Travelers benefit when bordering customs when they use delivery applications
Travelers benefit when bordering customs when they use delivery applications
Online companies that connect travelers willing to deliver goods to buyers abroad are building a new industry, but their users often participate in an old tradition: customs evasion.
The objective of the companies is to facilitate the purchase and receipt of products from the United States, such as electronics, to people abroad, by connecting them with visitors from their countries willing to transport the items in their bags.
Grabr, based in San Francisco, which says it has more than 500,000 registered users worldwide, offers a web platform that allows buyers to request international deliveries. The company, backed by renowned investors, including the Peter Thiel Founders Fund, is popular in markets such as Brazil and Argentina, where Foreign goods bought locally are expensive.
Many products are a much better offer for Grabr buyers if their travel companions do not incur any duty upon arrival.
The Wall Street Journal interviewed more than a dozen travelers from Grabr, almost all of whom said they tried to bring expensive items through customs without paying taxes.
"I would remove the items from the boxes to make them look used," said Evelyn Slater-Shew, a 27-year-old ex-food promoter from Long Beach, California, about how she would do it. Avoid customs when transporting goods..
Ms. Slater-Shew said that she delivered items selected by Grabr's staff that seemed to know "what we were doing" and advised her to "make everything look old or used".
"This is something we do not support as a company," said Daria Rebenok, executive director of Grabr. Ms. Rebenok and Artem Fedyaev, co-founders of Grabr, said they were concerned about the examples provided by the Journal of travelers dodging homework.
The co-founders of Grabr say that the company's terms of service require users to comply with customs.
Several lawyers said that customs evasion, while common, can be a crime. Companies that knowingly facilitate such behavior could be committing organized customs fraud, said Matt Gold, a former assistant US trade representative.
The co-founders of Grabr say they started the company to help people obtain items that are not locally available and to promote intercultural exchanges.
Grabr works like this: a buyer publishes on the Grabr platform that they would like to buy an item, such as a new smartphone. A traveler who plans to visit the buyer's country then agrees to transport the phone for a delivery fee negotiated with the buyer. Then, the traveler buys the phone, packs it and gives it to the buyer, who returns it through the Grabr system. The company earns a commission for each transaction.
Victor Parra, 24, tried to take a drone to a Grabr buyer in Argentina. He said that to avoid the import duty, he told the customs agents that the drone was for himself, but said they were suspects and forbade him to leave the country without bringing back the drone.
Photo:
Victor Vine
Often, travelers are responsible for paying for their own trips, and transporting the goods helps offset the cost. In other cases, Grabr hires travelers and gives them free airline tickets instead of rewards per item. These travelers, like Ms. Slater-Shew, carry suitcases full of items assembled by Grabr's staff.
Grabr says that travelers who bring items, not buyers, are responsible for paying customs. Grabr recommends that travelers set their delivery rates high enough to cover anticipated taxes.
An analysis by the Journal of more than 95,000 transactions on the Grabr site suggests that many travelers do not pay attention to that advice.
The Journal identified approximately 1,400 times that buyers in Argentina and Brazil ordered a single item that cost at least double the tax-free limits of $ 300 and $ 500, respectively. (Argentina recently changed its rules, exempting one phone and one laptop per traveler). In approximately 97% of transactions, the delivery rate of its travel partners, as reflected on the Grabr website, would not have been high enough to cover the rights. Travelers to those countries must owe customs 50% of the value portion of the items above the tax-free limit.
The co-founders of Grabr said that the amounts shown on their site do not always reflect the final shipping rate received by travelers; they did not give an example
Buyers could compensate travelers for customs charges in cash, Fedyaev said, adding that Grabr is improving its system to track those payments.
Ms. Rebenok said that most of the items requested through Grabr are below the tax-free limit. The frequency with which travelers exceed the limits can not be determined by combining several cheaper items, another way of imposing a duty.
The co-founders of Grabr, Artem Fedyaev and Daria Rebenok, say they do not support the avoidance of customs duties when their users travel and deliver products abroad.
Photo:
GRABR / Business Wire
Last year, Ms. Rebenok agreed to bring Apple laptops to seven buyers in Argentina, according to the Grabr website. The site says that its highest delivery rate on any of the computers was $ 285, although the tasks should have cost hundreds of dollars more for each computer.
