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Supplier responsibilities
Suppliers who fail to comply with product bans, mandatory standards or mandatory reporting requirements under the Australian Consumer Law may face enforcement action that attracts fines and pecuniary penalties.
Suppliers of a product may include the manufacturer, importer, distributor and retailer.
There will often be more than one supplier responsible for:
- compliance with the rules
- making sure products are safe and fit for purpose.
This is regardless of where they may be in the supply chain, or whether they are domestic or overseas suppliers.
How fines and penalties are determined
Only a court can determine the fine or penalty to be imposed in any court case.
The courts consider several factors when determining the appropriate fine or level of penalty.
The relevant law sets out the maximum penalty for any contravention. This may be:
- a monetary amount
- several ‘penalty units’, or
- some other method, such as turnover.
For more information on how fines and penalties are determined, including the current value of a penalty unit, see Fines and penalties on the ACCC website.
Criminal breaches
Some breaches of the law are criminal. In these cases, a criminal standard of proof applies. This is known as beyond reasonable doubt.
Criminal breaches can result in a monetary fine, which is imposed by the courts as a penalty in criminal proceedings.
Criminal breaches by individuals may also result in jail time.
Civil breaches
Some breaches of the law are civil. In these cases, the civil standard of proof applies. This is known as the balance of probabilities.
In civil cases, courts may impose pecuniary penalties.
Civil breaches do not result in jail time.
Product safety breaches attracting fines and penalties
Bans
A person who supplies a product or product related service that is the subject of a ban may be found guilty of a criminal offence.
Individuals
The maximum fine is $2,500,000.
Corporations
For a body corporate, the maximum fine is the greater of:
- $50,000,000
- if the Court can determine the ‘reasonably attributable’ benefit obtained, 3 times that value, or
- if the Court cannot determine the benefit, 30% of the corporation's adjusted turnover during the breach turnover period for the offence.
Civil penalties for the same amounts also apply.
Standards
A supplier may be found guilty of a criminal offence if they supply a product or product related service that fails to comply with a mandatory safety or information standard.
Individuals
The maximum fine is $2,500,000.
Corporations
For a body corporate, the maximum fine is the greater of:
- $50,000,000
- if the Court can determine the ‘reasonably attributable’ benefit obtained, 3 times that value, or
- if the Court cannot determine the benefit, 30% of the corporation's adjusted turnover during the breach turnover period for the offence.
Civil penalties for the same amounts also apply.
Where a safety standard specifies 2 or more sets of requirements for complying with the standard, the supplier must, if requested by a regulator, provide a notice specifying which set/s of requirements it intends to comply with.
Individuals
The maximum fine is $4,400.
Corporations
For a body corporate, the maximum fine is $22,000.
These are offences of strict liability. This means that a court may find a supplier breached the requirement, regardless of whether that supplier intended to breach a mandatory safety or information standard or fail to comply with a notification request.
Recalls
Compulsory recalls
A person who refuses or fails to comply with a compulsory recall notice may be found guilty of a criminal offence.
Individuals
The maximum fine is $2,500,000.
Corporations
For a body corporate, the maximum fine is the greater of:
- $50,000,000
- if the Court can determine the ‘reasonably attributable’ benefit obtained, 3 times that value, or
- if the Court cannot determine the benefit, 30% of the corporation's adjusted turnover during the breach turnover period for the offence.
Civil penalties of the same amounts also apply.
This is an offence of strict liability. This means that a court may find a person guilty, regardless of whether that person intended to refuse or fail to comply with a recall notice.
Voluntary recalls
Where a supplier undertakes a voluntary recall of a consumer good, they must notify the Commonwealth Minister within 2 days of taking a recall action.
The ACCC receives these notifications on behalf of the Minister and publishes them to the ACCC Product Safety website.
Suppliers that have supplied the recalled product to people overseas also need to tell those people and give the ACCC a copy of that notice within 10 days.
A supplier who fails to notify a voluntary recall within 2 days of taking recall action may be found guilty of a criminal offence.
Individuals
The maximum fine is $3,330.
Corporations
For a body corporate, the maximum fine is $16,650.
Mandatory incident reporting
Suppliers must notify the Commonwealth Minister within 2 days of becoming aware that a person suffered serious injury, illness or death associated with a consumer good or product-related service they have supplied in Australia or overseas.
A supplier who fails to do this may be found guilty of a criminal offence.
Individuals
The maximum fine is $3,330.
Corporations
For a body corporate, the maximum fine is $16,650.
Resolving breaches of product safety regulations
If a supplier is found to be supplying consumer goods or product related services that breach a mandatory standard or are banned, making sure that the goods or services are removed from the marketplace is one way to address product safety risks to consumers.
The ACCC or the state or territory regulator may indicate that suppliers should take action to recall the goods. This includes to:
- immediately stop the supply of the consumer goods or product related services
- remove the goods from retail outlets
- retrieve the consumer goods from the supply chain and from consumers.
The ACCC or the state or territory regulator assesses what compliance and enforcement action may be appropriate in the circumstances. They consider a range of factors when making this assessment. These include:
- the seriousness of the safety hazard – how much damage it has caused or is likely to cause
- the volume of goods supplied
- the blatancy of the breach
- the supplier’s past conduct
- the extent to which the supplier cooperates.