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The Defence Trade Controls Amendment Act 2024 - Overview with flowcharts

Updated: May 1



Background

The 2023 Defence Strategic Review made clear that Australia now faces the most complex set of strategic circumstances since the Second World War. To keep pace with these challenges, it is critical Australia has a robust export control regime.


In response to these changes in Australia’s strategic environment, the Australian Parliament passed the Defence Trade Controls Amendment Act 2024 (the Act). This legislation will enhance the protection of Australian technology and information, as well as that of key partners.


Operation of the Act

The Act creates a licence-free environment between Australia, the United Kingdom and

the United States and regulates three previously unregulated activities:


1. Deemed export offence: Supplying technology listed on the Defence Strategic Goods List

(DSGL) to a foreign person within Australia.

2. Re-export/re-supply offence: Supplying DSGL technology that was previously exported or

supplied from Australia to a foreign person or foreign country.

3. DSGL services offence: Providing DSGL services in relation to military goods or technology

(listed in Part 1 of the DSGL) to a foreign person.


The Act amends Australia’s defence export control framework by:


  • creating 3 new criminal offences in the Defence Trade Controls Act 2012 for the:

  • supply of Defence and Strategic Goods List (DSGL) technology to a non‑exempt foreign person within Australia (section 10A).

  • supply of goods and technology on Part 1 (Munitions) and Part 2 (Dual Use) ‘Sensitive’ and ‘Very Sensitive’ Lists of the DSGL, that was previously exported or supplied from Australia (section 10B).

  • provision of DSGL services related to Part 1 of the DSGL to foreign nationals outside of Australia (section 10C).

  • providing a national exemption to the United Kingdom (UK) and the United States (US) from Australia’s export control permit requirements under the Defence Trade Controls Act 2012.


Diagrammatic representation of the changes


The previous process in the previous act:





The Amendment Act 2024:




Takeaways

The Amendment removes permit requirements for supplies of DSGL technology to the UK or US,

potentially resulting in fewer permit applications for Australian exporters overall. However, the Bill is

anticipated to increase the compliance administration because of the additional activities that must be assessed, beyond exports to deemed exports, deemed re-exports, deemed re-supplies and DSGL services. Even if an exception is available in most circumstances, defence industry and academia would be required to expand supplier and personnel due diligence screening, to enable accurate assessment of exception availability, and document conclusions in relation to each specific transaction.


The role of ECAG

ECAG is one of 15 entities in Australia for the 3-year Department of Defence Working Group set to support the development of regulations and supporting education, policy and processes.


As part of the Working Group to implement the Act and subordinate legislation, ECAG is intimately involved in shaping and providing feedback to Government. This includes how the Act is implemented and the type of support required by Industry and Academia over the coming years to fully operationalise the changes.


As an Advocacy organisation, ECAG is "in the tent" with Government export controls decision makers, to ensure the concerns, ideas and support required by our membership base is at the forefront of policy options and regulator decision making.


Conclusion

The strengthening of controls is welcome and needed in this current geopolitical area. The Amendment represents the most significant overhaul of Australia’s export control framework in a decade. Australian industry and academia will require ongoing support over the next 18 months to understand and comply, in order for Government to obtain the policy benefit at the heart of these changes.



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