Legal issues

Compliance with government sanctions and regulations

Exporters should be aware that Australia maintains United Nations Security Council sanctions and bilateral sanctions in respect of a number of countries. These sanctions require Australian organisations and individuals to comply with a range of measures and, in general, also apply extraterritorially to Australian nationals overseas.

Sanctions may include export and import restrictions, prohibitions of technical assistance, training and financing, travel sanctions, and financial sanctions against specific persons and entities.

Information about United Nations sanctions currently in force is available by the Department of Foreign Affairs and Trade (DFAT).

For information about the operation of the defence and strategic goods export control regime, visit Defence Export Control Office .

Intellectual Property (IP) Registration

If you are ready to start exporting or have recently launched your new website it is time to think about how you are going to protect your intellectual property (IP) overseas. IP protection overseas cannot be understated, it is vital to protecting your business in foreign markets.

You may already have IP protection in Australia but you must remember that Australian IP registration only provides protection in Australia. Once your Australian registration is filed, the clock starts ticking and you need to think about filing your foreign applications within 12 months (for patents) and six months (for trade marks and designs).

As soon as you have identified the foreign markets you wish to trade in, you need to decide whether to file separate IP applications in those countries directly or make use of international agreements, which allow you to seek protection in several countries at once.

Protecting your IP overseas can seem overwhelming, and that is why IP Australia has developed a suite of fact sheets called IP Passport. The fact sheets outline foreign IP regimes and focus on some of the IP issues and challenges which may be faced by Australia exporters.

The extensive suite covers 11 countries including - Canada, China, Korea, European Union, India, Indonesia, Japan, New Zealand, Singapore, Thailand and the United States of America.

Human Rights

Businesses have a responsibility to respect human rights in their operations and their supply chains. Businesses should consider conducting appropriate due diligence to satisfy themselves that their activities do not support, or risk being seen to be supporting, human rights violations or abuses. Taking action makes good business sense, and can help businesses improve the integrity and quality of their operations and supply chains. As outlined in Austrade Services, Austrade will only provide services to organisations that will enhance the reputation of Australia and Australian trade. Non-compliance with human rights obligations could exclude your organisation from eligibility for Austrade services.

The Australian Government is taking a global leadership role in combating modern slavery. Modern slavery is a term used to describe serious exploitation, including forced labour, human trafficking and the worst forms of child labour. Austrade encourages all Australian businesses to identify and address modern slavery risks across their global supply chains, which can extend to include agents, subsidiaries and contracted third parties.

The Commonwealth Modern Slavery Act 2018, which entered into force on 1 January 2019, established a national Modern Slavery Reporting Requirement which applies to large businesses and other entities in the Australian market with revenue of at least AUD $100 million. Smaller businesses may voluntarily report. The Reporting Requirement supports the Australian business community to identify and address their modern slavery risks, and maintain responsible and transparent supply chains. For further information, visit the Australian Border Force’s  Online Register for Modern Slavery Statements.

Dealings with terrorists - what the Australian business community should know

The Government has passed laws making it a criminal offence to hold assets that are owned or controlled by terrorist organisations or individuals, or to make assets available to them, punishable by up to five years imprisonment. Go to the Department of Foreign Affairs and Trade's Consolidated List to search for individuals and entities listed by the Government for the purposes of terrorist asset freezing.

In addition to the Consolidated List, the Australian Government also maintains a list of groups that are proscribed as terrorist organisations under the Criminal Code. For the listed terrorist organisations visit the National Security Australia website. If a group is listed as a 'terrorist organisation' it is an offence to:

  • Direct the activities of the organisation
  • Recruit persons to the organisation
  • Receive training from or provide training to the organisation
  • Receive funds from or make available funds to the organisation
  • Provide support or resources to the organisation

Issues which may affect your ability to trade and operate offshore include:

  • Differences between legal systems
  • Question of which laws will apply in disputes
  • Rules of competition
  • Patent registration
  • Extra-territoriality of overseas legislation
  • Product liability

International contracts for the sale of goods can be very complex. This includes specially prepared contracts. It also includes contracts that have ‘standard terms and conditions’ that are often in small print on a standard order form.

