Before you can start importing products, you need to obtain all required licenses and permits. Failing to do so, can result in your cargo being seized by the customs, or at least delayed for a few days or weeks.
Or worse, you can be sued for using technology and IP without paying for it.
In this article, you will learn what every importer must know about permits, transportation restrictions, brand, technology and patent licensing – and why you should never assume that your supplier will do the work for you.
1. You don’t need an import license or permit for most products
Only a few categories are restricted, in the sense that you need to obtain some sort of license or notify the authorities in advance.
A few examples follow below:
- Agricultural products
- Medical devices
- Live plants and animals
- Tobacco and alcohol
As said, most products don’t need a license or other type of permit to be imported. Still, many products are covered by safety standards and documentation requirements – and you may need to get an EORI number or buy a customs bond before you import products:
|Customs bond||USA||You need to purchase a customs bond on a per shipment or yearly basis, before importing goods valued above $2500 to the United States.|
|EORI||EU||All companies and individuals importing products to the EU must apply for an EORI number, before the goods arrive. The application is free, and can be done online in most member states.|
|Test Reports||Various||While not a license or permit, a test report is used to demonstrate compliance with all applicable safety standards and/or chemical restrictions. The customs authorities in the EU, US and elsewhere are increasingly strict when it comes to enforcing product safety regulations at the port of entry.|
|Compliance Documents||Various||In addition to test reports, you may also need additional documentation to ensure compliance with all applicable regulations. May, for example, include a Declaration of Conformity, Children’s Product Certificate or Bill of Materials.|
2. Importing Battery Powered Devices and Lithium Batteries
Lithium batteries, or products powered by such batteries, are subject to transportation restrictions. Some companies, such as UPS, only ship lithium batteries for pre-approved customers.
To grant approval, they require importers to provide extensive information about their company, manufacturer – and even employee qualifications and UN 38.3 test reports.
In addition to obtaining a pre-approval, importers must also comply with packaging requirements, and make sure that the cartons are correctly labeled.
These restrictions are not unique to UPS, as they are implemented by all transportation companies.
3. Technology and Patent Licenses
The same thing goes for other technologies developed by, for example, Apple and Samsung. Want to make your device compatible with the Apple lightning connector cable? That’s an 8 dollar license fee – per manufactured unit.
Yet, many Importers make the assumption that, somehow, the supplier got them covered – until they eventually realize that they don’t.
Let me explain how this work.
When you go to a contract manufacturer, say in Shenzhen, to get your OEM product manufactured – this product is new and therefore not covered by existing technology licenses.
As such, the supplier is not giving any support at all when it comes to the licensing. Nor should they – it’s not their job to act as an international legal adviser for their customers.
Hence, it is up to you to secure all required licenses before importing products – be it to get your product Bluetooth enabled – or make your product compatible with Apple devices.
If your supplier has ever claimed to hold such licenses, trust but verify. Always ask for documentation that can be verified with a third party – preferably the IP owner.
I doubt that most small businesses, even know that they have to pay technology license fees, and take Bluetooth functionality and other tech for granted.
There are some cases when the supplier actually do hold the licensing, such as those that are part of Apple’s MFi licensing program. That said, the requirements are high, and few suppliers pass the strict audit procedures.
4. Intellectual Property and Brand Licensing
From time to time we get the inevitable request to help find suppliers that ‘sells’ Star Wars T-shirts or Hello Kitty toys.
The assumption is that some manufacturers in Asia, somehow hold the rights to produce brand name products on behalf of Disney, Marvel and other big brands.
While their merchandise is mostly manufactured in China, and other countries in Asia, the IP is never licensed to their suppliers.
In other words, Disney doesn’t give out licenses to factories, allowing them to sell Disney products to importers around the world.
Even if you would find a supplier that makes products for Disney (I just use them as an example here), and that’s not very hard, you cannot just go and order a fresh batch of Mickey Mouse T-shirts.
They factory doesn’t own the IP.
If you want to use their IP, you have to contact the IP owner, not their supplier.
This may be fairly obvious when it comes to brands and characters that we all recognize. It can be a whole lot more complicated when suppliers use designs, patterns and other IP that is less well known.
Do you want to learn more about how you can avoid licensing issues and get the right permits?
We know how hard it can be to navigate the process around manufacturers, licenses, certificates and permits.
That’s why we created the Starter Package, that includes tutorials and other tools that you need to go from spreadsheet to finished product:
a. Learn how to protect your IP and search patent databases (to avoid licensing issues)
b. Ensure compliance with all mandatory safety standards, document requirements and label files
c. Overview of mandatory licenses, permits and transportation regulations in the United States and the European Union
You can watch the video below, or follow this link, to learn more.