Commonwealth Numbered Regulations - Explanatory Statements

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CUSTOMS (PROHIBITED EXPORTS) REGULATIONS (AMENDMENT) 1996 NO. 281

Statutory Rules 1996 No. 281

Issued by the Authority of the Minister for Small Business and Consumer Affairs

Customs Act 1901

Customs (Prohibited Exports) Regulations (Amendment)

Section 270 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 to be prescribed for giving effect to the Act.

Section 112 of the Act provides in part that:

"(1)       The Governor-General may, by regulation, prohibit the exportation of goods from Australia.

(2)       The power conferred by the last preceding subsection may be exercised - (c) by prohibiting the exportation of goods unless specified conditions or restrictions are complied with.

"(2A) Without limiting the generality of paragraph (2)(c), the regulations -...(a) may provide that the exportation of the goods is prohibited unless a licence, per-mission, consent or approval to export the goods or a class of goods in which the goods are included has been granted as prescribed by the regulations; and

The Customs (Prohibited Exports) Regulations (the Regulations) control the exportation of the goods specified in the various regulations (or identified in a list made under section 112 of the Act) or the Schedules to the Regulations by prohibiting exportation absolutely, or making exportation subject to the permission of a Minister or a specified person. Previously, regulations 11, 13B, 13D, 13E, 13F and 13G and the strategic goods list and Schedules 9, 13, 15 and 16 controlled the exportation of defence and strategic goods,

These Regulations omitted regulations 13B, 13D, 13F and 13G and Schedules 13, 15 and 16 and amended regulations 13E and 13H and Schedule 9 in order to consolidate the controls on the exportation of defence and strategic goods.

Background

Australia's controls on the exportation of defence and strategic goods are implemented through the Customs Act 1901 and the Customs (Prohibited Exports) Regulations ("the Regulations"). These controls were introduced as part of Australia's nonproliferation policy. As a result of changes over the past 12 months in control fists or guidelines issued by the Nuclear Suppliers' Group, the Missile Technology Control Regime and the Australia Group (the multilateral export control regime in the chemical and biological weapons field), and the entry into force of the Chemical Weapons Convention ("CWC"), as well as the establishment of the Wassenaar. Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies, the Government decided that changes were required to be made to the Regulations. Details of the changes are set out in the

In addition, the Government decided to take the opportunity to consolidate the controls on the export of defence and strategic goods. Previously, responsibility for the administration of export controls for defence and strategic goods under the Regulations was divided between the Minister for Defence, the Minister for Primary Industries and Energy and the Minister for Foreign Affairs.

Defence administered regulation 138 which controlled the export of defence and related goods, and regulation 13E which controlled the export of dual-use goods. Foreign Affairs and Trade administered regulation 13D which controlled the export of. certain chemicals that could be used in the manufacture of chemical weapons, and regulations 13F and 13G which controlled the export of certain biological toxins that could be used in the manufacture of biological weapons. Primary Industries and Energy administered regulation 11 which controlled the export of nuclear specific goods.

The Australian National Audit Office ("ANAO") conducted an efficiency audit of the export control area recently and recommended that there may be significant operational advantages for both industry and government in adopting a single point of contact for arranging exports of strategically sensitive goods.

As the relevant area within Defence had the resources to rope with the anticipated extra workload, the ANAO recommended that Defence should become the "one-stop shop" for all export applications of "defence-relevant" goods.

In response to this the Government decided that the Minister for Defence Industry, Science and Personnel will assume responsibility for the administration of the controls on defence and strategic goods, with the exception of nuclear source materials such as uranium, and also special fissionable materials.

The Regulations commenced on gazettal with the exception of subregulation 5.4, relating to the controls to be introduced on certain chemicals as part of Australia's acquittal of international obligations under the CWC. As the CWC does not enter into, force until 29 April 1997, the requirement to provide 37 days notice of a proposed exportation does not start until then, although the export controls on the relevant chemicals will start upon gazettal.

ATTACHMENT

Regulation 1 - Commencement

Regulation 1 provides that subregulation 5.4 commences on 29 April 1997. Subregulation 5.4 inserts two new subregulations in regulation 13E relating to the controls to be introduced on certain chemicals as part of Australia's acquittal of international obligations under the Chemical Weapons Convention ("CWC"). AS the CWC does not enter into force until 29 April 1997, the requirement to provide 37 days notice of a proposed exportation does not start until then, although the export controls on the relevant chemicals started upon gazettal.

The remainder of the regulations commenced on gazettal.

Regulation 2 - Amendment

Regulation 2 provides that the Customs (Prohibited Exports) Regulations (the Regulations) have been amended as set out in the Regulations.

Regulation 3 - Regulation 13B (Export of goods specified in Schedule 13)

Regulation 3 omitted regulation 13B. Regulation 13B dealt with controls on the exportation of defence and related goods. These goods were previously set out in Schedule 13 of the Regulations. Subregulation 10.1 omitted Schedule 13.

Instead, these goods are now controlled under regulation 13E and are listed in Part 1 of the defence and strategic goods list (Subregulation 5.1 refers).

