ADMINISTRATIVE
REVIEW COUNCIL
REPORT TO THE
ATTORNEY- GENERAL
REVIEW OF IMPORT CONTROL
AND CUSTOMS BY-LAW
DECISIONS
Report No. 3
Australian Government Publishing Service, Canberra 1982
© Commonwealth of Australia 1982
ISBN 0 642 07067 9
ii
CONTENTS
PART I – Background………………………………………………….
The Reference…………………………………………………………..
PART II – QUANTITATIVE RESTRICTION DECISIONS………….
1. Types of quotas
(a) “Normal Quotas”
(b) Anomalies Reserve Scheme
(c) Market Sharing-based Quotas
(d) “Special Quotas” and other quota Control Decisions
2. Proposals for review of “Normal Quotas”
(a) Approach to Review
(b) Reviewable Decisions
(c) Legislation for Review Rights
(d) The Review Body
(e) Evidentiary Problems in Quota Reviews
(f) The Appropriate Remedy
(g) Procedure for Review
(h) Internal Review
3. Proposals for review of other Quantitative Restriction
Decisions
(a) Market Sharing-based Quotas
(b) “Special Quota” and other Quota Control Decisions
(c) Anomalies Reserve Scheme
PART III- “NORMAL CRITERIA BY-LAW DECISIONS
1. The Decision
2. Proposals for review
(a) The Character of the Decisions
(b) Internal Review
(c) External Review
Grant or Refusal of By-Law
(i) Powers of the Review Body
(ii) Review Body
(iii) Right of Review
(d) Bland Committee Recommendations
PART IV – OTHER “BY-LAW” DECISIONS
1. TYPES OF DECISIONS
(a) Import Licensing for Used Goods
(b) “Policy By-Laws”
(c) “Definitional By-Laws”
2. PROPOSALS FOR REVIEW
(a) Import Licensing for Used Goods
(b) “Policy By-Laws”
(c) “Definitional By-Laws”
PART V – CONCLUSION
(a) Quantitative Restriction Decisions
(b) “Normal Criteria By-Law” Decisions
(c) Other “By-Law” Decisions
ATTACHMENT I
Quantitative Restriction Decisions
ATACHMENT II
Internal Review of Refusals of “Normal Criteria By-Law”
Decisions
Paragraph(s)
1-6
1-6
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10-11
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17-42
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30-39
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65-70
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72-80
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iii
PART I - BACKGROUND
The Reference
1.
By letter dated 12 April 1977, the Attorney-General requested that the Council
examine the Issues arising from the absence of any provision for review of decisions made
pursuant to the Customs (Import Licensing) Regulations. That letter enclosed a letter from
the Minister for Business and Consumer Affairs requesting that a reference be given to the
Council and suggesting that the Council's consideration should cover the following points:
(a) having regard to the significance of Government policy in decisions made pursuant
to the regulations, what administrative elements of the decision making process
should be subject to review;
(b) having regard to the nexus that exists between the regulations and other statutory
powers that are central to the Government's policies in relation to protection for
Australian industry, what is the most appropriate avenue of review.
The statutory powers for implementing protection policy include the use of Customs by-laws
under section 271 of the Customs Act 1901 and Ministerial determinations under section 273
of the Customs Act, as well as decisions under the Customs (import Licensing) Regulations.
These mechanisms are used to regulate the protection given to Australian industry. The
tariff is the major mechanism for protection. The powers covered by this reference relate to
protection in three areas:
•
•
•
the imposition of quantitative restrictions on the Importation of goods where the tariff
provides insufficient or uncertain protection to Australian industry (quota decisions);
the reduction or elimination of the protective affect of the tariff where there are no
Australian-made goods to compete with imported goods (‘normal criteria by-law’
decisions); and
variation for other purposes of the tariff level by admitting, duty free or at reduced
duty, goods of particular descriptions (other 'by-law' decisions).
The term ‘quantitative restrictions’ is used throughout this paper to cover both tariff quotas
and import licensing. The term 'by-law' extends beyond the making of by-laws under section
271 to decisions, however given effect, which reduce duty payable under a tariff item or
permit entry of goods duty free notwithstanding that the tariff provides for duty.
2.
The report examines all areas of decision making and recommends suitable review
arrangements. Proposals have been made bearing in mind the extent and nature of appeal
rights currently available (in particular the jurisdiction of the Administrative Appeals
Tribunal) and the possibility of further review rights being recommended as a result of
Council's general review of decision making under Customs and Excise legislation.
3.
In preparing this report, the Council has not been able to measure the extent to which
a need for external review is felt. The proposed review of quantitative restriction decisions
may give rise to cases where there is no suitable remedy which can be made available to a
successful applicant, but the Council is unable to determine the likely frequency of such cases
or their possible financial implications for the applicants concerned.
4.
The complexity of decision-making in this area is reflected by the proposed review
process which is correspondingly complex. Whether the recommendation would require
changes in the procedures of the relevant Departments and If so what the costs of those
changes might be are questions which the Council has not been able to assess fully. Still less
has the Council been able to assess the effects of the proposed process on the costs of
industry.
1
5.
The Council is of the view that the decisions discussed in this report are susceptible of
external review in the manner proposed. The recommendations made are considered to be
the most efficient and suitable way of providing external review. However, implementation
of the proposed system will no doubt be affected by an evaluation of the matters referred to
in the preceding two paragraphs.
6.
The Council established a subcommittee consisting of Mr G. K. Kolts, and Mr E.J.L.
Tucker. That subcommittee consulted with the Departments of Business and Consumer
Affairs, and Industry and Commerce, the Industries Assistance Commission, and a number
of outside persons and bodies. The views expressed have been taken into account in this
paper and are referred to where appropriate.
PART II - QUANTITATIVE RESTRICTION
DECISIONS
7.
For protection policy purposes, Cabinet may decide to impose quantitative
restrictions on the importation of designated goods.
8.
The process by which a decision is made to impose a control or 'quota' and to issue
quota to interested eligible importers includes the following steps:








following representations from producers or manufacturers seeking protection from
import competition, the Minister for Business and Consumer Affairs (on advice of the
Minister for Industry and Commerce, or for Primary Industry, as appropriate) may refer
the matter to the industries Assistance Commission, the Temporary Assistance Authority,
or the Textile Authority (a division of the Industries Assistance Commission) for inquiry
and report on the protective needs of the industry concerned;
the report is examined by the Standing Committee on Industries Assistance (comprising
representatives of a number of departments) and a Cabinet submission is prepared on the
basis of the Committee's report;
Cabinet decides on the major elements of the controls, including whether ‘fine tuning’
(see below) is to apply, and the extent and nature of the controls are announced in a
Ministerial statement; the administrative detail is then set out in a departmental notice
which invites importers who consider themselves to be eligible for quota to supply
relevant information;
the Department of industry and Commerce or Primary Industry determines the nett
import ceiling (i.e. after allowance for any anomalies reserve scheme (see paragraph
12]etc.) available for allocation by the Department of Business and Consumer Affairs;
the Department of Business and Consumer Affairs allocates quota among the interested
eligible importers;
the ‘fine tuning’ committee, consisting of one representative from industry and from the
Departments of Business and Consumer Affairs and of Industry and Commerce,
recommends to the Ministers any final variations to the nett import ceiling, given any
changes in industry conditions that may have occurred relating to the factors underlying
the determination of the nett import ceiling by up to + or - 10%, and in practice has
chiefly been applied in the major areas of quota control, which cover clothing, textiles and
footwear);
The Department of Business and Consumer Affairs recalculates the nett import ceiling to
take account of ‘fine tuning’ and allocates any additional quota among eligible Importers;
‘Special quotas’ (see paragraph 14) may be granted In certain circumstances by the
Minister for Industry and Commerce, and allocated.
