSI has made representations to the Government setting out what it sees as the issues and the level of Government response required.
52. Further, there has been a significant level of direct public response supporting the HSI's position.
CONCLUSION AND RECOMMENDED OPTION
53. Each option imposes a regulatory cost on industry and government and there may be flow-on costs to the community as a result. The level of costs cannot be quantified at this stage as they largely depend on the nature and complexity of any legislation used to control trade in cat and dog fur products.
54. That said, the general operation of Customs prohibited imports and prohibited exports regulations is understood by the international trading community and is already factored into their business practices. Businesses new to importing and exporting have access to the Customs' website and information centre for assistance (for the cost of a local telephone call) to understand the detail of border controls and how they are administered. This access eases their regulatory burden.
55. While the potential for costs exists, it is impossible to say whether it would be realised in any real way from industry's perspective given the comments by TFIA that it is not aware of cat or dog fur being used by the TCF industry in Australia.
56. Unlike a requirement for stricter labelling at the point of sale (Option 1) a control on the import and export of cat and dog fur products would meet the community's expectations of the Government in this matter. That control should be in the form of permission-based arrangements to cater for unforeseen circumstances that may arise while the control is in force. While there is a cost involved with applying for and considering permissions for import and export, it not considered to be great based on experience with other such import and export controls.
57. However an import and export control may only create the impression that domestic commercial trade - if any - in the products at issue is acceptable. As this is not the intention, the import and export control should be supplemented by domestic market regulation. This will only have a limited, negligible impact on industry given that there does not appear to be any cat or dog fur used by the TCF industry in Australia.
58. Overall, it is recommended that Option 3 be adopted.
IMPLEMENTATION AND REVIEW
59. Should Option 3 be adopted, the import and export controls would be effected through the Customs (Prohibited Imports) Regulations 1956 and the Customs (Prohibited Exports) Regulations 1958 and be administered by the Australian Customs Service. Customs would administer the controls in line with its approach to other border measures by balancing the need to intercept goods which contravene the regulations while at the same time ensuring there is no significant impediment to the flow of legitimate trade.
60. The regulations are disallowable instruments and are subject to scrutiny by the Senate Standing Committee on Regulations and Ordinances.
61. Customs normal practice is to issue an Australian Customs Notice to the import/export community to advise of any legislative changes that may impact on industry practices. This is in addition to information being made available through the Customs' website and its information centre. Customs would also consult with TFIA to ensure its members were aware of the requirements.
62. The regulations would be reviewed as part of Customs ongoing monitoring of border measures.
63. The Commonwealth would raise the issue of regulation of domestic production and sale direct with States and Territories for them to introduce relevant measures/legislation.