7.7.1 Making a departure prohibition order

Summary

The Secretary can make a DPO, preventing an individual with an FA debt from leaving Australia.

Making a DPO

The Secretary has the discretion to make a DPO in a case where all 3 conditions below are satisfied:

• the relevant individual has one or more outstanding FA debts
• they have not made satisfactory arrangements to wholly discharge their debts, and
• the Secretary believes it is desirable to make such an order to ensure that they do not leave Australia without wholly repaying their debts or making satisfactory arrangements to do so.

Before making an order, the Secretary must also take the following matters into account:

• the individual's capacity to pay debt/s
• whether any debt recovery action has been taken and the outcome of the recovery action
• the length of time the debt/s have remained unpaid (after the day on which it became due and payable), and
• any other matters as the Secretary considers appropriate.

What constitutes a satisfactory repayment arrangement will depend on the facts of the case.

The Secretary cannot make a DPO unless all of these conditions are satisfied. Furthermore, as a DPO places significant restrictions on the debtor's freedom of movement, the Secretary will not make a DPO without considering all the relevant circumstances.

Secretary believes it is desirable to make a DPO

The purpose of a DPO is to secure payment of an individual's FA debts. As such, the Secretary will not make a DPO unless there are grounds for the reasonable belief that making the order will make recovery of the debt more likely.

Situations where a DPO may be appropriate include:

• The debtor is about to leave Australia - regardless of any plans to return.
• The debtor is transferring assets offshore, either directly or indirectly (for example, borrowing funds overseas by securing Australian assets).
• The debtor has resources, whether financial or otherwise, that would enable them to live offshore, such as family, assets, employment or a business.

Departure from Australia prohibited

A DPO made against an individual will prevent them from leaving Australia before either discharging all their debts or making satisfactory arrangements to do so.

A DPO places significant restrictions on the freedom of movement of citizens and residents of Australia and visitors to Australia, and will not be made without consideration of all relevant circumstances.

A DPO does not prohibit travel to Australia's external territories (for example, Christmas Island, Norfolk Island).

Once a DPO is made, it is in force from the time it is made until it is revoked or set aside by a court. However, the Secretary must revoke a DPO in certain circumstances and may revoke or vary it in other circumstances. The Secretary can revoke or vary a DPO after becoming aware of new information or in response to representations made by the debtor.

Revoking a DPO

The Secretary must revoke a DPO in any of the following 3 circumstances:

1. The debts have been wholly discharged.

   This condition is met when any combination of repayments, debt waivers or write-offs results in no portion of the debtor's debts being repayable.

2. The Secretary is satisfied that there are satisfactory repayment arrangements to wholly repay these debts.

   A common sense approach is required to determine whether arrangements are satisfactory in each case. A repayment arrangement that requires the presence of the debtor in Australia to function is not a satisfactory arrangement. Where the debtor has sold property and needs to leave Australia before settlement occurs, a garnishee notice in relation to the known proceeds would be a satisfactory arrangement.

3. The Secretary is satisfied that the debts will be completely irrecoverable.

   An individual's debt will be regarded as completely irrecoverable when there is no prospect that the debtor will be able to make any payment towards it.

Even when the tests outlined above are not satisfied, the Secretary has the discretion to revoke a DPO where they believe it is desirable to do so. The Secretary will exercise this discretion in a way that supports the intended policy.

Varying a DPO

The Secretary also has discretion to vary a DPO. They can only use this discretion to correct errors on the face of the order.

The Secretary will not vary a DPO to allow a debtor to depart Australia. Where the Secretary is satisfied that it is appropriate and necessary for a debtor to depart Australia, for a defined period, the Secretary will either revoke the DPO or issue a DAC.

Notification requirements to make, vary or revoke a DPO

Where the Secretary makes a DPO in respect of an individual, the Secretary must notify:

• the individual to whom the DPO applies
• the Australian Border Force
• the Australian Federal Police, and
• where the individual is not an Australian citizen, the Department of Home Affairs.

Due to the consequences of a DPO, the Secretary will make every effort to ensure that the individual receives a copy of the DPO as soon as possible after the order is made.

Where the Secretary makes a decision to vary or revoke a DPO, the individual to whom the order applies and any other individual to whom a copy of the order was provided must be notified. The Secretary must also notify the individual where they have rejected the individual's application to vary or revoke a DPO.

Enforcement

Australian Border Force officers and members of the Australian Federal Police are authorised to prevent the overseas departure of an individual subject to a DPO.

If an officer believes that an individual is about to depart from Australia when a DPO is in force and without a DAC, they can require the individual to answer questions or produce documents.

An individual is required to answer these questions, even if the answers may incriminate them or expose them to a penalty. However, their answers are not admissible in evidence against them except in relation to a prosecution for providing false or misleading information or documents.

Offences

It is an offence for an individual to depart from Australia for a foreign country:

• knowing that, or reckless as to whether, a DPO is in force, and
• the individual's departure is not authorised by a DAC, and the individual knows the departure is not authorised by such a certificate, or is reckless as to whether the departure is authorised by such a certificate.

Penalty: Imprisonment for 12 months.

An individual commits an offence if they fail to answer a question or produce a document that would assist an officer to establish whether a DPO is in force or whether the individual has a DAC, and they are capable of doing so.
Penalty: 30 penalty units.

It is also an offence of strict liability if an individual who has a valid DAC fails to produce the certificate at the request of an authorised officer.
Penalty: 5 penalty units

An individual who provides false or misleading answers to questions commits an offence and can be prosecuted.
Penalty: Imprisonment for 12 months.

An attempt to commit any of these offences is punishable as though the actual offence had been committed.