New Business - Importing - Customs Seized What Do I Do?

[Jedings]

Missouri

Hello All,
I've been a casual seller on Amazon and eBay for a few years now and due to injuries sustained in an auto accident recently I have stepped up the amount of work in this area due to not being able to perform the functions of my previous line of work. For the past several months I've been exploring different sourcing methods, selling platforms, software, equipment, etc to expand the business.

My business is registered and I do have a tax ID and I within the past month I've started sourcing pallets of merchandise through liquidation sources - ranging from new, case-packed to customer returns, etc from major retailers. I use multiple distributors but the one in question at the moment is Bstock Supply. I've used them multiple times (probably 12-15) and purchased an auctioned wholesale lot of mobile phone accessories (cases, chargers, screen cleaners) - late night + online shopping + placed a bid I didn't think would win but it did.

I had assumed (now I fully understand what assumptions cause) that I was bidding on a lot within the US (all my prior purchases had been US based and I never even thought to check into this) however the lot I purchased was from Canada. I instantly panicked, but did some quick reading online and it sounded like an easy enough process to get through so I went ahead with the process. The auction required purchaser to arrange shipment, which isn't uncommon with these types of purchases so I used YRC Freight, who I've used in the past for domestic shipments because they have routes from here to Ontario frequently and the prices are very competitive.

After booking the shipping and paying the items were picked up and within a day or two I received a call from someone with Customs wanting to know who my broker was. I had no clue - this was my first time dealing with this and when I booked shipping I was unaware there was a more extraneous process - I fully accept that this is on me and I should have educated myself better prior to doing so.
YRC referred me to a customs broker they often use based in New York City, which is near the port the shipment entered. They contacted me, asked me to prepare a proforma invoice based on the shipment and send it back - we had a back and forth several times getting the appropriate codes for duties/tariffs and everything seemed fine. Since this was a large lot (2 full pallets with several thousand items) it took some time but since there weren't many different types of product categories it wasn't too bad.

I was then told that the shipment was being released "pending intensive exam". The shipment was then moved all the way from NYC to Kansas City, MO, which is my location. I haven't heard anything for 10 days, so I emailed for an update today and was told that they need Trademark letters urgently and the customs broker seems to be trying to make me feel like a criminal. I let them know upfront this was my first time importing (via call and email) and wanted to ensure I did everything correctly. They asked numerous questions which I answered expediently and to the best of my ability. They've now said they were lead to believe these were generic brands, not brand names (which I didn't even know mattered since I paid for them). They've gotten pretty short and hateful and I'm trying to figure out my next steps.

I contacted the seller and obtained a full list of the shipments' items - since it was an auction lot I hadn't known exactly what all I would be getting; this is part of the fun when I purchase these domestically because I never know how good my purchase is until I dig through it all. Now that they've sent me the information I see several brand names that I've never heard of and assume aren't trademarked, but I do see a few products from Samsung and Belkin, which I assume are the issues.

The broker said she needs trademark letters immediately. The seller says they're a wholesale trader who ships across the boarder frequently and have never encountered this. They also stated they don't have "trademark letters" but their shipping department also didn't seem to know what I was requesting (I don't know either).

Here's my question: What do I do now? I'm apparently in over my head substantially and my customs broker would prefer to complain and be of no assistance since they've already been authorized to take $500 from my account.

Any help is greatly appreciated. I'm trying to read through material on customs websites but I'm likely not using correct terms as I'm not making much progress.

Thanks in advance!

 

[quincy]

Missouri

Hello All,
I've been a casual seller on Amazon and eBay for a few years now and due to injuries sustained in an auto accident recently I have stepped up the amount of work in this area due to not being able to perform the functions of my previous line of work. For the past several months I've been exploring different sourcing methods, selling platforms, software, equipment, etc to expand the business.

