Parallel Import: What It Is and Where It Is Used

The mechanisms of supplying goods to global markets are constantly transforming. One of the controversial phenomena is considered to be parallel import. Some mistakenly classify it as a “gray scheme,” while others actively use it in their business. In this article, we will examine everything in detail, taking current legislation into account.

What Is Parallel Import

Parallel import is the import of original products bearing the trademark of the rights holder without obtaining their direct consent. The key point is the import of original goods, not counterfeits or replicas. The products are manufactured by the brand itself, but purchased not from the official distributor in the retail country, but from intermediaries or retail chains abroad.

Many countries follow the “first sale doctrine.” Once the manufacturer sells the product to the first buyer, the right to control the distribution of that specific item ends.

Suppose the brand “Precise Watches” is not represented on the Ukrainian market. An entrepreneur can sign a contract with a supplier abroad, import the products into Ukraine, and legally sell “Precise Watches.” Since the brand has already completed the first sale, it cannot restrict or prohibit further resale.

This type of exhaustion of rights is called international exhaustion. There are also two other types:

• regional, when goods move freely within a specific union/region (for example, the EU);
• national: the rights holder permits import into a specific country.

The scheme received its name because deliveries go through alternative channels, often simultaneously with official distribution channels. In this case, the situation becomes even more interesting.

A vivid example is the Ukrainian pharmaceutical market. Certain medications are officially imported into the country, but their prices are higher than, for example, in Poland (for the same medicine and quantity). Therefore, purchasing medicines abroad and importing them into Ukraine through parallel import becomes an alternative channel. As a result, both an “expensive” and a “cheap” original medicine of the same brand exist simultaneously.

Why Businesses Use Parallel Import

For entrepreneurs, this scheme is a tool for solving economic challenges:

• Fighting monopoly. Official distributors often inflate prices, while parallel importers create competition.
• Eliminating shortages. If the manufacturer does not organize direct exports, alternative channels supply the market with goods.
• Lower prices. Sometimes parallel import results in lower prices than official distribution due to different pricing policies in different countries.
• Access to new products. Official distributors may delay releases, while importers can bring in a new collection or gadget as soon as it appears on sale abroad.

Products go through customs clearance on a “general basis,” so the scheme is not considered simplified.

Advantages and Risks of Parallel Deliveries

As always, it is about balancing benefits and potential risks. The advantages include:

• a wide selection of goods unavailable through official channels;
• cost savings;
• quick response to consumer demand.

There are also several risks for buyers:

• limited warranty and service coverage if the product was not purchased from an official supplier;
• localization issues (missing keyboard layout or plugs of a different standard);
• instructions in a foreign language.

The main issue with parallel import lies in the conflict between free trade and intellectual property protection.

• Reputational Risks and Quality Control

The manufacturer is not responsible if the importer improperly transported or stored the goods in a warehouse. This can lead to quality loss or spoilage, but complaints are directed at the brand because its logo is on the products.

• Legal Disputes

In Ukraine, court practice supports the free market. The Supreme Court confirmed that if the product is original and was legally purchased abroad, resale does not violate trademark rights. However, violations occur if:

1. The product was modified or damaged before sale.
2. The seller misleads buyers by presenting themselves as an official representative.
3. Advertising with branded styling is used beyond product identification purposes.

Today, parallel import does not require special licenses or permission from the rights holder.

• Import vs Counterfeit

Let us explain with an example:

• parallel import means Gucci brand T-shirts purchased in a boutique or from an intermediary abroad;
• counterfeit means T-shirts sewn in China with illegal use of the brand logo.

Such imports attract more attention from customs because counterfeit goods or replicas are often imported under the guise of originals.

Logistics and Customs Clearance Features

In most cases, the procedure is legal. The importer must submit accompanying documents and a declaration, pay all taxes (duties and VAT) and excise taxes if applicable, and pass certification procedures. There is only one difference — permission from the trademark owner is not required.

If the brand is included in the Customs Register of Intellectual Property Objects, customs clearance may be suspended to verify authenticity. After that, the goods are released into free circulation.

Delivery can be multi-stage:

1. Purchase from a foreign retailer or wholesaler.
2. Consolidation at intermediate warehouses.
3. Repackaging, labeling, or sticker application. It is important that the packaging contains information in the official language.
4. Transportation to the destination country.

On the one hand, parallel import can be a forced measure. On the other hand, it opens opportunities for new businesses that can bring previously unavailable products to the market. The scheme is not illegal, so it can be successfully adapted to Ukrainian realities. DiFFreight provides international logistics services from the USA, Europe, and China. We also offer customs broker consultations — find out whether parallel import can be established for your business.