Following is an article I had published in Lloyds List in June 2016
The CBFCA on 1 June 2016 issued a commentary as to DIBP position on refunds. As many would be aware, I had significant input to the submission to DIBP. I am concerned however as to the following comments made in today’s NNF to the effect that:
- The DIBP can request information from licensed customs brokers on any aspect of an import declaration when a refund application is lodged however, in relation to the seeking of this information, payment of the refund should not be withheld if information is outstanding that does not relate to the actual refund application. Other information which may be required from the importer of record or service provider from lodgement of the initial import declaration is a separate matter to the refund
- Licensed customs brokers who lodge a refund application should not be required to provide additional information as to the original import declaration (if they were not the entity which lodged the original import declaration), but would be expected to communicate with the owner of the goods to try and obtain that information to assist the DIBP
As we know DIBP have numerous legislated powers. In processing a refund, however, they have attempted to mix various powers so as to extend a review where no authority exists, and in the dot points above, rather than continuing to expound that this is incorrect at law, CBFCA appear to support a requirement to provide additional information not required to support the refund application. Customs brokers are busy. We work to strict time constraints and our time is precious, as is that of our clients. Certainly time is too precious to chase information from clients that is not required to process the refund.
I am not contending that DIBP do not have the authority to request additional information where it is required to satisfy a refund claim. I am contending and DIBP have agreed, that they do not have the authority to request brokers obtain information relating to additional lines based upon lodgement of a claim for refund. If they wish to audit lines not impacted by that refund then they must exercise monitoring powers. The correct process by the regulator should now be an ACN (if existing information isn’t enough) as to how they propose to exercise those monitoring powers if required.
In a refund application that goes redline the documents and IDM should be emailed to Refunds section by the broker. The claim by DIBP that this doesn’t happen is not a good reflection on industry, but I doubt the problem is wide spread given they have never been able to advise what percentage of red line refund lodgements are not accompanied by the documents and IDM. These red lines are treated as a desk audit and processed in Adelaide. There is no doubt that they are able to ask questions specific to the refund and adjustments made (but NOT other lines) to ensure that the refund is properly payable.
A monitoring audit however takes place in the importers premise and only after the written consent of the occupier is received. This is a much more formal and controlled process than is currently available to a refund officer. It is also a process that takes place after the ATD is issued, or, in the case of a Refund, after that refund is approved. Each of the officers must show their identity cards as monitoring officers and please remember that a monitoring officer must also be trained as such. Rumour has it that only about 42 are so trained.
Before undertaking any monitoring audit DIBP must make written contact with the company to be audited and an entrance interview between the DIBP audit team and key management personnel must be held to discuss the purpose, scope and timing of the audit. In essence they must:
1. Must identify themselves as authorised monitoring officers (S214AC/ S214AE(6))
2. May provide a notice under S214AD.
3. Must obtain consent in writing (S214AE(2))
4. and advise can refuse. (S214AE(3))
5. Must produce a statement of Rights and Obligations (section 214ACA)
The legislation exists for a reason. I’m only suggested that DIBP should comply with the legislation and its requirements just as we must. There are already too many officers in the Department with little or no understanding of the legislation under which they operate and their rights and responsibilities. There are also far too many delays in obtaining access to entries to process refunds and then in having queries resolved. Perhaps if refund officers concentrated on refunds we would see better processing times.