Previously, we article addressed some stories in the Fairfax media and media releases by the Minister for Home Affairs (“Minister”) which referred to concerns as to potential corruption of Government officials and misuse of the Integrated Cargo System (“ICS”) used by the Australian Customs and Border Protection Service (“Customs”) for the reporting of cargo movement in and out of Australia.
The Government has now announced additional measures to further enhance its control over the use of the ICS, those its employs in its agencies and those providing services in the private supply chain at ports and airports.
Following the announcement in April 2012 of the introduction of “Integrity Testing” for various Commonwealth law enforcement officers the following events have unfolded:
- ACCA 2012/04 was issued by Customs detailing the limitation of access to “Status” screens in the ICS to those with a “direct and legitimate interest in the import cargo in question” with effect from 9 May 2012. This included recording of “non-authorised” attempt to use and access » On 25 May 2012 the Government announced proposals for new legislation to enhance regulation of those working in the supply chain. These measures, in part, also reflected the Government response to the Report of the Parliamentary Joint Committee on Law Enforcement on the adequacy of security at ports and airports released in September 2011.
- Consequences for those on the waterfront and at airports will include the following » New legislation to provide powers to revoke or refuse a Maritime Security Identification Card (“MSIC”) or an Aviation Security Identification Card (“ASIC”) to a person where it is determined they are not a “fit and proper” person to hold a card on the basis of “compelling criminal intelligence”.
- Expand the list of offences for which an MSIC or ASIC can be refused to include offences relating to serious and organised crime » Increased targeted high visibility and covert patrols on the waterfront by Customs
- Placing specific obligations on stevedores through enforceable licensing arrangements to report information and intelligence
- The implementation of a more stringent system of establishing an applicant’s identity in the ASIC and MSIC schemes.
- Development of an MOU between AusCheck and law enforcement agencies to formalise existing arrangements to enable more timely exchange of criminal records.
- Consequences for the “private sector supply chain” include the following:
- The introduction of legislation to “criminalise” the provision of information from the ICS to aid a criminal organisation
- Limiting access to specific cargo information in the ICS to those in the private sector who have reported a direct and legitimate interest in the movement and clearance of consignments
- Introduction of “proactive auditing capabilities of the ICS” to detect “anomalies” and gather intelligence
- Introduction of on-screen “reason for access” declarations and on-screen warnings informing private sector users of the ICS about penalties for the misuse of information
- The imposition of new licence conditions on depots, warehouses and brokers limiting the use of the ICS. New conditions can be imposed on warehouse and depot holders at any time following legislation passed in 2011 (and discussed elsewhere in this magazine). New conditions will be imposed upon brokers on the initial grant or renewal of a licence. Conditions may include mandatory requirements to report any misuse of the ICS and revocation of a licence based on “criminal intelligence”
- The establishment of a new Industry Forum to discuss enforcement and exchange information
- The expansion of “Task Force Polaris” to Melbourne and Brisbane.
Much of this is not surprising. Industry had raised questions on the access to, use and potential abuse of the ICS well before it was introduced in 2005. However, this raises a number of ancillary questions:
- The proposed changes seem to impose an obligation on a number of parties to “dob in” dubious and potentially criminal behaviours to Customs or risk the loss of a valuable licence. This is a new concept and while many in industry already do so voluntarily, making it compulsory will create related issues such as protection of the providers of the information, indemnities if the information causes loss to others and whether providers will be required to give evidence in open court.
- Customs brokers will be looking nervously at the conditions in their licences when they are renewed next month and whether those conditions are reasonable
- Presumably, the focus will not just be on customs brokers but others who lodge other cargo reports into the ICS at various stages of the passage of cargo in and out of the country.
- If licensing of certain members of the private supply chain allows for increased control then why not extend licensing obligations to others who report into the ICS and handle the movement of goods but who are currently not obliged to be licensed?
- Concerns that parties could lose licences based on “compelling criminal intelligence”. How can a party can properly defend themselves when such intelligence will no doubt be subject to secrecy and confidentiality obligations and not be open to FOI action.
- How will this affect trade facilitation? The statements by the Minister in various forums suggest that there will be an increased presence of Customs officers and the new licensing and ICS access developments suggest significantly increased work for Customs. However, in the last Federal Budget, the Government reduced Customs funding again. One conclusion is that a bigger job with fewer resources means it will need to be done more slowly.