International trade business law, policy and ethics

LAW, POLICY AND ETHICSCavendish Publishing Australia Pty Limited Sydney • London Professor Peter Gillies, MA, LLB, PhD Landerer Professor of Business Law School of Economics and Financia

LAW, POLICY AND ETHICS

Cavendish Publishing (Australia) Pty Limited Sydney • London

LAW, POLICY AND ETHICS

Cavendish Publishing (Australia) Pty Limited Sydney • London

Professor Peter Gillies, MA, LLB, PhD

Landerer Professor of Business Law

School of Economics and Financial Studies

Macquarie University

Professor Gabriël Moens, JD, LLM, PhD

Professor of Law and Director

Australian Institute of Foreign and Comparative Law

TC Beirne School of Law The University of Queensland

43 Albert Road, Avalon, Sydney, New South Wales 2107

Any person who infringes the above in relation to this publication may be liable to criminalprosecution and civil claims for damages

Australia Cataloguing in Publication Data

Gilles, Peter

International Trade and Business: Law, Policy and Ethics

1 Foreign trade regulation 2 International business enterprises—Law and legislation

I Moens, Gabriel, 1948 II Gilles, Peter, 1938

341.75

ISBN 1 876213 25 6

Printed and bound in Great Britain

Chapter 1: The United Nations Convention on Contracts for the International Sale of

Goods (Professor Peter Gillies)

Chapter 2: The UNIDROIT Principles of International Commercial Contracts (Mr

Julian David Wagner with the assistance of Professor Gabriël A Moens)

Chapter 3: International Commercial Trade Terms—Incoterms 1990 (Professor Peter

Gillies)

Chapter 4: Carriage of Goods by Sea (Mr Howard Broderick)

Chapter 5: Carriage of Goods by Land and Air (Mr John Livermore)

Chapter 6: Financing Exports: Letters of Credit

(Professor Gabriël A Moens and Mr Ted Tzovaras)

Chapter 7: The General Agreement on Tariffs and Trade (GATT) and the World Trade

Organisation (WTO) (Mr Alexander Low)

Chapter 8: Anti-dumping and Countervailing Laws in the United States, Australia and

New Zealand (Mr ANG Smith)

Chapter 9: Trading Blocs: NAFTA (Mr Simon Fisher)

Chapter 10: Trading Blocs: the European Union (Professor Gabriël A Moens)

Chapter 11: International Commercial Arbitration

(Dr Suri Ratnapala and Ms Linda Haller)

Chapter 12: Extraterritorial Control of Business (Mr Alexander Bates)

This book deals with the core topics of international trade, which include internationalsales contracts, international commercial terms, carriage of goods by sea, land and air,financing of exports, regulation of imports, international commercial arbitration,extraterritorial control of business, and trading blocs.

Every chapter offers a description and analysis of the relevant law, policies and, insome cases, relevant ethical issues, tutorial questions, and a short list of references Inaddition, the most important international documents are reproduced in full or in part

to facilitate the study of international commercial law

International trade and business law courses are increasingly offered by most lawand business schools This increase is a response to repeated requests, by the legal andbusiness communities, to provide courses for lawyers and business people to enablethem to provide expert advice on international business practices and export trade law

In particular, International Trade and Business: Law, Policy and Ethics is aimed at

students and practitioners, who are interested in international business transactionsand want to gain familiarity with the law and practice of international trade law,policies and ethics It is also hoped that this book will be used by academics as theirteaching and research tool in international trade and business law courses However,the book is not limited to law since it also aims to cover trade and business policies Inaddition, the book also deals with relevant ethical issues

We would like to thank the contributors to this volume Without their dedicationand commitment this book would not have been completed The editorial processwas greatly facilitated by the excellent work of Cavendish Publishing, London whoensured that the book met the highest editorial standards The editors and contributorsare also indebted to Jo Reddy, Managing Editor at Cavendish Publishing, Londonwho decided to publish this book and provided us with moral support throughoutthis project

Professor Peter Gillies Professor Gabriël A Moens

March 1998

Contributors v

UNITED NATIONS CONVENTION ON

CONTRACTS FOR THE INTERNATIONAL SALE

OF GOODS (VIENNA SALES CONVENTION)

