What ecommerce sellers need to know about trade restrictions and prohibitions
Sometimes parents of young children don’t allow certain items into the home: Candy, for example, or video games. It could be a question of health or physical safety, or it could simply be personal preference. Parents get to do that. Countries do too.
When a country restricts trade, it’s usually to protect domestic companies or workers from foreign competition. Countries may also prohibit the import or export of products deemed a threat to the health or safety of animals, humans, plants, or the environment. Any traveler who’s ever had fresh fruit seized when crossing into California or Florida probably understands.
The particulars of each protectionist policy depend on the country and products in question but generally come in four different flavors:
- Documentation required
- Canada requires imported car seats to comply with certain safety standards and to be labeled as compliant in English and French
- License required
It’s the responsibility of importers, exporters, and travelers to be aware of and comply with all pertinent trade restrictions; failure to comply can lead to seizure of banned items at the border or fines.
Monetary penalties can be steep, especially if the infraction is found to be intentional. Per the U.S. Customs and Border Protection list of Prohibited and Restricted Items, any person caught importing, exporting, distributing, transporting, manufacturing, or selling products containing dog or cat fur “may be assessed a civil penalty of not more than $10,000 for each separate knowing and intentional violation, $5,000 for each separate gross negligent violation, or $3,000 for each separate negligent violation.”
Perhaps more troubling: In addition to a “hefty fine,” anyone caught bringing chewing gum into Singapore could face a “possible jail term.” Although gums with therapeutic value (e.g., nicotine gum) are now permitted into the country under a free trade agreement with the U.S., one could argue the potential risks outweigh any possible gains.
Countries often define restrictions clearly, as with the dog fur example above. It’s considerably more challenging for businesses to comply with nebulous restrictions, such as China’s ban on “photographs which are deemed to be detrimental to the political, economic, cultural and moral interests of China.” Even seemingly harmless items can be subject to bans or restrictions: It’s against the law to import used clothing into Saudi Arabia.
How to mitigate risk when selling restricted items across borders
The benefits of getting in front of trade prohibitions and restrictions are clear, especially given the risk of fines, product seizure, and jail terms. It can also help you make informed business decisions about where to list certain products for sale. You may choose to avoid shipping restricted goods into some countries, while opting to jump through the necessary hoops in order to cater to underserved markets in others.
Automating tariff code classification allows you to streamline cross-border sales of restricted items and to prevent shipment of prohibited goods. It maps domestic and international tax codes and flags restricted and prohibited items, alerting customers when their products may be affected by compliance restrictions or prohibitions. Learn more about Avalara Trade Restrictions Management.
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