Customs Amendment (Strengthening and Modernising Licensing and Other Measures) Bill 2024 - Initial Scrutiny [2024] AUSStaCSBSD 143 (14 August 2024)

• Chapter 1 : Initial scrutiny
• Customs Amendment (Strengthening and Modernising Licensing and Other Measures) Bill 20242
• Reversal of the evidential burden of proof3
• Coercive powers8

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Chapter 1 :
Initial scrutiny

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

Customs Amendment (Strengthening and Modernising Licensing and Other Measures) Bill 2024^[2]

Purpose	This bill seeks to amend the Customs Act 1901 (Customs Act) with the aim of modernising and strengthening the customs licensing regime and seeks to make amendments to streamline administrative processes including digitisation of forms. The customs licensing regime encompasses depot, warehouse and customs broker’s licences. The bill also seeks to amend the AusCheck Act 2007 to support these reforms by allowing for the disclosure of security identity card information to an officer of Customs for the purposes of the Customs Act.
Portfolio	Home Affairs
Introduced	House of Representatives on 26 June 2024
Bill status	Before the House of Representatives

Reversal of the evidential burden of proof^[3]

1.2 Section 15 of the AusCheck Act 2007 (AusCheck Act) makes it an offence for an AusCheck staff member (or former member) to disclose information obtained relating to the AusCheck Scheme. This bill seeks to create an additional defence to this offence if the information is AusCheck scheme personal information that is disclosed to a Customs officer for the purposes of assisting in the performance of the officer’s functions or the exercise of the officer’s powers under the Customs Act 1901 (Customs Act).^[4] By making this an exception to the offence, this reverses the evidential burden of proof (requiring the defendant to bear the burden of adducing or pointing to evidence that suggests a reasonable possibility that the matter exists or does not exist).^[5]

1.3 At common law, it is ordinarily the duty of the prosecution to prove all elements of an offence. This is an important aspect of the right to be presumed innocent until proven guilty. Provisions that reverse the burden of proof and require a defendant to disprove, or raise evidence to disprove, one or more elements of an offence, interferes with this common law right.

1.4 The committee expects any such reversal of the evidential burden of proof to be justified and for the explanatory memorandum to address whether the approach taken is consistent with the Attorney-General’s Department’s Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers which states that a matter should only be included in an offence-specific defence (as opposed to being specified as an element of the offence) where:

• it is peculiarly within the knowledge of the defendant; and

• it would be significantly more difficult and costly for the prosecution to disprove than for the defendant to establish the matter.^[6]

1.5 In relation to proposed paragraph 15(2)(e), while the explanatory memorandum provides a detailed explanation as to the necessity for disclosing information obtained through the AusCheck Scheme to a Customs officer, as well as privacy safeguards (including the application of the Privacy Act 1988), it does not provide a justification as to the creation of a new defence which reverses the evidential burden of proof.

1.6 It is not clear to the committee that the matters made out in the defence are peculiarly within the defendant’s knowledge or would be significantly more costly and difficult for the prosecution to disprove. The committee understands that the matter the defendant would need to raise evidence about relates to whether the disclosed information was provided to a Customs officer for the purpose of them performing their functions or exercising a power. This would appear to be evidence that would also be within the knowledge of the Customs officer.

1.7 The committee considers that where a provision reverses the burden of proof the explanatory memorandum should explicitly address relevant principles as set out in the Attorney-General’s Department’s Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers.^[7]

1.8 Noting the importance of explanatory materials as a point of access to understanding the law and, if needed, as extrinsic material to assist with interpretation (see section 15AB of the Acts Interpretation Act 1901), the committee considers that a justification for reversing the evidential burden of proof should have been included within the explanatory memorandum.

1.9 The committee draws this matter to the attention of senators and leaves to the Senate as a whole the appropriateness of reversing the evidential burden of proof in relation to the offence under section 15 of the AusCheck Act 2007.

Coercive powers^[8]

1.10 This bill also seeks to amend the Customs Act to provide that a collector may, at any time, gain access to and enter, if necessary by force, any place covered by a depot licence and examine any goods at the place.^[9] A collector is taken to be either the Comptroller-General or a Customs officer under the Customs Act.^[10]

1.11 Under common law, government officials cannot enter and search the premises of a person without consent. Although this common law position may be appropriately modified by legislation, the committee will closely scrutinise any conferral of coercive powers. As noted in the Guide to Framing Commonwealth Offences, the default position is that entry into a premises without consent should generally be authorised by a warrant issued by a judicial officer, such as a magistrate, and any departure from this should be accompanied by a compelling justification.^[11]

1.12 In accordance with the Guide to Framing Commonwealth Offences, there may be limited circumstances in which it is appropriate for entry and search without consent or judicial warrant.^[12] These may include licensed or registered non-residential premises by an inspector, though the applicable legislation should impose, as a condition of all licences, consent to entry where the licensed activity happens.^[13] Another circumstance that may justify entry without consent or warrant is where there is a situation of emergency, serious danger to public health or where national security is involved.^[14]

1.13 In relation to this matter, the explanatory memorandum provides:

There is no requirement under new section 77ZAA for a Collector to first obtain a warrant for the entry and examination of goods at a place licensed as a depot. This is appropriate in principle, and is consistent with those declared in the Guide, where the purpose of entry is to access or examine goods under customs control or to monitor compliance rather than to seek and collect evidence of an offence, and it is impracticable to obtain a warrant to carry out the day to day compliance monitoring activities. However, it has been suggested that where there is no requirement for obtaining a warrant to enter premises without consent, a reasonable period of notice should be given.

