Customs and excise

In November 1987 the ALRC was asked to review the Customs Act 1901 and the Excise Act 1901. Both Acts were outdated. Approximately 68 Acts amending the two pieces of legislation had been passed between 1901 and 1989, causing uncertainty as to the state of the law.

The final report (ALRC Report 60) aimed to simplify and modernise the law relating to customs and excise. ALRC Report 60 concluded that a single Customs and Excise Act would avoid the duplication and anomalous differences resulting from separate Acts. One volume of the three-volume report was dedicated to draft legislation.

In November 1991, the ALRC was asked to review the administrative penalty provisions of the Customs Act 1901 (Cth).

The final report (ALRC Report 61) identified that there were issues regarding ways the administrative penalty scheme of the Customs Service should operate and also whether there should be an administrative penalty scheme for excise.

The report questioned whether administrative penalties should apply to innocent or deliberate errors, how adequate the existing mechanisms for enforcement were and whether there should be review of the decision to require payment of a penalty.

Key recommendations

ALRC Report 60

  • A single Customs and Excise Act appropriate to modern conditions should be enacted.

ALRC Report 61

  • Administrative penalties should only be payable where duty has been understated due to a negligent error. This general rule should be subject to a number of exceptions.
  • A system of penalties for excise should be introduced.


The Administrative Review Council had finalised a report Review of Customs and Excise Decisions (Report 23) in 1985. The government deferred any decision on the Council’s report until after the completion of the ALRC’s reports.

In 1993, the federal Government appointed a Committee of Review into the Australian Customs Service. This Committee was required to review and report on the management and operations of the Australian Customs Service. As part of its report, Conroy Report: Review of the Australian Customs Service 1993 – the Turning Point (December 1993), the Committee looked briefly at the administrative penalty provisions of the Customs Act 1901 (Cth) and discussed the recommendations of the ALRC.

The Committee’s report was not entirely compatible with ALRC Reports 60 and 61. In 1996, the government accepted 92 of the 106 recommendations made by the Committee either totally or in principle.

In March 1995, the Customs Excise and Bounty Amendment Act 1995 (Cth) implemented a range of recommendations made by the Commission, including those dealing with outwards duty free shops and special rules to apply when the Customs electronic network is out of order. The seizure and forfeiture clauses of the Act are not consistent with the Commission’s recommendations.

ALRC Reports 60 and ALRC 61 have not been implemented any further to date.

Continuing issues

Among other measures, the Customs Legislation Amendment and Repeal (International Trade Modernisation) Act 2001 introduced strict liability administrative penalties for errors made on the face of a document. The measure was controversial, and was the subject of extensive discussion (see for example the report of the Senate Legal and Constitutional Legislation Committee). The changes relating to monitoring and examination powers, infringement notices, record retention obligations and certain offences commenced on 1 July 2002. The remainder of the changes were awaiting the development of a new computer system (the Integrated Cargo System or ICS) by the Australian Customs Service. The Customs Legislation Amendment (Application of International Trade Modernisation and Other Measures) Act 2004 (Cth) provided for improved transitional arrangements. The remaining changes relating to exports commenced on 22 September 2004 and those relating to the arrival of ships and aircraft, cargo reporting and imports are due to commence no later than 20 July 2005.

The ALRC examined the federal system of civil and administrative penalties, including issues relating to administrative penalties in the area of customs, in the 2003 report Principled Regulation (ALRC Report 95). The ALRC found no reason, other than historical practice, why the area of customs and excise should not be brought into line with other federal legislation governing civil and administrative penalties.