Richard Marles (Corio, Australian Labor Party, Minister for Defence) Share this | Link to this | Hansard source

I present a supplementary explanatory memorandum to the Defence Trade Controls Amendment Bill 2023, and I ask leave of the House to move government amendments (1) to (36) as circulated together.

Leave granted.

I move government amendments (1) to (36) as circulated together:

(1) Schedule 1, item 2, page 3 (before line 19), before the definition of Australian person, insert:

Australian Military Sales Program item means DSGL goods or DSGL technology specified in a determination in force under section 5AA.

(2) Schedule 1, item 2, page 4 (lines 11 and 12), omit the definition of DSGL goods, substitute:

DSGL goods means goods within the scope of the Defence and Strategic Goods List, but does not include goods constituting technology, as defined in that list, that has been produced in the course of, or for the purposes of, fundamental research.

(3) Schedule 1, item 3, page 4 (lines 19 to 21), omit the item, substitute:

3 Subsection 4(1) (definition of DSGL technology )

Repeal the definition, substitute:

DSGL technology means a thing that:

(a) either:

(i) is technology, as defined in the Defence and Strategic Goods List, not including such technology that has been produced in the course of, or for the purposes of, fundamental research; or

(ii) is software, as defined in that list; and

(b) is within the scope of that list.

(4) Schedule 1, item 4, page 4 (after line 24), after the definition of foreign person, insert:

fundamental research means basic or applied research conducted in circumstances where the results of the research:

(a) are intended for public disclosure, or would ordinarily be published or shared broadly; and

(b) are not subject to any restrictions on disclosure (however imposed) for purposes connected with the security or defence of Australia or any foreign country.

(5) Schedule 1, item 5, page 5 (before line 1), before section 5B, insert:

5AA Australian Military Sales Program items

The Minister may, by legislative instrument, determine that specified DSGL goods or DSGL technology is an Australian Military Sales Program item.

(6) Schedule 1, item 5, page 6 (line 30) to page 7 (line 22), omit paragraphs 5C(1)(a) to (d), substitute:

(a) the supply is covered by subsection (1A), (1B) or (1C); and

(b) any requirements prescribed by the regulations for the purposes of this paragraph that apply in relation to the supply are satisfied.

(7) Schedule 1, item 5, page 7 (after line 22), after subsection 5C(1), insert:

(1A) This subsection covers a supply of DSGL goods or DSGL technology if:

(a) the supply is to any of the following:

(i) an Australian person;

(ii) a citizen or permanent resident of the United Kingdom or United States of America;

(iii) a body corporate incorporated by or under a law of the United Kingdom or United States of America, or of part of either of those countries;

(iv) the Government of the United Kingdom or United States of America, or the government of part of either of those countries;

(v) an authority of the Government of the United Kingdom or United States of America, or the government of part of either of those countries; and

(b) either:

(i) the supply is to, or occurs wholly at, a place in Australia, the United Kingdom or the United States of America; or

(ii) if the supply is the provision of access to DSGL technology—at the time of the provision of access, the person to whom the access is provided is in Australia, the United Kingdom or the United States of America; and

(c) the DSGL goods or DSGL technology is not:

(i) an Australian Military Sales Program item; or

(ii) excluded by a determination in force under subsection (3).

(1B) This subsection covers a supply of DSGL goods or DSGL technology if:

(a) the DSGL goods or DSGL technology is:

(i) an Australian Military Sales Program item; or

(ii) any other DSGL goods or DSGL technology not excluded by a determination in force under subsection (3); and

(b) the supply is made in accordance with an agreement or arrangement between Australia and one or more foreign countries, including an agreement, arrangement or understanding between a Minister and an official or authority of one or more foreign countries.