2
Quantitative restrictions may be implemented either by:

Tariff quotas. Under a tariff quota system, a tariff structure is established with a
substantive tariff item incorporating a rate of duty together with a ‘by-law’ item for the
same goods which allows for concessional entry at lower rates or free from duty. Imports
up to a specified amount in the given period (which constitutes the quota element of the
system) are permitted entry at the concessional rates. Payment of the higher or ‘penalty’
duty thus provides disincentive to Importation of quantities in excess of quota.
or

Import licensing. Under the customs (Import licensing) regulations, all imported goods are
subject to licensing unless they have been excepted by the Minister. The Minister has
made a general exception from the requirement of licences. Licences are required only In
the case of designated goods to which quantitative restrictions apply and in the case of
certain second-hand equipment (the criterion for issue of these latter licences is that no
suitable locally produced equivalent is reasonably available - discussed below, paragraph
72).
Licensing is used in preference to tariff quotas where an absolute restriction to a particular
quantity is desired (goods imported without a licence are prohibited imports and subject to
seizure).
9.
Existing Appeal Rights. An appeal to the Administrative Appeals Tribunal is currently
available where duty on imported goods has been paid under protest pursuant to section 167
of the Customs Act. An appeal is also available to the Administrative Appeals Tribunal
against refusals to refund duty under Customs Regulation 128B. These appeal rights avail an
Importer affected by a quantitative restriction decision only if the question is whether the
particular goods he is seeking to import fall within the controls. They do not provide a
means whereby any of the decisions associated with the imposition or allocation of quotas
may be challenged (see Re Zimmax Trading Co. Pty Limited and Department of Business and
Consumer Affairs [decision of 8 January 1979] at page 6).
1.
(a)
Types of Quotas
'Normal Quotas'
10.
A nett import ceiling level (see paragraph 5) is imposed for allocation among
Importers who imported goods of the type specified in the decision to impose quotas during
a nominated ‘base’ period. A range of factors may affect the amount of quota to which an
importer is entitled, i.e:
 the quantity of goods which he entered for home consumption during the base period;
 the quantity of goods entered for home consumption under ‘by-law’ in the base period;
 whether all importers with performance in the base period apply for quota;
 whether any special provision is to be made for goods in transit or In bond or covered by
an irrevocable letter of credit at the date the control is imposed;
 whether goods from designated countries are exempted from controls;
 whether reserves are set aside for imports from particular countries (e.g. New Zealand
under NAFTA);
 whether a special reserve of quota has been established for anomalies (discussed below,
paragraph 12) as in the case of certain clothing, textiles and footwear.
A detailed breakdown of the matters which must be ascertained or decided in the process is
set out in Attachment 1.
11.
The administration of quantitative restrictions is currently subject to review by the
Department of Business and Consumer Affairs. In a recent announcement the Minister
3
raised the possibility of abandonment of current allocation measures in favour of the sale of
quotas, although he indicated that there would be no change during the currency of existing
arrangements (Commonwealth Record, 1 January 1979, p.3). In spite of possible changes to the
system, the Council is of the view that proposals for review should still be formulated, since
the nature, timing and extent of these changes are still uncertain, and because of the value of
work in this area as a precedent for review of other quota allocation decision-making
processes. A further view will be necessary if these changes are introduced.
(b)
Anomalies Reserve Scheme
12.
A fixed proportion of the quota ceiling for certain textiles, clothing and footwear
imports is reserved for allocation in cases involving ‘anomalies’ (mainly for off-shore
ventures). The criteria upon which allocation used to be made are not public, nor have they
been revealed to the Council. A recent announcement has advised that those certain criteria
will no longer be applied, and that importers who did not receive an allocation under the
anomalies reserve scheme in the first eighteen months of the scheme will not be eligible to
apply for an anomalies reserve quota in the remaining twelve months of the scheme
(Commonwealth Record, 22 December 1978, p.1704). Allocations are made by a committee of
Ministers after receiving the report of a committee consisting of representatives from a
number of departments and an independent chairman.
(c)
Market Sharing-based Quotas
13.
These quotas exist at present in the area of files and rasps and of completely built-up
motor vehicles. Eligibility to import files and rasps is based upon the importer having
purchased locally made files and rasps. An import licence is granted to eligible importers to
purchase a given number of goods in proportion to the local goods purchased. Motor vehicle
quotas falling within this class of quota are based, in contrast, on the numbers of locally
produced units sold in the market as a whole. Unlike ‘normal quotas’ there is no
predetermined nett import ceiling. The number of units permitted to enter Australia
depends on the volume of sales of locally produced goods. Other market sharing schemes
operate by ‘by-law’ without there being any quota element involved. Examples are porcelain
insulators, certain primary products, and the local content plan for motor vehicles. These
latter schemes will be considered in the context of by-laws (see paragraphs 73, 76-77).
(d)
‘Special Quotas’ and other Quota Control Decisions
14.
Generally, quota categories are expressed in terms of the tariff or statistical keys,
which allows for the collation of import performance data. In some cases, because of this
method of definition, certain products, usually of a specialty type, are covered by quota
categories when their import is not intended to be constrained because they are considered
not to be directly competitive with local production. There may also be situations where
goods not intended to be covered by the quantitative restriction become covered because of:


the grant or revocation of a ‘normal criteria by-law’ (see paragraph 44);
or a change to the content of a tariff item.
This situation may be dealt with in two ways. Cabinet decisions covering quota
arrangements usually set out the circumstances in which ‘special quota’ may be authorised in
relation to such products. These decisions at times also specify other circumstances in which
special quota allocations may be authorised. Alternatively, the Minister for Industry and
Commerce, in consultation with the Minister for Business and Consumer Affairs, may decide
that quantitative restriction arrangements should not apply in respect of certain goods which
were not intended to be the subject of controls (either because of problems of definition or
because the matter had not been raised when the Cabinet decision was taken). The
distinction between the above alternatives is on the one hand Ministerial determinations to
grant licences or ‘by-law’ entry automatically and without a ceiling, and on the other a formal
4
change in the decision Imposing quantitative restrictions or In the tariff Item or statistical key
concerned.
15.
In order to overcome rigidities in the system, Cabinet may permit the transfer of
quotas between importers within individual categories of goods subject to restraints. No
conditions have been attached to the transfer of quota entitlement within such categories.
16.
Import licences are required in the case of second-hand materials-handling equipment
and four-wheel drive vehicles. The criterion for granting licences is whether there are
suitably equivalent reasonably available Australian-made new goods. Since this criterion is
the same for ‘normal criteria by-laws’, these decisions will be considered in Part III
(paragraphs 72 and 75).
2.
(a)
Proposals for Review of ‘Normal Quotas’
Approach to Review
17.
The decision-making process involves a number of elements, some of which describe
the parameters by which the decision to establish quantitative restrictions is to be given
effect, and others are applications of those parameters. The Council considers that in
principle, decisions describing the parameters of quantitative restrictions in respect of an item
are the responsibility of Government and should not be reviewable. Decisions in application
of the parameters are, on the other hand, in principle justiciable by an independent review
body. However, the boundary between the two classes of decision is not clear-cut, nor is it
practicable to establish criteria which in any particular context will clearly identify any
particular decision as belonging to one class or the other. The Council considers that the only
practicable approach is to divide the decisions which are, or may be, required into two
categories, ‘reviewable’ and ‘non-reviewable’. In Council’s view, the ‘non-reviewable’
decisions would be those which described the parameters. All other decisions would be
reviewable.
