Australian Business Law Developments
May, 2010, the Australian Information Industry Association
(AIIA) welcomed the federal government’s decision to
establish a default position in favour of information technology
suppliers owning the intellectual property for software
developed under contract with federal agencies.
change came following a decision by the Attorney General and
after negotiations between the industry and state and federal
authorities. It will come into effect from October 1, 2010.
However, it is believed that the government has won the right
not to include the terms in new contracts in certain sensitive
areas of government such as military and security.
is a very strong outcome for the ICT industry, particularly
SMEs, and one that AIIA has worked hard to secure for many
years,” said Ian Birks, chief executive of the AIIA.
a software company retains ownership of IP, it encourages
the commercialization of IP across the ICT sector and fosters
a competitive culture of innovation. This outcome will provide
immediate and long-term returns to both government and the
exporters will have extra help to protect their valuable intellectual
property overseas with the signing in December, 2008,
of two key intellectual property (IP) treaties - the Singapore
Treaty on the Law of Trademarks (Singapore Treaty) and the
Patent Law Treaty.
Kim Carr, Minister for Innovation, Industry, Science and Research,
explained that the importance of these international treaties
lies in the significant benefits they provide for local exporters.
"The good news is that they encourage more user-friendly
systems by simplifying the process of obtaining and maintaining
trade marks and patents," Carr said, going on to add:
Singapore Treaty also reflects the worldwide growth in e-commerce
by providing consistent rules for electronic lodgment of trade
mark applications. By simplifying these processes Australian
exporters will reap the rewards of lower application costs
and greater flexibility and security when protecting their
IP. Signing on to the treaties offers a positive example for
Australia’s trading partners, thereby increasing the
capacity for regionally based trade." Carr remarked.
Carr said that following Australia’s ratification of
the Singapore Treaty, it will now enter into force on March
16, 2009. Member States include Denmark, Singapore and the
timing of the ratification will be greatly appreciated by
businesses trying to adjust to the global financial crisis,"
and the World Intellectual Property Organization also signed
an agreement to continue the role of IP Australia as an International
Searching Authority and International Preliminary Examining
Authority until December 31, 2017. Australia
has maintained this role for nearly 30 years.
decision handed down in July 2007 by the Australian Copyright
Tribunal was welcomed by the Phonographic Performance Company
of Australia (PPCA).
approved an application by the PPCA for an increase in music
licence fees paid to artists and record labels by
dedicated nightclub venues and commercially organised dance
In the first comprehensive
review of this tariff ever undertaken by the Copyright Tribunal,
the Tribunal lifted rates for licensed sound recordings played
in nightclubs from 7 cents per person to AU$1.05 per person.
The dance party rate rose from 20 cents to AU$3.07 cents per
The Tribunal found
of the tribunal in approving the proposed scheme is to fix
upon a licence fee that can be regarded, as nearly as it is
possible to estimate, on the basis of the evidence …as
the fair market price for the privilege of playing the recorded
music in respect of which (PPCA) is able to grant a licence.
If it be the fact that the market rate is 30 times the rate
that has hitherto been charged, that is no reason why it should
not now charge that rate.”
The move unsurprisingly
caused outrage amongst nightclub and other music venue owners,
some of whom warned that they would need to increase the amounts
that they charge club patrons in order to absorb the increase.
The new rates do
not affect community events, weddings or family functions.
February 2007, following an agreement reached the previous
between the US Patent and Trademark Office (USPTO) and IP
Australia, a project under which IP Australia provides
search and examination services on international patent applications
filed with the USPTO under provisions of the Patent Cooperation
Treaty (PCT) would be extended from March 1.
is a continuation of the project launched between the two
offices in 2005.
According to the
on PCT search and examination work is part of the USPTO's
ongoing efforts to improve examination efficiency and quality,
while reducing the growing backlog of US national patent applications
waiting to be examined. USPTO found that the quality and accuracy
of the work done by IP Australia during phase one warrants
extending the project and increasing the number of applications
Director General Ian Heath explained that IP Australia was
pleased to sign up to a new phase of the project, announcing
in this project is a significant opportunity for IP Australia
to move closer to its vision of being an office of choice
and for enhancing its international reputation. It represents
a further step towards achieving the goal of reducing re-work
between offices and making mutual exploitation of work a reality
for the ultimate benefit of Australian innovators and the
IP system as a whole."
