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Information about infringement notices

18 August 2020

Infringement notices (fines) are one of the compliance tools the TGA can use when we believe that a requirement of the Therapeutic Goods Act 1989 (the Act) has been breached.

The following information explains the basis for infringement notices, how the amount of those notices is calculated and the TGA's broad approach to using them.

When and why the TGA may issue an infringement notice

The TGA uses the suite of compliance tools available under the Act judiciously, reserving the strongest actions (such as criminal prosecution) for the most egregious non-compliance. As court action is a lengthy and expensive process for all parties concerned, it is not feasible to deal with most alleged breaches this way. Given the extended periods that court action involves, in a number of cases it may not be the most suitable means of securing compliance promptly, depending on the alleged breach(es). The TGA's regulatory compliance framework explains how we prioritise matters and use our compliance tools in a proportionate and efficient response to the compliance risk posed.

Infringement notices are generally used in matters where there is a reasonable prospect that they will achieve compliance quickly. They can also signal to other advertisers of related products about advertising practices which TGA alleges contravene the Act or Advertising Code, and encourage those advertisers to reconsider their advertising materials. Infringement notices can also be used in conjunction with other compliance tools (e.g. advertising direction notices, enforceable undertakings) where necessary.

What the TGA may issue an infringement notice for

The Act provides the TGA with the power to issue infringement notices as an alternative to pursuing court action in relation to alleged breaches of the requirements for therapeutic goods, including unlawful:

  • import
  • export
  • manufacture
  • supply, and
  • advertising.

We can also issue infringement notices for:

  • failing to respond to requests for information that we have issued under the Act
  • providing false or misleading information in response to requests for information under the Act, and
  • failing to comply with a direction under the Act to address non-compliant advertising.

An infringement notice must be issued within 12 months after the day on which the breach has occurred.

We will only issue an infringement notice if we are satisfied that we have sufficient evidence of the breach to successfully pursue the matter in court if the infringement notice remains unpaid.

Consistent with the use of infringement notices to achieve timely compliance, the TGA is more likely to issue an infringement notice for clear and objective breaches of the law than a subjective (controversial) matter.

Depending on the circumstances, the recipient of an infringement notice may or may not have had previous contact from the TGA, advising them about their alleged breach.

Amount of the infringement notice

The TGA must calculate the amount payable for an infringement notice using the formula in the Act (subsection 42YKA(3)). We do not have discretion to set the value of the infringement notice even if we are of the view the particular alleged offence may warrant a higher amount. This formula relies on the value of a penalty unit (as defined in the Crimes Act 1914, valued at $222 per penalty unit as at 1 July 2020) at the time the breach is alleged to have occurred.

Under the formula, the amount for corporations is larger than for individuals.

For example, the TGA identifies a breach of section 42DLB of the Act for advertising a prescription-only medicine to consumers and decides to issue an infringement notice. The amount of the infringement notice is calculated from the formula as follows:

Individual Corporation

Maximum penalty a court can impose

(under ss.42DLB(1) of the Act)

5,000 penalty units

50,000 penalty units

(A) - One-fifth of the maximum penalty (under ss.42YKA(2)(a) of the Act)

1,000 penalty units

10,000 penalty units

(B) - penalty units specified in provision (ss.42YKA(2)(b))

12 penalty units

60 penalty units

The Infringement notice is the lesser of (A) and (B)

12 penalty units

60 penalty units

Amount of the notice = number of penalty units x $222 (value of penalty unit as at 1 July 2020)

$2,664

$13,320

Multiple infringement notices can be issued

If, as part of an investigation, the TGA believes there have been multiple breaches of the Act by the same person or business, we can issue an infringement notice for each alleged breach. A breach relates to a particular action or activity. For example:

  • a shipment (within the one consignment) by a business of 10,000 units of a particular medicine which is not entered on the ARTG is treated as a single breach of section 19B of the Act. A shipment the following day by the same business, under a separate consignment, of a further 30,000 units of the same medicine is a separate breach. Therefore, two infringement notices could be issued to the business. Shipping of multiple different medicines within the one consignment may also be treated as separate breaches
  • an online advertisement by a business for a disinfectant contains an unapproved restricted representation (in breach of subsection 42DLB(4) of the Act) and promotes the disinfectant as 'safe' (in contravention of the Advertising Code and therefore section 42DMA of the Act). These are two separate contraventions which may attract two infringement notices, or
  • an advertising breach over multiple days may also be treated as individual contraventions i.e. per day. A single breach of an advertising requirement in a hard copy magazine would be treated as a single contravention.

In some cases, the TGA may suspect there have been numerous breaches of the Act. However, it is not always appropriate to issue an infringement notice for every alleged breach. In using its compliance tools, the TGA will have regard to the need for a proportionate response to the non-compliance and the risk it poses - in some situations, multiple infringement notices may not be proportionate.

Information included in the infringement notice

The Act (s.42YKA) requires the TGA to include specific information in infringement notices, including:

  • the details of the person being issued the infringement notice
  • brief details of the alleged breach, including the provision that was allegedly breached and the date and time (if known) of the alleged breach
  • the amount that is payable under the notice, how payment is to be made and the due date for payment (28 days after the day on which the infringement notice is issued).

Options available to recipients of infringement notices

The TGA cannot compel the recipient of an infringement notice to pay it. However, the recipient has a range of options, which are explained in the infringement notice:

Option Consequences

Pay the infringement notice, in full, by the due date specified (s.42YKD)

Discharges the recipient's liability. Note that this prevents court action in relation to the breach specified in the infringement notice. Payment is not an admission of liability.

Paying the infringement notice but failing to address the non-compliant activities, may however result in escalating compliance action in relation to ongoing non-compliance.

Request an extension of time to pay (s.42YKB)

The TGA will consider the request but does not have to agree to it. Where an extension is refused less than a week before the original due date, the recipient will have 7 days from the date of the decision to pay the notices.

Once paid in full by the due date (as extended if applicable), the recipient's liability is discharged as described above.

Formally request the withdrawal of the infringement notice (s.42YKC)

A request must, in detail and with supporting information/paperwork as appropriate, set out the reasons why the recipient considers that the infringement notice should be withdrawn, including any mitigating information the recipient may hold that the TGA should consider. The TGA must take these reasons into account, in addition to any other relevant matters. The TGA will notify the recipient in writing of the outcome of the request.

If the infringement notice is withdrawn but the TGA considers that the recipient is liable for the breach, the TGA may still pursue court action.

Do not pay infringement notice

If an infringement notice is not paid, the TGA will usually take the recipient of the infringement notice to court. This can involve either referring the matter to the Commonwealth Director of Public Prosecutions for criminal prosecution, or commencing civil penalty proceedings.

Requests for extensions of time to pay or withdrawal of the infringement notice should be lodged well in advance of the due date for payment to allow for adequate consideration.

Publication of infringement notices

We publish information on the TGA website about the infringement notices we issue. The publication of the information helps deter other entities from engaging in non-compliance with the regulatory requirements in Australia. Media releases also allow information to be disseminated where the matter relates to health concerns (such as the COVID-19 pandemic).

Information published about infringement notices includes:

  • the name of the business (unless an individual)
  • the number and total value of the infringement notices issued
  • the alleged breaches that resulted in the infringement notices, and
  • messages for other entities in the same situation.