Before you negotiate an international sales contract, ask for advice on the legal implications from a professional who specialises in international contracts. This includes information about:

  • Defining key terms (e.g. Incoterms 2010), which are the standard trade definitions most commonly used in international contracts. Please note: Incoterms 2010 is due to be replaced by Incoterms 2020, effective 1 January 2020.
  • Limiting agreement to the contract
  • Describing the goods
  • Contents of the payment clause
  • The ‘retain property until payment’ clause
  • Trade terms (shipping terms, as with Incoterms 2010)
  • Force majeure
  • Dispute resolution
  • Applicable law and jurisdiction
  • Fees and charges - including what you are responsible for and what your buyer is responsible for

Australian companies need to ensure that they have checked the credentials of overseas partners and buyers. Australian companies also need to be aware that there are scam operations working in some markets and again this emphasises the need to conduct background checks. Before signing or accepting contracts, it is in your interests to seek professional legal advice from legal firms specialising in international work.

Dispute resolution

The Australian Government is often called upon to provide assistance to Australian companies involved in commercial disputes – very often there is little that it can do to assist.

The Australian Government can provide companies with assistance such as providing referral lists of local law firms and arbitrators, sharing basic information on potentially applicable trade agreements and providing advice on relevant business practices. However, the Australian Government is not in a position to provide Australian companies or individuals with legal advice, neither can it interfere in foreign legal processes and law enforcement – including in relation to the return of stolen property or the refund of deposits/payments for goods and services rendered in foreign markets.

As this is a legal matter involving a commercial dispute, you will need to seek legal assistance. Australian exporters registered with Austrade can obtain a list of referral service providers. The Embassies and High Commissions of various countries in Canberra often maintain lists of attorneys who may be able to assist with commercial disputes in their respective countries. You can also consult the Law Society’s directory of legal practitioners.

Information on frauds, scams and dishonest conduct

An unfortunate outcome of the advancements in technology and electronic payments is the proliferation of international business scams and illegitimate trade deals. International business scams are of several types. One of the most common one is known as the Nigerian scan where Nigerian national purporting to be officials of their government or banks will approach Australian businesses and individuals seeking their banking details as they have large sum (usually tens of millions) to be deposited in a foreign business account. We are also aware that Australian businesses are being targeted by some scammers presenting themselves as government agencies from the Middle East placing significant orders.

Scammers are getting sophisticated and are using latest forms of technology to produce documents, letters and email that appear almost authentic. Scams usually follow a pattern – contact is made via the internet, an order for a large amount of product is quickly agreed to, and the buyer wishes to pay via credit card or have the exporter visit them in-country. They would generally communicate using LinkedIn or generic company email addresses, ask for copies of identity documents (passport, bank statements) and have email extensions mismatching official websites. This is not to say that all enquiries that exhibit these characteristics are scams but most probably are.

A buyer who insists that you bear the cost of product registration in a given market is an example of an advance-fee fraud. The key to this is that the transaction from the victim to the scammer will be untraceable and irreversible. Wire transfers via Western Union and MoneyGram are ideal for this purpose. International wire transfers cannot be cancelled or reversed, and the person receiving the money cannot be tracked. Other similar non-cancellable forms of payment include postal money orders and cashier's checks, but as wire transfer via Western Union or MoneyGram is the fastest method, it is the most common. Usually asking whether the buyer is requesting payment by Western Union is sufficient to convince a would-be victim to let the “opportunity” go.

Determining the legitimacy (due diligence) of an enquiry include obtaining a credit report , obtaining references, and/or insisting on full upfront payment via telegraphic transfer prior to shipping (or even production) of goods.

Checking the SCAMWatch website which has been set up by the ACCC will allow you to check if any similar scams have been reported.

Austrade may able to refer you to specialists in overseas markets who might be able conduct a background check and authenticate the nature of enquiry.

Up-front payments and advance fee fraud are a common scam targeting Australian exporters. This involves paying some money upfront in order to facilitate finalising a purchase order or contract with a foreign entity. Warning signs include unsolicited emails, requests for large orders, and a request to contribute money towards something. For more information, see SCAMwatch.

Foreign bribery

Bribery of foreign public officials is a crime. Australian individuals and companies can be prosecuted in Australia for bribing foreign officials when overseas. More information on this subject is available within the bribery of foreign public officials section and the foreign bribery page on the Attorney General's Department website.

Disclaimer

Disclaimer Austrade does not endorse or guarantee the performance or suitability of any introduced party or liability for the accuracy or usefulness of any information contained in this Report. Please use commercial discretion to assess the suitability of any business introduction or goods and services offered when assessing your business needs. Austrade does not accept liability for any loss associated with the use of any information and any reliance is entirely at the users’ discretion.