Entrepreneurship & Small Business

US Customs Contacting Client's about Product Value

  • Last Updated:
  • Sep 7th, 2018 9:53 am
[OP]
Deal Addict
Apr 5, 2016
2823 posts
1554 upvotes
Calgary/Vancouver

US Customs Contacting Client's about Product Value

So it's about a friend of a friend's company ;) . Here is the context, company is a furniture store that imports furniture from China and sells it all over North America including the US. Due to escalating trade war, the US Customs has withheld a ton of shipments for inspection and this cause frustration for both the company and the clients. One time, they confiscated a whole shipment because they suspected the furniture used rosewood which is a banned material. After a few weeks of inspection and testing, they found out it was imitation rosewood, but damage has been done. Had to refund the client and reputation damaged during this time.

Now this time is even worse. They withheld another shipment but this time, they contacted the client and told them they didn't think the products is worth this price, implying the company was ripping them off. Now this client is a long time client and very knowledgeable in the furniture business, so they know US Customs is full of shit. But like wtf, is it really Custom's responsibility to inform businesses what a product is worth? And luckily this time it was a old client that trusted us that told us what happened, who knows how many others they have contacted.

Has anyone been in this situation? What did you do? The owners are going to seek legal counsel to see what can be done. There is concern that Customs may retaliate by withholding every single shipment and inspecting all of them.
Current Fido customer.
Ex Koodo customer.
10 replies
Jr. Member
Sep 13, 2016
121 posts
103 upvotes
So you are saying custom is doing their job nowadays to make sure its worth as much as importer is saying?
[OP]
Deal Addict
Apr 5, 2016
2823 posts
1554 upvotes
Calgary/Vancouver
winnipeger1 wrote:
Sep 5th, 2018 11:38 pm
So you are saying custom is doing their job nowadays to make sure its worth as much as importer is saying?
That would make sense if we under reported the value, but in this case, they implying we are over charging the client. So in this case, shouldn't Customs refund us the taxes we paid then since the value is supposedly lower?

And if they really had a problem with the declared value, they could've taken action against the company but they didn't.
Current Fido customer.
Ex Koodo customer.
Deal Guru
Aug 2, 2010
12945 posts
3232 upvotes
Here 'n There
This story makes ZERO sense. Customs only cares if you are under-reporting not over-reporting as the former reduces the taxes the government collects. I suspect your client is lying in order to get you to charge less and is using this fake news US Customs story to provide leverage. I mean really? US Customs only ever contacts the importer which would be the store, not the store's client as they would not even know who that was. Also, you actually think US Customs gives a hoot if they collect more tax instead of less? They obviously think you are an idiot and believe their story, which it appears you are.

Also, the fact that first you said it was a 'friend of a friend' story, ie thrice removed from you lends a bit of stink to the story, especially since now you are saying 'we' 'we' 'we' in your last post. If you are going to pretend at least be consistent! LMFAO.

Anyway, you are being conned by the client and you are eating it all up line, hook and sinker.
[OP]
Deal Addict
Apr 5, 2016
2823 posts
1554 upvotes
Calgary/Vancouver
There's a reason I put ;) in the first line of my post. Doesn't matter who owns the company. You could be right the client is trying to lower prices but we never dropped the price afterwards and the orders still coming in.
Current Fido customer.
Ex Koodo customer.
Penalty Box
Apr 5, 2013
3344 posts
873 upvotes
markham
are you declaring properly meaning place of origin is China?...I don't think that customs look to kindly on items originating in China entering via Canada
[OP]
Deal Addict
Apr 5, 2016
2823 posts
1554 upvotes
Calgary/Vancouver
cardguy wrote:
Sep 6th, 2018 7:29 pm
are you declaring properly meaning place of origin is China?...I don't think that customs look to kindly on items originating in China entering via Canada
Everything is declared properly including the values. There's no issue with products entering Canada. It's just entering US afterwards that's an issue.
Current Fido customer.
Ex Koodo customer.
Jr. Member
Sep 13, 2016
121 posts
103 upvotes
Something is fishy. You are saying client has been placing orders in canada for “made in china” products for years when they could have order directly from china to cut middlemen. There is something wrong your clients are doing and now they are caught.
Penalty Box
Apr 5, 2013
3344 posts
873 upvotes
markham
bomber17 wrote:
Sep 6th, 2018 8:33 pm
Everything is declared properly including the values. There's no issue with products entering Canada. It's just entering US afterwards that's an issue.
like winipegger said...

canada has no issue with importing china products..US does...i ran into this years ago...especially via canada ..they probably caught on and you will now pay the price..did you in fact check US import laws?
[OP]
Deal Addict
Apr 5, 2016
2823 posts
1554 upvotes
Calgary/Vancouver
winnipeger1 wrote:
Sep 6th, 2018 10:16 pm
Something is fishy. You are saying client has been placing orders in canada for “made in china” products for years when they could have order directly from china to cut middlemen. There is something wrong your clients are doing and now they are caught.
cardguy wrote:
Sep 7th, 2018 1:43 am
like winipegger said...

canada has no issue with importing china products..US does...i ran into this years ago...especially via canada ..they probably caught on and you will now pay the price..did you in fact check US import laws?
It depends on the situation. Some times the furniture gets shipped directly from China to US. Reason why some products come to Canada first is to ship it along with Canadian made products as one whole shipment. We hold inventory in Canada and if a client wants a certain product faster, we can ship it to them faster as well. Everything is declared properly with origin of materials.

We been exporting to the US for many years and there has been no issues even with the occasional inspection. It was only after Q4 of last year that the inspections became more and more frequent. None of the products were actually confiscated. Even the imitation rosewood were released after few weeks of inspection. If there was an issue, they would've given us a fine or confiscated our products but no communication about it at all.

Our margins aren't even that high and the prices are competitively priced, often times below competitor's prices due to volume. This has became a side business now and to be honest, if they keep at this, might even stop this business altogether. It's practically impossible to provide a timeline for the clients now.
Current Fido customer.
Ex Koodo customer.
Jr. Member
Sep 13, 2016
121 posts
103 upvotes
Man you are keep repeating same thing. Im not saying you are doing something wrong. Its your client who is fishy. Hey remember the car you were gonna buy next, why dont you buy it from me. I will get the exact same car you want from the exact same dealer and place it in my driveway. You pay me 15% markup :) you will get exact same warranty and paperwork as dealer but you pay taxes twice. Once when i import it to my driveway and second time when you take possession plus 15% markup. We can do this transaction again and again for each of your next car orders

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