United Nations Convention on Contracts for the

United Nations Convention on Contracts for the

CONVENTION ON THE LAW APPLICABLE

TO CONTRACTS FOR THE INTERNATIONAL

SALE OF GOODS, THE HAGUE—

Convention on the Law Applicable to Contracts for the

UNIDROIT PRINCIPLES OF INTERNATIONAL

Introduction of the Governing Council of UNIDROIT,

UNIDROIT PRINCIPLES OF INTERNATIONAL

THE INCOTERM CATEGORIES, STRUCTURE

Delivered at frontier (DAF) 167

COMPARISON OF HAGUE RULES, AMENDED

ARGUMENTS AGAINST THE INTRODUCTION

INTERNATIONAL CONVENTION FOR THE

UNIFICATION OF CERTAIN RULES OF LAW

RELATING TO BILLS OF LADING

International Convention for the Unification of Certain

ANNEX 225

INTERNATIONAL RAIL AND ROAD CARRIAGE

CONVENTION FOR THE UNIFICATION OF

CERTAIN RULES RELATING TO INTERNATIONAL

CARRIAGE BY AIR (WARSAW

UNIFORM RULES CONCERNING THE

CONTRACT FOR INTERNATIONAL CARRIAGE

CARRIAGE OF GOODS BY ROAD ACT 1965—

SCHEDULE—CONVENTION ON THE CONTRACT

FOR THE INTERNATIONAL CARRIAGE OF

AGREEMENT ON MEASURES TO IMPLEMENT

BASIC FORMS AND TYPES

THE PRINCIPLE OF AUTONOMY OF THE

ON TARIFFS AND TRADE (GATT) AND

THE GENERAL AGREEMENT

THE LEGAL PRINCIPLES OF THE GATT 447

AGREEMENT ESTABLISHING

THE GENERAL AGREEMENT

UNDERSTANDING ON RULES AND

PROCEDURES GOVERNING THE SETTLEMENT

IN THE UNITED STATES, AUSTRALIA AND

A BACKGROUND TO THE

CURRENT INTERNATIONAL ANTI-DUMPING

A BRIEF HISTORY OF NATIONAL ANTI-DUMPING

AUTHORITIES INVOLVED IN THE

ADMINISTRATION OF ANTI-DUMPING

THE GATT 1994 AGREEMENT ON SUBSIDIES

NATIONAL LEGISLATION IMPLEMENTING

SAFEGUARDS—AS OPPOSED TO DUMPING

APPENDIX— A SUMMARY OF THE GATT 1994

FURTHER READING 612

AGREEMENT ON IMPLEMENTATION OF

ARTICLE VI OF THE GENERAL AGREEMENT

AGREEMENT ON SUBSIDIES AND

THE THREE EUROPEAN COMMUNITIES

CAPITAL AND PAYMENTS 710

Elimination of customs duties and establishment

THE STATUTORY FRAMEWORK OF

INTERNATIONAL COMMERCIAL

ARBITRATION IN AUSTRALIA 732

RECOGNITION AND ENFORCEMENT OF

JUDICIAL REVIEW OF ARBITRAL AWARDS: THE

Judicial review under the Commercial Arbitration

COMMERCIAL LAW OF THE EC 781

Abraham and Sons v Commissioner for Railways [1958] SR (NSW) 134 289

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Allied Corporation and Others v Commission [1984] ECR 1005 797Amazonia, The [1989] 1 Lloyd’s Rep 403 742American Airlines v Ulen [1949] US Av R 338 310American Banana Co v United Fruit Co 213 US 347 (1909) 798American Spring Wire Corp v United States 590 F Supp 1273 (1984) 606Amstelslot, The [1963] 2 Lloyd’s Rep 223 196Amsterdam Bulb BV v Hoofdproduktschap voor Siergewassen

Anders Maersk, The [1986] 1 Lloyd’s Rep 483 190Angus v London, Tilbury and Southend Railway Co (1906) 22 TLR 222 (CA) 256Anne Marty SA v Estée Lauder SA (Case 37/79) [1980] ECR 2481; [1981] 2 CMLR 143 781Ansett Transport Industries (Operations) Pty Ltd v Commonwealth and Others

