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Modernising a 20-year-old Act and making it easier to use

Modernising a 20-year-old Act and making it easier to use

The Customs and Excise Act 1996 is 20 years old, but some parts are 50 years old, and others are over 100 years old.

The world has changed since the Act was last thoroughly reviewed.  We had September 11, which added significantly to the border security function that Customs provides, and the increasing number of Free Trade Agreements that New Zealand has requires Customs to focus more on exports than ever before. 

Technology has changed significantly – people carry smartphones capable of storing thousands of images, and they can access documents stored in the Cloud.  Business practices and supply chains have also developed a lot – a big impact for the Customs and Excise Act has been the changes to manufacturing processes for excisable goods. 

It is clear that the Customs and Excise Act has not been keeping up with these changes.

We need modern legislation that is easy for people to understand and use and that can keep up with modern supply chains, technology, and an ever changing border environment.

If the Act adequately represents the modern environment, and is fit for purpose, it will enable Customs to respond more quickly and effectively to future changes, and then we can reduce the burden on businesses and potentially reduce compliance costs.

Customs is undertaking a review of the Customs and Excise Act 1996 and released a discussion paper for public consultation on 4 March 2015. 

The discussion paper does not suggest changes to Customs’ core roles of border protection, facilitating trade and travel, and collecting Crown revenue, nor does it present policy decisions.  Instead it begins a discussion about how some areas of our business are applied. In some areas preferred solutions are indicated and we are keen to hear if these are right and how they would work in practice.

It covers most of the areas of Customs’ business, including the collection of revenue, information sharing, new technology, Customs’ powers and sanctions.

The key proposals outlined in the discussion paper are:

  • Changing how Customs’ shares information to:
  • allow some agencies direct access for law enforcement, national security and border protection
  • establish a process for sharing information with other government agencies for broader government purposes
  • establish a process for sharing information internationally and outside of government.
  • Changes to how Customs receives information to enable risk assessments to occur before goods or craft enter or leave New Zealand.
  • Explicitly authorising Customs to collect, store and use biometric information for Customs purposes.
  • Allowing Customs to share or allow access to biometric information for security and law enforcement purposes, such as identifying terrorist suspects.
  • Clarifying Customs’ powers to examine electronic devices and requiring people to provide access to information on their devices.
  • Requiring people to empty their pockets when asked by an officer at the border.
  • Introducing infringement notices and instant fines for minor offending and removing petty offences.
  • Extend the use of penalties for overdue payments.
  • Improving the excise system to reduce costs for businesses and ensure consistency.
  • Using the discussion paper to gather information from industry and better understand the issue of paying GST to Customs and then claiming a refund from IRD.

You can download the Discussion Paper or individual chapters here.

Please tell us if you can see any issues that are not covered by the discussion paper, and where you think legislative change could make a difference to you or your business.

We encourage individuals and businesses to make a formal submission. The submission forms are attached to the back of the discussion paper and can be downloaded from the website.

Submissions close on Friday 1st of May. Following the consultation process, Customs will seek Cabinet’s agreement to change the legislation. In some areas there may be no proposed changes. If Cabinet agrees, it is expected that the new Act will be drafted during the second half of 2015 and that a Bill will be introduced in 2016.