(1C) This subsection covers a supply of DSGL technology if:

(a) the supply is to any of the following:

(i) a citizen or permanent resident of a foreign country that is specified in an instrument under subsection 15(4A);

(ii) a body corporate incorporated by or under a law of a foreign country that is specified in an instrument under that subsection; or of part of such a country;

(iii) the government of a foreign country that is specified in an instrument under that subsection, or of part of such a country;

(iv) an authority of the government of a foreign country that is specified in an instrument under that subsection, or the government of part of such a country; and

(b) any of the following applies:

(i) the place from which the supply is made and the place to which the supply is made are both in Australia;

(ii) the supply occurs wholly at a place in Australia;

(iii) if the supply is the provision of access to DSGL technology—at the time of the provision of access, both the person providing the access and the person to whom the access is provided are in Australia; and

(c) the DSGL goods or DSGL technology is not:

(i) an Australian Military Sales Program item; or

(ii) excluded by a determination in force under subsection (3).

(8) Schedule 1, item 5, page 7 (line 25) to page 8 (line 7), omit paragraphs 5C(2)(a) to (d), substitute:

(a) the provision of the DSGL services is covered by subsection (2A) or (2B); and

(b) any requirements prescribed by the regulations for the purposes of this paragraph that apply in relation to the provision of the DSGL services are satisfied.

(9) Schedule 1, item 5, page 8 (after line 7), after subsection 5C(2), insert:

(2A) This subsection covers the provision of DSGL services if:

(a) the DSGL services are provided to any of the following:

(i) an Australian person;

(ii) a citizen or permanent resident of Canada, New Zealand, the United Kingdom or the United States of America;

(iii) a body corporate incorporated by or under a law of Canada, New Zealand, the United Kingdom or the United States of America, or of part of such a country;

(iv) the Government of Canada, New Zealand, the United Kingdom or the United States of America, or the government of part of such a country;

(v) an authority of the Government of Canada, New Zealand, the United Kingdom or the United States of America, or the government of part of such a country; and

(b) the DSGL services are received at a place in Australia, Canada, New Zealand, the United Kingdom or the United States of America; and

(c) the DSGL goods or DSGL technology to which the DSGL services relate is not:

(i) an Australian Military Sales Program item; or

(ii) excluded by a determination in force under subsection (3).

(2B) This subsection covers the provision of DSGL services if:

(a) the DSGL goods or DSGL technology to which the DSGL services relate is:

(i) an Australian Military Sales Program item; or

(ii) any other DSGL goods or DSGL technology not excluded by a determination in force under subsection (3); and

(b) the DSGL services are provided in accordance with an agreement or arrangement between Australia and one or more foreign countries, including an agreement, arrangement or understanding between a Minister and an official or authority of one or more foreign countries.

(10) Schedule 1, item 5, page 8 (line 11), omit "paragraph (1)(c) or (2)(c)", substitute "subsections (1A), (1B), (1C), (2A) and (2B)".

(11) Schedule 1, item 6, page 8 (line 26), after "DSGL services", insert "outside Australia".

(12) Schedule 1, item 7, page 9 (line 11), after "another", insert "foreign".

(13) Schedule 1, item 7, page 9 (line 14), after "United States of America", insert ", and in some cases certain other countries, or activities involving arrangements between countries,".

(14) Schedule 1, item 14, page 11 (lines 12 to 14), omit paragraph 10(3A)(c), substitute:

(c) the DSGL technology is not:

(i) an Australian Military Sales Program item; or

(ii) specified in a determination in force under subsection 5C(3); or

(iii) prescribed by the regulations for the purposes of this subparagraph.

(15) Schedule 1, item 14, page 11 (lines 20 to 22), omit paragraph 10(3B)(b), substitute:

(b) the DSGL technology is not:

(i) an Australian Military Sales Program item; or

(ii) specified in a determination in force under subsection 5C(3); or

(iii) prescribed by the regulations for the purposes of this subparagraph.

(16) Schedule 1, item 15, page 13 (lines 7 to 16), omit subsection 10A(5).

(17) Schedule 1, item 15, page 13 (lines 26 to 28), omit paragraph 10A(6)(c), substitute:

(c) the DSGL technology is not:

(i) an Australian Military Sales Program item; or

(ii) specified in a determination in force under subsection 5C(3); or

(iii) prescribed by the regulations for the purposes of this subparagraph.

(18) Schedule 1, item 15, page 13 (lines 34 to 36), omit paragraph 10A(7)(b), substitute:

(b) the DSGL technology is not:

(i) an Australian Military Sales Program item; or

(ii) specified in a determination in force under subsection 5C(3); or

(iii) prescribed by the regulations for the purposes of this subparagraph.

