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What Amazon sellers need to know about Sanctions Law

by TaxJar December 1, 2023

This guest post is by Robert Segall from our friends at Amazon Sellers’ Lawyer. Please note: This blog was originally published in 2018. It’s since been updated for accuracy and comprehensiveness.

Export control and sanction laws exist in the United states and other countries to restrict unlicensed transactions with parties identified as engaging in terrorism, narcotics trafficking, weapons proliferation and other activities that threaten those countries’ national security, foreign policies or economies. Various government agencies publish lists of such parties. In addition, many countries maintain trade sanctions and embargo programs against specific countries (“Sanctioned Countries”), such that unlicensed transactions involving those embargoed countries are prohibited or restricted.

Amazon is well aware of sanction laws, and polices sellers to ensure compliance. Sellers who violate these laws can be and are suspended from Amazon all the time.

Why does this matter for Amazon sellers?

Believe it or not, these rules apply to Amazon Sellers as well. Even if it is unknowingly, Amazon Sellers who violate sanction laws are at risk for Amazon suspensions. If this happens to your account, you will not be permitted to sell on the Amazon platform until your Amazon Suspension Appeal Letter is accepted by Amazon.

In order to comply with these sanctions and other legal requirements, it is Amazon’s general policy that items imported from or originating in the following countries and regions may not be sold on

  • Iran
  • North Korea
  • Sudan
  • Crimea Region of Ukraine

No shipments or sales to parties in any of these countries, or Syria, may be conducted through Amazon. This means that Sellers who ship to and or source products from these restricted countries are likely to lose their selling privileges.

A sanction related suspension

Recently, we received a call at Amazon Sellers Lawyer from a client who was suspended by Amazon due to “sanction law violations.” Our client was sourcing cell-phones from a well-known brand that is based out of South Korea and subsequently selling them on the Amazon platform. The issue was that the cell-phones were labeled “made in Korea,” and Amazon believed this amounted to a violation of sanctions law. In order to maintain confidentiality, we will refer to that brand name as SKPHONE for the remainder of this article.

When reviewing Amazon’s policy, we immediately realized that South Korea is not on the list of prohibited countries Amazon provides. After further legal research, paralegal Vincent Famularo confirmed that there are no sanctions in effect regarding South Korea, but only North Korea.

In this case, we needed to explain to Amazon that although the phones were labeled “made in Korea,” they were actually manufactured in South Korea, and thus our client did not violate any sanctions or policies imposed by the Amazon platform.

In their Amazon appeal, our client demonstrated that they sell authentic cell-phones manufactured by SKPHONE Corporation; a South Korean company. South Korea has been a member of NATO since 2005, and is an ally to the United States. Although the product is labeled “Made in Korea,” the word “Korea” does not necessarily imply that the product was manufactured or associated with North Korea.

In fact, SKPHONE is South Korea’s third largest cell-phone manufacturer, and provides products to the United States, Japan, China, and Europe; but never North Korea. SKPHONE does not manufacture any phones in North Korea, and Pantech phones are never exported into North Korea and subsequently to any other country. Our clients’ product likewise was manufactured in South Korea and sold on the Amazon platform. Our client has not violated any Amazon policy or sanction. The Amazon appeal our team helped draft ultimately resulted in our client’s Amazon suspension being lifted and selling privileges reinstated.

Takeaways for Amazon sellers

For Amazon Sellers, avoiding suspensions is typically a top priority. This is no easy task as Amazon’s policies seem to be updated on a regular basis. Sellers must remain knowledgeable of Amazon’s policies as well as the law surrounding the products they sell and how they source them. The team at Amazon Sellers Lawyer works hands on with Amazon’s terms of service and policies and the related law every day. We are here to answer any questions you may have.

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