New labelling ruling opens loophole

THE DEMAND for all imported textiles, clothing and footwear to bear newly legislated labelling has met with another major complaint – one which could see an open season being declared on identity theft and fraud in SA, according to Phillip Abelheim, owner of a high-profile, designer-label retail chain. The problem, he told FTW, comes from the requirement that the labels not only indicate the country of origin, but also bear the importer’s registration number – or the manufacturer’s income tax number if goods are made locally from SA materials. Both of these, said Abelheim, are confidential, and revealing the importer’s number publicly would allow criminals to use the importer’s name and number for their own illegal imports. “With this, anyone could order using my import code and name and have the goods delivered to anywhere in SA – and I wouldn’t know a thing about it,” he said. “Also, if there was contraband included in the consignment and customs found out about it, their only recourse would be to come to me – and I’d be charged as the liable party.” The innocent party could contest the case, but this would be an expensive exercise both in time and legal cost. He was one of a group of these top-end clothing retailers who recently met with Shareen Osman, who sits at the department of trade and industry (dti) textiles, clothing, leather and footwear sector desk, and is a representative of SA Revenue Service (Sars) customs. “We were all agreed that – representing high-profile international brands – we would never be able to get these companies to put special numbers on such small orders,” said Abelheim. “And having to release our importer’s code licence number is just not on.” One source said they would only reveal the number if government carried indemnity for any wrongdoing under this system. It seems that customs sees this new labelling requirement as a way of establishing a “paper chain” back to the importer so that they can check if duty has been paid on the items. “But,” said Abelheim, “it’s asking honest importers who legally label their clothing to leave themselves open to criminal elements importing under their names and numbers. “It would be an open season in SA under these circumstances.” The alternative suggested by the retailer group was that they could use another means of identifying themselves – but not with a confidential number. The other question raised was whether the authorities would allow them to label their imports locally. The initial reaction to this was unfavourable, according to Abelheim, and seemed to be that this would require customs to rely on the importers being honest. “But,” he said, “they have to rely on my honesty in declaring my goods and paying duty. “So what’s the difference?”