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The US’s ‘Integrity, Notification and Fairness in Online Retail Marketplaces for Consumers’ Act (the “INFORM Consumers Act”) Comes into Force

As the preamble says, in an effort to “combat the online sale of stolen, counterfeit, and dangerous consumer products,” Congress passed the INFORM Consumers Act, which was signed into law at the end of 2022. The INFORM Consumers Act mandates transparency with respect to high-volume sellers in online marketplaces, with the primary goal of discouraging marketplaces or other similarly situated platforms from facilitating the sale of counterfeit goods. Starting on 27 June 2023, online marketplaces must comply with the Act’s information collection and verification requirements for “high-volume third-party sellers,” broadly defined as those sellers who, in any continuous 12-month period during the previous 24 months, have entered into 200 or more sales or transactions of “new or unused consumer products” and which had an aggregate total of $5,000 or more in gross revenues.

Each online marketplace must, no later than 10 days after a seller qualifies as a high-volume seller, collect the seller’s:- bank account number, government-issued identification, tax identification number, and contact information (including name, email and phone number). The Act allows marketplaces to provide this information themselves, but it does permit certain information, such as bank account information, to be collected by third parties provided that the marketplace can obtain such information within 3 business days. Within 10 days following the collection of this information, the marketplace must:- verify the information (though the information on a valid government-issued tax document may be presumed verified); and thereafter annually certify with the seller any (or no) changes to such information. If a high-volume third-party seller does not provide this information to the marketplace, the marketplace must suspend the seller with 10 days’ notice. There are other requirements, but these are the most important for a e-platform selling from Africa to the USA.

Meanwhile our colleagues in the USA, the E-Merchants Trade Council (EMTC) has warned us of 2 other developments which importers to the USA needed to keep an eye on: – first, a bill requiring the verification of country of origin (S.1421) for all products offered online was introduced into the US Senate in May. EMTC is following this as it has extraterritorial impacts as well as challenges for US e-sellers. Second, the US Customs and Border Protection (CBP) held its annual Trade Summit in May. Ecommerce was a dominant theme. CBP introduced the idea of CTPAT for ecommerce. This would require site and vendor visits as well as substantial investment in security regimes.  They also want to collect additional data on small packages. This could impact on the de minimis rule (see the lead story above).



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Alastair Tempest

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