emerged in November, 2006, that IP Australia, in conjunction
with the country's Foreign Affairs and Tourism Departments,
and the Attorney General's office, will in January 2007 co-host
the 'Trading Ideas Symposium', under the
auspices of the Australia-Pacific Economic Cooperation (APEC)
to be held between January 28-30 in Sydney, aims to provide
assistance and information to patent and trade mark attorneys,
IP lawyers and in-house legal counsel, businesses seeking
to capialize on their IP at home or overseas, R&D managers,
government policy makers and competition regulators, and academics
working in the field.
will include: Dr Francis Gurry, Deputy Director of the World
Intellectual Property Organization (WIPO), Alison Brimelow,
President Elect of the European Patent Office, and Jon Dudas,
Under Secretary of Commerce for Intellectual Property and
Director of the United States Patent and Trademark Office.
Speaking with regard
to the forthcoming event, Minister for Industry, Tourism and
Resources, Ian MacFarlane announced that:
which will also be the key IP event in support of APEC Australia
2007, is a collaborative effort between the major Australian
government departments and agencies responsible for IP in
"The program will
highlight emerging IP issues, new policy direction, business
case studies and issues for IP professions. In addition, it
will provide a forum to explore future IP directions in the
prosperity of our region depends on the creation of an innovative
environment for business. The Australian Government recognises
the value of IP as a cornerstone for future growth in the
global knowledge based economy for both developing and developed
economies. We wholeheartedly support efforts to develop a
strong and effective intellectual property rights system in
the Asia Pacific."
Trade Marks Amendment Bill 2006 was passed in Australia's
Parliament in October, 2006, making a number of incremental
improvements to the Trade Marks Act 1995
that will strengthen the Trade Marks system and provide greater
certainty for Australians and Australian business.
to the Trade Marks Act came about through a review conducted
by IP Australia, the Australian Government agency responsible
for administering the patents, trade marks, designs and plant
breeder’s rights systems. The review found that the trade
marks system was working effectively, but there were some
changes that could be made to enhance the system.
The changes made
by the Bill will improve the trade marks system in a number
of ways. Key amendments included:
- The ability
to conduct simple trade mark transactions over the phone;
- Two new 'opposition
to registration' provisions; and
- Increased certainty
that ownership of and interests in a trade mark have been
recorded accurately on the Register of Trade Marks.
to the Minister for Industry, Tourism and Resources, Bob Baldwin
last week described trade marks as very important resources
“A registered trade
mark represents a valuable business asset that can help to
establish a strong and competitive market position," he observed.
Trade Marks Act 1995 has been in force for ten years and strengthening
of the trade mark system will increase consumer confidence
that they are buying genuine goods and services with the quality
expected from the brand or mark," Mr Baldwin concluded.
Parliamentary Secretary to the Minister for Industry, Tourism
and Resources, Bob Baldwin revealed in September, 2006, that
a review of Australia's innovation patent
had found that the system meets its objectives and that changes
are not warranted at this time.
The review was
conducted by IP Australia, the government agency responsible
for administering the patent system, with assistance from
the Intellectual Property Research Institute of Australia
patent is predominantly used by Australian individuals and
SMEs for less-knowledge intensive innovations such as consumer
goods, and at nearly double the rate of the previous petty
“The Review of
the Innovation Patent has found the system successfully encourages
SMEs to develop incremental inventions and market them in
Australia. By providing a second tier patent, the Government
is ensuring that the intellectual property system continues
to be responsive to the needs of businesses operating in fast
moving, highly competitive markets by providing the option
of shorter term, more flexible and affordable protection,”
Mr Baldwin announced.
knowledge of the innovation patent was identified by the review
as a key barrier to further improving public usage of the
system. To address this, IP Australia is planning to undertake
further public awareness activities for the innovation patent.
The review also
found some businesses are using the system as interim protection
for higher-level inventions such as chemicals and medical
equipment, and recommended that this trend be monitored to
ensure the innovation patent system is being used as intended.
The innovation patent was introduced in 2001 as part of the
Government’s Backing Australia’s Ability initiative, and replaced
the petty patent system. The innovation patent system was
intended to stimulate lower level innovation by providing
quick, inexpensive intellectual property rights, with a lower
inventive requirement than a standard patent.
Australian Domain Name Administrator (auDA) warned in August,
2006, that it had become aware of a scam involving fraudulent
offers to register domain names.
According to auDA,
Domains Australia Pty Ltd has sent letters and/or faxes to
some domain name registrants offering to arrange registration
of the net.au equivalent of the registrant's com.au domain
name for $225.
