In a move which highlights that delays in the maritime industry can prove costly in more ways than one, the Magistrates Court at Brisbane recently imposed a substantial fine on a shipping line for the late submission of a crew report.
Under the Customs Act 1901 the operator of a vessel due to arrive at a port in Australia from a place outside Australia must report to Customs on each member of the crew expected to be on board the vessel at the time of its arrival. The crew report must be made no earlier than 10 days but no later than 96 hours prior to the vessel’s estimated time of arrival.
Each offence carries a maximum penalty of $6,600, but a separate offence is committed for each failure to report every individual crew member. This means that to a significant extent the size of the maximum fine is tied not to the gravity of the offence but to the number of crew on board, with potentially unjust results. The recent case illustrates the point.
A shipping line was fined $15,000 for late submission of a report to Australian Customs on the 23 crew expected to be on board a vessel at the time of its arrival in Australia. The report was submitted only 56 hours before the vessel’s estimated time of arrival, some 40 hours late. The vessel submitted all other paperwork for its impending arrival in full and on time.
The total maximum penalty available for all 23 offences would have been a whopping $151,800, although Australian Customs sought only a penalty of $1000 per offence for a total penalty of $23,000.
In mitigation, the shipping line pointed out that most previous prosecutions for the same offence concerned vessels that in many cases simply arrived in Australia totally unannounced, and had not submitted customs paperwork at all (rather than merely somewhat late). The line submitted that in circumstances where they had completed all other paperwork concerning the vessel’s arrival properly, and had only submitted a single report late, the fine imposed should be relatively minimal, regardless of the number of crew involved.
The magistrate imposed a fine of 10% of the maximum penalty per offence – $660 – which totalled $15,180 (rounded to $15,000) when applied to all 23 offences. As far as we are aware, this fine is the largest fine ever imposed for this offence, not because the shipping line’s conduct was notably poor, but merely because the vessel involved had a substantial crew while all previous offences concerned far smaller vessels.
Although $660 per crewmember in and of itself may not break the bank, this case clearly demonstrates how a seemingly small oversight could quickly add up to a significant fine in a commercial shipping context where vessels have large crew numbers. Moreover, $660 per crewmember was the fine imposed for a first offence for the late submission of the crew report – a complete failure to submit a report is likely to illicit a much higher penalty. The fine that would be imposed in similar circumstances on a cruise vessel with hundreds (or more) of crew could be extremely substantial.
The very simple lesson to be taken away from this cautionary tale is that crew reports, and all other required customs reports for that matter, must be not just submitted but submitted on time to avoid the risk of a potentially significant fine.