Customs Amendment (Product Specific Rule Modernisation) Bill 2019 [2019] AUSStaCSBSD 151 (27 November 2019)

• Customs Amendment (Product Specific Rule Modernisation) Bill 2019
• Parliamentary scrutiny1

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Chapter 1

Commentary on Bills

1.1 The committee comments on the following bill and, in some instances, seeks a response or further information from the relevant minister.

Customs Amendment (Product Specific Rule Modernisation) Bill 2019

Purpose	This bill seeks to amend the Customs Act 1901 to change the way in which the product specific rules of origin of six of Australia's free trade agreement are given effect domestically.
Portfolio	Home Affairs
Introduced	House of Representatives on 12 September 2019

Parliamentary scrutiny^[1]

1.2 The main provisions in this bill seek to amend the Customs Act 1901 (the Customs Act) to change the way in which the product specific rules of origin (PSRs) of six of Australia's free trade agreements (FTA) are given effect domestically. PSRs are set out in an Annex to each FTA and list goods according to their Harmonized System classification. Currently, the relevant PSRs for each FTA are prescribed via regulations made under the Customs Act. The bill seeks to amend the Customs Act to apply the PSRs for each FTA by direct reference to the PSR Annex in each FTA.

1.3 In addition, the bill also seeks to amend the Customs Act to:

• amend the definitions of 'Harmonized System' in the Customs Act for each FTA to expressly recognise the version of the Harmonized System currently set out in each FTA and to allow subsequent versions of the Harmonized System to be recognised if and when the PSRs are updated to recognise a newer version of the Harmonized System in each FTA;^[2] and

• repeal the definition of 'textile and clothing goods' in section 126AE and insert a new definition of 'textile or apparel good' which would provide that this term has the meaning given by Article 1.2 of Chapter 1 of the Australia-United States FTA (section 126AE provides that authorised officers may request records or ask questions relating to the exportation of textile and clothing goods to the United States).^[3]

1.4 Each of these changes will have an impact on the level of parliamentary scrutiny of changes to the relevant FTAs. The amendments to the definitions of 'Harmonized System' and 'textile and clothing goods' mean that when the definitions of these terms are updated in the relevant FTAs the Customs Act will not need to amended to recognise the updated definitions.

1.5 In relation to applying the PSRs for each FTA by direct reference to the PSR Annex for each FTA, these amendments will remove the need for regulations under the Customs Act to prescribe the PSRs for each FTA. The bill also provides that if the relevant Annex is updated, the updated version will apply. As a result, there will be no need to amend regulations when changes are made to the PSRs under the FTAs.

1.6 The explanatory memorandum states:

Directly referring to the Annex containing the PSRs, rather than implementing them through regulations, does not change the operation of the PSRs. The amendments merely aim to simplify the way in which the PSR Annexes are implemented domestically.^[4]

1.7 However, at a general level, the committee will have scrutiny concerns where provisions in a bill allow the incorporation of legislative provisions by reference to other documents because such an approach:

• raises the prospect of changes being made to the law in the absence of Parliamentary scrutiny, (for example, where an external document is incorporated as in force 'from time to time' this would mean that any future changes to that document would operate to change the law without any involvement from Parliament);

• can create uncertainty in the law; and

• means that those obligated to obey the law may have inadequate access to its terms.

1.8 Additionally, the committee notes that the removal of the PSRs from regulations may limit the opportunity of Parliament to review and scrutinise the content of the PSRs. The Legislation Act 2003 requires that all legislative instruments, including regulations, are required to be tabled in both Houses of the Parliament. Members of either House of the Parliament can then give notice that they intend to a motion to disallow a legislative instrument within 15 sitting days of the instrument being tabled before that House. This provides Parliament with the ability to review and scrutinise delegated legislation made by the executive.

1.9 The committee draws its scrutiny concerns to the attention of senators and leaves to the Senate as a whole the appropriateness of amending the definitions of 'Harmonized System' and 'textile and clothing goods' in the Customs Act and removing the product specific rules from regulations and instead incorporating them by reference in the primary legislation.

1.1

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[1] General comment. The committee draws senators' attention to these provisions pursuant to Senate Standing Order 24(1)(a)(v).

[2] Items 8, 18, 26, 33, 40 and 46 of Schedule 1.

[3] Items 1‑–4 of Schedule 1.

[4] Explanatory memorandum, p. 6.