This is the reason i always state CONUS in all my sales threads. How is the seller responsible for a lost knife?
I have a generic answer for this questions.
According to the way transactions work, if you order something from a store or a person, it is their obligation to make sure the paid for item reaches its intended destination. You wouldn't order something from eBay and say "well it didn't make it, oh well." You'd be looking for some restitution.
What happens in most of these situations I've seen is that sellers do not want to ship through the more expensive registered international way. It adds time, cost, and forms to the equation. The customs forms may not be filled out correctly, the value will incur duties to be paid by the recipient.
The sellers on the other hand, may not be aware that some items just won't pass through customs. This has been seen in the previous 3-4 years when a person in Australia in particular goes after the seller for nondelivery even though it was in fact the AUS customs that confiscated the knife as illegal gravity knives. I've heard that Russia has a pretty strange/complex customs and delivery system as well. Most common household items will be fine, but when it comes to things of value it gets really difficult and the chance of loss increases exponentially and the cost of duties increases quite a lot as well. A lot of EU countries have this practice, not just Russia.
So with that said, Paypal doesn't care about customs or import duties, they only care about "did the package make it and is there going to be a claim of any kind", if the answer to those questions is Yes it made it and no claims are necessary, all is well. If the answers are No the package did not make it, and customs ate it, then they go into the claims process.
The first thing they ask is "Was the package shipped by the required method? Signature confirmation, insurance, etc?" If the answer is no, they side with the buyer. They might side with the buyer anyway.