The letter is headed
‘DOMAIN NAME AVAILABLE’ and some versions of it offer a free
MP3 player with each registration. However, auDA has received
numerous complaints which indicate that despite the net.au
name being paid for, it is not being registered and that registrants
are not receiving the ‘free’ MP3 player.
Based on the complaints
received, the registrar expressed concern that the letters
may mislead people into believing that they are renewing their
existing com.au domain name when in fact they are purchasing
a new net.au name.
a statement, it announced that: "Further, consumers should
be aware that $225 for a net.au domain name is significantly
higher than prices charged by auDA accredited registrars and
Pty Ltd is a company controlled by Blair Rafferty, the brother
of Chesley Rafferty. It is NOT an auDA accredited registrar
nor is it a reseller of an auDA accredited registrar."
has previously successfully taken legal action against Chesley
Rafferty and companies controlled by him under the Trade Practices
emerged in August, 2006, that the major record companies have
reached a global out-of-court settlement of international
litigation against the operators of the Kazaa peer-to-peer
settlement, announced by the trade organizations representing
the international and US recording industries (IFPI and RIAA),
applies to Kazaa's operations worldwide and concluded the
ongoing legal proceedings brought by the record companies
against the service's operators in Australia and the United
the terms of the settlement, Kazaa agreed to pay $100 million
in compensation to the record companies that took the legal
action to stop copyright infringement on the Kazaa network.
Kazaa will also introduce filtering technologies ensuring
that its users can no longer distribute copyright-infringing
John Kennedy, chairman
and CEO of IFPI observed that:
"Kazaa was an international
engine of copyright theft which damaged the whole music sector
and hampered our industry's efforts to grow a legitimate digital
business. It has paid a heavy price for its past activities.
At the same time Kazaa will now be making a transition to
a legal model and converting a powerful distribution technology
to legitimate use."
"This is the best
possible outcome for the music industry and consumers. Our
industry will have a new business partner and consumers will
experience new ways of enjoying music online, with more choice.
This is a win-win scenario."
settlement followed a landmark ruling in the Federal Court
of Australia in 2005 which found the Kazaa operators guilty
of authorising widespread copyright infringement, and litigation
in the US by record companies, music publishers and motion
picture studios against Kazaa, Grokster and Streamcast for
case against Grokster and Streamcast ultimately reached the
US Supreme Court, which in June 2005 unanimously ruled that
individuals or companies that promote copyright theft by users
of their service can be held responsible. Grokster settled
the case with the record labels and motion picture studios
in November, 2005.
copyright law changes unveiled in June, 2006, Australian television
viewers will now be able to legally record programs for later
viewing (known as time-shifting), or for viewing by others,
within certain limits.
The expansion of
the 'fair use' provisions, described by Attorney General Philip
Ruddock as "commonsense amendments", also legalises the transfer
of copyrighted material between formats, or 'format-shifting'.
However, this will not apply to DVDs.
In addition, new,
tougher measures have been introduced for cases of copyright
to an AAP report on the changes, Mr Ruddock observed that:
"Copyright is important and should be respected. That is why
the government is updating our laws to keep pace with technology."
Australian Parliament in October, 2006, passed media laws
that will allow the emergence of a range of new services
for Australian consumers, and will safeguard competition
in the sector, Minister for Communications, Information Technology
and the Arts, Senator Helen Coonan, asserted.
“By next year,
a range of new services including free-to-air, in-home, digital
only channels or even perhaps ‘snack’ television – small segments
of TV content delivered over a mobile device much like a mobile
phone could be available,” Senator Coonan said.
She then went on
to unveil the details of safeguards that have been put in
place to protect diversity and local content.
will only be able to take place subject to there remaining
five independent media groups in metropolitan markets and
four in regional markets."
also only be able to own two of the three regulated media
platforms – commercial radio, commercial television and associated
newspapers. The Australian Communications and Media Authority
will enforce the diversity tests and, of course, all mergers
will be subject to the approval of the Australian Competition
and Consumer Commission," she explained.
has passed the legislation to allow a relaxation of the current
cross media and foreign ownership restrictions, the Government
has not yet announced when these reforms will come into effect.
Government will consider a proclamation date for the new laws
and is keen to ensure that any opportunities for new investment
in the media industry are accompanied by the potential for
new services for Australian consumers,” Senator Coonan concluded.
