ACCC's response to parallel importation

The ACCC welcomes changes to the Motor Vehicles Standards Act (MVSA) that would ease restrictions applying to parallel importation.

But Australia's consumer watchdog, in its submission to the review, has also called for stronger recall provisions that would apply to grey import vehicles, in the interests of consumers. Additionally, it warns that grey imports sold through auction houses may leave buyers without adequate protection under local consumer law.

In its submission to the MVSA review, the ACCC noted "net economic benefits" for the New Zealand economy after the "removal of parallel import restrictions".

However, the ACCC did stress that changes to the MVSA must go hand in hand with stronger provisions in the Australian Consumer Law (ACL) to protect buyers. According to the ACCC's submission, it's common in New Zealand for grey imports to be sold at auction, and auctions are not regulated as strongly by the ACL in Australia. It's a potential loophole/pitfall that would save dodgy importers from being held accountable by consumers and by government in the event that vehicles auctioned to buyers failed to comply with all provisions stipulated by the ACL.

These provisions are as follows:

1. Suppliers and manufacturers guarantee that vehicles are of acceptable quality.

2. Suppliers guarantee that vehicles will be reasonably fit for any purpose the consumer or supplier has specified.

3. Suppliers and manufacturers guarantee that their description of vehicles is accurate (for example, in a catalogue or television commercial).

4. Suppliers guarantee that vehicles will match any sample or demonstration model.

5. Suppliers and manufacturers guarantee that vehicles will satisfy any extra promises – or 'express warranties' – made about them.

6. Suppliers guarantee they have the right to sell the vehicle (clear title), unless they alerted the consumer before the sale that they had 'limited title'. Note that licensing laws in some states or territories may require vehicle traders to guarantee clear title.

7. Suppliers guarantee 'undisturbed possession' or that no one will try to repossess or take back the vehicle, or prevent the consumer using it, except in certain circumstances.

8. Suppliers guarantee that vehicles are free of any hidden securities or charges and will remain so, except in certain circumstances.

9. Manufacturers or importers guarantee they will take reasonable steps to make spare parts and repair facilities available for a reasonable time after purchase.

Vehicles sold at auction only need to comply with the provisions related to title, undisturbed possession and undisclosed securities – points 6, 7 and 8 above.

Where recalls are concerned, the ACCC notes that provisions "may be difficult to apply in relation to parallel imported vehicles." For this reason, the ACCC argues in favour of strengthening MVSA recall powers granted to the minister for infrastructure, enabling the minister to regulate vehicle recalls – including for commercial vehicles not currently covered by consumer law – without needing to rely on intervention by the ACCC. That suggests that local firms importing and selling grey imports may be held responsible for recalling vehicles that are found to be unsafe for whatever reason.

Picture courtesy of Sgt Ken Scar/Wikimedia Commons