No furore over Merchandise Act

The enforcement of the Merchandise Marks Act, which dictates very specific product labelling on the SA imports of clothing and textiles and footwear, has not caused the furore in the industry that was predicted a year ago when the SA Revenue Service (Sars) threatened to tighten the regulatory screws of the year-old act. In the first year after the act was promulgated, and effective from April 14, 2007, customs were lenient in enforcement, said Riaan de Lange of Tariff & Trade Intelligence. It aimed to prevent false trade descriptions of goods and their sales, and basically demanded that no textiles, clothing and footwear would be allowed to be imported without certain information being “attached permanently and prominently” to the goods. This labelling has to show the country where they were produced, and also demands that locally manufactured products using imported material must state “made in SA from imported material” – and conform to the SA national standards for fibre content and care labelling. But a release by Sars of an information circular on the subject on May 8 last year told the industry that a sword would now be wielded against those who failed to comply with the act. The Sars notice also said it would randomly detain consignments to conduct inspections, and goods that did not comply with the originlabelling requirement would be seized. And, said De Lange, if importers hadn’t complied, they faced pretty hefty penalties and fines. Any person found guilty of an offence in terms of the act were liable to: in the case of a first conviction, a fine not exceeding R5 000 for each article to which the offence relates, or imprisonment for a period not exceeding three years – or to both a fine and imprisonment; in the case of repeat offenders, a fine not exceeding R10 000 for each article, or imprisonment for a period not exceeding five years – or both. “In addition to any penalty, Sars can order the confiscation of all or any part of the offending goods which will be disposed.” But there was no sign of any major disruption of the import industry. “I had only one or two queries,” said De Lange, “even with Sars definitely putting the pressure on for certificates of compliance.” And the feedback from members of the textile import industry to Brian Brink, executive director of the Textile Federation, indicated an equally unworried attitude. “I got the sense that the appropriate labelling of consumer products is just about universal now in the industry,” he told FTW, “and every one of the large outfits, like the major clothing retail chains, reports that they are fully compliant.” An FTW shipping source at a big clothing retailer was equally complacent. “We get new laws which we’ve got to comply with as clothing importers,” he said. “So we comply.” He also said the forecasts of big costs for importers, and disruption to scheduled import contracts that were anticipated by some of the gloom-mongers in the industry, were all really imaginary. The increased unit costs on their big production runs were minimal, and the down-time in production runs as label changes were made was only temporary. “If you’ve got to do it,” our shipping source added, “you do it!”