• Permits and Licenses When Importing from Asia: A Complete Guide

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    Licenses and permits

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    Importing certain types of products requires that you first obtain a permit or license. Failing to obtain the necessary permits and licenses can be disastrous, as it can result in your cargo being seized by the customs authorities.

    Keep reading, and learn what you must know about import permits and licenses in the European Union, United States, Australia, and many other countries.

    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
    • Chemicals
    • Pharmaceuticals
    • Medical devices
    • Live plants and animals
    • Tobacco and alcohol

    As said, most products don’t require a license or other type of permit to be imported. Still, many products are covered by product regulations, safety standards, and documentation requirements – and you may need to get an EORI number or buy a customs bond before you import products:

    DocumentCountryDescription
    Customs bondUSAYou need to purchase a customs bond on a per shipment or yearly basis, before importing goods valued above $2500 to the United States.
    EORIEUAll 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 ReportsVariousWhile 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 DocumentsVariousIn 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. Wooden Handicrafts Pre-Import Approval (United States)

    You must apply for pre-import approval when importing certain types of wooden handicrafts to the United States. The purpose of the pre-import approval is to ensure that wooden products imported to the United States don’t contain agricultural pests and diseases.

    Here are some products defined as wooden handicrafts:

    • Carvings
    • Baskets
    • Boxes
    • Bird houses
    • Rustic garden and lawn/patio furniture
    • Garden fencing and edging
    • Picture frames
    • Home holiday decorations
    • Pens
    • Pencils
    • Wooden decorative collectibles
    • Wooden kitchenware
    • Other items composed of wood

    You can learn more on the USDA Animal and Plant Health Inspection Service website.

    4. Technology and Patent Licenses

    Let’s say that you import a Bluetooth-enabled product. Well, that means you have to pay a declaration fee – $8000 per product (or $2500 per product, if you qualify for their Startup program).

    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.

    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 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 does 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.

    5. 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.

    The 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.

    FAQ

    How do I know if a license or permit is required for our product?

    My recommendation is that you start by contacting the customs authority in the importing country. They can sometimes provide a list of product types that require a permit or license, or tell you which government agency is in charge of such requirements.

    Another option is to ask your freight forwarder, as long as they have experience with your specific product category. That said, some freight forwarders are reluctant to give any advice on permits and licenses as it’s often not their core area of expertise.

    Your third, and best, option is to contact a consultant or law firm that specializes in import permits and licenses.

    What can happen if we don’t have the necessary import permit or license?

    The main risk you’re facing is that the products cannot be cleared through customs. This means that your products cannot enter the country. Hence, failure to obtain the appropriate license or permit can result in a total loss.

    What can happen if we import branded products without a brand license?

    The risk is that the customs authorities will reject your cargo upon arrival at the port of destination. Keep in mind that they are on the lookout for counterfeit items.

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  • 5 Responses to “Permits and Licenses When Importing from Asia: A Complete Guide

    1. udonis white at 8:15 am

      Hi,
      Does the supplier shall apply for the the pre-import approval or us.

    2. Greg at 11:16 pm

      Hello, Fredrik

      My name is Greg, you have very interesting articles, with a lot of information, which is helping a lot, what kind of service your company is providing?
      Can you help me to find a good freight forwarder to ship one container from Ningbo, China to Chicago, USA. Or to different State.

      Thank you,
      Greg

      1. Fredrik Gronkvist at 9:28 am

        Hello Greg,

        We don’t offer freight services unfortunately

    3. Tyler Johnson at 12:58 am

      That’s good to know that some products will need to you to have a permit in order to trade them. I am thinking about starting a business, and I would want to make sure that I do everything legally if I was to trade overseas. I should consider getting a lawyer to help me make sure that everything is in order if I do that.

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