My business is registered and I do have a tax ID and I within the past month I've started sourcing pallets of merchandise through liquidation sources - ranging from new, case-packed to customer returns, etc from major retailers. I use multiple distributors but the one in question at the moment is Bstock Supply. I've used them multiple times (probably 12-15) and purchased an auctioned wholesale lot of mobile phone accessories (cases, chargers, screen cleaners) - late night + online shopping + placed a bid I didn't think would win but it did.

I had assumed (now I fully understand what assumptions cause) that I was bidding on a lot within the US (all my prior purchases had been US based and I never even thought to check into this) however the lot I purchased was from Canada. I instantly panicked, but did some quick reading online and it sounded like an easy enough process to get through so I went ahead with the process. The auction required purchaser to arrange shipment, which isn't uncommon with these types of purchases so I used YRC Freight, who I've used in the past for domestic shipments because they have routes from here to Ontario frequently and the prices are very competitive.

After booking the shipping and paying the items were picked up and within a day or two I received a call from someone with Customs wanting to know who my broker was. I had no clue - this was my first time dealing with this and when I booked shipping I was unaware there was a more extraneous process - I fully accept that this is on me and I should have educated myself better prior to doing so.
YRC referred me to a customs broker they often use based in New York City, which is near the port the shipment entered. They contacted me, asked me to prepare a proforma invoice based on the shipment and send it back - we had a back and forth several times getting the appropriate codes for duties/tariffs and everything seemed fine. Since this was a large lot (2 full pallets with several thousand items) it took some time but since there weren't many different types of product categories it wasn't too bad.

I was then told that the shipment was being released "pending intensive exam". The shipment was then moved all the way from NYC to Kansas City, MO, which is my location. I haven't heard anything for 10 days, so I emailed for an update today and was told that they need Trademark letters urgently and the customs broker seems to be trying to make me feel like a criminal. I let them know upfront this was my first time importing (via call and email) and wanted to ensure I did everything correctly. They asked numerous questions which I answered expediently and to the best of my ability. They've now said they were lead to believe these were generic brands, not brand names (which I didn't even know mattered since I paid for them). They've gotten pretty short and hateful and I'm trying to figure out my next steps.

I contacted the seller and obtained a full list of the shipments' items - since it was an auction lot I hadn't known exactly what all I would be getting; this is part of the fun when I purchase these domestically because I never know how good my purchase is until I dig through it all. Now that they've sent me the information I see several brand names that I've never heard of and assume aren't trademarked, but I do see a few products from Samsung and Belkin, which I assume are the issues.

The broker said she needs trademark letters immediately. The seller says they're a wholesale trader who ships across the boarder frequently and have never encountered this. They also stated they don't have "trademark letters" but their shipping department also didn't seem to know what I was requesting (I don't know either).

Here's my question: What do I do now? I'm apparently in over my head substantially and my customs broker would prefer to complain and be of no assistance since they've already been authorized to take $500 from my account.

Any help is greatly appreciated. I'm trying to read through material on customs websites but I'm likely not using correct terms as I'm not making much progress.

Thanks in advance!

I agree with you that you are in over your head. Find an attorney in your area for a personal review of the items shipped and the correspondence you've received over the shipment.

Good luck.

 

[Jedings]

Thanks for the quick response - and also thanks for wording that politely haha; I learn from my mistakes but there's been a lot of insult added to injury today!
I will plan to consult a local attorney. In the meantime any chance you can tell me which areas to "brush up on" as far as customs procedures for importing trademarked goods for resell? I'd like to do some more reading so I don't come across as a complete idiot when meeting with a professional.

Most of what I find is associated with paying the appropriate fees, which isn't my issue. And from reading through the FAQs on the marketplace's website regarding importing auction purchases, I'm still not finding where I went wrong.

Thanks again for your help!

 

[quincy]

Thanks for the quick response - and also thanks for wording that politely haha; I learn from my mistakes but there's been a lot of insult added to injury today!
I will plan to consult a local attorney. In the meantime any chance you can tell me which areas to "brush up on" as far as customs procedures for importing trademarked goods for resell? I'd like to do some more reading so I don't come across as a complete idiot when meeting with a professional.

