Understanding the Role of Australian Importers as Manufacturers: ACCC Requirements

Australia’s market is characterized by a diverse range of products, many of which are imported from around the globe. For Australian businesses involved in importing goods, compliance with the Australian Competition and Consumer Commission (ACCC) requirements is paramount, particularly when these businesses are deemed manufacturers.?

Yesterday, I was fortunate enough to meet with one of these businesses; a large Brisbane based textiles importer and distributor. A key point which we discussed was the importance of Australian importers being recognized as manufacturers under the ACCC guidelines.

According to the ACCC, an entity is considered a manufacturer if it:

1. Produces goods.
2. Assembles goods.
3. Imports goods into Australia where no Australian manufacturer exists.

For many Australian businesses, the third point is particularly significant. When businesses import goods, they may be considered the manufacturer if the product is intended for sale within Australia and there is no other entity in Australia that undertakes significant manufacturing processes for the product.?

This designation is crucial because it places various legal and regulatory responsibilities on the importer. When an importer is deemed a manufacturer, several key responsibilities arise:

1. Product Safety: Importers must ensure that the products meet Australian safety standards. This involves conducting due diligence to verify that the products comply with relevant safety regulations and standards before they enter the Australian market.
2. Labelling and Instructions: Products must be appropriately labelled with information such as the country of origin, instructions for use, and any relevant warnings. This information must be clear, accurate, and in compliance with Australian labelling requirements.
3. Product Recalls: In the event of a product safety issue, the importer is responsible for conducting a product recall. This includes notifying the ACCC, informing consumers, and taking the necessary steps to remove the product from the market and address safety concerns.
4. Liability for Defects: Under the CCA (Competition & Consumer Act), if an imported product is found to be defective, the importer as the deemed manufacturer may be held liable for damages. This includes providing remedies to consumers, such as repairs, replacements, or refunds.
5. Compliance with Standards: Importers must ensure that products comply with Australian mandatory standards and bans. This involves staying updated with changes in regulations and standards and ensuring ongoing compliance.

To navigate these responsibilities effectively, Australian importers can adopt several best practices:

1. Rigorous Supplier Vetting: Conduct thorough assessments of overseas suppliers to ensure they can consistently meet Australian standards. This includes regular audits and quality checks.
2. Documentation and Record-Keeping: Maintain comprehensive records of all product compliance documentation, safety certifications, and testing reports. This is essential for demonstrating compliance to the ACCC.
3. Ongoing Training and Awareness: Stay informed about changes in regulations and standards. Regular training for staff involved in the importing process can help ensure ongoing compliance.
4. Insurance Coverage: Consider obtaining product liability insurance to mitigate financial risks associated with product defects or recalls. Continued below.
5. Clear Communication Channels: Establish clear communication channels with overseas suppliers to ensure prompt action can be taken in the event of a compliance issue or product recall.

In addition to the above, it is imperative that your liability insurer is aware of your importing activities and that your policy is rated as such. Far too often we come across businesses who have been noted as a retailer/wholesaler for years, only for them to realise that they haven’t been insured appropriately.

Please refer to my recent article “The manufacturers safety net; Navigating the world of Product Recall Insurance” where we discuss how to protect your business from potential recall incidents.

As always, if you have any questions, be sure to reach out.

[email protected]

0449 863 905