As we all know, South Africa has a comprehensive regulatory environment. Regulations in the country are quite structured, offering tiered levels that need to be climbed like steps. Business and tax registration are foundational, and industry-specific regulations are at the top. One industry-specific regulation that many don’t know about is the Second-Hand Goods Act.
This regulation’s primary aim is to prevent stolen goods from being sold to South Africans. Beyond that, it promotes various ethical trading standards and ensures proper record-keeping of second-hand products.
For small to medium-sized enterprise (SME) founders or solo entrepreneurs, to procure second-hand products, you need to know this regulation to stay compliant. Compliance is one of the strongest pillars of any business and falls under the governance, risk and compliance (GRC) framework of a business.
In this article, we look at the Act, how it works and its enforcement, and how you can ensure you stay compliant.
What is the Second-Hand Goods Act?
The Second-Hand Goods Act 6 of 2009 in South Africa regulates dealers and pawnbrokers to combat the trade in stolen goods. It mandates that dealers register with the SAPS, keep detailed registers of transactions for five years, verify supplier identities, and report suspected stolen items. The Act applies to businesses dealing in used items worth over R100.
The Act recognises the following as key goods:
- Electronics
- Communication equipment
- Vehicles and vehicle parts
- Jewellery (including precious metals)
- Household and office equipment
- Furniture
- Books
- Antiques
- Controlled scrap metals
Compliance with the Act is not limited to the above goods. If you are dealing with second-hand goods you need to be compliant with all aspects of the Act.
Registration Under the Act
Under the Act, registration is outlined as such.
1. Obligation to Register
Every person who carries on a business as a dealer must be registered under the Act.
- Any person other than a natural person may only be registered if a natural person who is not disqualified in terms of the Act is appointed to manage and be responsible for the business of the dealer.
2. Application for Registration
- All applications for registration must be made to the National Commissioner and must be accompanied by the required documents.
- The National Commissioner may require the applicant to provide further information necessary for processing the application.
- If the applicant intends to conduct business from more than one premises or where second-hand goods are stored on additional premises, the applicant must apply for registration in respect of each of those premises.
- Subject to section 14 of the Act, the National Commissioner may, after consideration of the application and upon the applicant complying with all the requirements, register the applicant as a dealer.
If you fail to comply with the requirements of the application, the National Commissioner will refuse the application and inform you of the fact.
3. Effect of Registration
When you have been registered in accordance with section 3 (3) of the Act, the National Commissioner must issue the prescribed certificate of registration to you, authorising the following:
- The dealer may carry on business in respect of the classes of second-hand goods specified on the certificate.
- Carry on business on the premises specified on the certificate.
- Be subject to the prescribed conditions as the National Commissioner may impose
Note that registration under the Act remains valid for a period of five years from the date of the issuance of the certificate. Details within the certificate can be changed by writing to the National
Commissioner within 30 days if:
- There is any change to information that was submitted during the application process;
- There is a change in the control or ownership of the dealer;
- There are any changes that impact the ability of the dealer to meet all or any of the requirements for its registration in terms of this Act.
Upon approval of certificate amendments, you must immediately hand over all previous certificates relating to the registration to the police official handing over the amended certificate.
Restrictions on Dealers and Pawnbrokers
Under the Act, there are various restrictions. These include:
- No dealer may acquire or accept goods from any person under the age of 18.
- You cannot store goods elsewhere other than the premises documented on the certificate.
- You cannot take goods into your possession unless you are sure the seller of the goods is the owner or titleholder or is duly authorised to dispose of the goods.
- You are prohibited from delivering to a person or changing the form or altering the appearance of the goods until after the expiration date of seven days from acquisition.
- You cannot accept any firearms or ammunition as defined in section 1 of the Firearms Control Act.
How the Act Regulates Goods
In this section, we will look at what the act says about buying and selling second-hand cars, controlled metals and communication equipment.
Motor Vehicles
Under the Act, the following is required when it comes to vehicle records.
- Subject to section 21, a dealer dealing in second-hand motor vehicles must also record in the prescribed register the particulars regarding every acquisition or disposal of a motor vehicle contemplated in subsection.
The particulars contemplated in subsection (1) are:
- The vehicle identification number (VIN) and the chassis and engine number.
- The odometer reading.
- The exterior and trim colour.
- Any distinguishing mark or feature, such as microdot particulars.
Controlled Metals
In the Act, anybody who engages in the business of recycling any controlled metal must apply to be registered as a recycler, in addition to having to be registered. Once the application has been approved, the National Commissioner will issue a certificate. Once registered, no person may:
- Have in their possession any apparatus which can be used for the recycling of any controlled metal or any article or substance containing any controlled metal, unless registered as a recycler or authorised to possess and recycle precious metals under the Precious Metals Act.
- You may not acquire or dispose of any cable consisting of controlled metal of which the cover has been burnt, unless the seller thereof is able to provide a reasonable explanation for the burnt cover, and only after the matter has been reported to a police official.
If you believe that the appearance or aspects of any scrap metal offered to you have been tampered with, you must make a report contemplated in section 22(1)(c), which applies with the changes required by the context.
Communication Equipment
Subject to section 21 and any other applicable law, a dealer dealing in second-hand communication equipment must also record in the prescribed register the particulars regarding every acquisition or disposal of communication equipment contemplated in subsection (2).
The details contemplated in subsection (1) are:
- A description of communication equipment, including the make and model.
- The communication equipment’s IMEI number, where applicable.
- Any distinguishing mark or feature, including any serial numbers.
How to Apply Under the Act
When registering under the Act, the requirements are determined by the type of dealer you want to be. Examples are:
- SAPS 601 (Application for registration as a SHG Dealer/Recycler)
- Checklist for a Juristic person
- Checklist for a Natural person
- Regulation 6(3) statement (affidavit)
Today, we will look at the requirements/checklist for registration as a natural person.
Key Requirements for Registration as a Natural Person
These are the documents required to register as a natural person under the Act. Required documents are:
- 2x Colour ID photos of the applicant, no older than 3 months
- Certified copy of the official RSA ID document or foreign passport of the applicant and every person responsible for the day-to-day management of the business
- Certified copy of relevant utility account or lease agreement verifying the address of the premises
- Documented proof of bank account (official stamped letter from bank, not actual bank statement)
- Certified copy of an Accredited Dealers Association Membership Certificate
- Basic floor plan of the premises where the applicant intends to conduct business
- Certified copy of any certificate or permit issued in terms of other legislation regulating such business or industry, including but not limited to local-authority by-laws or any legislation regarding zoning, customs control, revenue, international trade, fire safety, communications, occupational health and safety, waste management, or environmental management.
- Certified copy of certificate of registration as a Second-Hand Goods Scrap Metal Dealer (only applicable on an application to be registered as a recycler).
- Certified copy of certificate of registration as a dealer/recycler if applicant is already registered to trade/recycle on premises other than the premises indicated in this application
- Supporting Statement in terms of Regulation 3 under oath or affirmation that: the applicant or any other person responsible for the management or day-to-day control of the business is not disqualified from being registered as a dealer, and the applicant complies with all requirements of other legislation regulating such business.
- Set of fingerprints of the applicant and every person responsible for the day-to-day management of the business
- Any other supporting documentation as required by the National Commissioner
Remember, compliance is very important when it comes to conducting business in South Africa. If you are selling second-hand goods, check your compliance framework to ensure you remain in line with the Act.
For those who want to become compliant in the second-hand goods industry, this is the application form.
