What is Parallel Importing and What Legal Issues Do I Need to Consider?

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Table of Contents

• Background: Parallel Imports in Australia 
• Obligations as a Seller of Parallel Imports
• Controlling the Quality of Parallel Imports
• Key Takeaways
• Frequently Asked Questions

Parallel importing, otherwise known as ‘grey importing’, occurs when:

• branded or otherwise trademarked products in an international market are imported into Australia by a person or entity other than the owner of the brand and/or trademark; or
• when a trademark licensee sells products beyond the geographical scope of their licence to importers.

If you are planning to sell any products online, which have been imported from overseas, this article sets out the key issues you should consider.

Background: Parallel Imports in Australia 

Section 123 of the Trade Marks Act 1995 (Cth) provides a defence against the infringement for parallel importation of trade marked goods or services. Previously, importers had the burden to obtain and prove they had consent. Accordingly, distributors could rely on the legislation to demonstrate infringement had occurred because they had not provided consent. 

Parallel importing has become easier since legal reforms have limited distributors relying on previous laws. Consent can now be reasonably assumed by parallel importers, which will make it harder for distributors in Australia to prevent parallel importing. 

Obligations as a Seller of Parallel Imports

If you decide to sell parallel imports, you will need to: 

• be aware of, and comply with, product safety and labelling requirements;
• provide accurate information to consumers about the products you sell;
• ensure that you do not mislead consumers about their refund, return and warranty rights; and
• understand your general obligations under the Australian Consumer Law (ACL) when selling these products.

You may also be required to comply with other laws for the importation of specific types of products. For example, if you decide you may import a therapeutic good, you will need to ensure you comply with obligations set out by the Therapeutic Goods Administration. Additionally, you must also generally enter the goods on the Australian Register of Therapeutic Goods (ARTG). 

Controlling the Quality of Parallel Imports

Parallel importing raises concerns about the quality of the products. If you import products from overseas to resell in Australia, here are some things you should consider:

• whether the products will have issues at customs;
• whether the products or ingredients of the products comply with Australian law;
• who will be responsible if the products are faulty or have defects;
• how you can ensure the quality of the products;
• how the products have been manufactured and tested;
• what happens if a consumer requires repairs on the products; and
• whether the products come with warranties and, if so, who will honour that warranty.

The quality of any products you resell is important. Selling products that are faulty or are not of merchantable quality exposes your business to potential liability. Liability can range from the hassle of dealing with complaints, to the issues involved with a major product failure.

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Key Takeaways

While parallel importing is an appealing strategy for new business owners, allowing you to source cheaper goods and enter the market at a competitive price point, it is important to be aware of the abovementioned considerations. 

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Frequently Asked Questions