Ms. Rebenok said that other deliveries attributed to her on the site were made by other staff using her account. She said that she always pays duties and does not intend to make profits from the transactions, what she was doing for research and development purposes.
Kevin Hartz, a former partner of the Founders' Fund, said people can have an "instinctive reaction" that a new market such as peer-to-peer delivery "would be a kind of contraband." One of the first Airbnb investors, Hartz compared them. Concerns to those expressed by the first skeptics about the legality of sharing the home.
"This is just a matter of changing sentiment," said Mr. Hartz, who led the $ 250,000 investment of his former company in Grabr. Grabr says he has received about $ 14 million from investors.
When the Journal provided examples of Grabr travelers evading customs officials, Mr. Hartz said he does not support customs evasion and that Grabr should encourage compliance. A representative in the Founders Fund had no comments.
The goal of peer delivery "is not to circumvent the laws," said James Currier, managing partner of NFX, a company that invested in Grabr. Currier said that this type of delivery is not a conventional business, but many critics say that "you should not push for anything."
"If you want to make a cake, you have to break some eggs, and Silicon Valley breaks the eggs," he said.
The rival of the Los Angeles area, Airmule, whose CEO, Sean Yang, says it has about 30,000 registered travelers, received $ 1.2 million in total funds, largely from a Chinese firm.
People who flew packages to China by Airmule personnel also told the newspaper that they had walked through the lines with expensive items such as electronic items, Coach bags and a Burberry coat, on the recommendation of company employees. Foreigners can import around $ 300 of duty-free products to China through luggage.
Mr. Yang said that the company tracks the value of shipments and notifies travelers when they need to declare items. In cases where travelers did not declare luxury items, they said that the items may have been purchased at a discount, or that some buyers might underestimate the items on the company's forms. He said the company is working to prevent people from undervaluing the items.
Meanwhile, in Buenos Aires, which Grabr calls among its largest markets, Emiliano Gioia, 23, says he has purchased more than 15 items through Grabr. To his knowledge, none of his travelers paid duties. He paid a traveler around $ 170 to deliver a virtual reality headset that costs $ 800. A tax on that item could have cost around $ 250. He said the item would have cost around $ 1,900 in Argentina.
A traveler whose experiences Grabr promoted on her site said she has not paid duties to travel the company for approximately two years. Gardenia Zuniga-Haro, 28, of San Francisco, estimated that he has transported thousands of dollars worth of items on flights financed by Grabr to South America.
"I'm helping people," said Ms. Zuniga-Haro. In Argentina, "inflation is ridiculous".
The co-founders of Grabr said that the experiences of travelers making mass deliveries in exchange for flights do not reflect Grabr's future business model, because that team is being phased out. Grabr is improving the traveler's education on customs, they said.
A man in Brazil asked on Grabr's Facebook page if a traveler could bring an item without a box "to skip the country's rates." Mrs. Rebenok replied that the buyer "can ask for a box, but the delivery rate could be higher for that, if without the box, it will definitely be cheaper, so yes, you can ask for that", adding an emoji of faces smiling
Ms. Rebenok said she made that suggestion because people may want to "save space in their suitcases." The comment was deleted after the newspaper consulted it.
The investors of Grabr
Grabr has said that the following are some of its investors:
• Foundation Capital, the firm that led the Grabr Series A financing round
• Founders Fund, a company co-founded by Peter Thiel, which invested in Grabr through its initial investment vehicle.
• NFX, another venture capital firm.
• Geoff Donaker, former director of operations for Yelp
• Konstantin Nikolaev, a Russian railway billionaire
• Javier Olivan, vice president of Facebook
• Alexey Repik, a Russian pharmaceutical mogul.
• Charlie Songhurst, former head of corporate strategy at Microsoft
• Matt Wyndowe, former employee of Uber and Facebook, now adviser to Kleiner Perkins
Note: Messrs. Olivan, Nikolaev and Wyndowe and a spokesperson for the Founders' Fund declined to comment. Messrs. Donaker and Songhurst and a spokesperson for Mr. Repik's company did not respond to the request for comments. Charles Moldow, general partner of Foundation Capital, said his firm advises Grabr and sees the potential in Grabr's business model, but Grabr's management is ultimately responsible for legal compliance.
Write to Andrea Fuller in andrea.fuller@wsj.com
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