Agents serving ‘grey’ importers face prosecution

Definition of importer covers wide spectrum ALAN PEAT THE CUSTOM clearing community could be placed at risk if involved in the importation of “grey goods”. This follows a host of cases in SA recently where accusations have been made about the illegal importation of counterfeit products, and the growing concern about “pirated” products appearing in ever-growing quantities on the local market. In one recent case a major retail chain was nailed by customs for importing what the authorities decided was a shipment of counterfeited padlocks. The SA Federation Against Copyright Theft meantime has vowed to crack down on flea market landlords whose traders are selling counterfeit goods. In this growing battle, what is the liability of clearing agents if their import customers are bringing in grey goods? They could technically get hit if their clients are doing so, but any prosecution may be defensible, according to Quintus van der Merwe, maritime specialist at attorneys Shepstone and Wylie. Questioned on the danger to c&f agents of the importation of counterfeit goods, Van der Merwe points out that there’s a very wide definition of an importer in the Counterfeit Goods Act - which means a wide spectrum of parties can be caught in the net. to page 12 from page 1 “There are two acts of interest,” he told FTW, “although common law also refers.” The first is 113A of the Customs & Excise Act - which gives officials fairly wide powers to detain goods suspected of being counterfeit. The second is in the Counterfeit Goods Act itself. Its definition of an importer includes any person who is the “owner” or “in control or possession of” the suspect goods; “acts as if owner or importer” of the goods; actually brings the goods into the Republic; or has “any beneficial interest” in the goods. Van der Merwe cites the EBN Trading case where “the Court found that a financier of goods had a beneficial interest” in the goods. An analysis of the case shows the net is cast very wide. This at a time when the SA market has been flooded with counterfeit goods from various jurisdictions, which tend to end up “on all sorts of street corners and with flea market vendors”, as Van der Merwe put it. “Notionally,” Van der Merwe added, “a c&f agent can be held liable, because the definition of importer gives such a big let. The prohibition of dealing in counterfeit goods is contained in section 2 of the Counterfeit Goods Act and does not provide for strict liability. In other words, the State or complainant would have to show that the c&f agent knew or should have known that the goods were counterfeit. Van der Merwe cautions that c&f agents have been pursued on a number of occasions. The suggestion from Customs is that the agent should check the customer’s integrity before getting caught up in a counterfeit goods net. Quintus van der Merwe É C&F agents have been pursued.