Digest N. 2425 Custms and Excise Bill 2016 Date f Intrductin: 23 Nvember 2016 Prtfli: Select Cmmittee: Published: 24 Nvember 2016 by Jhn McSriley BA LL.B, Barrister, Legislative Analyst P: (04) 817-9626 (Ext. 9626) Custms As at 24 Nvember, 1st Reading nt held. Cautin: This Digest was prepared t assist cnsideratin f the Bill by members f Parliament. It has n fficial status. Althugh every effrt has been made t ensure accuracy, it shuld nt be taken as a cmplete r authritative guide t the Bill. Other surces shuld be cnsulted t determine the subsequent fficial status f the Bill. Purpse The aim f this Bill is t replace the Custms and Excise Act 1996 (the 1996 Act) t accunt fr changed circumstances such as raised standards fr trade security, new free trade arrangements, and the use f new frms f infrmatin and technlgy fr passenger facilitatin and risk targeting and t make the law less prescriptive, easier t understand and apply and, in sme areas, reduce unnecessary cmpliance csts. 1 Backgrund Mst f the prvisins f this Bill re-enact prvisins currently cntained in the Custms and Excise Act 1996. Althugh these prvisins f the Bill are ften in a rewritten r restructured frm, they d nt make any substantive changes t the law. 2 Departmental disclsure statement http://legislatin.gvt.nz/disclsure.aspx?type=bill&subtype=gvernment&year=2016&n=209 Regulatry impact statements http://www.treasury.gvt.nz/publicatins/infrmatinreleases/ris The analysis belw attempts t cver new material nly. 1 Custms and Excise Bill, 2016 N 209-1, Explanatry nte, General plicy statement, p. 1. 2 Custms and Excise Bill, 2016 N 209-1, Explanatry nte, Part by Part analysis, p. 6. BILLS DIGEST Digest N. 2425 1
Main Prvisins Purpses The Bill prvides that its purpses are as fllws: t levy excise duty and excise-equivalent duty; t enable the cllectin f duty impsed under the Tariff Act 1988, excise duty and exciseequivalent duty and ther types f duties, taxes, and levies; t prvide fr the administratin and enfrcement f custms cntrls at the brder and t facilitate brder cntrl thrugh risk management; t set ut bligatins f persns wh crss the brder and persns wh cause r allw gds, persns, r craft t crss the brder; t set ut the pwers f Custms in relatin t gds, persns, and craft; t restate, with sme mdificatins, the law relating t custms; t repeal the Custms and Excise Act 1996 (Part 1, Clause 3 (the purpse clause ). Excise duty and excise-equivalent duty The Bill defines excise duty as a duty levied in respect f alchl, tbacc and fuel that are manufactured in New Zealand. Excise-equivalent duty is duty levied in respect f imprted alchl, tbacc, and fuel where excise duty wuld have been levied in respect f the alchl, tbacc r fuel had it been manufactured in New Zealand. The Bill prvides: fr a regulatin-making pwer restricting the discretin f the chief executive f Custms t allw gds subject t excise duty t be remved frm a Custms-cntrlled area withut being remved fr hme cnsumptin; that excise duty levied n gds that are manufactured utside f a manufacturing area (a Custms-cntrlled area that is licensed fr the manufacture f Part A gds (i.e. specified in Part A f the Excise and Excise-equivalent Duties Table)) must be paid when the gds are manufactured; fr regulatin-making pwers in relatin t mtr spirits that are manufactured by the blending f tw r mre substances; fr the cntinuatin, by Order in Cuncil, f the Excise and Excise-equivalent Duties Table currently in frce under the 1996 Act. The definitin f manufacture is amended t include curing (imprtant in the manufacture f tbacc) (Part 2, Clause 11 and Schedule 3 f the Bill, particularly clauses 3, 5, 10 and 16; Part 1, Clause 5, definitins f manufacture, manufacturing area and Part A gds ). Entry and exit f gds, persns, and craft The Bill largely cntinues the prvisins relating t the entry and exit f gds, persns, and craft int and ut f New Zealand, the designatin r licensing f prts and airprts as Custms places r Custms-cntrlled areas and prvides that certain activities relating t gds, persns, r craft must be carried ut nly in Custms-cntrlled areas that are licensed fr thse activities. The Bill als cntinues the prvisins relating t the entry f, and accunting fr, imprted gds, gds n which excise duty is levied and gds that are being exprted. The Bill als prvides fr prhibitins n the imprtatin and exprtatin f bjectinable publicatins, gds that are designed, manufactured, r adapted fr a dishnest purpse, ther gds prhibited by Order in Cuncil r by the Secretary f BILLS DIGEST Digest N. 2425 2