Australian Communications and Media Authority last week welcomed
the decision of Justice Nicholson in the Federal Court in
Perth concerning the contraventions of the Spam Act 2003 (Spam
Act) by Clarity1 Pty Ltd of Perth and Wayne Mansfield, its
of Clarity1 is especially significant, as it represents the
first prosecution under the Spam Act.
Among other matters,
ACMA submitted to the Federal Court that in the twelve months
after the Spam Act commenced in April 2004, Clarity1 Pty Ltd
and Mr Mansfield sent out at least 56 million commercial emails
with most of the messages being unsolicited and in breach
of the Spam Act.
on Thursday rejected the company’s defence that the recipients
of emails had consented to receive them. He further rejected
the defence that the company could use harvested lists acquired
before the Spam Act commenced to send Spam emails at any time.
"The fact that
address-harvesting may have occurred at a time when no such
prohibition was in the law, does not prevent the application
of the provision in its term from the date it came into force,"
Welcoming the verdict,
ACMA Chairman, Chris Chapman announced that:
"This has been
an important test case for the Spam Act. Justice Nicholson’s
findings should give Australians confidence in the effectiveness
of this important legislation."
continued: "The receipt of spam imposes significant cost and
inconvenience on individuals and businesses by disrupting
email delivery, clogging up computer systems, reducing productivity,
wasting time, irritating users and raising the cost of internet
"This case provides
a strong indication to Australian spammers that their activities
will be vigorously pursued by ACMA."
The Federal Court
has advised that the determination of penalties will be made
at a later date.
March, 2006, Australia's Minister for Communications, Information
Technology and the Arts, Senator Helen Coonan, has released
a discussion paper on reform options for Australia's
services are being challenged by new digital technologies
and this is resulting in the emergence of new players, new
content, new services and new platforms,” she explained, continuing:
“For the consumer,
this means an ever-increasing number of new sources of information
and entertainment. For the media sector, while this evolution
poses challenges as audiences are attracted away from traditional
media sources, it also presents significant opportunities
to embrace new ways of doing business."
“For the Government,
the impact of digital technologies means the current regulatory
settings, which are largely designed for an analogue world,
risk becoming outdated."
“In the end any
media reforms must be about providing a richer and more diverse
media environment for Australian consumers and that is why
their views are important. So today I am releasing a discussion
paper outlining options for a strategic framework for proposed
reforms to the media industry in Australia.
Government is seeking comment on options outlined in the paper,
which cover areas such as the expedition of digital conversion,
media ownership and control, and the impact on broadcasters
of an analogue switchover, by 18 April 2006.
August, 2009, the Australian government announced changes
to the supervision of the country's financial markets,
with the stated purpose of enhancing their integrity and,
ultimately, of establishing Australia as a financial services
hub in the region.
has decided that the Australian Securities and Investments
Commission (ASIC) should supervise the real-time trading on
all of Australia's domestic licensed markets. This change,
it was said, will mean that ASIC will now be responsible for
both supervision and the enforcement of the laws against misconduct
on Australia's financial markets.
The Minister for
Financial Services, Chris Bowen, said that: “As part
of the government's drive to improve regulation of the financial
industry, the government has decided to transfer supervisory
responsibility for Australia's financial markets to ASIC as
it is more appropriate for an agency of the government to
perform this important function.”
The present arrangements
require individual financial markets to self-supervise their
trading, but the new reform, it is said, is in line with the
move towards centralised or independent regulation in other
whole-of-market supervisor will consolidate the current individual
supervisory responsibilities into one entity, streamlining
supervision and enforcement, and providing complete supervision
of trading on the market,” Chris Bowen said. “Moving
to whole-of-market supervision is also the first step in the
process towards considering competition between market operators.”
It was further
explained that the changes will mean that ASIC will become
responsible for supervising trading activities by broker participants
which take place on a licensed financial market, while individual
markets – such as the Australian Securities Exchange
(ASX) - will retain responsibility for supervising the entities
listed on them.
of listed entities raises a different set of issues. The government
is comfortable that there is no need for the government to
supervise listed entities. ASIC and the ASX are working well
together in performing this role,” Chris Bowen added.
is intended that legislation will be introduced into Parliament
in 2010 to give effect to this change, with ASIC to begin
performing these functions in the third quarter of 2010.
a separate move, Chris Bowen has also released, for public
comment, draft regulations in relation to the national regulation
of margin lending facilities, the national regulation of trustee
companies and enhancements to the regulation of debentures.
Submissions are due by 18 September 2009.