Regulation 4 - Regulation 13D (Exportation of goods containing certain chemical compounds)

Regulation 4 omitted regulation 13D. Regulation 13D dealt with controls on the exportation of goods containing certain chemicals. These goods were previously set out in Schedule 15 of the Regulations. Subregulation 12.1 omitted Schedule 15.

Instead, these goods are now controlled tinder regulation 13E and are listed in Category 1 of Part 3 of the defence and strategic goods list. (Subregulation 5.1 refers).

Regulation 5 - Regulation 13E (Exportation of certain goods)

Regulation 13E has been used as the basis for the consolidated control regime for exports of defence and strategic goods. In order for this to occur, numerous amendments were required to be made to the regulation, as follows:

Subregulation 5.1 omitted the previous definition of "strategic goods list" and replaced it with a definition of "defence and strategic goods list".

The defence and strategic goods list is a completely new integrated list which incorporates all of the strategic goods which need to be controlled under regulation 13E. It is formulated and published under paragraph 112(2A)(aa) of the Customs Act 1901 by the Minister for Defence Industry, Science and Personnel and is contained in the publication "Australian Controls on the Export of Defence and Strategic Goods" and is dated November 1996.

-       The defence and strategic goods fist is 198 pages long, including explanatory notes and the index, and may need to be amended at short notice to take account of changing circumstances (see further the discussion below) and so it has been accepted that it is more appropriate to include the list of goods to be controlled in a separate document rattier than in a Schedule to the Regulations.

-       Copies of the defence and strategic goods fist are available free of charge from the Strategic Trade Policy and Operations section of the Department of Defence, Anzac Park Offices, Canberra.

Instead of having defence and strategic goods set out in eight different schedules or lists, as was the case, the defence and strategic goods list combines them into a single list with three parts: defence and related goods, nuclear goods; and dual-use goods. The European Union ("EU") developed such a list over two years ago and it has been in use in the EU since then. In the spirit of harmonisation, and recognising the significant advantages to industry, the United States is adopting the EU fist (and numbering system) for its export control administration.

The defence and strategic goods list may be amended by the Minister to take account of changing circumstances. Under subsection 112(2A) of the Customs Act 1901 where any such amendment is made, that amendment is a disallowable instrument within the meaning of section 46A of the Acts Interpretation Act 1901, and is therefore required to be tabled in the Parliament, and is subject to Parliamentary scrutiny and possible disallowance.

Subregulation 5.2 omitted the previous subregulation 13E(1A) and replaced it with new subregulations 1A and 1B. These subregulations provide the Minister for Defence Industry, Science and Personnel with the power to appoint "authorised persons" to grant a licence or permission for the purposes of the regulation 13E to export from Australia goods listed in the defence and strategic goods fist.

These authorisations must be in writing and may be given to a person employed in the Department of Defence or to an Officer of Customs. However, Officers of Customs may only be given authorisations to grant a licence or permission in respect of goods listed in Part 1 of the defence and strategic goods list, namely defence and related goods. in addition, the Minister is given the ability to impose conditions and restrictions on the licences and permissions which authorised persons can grant. These are intended to cover such conditions and restrictions as the destination of the Foods, whether the exportation must be for non-commercial purposes and the number of goods or the type of particular goods for which a licence or permission can be granted.

Subregulation 5.3 effected a technical amendment of subregulation 13E(2) to take account of the fact that the strategic goods list has been replaced with the defence and strategic goods fist.

Subregulation 5.4 inserted new subregulations 13E(2A) and (2B) which provide that applications for a licence or permission to export certain chemicals must be made in writing at least 37 days before the proposed date of exportation.

Under the CWC, which is a multilateral treaty providing for restrictions on trade in certain chemical weapons and precursors, which will enter into force on 29 April 1997, Australia is obliged to notify the Organisation for the Prohibition of Chemical Weapons of any proposed shipment of prescribed chemicals. This notice must take place at least 30 days prior to the preposed shipment from the country of origin, In addition, the Chemical Weapons Convention Office requires an additional seven days to process applications. Accordingly, a minimum notification period of 37 days has been set.

The relevant chemicals are those identified in new subregulation 13E(2B) by reference to where they appear in the defence end strategic goods fist.

These amendments commence on 29 April 1997, the date that the CWC enters into force (subregulation 1.1 refers).

Subregulation 5.5 effected certain technical amendments to the regulations to change references in paragraphs 13E(2)(a), 2(b) and 6(a) and in subregulations 13E(5) and (7) from the Minister for Defence to the Minister for Defence Industry, Science and Personnel. These changes reflect the change in Ministerial responsibility within the Defence portfolio.

Subregulation 5.6 amended paragraph 13E(2)(c) by adding a new subparagraph (iv). Subregulation 13B(3B) and paragraph 13E(2)(c) were inserted into the Regulations in 1995 to allow visiting defence forces to enter Australia and depart with goods which would otherwise have been prohibited exports, without the need to be granted a permission or licence.

This exemption is still required to cover Part 1 and most of Pan 3 of the defence and strategic goods list (with the exception of chemical and biological weapons precursors previously listed in Schedules 15 and 16 of the Regulations, and the CWC Scheduled chemicals). However. it was not intended that the exemption extend to Part 2 items (those nuclear items extracted from Schedule 9 of the Regulations). Subregulation 5.6 was drafted with this objective in mind.

