Rules and regulations

New country of origin label requirements

In December 2006 Trade and Industry Minister, Mandisi Mpahlwa, signed a new regulation in terms of the Merchandise Marks Act on country of origin labelling, which came into effect on 14 April 2007.

The new regulations are a result of an investigation conducted by the trade and industry department into the influx of imported goods into the country. According to the Department, in the past many goods were imported with misleading labels stating that the goods were from SA when in fact they were not. The aim of the regulation is to act as a guardian of consumer interests.

Retailers will, from now on, be required to display permanently and prominently a label with the country in which certain products — including textiles and garments — was produced or made; an indication where a SA textile manufacturer has used imported griege fabric to produce dyed, printed or finished fabric; and whether such fabric has been dyed, printed or finished in SA from imported fabric.

In addition, retailers will have to give an indication, where a locally manufactured product uses imported material, that the product was made in SA from imported material. Even goods that have been reconditioned, rebuilt or remade (whether in SA or elsewhere), will have to state on a label that they have been reconditioned, rebuilt or remade as the case may be.

The goods must also conform to South African Bureau of Standards (SABS) requirements for fibre content and care labelling.

According to the regulations if one wants to attach a label to a product which states that the product is made in SA, then the label itself must be made in SA.

It also follows that if the product has been wholly assembled in SA, it is not considered as made in SA, and can thus not have the local production label attached to it as the materials used would not have originated from SA.

This should be easy enough to determine with reference to present certificates of origin which accompany the bill of lading on imported goods.

Thus, in a nutshell, this is what is required:

» Garments must display (permanently and prominently) a label indicating the country where the product was produced or made;
» The label must indicate whether a SA textile manufacturer has used imported fabric to produce dyed, printed or finished fabric; and whether this fabric has been dyed, printed or finished in SA from imported fabric;
» The label must indicate, where a locally manufactured product uses imported material, that the product was "made in SA from imported material";
» The label must stipulate whether the goods are reconditioned, rebuilt or remade and name of country of manufacture

The Department, in collaboration with the South African Revenue Service (SARS) and the SABS, will ensure enforcement of the regulations.

SARS can randomly detain consignments to conduct inspections. Failure to comply with this regulation could result in the goods being seized.

An offender, which could include a business, could find itself facing:

» a fine of up to R5 000 per article to which the offence relates and / or 3 years imprisonment on a first conviction
» R10 000 per item and / or 5 years imprisonment on a second conviction,
» a fine of R5000 and/or imprisonment of 3 years could be levied for each article which contravenes the regulations.