THE DEPARTMENT of Homeland Security in its recent customs brokers licence renewals has added new conditions and legislative intent (yet to be passed by the Senate) which has long-term serious impact on licensed customs broker viability where such persons are nominees under a Corporate Customs Brokers licence

It is common industry knowledge, but apparently not so with the Australian Border Force, that certain service providers have been clearly in contravention of requirements under Part XI of the Customs Act (the Act).

Section S183CD of the Act is clear and unambiguous in that persons acting in a capacity under a Corporate Customs Brokers licence are required to be an employee or director to act as a nominee. Persons not being an employee and carrying out functions in the ABF Integrated Cargo System are non-compliant with the legislation. Such is a legal fact.

“Industry consultation”

The ABF has instituted legislative amendment after what it euphemistically labels “industry consultation”. Suffice to say that the industry association, as its core remit is to represent its members, did not support this change. So, a simple question is posed: Who did? As referenced by an ABF representative such a change was to “expand the ability for contractors to act as nominees to suit industry practise”.

The reality of this change is that the future will see the industry become a contractor-based profession either though professional services contracts (through corporate entities) or corporate entities in their own right. This creates all levels of complexity that will challenge the ABF in its compliance rhetoric as to accountability, liability, control and impacts into relationships with other regulatory agencies and mutual recognition with the Authorised Economic Operator concept.

Case in point

Let’s put this into a reality context. Over recent rounds of 3DL recruitment there has been an ever-increasing level of applicants who are employees being made redundant from their roles as fulltime licensed individual (nominee) customs brokers, while the Corporate Licensed Customs Broker is contracting a third party even when such arrangements are clearly not within the scope of the Customs Act Part XI. This contracted entity is not a nominee, however the ABF in its regulatory compliance has, and continues, not to take any action in relation to such blatant challenge to its authority as regulator and its own rhetoric in demanding from industry absolute regulatory compliance supported with sanctions and penalties.

What these changes do is undermine border security. They will eventually see the demise of an already-dwindling individual licensed customs brokers sector who, as nominees, underpin the whole border clearance process.

By Chris Roberts, director, 3DL Logistics