Commonwealth Numbered Regulations - Explanatory Statements

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AUSTRALIAN HORTICULTURAL CORPORATION (EXPORT CONTROL) REGULATIONS (AMENDMENT) 1991 NO. 436

STATUTORY RULES 1991 No. 436

Issued by the Authority of the Minister of State for Primary Industries and Energy

AUSTRALIAN HORTICULTURAL CORPORATION ACT 1987

AUSTRALIAN HORTICULTURAL CORPORATION (EXPORT CONTROL) REGULATIONS (AMENDMENT)

Section 117 of the Australian Horticultural Corporation Act 1987 provides scope for the Australian Horticultural Corporation (AHC) to control the export of horticultural products through the issuance of licences, permissions and approvals.

The AHC currently licenses exporters of apples, pears, nashi and citrus under the provisions of the Australian Horticultural Corporation (Export Control) Regulations.

The Regulations (Amendment) will put into effect suggestions made by the AHC to improve the operations of its export licensing procedures. Some amendments were also requested by the Senate Standing Committee on Regulations and ordinances.

The main changes are:

•       ensuring the eligibility requirements apply equally to all licensees whether they are companies, partnerships, or individuals;

•       permitting the review and reassessment of a licensee's eligibility and financial standing at any time during the licence period, and ensuring that licensees who become ineligible to hold licence have them cancelled;

•       clarifying the requirements and procedures for licence applications, eligibility and renewal;

•       setting out the procedures relating to assessment, determination and publication of financial ratings and related information;

•       requiring licensees to keep the AHC Board informed of all germane developments during the licence period, including changes of composition, ownership and eligibility;

•       permitting licensees to increase the number of different horticultural products for which their licence is valid;

•       broadening the range of decisions which are appellable to the Administrative Appeals Tribunal;

•       correcting spelling errors in the Regulations;

•       expanding the list of prescribed financial arrangements.

Explanations of individual regulations are given in the Attachment.

ATTACHMENT

DETAILS OF THE PROPOSED AUSTRALIAN HORTICULTURAL CORPORATION (EXPORT CONTROL) REGULATIONS (AMENDMENT)

Regulation 1 provides for the amendments to come into effect on 1 January 1992.

Regulation 2 specifies that the Australian Horticultural Corporation (Export Control) Regulations are amended by these Regulations.

Regulation 3 corrects a spelling error, changing "applies" to "apples".

Regulation 4 prevents the possibility that an exporting company need only be owned by a licensee rather than being a licensee itself. Thus, all exporting entities must be licensed.

Regulation 5 makes the provision (upon the request of the AHC or an approved credit assessor) of a financial statement, including a statement of assets and liabilities, a part of the application process. It also empowers the AHC to have an approved credit assessor assess an applicant's financial standing.

Regulation 6 entirely redrafts Regulation 7 of the existing Regulations and inserts Regulations 7A, 7B and 7C in order to clarify the eligibility restrictions for applicants who are individuals, partnerships or corporations respectively.

This now makes it a requirement for the AHC to grant a licence to an applicant unless the applicant has, in the last five years, been convicted of a prescribed offence.

Ineligibility to hold a licence also applies not only if the applicant was an individual, a partner in, or a controlling shareholder or director of a previous licensee which had its licence revoked or which was subject to a prescribed financial arrangement within the last five years.

The applicant is also ineligible if one of its partners (if a partnership) or controlling shareholders or directors (if a corporation) would have been ineligible for the above reasons. A corporate applicant is also ineligible if a controlling shareholder is a company that would be ineligible to be a licensee in its own right for any of the above reasons.

Applicants are ineligible if they have not had their financial standing assessed by an approved credit assessor if required to do so by the AHC or if they have been refused or not given a financial rating.

The AHC may grant a licence to an applicant who fails these conditions if the failure was beyond the reasonable control of the applicant.

Licences are to state the types of horticultural product for which they are valid.

The AHC must, if practicable, decide to issue or refuse a licence within 56 days of receipt of the application. In the case of a refusal, the applicant must be advised of the reasons for the decision and given a statement of their rights under the Administrative Appeals Tribunal Act 1975.

Failure to properly notify the applicant does not affect the validity of the refusal to issue a licence.