Most of what I find is associated with paying the appropriate fees, which isn't my issue. And from reading through the FAQs on the marketplace's website regarding importing auction purchases, I'm still not finding where I went wrong.

Thanks again for your help!

Importing legal goods that have been legally purchased in other countries with the intended purpose of reselling these goods in the U.S. (generally) should not be a problem.

I can provide you with fairly recent court decision on this later.

But it appears there is some question about whether the goods you imported are actually legal (e.g., counterfeit). Counterfeit goods would cause customs and trademark holders to become involved in a shipment.

Because we cannot do personal reviews on this forum, you will need the personal review by an IP attorney local to you, to see what exactly was shipped.

I'll post back in awhile with some additional information.

 

[Jedings]

Ahhhhhh... Now we're on the same page - or at least closer to it. It makes perfect sense to me to be going through this if there is suspicion of counterfeit goods; not that that's a good thing, but at least that's something I can understand a bit better (and have done a lot of reading on prior to purchasing).

My head was just reeling because no one used the words counterfeit or contraband or anything to lead me to believe there was any sort of issue with the merchandise other than that a "Name Brand" product was included. I couldn't understand how it could be "illegal" or in any way an issue to import a legal purchase and that's what I was trying to wrap my head around before speaking with any other officials prior to - in case I open mouth, insert foot and incriminate myself for something that I'm not aware of since ignorance isn't a defense.

Okay, at least now I have some areas to research and can contact an attorney and take the necessary steps to resolve this.

Thanks again for your help!

 

[quincy]

Here is a link to Kirtsaeng v. John Wiley & Sons, Inc, 568 US 519, where the U.S. Supreme Court held that the Copyright Act's "First Sale Doctrine" applies to legal goods purchased in other countries and resold in the U.S.

https://www.google.com/amp/www.scotusblog.com/case-files/cases/kirtsaeng-v-john-wiley-sons-inc/amp/

The First Sale Doctrine allows a purchaser of a legal copy of a rights-protected work to treat the purchased work in any way they want as long as the copyright holder's rights are not infringed. The purchaser can give away or throw away the work or the purchaser can sell the work to someone else.

But it is likely that the concerns raised by your imported goods have less to do with possible copyright infringement and more to do with possible trademark infringement. If your goods originated in China, this could be a legitimate concern.

Good luck. And thanks for the thanks. They are appreciated.

 

[LdiJ]

I agree with you that you are in over your head. Find an attorney in your area for a personal review of the items shipped and the correspondence you've received over the shipment.

Good luck.

I think he possibly needs a different custom's broker. I was CFO for a small company that imported goods on a weekly basis for 15 years and a very knowledgeable broker should be able to deal with these things. An attorney generally would not be much help unless it was a attorney working for the custom's broker.

One thing that I CAN tell you, is that if you go to the warehouse where customs is storing your goods, and separate out and surrender the things that they have a problem with (its something that you would have to do yourself) they will likely release the rest of the goods to you.

 

[quincy]

I think he possibly needs a different custom's broker. I was CFO for a small company that imported goods on a weekly basis for 15 years and a very knowledgeable broker should be able to deal with these things. An attorney generally would not be much help unless it was a attorney working for the custom's broker.

One thing that I CAN tell you, is that if you go to the warehouse where customs is storing your goods, and separate out and surrender the things that they have a problem with (its something that you would have to do yourself) they will likely release the rest of the goods to you.

The broker is apparently not the problem. The goods purchased at auction are the problem. And it appears to be a problem with brand name goods.

An IP attorney is the one with whom Jeddings should consult.

 

[LdiJ]

The broker is apparently not the problem. The goods purchased at auction are the problem. And it appears to be a problem with brand name goods.

An IP attorney is one with whom Jeddings should consult.

We are assuming that is the problem. I do not think that the broker is explaining it well to the OP, or the OP wouldn't have needed to come here for questions. Therefore I think that the broker doesn't understand what is wrong very well themselves.

 

[quincy]

I am not assuming anything. My advice and information is based strictly on what was provided and does not change because of your personal experience with a small import company.