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Export Control Amendment (Miscellaneous Measures) Bill 2020 - Commentary on Ministerial Responses [2021] AUSStaCSBSD 14 (29 January 2021)

Export Control Amendment (Miscellaneous Measures) Bill 2020

Power for delegated legislation to modify primary legislation (akin to Henry VIII clause)^[15]

2.37 In Scrutiny Digest 17 of 2020 the committee requested the minister's advice as to:

• why it is considered necessary and appropriate to allow delegated legislation to modify the operation of Export Control Act 2020 (the Act) and the Administrative Appeals Tribunal Act 1975 (the AAT Act), and the circumstances in which it is envisaged that these powers are likely to be used; and

• whether the modification of the operation of the Act or the AAT Act may trespass on an individual’s right to a fair hearing.^[16]

Minister's response^[17]

2.38 The minister advised:

The Australian Government supports Australian agricultural exports by facilitating trade. We negotiate bilateral and multilateral agreements with trading partners. These agreements can include reduced tariff rate arrangements for certain products. These are administered via tariff rate quotas. Exporters can get reduced import taxes on entry of a certain volume of goods into a particular country. This can save money for Australian businesses.
Tariff rate quota certificates enable specific amounts of goods to enter an importing country at a reduced, or zero, tariff rate.
The Export Control Amendment (Miscellaneous Measures) Bill 2020 (Bill) will amend existing section 386 of the Export Control Act 2020 (Act) so that rules modifying subsection 383(4) of the Act and subsection 43(1) of the Administrative Appeals Tribunal Act 1975 (AAT Act) in relation to decisions on review will apply to reviewable decisions about tariff rate quota certificates, in addition to tariff rate quota entitlements as already provided for. Tariff rate quota certificates are a component of the tariff rate quota system, or systems, that may be established by rules under section 264 of the Act and which also includes tariff rate quota entitlements. Such certificates will be able to be issued to facilitate an export consignment’s entry to a country at the concessional tariff rate relevant to the tariff rate quota.
Tariff rate quota certificates depend on the product and its destination:

• For an allocated quota, my department issues a certificate to exporters who have an allocation. The certificate covers the volume of the quota request (either in kilograms, tonnes, litres or pieces).

• Some quotas are not allocated. My department issue certificates on a first-come, first-served basis.

Rules as described above can only be made where for the purpose of ensuring that tariff rate quota amounts are not exceeded. The provisions of the Act and the AAT Act that may be modified relate to the range of decisions open to the Secretary (in respect of internal merits review) and the Administrative Appeals Tribunal (in respect of external merits review) upon review of a reviewable decision. The ability to amend the application of these provisions in relation to the tariff rate quota system recognises that, due to agreements in place with trading partners, certificates issued for any quota type cannot exceed the stated access amount (that is, must not be more than 100 per cent).
Eligibility for, and allocation of, the tariff rate quota entitlements for Australian exporters is determined by the specific methods prescribed in the various Export Control (Tariff Rate Quotas) Orders. These methods must factor in access amounts agreed with Australia’s trading partners.
It is proposed that rules under section 386 of the Act, as amended by the Bill, will be made in equivalent terms to the current Export Control (Tariff Rate Quotas) Order 2019, which prevents a person making a decision to overturn an initial decision if there is an insufficient amount of quota available at that time. This means there will be no change to the current administration of tariff rate quota certificates or impact on related trade agreements. Overturning a decision where this would result in a quota being overfilled, or in the quota allocation issued to an individual being overused, would result in subsequent consignments being refused their preferential tariff rates at import. Refusal of such tariff rate concessions would negatively impact— by way of the imposition or increase of import tariffs—other parties who had correctly been issued tariff rate quota (TRQ) certificates. Most importantly, the issuance of TRQ certificates that exceed the total access amounts available may also undermine confidence in Australia’s regulatory system.

Committee comment

2.39 The committee thanks the minister for this response. The committee notes the minister's advice that due to agreements in place with trading partners, certificates issued for any quota type cannot exceed the stated access amount, and that rules modifying subsection 383(4) of the Export Control Act 2020 and subsection 43(1) of the Administrative Appeals Tribunal Act 1975 can only be made for the purpose of ensuring that tariff rate quota amounts are not exceeded. The committee further notes the minister’s advice that overturning a decision that would result in a quota being overfilled would lead to subsequent consignments being refused their preferential tariff rates at import, and that this would negatively impact parties who had correctly been issued tariff rate quota certificates.

2.40 The committee requests that an addendum to the explanatory memorandum containing the key information provided by the minister be tabled in the Parliament as soon as practicable, noting the importance of these 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).