18.
In considering which decisions fall into each category, the following aspects appear
relevant:
 Decisions as to the nature and extent of assistance to Australian producers involve
questions of protection policy and the management of the economy and are not amenable
to tribunal review.
 Decisions on fundamental matters such as the goods to be subject to restrictions, the
volume of imports to be permitted, the period of restriction and the means by which
eligibility to import is to be determined are generally made by Cabinet.
 Cabinet decisions generally tend to describe the parameters of establishing quantitative
restrictions in respect of an item; departmental decisions are usually applications of those
parameters; decisions by Ministers (other than Cabinet decisions) may fall into either
category according to circumstances.
(b)
Reviewable Decisions
19.
In the light of these considerations the Council considers the following decisions
should not be reviewable, viz. those which determine:
(a)
the categories of goods to be subject to controls;
(b)
the total volume of permitted imports;
(c)
the period of restriction;
(d)
the method of criteria by which eligibility to import is to be ascertained;
(e)
whether import licensing or tariff quota is to be used;
(f)
any provision for exemption from controls of goods from specified countries;
exemption for specified goods, goods entered under ‘by-law’ etc.
(g)
the provision for and size of quota to be held for allocation in cases involving
anomalies (so far only applied to certain clothing, textiles and footwear commodities)
5
(i)
(j)
(k)
(l)
(m)
(n)
(o)
or for other reasons (e.g. NAFTA);
the treatment of goods in transit, in bond or under an irrecoverable letter of credit at
the time of introduction of quantitative restrictions;
whether and when ‘special quota’ will be allocated;
whether and by whom global quotas will be adjusted should shortages of supply of
goods in question occur (as distinct from the implementation of that decision if
implemented otherwise than by Cabinet decision);
in the case of tariff quota, what level of penalty duty is to be applicable to goods
imported in excess of, or without, quota entitlement;
whether ‘fine tuning’ is to apply;
the period of validity of quota instruments;
whether transfers of quota are to be permitted.
20.
The Department of Industry and Commerce has suggested that a further category of
non-reviewable decisions should be included, namely, ‘any other matters specifically
mentioned in Cabinet's decision’. This suggestion is not favoured by the Council. The
justification for regarding any decision as un-reviewable lies in the character of the substance
of the decision. The identity of the decision maker is irrelevant to that decision. It may be,
however, accepted that in the context of import controls Cabinet decisions have tended to
relate to matters which should be un-reviewable.
21.
The Department of Business and Consumer Affairs has suggested two further
categories of non-reviewable decisions, namely decisions whether to grant (a) an extension of
the period of validity of quota instruments and (b) an extension of the time for application of
quota. The primary reason advanced as to the former was that an extension would take the
validity of the Instrument through to the next quota period, so permitting more goods to be
Imported in that period than had been determined as appropriate by the Government. In the
case of Imports of motor vehicles this could trigger off an increase of duty across the board.
It should be noted, however, that this objection suggests equally that extensions should never
be granted. The objection is not persuasive of the conclusion that there should be no review.
As to the latter, it was suggested that extensions would make it very difficult for the
deadlines in allocating quota to be met. Two further reasons application to both decisions
were advanced. It was said that the Administrative Appeals Tribunal would be likely to
grant extensions too readily and without regard to the problems giving rise to the primary
reasons advanced above. The Council does not accept this. If the Department puts its case
fully to the Tribunal there is no reason to suppose that the Tribunal would decide upon a
wrong basis or in ignorance of the implications of its decision. It was further suggested that
review is inappropriate because the Minister is moving to make extensions more difficult to
obtain or is eliminating extensions. It was suggested that the Minister may prefer to have no
discretion to extend time than to have exercised of his discretion reviewed. The Council is of
the view that in principle where there is a power to grant extensions of time, there should be
review. There is considered to be no valid reason why there should be a discretion to extend
times in import quota matters which is not reviewable.
22.
All decisions other than those set out in paragraph 19 should, in the view of the
Council, be reviewable. The Department of industry and Commerce has suggested that there
may be decisions analogous to those in paragraph 19 which have not been included and that
it would be better to list the reviewable decisions and make all others non-reviewable. The
Council does not favour this suggestion, but considers that administrative decisions which
have a significant impact upon individuals or businesses should be reviewable unless they
are non-justiciable or otherwise inappropriate for review. Where there is a bundle of closely
related decisions forming one general area, the proper approach is considered to be to make
the whole area reviewable subject to the exclusion of particular decisions. The Council does
not regard the decisions in paragraph 19 as exhaustive, and should there subsequently be
6
other decisions which are properly analogous to those decisions the Council would not
oppose their inclusion in the non-reviewable category.
23.
It is estimated that this appeal right would give rise to a number in excess of twenty
appeals per annum depending on the number of areas subject to quotas and the findings of
the review body in the early cases.
(c)
Legislation for Review Rights
24.
At present quota decisions are not taken pursuant to a particular statutory provision;
rather, decisions to apportion quota are given effect by the use of the power either to grant an
import licence (regulations 11 and 12 of the Import Licensing Regulations) or to make a
Ministerial determination under section 273 of the Customs Act. In order to provide for
review of appropriate sub-decisions, it would be necessary to provide a legislative basis for
quota decisions themselves.
25.
Review arrangements proposed would be best given effect by providing for review of
a decision in respect of an application for quota allocation, but excluding those matters set
out In paragraph 16 as grounds for review.
(d)
The Review Body
26.
Because of the significance of the decisions involved, it is desirable that there be
independent tribunal review. The two options are:
(a)
the Administrative Appeals Tribunal; or
(b)
a specialist tribunal (perhaps located within or associated with the Department but
not subject to its direction), possibly with a right to apply to the Administrative
Appeals Tribunal for review of the specialist tribunal’s decisions.
27.
Option (a) is preferred for several reasons. Firstly, the Administrative Appeals
Tribunal currently exercises jurisdiction in respect of a number of Customs matters.
Secondly, it is doubtful whether there would be a sufficient volume of quota appeals to
justify the establishment of a new tribunal. Thirdly, the Administrative Appeals Tribunal is
established with the object of its possessing jurisdiction over all but exceptional areas of
appeal, and there is no sufficient reason to place quota control review otherwise than in the
Tribunal. It may be, however, that proposals emanating from the Council's general review of
Customs and Excise decisions might lead to a situation where the second reason no longer
applies. In that case it will fall to be considered whether the Administrative Appeals
Tribunal should hold primary jurisdiction in high volume areas of decision making, and, if
not, what relationship it should have with specialist tribunals in such areas. The latter issues
arise also in other contexts, such as Social Security appeals.
(e)
Evidentiary Problems in Quota Reviews
28.
Entitlement to quota is currently established by evidence of the quantity of goods of
the relevant class entered during a base period. A problem arises in that the tariff item or
statistical code ascribed to goods by the importer at the time of entry might have been
incorrect, or the code might have been varied in content since the time of entry with the
consequence that the customs entry documents will not suffice as evidence. In either case,
the actual goods or other sufficient evidence of their nature (which may be difficult to obtain
after the passage of time) will be required. This evidentiary difficulty might be alleviated to
some extent with increased publicity of the importance of correct entry details, with the result
that disputes as to classification of goods will arise more often at the time of entry.
Resolution of disputes at that stage would reduce the likelihood of incorrect assessment of
quota entitlement.
29.
