Importing goods from overseas can be risky. Several legal issues arise when dealing with business partners from overseas, and these issues magnify when importing goods. In addition to maintaining a good relationship with the importer and complying with the relevant laws, you must familiarise yourself with the legal framework when importing goods from another country. This article is for Australian businesses that use, market or sell goods imported from a business overseas. It introduces the key legal issues and laws you need to be aware of when importing goods.
Australian Law Applies
For starters, there can often be confusion about which national law applies when goods are crossing national boundaries. However, other than minimal quantities imported for personal use, all consumer goods brought into Australia must be imported under Australian law.
Ensure you are aware of your obligations under the Australian Consumer Law (ACL), particularly where the manufacturer of the goods does not have a place of business in Australia. Under the ACL, an importer can be deemed a manufacturer and held liable for safety problems with the imported goods. This is the case even if the importer had no actual control over the manufacture of goods. The definition of manufacturer is broadened to include ‘deemed manufacturers’ when the actual manufacturer is not based in Australia or cannot be identified.
Licensing
There is no general requirement for importers to hold a government licence to import goods. Nevertheless, under some circumstances, you may need special permits to allow for clearance of the goods at the Australian border. The most common types of permits include:
- import;
- trade gate; and
- quarantine fees.
You must comply with the relevant laws under the different categories of fees to ensure your goods are imported as you planned.
This guide will help you to understand your corporate governance responsibilities, including the decision-making processes.
Dangerous Goods
Suppose the imported goods contain certain chemicals or poisons that may harm people. In that case, you will be subject to a wide range of legal obligations which apply to the transportation, packaging, handling, storage and labelling of such goods. Typical goods in this category include:
- cleaning products;
- poisons;
- industrial chemicals; and
- agricultural chemicals.
In some situations, you may need written permission, a permit or a licence to import dangerous goods. Otherwise, you could be fined, or the goods could be seized and destroyed. For example, in NSW, you would need a licence from SafeWork NSW to import explosives or security-sensitive dangerous substances (SSDS).
Goods Registration
“Therapeutic Goods” include any products which claim to have therapeutic effects, including:
- complementary medicines;
- medical devices; and
- pharmaceuticals.
Under “Therapeutic Goods” legislation, the goods’ importer is considered a ‘sponsor’.
Depending on the product, you may have certain obligations relating to compliance, licensing and notification requirements. Sponsors also have the burden of showing relevant evidence to support any claims made about the product on its packaging and advertising. You should be aware that there may be further compliance and registration obligations if you import chemicals used in the industrial, agricultural or veterinary sectors.
Signing a Contract with an Overseas Company
One of the most effective ways to mitigate the risks associated with dealing with an overseas exporter is to have a comprehensive export or import agreement that safeguards your interests. An export or import agreement is a legally binding contract once signed, and it outlines the terms and conditions of your arrangement with the exporter.
When drafting or reviewing your export or import agreement, several crucial terms should be carefully considered.
Governing Law
Firstly, it is essential to specify which laws will govern the agreement, considering both parties’ jurisdiction and any relevant international trade laws. This ensures that any disputes or legal issues can be resolved clearly and efficiently.
Intellectual Property Rights
Another critical consideration is the protection of intellectual property rights, including business logos, trademarks, and branding. Clearly defining the ownership and usage rights of such intellectual property in the agreement can prevent potential disputes or infringement.
Legal Title and Risk
The agreement should also clearly outline when the legal title and risk of the goods pass from the exporter to you. This includes specifying the point at which ownership and responsibility for the goods transfer, such as at the point of shipment or delivery, and the allocation of risk for loss or damage during transit.
Payment Terms
In addition, the agreement should outline the agreed-upon payment terms, including the currency, method, and timeframe for payments. This includes details on any down payments, instalment payments, or milestone payments that may be applicable, as well as any penalties or remedies for late or non-payment.
Liability
Lastly, the issue of liability for defective products should be addressed in the agreement. This includes establishing who bears responsibility for any defective or non-conforming goods and the procedures for handling issues, such as returns, replacements, or refunds.
Key Takeaways
If you are importing goods from overseas, you should consider speaking with a business lawyer. This is important to ensure that you lower your business risks and protect yourself as much as possible.
For more information, our experienced regulatory and compliance lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
When importing goods from overseas for your Australian business, there are several legal issues you should be aware of. First, you must ensure that you comply with Australian law, particularly the Australian Consumer Law (ACL), which can hold importers liable for safety problems with imported goods. Even if you had no control over the manufacture of the goods, you could still be held responsible for any safety defects. Additionally, you may need special permits, such as import, trade gate, or quarantine permits, to clear the goods at the Australian border. There may also be obligations related to dangerous goods, goods registration (particularly if the goods are classified as “therapeutic”) and signing a contract with an overseas company.
In general, importers are not required to hold a government licence to import goods into Australia. However, there may be specific permits or licences required for certain goods, such as dangerous goods or goods classified as “therapeutic” under Therapeutic Goods Administration laws. It is important to familiarise yourself with the relevant laws and regulations to ensure compliance and avoid fines or seizure of goods. Consulting with a business lawyer can provide you with guidance on any licensing requirements for your specific goods and circumstances.
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