My girlfriend from China (who has a green card and is living with me in the USA) wants to buy used products in the USA such as CPUs and jewelry using money from her brother in China. She then wants to ship the items to her brother and he will sell the products in China for a profit. He will then share the profit with her. Is this legal? Can I get into any trouble helping her do this?
I’m no kind of expert whatsoever, but that doesn’t even sound marginally illegal to me, as long as they go through customs properly, etc. That is something I wouldn’t even wonder whether it is legal, if I were thinking of doing it. Unless her brother is going to try to pass them off as new or something?
Buying something and then reselling it somewhere else at a profit is pretty much the basis of all trade. It’s about as legal as it gets, unless there’s some additional details that you aren’t revealing.
For some reason, I read the title of the thread as “Is there a legal way to make money?”
I know there are some kinds of security restrictions and copyright laws and so forth but like other people have said if you’re going through customs and labeling your packages properly if you’re mailing the stuff I’m sure you’re fine.
You can also feel good about helping to narrow the trade deficit.
Can’t China throw you in jail for using Google, or something?
My understanding about the details of import/export is that the licenses, taxes, etc. are complex enough that it’s very unusual for a small-scale operation to be legal.
But I don’t really know.
There was a time when you couldn’t bring money into China unless you converted
it to bikes first :)
Check with an embassy - I’m pretty sure that’s just the sort of thing they can help with.
I’m pretty sure the customs laws are different if you’re importing items for sale rather than for your personal use. Check with a lawyer.
I’ve imported to China it’s somewhat expensive comparative to the cheap prices due to low wage labor there (thus the huge trade deficit.) The items would have to be those hard to obtain in China to be worth the effort.
I ran into difficulties in China with customs, mostly because I hadn’t gotten help in country there to “work with” customs once the shipment arrived. Apparently there is still some corruption in the customs officials. After a small fee (above and beyond shipping and the tariff), the package made it’s way into the country. My fee to ship and import was a pretty large percentage of the total unit and I wasn’t too happy about it.
I’m assuming your girlfriend and brother want to bend the rules a bit and mark this as personal mail packages so they can aviod the import tariffs. This would be illegal, I have no clue how much time is spent in China investigating it though.
I know someone who does that as a business and makes a fair bit of money off of it. Basically sends used U.S. electronics equipment (stereos, computers, etc.) in bulk to various Eastern European and Asian companies, where they actually have value.
That sort of thing probably happens a lot, but keep in mind that that is not only (presumably) against the law in China, it’s also a violation of US law – the Foreign Corrupt Practices Act. That’s a federal felony, and I’ve seen large family-owned businesses that are doing otherwise legitimate sales get completely tubed because of it.
Also, I believe there are still some broad-reaching import/export restrictions to China. Items that can be used for military and strategic purposes – even so-called “dual-use” items that have legitimate civilian applications as well – may require special export licenses from (IIRC) the State Department. You may think “Well Jesus it’s not like we’re shipping them missiles,” but I’ve seen people get in trouble for shipping stuff like circuit boards or switches that, unbeknownst to the shipper, were on the “no” list because they could be put into military helicopters or whatever. Google “EAR database” and you’ll see what I mean.
Bottom line: hire a lawyer to be sure. There are lawyers (mostly in DC, I think) who specialize in this sort of thing.
Disclaimer: This is not legal advice, you’re not my client, hire your own lawyer who will learn all the details of your case to get a real opinion. This is just a layperson-to-layperson “heads up” that you should get competent legal advice from someone who specializes in this area.
Edit: Out of curiosity I flipped to China’s entry on the EAR summary chart. The US government restricts exports in 16 different categories of stuff (nuclear nonproliferation, national security, crime control, etc.). Exports to China are forbidden or restricted in 11 of the 16 categories, similar to countries like Iraq (12), Syria (12), and Vietnam (11). Proceed at your own peril.
Gotta love the disclaimer.
I would just find someone who understands import / export law, maybe an agency of some kind. I know you can’t just UPS stuff to china (beyond personal items). You need to pay import / export duties and as mentioned, there are restrictions.
While things like Jewelry are OK, electronics definitely can cross into the danger zone. I am sure if you do it all legal like, you can make a very good business this way. Just make sure you do all the right paperwork.
Not sure I follow you. I shipped into China and paid all tarriffs. Said unit sat in customs “clearing” for 3 weeks until I finally got someone from our company that worked in a nearby city to go to customs. They paid a “fee” which was most definately not listed as a tariff, nor any receipt thereof, and my shipment was released off “clearing.” Why this would have been illegal on my end is where I don’t get your meaning? The person who paid the fee was native to China. Yes I know they are pushing hard to get rid of corruption within Chinese customs and that it’s illegal under their law. Again though, where does the federal felony come in? I wouldn’t doubt we have one, but isn’t that like shooting the messenger?
Other than that I found things pretty easily marked as to what I could ship, and I also found most of the information I needed from the FedEx person I worked with as well as a local shipper who had worked with items imported to China. In addition these sites were very informative:
For your SED:
For your EAR:
For general info on export to China:
However, just looking through that again while getting your links I noticed this would would be of interest to the OP’s girlfriend:
“Prohibited or Restricted Commodities”
Electrical Equipment and Machinery
Shipments of used electrical equipment and machinery are prohibited.