The Department of Business and Consumer Affairs has expressed concern that it
might be placed in the position of having to justify the correctness of the recorded entry
7
details rather than that the applicant should prove that they were in error. A possible
solution might appear to be to provide legislatively that the applicant bears the onus of proof.
An applicant before the Administrative Appeals Tribunal bears no onus of proof as
applicant, though there remains the ‘natural’ onus of proof on any person who advances a
proposition or who has the material necessary for proof in his own possession (Re Ladybird
Childrens Wear Ply Ltd and Department of Business and Consumer Affairs (1976) 1 ALD 1 at 5). In
the view of the Council, the onus of proof will fall ‘naturally’ upon the applicant, and the
situation of concern to the Department will not eventuate. Whilst problems of evidence may
exist, some bodies representing importers which were consulted on this report have doubted
that they would be a serious problem. Legislation on an onus of proof is considered to be
unnecessary.
(f)
The Appropriate Remedy
30.
A decision of a review body to grant quota entitlement or increase a quota entitlement
previously granted must be capable of implementation without causing unacceptable
dislocation by the consequent re-apportioning of shares of the other quota holders and
without breach of the level of protection sought by the quantitative restrictions. The Council
has identified a number of possible remedies which would not have these effects, none of
which on its own would provide an answer in all situations. The Council proposes that all
should be available as alternative remedies, since, depending on the circumstances of a
particular case, one remedy might provide greater scope to accommodate a re-apportionment
decision than would the others. It is envisaged that the Tribunal ascertain quota entitlement
and refer back to the Department the making of provision for implementing that decision
(see also paragraph 39).
31.
(a)
(b)
(c)
(d)
The possible remedies are:
an increase in the size of the nett import ceiling to accommodate the grant of quota
entitlement to a successful applicant, or an increase in his share, so as to avoid a reapportionment among quota holders;
management of the quota allocation and review process so that any adjustment could
be made early enough to be accommodated at or before the stage of ‘fine tuning’
where there is ‘fine tuning’;
creation of a ‘quota appeals reserve’ involving the reservation of a proportion of
quota for allocation by a certain date (possibly the date of ‘fine tuning’ where there is
‘fine tuning’), taking into account any allocation appeal decision;
adjustment of future quotas to take account of any allocation review decision by
conferring a notional import performance in the quota period in issue and making an
allocation in a future period of the amount assessed by the Tribunal together with the
quota the applicant would ordinarily be entitled to in that future period.
Where there is an adjustment of quota entitlement for the period in respect of which the
review is made, it is not envisaged that this would result in a reduction of the quota for that
period held by other importers.
32.
The feasibility of each of these options was discussed with officers of the Departments
of Business and Consumer Affairs, and of Industry and Commerce, and with the Industries
Assistance Commission.
33.
Remedy (a) is of limited value. Quota ceilings are based on a judgment of the
desirable level of imports and Cabinet is unlikely to countenance any significant increase in
‘quota’ above that initially determined. If successfully appeals are few or involve only small
quantities, accommodation by increasing the ceiling may be feasible.
34.
Remedy (b) may be an appropriate remedy where cases can be resolved early and
8
where there is ‘fine tuning’. The following timetable would apply for a quota period of
1 January to 30 June 1980 with a ceiling of 100 000 units for all 1980.
1 June 1979 - allocation of 40 000 units notified to entitled importers and in the
Commonwealth Gazette.
1 November 1979 – following deliberations of ‘fine-tuning’ committee, further units
may be allocated among entitled importers. If the committee
recommends no variation to the ceiling, the 10 000 units will be
available, but if variation is recommended this may result in any
amount from no units to 20 000 units becoming available.
It would be possible for a successful applicant to have his entitlement accommodated at the
‘fine-tuning’ stage where his application has been determined in time and there is sufficient
lead time to order the goods and have them delivered within the quota period. Only if the
aggregate of additional units granted by the Administrative Appeals Tribunal exceeded the
number of units available for allocation after ‘fine tuning’ would another remedy have to be
availed of in the example above, applications for review made to the Administrative Appeals
Tribunal could be lodged by 28 June, and statements of reasons and relevant documents
lodged by 14 July, and, allowing three weeks notice of setting down the applications for
hearing, hearings could commence in mid-August. This should leave adequate time for
decisions to be rendered.
35.
It has been suggested to the Council by the Departments and the industries
Assistance Commission that the ‘fine-tuning’ allowance should not be used for
accommodating successful appeals. It is said that since the ‘fine-tuning’ mechanism is
applied solely to ensure that the protection policy is attained, any additional units emerging
from it should be allocated solely pro rata on the amounts previously allocated. The
principle of allocation suggested in this argument does not, however, follow from the
philosophy of ‘fine tuning’. So long as the ceiling as varied by the ‘fine-tuning’ committee is
not departed from, it is open for the ‘fine-tuning’ allocation to be used, firstly, to
accommodate successful applicants, and, secondly, for pro rata allocation among all entitled
importers. At a point in time at which it may be anticipated that all relevant appeals will
have been determined, an amount of quota may remain un-allocated, and indeed, it may be
undetermined whether an amount will be allocated. No importer will have a vested interest
in any proportion of ‘fine-tuning’ quota. There may therefore be an amount of quota which
may properly be used to implement the Tribunal's decision.
36.
Remedy (c) differs from (b) in that it requires a portion of the quota ceiling to be set
aside from the first allocation (1 June 1979 in the above example), and there is no clear
terminal date for allocating quota un-allocated to successful applicants, unless the date for
‘fine tuning’ (if there is to be or had there been ‘fine tuning’) is used. There are the following
objections to remedy (c):
 The problem of determining the size of the reserve.
 The creation of a reserve within the quota ceiling with no clear terminal date on its being
allocated would mean that the final orders would be delayed. This would exacerbate
existing problems of uncertainty as to final entitlement arising in the case of the
anomalies reserve scheme and ‘fine-tuning’ adjustments.
 There might still be an un-allocated portion of the reserve after conclusion of review
which would have to be distributed pro rata. The Department of Business and Consumer
Affairs has suggested that this may require some tens of thousands of new Ministerial
determinations or licences for quantities as small as one item of little value. However,
9
this does not appear to have been a problem with ‘fine tuning’ and there is no reason to
assume it would be a problem in this option.
37.
Remedy (d) is the one most easily applicable but still raises certain problems:
 An applicant quota holder might suffer loss resulting from the delay in implementing a
re-allocation decision.
 Other quota holders, whose entitlement will be reduced (because of the appeal) during
the future period by comparison with their entitlement during the relevant base period,
would be disadvantaged, and this might be particularly significant where there has been
a transfer of quota.
 Quota arrangements may not be applicable during a future period.
38.
In some cases it might not be practicable to employ any one or combination of the
above remedies for providing quota to a successful applicant. In other cases every remedy
might still leave the successful applicant unfairly disadvantaged. It has been considered
whether, in these circumstances, monetary compensation might be an appropriate remedy.
Such compensation would relate to, e.g. penalty duty paid and loss of profit because the
importer is unable to obtain any quota in an import licensing scheme by reason of all quota
having been already distributed. Other loss, e.g. arising from delays, or having to make
several buying trips (but excluding the cost of litigation itself) might also be compensable.
Major difficulties beset implementation of compensation as a remedy. Should compensation
be a right, it is likely that the determination of the proper amount of compensation would be
an exercise of the judicial power of the Commonwealth and so beyond the competence of the
Administrative Appeals Tribunal. Tribunal review of ex gratia payments; or the creation of an
intermediate status for compensation decisions equally poses difficulties. For those reasons,
it is inappropriate to recommend that provision be made for compensation as a remedy.
