CUSTOMS LEGISLATION AMENDMENT (PROHIBITED EXPORTS AND IMPORTS) REGULATIONS 2018 (F2018L01135) EXPLANATORY STATEMENT

Commonwealth Numbered Regulations - Explanatory Statements

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CUSTOMS LEGISLATION AMENDMENT (PROHIBITED EXPORTS AND IMPORTS) REGULATIONS 2018 (F2018L01135)

EXPLANATORY STATEMENT

Issued by the Minister for Law Enforcement and Cyber Security

Customs Act 1901

Customs Legislation Amendment (Prohibited Exports and Imports) Regulations 2018

Authority

The Customs Act 1901 (the Act) concerns customs related functions and is the legislative authority that sets out the customs requirements for the importation, and exportation, of goods to and from Australia.

Subsection 270(1) of 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.

Section 50 of the Act provides, in part, that the Governor-General may, by regulation, prohibit the importation of goods into Australia and that the power may be exercised by prohibiting the importation of goods absolutely or by prohibiting the importation of goods unless specified conditions or restrictions are complied with.

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.

Purpose and background

The purpose of the Customs Legislation Amendment (Prohibited Exports and Imports) Regulations 2018 (the Amendment Regulations) is to amend both the Customs (Prohibited Exports) Regulations 1958 (the Prohibited Exports Regulations) and the Customs (Prohibited Imports) Regulations 1956 (the Prohibited Imports Regulations) to revise export and import controls in accordance with the Charter of the United Nations (Sanctions-Democratic People's Republic of Korea) Regulations 2008 (the 2008 Regulations).

Under Article 25 of the Charter of the United Nations (the Charter) Australia has an international legal obligation to implement decisions of the United Nations Security Council (UNSC). The Charter of the United Nations Act 1945 provides legislative approval for the Charter in Australian law. Section 6 of that Act provides that the Governor-General may make regulations to give effect to decisions of the UNSC taken under Chapter VII of the Charter that Australia is required to carry out under Article 25 of the Charter, in so far as those decisions require Australia to apply measures not involving the use of armed force. Made under that Act, the 2008 Regulations give effect to decisions by the UNSC related to the Democratic People's Republic of Korea (DPRK). The 2008 Regulations also establish certain exceptions to the measures and a power to issue permits to allow certain activities that would otherwise be prohibited.

The 2008 Regulations were amended twice in 2017 to implement certain decisions of the UNSC concerning the DPRK. UNSC Resolutions 2270 (2 March 2016), 2321 (30 November 2016), 2371 (5 August 2017) and 2375 (11 September 2017) intensified sanctions on the DPRK in an attempt to modify its behaviour in respect of its weapons of mass-destruction and missile programs, and to demonstrate the international community's condemnation of the DPRK's actions. The resolutions are decisions under Chapter VII of the Charter that Australia is required to carry out under Article 25 of the Charter.

Paragraph 8 of UNSC Resolution 2270 (2016) extends sanctions imposed on the DPRK to include the supply, sale or transfer to the DPRK, or procurement from the DPRK, of any item (except food or medicine) if such an item could directly contribute to the development of the operational capabilities of the DPRK's armed forces. Additionally, paragraph 9 of UNSC Resolution 2371 (2017), amongst other things, provides that all States shall prohibit the procurement of seafood (including fish, crustaceans, molluscs, and other aquatic invertebrates in all forms) from the DPRK.

Prior to the present amendments, the prohibition on the exportation and importation of goods to the DPRK under the Prohibited Exports Regulations and the Prohibited Imports Regulations applied to arms or related matériel, goods that are capable of being used in the development, production or stockpiling of nuclear, biological or chemical weapons, goods that are capable of being used in the development or production of missiles that are capable of delivering nuclear, biological or chemical weapons, and goods for exportation included on the luxury goods list (the Charter of the United Nations (Sanctions - Democratic People's Republic of Korea) (Luxury Goods) Instrument 2017 made under subregulation 5(2) of the 2008 Regulations refers).

In line with the amendments to the 2008 Regulations, the Amendment Regulations implement sanctions against the DPRK imposed by paragraph 8 of UNSC Resolution 2270 (2016) and paragraph 9 of UNSC Resolution 2371 (2017). The Amendment Regulations amend the Prohibited Exports Regulations and the Prohibited Imports Regulations to prohibit the exportation and importation of all goods to, and from, the DPRK unless the Foreign Minister has granted a permission to do so. In light of the scope of the UNSC Resolutions mentioned, the prohibitions do not apply to food (except seafood as specified on import and food included on the luxury goods list on export), medicine, and accompanied personal or household effects that are not arms or related matériel.