(19) Schedule 1, item 15, page 14 (after line 2), after subsection 10A(7), insert:

(7A) Subsection (1) does not apply if:

(a) the DSGL technology is supplied to a person who is producing, or is to produce, one or more components of DSGL goods; and

(b) the supply is made in connection with the production of the components; and

(c) any requirements prescribed by the regulations for the purposes of this paragraph are satisfied.

Note: A defendant bears an evidential burden in relation to the matter in subsection (7A): see subsection 13.3(3) of the Criminal Code.

(20) Schedule 1, item 15, page 14 (line 16), after "DSGL goods", insert ", other than firearms,".

(21) Schedule 1, item 15, page 14 (after line 17), after paragraph 10B(1)(a), insert:

(aa) the DSGL goods or DSGL technology is within the scope of:

(i) Part 1 of the Defence and Strategic Goods List; or

(ii) the Sensitive List of Dual-use Goods and Technologies in Part 2 of the Defence and Strategic Goods List; or

(iii) the Very Sensitive List of Dual-use Goods and Technologies in Part 2 of the Defence and Strategic Goods List; and

(22) Schedule 1, item 15, page 14 (line 24), omit "or to a foreign person".

(23) Schedule 1, item 15, page 14 (line 28), omit "or is a foreign person".

(24) Schedule 1, item 15, page 17 (lines 10 to 12), omit paragraph 10B(7)(c), substitute:

(c) the DSGL goods or DSGL technology is not:

(i) an Australian Military Sales Program item; or

(ii) specified in a determination in force under subsection 5C(3); or

(iii) prescribed by the regulations for the purposes of this subparagraph.

(25) Schedule 1, item 15, page 17 (lines 18 to 20), omit paragraph 10B(8)(b), substitute:

(b) the DSGL goods or DSGL technology is not:

(i) an Australian Military Sales Program item; or

(ii) specified in a determination in force under subsection 5C(3); or

(iii) prescribed by the regulations for the purposes of this subparagraph.

(26) Schedule 1, item 15, page 17 (after line 22), after subsection 10B(8), insert:

(8A) Subsection (1) does not apply if the earlier export or supply, the current supply or any intervening supply of the DSGL goods or DSGL technology is to the person who originally produced the DSGL goods or DSGL technology.

Note: A defendant bears an evidential burden in relation to the matter in subsection (8A): see subsection 13.3(3) of the Criminal Code.

(8B) Subsection (1) does not apply if:

(a) the DSGL goods or DSGL technology is within the scope of:

(i) the Sensitive List of Dual-use Goods and Technologies in Part 2 of the Defence and Strategic Goods List; or

(ii) the Very Sensitive List of Dual-use Goods and Technologies in Part 2 of the Defence and Strategic Goods List; and

(b) any of the following applies:

(i) the current supply occurs wholly at a place in a foreign country that is specified in an instrument under subsection 15(4A);

(ii) the current supply is from or to a place in a foreign country that is specified in an instrument under subsection 15(4A);

(iii) if the current supply is the provision of access to DSGL technology—at the time of the provision of access, the supplier or the other person mentioned in paragraph (1)(a) is in a foreign country that is specified in an instrument under subsection 15(4A).

Note: A defendant bears an evidential burden in relation to the matter in subsection (8B): see subsection 13.3(3) of the Criminal Code.

(8C) Subsection (1) does not apply if a period prescribed by the regulations for the purposes of this subsection, in relation to DSGL goods or DSGL technology of that kind, has elapsed since the day the earlier export or supply was made.

Note: A defendant bears an evidential burden in relation to the matter in subsection (8C): see subsection 13.3(3) of the Criminal Code.

(8D) Subsection (1) does not apply if:

(a) the earlier export or supply was made in accordance with a permission or permit mentioned in paragraph (1)(f); and

(b) the permission or permit was granted before the commencement of this section.

Note: A defendant bears an evidential burden in relation to the matter in subsection (8D): see subsection 13.3(3) of the Criminal Code.

(27) Schedule 1, item 15, page 18 (line 3), at the end of the heading to section 10C, add "outside Australia".

