May 31, 2024
Department of Defence
The Group of Eight (Go8), which represents Australia’s research-intensive universities, welcomes the opportunity to respond to the Exposure Draft of the Defence Trade Legislation (DTL) Amendment Regulations 2024.
Go8 universities are all ranked in the world’s top 100, with six in the top 50. We collectively invest $7.7 billion into R&D annually, including 52 per cent of the total university sector’s defence R&D investment[1]. We receive almost 80 per cent of total US Department of Defence funding to Australian universities.
Please note that this submission represents the views of the Go8 network and member universities may wish to make their own individual submissions. The Go8 consents for this submission to be published in full.
Recommendation
That the Department of Defence expedite the release of detailed guidance on new elements of reform clarified or expanded through the draft DTL Regulations 2024, including but not limited to:
- How regulated bodies can assess the relevance of the three criteria used as the decision-making basis for the Minister to determine if supply under 10A is prejudicial to Australia’s security, defence or international relations
- new record keeping requirements to ensure that universities invest appropriate time, effort and resources in pursuing the most effective and tailored approaches to a potentially complex change.
General
The Go8 acknowledges the ongoing efforts by the Department of Defence to engage with the university sector on the reforms to the Defence Trade Controls Act 2012 and associated developments, via the Defence Trade Controls Higher Education and Research Sector Working Group. Discussions with the Department via that forum provide essential insights into the Government’s plans, motivations, and intentions, as well as early opportunity to review and input to key matters, such as this draft regulation.
The draft Explanatory Statement, being a necessary explanation of the draft regulation, is highly welcome.
The Go8 emphasises the critical importance of providing support materials and guidance to regulated bodies on the new elements of the reforms and encourages the Department’s continued efforts to engage stakeholders on the form, shape and topics of such resources.
Specific comments
5A covered security clearance
The Go8 does not oppose the proposed level of Negative Vetting Level 1 or higher, on the basis that clearance – including issued by UK, US, Canada or NZ Governments – must be suitable for permitting access to information classified as secret. However, the level of security clearance should be commensurate with the level of risk.
5B Requirements relating to the definitions of relevant supply and relevant DSGL services
The Go8 recommends that the Department be explicit in its guidance around how the unique identifier (AUKUS Defence Export Control Registration Number) – proposed as the basis for the additional exclusion – can be acquired for existing exporters to the USA and the UK as well as for new exporters. This includes how the new identifier replaces the existing arrangement a supplier may have, for example as an existing permit holder or member of the AU-US Defence Trade Treaty Community.
The Go8 appreciates the Department of Defence’s confirmation that the Department (rather than Minister) is the decision-maker on issuance of the AUKUS DCRN, which may enable decisions to be made in a timely and streamlined manner.
7A Exception to offence—supply to producer of components
The build to print exemption has limited (known) applicability to our universities, however there will be instances in which it may be relevant, including because of engagement with industry, for example on additive manufacturing.
The Go8 considers the following proposed requirements as the basis for the exception:
- Exception for technology which is reasonably necessary for the person to produce the components of the DSGL goods, with ‘reasonably necessary’ determined by reference to what a person of relevant skill, experience and qualification in the profession, industry or field of endeavour would consider appropriate and required to produce the components
- Non-application of the exception to technology ‘of a kind that would enable the producer to discern or determine the overall design of the DSGL goods, or any means of producing or reverse engineering the DSGL goods as a whole.’
7C Exception to offence – elapsed period
The Go8 does not object to the proposed elapsed period of six months for goods or technology in the scope of the Sensitive List of Dual-use goods and technologies to be acceptable.
The Go8 urges the Government to confirm the elapsed period in relation to DSGL Part 1 goods and technology as soon as possible, to reduce uncertainty.
The Go8 recommends the Explanatory Statement provide more detail of the basis on which the elapsed periods are determined, for example if it is based on the expected timeframes for technology development.
7D Exception to offence – supply of DSGL technology that is not a relevant supply
The Go8 supports this change and has no further comments.
19 At the end of Section 8
The Go8 supports the proposed criteria that the Minister needs to have regard to for assessing whether a supply of DSGL technology to a foreign person in Australia (10A) would or would not be prejudicial to Australia’s security, defence or international relations.
We recommend that guidance be provided as soon as possible to assist regulated bodies to determine the relevance or otherwise of the criteria to a supply of DSGL technology to a foreign person in Australia.
21 At the end of Part 6
The Go8 emphasises that new requirements for record keeping need to be risk proportionate. The Go8 notes the potential for the requirements to be misunderstood and misapplied, if it is not clear what circumstances do not attract the need for record keeping.
The Go8 supports the non-application as widely as possible of the new record-keeping requirements to supply of DSGL goods or DSGL technologies produced in the course of, or for the purposes, of fundamental research.
The Go8 emphasises the need for detailed guidance to support regulated bodies’ and individuals’ assessment of the need for record keeping, including by listing the circumstances in which records are not needed, and specifically – within the university context – guidance:
- where teaching activities may come under scope for this provision; and/or
- where software to which the fundamental research exemption for DSGL technology may not apply is transferred
Thank you again for the opportunity to provide this submission.
[1] Based on latest Department of Education figures available at https://www.education.gov.au/research-block-grants/resources/higher-education-expenditure-rd-higher-education-provider
