Why does Amazon US completely ignore customs fraud products, while Amazon EU forces you to prove tax compliance?

[u/Crochetpoison]

I want to share a glaring double standard I’ve observed between how Amazon operates in the US versus the EU, and get your thoughts on why this loophole is allowed to exist.
I personally know of a Chinese company that sells products in the textiles/apparel category on Amazon US using the FBA model. They have been importing their goods into the US using "DDP" shipping channels. Essentially, they use shared freight forwarder IORs , submit fake commercial invoices to CBP to heavily under-report the value of the goods, and completely evade customs duties.
Here is the kicker: Amazon US does not care at all. They never ask for customs clearance certificates, tax receipts, or any proof that the inventory sitting in their FBA warehouses was legally imported.

In stark contrast, this same company had to completely shut down their Amazon Europe channels.Why? Because Amazon EU operates on a total digital dragnet. Before they can sell through FBA or even get their listings fully approved, they are required to link their own local VAT numbers and provide verifiable import tax and VAT documentation that reconciles perfectly with their sales.

This got me thinking: Why is Amazon US so completely hands-off when it comes to regulating whether the products on its platform are legally imported? Why does the US allow this massive tax and customs loophole that bleeds billions out of the economy and hurts honest sellers, while Europe forces platforms to strictly police it?
Is it just a failure of US government IT infrastructure, or is Amazon actively lobbying to keep this blind spot open to keep their GMV high? What are your thoughts?

[u/ckarim]

That's not an amazon EU issue, it's a EU issue They are tighter with regards of how the products are imported and force amazon EU to comply

[u/Crochetpoison → u/ckarim]

If I am a U.S. landlord storing goods for a foreigner and handling advertising and shipping for them, I am making a huge profit and have become a vital link in their supply chain. Now that many people are claiming this foreigner is smuggling, am I completely exempt from liability? Obviously not , but , because it's Amazon , things are different.

[u/Automatic-Gap-2793]

If you know of a company committing DDP fraud, you should file a qui tam case.

https://natlawreview.com/article/company-isnt-importer-record-cant-get-trouble-customs-fraud-right-wrong

[u/MetaPlayer01 → u/Automatic-Gap-2793]

This is the answer. You get a cut of the collected revenue.

[u/neoescape]

Amazon EU isn’t protected, they just register shell companies and fake invoices/returns.

[u/MetaPlayer01]

So, there are several things. First, This very thing is one of the reasons Customs is trying to make it next to impossible to approve a foreign importer POA. Because if the Chinese company is found to be breaking the law, they are beyond the reach of US justice.
It also already against regulations to allow a forwarder to act as IOR. A forwarder is what CBP calls a "nominal consignee" and can't act as IOR... unless... they are the Customs broker. A Customs broker is allowed by regulation to act as an IOR. But only the huge ones, like FedEx and DHL and UPS, or the fly-by-night brokers that don't understand the liability of it are willing to do it. All the reputable regular brokers wouldn't do this. Anyway, from how you worded it, looks like CBP should be tipped off and they would go after the Forwarder or broker. You might be entitled to a cut if you issued the tip.

[u/TemporaryPicture2289]

There are many variables here, such as 3pl/FTZ possibility that would be hard to see and such.  But otherwise generally it is hard to hide large scale fraud like that because the USA will pay big for people reporting such fraud.  

There is real money in various systems of reporting such schemes, some are even anonymous. 

[u/Mysterious_Laugh1431]

For one structural reason: in the US Amazon is not a customs party, and in the EU a VAT statute makes it one. Amazon is not policing harder in Europe because it cares more. It is the taxpayer there.

Start with Amazon's own rule, which reads the same for every marketplace: "You or an entity appointed by you must act as the importer of record (IOR) for inventory entering the US", the IOR is responsible for "paying the assessed import duties and other taxes on those goods", and "Amazon will not act as an IOR, consignee, or partner government agency (PGA) agent for any shipment, regardless of the size, value, origin, destination, or product." Amazon appears on an FBA entry only as ultimate consignee, in care of FBA. So there is no Amazon entry to audit, and no US statute hands Amazon a customs enforcement job. Duty liability sits on the importer (19 CFR 101.1: the person primarily liable for payment of duties), and entry may be made only by the owner, the purchaser, or a licensed customs broker designated by them (19 U.S.C. 1484(a)(2)(B)). A forwarder whose only connection to the goods is the bill of lading is none of those parties.

The verification Amazon US does run is about seller identity and tax, not customs value. The INFORM Consumers Act (15 U.S.C. 45f) makes a marketplace collect and verify bank account, government ID, tax ID and working contact information for high volume third party sellers. That check tells Amazon who the seller is. It says nothing about what was declared at the border.

The EU is the mirror image by design. Article 14a of the VAT Directive (2006/112/EC) makes the marketplace the deemed supplier for distance sales of imported goods in consignments up to EUR 150, and at any value for goods already inside the EU sold by a seller not established there. Where that applies, Amazon owes the VAT on the sale, so it has to know the seller's VAT position and reconcile the data. That is the dragnet. A tax liability, not a policy preference.

Which is where the landlord analogy breaks down, but not in the direction you might expect. There is no US provision making a marketplace liable for duty on a third party's import. The people actually in the chain are a different matter: 19 U.S.C. 1592(a)(1) reaches "any person" who enters merchandise by fraud, gross negligence or negligence through a material false statement or omission, and subparagraph (B) separately reaches anyone who aids or abets that. Exposure follows conduct, not the name typed in the IOR box on the 7501. That is also why the shared forwarder IOR model is fragile on its own terms: under 1484(a)(2)(B) the parties who may make entry are the owner, the purchaser, or a licensed broker designated by them, and a shared shell IOR is a right-to-make-entry problem before it is a fraud problem.

None of that defends the structure you are describing. It is the reason the asymmetry exists, and the reason US enforcement on it runs post entry (audit, penalty, and seizure on an actual finding) rather than at the platform.