2.41 The committee also draws this matter to the attention of the Senate Standing Committee for the Scrutiny of Delegated Legislation.

2.42 In light of the detailed information provided, the committee makes no further comment on this matter.

Incorporation of external materials as in force from time to time
Significant matters in non-legislative documents^[18]

2.43 In Scrutiny Digest 17 of 2020 the committee requested the minister's advice as to:

• whether documents incorporated by reference into the rules will be made freely available to all persons interested in the law; and

• why it is considered necessary and appropriate for matters relating to the calculation of tariff rate quotas to be set out in non-legislative documents which may be subject to limited (if any) parliamentary scrutiny.^[19]

Minister's response

2.44 The minister advised:

My department provided a previous response to the Senate Scrutiny of Bills Committee’s comments in Scrutiny Digest 3/18, as to the incorporation of external material in the Export Control Bill 2017, which preceded the  Export Control Bill 2019 .
It remains the intention that whenever documents described in subsection 432(3), and specifically paragraphs 432(3)(g) and (h) are applied, adopted or incorporated by the rules, these documents will be publicly available. The documents will be accessible either on my department's website or through a link to where the documents may be found on the website of the relevant authority or body.
The purpose of the provisions in paragraphs 432(3)(g) and (h) is to ensure rules can be made to enable accurate calculation of tariff rate quotas for the exportation of Australian goods into a particular country.
Our key trading partners place a great deal of importance on the accurate calculation of tariff rate quotas for the importation of goods. Considerable work may be undertaken by Australia and our trading partners to enter into agreements that cover the trade between our respective countries. These agreements may contain the amount of tariff rate quota available for a good to a particular country or the method for calculating the tariff rate quota. This amendment will ensure that if a responsible authority or body were to make changes to the documents listed under subclause 432(3) after the Bill or rules are first made, the Bill, rules and standards to be applied will not be out of date.
Paragraph 432(3)(h) operates in addition to paragraph 432(3)(g) in the circumstance an agreement is entered into between Australia and another country (for example, a free trade agreement with the European Union), which may be made by an authority or body that is not responsible for regulating the importation of goods into that county.
To ensure Australian exports may have access to tariff rate quotas, it is necessary to provide for incorporation of agreements between Australia and other countries that may contain the amount of tariff rate quota and calculation of that tariff rate quota.
If these agreements were not incorporated, Australian exports may be unable to access the available rates of tariff rate quotas and subsequently be exposed to higher importation taxes upon entry into the importing country.

Committee comment

2.45 The committee thanks the minister for this response. The committee notes the minister's advice that it remains the intention that whenever documents described in paragraphs 432(3)(g) and (h) are applied, adopted or incorporated by the rules, these documents will be publicly available, and that the documents will be accessible either on the department's website or through a link to where the documents may be found on the website of the relevant authority or body.

2.46 The committee further notes the minister’s advice that the purpose of the provisions in paragraphs 432(3)(g) and (h) is to ensure rules can be made to enable accurate calculation of tariff rate quotas for the exportation of Australian goods into a particular country. The minister advises that it is necessary to provide for incorporation into these rules of agreements between Australia and other countries that may contain the amount of tariff rate quota and calculation of that tariff rate quota to ensure Australian exports may have access to tariff rate quotas, and to ensure that the rules will not be out of date if changes are made.

2.47 The committee requests that an addendum to the explanatory memorandum containing the key information provided by the minister be tabled in the Parliament as soon as practicable, noting the importance of these 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).

2.48 The committee also draws this matter to the attention of the Senate Standing Committee for the Scrutiny of Delegated Legislation.

2.49 In light of the detailed information provided, the committee makes no further comment on this matter.

[15] Schedule 1, items 10, 12 and 13. The committee draws senators’ attention to these provisions pursuant to Senate Standing Order 24(1)(a)(v).

[16] Senate Scrutiny of Bills Committee, Scrutiny Digest 17 of 2020, pp. 10-11.

[17] The minister responded to the committee's comments in a letter dated 20 December 2020. A copy of the letter is available on the committee's website: see correspondence relating to Scrutiny Digest 1 of 2021 available at: www.aph.gov.au/senate_scrutiny_digest.

[18] Schedule 1, item 14, proposed paragraphs 432(3)(g) and (h). The committee draws senators’ attention to these provisions pursuant to Senate Standing Order 24(1)(a)(iv) and (v).

[19] Senate Scrutiny of Bills Committee, Scrutiny Digest 17 of 2020, pp. 11-12.