Antill Ranger and Co Pty Ltd v Commissioner for Motor Vehicle Transport

Arcweld Constructions Pty Ltd v Smith (1986) unreported

Aries Tanker Corp v Total Transport Ltd, The Aries [1977] 1 Lloyd’s Rep 334 193Artic Electronics Co (UK) Ltd v Mcgregor Sea and Air Services Ltd

Atlantic Sun, The [1972] 1 Lloyd’s Rep 509 749Auckland Harbour Board v Comptroller of Customs (1992) 3 NZLR 392 608Australian National Airways Pty Ltd v The Commonwealth (1945) 71 CLR 39 300Bamfield v Goole and Sheffield Transport Co [1910] 2 KB 94 265

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SV SABAM and NV Fonier (Case 127/73) [1974] ECR 51; [1974] 2 CMLR 238 770, 778, 781

BHP v Hapag-Lloyd A/G (1980) 2 NSWLR 572 253Birtly v Windy Nook (No 2) [1960] 2 QB 1 750Blackwell v Derby Corp (1911) 75 JP 129 736

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Briddon v GN Railway (1853) 28 LJ Ec 51 254Brilawsky v Robertson and Cannell (1916) 10 QJPR 113 255British Telecommunications, Re [1983] 1 CMLR 457 776British Traders Ltd v Ubique Transport Ltd [1952] 2 Lloyd’s Rep 236 254Brookes v London Passenger Transport Board [1947] 1 All ER 506 256Brooks Wharf and Bull Wharf Ltd v Goodman Bros [1937] 1 KB 934 253Brother Industries Ltd and Others v Commission [1988] ECR 5655;

Brown-Boveri (Aust) Pty Ltd v Baltic Shipping Co Ltd (The Nadezhda Krupskaya)

(1989) 1 NSWLR 448; [1989] 1 Lloyd’s Rep 518 176, 198Buchanan (James) & Co Ltd v Babco Forwarding & Shipping (UK) Ltd [1978]

Canon Inc v Council [1988] ECR 5731; [1989] 1 CMLR 915 785, 786, 789Cape Asbestos Co v Lloyd’s Bank [1921] WN 274 390Captain Gregos [1990] Lloyd’s Rep 310 185, 186Captain v Far East Steamship Co [1979] 1 Lloyd’s Rep 595 190

Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 15Carlton United Breweries Ltd v Minister for Customs (C.P25/86) 590Carrington Steamship v Commonwealth (1921) 29 CLR 596 736Cashmore v Chief Commissioner for Railways and Tramways (NSW) (1915) 20 CLR 1 256Cayrol v Giovanni Rivoira e Figli (Case 52/77) [1977] ECR 2261;

Chemidus Wavin Ltd v Société pour la Transformation et l’Exploitation des

Résiners Industrielles SA [1987] 2 CMLR 387 770China Ocean Shipping Co v PS Chellaram and Co (CA 762/88) unreported

Christian Poucet v Générates de France (Cases 159/91 and 160/91) [1993] ECR I 637 774Clark v Lelhberg [1969] Tas SR 190 (NC 11) 270

Commissioners for Railways (NSW) v Quinn (1946) 72 CLR 345 289Commonwealth v Rian Financial Services and Developments Pty Ltd

Compagnie d’Armement Maritime SA

v Compagnie Tunisienne de Navigation SA [1971] AC 572 744Confédération Nationale des Producteurs de Fruits et Légumes v Council

Coxan v Great Western Railway Co (1860) LJ Ex 165 287Criel v Procureur de la République at the Tribunal de Grand Instance

Crows Transport Ltd v Phoenix Assurance Co Ltd [1965] 1 WLR 383 253Daly v Commissioner of Railways (1906) 8 WALR 125 255Data Card Corporation v Air Express International Corporation [1983] 2 All ER 639 313

Delco Australia Pty Ltd v Darlington Futures Ltd (1987) 43 SASR 519 252Dillington Constructions v Downs (1969) 90 WN (Part 1) NSW 258 736Directive on Animal Semen, Re EC Commission v Ireland (Case C236/91)