(28) Schedule 1, item 15, page 18 (lines 9 to 12), omit paragraph 10C(1)(e), substitute:

(e) the provider is an Australian person; and

(ea) the provider provides the DSGL services at or from a place outside Australia; and

(eb) the other person receives the DSGL services at a place outside Australia; and

(29) Schedule 1, item 15, page 20 (lines 31 to 33), omit paragraph 10C(6)(c), substitute:

(c) the DSGL services are not provided in relation to DSGL goods or DSGL technology that is:

(i) an Australian Military Sales Program item; or

(ii) specified in a determination in force under subsection 5C(3); or

(iii) prescribed by the regulations for the purposes of this subparagraph.

(30) Schedule 1, item 15, page 21 (lines 3 to 5), omit paragraph 10C(7)(b), substitute:

(b) the DSGL services are not provided in relation to DSGL goods or DSGL technology that is:

(i) an Australian Military Sales Program item; or

(ii) specified in a determination in force under subsection 5C(3); or

(iii) prescribed by the regulations for the purposes of this subparagraph.

(31) Schedule 1, item 15, page 21 (after line 7), after subsection 10C(7), insert:

(7A) Subsection (1) does not apply if:

(a) the DSGL services are provided in connection with a lawful supply of DSGL goods or DSGL technology that occurred before the commencement of this section; and

(b) the DSGL services are provided under a contract, agreement or arrangement entered into before the commencement of this section.

Note: A defendant bears an evidential burden in relation to the matter in subsection (7A): see subsection 13.3(3) of the Criminal Code.

(32) Schedule 1, page 26 (after line 20), after item 30, insert:

30A Paragraph 15(4)(b)

Repeal the paragraph.

30B After subsection 15(4A)

Insert:

(4AA) The Minister must not specify a foreign country in an instrument made under subsection (4A) unless:

(a) the foreign country is:

(i) a Participating State for the purposes of the Wassenaar Arrangement; and

(ii) a participant in the Australia Group; and

(iii) a partner in the Missile Technology Control Regime; and

(iv) a participant in the Nuclear Suppliers Group; or

(b) the Minister is satisfied that specifying the foreign country in the instrument is in the interests of Australia's national security, Australia's foreign relations or Australia's national economic well-being.

(33) Schedule 1, page 27 (after line 23), after item 40, insert:

40A Subsection 27(1) (note 2)

Repeal the note, substitute:

Note 2: Sections 10 to 10C (about offences for certain activities relating to DSGL goods or DSGL technology) contain exceptions that apply in relation to the holder of an approval.

(34) Schedule 1, page 27 (after line 26), after item 41, insert:

41A Section 57A (paragraph beginning "Persons holding permits under Part 2")

After "make", insert "or DSGL services the persons provide".

41B Section 57A (after the paragraph beginning "Persons holding approvals under section 27")

Insert:

Persons who make certain other supplies of DSGL goods or DSGL technology, or who provide certain DSGL services, must also keep records of those activities.

41C After subsection 58(3)

Insert:

Records for other activities

(3A) If a person makes any supply covered by subsection (3B) or (3C), the person must keep records of the supply, unless:

(a) the supply is made under a permit given to the person under section 11; or

(b) the circumstances prescribed by the regulations for the purposes of this paragraph apply.

(3B) This subsection covers a constitutional supply of DSGL technology, in circumstances where:

(a) the supply is from a place in Australia and is to:

(i) a place outside Australia; or

(ii) a foreign person; or

(b) if the supply is the provision of access to DSGL technology—at the time of the provision of access, the person providing the access is in Australia and the person to whom access is provided is either:

(i) outside Australia; or

(ii) a foreign person.

(3C) This subsection covers a constitutional supply of DSGL goods or DSGL technology, in circumstances where:

(a) any of the following applies:

(i) the supply occurs wholly at a place outside Australia;

(ii) the supply is from a place outside Australia and is to a place outside Australia;

(iii) if the supply is the provision of access to DSGL technology—at the time of the provision of access, the person providing the access is outside Australia and the person to whom access is provided is outside Australia; and

(b) the person making the supply obtained the DSGL goods or DSGL technology as a direct or indirect result of the export or supply of the DSGL goods or DSGL technology:

(i) from a place in Australia to a place outside Australia; or

(ii) if the earlier export or supply was the provision of access to DSGL technology—in circumstances where, at the time of the provision of access, the person providing the access was in Australia and the person to whom the access was provided was outside Australia; and

(c) either of the following (whether or not obtained) was required in relation to the export or supply mentioned in paragraph (b):

(i) permission (however described) under regulations made under the Customs Act 1901;

(ii) a permit given under section 11 of this Act.