However, the Council considers that in principle monetary compensation should be
available, and would be in favour of it if the constitutional problems could be overcome.
Further, the Council draws the attention of the Attorney-General to the desirability of
making ex gratia payments where the remedies considered above leave a successful applicant
unfairly disadvantaged.
39. A decision regarding the manner in which a remedy should be effected is one which is of
considerable significance for departmental management of the quota allocation process and
for this reason should generally be taken by the administration rather than the
Administrative Appeals Tribunal. This could be achieved by the Tribunal determining the
appropriate entitlement of the applicant, and remitting the matter to the Minister with, at the
Tribunal's discretion, a recommendation as to the appropriate manner of giving effect to the
entitlement, taking account of the need to mitigate the damage suffered by the importer by
virtue of the incorrect primary decision. The resulting decision of the Minister would not,
however, be reviewable.
(g)
Procedure for Review
40.
Assuming that the above arrangements were implemented, it should be noted that
considerable pressure would exist for an early resolution of applications for review in order
to maintain the greatest flexibility of remedy. To promote this, it would be desirable for
section 29 of the Administrative Appeals Tribunal Act to be amended as to this jurisdiction to
provide that the time for lodgment of an application for review shall commence from the
notification of allocation in the Gazette (i.e. be limited to 28 days therefrom regardless of any
individual notification or request for reasons under section 28 of the Act). It would be
possible for the Administrative Appeals Tribunal to order its business so as to determine all
cases in relation to a particular quota period for a particular item as one proceeding or as a
series of proceedings one after another.
10
(h)
Internal Review
41.
A system of prompt internal reconsideration of departmental decisions as a
preliminary to external review is generally desirable to ensure that costly review resources
are not needlessly expended. In the case of quota control decisions, an internal review
arrangement, providing the potential for a speedier resolution of a dispute, is particularly
important in view of the problems of re-apportionment discussed above. However, because
of the significance of time factors, and the opportunity available to the Department to revise
its decision after lodgment of an appeal with the Administrative Appeals Tribunal, it is
suggested that internal review should not be a prerequisite to an application for review.
42.
On any internal reconsideration of a decision, the powers of the reviewer would of
course need to be the same as those associated with external review arrangements suggested
above, i.e. if the option of compensation were to be available on external review it would
likewise need to be open at the Internal review stage.
3.
Proposals for Review of other Quantitative Restrictions
Decisions
(a)
Market Sharing-based Quotas
43.
The legal situation here for review of decisions is essentially no different from that for
‘normal quota’ decisions. It does not appear to be necessary for there to be a separate
statutory basis for the decisions; they may be subsumed to the proposed provision relating to
‘normal quota’ decisions (see paragraph 24). The description of matters not available as
grounds for review (see paragraph 25) should be so drawn as to be applicable to the
equivalent matters in these decisions.
(b)
‘Special Quota’ and other Quota Control Decisions
44.
‘Special Quota’ (paragraph 14) involves, of necessity, the incidence of protection for
Australian industry, albeit that the incidence of protection has differed from that originally
intended because of a change in tariff classifications occurring otherwise than pursuant to the
particular quota control decision concerned or because particular goods were not intended to
be covered by the quantitative restriction. The Department of Industry and Commerce has
suggested that there might be difficulties in review arrangements because, pursuant to
section 23 of the Industries Assistance Commission Act 1973, there might have to be a reference
to the Industries Assistance Commission, the Temporary Assistance Authority, or the
Textiles Authority, before corrective action can be taken. These difficulties are technical
problems of primary decision making, and need not preclude review.
45.
(a)
(b)
(c)
The two methods of dealing with the situation discussed in paragraph 11 involve:
a Cabinet decision describing the parameters of when ‘special quota’ is to be
allocated, or Ministerial determination on when quantitative restriction arrangements
are not to apply;
ascertainment that the requisite conditions for ‘special quota’, or for grant of licences
or ‘by-law entry’ have arisen; and
allocation of quota, or grant of licences or ‘by-law’ entry.
Decisions covered in (a) are contained in paragraph 16 as un-reviewable matters. The
Council regards decisions made in (b) and (c) as matters which should be reviewable. The
legislative structure for review rights set out above in paragraphs 24 and 25 is therefore
appropriate for these decisions.
46.
Transfer of quota (see paragraph 15) as presently administered does not require
review rights. The decision whether to permit transfer is un-reviewable (see paragraph
19(o)), and there have been no restrictions attached to the transfer of quota entitlement within
11
individual categories of goods subject to restraints. Should restrictions on individual
transfers be imposed in the future, the application of those restrictions will automatically and
properly become reviewable under the legislative scheme proposed in paragraphs 24 and 25.
(c)
Anomalies Reserve Scheme
47.
Given the recent change to this scheme (by which allocation is understood to be an
arithmetical function without decision making in accepting or rejecting applications) outlined
In paragraph 12, it would be inappropriate for the Council to propose review arrangements.
However, the Council is of the view that the criteria governing administrative discretions
should not be kept secret unless there is some pressing reason, such as defence or security
requirements, for doing so. Should any analogous anomalies reserve scheme be introduced
in the future, or should the existing scheme revert to the criteria for entitlement previously
obtaining, then:
(a)
(b)
there should be a right of review of decisions taken under the Scheme, and for this
purpose.
the criteria for entitlement should be properly established and made public.
PART III – ‘NORMAL CRITERIA BY-LAW’ DECISIONS
48.
The decisions in this and the following part operate to remove or reduce the
protection provided by the tariff. They may be implemented by either the making of by-laws
under section 271 of the Customs Act or by Ministerial determinations under section 273.
1.
The Decision
49.
Under item 19 of Schedule 2 of the Customs Tariff, ‘by-laws’ may be made prescribing
goods ‘a suitable equivalent of which that is the produce or manufacture of Australia is not
reasonably available’ (here ‘SERA’) with the result that these goods may be entered duty free.
The interpretation and application of ‘SERA’ may affect the extent of protection granted to
local industry.
50.
An importer wishing to gain ‘by-law entry’ for a certain class of goods approaches the
Department of Business and Consumer Affairs and is required:
 to complete an application form; where an overseas order has been placed, he must lodge
the application within a reasonable time thereafter; and
 to provide particulars requested in the form, principally, evidence that a suitable
equivalent to the goods is not reasonably available from local manufacturers (usually in
the form of correspondence with local manufacturers concerning their ability to produce
the goods in question).
In considering an application, the Department relies upon its knowledge of industry, contacts
potential manufacturers and often arranges conferences of importers and manufacturers in
order to resolve issues. Officers liaise with importers and manufacturers and give guidance
on the application of ‘by-law’ criteria. Decisions to permit ‘by-law entry’ are generally made
in the context of individual applications, but the decision, once made, is applicable to every
entry of goods of the class concerned no matter by whom they are entered. If the class of
goods can be expressed sufficiently clearly for legislative purposes, then the ‘by-law’ is
included in the Consolidated By-law References. This is included in the Department's
‘working tariff’ so that every person importing goods subject to that ‘by-law’ may enter his
goods at the preferential rate, administratively just as if the rate was the rate prescribed in the
tariff. Where there is no Consolidated By-law Reference, an importer must apply to the
Department for an authorisation which will be produced when entering the goods. This
authorisation is given automatically. All ‘by-law’ decisions are published in the
12
Commonwealth Gazette.
51.
The Department in some circumstances recommends to its Minister that a ‘by-law’
reference be given to the Industries Assistance Commission. This occurs in two situations:
 where there is a dispute between a manufacturer and importer which the Department is
unable to resolve;
 where the Department seeks guidance as to the application of SERA.