These amendments allow the enforcement regime under the Act to apply in relation to such goods that cross the Australian border. Goods for which exportation or importation is prohibited under the Prohibited Exports Regulations or Prohibited Imports Regulations are prohibited exports and imports. This means officers of Customs can seize such goods without a warrant when they are in a Customs place, and offences in the Act apply to their exportation and importation.

Details of the Amendment Regulations are set out in Attachment A.

Statement of Compatibility with Human Rights

In accordance with the Human Rights (Parliamentary Scrutiny) Act 2011, a Statement of Compatibility with Human Rights is included at Attachment B.

Consultation

No public consultation was undertaken in relation to the Amendment Regulations under section 17 of the Legislation Act 2003 as the instrument better aligns existing Commonwealth law in order to cohesively implement Australia's international legal obligations arising from decisions of the UNSC. The Department of Foreign Affairs and Trade conducts regular outreach to the Australian business community to explain Australia's sanctions laws implementing UN sanctions. Therefore, it was not necessary for the Department of Home Affairs to undertake further public consultation.

Regulatory Impact

The Office of Best Practice Regulations has advised that a regulatory impact statement is not required (reference 22887).

Commencement

The Amendment Regulations commence on the day after registration on the Federal Register of Legislation.

OPC63034 - B

ATTACHMENT A

Details of the Customs Legislation Amendment (Prohibited Exports and Imports) Regulations 2018

Section 1 - Name

This section provides that the title of the Regulations is the Customs Legislation Amendment (Prohibited Exports and Imports) Regulations 2018 (the Amendment Regulations).

Section 2 - Commencement

This section provides, in table item 1, that the Amendment Regulations are to commence on the day after registration on the Federal Register of Legislation.

Section 3 - Authority

This section sets out the authority under which the Amendment Regulations are made, which is the Customs Act 1901.

Section 4 - Schedules

This section is the formal enabling provision for the Schedule to the Amendment Regulations, and provides that, each instrument that is specified in a Schedule to the Amendment Regulations, is amended or repealed as set out in the applicable items in the Schedule concerned, and that any other item in a Schedule to this instrument has effect according to its terms.

The instruments being amended are the Customs (Prohibited Exports) Regulations 1958 (the Prohibited Exports Regulations) and the Customs (Prohibited Imports) Regulations 1956 (the Prohibited Imports Regulations).

Schedule 1 - Amendments

Customs (Prohibited Exports) Regulations 1958

Item 1 - Regulation 13CO (heading)

This item repeals the existing heading of regulation 13CO which is '13CO Exportation of arms or related matériel to Democratic People's Republic of Korea', and substitutes the new heading to be:

13CO Exportation of goods to Democratic People's Republic of Korea

The revised heading reflects the updated purpose of the section, which is outlined in the amended subregulation 13CO(2), outlined below at item 2.

Item 2 - Subregulation 13CO(2)

This item repeals present subregulation 13CO(2) and substitutes three new subregulations which together operate to stipulate the goods which are prohibited to be exported to the Democratic People's Republic of Korea (the DPRK).

Paragraph 8 of United Nations Security Council (UNSC) Resolution 2270 (2016) extends the coverage of sanctions imposed on the DPRK to include any item (except food or medicine) if such an item could directly contribute to the development of the operational capabilities of the DPRK's armed forces. Australia has adopted these sanctions in the Charter of the United Nations (Sanctions-Democratic People's Republic of Korea) Regulations 2008 (the 2008 Regulations).

In accordance with paragraph 8 of UNSC Resolution 2270 (2016) and the 2008 Regulations, substituted subregulation 13CO(2) prohibits the exportation of all goods, the immediate or final destination of which is, or is intended to be, the DPRK. Under subregulation 13CO(2), this is the case for all goods, unless the written permission of the Foreign Minister or an authorised person is shown to a Collector at or before the time of exportation. 'Foreign Minister' is defined in existing subregulation 2(1) to mean the Minister for Foreign Affairs. An 'authorised person' is defined in existing subregulation 13CO(1) to be an officer (of the Department administered by the Foreign Minister) who is authorised in writing to give such permissions.