Electric Supply Stores v Gaywood (1909) 100 LT 855 255Eleftheria, The [1969] 1 Lloyd’s Rep 237 195, 196Elizabeth, The [1962] 1 Lloyd’s Rep 172 736EMI Records Ltd v CBS (UK) Ltd (Case 51/75) [1976] ECR 811;

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Extraordinary Customs Clearance, Re, EC Commission v Italy (Case 24/68)

Gatewhite Ltd v Iberia Lineas Aereas de Espana SA [1989] 1 All ER 944 312Gee v Metropolitan Railway Co (1873) LR 8 QB 161 256General Motors Continental BV v Commission (Case 26/75) [1975] ECR 1367 778Gestetner Holdings plc v Council and Commission [1990] 1 CMLR 820 790, 798Gian Singh and Co Ltd v Banque de l’Indochine [1974] 1 WLR 1234 400Gibbons v Ogden 22 US (9 Wheat) 1, 7, 6 L Ed 23, 69 (1924) 773Goldman v Thai Airways International Ltd [1983] 1 WLR 1186 310Goldsborough v McCulloch (1868) 5 WW and A’B(L) 154 255Golodetz (M) and Co Inc v Czarnikow-Rionda Co Inc, The Galatia [1980] 1 WLR 495 402, 405Grace Bros Pty Ltd v Rice (1976) 10 ALR 185 257Grad v Finanzamt Traunstein [1971] CMLR 1 713

Hadley v Baxendale (1854) 9 Ex 341 35, 36, 96, 255Hair and Skin Trading Co Ltd v Norman Air Freight Carriers and World

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Hamzeh Malas and Sons v British Imex Ltd [1958] 2 QB 127 391, 410Hansson v Hamel and Horley Ltd [1922] 2 AC 36 405

Harbottle (RD) (Mercantile) Ltd v National Westminster Bank Ltd [1978] QB 146 388Harbour Assurance Co (UK) Ltd v Kansa General International Assurance Co Ltd

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Hayes v Brisbane City Council [1979] 5 QL 269 255Hellenic Republic v Council [1989] ECR 3963 792Heugh v L and NW Railway (1870) LR Ex 51 254

Hill (DH) & Co v Walter H Wright Pty Ltd [1971] VR 749 252Hoffmann-La Roche and Co AG v Centrafarm Pharmazeutischer Erzeugnisse

GmbH (Case 102/77) [1978] ECR 1139; [1978] 3 CMLR 217 780Hoffmann-La Roche and Co AG v Commission (Case 85/76)

Horabin v British Overseas Airways Corporation [1952] 2 All ER 1016 309, 310Horne v Midland Railway (1873) LR 8 CP 131 255Hortico (Australia) Pty Ltd v Energy Equipment Co (Australia) Pty Ltd

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Import Ditoes on Gingerbread, Re, Commission v Grand Duchy of Luxemburg

and Kingdom of Belgium [1963] CMLR 199 715

Imports of Animal Semen, Re, EC Commission v Ireland (Case 235/91) [1993]

Inflatable Toy Co Pty Ltd v State Bank of New South Wales (1994) 34 NSWLR 243 419Inntrepreneur Estates Ltd v Mason [1993] 2 CMLR 293 713, 770, 778Instituto Chemioterapico Italiano SpA and Commercial Solvents

Corporation v Commission (Joined Cases 6/73 and 7/73)

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Kunze v Vowles, ex p Vowles (1955) QSR 591 270L’Oréal v De Nieuwe AMCK (Case 31/80) [1980] ECR 3775; [1981] 2 CMLR 235 778Lee and Sons Pty Ltd vAbood (1968) 89 WN (NSW) (Pt 1) 430 251Life Savers (Australia) Ltd v Frigmobile Pty Ltd [1983] 1 NSWLR 431 252Lisi v Alitalia-Linee Aeree Italiane SpA [1967] Lloyd’s Rep 140; F 2d 508

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Shipping Corp of India Ltd v Gamlen Chemical Co (Australasia) Pty Ltd

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Skinner v Upshaw (1702) 2 Ld Raym 752 255

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SS Pharmaceutical Pty Ltd v Qantas Airways Ltd [1991] 1 Lloyd’s Rep 288 200, 313, 314State Rail Authority (NSW) v Everson (1985) unreported (Supreme Court

