CTH Bill to Amend Country of Origin Laws Awaits Assent

Friday 30 October 2020 @ 3.15 p.m. | Legal Research | Trade & Commerce

On 27 October 2020, the Competition and Consumer Amendment (Australian Consumer Law—Country of Origin Representations) Bill 2020 (Cth) (‘the Bill’) was passed by both Houses. 

Purpose of the Bill

The purpose of the Bill is to make an amendment to the Australian Consumer Law (ACL), which is found in Schedule 2 of the Competition and Consumer Act 2010 (Cth). According to the Second Reading Speech, the purpose of the amendment is to

“(lay) the foundation for Australian made complementary medicines to have robust access to a safe harbour Australian origin claim and to the 'Australian Made, Australian Grown' logo - the iconic kangaroo in a triangle symbol.”

While the Second Reading Speech makes a specific reference to the complementary medicines industry, the amendment itself provides a broader power. Specifically, the amendment is intended to widen the definition of what constitutes the ‘substantial transformation’ of goods for the purposes of "safe harbour" provisions relating to country of origin representations. 

Background of the Bill

The ACL establishes statutory consumer protections, two of which are particularly relevant to this Bill. The first is a broad prohibition against misleading or deceptive conduct and the second is a specific prohibition against making a false or misleading representation, in trade or commerce, about the place of origin of goods.

These consumer protections invited the introduction of “safe harbour” provisions which establish statutory criterion for determining when goods would be regarded as made in, or produced in, Australia. A particularly important concept in “safe harbour” provisions is the idea of “substantial transformation”. 

The definition of “substantial transformation” is contained in subsection 255(2) of the ACL and currently states:

(2)  Goods were substantially transformed in a country if:

(a) the goods met, in relation to that country, the requirements of item 1 or 2 in the second column of the table in subsection (1); or

(b) as a result of one or more processes undertaken in that country, the goods are fundamentally different in identity, nature or essential character from all of their ingredients or components that were imported into that country.

Where the production of a good involves raw materials from different countries or undergoes different processes in different countries, the country where the last substantial transformation took place is the country of origin of the product.

The Effect of the Bill

The Bill proposes to add to subsection 255(2) the following provision:

; or (c) the goods underwent in that country one or more processes prescribed by the regulations.

Conditional to the Bill’s assent, this provision will provide another means of determining “substantial transformation” by providing an express power to prescribe one or more processes as sufficient evidence of “substantial transformation”.

Upon assent, the Government will need to make regulations and accompanying information standards as outlined in the Second Reading Speech:

“Following passage of the Bill, we will make new regulations to prescribe one or more processes in the Australian manufacture of complementary medicines that will meet the definition of 'substantially transformed'. We will also introduce an information standard to govern labelling on complementary medicines when an Australian origin claim is made under these reforms.”

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Competition and Consumer Amendment (Australian Consumer Law Country of Origin Representations) Bill 2020 and supplementary material available from TimeBase’s LawOne Service

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