How to Lawfully Import Products from China
The importing process can be confusing and overwhelming—and costly, if not done correctly. Inexperienced importers can run into a number of concerns that could kill their business in just a few weeks. From unexpected late shipments to fluctuating shipping costs to customs delays and beyond, importing products from China can feel like a legal chess game. One wrong move can land you with hefty fines, severe penalties, and even a complete shutdown of the business.
So how can you ensure legal compliance when importing products? What should you be aware of in order to avoid breaking laws, rules, or regulations in the import process?
Obtain necessary licenses and permits.
Compared to other nations, America is lenient when it comes to importation. Nevertheless, when importing for any non-personal, business, or commercial use, you need to be appropriately licensed and permitted. You should be approved for the necessary licenses and permits before placing an order to avoid any legal complications or ramifications.
Before placing any import order, check with U.S. Customs and Border Protection to see if you will need a license. For example, certain categories have special requirements, like foods, plants, animal products, medications, and trademarked items.
Ensure your products can be legally imported.
You want to ensure that it is legal to import your product into the U.S. This means the product cannot be on the list of prohibited or restricted items, and it cannot be trademarked. Trademarked goods are especially a cause of concern as China has different patents than the U.S. This means that it could be legal to create American-patented items in China, but they become an infringement once they cross over to American soil.
Moreover, you want to make sure that the product is legal to sell on Amazon. Although Amazon’s prohibited items list is similar to that of U.S. Customs, the two differ slightly. It’s important to ensure that you learn about the regulations and requirements for selling certain products and categories on Amazon.
Understand the rules and regulations of your product.
Whether or not you will require a license, U.S. Customs will set certain regulations based on the product you are importing. Your units need to meet certain quality standards, or customs has the right to fine you or detain and destroy your materials. Different branches of government will regulate different products. For example, the U.S. Department of Agriculture regulates the importation of agricultural products, while the FDA regulates cosmetics imports.
Research the needs of your product and the related branch of government. It’s often best to talk to a law firm or third party sourcing agency to learn more about the necessary steps for compliance with your imports.
Choose reputable suppliers.
You are responsible for any and all items you import. Thus, if your supplier doesn’t follow regulations or comply with laws, you are in hot water—not the supplier. Thus, you need to partner with a reputable supplier who will promise legitimate, honest, and quality compliance standards.
Ensure your suppliers have export experience, verified testimonials, and a physical location and address. You should perform quality inspections before entering into a partnership and frequently throughout the contract. A reputable supplier will welcome quality inspections.
If possible, you want to visit the factory firsthand to meet the suppliers and see the quality standards. If this isn’t feasible—as it’s not for many Amazon sellers—you will want to partner with a sourcing agency like Ask Idea Sourcing. A team on the ground in China can meet your suppliers, perform inspections, and break through any cultural barriers.
Create a contract.
You should always have a specific, detailed contract with your supplier. This contract should specify every aspect of quality standards, product manufacturing, shipping, packaging, communication, and more. Using a contract can ensure that your supplier can’t take any shortcuts against regulation compliance.
File import documents and pay duties.
It’s usually the importer’s duties to ensure that import documents are prepared and all duties are paid off. Be sure to get in all forms ahead of time to avoid delayed shipments, fines, or product detainments.
This includes filing the Import Security Filing at least 24 hours before your goods set sail (if shipping by sea), or you will have to pay a $5,000 fine. You should also include the bill of lading, packing lists, commercial invoice, certificate of origin, customs bond, and inward cargo manifest or immediate delivery form. You may also be subject to additional documents, like the U.S. Customs Form 7501 and relevant invoices. You will want to discuss the necessary documents with a sourcing or law firm.
You’ll also need to pay the import duties. The cost is usually based upon the tax rate for the value of your shipment. Customs officers will value your shipment based on price paid, commissions incurred from purchase, royalty fees, license fees, packing costs, and value of assists. After valuation, they can determine the tax rate based on the U.S. Government’s Harmonized Tariff Schedule.
Consider a customs broker.
The U.S. Customs document and duty process can be lengthy and intricate. You might want to consider hiring a customs broker to facilitate communication, fill out the paperwork, and navigate the import regulations. They will ensure everything is declared appropriately and paid for so your units can sail smoothly through the customs process. Note that this will cut into your margins. Still, it could be a better option than neglecting compliance, which could result in exorbitant fines, storage fees, and delays. You can find a licensed broker through the National Customs Brokers and Forwarders Association of America.
How to Lawfully Import Products from China – The Bottom Line
There’s a lot that goes into ensuring legal importation. Don’t navigate the murky waters alone… only to end up in unlawful hot water. If you want to protect your imported products and your business, you need two key partners.
A sourcing firm like Ask Idea Sourcing will help you:
- Find legal, permitted products you can sell on Amazon.
- Choose reputable suppliers.
- Draw up a contract.
- Handle the regulations and intricacies of logistics.
An Amazon-centric law firm like Amazon Sellers’ Lawyer will ensure you are always cooperating with the rules and regulations set by Amazon, from sourcing to selling and beyond.
Running a successful business starts on the basis of understanding and meeting laws and regulations for imported products.
This article was drafted and provided to AmazonSellersLawyer.com by Ask Idea Sourcing.