In addition, the Industries Assistance Commission during its normal references on industry
assistance may consider the desirability of granting or cancelling ‘by-law’. It may of its own
motion inquire into and report on ‘by-law’ matters (paragraph 24(3)(b) of the Industries
Assistance Commission Act 1973). Given the significance of the decisions being made there will
always be a need for some form of independent review. There is at present no right to have
the Industries Assistance Commission consider a ‘by-law’ matter, hence the present process
should not be said to constitute an adequate system of external review. The Department of
Business and Consumer Affairs regards its internal review process as ‘both fair and realistic’,
especially given the existing potentiality for Industries Assistance Commission review, but
does not oppose a right to have ‘by-law’ decisions reviewed by the Commission.
2.
Proposals for Review
52.
The Department of Business and Consumer Affairs exercises a discretion:
 to refuse to consider applications for by-law on the basis of:
(i) unreasonable delay in the lodgment of an application; or
(ii) inadequate provision of particulars;
 to grant or refuse a by-law after application of the SERA test.
(a)
The Character of the Decisions
53.
The making of a by-law under section 271 of the Customs Act is in form an exercise of
a delegated legislative power and hence not reviewable by the Administrative Appeals
Tribunal and strictly not within the Council's functions under section 51 of the
Administrative Appeals Tribunal Act. However, by-laws are in practice rarely used in this
area of decision making. Ministerial determinations under section 2-3 of the Customs Act are
the usual means of implementing ‘normal criteria by-law’ decisions. Ministerial
determinations are not legislative in form, but may arguably be legislative in character. The
interpretation and application of SERA is, however, administrative in procedure and
character. The decision whether to use section 271 or 273 is essentially an internal
management decision of the Department and hence not appropriate for review.
(b)
Internal Review
54.
Each year the Department receives 10 000-12 500 applications for ‘by-law’ from
importers or from local manufacturers wishing to import raw materials, supplies and other
requirements of manufacture. Of these, 85% to 93% are approved. Of those refused, about
400 ‘appeal’ to the Department or Minister. Where applications are approved, there is a
much smaller number of objections by manufacturers whose level of protection is thereby
affected. Similarly, a smaller number of objections to the revocation of ‘by-law’ are received.
The Department has recently introduced an improved system of internal review to deal with
refusals to grant ‘by-law’ (see Attachment 2). The system has the following features:
 initial review by the original decision maker; if he does not accept the objection then it is
dealt with by a ‘review’ section which consults with the operational area, at increasing
levels in the hierarchy with the aim of reaching a consensus.
 a second request for review is dealt with in the review area, consulting if necessary with
the operational area.
 a third request for review may be determined by the head of the operational area.
13

subsequent requests for review are dealt with by the next level in the hierarchy (there
have been no such requests so far).
55.
Statistics provided by the Department indicate that of those applicants obtaining an
adverse decision initially or at any stage of the appeal process, about 30-45% take the matter
further. Their success rate varies from 35% on the initial review to 15% on the third request,
by which stage the number receiving an adverse decision is about twenty.
56.
The internal review procedures are characterised by an involvement of officers at a
more senior level than the primary decision maker and a willingness to entertain a series of
reconsiderations should the applicant so wish. The effectiveness of departmental
arrangements in ‘filtering out’ dissatisfied applicants is demonstrated by the statistics above.
It is not certain what part attrition plays in the process.
(c)
External Review
57.
Refusal to Consider Applications. Decisions to refuse to consider applications for ‘bylaw’ (paragraph 52) are based on straightforward issues. They do not concern protection
policy. It is therefore recommended that these decisions should be reviewable by the
Administrative Appeals Tribunal. Given the recommendations made by the Council
concerning review of the granting or refusal of ‘by-law’ (paragraph 63), this represents a
splitting of ‘normal criteria by-law’ review jurisdiction. Refusals to consider applications for
‘by-laws’ are, however, discrete and the splitting of jurisdiction is unlikely to cause
difficulties. It may be noted by way of analogy that the Administrative Appeals Tribunal has
jurisdiction to review extensions of time under the Patents Act 1952, although the substantive
application is considered by another body.
58.
Grant or Refusal of By-law. In respect of decisions granting or refusing to grant ‘bylaw’, the following Issues require resolution in considering external review arrangements:
(i) whether the powers of the review body should be recommendatory or determinative
(i.e. involving a power of substitution for the original decision);
(ii) which body should undertake the review;
(iii) the extent to which a right of review should be available.
59.
(i) Powers of the Review Body. As mentioned in paragraph 49, the interpretation given
to SERA may affect the extent of protection afforded to manufacturers concerned. Given the
significance of protection policy decisions, it would not be appropriate to usurp the
executive's role by substituting an external review body with full power to impose its own
decision. Apart from providing no review at all, the alternatives are a recommendatory
review, or a determinative review with a power for the Minister to prescribe certain matters
which are to be binding on the review body.
60.
The latter alternative would be feasible if the Ministerial directive were relatively
specific, e.g. that no by-law is to be granted in respect of certain goods. However, a more
general directive regarding an approach to be taken, e.g., that a restrictive attitude is to
prevail in respect of certain goods, would present difficulties. Moreover, there would
inevitably be cases where Government would still wish to retain the power to reject the
review body's decision in this area it is therefore submitted that a recommendatory review
should be available.
61.
(ii) Review Body. Three options are available:
(a) review by the Administrative Appeals Tribunal;
(b) review by a specialist tribunal (if such a tribunal were to be Instituted - see
paragraph 27);
(c) review by the Industries Assistance Commission.
14
62.
Application of the SIERA test involves the following elements:
 the question of ‘reasonable availability’ of goods;
 the question of product substitutability;
 the question whether goods are the ‘produce or manufacture of Australia’.
While the above issues would no doubt be capable of resolution by tribunals suggested in
options (a) and (b) the IAC is regarded as the most appropriate review body.
63.
This choice of review body is largely dictated by the current role of the Industries
Assistance Commission. Given that the Industries Assistance Commission from time to time
makes recommendations on ‘by-law’ matters in its normal references (see -paragraph 51),
there would be a potential for conflicting sources of authority on the application of the SERA
criteria if another body were to be entrusted with a review role (see also paragraph 75).
Moreover, in view of the protection policy implications of ‘normal criteria by-laws’, it is
desirable that the Industries Assistance Commission, the body with the broader protection
policy involvement, should be the sole authority. The Industries Assistance Commission in
addition already has a developed expertise in this area. It has been suggested that if
proposals of this report are adopted, it may be desirable for ‘by-law’ review to be undertaken
by particular members of the Commission established as a division of the Commission (as is
the Textile Authority) under section 19 of the industries Assistance Commission Act 1973. The
Council considers this a matter of internal administration within the Commission and
therefore inappropriate for its recommendation, but sees no objection to this course being
taken.
64.
The role of the Industries Assistance Commission proposed here is consistent with its
present advisory function. It is not envisaged that there would be such a substantial volume
of reviews under this proposal as to work a qualitative change in the nature of its role.
65.
(iii) Right of Review. Access to the Industries Assistance Commission could be:
(a) a right of review; or
(b) subject to leave of the Industries Assistance Commission, the refusal to grant leave
being reviewable by the Administrative Appeals Tribunal; or
(c) subject to referral by the Minister for Business and Consumer Affairs, the refusal to
refer being reviewable by the Administrative Appeals Tribunal.
66.