Gambling devices are prohibited.
Military equipment is prohibited."
It comes in at the Foreign Corrupt Practices Act, which you can read about here if you’re interested. Broadly speaking, the FCPA prohibits anyone in the US from paying bribes to foreign officials, including low-level officials like customs officers. There are some exceptions for bribes that are routinely paid to get an official to perform a ministerial duty he is bound to perform anyway, but IIRC the exception does not apply if the bribe is illegal under the foreign country’s laws. (The exception also has other complications associated with it; don’t try to use it unless you’ve hired an experienced lawyer to OK it, or you’re taking a serious risk.)
Would the US Attorney really come down on a small-potatoes operation like yours or the OP’s? I would tend to think not (especially now, when they’re so strapped for cash), but you never know. I’ve seen them hit relatively small family-owned businesses over this sort of thing.
Again, this isn’t legal advice; just a heads-up that people should talk to a qualified lawyer.
Edit: rereading your question, if your question is “Yeah but why would it apply to me since I didn’t pay the bribe?”, the answer is that the FPCA applies to any US person who facilitates, conspires, aids & abets, etc. any violation. Unless you think you can convince a jury that the guy on the ground paid the bribe on his own, out of the goodness of his heart, without encouragement or reimbursement or benefit from you – he just loves you and your business so much and really wants to see you succeed – you’re not likely to win on that defense.
Hrm … good to know. According to the person who helped me it wasn’t uncommon to have to do that at the customs office. Either way the fees to ship and the tarriff was much more than I expected. I’m not sure I would do it again. It would be interesting to find out just how easy and cheap they can ship here though.
When you really get down to it, we’re all prostitutes.
This is true, but if you are making a business of it you can work with a company like UPS as the packer/shipping/exporter so that all of your fees and duties are covered, customs is taken care of, etc. They are really pushing this kind of vertical business sourcing now.
That approach made my red flags go up (no pun intended!)
Many years ago, when the Iron Curtain was still up, and I was in grad school, we had a visiting professor from an eastern European country who approached me and asked my to purchase 10 PCs for him. He would provide the cash, but he said his English was too poor to buy them. Um, OK. So I did. I figured no one asks for any ID, etc. if you pay cash, so what the heck. Then he asked me to ship them to an address in Hungary, and label them this way or that way, again, because it was too “complicated” for him. This time I refused, and he pressured me very hard, then went away and got someone else to do it.
A month later, I was home violently ill with the flu, and he calls me at home, and says his son in Hungary was in computer science and was trying to get a program for his mainframe, and because his English was so poor, could I make a couple of phone calls and get pricing for him? I told him I was sick, but he was relentless, so I called and got a place, and asked them about ADA for a certain type of mainframe. It was extremely expensive, and the guy said that I’d have to physically fill out some forms as this was a Department of Defense controlled program (this was in about 1980 or so.) I immediately backed out, and when the prof called again I told him no way in hell, this was a DoD controlled piece of software. He said he knew, and he could go through all the hoops to get it, it would just be simpler if I did it for him as a U.S. citizen, as it would cut a month or two off of the process. I told him no way, and he threatened to go tell the head of the department how uncooperative I was, and that I would likely fail his advanced fracture physics class. I told him don’t bother, I’ll be in the dean’s office first thing Monday morning, and he laughed and said c’mon, I’m just teasing, thanks for the help. and hung up.
Years later I’m working in the Houston area and get a phone call - a guy from the Houston FBI office wants to visit me an interview me. Today. Won’t tell me what it is about on the phone. I’m sweating blood - crap, my days as a software cracker in the late 70s/early 80s have caught up to me! He arrives, we go to a private room, he opens a folder stamped with all kind of secret markings, and shows me pictures of guys with Russian names, asks me if I know them. Nope. Then asks me about this professor, did he seem like a real professor, did he know his science? Yes. ??? Asks me if I’d ever seen him in the presence of these Russian guys. No. Then he asks me if he ever asked me to do anything illegal. Like what? Oh, purchase things he could not legally purchase and ship them for him. Ahhh!
Long interview, turns out it was common for the secret police/intelligence agencies in Russia and Eastern Bloc nations to ask citizens with easy U.S. access to look at a list of things they wanted to acquire. Computers, chips, software, etc. Then they would pay them well for anything on the list they could get back to the home country. I asked the FBI guy (Jim Hoover,still have his card) why they did that, and he said that way they didn’t risk higer value intelligence agents on relatively trivial (but valuable) stuff like this. And it turns out, this guy was blackmailing a Hungarian couple that were friends of my wife and I - either they help him, or their parents back in Hungary were going to have a hard time.
Lots more, but that’s too long a post already!
There are all sorts of prohibitions and licenses you need to know about to export from the USA, and just as many ways to legally circumvent the prohibitions.
For example, I know a guy who would disassemble used cellphones in the USA, send the parts to Mexico, then re-assemble them there. He did this because he’d need an export license to legally ship used cellphones to Mexico, but not if he was shipping “spare parts”.
stuff like that.