New subregulation 13CO(2AA) provides for exceptions to the above prohibition on the exportation of all goods for:

(a) food (except goods included on the luxury goods list);

(b) medicine; and

(c) accompanied personal or household effects (except arms or related matériel) of a person who is a passenger, or a member of the crew, of a ship or aircraft, being effects that a Collector reasonably believes to be for the personal use of that person.

As such, the exportation of goods specified in paragraphs 13CO(2AA)(a), (b) and (c) is not prohibited and does not require the permission of the Foreign Minister or an authorised person.

In some circumstances, goods subject to prohibition from export under regulation 13CO may also be subject to another export prohibition under the Prohibited Exports Regulations. For example, an exported good that is a good listed in the defence and strategic goods list (regulation 13E of the Prohibited Exports Regulations refers) would require both the written permission from the Minister for Defence and the Foreign Minister.

Luxury goods list items

The specification in paragraph 13CO(2AA)(a) for goods included on the luxury goods list operates such that, while food may be exported to the DPRK under new paragraph 13CO(2AA)(a), food on the luxury goods list continues to be prohibited from export to the DPRK. Under UNSC Resolution 1718 (2006) operative paragraph 8(a)(iii), Australia is required to prevent the export of luxury goods to the DPRK. The luxury goods list is determined by the Foreign Minister under subregulation 5(2) of the 2008 Regulations (existing subregulation 13CO(1) and the Charter of the United Nations (Sanctions - Democratic People's Republic of Korea) (Luxury Goods) Instrument 2017 (the luxury goods list) refer). The luxury goods list reflects a list of goods that the UNSC has determined are 'luxury goods'. Presently, listed food items on the luxury goods list are:

* caviar;

* crustaceans (all), e.g. rock lobsters;

* abalone; and

* molluscs and aquatic invertebrates, e.g. oyster in any form.

Therefore, the exportation to the DPRK of these food items remains prohibited.

Wine and spirits (all kinds) are beverages included on the luxury goods list. To avoid doubt, these goods do not fall within the exemption for 'food' under new paragraph 13CO(2AA)(a) and remain prohibited from export to the DPRK.

Accompanied personal or household effects

The exemption to the prohibition on export of all goods to the DPRK for accompanied personal or household effects (except arms or related matériel) under paragraph 13CO(2AA)(c) is provided to avoid the export controls being overly restrictive. As such, if a person travels to the DPRK, the exportation of their accompanied personal effects (to the extent that they are not arms or related matériel), e.g. clothing and toiletries, are not prohibited exports. For such items to be exported, a Collector must reasonably believe the items to be for the personal use of the person traveling.

Subregulation 13CO(2AB) provides, without limiting the matters a Collector may take into account, that in forming a reasonable belief a Collector may take into account the quantities of the accompanied personal or household effects. This subregulation is aimed at providing guidance in cases where, for example, a person may be proposing to travel with certain items the quantity of which indicates to a Collector that the items could be financed to contribute to the development of the operational capabilities of the DPRK's armed forces. As the Collector is required to form a reasonable belief in relation to any given item proposed to cross the border, the Collector is not limited by any pre-determined threshold quantity when forming such a belief.

Arms or related matériel remain prohibited exports and are inclusively defined in existing subregulation 2(1).

Requirement to consider foreign relations and international law

Subregulation 13CO(5) is unaffected by the present amendments and maintains the requirement for the Foreign Minister or authorised person to take into account Australia's relations with other countries and Australia's obligations under international law when deciding whether to give permission under substituted subregulation 13CO(2) to export goods to the DPRK.

Item 3 - Subregulation 13CO(3)

This item is a consequential amendment to above item 2, omitting the words "arms, related matériel or" from subregulation 13CO(3) wherever they occur.

Subregulation 13CO(3) provides that a permission granted by the Foreign Minister or an authorised person which is required to be shown to a Collector at or before the time of exportation may state: conditions or requirements, including times for compliance, to which the exportation is subject; the quantity of the goods that may be exported and the circumstances in which the goods may be exported.

As substituted subregulation 13CO(2) no longer prohibits only certain specified goods from export (including arms or related matériel) and instead prohibits the export of all goods to the DPRK, the reference to "arms, related matériel or" is made redundant. Under substituted subregulation 13CO(2), all goods except those exempt under new subregulation 13CO(2AA) require the written permission of the Foreign Minister or an authorised person to export, and accordingly under subregulation 13CO(3) the permission to export any such goods may be granted stating:

(a) conditions or requirements, including times for compliance, to which the exportation is subject; and

(b) the quantity of the goods that may be exported; and

Item 4 - Paragraph 13CO(4)(b)

This item omits the words "arms, related matériel or" and substitutes the word "the" in paragraph 13CO(4)(b).