Minister for Trade, Simon Crean, visited Riyadh and Dubai
in November, 2008, to press for progress in negotiations
for a Free Trade Agreement with the States of the Gulf Cooperation
Council (GCC). “Australia
has emphasised to our Saudi and UAE (United Arab Emirates)
hosts the strength of our commitment to advancing these important
trade negotiations,” Mr Crean said.
GCC as a whole is Australia’s eleventh largest merchandise
export market. This is true in the case of automobiles where
the GCC took AUD2.2bn (USD1.5bn) in Australian exports in
2007-2008 - and also in a host of other sectors, including
services, infrastructure, mining, energy and agribusiness.
This rapidly growing market matters to our trading future,"
GCC member countries include Bahrain, Qatar, Kuwait, Oman,
Saudi Arabia and the UAE. On November 2 and 3, Crean met Prince
Salman, the Governor of Riyadh, as well as the Saudi Ministers
for Trade and Industry and for Economic Planning during his
visit to Riyadh. Crean met the UAE Minister for Trade in Dubai
on November 4. “I left our hosts with no uncertainty
as to Australia’s interests in making progress in these
negotiations," Crean said.
are a crucially important part of our relationship in areas
like education, where there’s been huge growth in student
numbers to Australia, project management, infrastructure development,
health-care services, mining services, agriculture services,
and financial services. My view is that governments have an
obligation to catch up with the rapid growth of the private
sector relationships. That’s the message I conveyed
in my meetings in Riyadh and Dubai - because it’s in
the interests of both sides to allow these relationships to
continue to flourish," he added.
February 2007, the Australian Senate passed a bill
that will enhance cooperation between the national financial
markets regulator, the Australian Securities and Investments
Commission (ASIC), and foreign regulatory agencies.
is an important milestone in furthering international cooperation
between regulators,” explained Chris Pearce, Parliamentary
Secretary. "It will empower the Australian Securities
and Investments Commission, with the consent of the Minister,
to enter into cooperative audit arrangements with foreign
As a result of
the Australian Securities and Investments Amendment (Audit
Inspection) Bill 2006, ASIC has been able to enter into a
cooperative audit arrangement with the US Public Company Accounting
Oversight Board (PCAOB).
The bill will also
enhance ASIC’s domestic and international audit inspection
powers. "These measures are also designed to reduce compliance
costs and they will clarify the scope of ASIC’s existing
power to review audit firms,” Pearce stated.
The Bill additionally
contains a technical amendment to a transitional provision
relating to auditing standards made by the professional accounting
bodies, bringing the period of immunity against criminal liability
applying to the standards into line with the extended life
of the standards.
has benefited from constructive input from stakeholders, including
the major audit firms, during the consultative process,”
Pearce announced. "I would like to thank them for their
valuable contribution to shaping the legislation.”
"I am also
pleased that the extensive consultative process has ensured
that all key stakeholders support the measures in the Bill,"
Australian Securities and Investments Commission (ASIC) acted
in October, 2005, to stop a number of investment clubs
based in the Republic of Vanuatu from operating in
announced that it had also obtained orders banning the directors
of the group from providing financial product advice, dealing
in a financial product or operating a registered managed investment
scheme in the country. The orders were made, by consent, in
the Federal Court against Gramax Investment Club Limited (Gramax),
Biri Limited (Biri), ClubInvest Limited (ClubInvest), all
incorporated in the Republic of Vanuatu, and their directors,
Mr Graham Laughlin, Mr Philip Northam and Mr Allan Veivers.
commenced proceedings due to concerns that Gramax, Biri and
ClubInvest were offering financial services to Australian
investors without holding an Australian Financial Services
Licence (AFSL) or being appropriately authorised by an AFSL
holder. In particular, ASIC was concerned that in promoting
the investment club to Australian investors, Gramax and Biri
were operating and promoting a managed investment scheme,
and that ClubInvest was offering securities without a current
disclosure document, in breach of the requirements of the
Court agreed with ASIC’s claim that the companies had contravened
various sections of the Corporations Act and ASIC Act in relation
to their operation of the investment clubs. The Court also
made banning orders against the directors, restraining them
from either directly or indirectly providing financial product
advice, dealing in a financial product or operating a registered
investigations found that investors in the schemes were recruited
from referrals from other Club members attending club meetings
in Australia and via the clubs' websites. Over $15 million
was raised collectively by the investment clubs from more
than 500 Australian investors.
