I think I am confused with the fact you sell knives as a profession in a country that considers them bad weapons and you didn’t know you couldn’t ship them into the country.
I don’t think you have a case to bring up to PayPal to argue given what facts you have specified. According to what you say customs told you, your primary concern should be with what the police want to do moving forward.
Scary issue to say the least. I wish you the best of luck and hope everything works out okay for you.
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