To complement the Foreign Minister's power to issue a permission to export under subregulation 13CO(2) and in accordance with subregulation 13CO(3), subregulation 13CO(4) provides that the Foreign Minister may revoke or modify any such permission granted.

As described for Item 3, the reference to "arms, related matériel or" is made redundant by substituted subregulation 13CO(2) which no longer prohibits only certain specified goods from export (including arms or related matériel) and instead prohibits the export of all goods to the DPRK unless the written permission of the Foreign Minister or an authorised person is shown to a Collector at or before the time of exportation.

When exercising this power, the Foreign Minister must be satisfied on reasonable grounds that:

(a) a condition or requirement of the permission has not been complied with, or is unlikely to be complied with unless modified; or

(b) permitting, or continuing to permit, the exportation of the goods in accordance with the permission would breach Australia's international obligations or otherwise damage Australia's international relations.

Customs (Prohibited Imports) Regulations 1956

Item 5 - Subregulation 4Y(1)

This item inserts into existing subregulation 4Y(1) a definition of 'seafood' which includes fish, crustaceans, molluscs and other aquatic invertebrates. The definition of seafood is open and the items listed are not intended to form an exhaustive list. The definition of seafood is relied upon in new paragraph 4Y(2AA)(a), outlined below at item 6.

Item 6 - Subregulation 4Y(2)

This item repeals present subregulation 4Y(2) and substitutes three new subregulations which together operate to stipulate the goods which are prohibited to be imported into Australia from the DPRK.

In accordance with the extension of sanctions measures to the import of all items in paragraph 8 of UNSC Resolution 2270 (2016) and the implementation of the resolution in the 2008 Regulations, substituted subregulation 4Y(2) provides that, subject to subregulation 4Y(2AA), the importation of all goods from the DPRK to Australia is prohibited unless the written permission of the Foreign Minister or an authorised person is produced to a Collector at or before the time of importation. 'Foreign Minister' and 'authorised person' are defined in existing subregulation 4Y(1) and take the same meaning as described above for item 2, in relation to exportation.

New subregulation 4Y(2AA) provides that subregulation 4Y(2) does not apply to the following:

(a) food (except seafood);

(b) medicine; and

(i) to be for the personal use of that person; and

(ii) if that person is not a resident of the DPRK - were not purchased in the DPRK.

As such, the importation of goods specified in paragraphs 4Y(2AA)(a), (b) and (c) is not prohibited and does not require the permission of the Foreign Minister or an authorised person.

Item 6 intends to mirror the amendments made in relation to exportation, as described in item 2 above, with two distinctions as discussed below.

Seafood items

The specification in paragraph 4Y(2AA)(a) of 'seafood' operates such that, while food may be imported from the DPRK under new paragraph 4Y(2AA)(a), seafood continues to be a prohibited import from the DPRK. This prohibition reflects the obligation contained in paragraph 9 of UNSC Resolution 2371 (2017) which, amongst other things, provides that all States shall prohibit the procurement of seafood (including fish, crustaceans, molluscs, and other aquatic invertebrates in all forms) from the DPRK.

Accompanied personal or household effects

The exemption to the prohibition on import of all goods from the DPRK for accompanied personal or household effects (except arms or related matériel) under paragraph 4Y(2AA)(c) is provided in order to avoid import controls being overly restrictive. As such, if a person travels to Australia from the DPRK, the importation of their accompanied personal or household effects to the extent that they are not arms or related matériel, e.g clothing and toiletries, are not prohibited imports.

For such items to be imported, a Collector must reasonably believe the items to be for the personal use of the person traveling. Subregulation 4Y(2AB) provides, without limiting the matters a Collector may take into account, that in forming a reasonable belief a Collector may take into account the quantities of the accompanied personal or household effects. This subregulation operates in the same manner as new subregulation 13CO(2AB) does in relation to exportation, described above for item 2.

