How does DEC address non-compliance?
DEC’s goal in addressing non-compliance is to prevent similar breaches from occurring in the future. We recognise that for those who are new to Australia’s export control legislation, compliance with Australia’s export controls can be challenging. Even individuals and companies committed to fulfilling their responsibilities may unintentionally commit breaches. Our aim is to work with clients to identify the causes of a breach and to help them put measures in place to prevent future recurrences.
DEC’s response to non-compliance will depend on the specific context of a breach. Factors that may be considered by DEC as aggravating or mitigating circumstances include:
- causes of the breach, whether due to deliberate intent, negligence or lack of understanding;
- risks arising from the breach for Australia’s national interest and international obligations;
- whether the breach was an isolated event or a recurring issue;
- the client’s export and compliance history, including commitment to internal compliance procedures of an appropriate standard;
- client efforts to redress breach and level of cooperation with DEC; and
- whether the client made a timely, accurate and comprehensive voluntary disclosure.
DEC’s priority is to assist clients to remedy non-compliance, however, breaches that are recurring, or are due to intentional or wilfully negligent behaviour, may be referred to enforcement agencies in order to enforce penalties under the DTC Act.
DEC’s assessment of the circumstance surrounding a breach will in turn inform the steps DEC takes to address non-compliance. DEC may request records from clients related to their activities under the DTC Act to enable DEC to accurately assess the scope and implications of any such breaches.
DEC’s goal is to take fair and proportionate action that helps clients avoid breaches in the future. Depending on the circumstances, DEC may initially take one or more of the following corrective actions:
- provide guidance on how to prevent future breaches, including correspondence requiring a client to improve their compliance procedures;
- increase checks to ensure appropriate use of permits, licences, broker registrations or Australian Community Membership; and
- impose new and/or more restrictive conditions on permits for the conduct of controlled activities.
DEC’s preferred approach is to assist clients to improve their compliance procedures and thereby prevent future cases of non-compliance. However, in the event of continued inaction or non-compliance by a client, DEC may initiate more formal corrective measures, including:
- formal warning letters;
- imposition of new and/or more restriction conditions on permits (including brokering registrations and permits);
- prohibition notices to prevent the supply, publication or brokering of Defence and Strategic Goods List (DSGL)-listed goods and technologies;
- suspension or cancellation of Australian Community Membership; and/or
- cancellation of permits and broker registrations.
Referrals for Enforcement
DEC may refer serious cases of deliberate, wilfully negligent or recurring non compliance to enforcement agencies together with recommendations for investigations, inspections and other possible punitive action. The DTC Act includes significant penalties for persons conducting unauthorised controlled activities or breaching the conditions of permits issued under the legislation. For example, the maximum penalty for supplying DSGL technology without a permit is up to ten years imprisonment or 2500 penalty units (equivalent to a fine of $450,000) or both.