Subregulation 5.7 omitted subregulations 13E(3), (3A), (3B), (3C) and (3D) and instead substituted a new subregulation 13E(3). The new subregulation 13E(3) is designed to replace subregulations 13E(3), (3A), (3B), (3C) and (3D) by inserting a simplified and general condition making power for licences and permissions granted under subregulation 13E(2). The conditionmaking power is designed to be broad enough to cover any of the conditions that could be imposed under subregulations 13E(3), (3A), (3B), (3C) and (3D) and to, for instance, allow for the specification of a time within which goods can be exported, as well as allowing a licence or permission to be issued for a specified period.

Subregulations 5.8 and 5.9 effected the necessary technical amendments to subregulations 13E(4), (5) and (6) to allow both permissions and licences to be granted for the purposes of the consolidated control regime.

Regulation 6 - Regulation 13F (Exportation of live biological agents (pathogens) and toxins - nonvaccines)

Subregulation 6.1 omitted regulation 13F. Regulation 13F dealt with controls on the exportation of live biological agents and toxins - non-vaccines. These goods were previously set out in Schedule 16 of the Regulations. Subregulation 13.1 omitted Schedule 16.

Instead, these goods are now controlled under regulation 13E and are listed in Part 3 of the defence and strategic goods list (Subregulation 5.1 refers).

Regulation 7 - Regulation 13G (Exportation of live biological agents (pathogens) and toxins vaccines)

Regulation 7 omitted regulation 13G. Regulation 13C7 dealt with controls on the exportation of live biological agents and toxins-vaccines. These goods were previously set out in Schedule 16 of the Regulations. Subregulation 13.1 omitted Schedule 16.

The Australia Group, which is an informal group of countries chaired by Australia which cooperate in efforts to prevent the proliferation of chemical and biological weapons, resolved at the October 1995 Australia Group meeting that vaccines no longer need to be controlled.

Regulation 8 - Regulation 13H (Certain applications to be referred)

Subregulations 8.1, 8.2, 8.3, 8.4, 8.5, 8.6, 8.7, 8.9 and 8.10 all effected technical amendments to regulation 13H to remove references to regulations which have been omitted. Also, in relation to the references to regulation 13CD, this regulation was omitted by Statutory Rules 1996 No. 32 and so the amendments simply removed obsolete references.

Subregulation 8. 8 effected a technical amendment to paragraph 13H(4)(a) to change the reference the Minister who is responsible for regulation 13E from the Minister for Defence to the Minister for Defence industry, Science and Personnel to reflect the changed Ministerial responsibility within the Defence portfolio.

Regulation 9 - Schedule 9 (Nuclear-specific goods (exportation prohibited except an production of approval under regulation 11))

Subregulation 9.1 omitted the previous heading of Schedule 9 and substituted a new heading that more accurately reflects the remaining goods controlled under regulation 11.

Subregulation 9.2 omitted Parts 1, 3, 4, 5, 6, 7, 8, 9, 10, 11 and 12 of Schedule 9 as these nuclear specific goods am now controlled under regulation 13E and are listed in Part 2 of the defence and strategic goods list.

This means that all that remains controlled under regulation 11 and Schedule 9 is nuclear source material and special fissionable material.

Subregulation 9.3 omitted the heading to Part 2 of Schedule 9. This heading is now used to describe Schedule 9 itself.

Subregulation 9.4 effected a technical amendment to Part 2 of Schedule 9 by renumbering items 2.1, 2.2, and 2.3 given that there are now no other parts in Schedule 9.

Regulation 10 - Schedule 13 (Military and non-military goods (exportation prohibited except on production of a licence or permission under regulation 13B))

Subregulation 10.1 omitted Schedule 13, as the goods which were controlled under regulation 13B and this Schedule are now controlled under regulation 13E and are listed in the defence and strategic goods list.

Regulation 11 - Schedule 14A (Goods the exportation of which to Libya is prohibited)

Subregulation 11.1 amended item 7 of 1 art 1 of Schedule 14A by omitting the reference to regulation 13B which has been omitted from the regulations and instead referring to the place where the relevant aircraft and aircraft components are now controlled, which is under regulation 13E and the defence and strategic goods list.

This amendment was necessary to ensure that the sanctions against Libya are unaffected by the consolidation of the controls on defence and strategic goods.

Regulation 12 - Schedule 15 (Chemical compounds)

Subregulation 12.1 omitted Schedule 15 as the chemicals previously controlled under regulation 13D and this Schedule are new controlled under regulation 13E and are listed in the defence and strategic goods list.

Subregulation 13 - Schedule 16 (Live biological agents (human pathogens and animal pathogens): toxins)

Subregulation 13.1 omitted Schedule 16 from the Regulations. The goods which were previously controlled under regulation 13F and this Schedule are now controlled under regulation 13E and are listed in the defence and strategic goods list. The goods (vaccines) previously controlled under regulation 13G and Schedule 16 are no longer controlled.