Regulation 7 amends existing Regulation 8 concerning the duration of a licence. It adds the proviso that a licence which is revoked ceases to be in force on the day it is revoked. It also clearly sets out the procedure for renewing a licence at the end of the licence period. All the eligibility criteria and notification requirements which relate to new licences also apply to renewal of licences.

Regulation 8 entirely redrafts existing Regulation 9 which permits the AHC to determine a financial rating for a licensee, to print the name and basic details of the licensee and, with the written permission of the licensee, the rating.

This Regulation provides that a financial rating must be given to an applicant who has provided sufficient information to allow a proper assessment but may otherwise be refused (resulting in ineligibility to hold a licence under Regulation 7). Included in the credit ratings will be codes indicating a new venture, a trusteeship or a net negative worth since these are not able to be given normal ratings.

The licensee's financial rating is taken to be that given at the time of application unless it is reviewed. The AHC may order that the licensee's financial standing be assessed by an approved credit assessor at any time while the licence is in force. A licensee may also request a new financial rating. The AHC may refuse the request. The AHC may use the information provided to it by the approved credit assessor to decide whether to issue a rating and to determine the rating.

If permission for publication of the licensee's financial rating is refused, the AHC may publish a statement that the licensee has not agreed to publication of the rating and may give the reason (if any) for the refusal.

Regulation 9 amends existing Regulation 10 which specifies conditions of licences. Paragraph 10(1)(b), which referred only to licences held in 1991, now has no equivalent crossreferences and has been omitted.

The condition of not supplying false or misleading information is extended to cover information supplied to an approved credit assessor and information supplied under the redrafted Regulation 13 (see below) as part of the AHC's process of monitoring the performance of licensees.

Additional conditions are that the licensee must inform the corporation within 28 days if a partner or controlling shareholder changes, if a shareholder comes into control of 20 percent or more of the licensee's shares or if the licensee, a partner, controlling shareholder or director is convicted of a prescribed offence. Licensees who are required to have their financial standing assessed must do so as soon as is practicable and information required under the redrafted Regulation 13 (see below) is also required as soon as practicable.

The rewriting of Regulation 10 has led to the provisions of paragraph 10(1)(h) being subsumed into 10(1)(g)(iv). 10(1)(h) has therefore been omitted.

Regulation 10 amends existing Regulation 11 which provides that the AHC may revoke a licence or vary it by omitting a kind of horticultural product set out in the licence. At the request of the licensee, the AHC may also vary the licence to add a type of horticultural product to the licence. Subregulation 11(4) is amended to make clear that it refers only to variations where the AHC omits products from the licence.

Regulation 11 amends existing Regulation 12 which permits the AHC to publish the Corporation Permission which may specify conditions of export. As the Permission may apply to some exporters and not others (for example, in the case where a market is reserved for a limited number of exporters), the right of review is limited to those licensees to whom the published Permission applies.

Regulation 12 entirely redrafts existing Regulation 13 which permits the AHC to annually review the compliance of a licensee with the conditions of the licence and the corporation Permission in order to make the process clearer. It entitles the AHC to request information relating to the licensee's conduct, its financial arrangements, the identity of its partners or ownership and management arrangements and whether the licensee, a partner, director or controlling shareholder has entered into a prescribed financial arrangement or has been convicted of a prescribed offence.

Regulation 13 amends existing Regulation 16 which specifies the markets for which a licence to export is not necessary. The misspelt "Federates States of Micronesia" is corrected to read "Federated States of Micronesia".

Regulation 14 amends existing Regulation 18 which provides for both internal and Administrative Appeals Tribunal review of AHC decisions. Matters which are added to this list are refusal to vary a licence, financial ratings given by the AHC, refusal to give a financial rating and appointment of an approved credit assessor.

Regulation 15 amends existing Regulation 19 which deals with returns to be provided by making some consequential changes due to the redrafting of Regulations 9 and 10 and by changing the notification period from 14 to 28 days to make the requirement consistent with the notification requirements in Regulation 10.

Regulation 16 amends existing Schedule 1 by adding the winding up of an applicant or licensee and the appointment of a provisional liquidator to an applicant or licensee to the list of prescribed financial arrangements.