Freign Affairs and Trade and fr the frfeiture, seizure, and cndemnatin f gds (Part 1, Clause 4(4); Part 3, Subparts 1 8, Clauses 12-168) Cmmercial transprtatin peratr may be required t prvide PNR infrmatin The Bill prvides that the chief executive may, by ntice in writing, require a cmmercial transprtatin peratr (generally an wner r peratr f a craft that transprts gds r persns fr cmmercial purpses) t prvide passenger name recrds r PNR infrmatin within 72 hurs befre departure and nt later than 24 hurs after arrival. This infrmatin relates t persns wh have arrived in, r departed frm, New Zealand n r after the specified date, are arriving in, r departing frm, New Zealand n r after the specified date r are intending t arrive in, r depart frm, New Zealand n r after the specified date (Part 3, Clause 49). Custms places and Custms-cntrlled areas The Bill prvides (as des the current law) that unless an area is licenced by the chief executive as a Custms-cntrlled area, it may nt be used fr such purpses as the manufacture f Part A gds, the strage f imprted gds withut the payment f duty and the prcessing f craft arriving in, r departing frm New Zealand. The Bill prvides that the chief executive may grant a licence fr a Custms-cntrlled area nly if satisfied that the applicant is a fit and prper persn t be granted the licence. In determining this, the chief executive must cnsider any f the fllwing: any serius r repeated failure by the applicant t cmply with this Act r the Bisecurity Act 1993; any cnvictin f the applicant fr an ffence under the Hazardus Substances and New Organisms Act 1996, the Immigratin Act 2009, the Civil Aviatin Act 1990, the Wine Act 2003, r the Maritime Transprt Act 1994; any current r previus bankruptcy f the applicant under the Inslvency Act 1967 r the Inslvency Act 2006; any cnvictin f the applicant, in New Zealand r in anther cuntry, fr an ffence invlving dishnesty r drugs; whether the applicant is r has been prhibited, under sectin 382, 383, 385, r 386A f the Cmpanies Act 1993, frm being a directr r a prmter f, r frm taking part in the management f, a cmpany; any prescribed matters; any ther matters that the chief executive cnsiders relevant. The Bill prvides as an exceptin t the manufacture f Part A gds, the manufacture f tbacc, r beer, wine r spirits and the manufacture f bifuel r a bifuel blend fr persnal use (Part 3, Subpart 2, Clauses 56-73). Prhibited imprts and prhibited exprts The Bill cntinues and redrafts the prhibitins n the imprtatin int New Zealand f bjectinable publicatins and gds that are fr a dishnest purpse and the pwers f the Gvernr-General in relatin t prhibiting, by Order in Cuncil, the imprtatin r exprtatin f gds in the public interest. Pwers f the Secretary f Freign Affairs and Trade t prhibit the exprtatin f gds that may be put t certain uses (fr example, military r terrrist uses) are redrafted (Part 3, Subpart 4, Clauses 95-99). BILLS DIGEST Digest N. 2425 3
Actins ut f New Zealand The Bill cntinues t prvide that the pwer t seize frfeited gds in the cntiguus zne f New Zealand may be exercised nly in accrdance with article 33 f the United Natins Cnventin n the Law f the Sea (Part 3, Subpart 8, Clause 158(6)). Custms pwers The Bill makes numerus updating r redrafting amendments in respect f the pwers f Custms including: limiting the scpe f the current pwer f Custms t rder ships t leave New Zealand t cases where the chief executive f Custms is satisfied that the rder is in the public interest (Part 4, Clause 176(4); prviding fr the accessing and searching by Custms fficers f data n electrnic devices that are subject t the cntrl f Custms and requiring the prductin f access infrmatin fr an electrnic device such as passwrds (Part 4, Clause 207); prviding fr the investigatin f certain ffences invlving bjectinable publicatins, gds that have been designed, manufactured, r adapted t