Stockdale v Lancashire and Yorkshire Railway Co (1863) 8 LT 289 256Stoneham v Ryan’s Removals Ltd (1979) 23 ALR 1 257Suisse Atlantique Société d’Armement SA v NV Rotterdamsche Kolen Centrale

Svenska Traktor Akt v Maritime Agencies (Southampton) [1953] 2 Lloyd’s Rep 124 186Swiss Bank v Brinks Mat [1986] 2 Lloyd’s Rep 79 306, 307Szteijn v J Henry Schroder Banking Corporation 31 NYS 2d 631

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(1937) 37 (NSW) 504; [1937] 54 WN 201 271Taylor v GN Railway (1866) LR 1 CP 385 254Technointorg v Council and Commission [1988] ECR 6077; [1989] 1 CMLR 281 789, 796Tepea BV v Commission (Case 28/77) [1978] ECR 1391; [1978] 3 CMLR 392 771, 775, 776Tetra Pak Rausing v Commission (Case T51/89) [1990] ECR II 309 778Thermo Engineers Ltd v Ferrymasters Ltd [1981] 1 Lloyd’s Rep 200 295, 296Thompson v Commissioner for Railways (1863) 2 SCR (NSW) 292 256Timberlane Lumber Co v Bank of America 549 F 2d 597 (1976) 799Timex Corporation v Council and Commission

[1985] ECR 849; [1985] 3 CMLR 550 792, 797TNT Pty Ltd v May and Baker (Australia) Pty Ltd (1966) 115 CLR 353 252

Tokyo Electric Co Ltd v Council [1988] ECR 5855; [1989] 1 CMLR 169 785, 789Tradesman, The, SA Hersent v United Towing Co Ltd [1961] 1 WLR 61 739Trans World Airlines Inc v Franklin Mint Corporation [1952] 3 Lloyd’s MCLQ 453 315Trickett v Queensland Insurance [1936] AC 159 251Tukan Timber Ltd v Barclays Bank plc [1987] 1 Lloyd’s Rep 171 413Turnleys Pty Ltd v Commissioner for Railways [1955] SR Qd 4 291Tzoritz v Monarch Line AB [1968] 1 WLR 406 752Ulster Bank v Synott (1871) 5 IREq 595 413Ulster-Swift Ltd v Taunton Meat Haulage Ltd [1977] 1 Lloyd’s Rep 346 294–97Union Laitiere Normandie v French Dairy Farmers Ltd (Case 244/78) [1979] ECR 1629 712United Brands Co and United Brands Continental BV v Commission

(Case 27/76) [1978] ECR 207; [1978] 1 CMLR 429 777–80United City Merchants (Investments) Ltd v Royal Bank of Canada,

The American Accord [1985] 1 AC 168 414, 415United City Merchants (Investments) Ltd v Royal Bank of Canada [1982] QB 208 388United International Stables Ltd v Pacific Western Airlines (1969)

5 DLR 367 (Supreme Court of British Columbia) 306United States v Aluminium Co of America (ALCOA) 148 F 2d 416 (1945) 778, 798Upperton v Union-Castle Mail Steamship Co Ltd (1902) 19 TLR 123 256

US Steel Products Co v GW Railway [1916] 1 AC 189 255Van Duyn v Home Office [1974] ECR 1337 713Verenigingter Bevordering van het Vlaamse Boekwezen (VBVB) and Vereniging

ter Bevordering van de Belangen des Boekhandels (VBBBV) v Commission

(Joined Cases 43/82 and 63/82) [1984] ECR 19; [1985] 1 CMLR 27; [1985] CMR 14 774Vereniging van Cementhandelaren v Commission (Case 8/72)

Victoria Laundry (Windsor Ltd) v Newman Industries Ltd [1949] 2 KB 528 255Viho Europe BV v Commission (Case T102/92) [1995] ECR II 17 774Vita Food Products Inc v Unus Shipping Co Ltd [1939] AC 277 182Voest-Alpine International Corporation v Chase Manhattan Bank 707 F 2d 680 (1983) 387Volk v Vervaecke (Case 5/69) [1969] ECR 295; [1969] CMLR 273 776

