The Assistant Comptroller-General of Customs has forwarded the following memorandum for advice:

• On 18/2/23 Regulation 34(B) under the Customs Act 1901–23 was made by the Governor-General, Statutory Rules 1925, No. 29.

2. Clauses (a), (b) and (c) of regulation 34(B)(1) read:

34(B)(1) Goods which comply with the following conditions shall be deemed to be the produce or manufacture of the United Kingdom for the purposes of the operation of the British Preferential Tariff, viz.,

1. Goods which are wholly produced or wholly manufactured in the United Kingdom. As to manufactured goods, these will only be considered ‘wholly manufactured in the United Kingdom’ if in the raw materials used and also in the finished goods no manufacturing process has been performed outside the United Kingdom which is being commercially performed in the United Kingdom.

The Minister shall determine what are to be regarded as raw materials and in such determination may include partially manufactured Australian materials.

2. Goods, not wholly produced or wholly manufactured in the United Kingdom in the terms of paragraph (a), provided they contain at least 75 per cent of United Kingdom labour and/or material in their factory or works cost.
3. Not withstanding anything contained in the preceding paragraphs–goods of a class or kind not commercially manufactured in Australia provided they contain at least 25 per cent of United Kingdom labour and/or material in their factory or works cost.

3. Section 8 of the Customs Tariff Act No. 25 of 1921 reads:

The rates of duty set out in the schedule in the column headed ‘British Preferential Tariff’ shall apply to goods the produce or manufacture of the United Kingdom …

4. Section 2 of the Customs Tariff Act 1921 reads:

The Customs Act 1901–1923 shall be incorporated and rend as one with this Act.

5. The legal authority under which the regulation referred to was made is section 27(1) of the Customs Act 1901–23. This section reads:

The Governor-General may make regulations not inconsistent with this Act prescribing all matters which by this Act are required or permitted to be prescribed or as may be necessary or convenient to be prescribed for giving effect to this Act or for the conduct of any business relating to the Customs, and in particular for prescribing …

(Here follow many subjects particularly named, but the British Preference is not one of them.)

6. In framing the regulations governing the preference conditions the words relied upon are those underlined in paragraph (5) above. Particular attention is invited to the fact that section 27 (quoted above) distinctly defines two different categories, as it were, of matters on which regulations may be made, the first being those which by this Act are required or permitted to be prescribed, the second, vide the underlined words⁽¹⁾ already referred to, must necessarily be matters which by this Act are not specifically required or permitted to be prescribed, otherwise there would be no sense in the addition of the underlined1 words.
7. A doubt has been raised as to the legality of the regulation. I should therefore be glad of the Secretary’s opinion as to–
1. whether the regulation is valid.
2. if not valid, what amendment of the law would be necessary to obtain the power to make such Regulations.

The effect of section 8 of the Customs Tariff 1921 is to prescribe a preferential tariff for goods ‘the produce or manufacture of the United Kingdom’. The meaning to be attached to these words is a matter for interpretation. That meaning must be their obvious and popular meaning. In my opinion, goods, in order to be entitled to the British Preferential Tariff, must be substantially the produce or manufacture of the United Kingdom. In the absence of an express power, it is not possible by regulation to give a meaning to words used in an Act. In this case, there is no express power, the power contained in section 27 of the Customs Act being limited to the making of regulations not inconsistent with the Act.

I am of opinion that regulation 34B is not valid.

As to the amendment necessary to make it valid, I suggested the addition to section 8 of the Customs Tariff 1921 of two subclauses, (2) and (3), as follows:

(2) For the purposes of this section goods shall be deemed to be the produce or manufacture of the United Kingdom if the prescribed conditions of production or manufacture are complied with.

(3) It shall not be necessary that the same conditions be prescribed as regards all goods or classes of goods, but different conditions may be prescribed as regards different goods or classes of goods.

If it is desired to validate the provisions of regulation 34B, I suggested that a clause of the amending Bill be framed to declare that–

Statutory Rules 1925 No. 29 shall be deemed to be, and from the time of their making to have been, as valid and effectual as if this Act had been in force at the time when they were made, and they purported to have been made in pursuance of the Customs Tariff 1921 as amended by this Act.

[Vol. 22, p. 115]

(1)(1) In italics in this publication.