investment clubs promoted average annual returns of 28.5 per
cent to 31 per cent. The Gramax and ClubInvest websites also
promoted a referral system whereby existing investors who
referred new investors received a benefit for the referral.
response to the action, Gramax, Biri and ClubInvest have made
undertakings to both ASIC and the Court to: notify all investors
of the outcome of the proceedings within 14 days; offer full
redemption of an investment to any investor within 60 days
of a request; and no longer pay referral fees with respect
to any investor referred to Gramax, Biri or Clubinvest on
or after 29 September 2005.
on the action, ASIC Deputy Executive Director of Enforcement,
Mr Allen Turton, urged Australian investors to ensure that
they deal only with investment funds licensed in Australia,
warning that they stand little chance of recompense once their
money is moved offshore.
will take action against individuals or companies that seek
to operate within Australia without holding the appropriate
license or authorisation," stated Mr Turton.
recommends that investors check that they are dealing with
an entity that is licensed in Australia, as there may be limited
prospects to get your money back once the funds are sent offshore,"
June, 2005, ASIC warned internet users to beware of
'phishing', citing a recent doubling in reports to
ASIC concerning this financial scam.
Commissioner, Professor Berna Collier explained that complainants
had reported receiving emails which appeared to be from well-known
Australian and international banks or financial institutions.
emails, with titles like 'Urgent Security Notice', ask for
information including pin numbers, card expiry dates or internet
banking registration numbers and passwords. The emails often
give plausible explanations for why this information is needed,
such as 'to conduct security upgrades', 'investigate irregularities'
or 'arrange payment of bills due'', Professor Collier announced,
some instances, the email will include links to real websites
so that you can access your account, it may use copies of
the branding of a real bank or provide a contact telephone
number so that customers may 'verify' the request for information.
All of these tricks combine to set an elaborate trap for unsuspecting
bank will never ask you to confirm your internet banking password,
especially in an email', she concluded.
Law For Lawyers
to a report published in The Lawyer.com in October, 2004,
lawyers in New Zealand are facing increasing competition in
the domestic corporate market from their Australian
counterparts, and from in-house lawyers.
In order to counter
the phenomenon, according to the news service, a number of
boutique firms specialising in trans-Tasman work have recently
been established in New Zealand.
Mayne, senior partner at one such boutique firm, Mayne Wetherall,
confirmed the situation, explaining that: "The legal market
in New Zealand has become increasingly provincialised, with
the decision-making moving from Auckland and Wellington to
Sydney. New Zealand has evolved into a branch office economy
- and with six heavily lawyered, 40-plus-partner firms, there's
a lot of competition."
went on to add: "There's been more than a drift of work across
the Tasman - all of New Zealand's banks are now Australian-owned,
with the last one sold to ANZ last year, and many corporations
have head offices offshore."
newly adopted Australian cross border insolvency law may
provide some comfort to companies with foreign subsidiaries
and their suppliers in the current volatile market, according
to Neil Cussen, Deloitte’s Corporate Reorganisation
to 250 guests at Deloitte’s National Corporate Reorganisation
Group in October, 2008, Mr Cussen said that the
Australian version of the United Nations Commission and
International Trade model law (UNCITRAL) became effective
on July 1, 2008. In addition, court rules are being
drafted and will be available within the next three months.
trade and financing increasingly mandates insolvency solutions
across international jurisdictions with the application
of multiple, often conflicting laws,” said Mr Cussen.
“This new legislation may possibly provide a modest
shield for Australian companies, their suppliers and their
assets, against foreign interests being sold from underneath
them by providing a due process for the sale of assets.”
has joined many other countries in adopting this model law.
It has already been adopted and enacted in Mexico, the United
Kingdom, Columbia, Eritrea, Japan, Montenegro, New Zealand,
Poland, Romania, Serbia, South Africa and the United States.
United States is adopting the law under its Chapter 15 legislation
in 2005, and Canada has also adopted parts of it.
Cross Border Insolvency Act 2008 encompassing the model
law will go a long way to protecting creditors in local
jurisdictions from wealthy foreign interests,” says
Mr Cussen. “The model law should provide an efficient
mechanism for dealing with cross border insolvencies. It
will promote greater co-operation, legal certainty, fair
and efficient administration of cross border insolvencies,
protection and maximisation of the value of debtors’
assets and facilitate the rescue of financially troubled
February 2007, Australian Treasurer and Minister for Small
Business and Tourism, Peter Costello, released draft legislation
containing proposals to reduce tax compliance burdens
for the country's small businesses.
aimed to standardise the eligibility thresholds for small
business tax concessions from 1 July 2007. Previously, separate
eligibility tests existed for GST, the Simplified Tax System,
capital gains tax (CGT), fringe benefits tax (FBT) and pay-as-you-go
(PAYG) small business concessions.