(3D) If an Australian person provides any constitutional DSGL services to a foreign person at or from a place outside Australia, that are received at a place outside Australia, the Australian person must keep records of the provision of the DSGL services, unless:

(a) the DSGL services are provided under a permit given to the Australian person under section 11; or

(b) the circumstances prescribed by the regulations for the purposes of this paragraph apply.

41D At the end of section 58

Add:

Definition

(9) In this section:

place includes:

(a) a vehicle, vessel or aircraft; and

(b) an area of water; and

(c) a fixed or floating structure or installation of any kind.

(35) Schedule 1, item 47, page 29 (line 21 to 23), omit subitem (4), substitute:

(4) The amendments made by items 26 and 29 of this Schedule apply in relation to conduct occurring on or after the start day.

(4A) The amendments of section 58 of the Defence Trade Controls Act 2012 made by this Schedule apply in relation to activities done on or after the start day.

(36) Schedule 1, page 30 (after line 5), after item 49, insert:

49A Saving provision — foreign country list

The amendments of section 15 of the Defence Trade Controls Act 2012 do not affect the continuity of an instrument that is in force under subsection 15(4A) of that Act immediately before this Schedule commences.

These amendments respond to the recommendations of the Senate committee and to feedback from stakeholders identified through the consultation process. The first amendment establishes an exemption from all offences for fundamental research and includes the definition of fundamental research in the legislation. The second amendment will amend the criteria for the Foreign Country List to provide the minister with the authority to add countries that are not members of the four multilateral regimes to the Foreign Country List where such additions are in the interest of Australia's national security, economic prosperity or international relations.

The third amendment is a grandfathering mechanism which will provide an exemption from the 10B and 10C offences for all permits issued prior to the day the bill commences. The fourth amendment amends section 58 of the act to require exporters to keep records relating to the transfer of DSGL goods and technology even where the transfer is a relevant supply or subject to an exception.

The fifth amendment establishes a mechanism to support licence-free transfer for international arrangements between Australia and another foreign government. The sixth amendment will establish a mechanism to support licence-free transfer for controlled goods and technology sold or gifted through the Australian Military Sales program. The seventh amendment exempts all foreign persons from countries on the Foreign Country List from the 10A offence.

The eighth amendment establishes a build-to-print exemption which will exempt from the 10A offence entities manufacturing components of DSGL goods and technology where they are unable to reverse-engineer the component to make the regulated item. Requirements will be prescribed in the regulations. The ninth amendment will apply the 10B offence to DSGL part 1 goods and technology and to DSGL part 2 goods and technology on the sensitive list and the very sensitive list.

The 10th amendment exempts from the 10B offence DSGL part 2 goods and technology on the sensitive list and the very sensitive list if they are resupplied within, from or to a country on the Foreign Country List. The 11th amendment exempts from the 10B offence DSGL part 1 and part 2 goods and technology on the sensitive list and the very sensitive list returning to Australia or transferring back to the original equipment manufacturer.

The 12th amendment creates an exemption to lapse the 10B offence for DSGL part 2 goods and technology on the sensitive list and the very sensitive list for all suppliers from countries not on the Foreign Country List following a defined period after the initial supply—the period will be defined in the regulations—and to lapse the 10B offence for DSGL part 1 goods and technologies following a defined period after the initial supply—the period will again be defined in the regulations. The 13th amendment creates an exemption from the 10B offence for all firearms with serial numbers. The final amendment creates an exemption from the 10C offence for citizens or permanent residents of Canada and New Zealand.

These amendments have strong support across all stakeholder groups and will further streamline trade with our international partners beyond the US and UK, without compromising Australia's security, defence or international relations. I commend the amendments to the House.

Question agreed to.

Bill, as amended, agreed to.