In the context of the regulation of customs functions it would defeat the purpose of granting powers of entry and examination if a reasonable period of notice were given to licence holders. The purpose of entry under proposed section 77ZAA is for an audit of goods in a place covered by a depot licence to be undertaken to monitor compliance by a licence holder with their obligations in order to maintain the integrity of the customs regulatory regime, and thus to facilitate legitimate trade and cross-border movements. Were a period of notice mandated, it would provide non-compliant licence holders the opportunity to conceal their non compliance and thus continue to engage in potentially criminal activities to the detriment of Australian industry, the community and the revenue of the Commonwealth.^[15]

1.14 While the committee notes the importance of monitoring compliance and of preventing non-compliant licence holders the opportunity to conceal their non-compliance, it is still not clear to the committee what circumstances necessitate search and entry without a warrant or make seeking a warrant impractical as part of monitoring. The committee understands that seeking a warrant is not a process that would require the license holder to be alerted to a search and entry procedure.

1.15 Further, the committee notes that presently, depot licences are subject to a condition that the holder of the licence must permit an authorised officer entry and the ability to search a licensed area when requested to do so under subsection 77N(10) of the Customs Act. It is unclear why this existing power is not sufficient, noting that licence holders (to whom this power is directed) would be in breach of their licence conditions if they do not permit an authorised officer to enter. This existing power can be used at ‘any reasonable time’ (within a relevant licence period, without the need to provide notice. It is unclear in what circumstances it would be necessary to enter without consent and potentially use force to enter. Breach of these conditions is an offence subject to 60 penalty units. It is unclear why provisions requiring a licence holder to grant entry could not be strengthened if necessary, rather than providing a general power for a collector to gain entry at ‘any time’. This would be consistent with the Guide to Framing Commonwealth Offences which provides that in relation to licenced premises the ‘applicable legislation should impose as a condition of all licences consent to entry onto non-residential premises where the licensed activity happens’.^[16]

1.16 The committee notes that without the requirement for a warrant, there is no independent assessment of whether search and entry in the specific circumstance is justified. The proposed provision is not accompanied by any safeguards regarding its use, requiring only that a collector may ‘at any time’ enter premises covered by a depot licence ‘if necessary by force’. There is no requirement that a senior officer authorise the entry or use of force. There are also no reporting requirements. Further, licence holders may be unaware that search and entry of licensed premises may occur without a warrant and, if not present at the time of the search, may be unaware the premises were searched. The committee’s concerns are also heightened as the proposed power would grant a collector the power to use force if necessary and this power may be exercised by any Customs officer in the absence of a warrant. The explanatory memorandum states that the officers who exercise these powers ‘are highly trained and subject to rigorous integrity checks’.^[17] However, it is not clear if they are trained in the use of force, noting that such officers do not currently have such powers.

1.17 In light of the above, the committee seeks the minister’s advice on:

• why subsection 77N(10) of the Customs Act 1901, which currently makes it a condition for licence holders to permit authorised officers to enter and search premises is insufficient, and whether consideration was given to amending this provision (rather than allowing a general right of warrantless entry at any time);

• why seeking a warrant would be impractical (noting the bill could provide no requirement for prior notification to be given regarding the warrant);

• what safeguards would apply if a collector were to enter premises without consent and without a warrant, including oversight of the officer’s actions and reporting requirements;

• in what circumstances is it envisaged that an officer would need to use force to enter premises;

• whether training will be provided to any officer exercising these proposed powers in relation to the use of force; and

• why is there no requirement that a licence holder be notified after a search has occurred.

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^[2] This entry can be cited as: Senate Standing Committee for the Scrutiny of Bills, Customs Amendment (Strengthening and Modernising Licensing and Other Measures) Bill 2024, Scrutiny Digest 9 of 2024; [2024] AUSStaCSBSD 143.

^[3] Schedule 1, item 121, proposed paragraph 15(2)(e). The committee draws senators’ attention to this provision pursuant to Senate standing order 24(1)(a)(i).

^[4] Schedule 1, item 121.

^[5] See section 13.3 of Schedule 1 to the Criminal Code Act 1995.

^[6] Attorney-General's Department, A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers (May 2024) p. 48.

^[7] Attorney-General's Department, A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers (May 2024) p. 48.

^[8] Schedule 1, item 162, proposed section 77ZAA. The committee draws senators’ attention to this provision pursuant to Senate standing order 24(1)(a)(i).

^[9] Schedule 1, item 162, proposed section 77ZAA.

^[10] Customs Act 1901, subsection 8(1).

^[11] Attorney-General's Department, A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers (May 2024) pp. 72-73.

^[12] Attorney-General's Department, A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers (May 2024) p. 78.

^[13] Attorney-General's Department, A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers (May 2024) p. 79.

^[14] Attorney-General's Department, A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers (May 2024) p. 80.

^[15] Explanatory memorandum, p. 52.

^[16] Attorney-General's Department, A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers (May 2024) p. 79.

^[17] Explanatory memorandum, p. 52.