Under the proposals,
any business with annual turnover of less than A$2 million
would be able to access these concessions, subject to any
additional criteria set out in the particular concessions.
meeting the $2 million annual turnover test would not need
to make any further decisions to enter into the new arrangements,
Costello explained, nor would they be obliged to adopt any
concessions not suited to their requirements. Any business
meeting the new small business definition would be able
to choose those concessions that meet its business needs.
the Treasurer, a single definition of small business was
expected to result in reduced compliance costs for some
2 million Australian small businesses, or 96% of all Australian
businesses, effectively giving small firms a A$150 million
In December, 2006,
Costello announced a new initiative that he claimed would
provide a significant and sustained reduction in
business to government reporting burden.
Standard Business Reporting project builds upon the business
measures announced by the Commonwealth in response to the
Banks Report, to increase the scope for innovation, enhance
entrepreneurial drive and increase productivity.
requirements from the various levels of government impose
a significant burden on Australian business. The recent
Report of the Taskforce on Reducing Regulatory Burdens on
Business considered that getting rid of unnecessary regulatory
compliance costs could save business billions of dollars
Business Reporting is a whole of government programme to
reduce reporting burdens for business through eliminating
unnecessary or duplicated reporting and improving the interface
between businesses and government agencies.
said that the participation of state and local governments,
and close consultation with the business community will
be crucial to achieving the maximum benefits for Australian
Business Reporting will pursue three broad opportunities
for reducing business reporting burden: reducing the number
of different agencies to which businesses have to report
directly the same or similar information; reducing the number
of data elements that businesses report to government through
standardising and harmonising data definitions and eliminating
duplication; and providing options for increased automation
of business reporting, including greater pre-population
full benefits of Standard Business Reporting rely on all
three opportunities being pursued concurrently," the Treasurer
will involve a single broad coordination and support authority
which will manage business to government reporting holistically,
over a sustained period," he added.
September, 2006, the Australian government released the
draft Corporations Amendment (NZ Closer Economic
Relations) Bill 2006 for public scrutiny.
to Chris Pearce, Parliamentary Secretary, the initiative
builds on the commitment by both the Australian and New
Zealand Governments to remove unnecessary regulation of
trans-Tasman business and promote greater coordination of
business law between the two countries.
enacted, the provisions will allow the offer of securities
and managed investment interests to be made in either country
with the same offer documents, therefore reducing duplication
and cost which inevitably get passed on to consumers," Pearce
reduced filing requirements provisions of the draft bill
are intended to exempt New Zealand companies operating in
Australia from lodging the same information with ASIC that
the companies have already lodged with the New Zealand Companies
Office,” he added.
Australian Treasury is inviting comments on the new legislation
in a consultation that closes on October 13, 2006. The draft
bill and commentary can be viewed on the Treasury's website.
January, 2010, Australia’s Minister for Financial
Services, Superannuation and Corporate Law, Chris Bowen,
released, for public consultation, legislation aimed at
further enhancing the ability of the Australian
Prudential Regulation Authority (APRA) to regulate institutions
in the financial sector.
proposed bill, amongst other measures, would enhance the
APRA's powers to administer the financial claims scheme
(FCS), which protects deposits in Australian banks, credit
unions and building societies, currently up to a limit of
AUD1m (USD923,500) per depositor; and would also make amendments
to the financial sector levies (FSL) framework, as recommended
by a report last year.
bill would amend the banking legislation to enable the APRA
to determine the rate of interest that applies to protected
accounts for the purposes of determining entitlements under
the FCS, where the APRA considers that the rate of interest
is not certain; clarify the operation of the FCS in relation
to pooled trust accounts; and clarify that the APRA may
require a liquidator to assist it in paying account holders
their entitlements under the FCS.
rates are used to calculate the annual FSL from the financial
services sector to fund the operational costs of the APRA,
together with certain market integrity and consumer protection
functions undertaken by the Australian Securities and Investments
Commission (ASIC) and the Australian Taxation Office (ATO)
in relation to APRA-regulated institutions.
