Importing goods into Australia can be a lucrative opportunity for businesses, offering cost savings, access to unique products, and a competitive edge. However, it also comes with risks and legal obligations that must be carefully managed.
This article, written by our procurement contract lawyers, outlines how to protect your business when importing goods from overseas. You’ll learn key legal obligations, risk management strategies, and how to comply with Australian import regulations.
Key Takeaways
Comply with Australian import laws, including the Customs Tariff Act 1995 and Biosecurity Act 2015.
Reduce risk through supplier vetting, strong contracts, and clear quality controls.
Protect your business with insurance and effective financial recourse mechanisms.
Address modern slavery risks in your supply chain to avoid penalties and reputational damage.
Understand your responsibilities as a deemed manufacturer under the Australian Consumer Law (ACL).
Why Businesses Import Goods
Cost Advantages
Overseas manufacturing can dramatically reduce production costs.
Bulk purchasing often provides volume discounts.
Even after freight and duties, importing can remain more cost-effective than local production.
Access to Unique Products
Importing gives access to innovative or niche goods unavailable in Australia.
Offering exclusive products can set your brand apart from competitors.
Managing Import Risks and Insurance
Identifying and Evaluating Risks
Common import risks include:
Currency fluctuations
Freight damage or shipping delays
Political or economic instability in supplier regions
Fraud or non-delivery
Tools like SWOT and PESTEL analyses help evaluate exposure and plan contingencies.
Mitigation Strategies
- Use hedging instruments to manage currency risks
- Develop contingency plans for supply chain disruptions
- Establish clear communication protocols with suppliers
Insurance Options for Importers
- Cargo Insurance: Provides coverage for loss or damage to goods during transit, whether by land, sea, or air
- Marine Insurance: Offers protection against risks specific to sea freight, including piracy, adverse weather conditions, and other maritime hazards
- Credit Insurance: Protects businesses from the risk of non-payment by foreign or domestic buyers, ensuring financial security in trading transactions
Consult with insurance professionals to tailor a policy that fits your business’s specific needs. Comprehensive coverage ensures financial security and peace of mind.
Australian Import Regulations: How to Stay Compliant
Understanding the Regulatory Framework
Australian businesses must comply with strict import regulations to avoid penalties. Key legislation includes:
- Customs Tariff Act 1995: Governs import duties and tariffs
- Biosecurity Act 2015: Enforces biosecurity measures to protect Australia’s environment and agriculture
Adherence to Import Protocols
- Maintain thorough documentation, including commercial invoices, packing lists, and certificates of origin
- Engage a licensed customs broker to navigate complex tariffs and duties
For more information, visit the Australian Border Force website
Building Reliable Supplier Relationships
Conducting Due Diligence
- Verify suppliers’ financial stability and market reputation
- Visit manufacturing facilities to assess quality standards
- Request batch testing certificates as a condition of payment
Establishing Strong Contracts
A clear contract reduces misunderstandings and disputes.
Include:
Detailed product specifications and quality standards
Delivery timelines and payment conditions
Clauses on inspection, returns, and dispute resolution
Incoterms (e.g. CIF, FOB) to define buyer/seller responsibilities
Your Legal Responsibilities as an Importer
Deemed Manufacturer Under Australian Consumer Law
If the overseas manufacturer has no Australian presence, your business is treated as the manufacturer.
That means you’re legally responsible for safety, defects, and consumer guarantees under the Australian Consumer Law.
In plain terms: if a product you import is faulty or causes injury, your business (not the overseas factory) may face the consumer claim.
Intellectual Property Considerations
- For private label goods, ensure you license intellectual property (e.g. trademarks, designs) to the overseas manufacturer
- For non-private label goods, secure written agreements that allow you to market and sell the products
Addressing Modern Slavery Risks
Australia’s Modern Slavery Act 2018 (Cth) requires larger companies – and encourages smaller ones – to address exploitation risks in global supply chains.
Request and review your supplier’s modern slavery policy.
Conduct regular audits and site visits.
Terminate relationships with non-compliant suppliers.
Failure to act can result in legal penalties and serious reputational harm.
Financial Recourse for Defective Goods
To safeguard your business financially:
Have a detailed written supply agreement outlining warranties and returns.
Confirm the supplier maintains product liability insurance.
Retain partial payments until quality assurance is complete.
Consider product liability insurance for your own business to cover claims in Australia.
Frequently Asked Questions
What are the key risks of importing goods into Australia?
Key risks include currency fluctuations, transportation delays, political instability, fraud, and non–compliance with Australian regulations.
What documents are required for customs clearance in Australia?
Essential documents include commercial invoices, packing lists, certificates of origin, and any required import permits.
How can I ensure the quality of imported goods?
Conduct due diligence on suppliers, request batch testing certificates, and include quality specifications in your supply agreement.
What is the legal definition of a manufacturer under Australian Consumer Law?
A manufacturer includes businesses that import goods into Australia if the overseas manufacturer has no local presence.
How can I mitigate modern slavery risks in my supply chain?
Request modern slavery policies from suppliers, conduct due diligence, and monitor supply chains regularly to ensure ethical practices.
By implementing these strategies, Australian businesses can navigate the complexities of importing goods while minimising risks and maximising opportunities. For tailored legal advice on importing goods into Australia, contact our experienced commercial lawyers today.
