Export Corporation penalised $3.1 million for importing and supplying products not on the ARTG
10 February 2012
On 3 February 2012 the Federal Court ruled that Export Corporation (Australia) Pty Ltd should pay civil penalties of just over $3.1 million for importing and supplying a number of products that were not on the Australian Register of Therapeutic Goods (ARTG).
Export Corporation imports and distributes products under the business name 'Nutrition Systems'. In the period from 2006 to 2009 the company imported and supplied over 35 different products that were not approved for import or supply under the Therapeutic Goods Act 1989. They included nutritional and weight loss products as well as body building, muscle growth and vitamin products. A number contained prescription medicines and undeclared ingredients which could have the potential to harm consumers.
As the company accepted that it had contravened the Act, the only issue for the Federal Court to decide was the size of the civil penalties which should be imposed.
In deciding on the appropriate penalty, the Federal Court took into account the following:
- the large number of contraventions (numbering in the thousands)
- the lack of appreciation by the company of the seriousness of the regulatory requirements
- the deficiencies in the company's compliance culture
- the need for the level of penalty to act as a deterrent to others who might be tempted to "make the same mistake" and to serve as a particular message to those involved in importing and distributing sports supplements in Australia.
The fact that the contraventions were neither deliberate nor systematic, that no loss had been suffered by anyone in consequence of the contraventions and that the company had not previously been found to have contravened the Act were mitigating factors noted by the Federal Court in determining the penalty to be imposed.
Because of the company's cooperation with the TGA, the Court applied a substantial discount to the penalty that would otherwise have been imposed. Even so, the final amount of the penalty was over $3 million.
The decision shows that the Federal Court can and will impose significant penalties on companies which import or supply therapeutic goods in contravention of the Act even in the absence of a demonstrated health risk to consumers.
Content last updated: Friday, 10 February 2012
Content last reviewed: Friday, 10 February 2012
Web page last updated: Friday, 10 February 2012