Importing Gray Market and Used Goods: What to Know

Gray market goods — genuine branded products bought in a foreign market and imported for U.S. resale without the U.S. trademark owner’s authorization — are legal to import in some configurations and flatly prohibited in others, and the line between the two is a specific set of customs regulations and court decisions, not a gut feeling. Used and refurbished goods carry their own problems: harder customs valuation, condition-based admissibility rules, and partner-agency requirements that a foreign-market or secondhand product often cannot meet. Both categories are drawing more scrutiny right now, because the 2025–2026 tariff and trade-enforcement push targets exactly the practices these supply chains tend to involve: undervaluation, misdescription, and documentation gaps.

This guide explains the rules that decide whether a parallel-imported or used-goods shipment clears, and where importers get tripped up. For the trademark-law theory underneath those rules — exhaustion, the first-sale doctrine, and why a genuine mark can still be excluded — see our companion explainer on gray market goods and parallel imports; this guide stays on the importer-side enforcement and compliance questions.

What “Gray Market” Actually Means

A gray market good is not a counterfeit. The trademark on it is genuine — it was placed there by or with the authority of the brand owner. The problem is the distribution channel: the product was made for sale in another country, bought there, and is being imported into the United States outside the brand’s authorized U.S. distribution network. “Parallel import” is the more neutral term for the same transaction.

Used and refurbished goods — pre-owned equipment, electronics, vehicles, or machinery imported for resale — are a separate but overlapping category; used gray-market electronics are a classic e-commerce example.

The legal question for gray goods is never “is the product real?” It is “does U.S. law treat this genuine product as admissible?” Three authorities answer that question.

The Trademark Owner’s Toolkit: §1526, the Lever-Rule, and Lanham Act §42

U.S. trademark owners who record their marks with CBP get border enforcement against gray goods under Section 526 of the Tariff Act (19 U.S.C. § 1526) and CBP’s implementing regulations at 19 CFR 133.21–133.24. The Supreme Court upheld the core of this scheme in K Mart Corp. v. Cartier, Inc., 486 U.S. 281 (1988), including the “common control” exception that allows parallel imports where the foreign manufacturer and the U.S. trademark owner are commonly owned or controlled.

The exception that matters most in practice is the Lever-rule, codified at 19 CFR 133.23(a)(3) and named for Lever Bros. Co. v. United States, 877 F.2d 101 (D.C. Cir. 1989). The rule: if the foreign-market version of a product is physically and materially different from the version the U.S. trademark owner authorizes for sale here, the trademark owner can ask CBP to exclude or seize it — even though the mark is genuine. Formulation differences, different warranty terms, different labeling or packaging, different performance specs, and different model features have all been treated as material. An importer can sometimes cure a Lever-rule detention by affixing a conspicuous label disclosing the differences to consumers (19 CFR 133.23(b)), but that is a narrow fix with its own compliance requirements.

Separately, Section 42 of the Lanham Act (15 U.S.C. § 1124) bars importation of goods that “copy or simulate” a registered U.S. mark. Under Lever Bros., courts read §42 to prohibit importation of materially different gray goods — the statutory hook brand owners use in court, not just at the border.

One neighboring doctrine importers hear about: patent exhaustion. In Impression Products, Inc. v. Lexmark International, Inc., 581 U.S. 360 (2017), the Supreme Court held that a patent owner’s authorized sale of a product — anywhere in the world — exhausts its U.S. patent rights in that item. That helps on the patent side. It does not override the trademark rules above, which is where most gray-market enforcement actually happens.

How a Gray Goods Detention Plays Out

When CBP detains a shipment on suspicion of being restricted gray market merchandise, the regulations give a short procedural fuse. Under 19 CFR 133.25, the importer has 30 days from the date of the detention notice to present evidence that the goods are admissible — proof of the mark owner’s consent, evidence the goods aren’t materially different, or a labeling proposal. If that showing fails, the goods move toward seizure and forfeiture under 19 U.S.C. § 1526(e).

A gray-market seizure is not a private dispute between you and the brand — it is a customs case: forfeited merchandise, potential penalties, and an enforcement record that follows your importer number. If you are already holding a seizure notice, the response framework in our guide to customs seizure notices applies, deadlines included.

Used and Refurbished Goods: Valuation and Classification Pitfalls

Used goods avoid most of the trademark fight above (a genuine used product resold as used rarely implicates the Lever-rule), but they trip a different set of wires.

Valuation. CBP’s preferred basis is transaction value — the price actually paid or payable. For used goods bought at foreign liquidation auctions, from brokers, or in bulk lots, that price is often genuinely low, which is exactly what draws scrutiny: CBP undervaluation enforcement does not assume low prices are honest. Importers of used goods should be able to paper the declared value with purchase invoices, auction records, and payment trails. Where no usable transaction value exists, the fallback valuation methods (deductive value, computed value) get complicated fast — see our primer on customs valuation.