facilitate a crime invlving dishnesty, r tbacc (Part 4, Clauses 244 t 246). Custms fficers The Bill cntinues t allw the chief executive t authrise particular identified individuals wh are nt Custms fficers t act as Custms fficers and, as a new matter, nw prvides that the chief executive may, in certain circumstances, authrise classes f individuals t act as Custms fficers. The particular individuals authrised wuld nt need t be identified (Part 5, Subpart 1, Clause 251). Disclsure f infrmatin The Bill cntinues t prvide that Custms may cntinue t disclse infrmatin t : the Inland Revenue Department, under an infrmatin matching agreement r direct access agreement, fr the purpses f the Student Lan Scheme Act 2011 and the Child Supprt Act 1991; the Ministry f Scial Develpment (MSD), under an infrmatin matching agreement, fr the purpse f verifying benefit entitlement r eligibility, recvery f benefit debt, and giving mutual assistance; the Ministry f Justice, under an infrmatin matching agreement, fr the purpses f fines enfrcement. As new matters, the Bill prvides that Custms may: enter int an agreement with the Ministry f Scial ddvelpment (MSD) t facilitate MSD having direct access t Custms infrmatin fr the purpse f verifying benefit entitlement r eligibility and benefit debt recvery; enter int an agreement with a gvernment agency t facilitate that agency having direct access t Custms infrmatin fr the purpse f assisting the agency t perfrm its functins related t, r invlving, any f the fllwing, the preventin, detectin, investigatin, prsecutin, r punishment f ffences, the preventin, detectin, r investigatin f any ptential, suspected, r actual terrrist act r facilitatin f a terrrist act, BILLS DIGEST Digest N. 2425 4
the prtectin f natinal security, the prcessing f internatinal passengers, the prtectin f brder security, the prtectin f public revenue, the prtectin f public health and safety; enter int an agreement with a gvernment agency t facilitate the disclsure f infrmatin t that agency if the disclsure is t be n a regular basis and is nt prvided under an infrmatin matching agreement r a direct access agreement (Part 5, Subpart 6, Clauses 283-295). Offence f defrauding revenue f Custms: intrducing intentin The Bill cntinues the ffence f defrauding the revenue f Custms but includes an express mens rea (intentin) that is new. The prvisin nw prvides (s far as relevant), in general terms, that a persn cmmits an ffence if the persn knwingly des any act, r mits t d any act, intending t evade the payment f any duty n gds, enable any ther persn t evade the payment f any duty n gds, btain mney by way f drawback r a refund f duty n gds t which that persn is nt entitled under [the Bill], enable any ther persn t btain mney by way f drawback r a refund f duty n gds t which that ther persn is nt entitled under [the Bill] r defraud the revenue f Custms in any ther manner in relatin t gds (Part 6, Subpart 2, Clause 348(1)). Offences generally The Bill creates an infringement ffence system, but cntinues the existing ffence prvisins and increases the penalties (Part 6, Subpart 2, Clauses 336-379). Cmment These ffences and the increased penalties are listed in the explanatry nte t the Bill pages 17-19. A number f the ffence prvisins in the Bill that have been brught ver frm the 1996 Act have been amended s that, bradly speaking, a persn cmmits the ffence nly if the persn has n reasnable excuse fr the cnduct that cnstitutes the ffence. The ffences cncerned include the ffences in Clauses 68(1) and (4), 69(1), 71(1), 79(1), 84(1), 86(1), 133(1), 160(1), 215(1), 225(1), 259(1), 308(1), (2), and (3), 333(1), 336(1), 337(2) and (3)(c), 338(2), 357(1) and (2), 359(2) and (3), 362(1), 365(1), and 370(1). 3 Cpyright: NZ Parliamentary Library, 2016 This wrk is licensed under the Creative Cmmns Attributin 3.0 New Zealand licence. In essence, yu are free t cpy, distribute and adapt the wrk, as lng as yu attribute the wrk t the Parliamentary Library and abide by the ther licence terms. T view a cpy f this licence, visit: http://creativecmmns.rg/licenses/by/3.0/nz/. 3 Custms and Excise Bill, 2016 N 209-1, Explanatry nte, Part by Part analysis, p. 19. BILLS DIGEST Digest N. 2425 5