2009-10, the APRA is due to collect AUD119.8m to fund its
own FSL-related activities and to cover the relevant costs
of the ASIC and the ATO. This compares to the FSL requirement
of AUD107.9m in the previous year, and raised the maximum
levy on domestic deposit-taking institutions from AUD1.4m
to AUD1.6m. The budgeting of additional funding reflected
the increase in supervisory activities by the regulators
to address the effects of the global financial crisis.
its inception, gross assets have been used as the primary
measure for determining FSL. While this has generally proved
to be a reasonable measure, it is said that, from time to
time, it has generated particular anomalies. For example,
using assets as a valuation basis may not be appropriate
for a financial institution which has a large volume of
transactions but holds minimum assets and as a result is
subject to the minimum levy, or where a participant otherwise
does not conform to the general characteristics of other
entities within the industry.
bill would address this by amending the legislation to provide
flexibility so that a valuation basis other than assets
can be used in determining FSL on a case-by-case basis.
This would be done by changing the applicable reference
from “asset value”’ to “levy base.”
July 2007, Chris Pearce, Parliamentary Secretary to the
Treasurer consented to the Australian Securities
and Investments Commission (ASIC) entering into a cooperative
audit oversight arrangement with the US Public Company Accounting
Oversight Board (PCAOB).
international cooperation by ASIC with overseas regulators
is in Australia’s national interest because of the
globalisation of capital markets,” Mr Pearce explained.
facilitated the proposed arrangement between ASIC and the
PCAOB with the enactment earlier in the year of the Australian
Securities and Investments Commission Amendment (Audit Inspection)
Act 2007. This Act provided a legislative framework to empower
ASIC, with the consent of the Minister, to enter into cooperative
audit oversight arrangements with foreign regulators.
joint audit inspection process between ASIC and the PCAOB
will reduce red tape here in Australia and provide significant
cost savings for Australian audit firms registered with
the PCAOB. The safeguards built into the legislation and
the cooperative arrangement will ensure we get the right
balance between ASIC’s statutory responsibilities,
and protecting the interests of clients and their audit
firms,” stated Mr Pearce.
The first joint
inspections by ASIC and the PCAOB were expected to begin
later in 2007.
May 2007, the Australian government announced a
package of improvements to the income tax law affecting
consolidated groups and multiple entry consolidated
groups (MEC groups). The improvements aim to ensure the
law operates effectively and to reduce compliance costs
for consolidated groups and MEC groups.
Under the consolidation
regime, which was introduced from 1 July 2002, wholly-owned
groups are taxed as a single entity. Over time, taxpayers
and the Australian Taxation Office have identified certain
aspects of the consolidation regime that are producing inequitable
outcomes or imposing excessive compliance costs.
The package clarifies
the application of the income tax law for consolidated groups
and MEC groups in two ways.
First, it modifies
the consolidation tax cost setting rules, which set the
costs of a joining entity’s assets for income tax
purposes, to ensure that they operate effectively.
Second, it clarifies
interactions between the consolidation provisions and other
parts of the income tax law, including interactions with
the capital gains tax regime and the uniform capital allowances
Some of the changes
apply from the commencement of the consolidation regime
because they clarify the operation of the law and ensure
that it operates effectively. Other changes apply prospectively.
In September, 2006,
Dubai Financial Services Authority (DFSA) entered
into a Memorandum of Understanding (MoU) with the Australian
Securities & Investments Commission (ASIC).
The MoU was signed
in Sydney by David Knott, Chief Executive of the DFSA, and
Jeffrey Lucy, Chairman of ASIC.
The signing coincided
with a visit to Australia by a delegation from the Dubai
International Financial Centre (DIFC), led by the Governor
of the DIFC, Dr. Omar bin Sulaiman.
During the signing,
Knott commented: “Australia has a well developed capital
market and an internationally respected regulatory framework.
The strength of the Australian system was demonstrated during
the Asian financial crisis in the late 1990s from which
Australia emerged largely unaffected."
“Reforms to the
Australian regulatory system in the early and mid-1990s,
creating a nationally integrated capital markets and regulatory
structure, have underpinned Australia’s long period of sustained
“As the national companies and securities regulator ASIC
plays a key role both within Australia and internationally.
A significant part of the DFSA’s securities regulation is
based on the ASIC model, adding special significance to
“As a former
Chairman of ASIC, I am personally delighted to be signing
the MoU today on behalf of the DFSA with my friend and former
colleague Jeffrey Lucy.”
signing of the MoU put in place arrangements for cooperation
and information sharing between the two regulators. It recognizes
that both regulators rely on the quality of regulatory standards
administered in the other’s jurisdiction.