Option (a) has the disadvantage of possibly swamping the Industries Assistance
Commission with appeals or at least straining its resources and making its role very much
that of an appellate body. By analogy with this jurisdiction (if created) it might be argued
that there should a right to a review of assistance levels generally. Furthermore, it could be
argued that the Minister, who it is proposed should have the right to reject the
recommendation of the review body, should also have a role in deciding whether he wishes
to seek that advice in the first place. Against this it could be said that despite the
recommendatory nature of the review, a right of review is still justified because of the
benefits of a public and independent hearing.
67.
Option (b) would provide a means of avoiding the problems for the Industries
Assistance Commission in option (a) as well as avoiding the possibility that too frequent
reviews by the Commission might cause financial hardship to a small manufacturer or
importer. It would be necessary to establish criteria for the exercise of the discretion to grant
leave. Possible criteria are discussed in paragraph 69. A more fundamental problem arises
from the provision of review of refusals to grant leave. This constitutes yet another link in an
already lengthy review chain, and the financial hardship mentioned above is relevant.
15
Furthermore, Administrative Appeals Tribunal review of the leave decision may lead to a
hearing of the substantive issues.
68.
Option (c) presents the same difficulties as option (b). It is however, preferred over
option (b) because it maintains the present relationship between ‘the Minister and the
Industries Assistance Commission’ and eliminates the possibility that an application to the
Industries Assistance Commission for leave might develop into a hearing on the merits (as
sometimes occurs in analogous situations before courts).
69.
Criteria for making a reference to the Industries Assistance Commission for review
should be enacted. Given an existing satisfactory process of internal review, Industries
Assistance Commission review is required principally to provide guidance on the
interpretation of SERA and to ensure that there is an independent ‘check’ on the internal
review system. These elements give rise to two criteria for alternative rights of review:
(a)
(b)
The matter involves an important principle of wide application.
The applicant establishes an arguable case that the internal review process has been
inadequate.
The Department of Business and Consumer Affairs suggested that consideration might be
given to a further criterion based on the importance of ‘by-law’ to the applicant's business.
This is not favoured since it would not provide a readily ascertainable test and is unrelated to
the purpose of introducing Industries Assistance Commission review.
70.
As mentioned in paragraph 54, there are at present more than three levels of internal
review. It is recommended that it should be a prerequisite to an application for Industries
Assistance Commission review that the applicant has applied for internal
reconsideration and a decision adverse to his interests has been made on that
reconsideration. It would be open to the Department to undertake further reconsideration
when advising its Minister whether to give a reference to the Industries Assistance
Commission.
(d)
Bland Committee Recommendations
71.
The Committee on Administrative Discretions (the ‘Bland Committee’) proposed that
a person aggrieved by a ‘normal criteria by-law’ decision should have recourse to a General
Administrative Tribunal with recommendatory powers, but that the Minister should have
power to remove a particular case which raised sensitive protection policy questions from the
Tribunal to the then Tariff Board (Final Report, paragraphs 83-84). The Council's
recommendations accord with those of the Bland Committee in respect of the proposed
powers of the review body. However, the Council considers that because of the nature of
‘by-law’ questions it is not desirable to distinguish between review bodies on the basis of
‘sensitive’ protection issues.
PART IV - OTHER ‘BY-LAW’ DECISIONS
1.
(a)
Types of Decisions
Import Licensing for Used Goods
72.
The Customs (Import Licensing) Regulations are also used to prohibit the import of
used goods where suitably equivalent new goods are reasonably available from Australian
manufacturers, and protection cannot be provided adequately by the tariff. They are at
present used for this purpose in the case of second-hand material-handling equipment and
four wheel drive vehicles. The decision-making process is essentially similar to that applying
16
in the case of ‘normal criteria by-laws’ (see paragraphs 49-51) though it results in the granting
or refusal of a licence rather than the making of a Ministerial determination or by-law.
(b)
‘Policy By-laws’
73.
In addition to ‘normal criteria by-laws’, ‘by-law entry’ of goods is employed to give
effect to a number of government policy decisions. These involve the granting of, ‘by-law’
entry when certain conditions have been met. An example of one class of these decisions is
that goods specially designed for use by the deaf, dumb, or blind, and imported by public
institutions having the care of such persons, are afforded duty-free entry. A second class of
decisions relates to protection for primary products, e.g. Australian tobacco or cotton, New
Guinea coffee or plywood. In this class, a foreign government or an industry group in
consultation with the Department assesses whether the crop has been or is likely to be fully
purchased and the Department then issues ‘by-laws’ to permit duty-free or reduced duty
entry for imported products. A third class of decisions is represented by the local content
plan for motor vehicles.
(c)
‘Definitional By-laws’
74.
‘By-laws’ have been used to define tariff items. Although the introduction of the
Brussels nomenclature has led to a reduction of this practice, ‘definitional by-laws’ are still
made on occasions. Examples are kitchen carpets and dictating machines.
2.
Proposals for Review
(a)
Import Licensing for Used Goods
75.
These decisions are discussed in paragraph 72 in principle, it would appear to be
inappropriate for the Administrative Appeals Tribunal to have jurisdiction over the SERA
criteria when an import licence is in issue, while the Industries Assistance Commission has
jurisdiction In all other situations (see paragraph 62). However, it would not be practicable
to separate these decisions from other import licensing decisions unless licences based on
SERA are given a specific legislative basis. The Council recommends that this should be
done and that the Industries Assistance Commission should have jurisdiction to review
decisions under that power in the same manner as it is proposed it should review ‘normal
criteria by-law’ decisions.
(b)
‘Policy By-laws’
76.
These ‘by-laws’ are discussed in paragraph 73. They range widely in character,
purpose, effect, and the procedure which leads to their being made. in consequence, different
classes of ‘by-laws’ might appear to require different forms of review or no review, e.g. a ‘bylaw’ made following consultation with the Papua New Guinea Government on the coffee
crop may be considered to be unsuited to review, but the decision to make a ‘by-law’ in the
local content plan for motor vehicles may give rise to justiciable issues. It would not be
practicable to separate these classes legislatively so as to facilitate review rights for some
classes only; all policy ‘by-laws’ should be treated alike. The Department of Business and
Consumer Affairs has submitted that there is no scope for disagreement on determinations
implementing these ‘by-laws’ (and hence no scope for review) since the Department acts with
the agreement of interested parties or in reliance on the facts put forward by them. In the
local content plan for motor vehicles, the Department is of the view that the likelihood of a
company seeking review is too remote. The Department of industry and Commerce is of the
view that there should be no review of these ‘by-laws’ since, as their name suggests, they are
matters of policy.
77.
The Council notes that if ‘policy by-laws’ are to be un-reviewable, it will be necessary
to provide a separate statutory basis for them distinct from ‘normal criteria by-laws’. While
17
this could be done, the Council does not favour it and recommends that ‘policy by-laws’
should be reviewable in the same manner as ‘normal criteria by-laws’. In so far as the
Department of Business and Consumer Affairs submission that there is no need for review is
based on the proposition that it accepts the facts put forward by the interested parties, the
submission rests on Departmental practice only. Refusal of ‘by-law’ can have substantial
effects on a business. If the Departmental practice continues then there might be no
applications for review. If the Departmental practice changes, then it would be unfortunate if
fresh legislation were needed to confer the desirable review arrangements. ‘Policy by-laws’
should, therefore, be reviewable in the same manner as ‘normal criteria by-laws’.
(c)
‘Definitional By-laws’
78.