Wallis v Downard Pickford (North Queensland) Pty Ltd (1992) unreported 257Wattmaster Alco Pty Ltd v Button (1985) 8 FCR 471 608Westminster Bank v Imperial Airways Ltd [1936] 2 All ER 890 307Westpac Banking Corporation v South Carolina National Bank

Whitchurch v Commissioner for Railways (1901) 4 WALR 53 255

White v John Warwick & Co Ltd [1953] 1 WLR 1285 252White v South Australian Railways Commissioner (1919) SALR 44 288White v South Eastern Railway (1885) 1 TLR 391 (DC) 287Wibau Maschinen Fabric Hartman SA v Mackinnon Mackenzie and Co

Wing Hang Bank Ltd v Japan Airlines 357 F Supp 94 DCNY (1973) 307Wood Hall Ltd v Pipeline Authority (1979) 141 CLR 443 410Woods v Thiedemann (1862) 1 H and C 478 413Worldwide Carriers v Ardtran [1983] 1 All ER 692 297Young Jewel Manufacturing Co v Delta 414 NYS 2d 528 (1979) (App Div) 307

Z Ltd v A-Z and AA-LL [1982] 1 QB 558 417Zenith Radio Corp v United States 437 US 443 (1978); 98 S Ct 2441, 2444,

Zoni, Re [1988] ECR 4285; [1990] 1 CEC 570 722Züchner v Bayerische Vereinsbank AG (Case 172/80) [1981] ECR 2021;

Air Services Act 1995 326

Air Transport Act 1964 (NSW) 299

Airline Agreement Act 1981 (Cth) 324

Airline Agreement (Termination)

Act 1990 (Cth)—

Airline Equipment Act 1958 (Cth) 325

Airports (Business Concessions)

Carriage of Goods by Land (Carrier’sLiability) Act 1967 (Qld) 257Carriage of Goods by Land (Carrier’s

Liability) Act Repeal Act 1993(Qld) (no 13 of 1993) 257COGSA Carriage of Goods by

Carriers Act 1891 (SA) 250

Carriers Act 1920 (WA) 250

Carriers and Innkeepers Act 1958 (Vic) 250

Civil Aviation Act 1988 (Cth)—

Sch 2 Arts 26(2)–(4), 28(1) 318Sch 2 Art 29(1) 318Sch 2 Arts 30, (3), 31, 31A 317Sch 2 Art 31(1) 318Sch 2 Art 31(2), (3) 317Sch 2 Arts 32, 35 318Civil Aviation (Carrier’s Liability)

Amendment Bill 1991 315

Civil Aviation LegislationAmendment Act 1995 326Civil Aviation Regulations (Cth)

(SR 1988 no 158) 301Commercial Arbitration

s 44 733

Commercial Passenger (Road)

Transport Act 1991 (no 34 of 1991) 283

Commercial Passenger (Road)

Transport Act 1992 (no 29 of 1992) 283

Commercial Passenger (Road)

Commonwealth Powers (Air

Transport) Act 1952 (Tas) 298

1984 (Act) 265, 289Dangerous Substances Act 1976 (SA) 265, 289Evidence Act 1919 280Explosive and Dangerous Goods

Federal Airports Corporation

Government Railways Act 1904 (WA)—

ICSID Implementation Act 1990 (Cth) 686

Industry Commission Act 1990 (Cth) 268

1989 (Cth) 264, 266

Motor Vehicles Insurance Acts 1936–59 276

Motor Vehicle Taxation Act 1981 281

Motor Vehicles Taxation Act 1988 270

Mutual Recognition Act 1992 (Cth) 690

Mutual Recognition (Australian Capital

Territory) Act 1992 (Act) 690

Mutual Recognition (Northern

National Road Transport CommissionAmendment Act 1992 (Cth)(no 149 of 1992) 259, 262Sch 2 Recitals C, E 259Sch 2 Recital F260Northern Territory Acceptance

Passenger Movement Charge Act 1978 326Passenger Movement Charge

Amendment Act 1995 (Cth) 326Passenger Movement Charge

Collection Act 1978 326Passenger Movement Charge CollectionAmendment Act 1995 326Passenger Transport Act 1990 271

(no 44 of 1995) 324Queensland Act 1967 257