Defence Trade Controls Amendment Act 2024

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 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.

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 nonexempt 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.

Australia’s export control framework is a permissive system designed to permit the responsible transfer of controlled goods and technology – these reforms do not change this underlying principle.

AUKUS licence-free environment

Australia, the UK and the US are streamlining the flow of defence trade between AUKUS partners to deepen our scientific, technological and industrial cooperation. This includes the creation of an export licence-free environment, which removes barriers to defence trade, collaboration, research and innovation between Australia, the UK and the US.

On 22 December 2023, President Biden signed into law the 2024 National Defense Authorization Act which provides Australia and the UK a full national exemption from US export control regulations (the International Traffic in Arms Regulations). This generational reform will be fundamental to enabling AUKUS through the licence-free environment.

Exceptions

This Act strikes a balance between protecting Australia’s national security and supporting economic prosperity and research collaboration by narrowing the scope of the Act to those items and activities that could prejudice Australia’s security, defence or international relations.

Under the new offences, Australian citizens who have dual citizenship will be treated the same as Australian citizens without dual citizenship.

The Act includes a number of exceptions to support Australian research and innovation and streamline trade with international partners beyond the UK and the US.

The Act provides certain exceptions for certain persons or activities linked to:

  • AUKUS partners (sections 10A, 10B and 10C)
  • Fundamental Research (sections 10A, 10B and 10C)
  • Defence Trade Cooperation Treaty (sections 10A, 10B and 10C)
  • Five Eyes (sections 10A, 10B and 10C)
  • Australian Government employees (sections 10A, 10B and 10C)
  • Foreign Country List (section 10A)
  • Build-to-print (section 10A)
  • Items returning to Australia (section 10B)
  • Original manufacturers (section 10B)
  • Firearms with serial numbers (section 10B)
  • Lapsed timeframes (sections 10B)
  • Grandfathered existing permits (sections 10B and 10C).

The full exceptions alongside each offence can be found in the Act and the explanatory memorandum. 

Education and guidance materials to support stakeholders to understand and interpret the offences and exceptions are being co-designed and developed with the Industry and Investment Working Group and Higher Education and Research Sector Working Group.

The Act commences within 6 months of receiving Royal Assent. The offences will come into effect a further 6 months after commencement of the Act.

Legislation

The legislation and explanatory memorandum can be viewed on the Parliament of Australia website.

Implementation

Defence has established 2 working groups to provide advice to Defence in relation to the Act and its implementation:

  • the Industry and Investment working group
  • the Higher Education and Research sector working group.

The working groups are made up of representatives from the peak bodies in each sector and individuals and organisations who have engaged with Defence during the development of the legislation.

The Government will consult with key stakeholders on the development of the regulations.

To ensure implementation is effective, Defence is:

  • developing a suite of education and guidance materials for the Defence Export Controls website to support stakeholder decision-making on permit requirements
  • co-designing online learning modules for the Defence Export Controls website with the Working Groups
  • upgrading the ICT case management system to ensure it is user-friendly
  • recruiting additional staff to process permit applications.