The Council considers that the making of these ‘by-laws’ (see paragraph 74) is a
legislative act and should not be reviewable. However, questions may arise concerning
whether the ‘by-law’ correctly defines a tariff item, and whether specified goods would, if
imported, receive a particular classification in the light of the ‘by-law’. These questions could
be resolved after importation by means of the existing rights of review. But it may be
desirable to provide review of classification in advance of import. The Department has the
practice of issuing tariff classification notices upon request of an importer who can provide a
sufficient description of the goods he wishes to import. These notices are not legally binding
on the Department but in practice are not departed from to the detriment of an importer
when the goods are in fact entered for home consumption.
79.
The present review mechanism is available to the importer to obtain an interpretation
of a ‘by-law’ by appeal to the Administrative Appeals Tribunal against duty levied on goods
when imported. However, there is the obvious problem that Tribunal interpretation cannot
at present be obtained in advance of importation. Furthermore, it is not available at the
instigation of a non-importing manufacturer unless he resorts to the device of importing
goods himself. The Council is of the view that there should be provision for obtaining an
authoritative decision on the classification of goods prior to import.
80.
It is recommended that legislative provision should be made for tariff classification
notices and that such notices should be reviewable by the Administrative Appeals Tribunal
on the application of the person who requested the notice or on the application of any other
person affected by the notice. The making of ‘definitional by-laws’ as such would not be
reviewable, though their application would be.
PART V - CONCLUSION
81.
Subject to the considerations discussed in paragraphs 3, 4 and 5, it is recommended that:
(a)
Quantitative Restriction Decisions
(i) legislative provision be made authorising quantitative restrictions, whether they
are to be implemented by import licensing or tariff quota;
(ii) jurisdiction be vested in the Administrative Appeals Tribunal to review decisions
made under the legislative provision referred to in (i) but excluding those matters set
out in paragraph 19 of this report as grounds for review;
(iii) the review referred to in (ii) should extend only to finding entitlement to a
particular amount of quota, with the matter being referred back to the Minister for
Business and Consumer Affairs to decide which of the remedies set out in paragraph
31 of this report should be used to implement the entitlement decision provided that
it would be open to the Tribunal in making its decision on entitlement to make, in its
discretion a recommendation as to the appropriate manner of implementing that
18
decision;
(iv) the time for lodgment of an application for review under section 29 of the AAT
Act with respect to quantitative restriction decisions should be 28 days from the
notification of the allocation of quota in the Commonwealth Government Gazette
whether or not the applicant has requested a statement of reasons under section 28 of
the Act;
(v) the Administrative Appeals Tribunal should arrange its business so as to
determine all cases in relation to a particular quota period for a particular item as one
proceeding or as a series of proceedings one after another; and
(vi) should any anomalies reserve scheme be introduced in the future, or should the
existing scheme revert to criteria for entitlement previously obtaining, then
(a)
(b)
there should be a right of review of decisions taken under the scheme, and for this
purpose;
criteria for entitlement should be properly established and made public.
(b)
‘Normal Criteria by-law’ Decisions
(i) Decisions to refuse to consider an application for ‘by-law’ should be reviewable by
the Administrative Appeals Tribunal.
(ii) Decisions to grant, refuse, or revoke, a ‘normal criteria by-law’ should be
reviewable by the industries Assistance Commission.
(iii) The AC should have the power only of recommendation to the Minister for
Business and Consumer Affairs.
(iv) Review by the AC should be only by referral from the Minister for Business and
Consumer Affairs, but his refusal to refer an application should be reviewable by the
Administrative Appeals Tribunal.
(v) The criteria for referral should be:
(a) that the matter involves an Important principle of wide application; and
(b) that the applicant establishes an arguable case that the internal review process has
been inadequate;
(vi) It should be a prerequisite to application for a referral by the Minister that the
applicant has applied for internal reconsideration by the Department and that the
decision upon reconsideration should have been adverse to the applicants interest.
(c)
Other ‘By-law’ Decisions
(ii) Import licensing decisions based on Australian-made equivalent goods should be
reviewable by the Industries Assistance Commission in the same manner as has
been recommended for 'normal criteria by-laws'.
(ii) Decisions to make ‘policy by-laws’ should be reviewable by the Industries
Assistance Commission in the same manner as has been recommended for
‘normal criteria by-laws’.
(iii) Tariff classification notices issued by the Department of Business and Consumer
Affairs should be reviewable by the Administrative Appeals Tribunal.
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ATTACHMENT I
Quantitative Restriction Decisions
The Industries Assistance Commission reports to the Department of Business and Consumer
Affairs. The report is considered by the Standing Committee on Industry Assistance which
provides the basis for a Cabinet Submission by the Minister for Business and Consumer
Affairs and relevant policy Minister (Industry and Commerce, or Primary industry).
Particular decisions in the set of decisions constituting the imposition and administration of
quantitative restrictions are set out below. Cabinet Decisions may cover (a) to (n).
Determination of:
(a) the categories of goods to be subject to controls;
(b) the total volume of permitted imports;
(c) the period of restriction;
(d) the method or criteria by which eligibility to import is to be ascertained;
(e) whether import licensing or tariff quota is to be used;
(f) any provision for exemption from controls of goods from specified countries;
(g) exemption for specified goods, goods entered under ‘by-law’ etc;
(h) the provision for and size of quota to be held for allocation in cases involving anomalies
(so far applied to certain clothing, textiles and footwear commodities) or for other reasons
(e.g. NAFTA);
(i) the treatment of goods in transit, in bond or under an irrecoverable letter of credit at the
time of introduction of quantitative restrictions;
(j) whether and when ‘special quota’ will be allocated;
(k) whether global quotas will be adjusted should shortages of supply of goods in question
occur (as distinct from the implementation of that decision);
(l) in the case of tariff quota, what level of penalty duty is to be applicable to goods imported
in excess of, or without quota entitlement;
(m) whether ‘fine tuning’ is to apply;
(n) the period of validity of quota instruments;
(o) whether transfer of quota is to be permitted;
(p) whether to accept late application;
(q) whether entries claimed as establishing entitlement In fact do so (e.g. is the entry in the
applicant's name? Does it relate to goods subject to control? Were goods entered for
home consumption within the base period? Were they entered under ‘by-law’? Were
they entered under ‘special quota’ or under the anomalies reserve scheme?);
(r) if special provision exists for goods in transit, bond or subject to an irrecoverable letter of
credit, whether goods satisfy the requirements of that provision as at the relevant date;
(s) arithmetic calculation of factor and entitlement;
(t) amounts to be debited to future quota periods and their subsequent offset;
(u) after quota has been allocated, the tariff classification of goods entered for home
consumption and, if necessary, whether goods within a particular classification meet the
description of goods subject to control (including whether the goods are from an
exempted country). (These aspects are currently appealable to MT if duty is paid under
protest or if a refund application refused.);
(v) whether to extend validity period of entitlement, where Cabinet decision permits;
(w) whether to reinstate quota, e.g. where the goods have been destroyed;
(x) whether to backdate quota use, e.g. where the quota is by value and a post note increases
the valuation of the goods imported assessed by Customs.
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ATTACHMENT II
Internal Review of Refusals of 'Normal Criteria By-Law' Decisions
Table of Abbreviations
AS Assistant Secretary (By-law Branch)
DO By-law Decisions Officer
RO By-law Review Officer
CO Chief By-law Officer
Cl Chief Inspector, By-law Research
DIR Director, By-law Operations
(level 1)
(class 8)
(class 8)
(class 9)
(class 9)
(class 10)
PRIMARY DECISION DO
FIRST REVIEW OF REFUSAL
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SECOND REVIEW OF REFUSAL
(a)
If refusal was at stage A on previous page:
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