Classification. A used good generally classifies under the same HTS heading as its new equivalent — condition usually changes the value, not the code. The trap is refurbishment: depending on the extent of work done abroad, CBP may ask whether the imported article is “used equipment” or a remanufactured product, and whether the refurbishment itself added dutiable value. Getting the HTS classification right matters even more now, because a wrong code on top of a low declared value is the fact pattern tariff-evasion cases are built from.

Condition and marking. Used goods still need proper country-of-origin marking (the origin is where the goods were made, not where you bought them secondhand), and some categories — vehicles, certain machinery — face outright admissibility standards tied to age or condition.

Partner-Agency Admissibility: Where Foreign-Market and Used Goods Fail

Even a shipment that clears CBP’s trademark and valuation review can be stopped cold by a partner government agency, because the foreign-market version of a product was built for someone else’s regulatory regime:

• FDA. Foreign-market versions of U.S.-approved drugs and devices are generally inadmissible — different labeling and supply chain, same problem as any unapproved product.
• FCC. Devices with radio transmitters need FCC equipment authorization; a model certified for the EU or Asian market is not automatically authorized for the U.S.
• EPA / DOT. Engines, vehicles, and equipment must meet U.S. emissions and safety standards, and foreign-market or used units frequently cannot be brought into conformity economically — or at all.
• CPSC. Children’s products and consumer goods must meet U.S. safety standards and certification requirements; a used or foreign-market item without the required testing documentation is inadmissible.

The pattern to internalize: “genuine” and “admits to the U.S.” are different questions, answered by different agencies.

Why Scrutiny Is Rising in 2025–2026

Several verified developments have converged on exactly this category of imports:

• Tariff levels are historically high. The 2025 executive actions imposed steep new duties across most trading partners, raising the payoff for undervaluation, misclassification, and transshipment — and the enforcement attention those practices receive. Gray-market and used-goods supply chains, with their thin documentation and low declared values, sit close to that fact pattern.
• DOJ made trade fraud a named priority. A May 2025 Criminal Division memorandum designated trade and customs fraud, including tariff evasion, a “high-impact” white-collar enforcement area, and DOJ and DHS stood up a joint Trade Fraud Task Force in 2025. DOJ has since announced that the task force surpassed $1 billion in recoveries and charged losses in under a year.
• The de minimis exemption is gone. Duty-free treatment for low-value shipments ended for China and Hong Kong on May 2, 2025 and was eliminated worldwide on August 29, 2025. The channel that carried a large share of gray-market and refurbished e-commerce inventory now requires full entry, duties, and data — putting those low-value shipments squarely in CBP’s data-driven enforcement view.

None of this makes lawful gray-market or used-goods importing impossible. It makes sloppy importing indefensible. The importer of record bears the duty of reasonable care regardless of who prepared the entry.

Frequently Asked Questions

Is importing gray market goods illegal?

Not categorically. Genuine goods identical to the U.S. version can often be imported lawfully, especially under the common-control exception or with the trademark owner’s consent. Goods that are physically and materially different from the U.S. version can be excluded, seized, or barred under 19 CFR 133.23 and Lanham Act §42 when the U.S. trademark owner has recorded its mark and claimed Lever-rule protection.

Can CBP seize genuine products that aren’t counterfeit?

Yes. CBP seizes genuine but materially different gray market goods when the recorded trademark owner has Lever-rule protection, and the importer’s disclosure-labeling cure under 19 CFR 133.23(b) is narrow. “It’s the real product” is not a defense by itself.

Does patent exhaustion protect gray market imports?

Only on the patent side. Impression Products v. Lexmark (2017) established worldwide patent exhaustion after an authorized first sale, but trademark-based restrictions — the Lever-rule and §1526 — are the tools brand owners actually use at the border, and exhaustion does not displace them.

How do I value used or refurbished goods for customs?

Start with transaction value — what you actually paid — and keep the invoices, auction records, and payment proof to defend it. Low declared values on used goods attract undervaluation scrutiny, so documentation is the whole game. If there is no reliable transaction value, the statutory fallback methods apply in order.

What is the single biggest mistake gray market importers make?

Assuming genuineness equals admissibility. The product can be completely real and still be detained because it is materially different from the U.S. version, incorrectly valued, misclassified, or non-compliant with FDA, FCC, or EPA requirements for the U.S. market.

Gray market and used-goods sourcing can be a legitimate, profitable model — but only when the trademark posture, valuation file, classification, and partner-agency clearances are worked out before the shipment leaves. Reidel Law Firm’s flat-fee Import / Export Compliance Memo gives you a written, shipment-specific analysis of those issues for $2,499, so you find out whether your goods are admissible before CBP does. Get an import compliance memo.