However in addition, for persons who are not residents of the DPRK to import such items, the Collector must reasonably believe that the relevant person's accompanied personal or household effects (except arms or related matériel) were not purchased in the DPRK. Subparagraph 4Y(2AA)(c)(ii) acknowledges that, for those who ordinarily reside in the DPRK, their accompanied personal or household effects are likely to have been purchased in the DPRK - while simultaneously discouraging non-residents from purchasing items in the DPRK as the funds used in the procurement of items may contribute to the DPRK's weapons of mass-destruction programs.

Arms or related matériel remain prohibited imports and are inclusively defined in existing subregulation 4Y(1).

Requirement to consider foreign relations and international law

As described above in relation to the Prohibited Exports Regulations, subregulation 4Y(3) is unaffected by the present amendments and maintains the requirement for the Foreign Minister or authorised person to take into account Australia's relations with other countries and Australia's obligations under international law when deciding whether to give permission under substituted subregulation 4Y(2) to import goods from the DPRK.

ATTACHMENT B

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Customs Legislation Amendment (Prohibited Exports and Imports) Regulations 2018

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The Legislative Instrument amends the Customs (Prohibited Exports) Regulations 1958 (the Prohibited Export Regulations) and the Customs (Prohibited Imports) Regulations 1956 (the Prohibited Import Regulations) to give effect, in customs legislation, to the sanctions in the Charter of the United Nations (Sanctions-Democratic People's Republic of Korea) Regulations 2008 (the 2008 Regulations).

The Legislative Instrument, which expands on the previous export and import prohibitions against Democratic People's Republic of Korea (the DPRK) in the Prohibited Export and Prohibited Import Regulations, prohibits the export and import of all goods from, and to, the DPRK unless permission has been granted by the Foreign Minister. The prohibitions do not apply to food (except foods listed as 'luxury goods' under the 2008 Regulations on export and 'seafood' on import), medicine and accompanied personal or household effects (except 'arms or related matériel').

The 2008 Regulations were amended on 3 November 2017 by the Charter of the United Nations (Sanctions-Democratic People's Republic of Korea) Amendment (2017 Measures No. 2) Regulations 2017 to give effect to United Nations Security Council Resolutions (UNSCR) 2371 (2017), UNSCR 2375 (2017), UNSCR 2270 (2016) and UNSCR 2321 (2016). These resolutions were made in response to the DPRK's continued pursuit of advanced weapons capabilities and are intended to modify the DPRK's behaviour to abandon its weapons of mass-destruction and missile programs and demonstrate the international community's condemnation of these activities. The Legislative Instrument gives effect to the amended 2008 Regulations at the border, which are enforced by the Australian Border Force.

Human rights implications

The Legislative Instrument engages the right to an adequate standard of living, including adequate food, clothing and housing, in Article 11(1) of the International Covenant on Economic, Social and Cultural Rights.

The right is engaged by impacting the ability of those individuals within Australia's jurisdiction to bring or facilitate the movement of certain (sanctioned) goods to, and from, the DPRK.

The objective of the Legislative Instrument is to restrict the DPRK's ability to fund and operate its weapons of mass-destruction programs, consistent with UNSCR against the DPRK, and to send a message to the DPRK to abandon its weapons of mass-destruction programs which threaten world security. It does this by placing prohibitions on the import and export of all goods (except food, medicine and accompanied personal or household effects), as these activities may generate revenue for the DPRK to continue to develop these programs.

To ameliorate the possibility of any adverse impact, the Legislative Instrument allows for the movement of goods to, and from, the DPRK, if written permission has been granted by the Foreign Minister or an authorised person within the Foreign Minister's Department. When deciding whether to give permission to import or export goods, the Foreign Minister or authorised person must take into account Australia's obligations under international law, which necessarily include Australia’s international human rights obligations. This would allow for the Foreign Minister or an authorised person to grant permission for the movement of goods in circumstances such as the provision of aid for humanitarian purposes. In addition, the Legislative Instrument allows for the movement of personal and household effects to, and from, the DPRK, with the exception of goods purchased in the DPRK by non-residents in recognition that the funds used for the purchase of such goods by non-residents may contribute to the DPRK's weapons of mass-destruction program.

Such conditions are reasonable, necessary and proportionate in order to give effect to the legitimate objective of restricting the DPRK's ability to fund and operate its weapons of mass-destruction programs and to encourage the DPRK to abandon its weapons of mass-destruction programs.

Conclusion

The Legislative Instrument is compatible with human rights because to the extent that it may limit human rights, those limitations are reasonable, necessary and proportionate.

The Hon. Angus Taylor MP, Minister for Law Enforcement and Cyber Security