Customs Offences can be complicated to wrap your head around. This article will (hopefully) make things easier.
Customs Act Offences
Customs related offences are those within the Customs Act 1901 (Cth). The main offences under the legislation include smuggling, importing/exporting prohibited goods, evasion of tax duty and the unlawful moving or possession of smuggled or prohibited goods. There are also separate offences related to the illegal importation of tobacco.
These offences are typically prosecuted by the Australian Border Force (ABF), who are responsible for monitoring and protecting Australia’s borders from illegal behaviour. It is also common for the Australian Federal Police to be involved, as there are ancillary charges related to Customs offences contained within the Criminal Code Act 1995 (for example, the smuggling or importation of drugs).
The offences of smuggling, importing/exporting
Pursuant to section 233 of the Customs Act, it is illegal for a person to:
- Smuggle any goods;
- Import any prohibited import; or
- Export any prohibited exports; or
- Unlawfully convey or have in his or her possession any smuggled goods or prohibited imports or prohibited exports
In this context, prohibited goods are items that have been categorised as ‘prohibited’ by Commonwealth legislation. This has included certain animals and plants, and some types of animal and plant material; tobacco; firearms and other weapons without the appropriate permission/licensing; ammunition; pornography; counterfeit goods and chemicals without a license
To be found guilty, the prosecuting agency (most likely the ABF) must prove that the person attempted to import/export prohibited goods, OR actually imported/exported prohibited goods OR possessed prohibited imported/exported goods. Like all other criminal prosecutions, the prosecution must prove the elements beyond reasonable doubt.
Strict Liability & Defences
Offences under this section are strict liability offences, which means that the element of fault (aka intention) does not have to be proven.
Given the offences are strict liability, the most effective defence is one of mistake of fact. This defence essentially establishes that a person is not criminally responsible if at, or before the time of the conduct constituting the physical element (in this context smuggling/importing/exporting/possessing) the person considered whether or not facts existed and is under a mistaken but reasonable belief about those facts and had those facts existed the conduct would not have constituted an offence. For example, if the person had an honest and reasonable belief that the goods were not prohibited goods, or a belief that there was no exercisable duty on those goods.
Penalties for Customs Offences
The ABF offers a range of penalties to ensure compliance with the Act. These options include educational measures, warning letters, infringement notices, suspension or cancellation of Department-issued licenses, and even prosecution. When an alleged breach occurs, the ABF evaluates various factors—including the nature of the offence, the severity of the breach, and the compliance history of the individual or organization—before determining the appropriate response.
The penalties for the above offences are varied. Under section 233AB, if the amount of duty that would have been payable on the goods that were smuggled/illegally import/exported can be calculated, the court may order a penalty of up to 5 times the amount of that duty. Alternatively, in circumstances where the court is unable to calculate the duty, the court may order a penalty of up to 1,000 penalty units. As of July 2023, one penalty unit is $313. Accordingly, the maximum penalty for individuals is $313,000.
Corporate Multiplier
Section 243X of the Act introduces a corporate multiplier for customs offences committed by companies. Under this section, the infringement notice penalty may be multiplied by up to five times that which would be payable by an individual alleged to have committed the same offence. This multiplier is predicated on section 4B(3) of the Crimes Act 1914 (Cth), which establishes that Where a body corporate is convicted of an offence against a law of the Commonwealth, the court may, if the contrary intention does not appear and the court thinks fit, impose a pecuniary penalty not exceeding an amount equal to 5 times the amount of the maximum pecuniary penalty that could be imposed by the court on a natural person convicted of the same offence. This means that the penalty for companies who are found guilty of illegal smuggling/importing/exporting is likely to be very significant, particularly for smaller businesses.
Customs Act Infringement Notice Scheme
In order to streamline the penalty process, the Department of Home Affairs and ABF have established the Customs Act Infringement Notice Scheme (INS). In issuing an infringement notice, the ABF advises the recipient that it has reasonable grounds to believe that they have contravened the law. The recipient has the options of:
- Resolving the matter immediately by paying the penalty specified in the infringement notice (Note that this is not an admission of guilt or liability)
- Providing evidence to support their right to request withdrawal of the infringement notice.
- Providing evidence to support their right to request an extension of the payment period so the recipient may pay the penalty amount.
- Choose not to pay the penalty and have the matter heard by the relevant court if prosecuted.
A benefit in accepting an infringement under the scheme is that the penalty is significantly reduced. This is because the maximum INS penalty is 25% of the penalty a court may impose on a person. There is an additional limit if the offence penalty is calculated using penalty units. The maximum INS penalty is: – 15 penalty units for a person, except body corporate entities – 75 penalty units for a body corporate. Under these maximum limits, the ABF has established national policy that sets the amount of INS penalty. Individual officers do not have discretion to vary the amount of INS penalty impose.
How Galbally Parker Lawyers can Help with Customs Offences
Navigating customs offences and understanding the complexities of the Customs Act Infringement Notice Scheme can be challenging. If you’re facing a customs-related issue, it’s crucial to have expert legal advice to ensure your rights are protected and the best defence is prepared. Galbally Parker Lawyers have extensive experience in customs law and can guide you through every step of the process. Don’t hesitate to contact our team for the support and representation you need.
