Importing Your China Product: Its Own Special Mess

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About once a month, one of the international trade lawyers at my law firm will get a call from someone whose product is being held at the U.S. border for one problem or another. At least half the time the problem stems from the products’ lack of compliance with U.S. laws or the packaging of the product failing to comply with U.S. laws. Much of the time it does not make economic sense for us to take these matters because the companies that let themselves get into this sort of trouble tend to be small and the value of their incoming product is usually fairly small as well. It just does not make economic sense for international trade lawyers to research the compliance requirements for $20,000 in product and then fight with customs or whomever to try to get it in.

Our international trade lawyers are also frequently contacted by importers who were promised by their Chinese manufacturers that such and such product would comply with such and such compliance requirement, but it did not. Many times the Chinese manufacturer has faked a certificate of compliance. These importers now realize they were duped and they want us to sue their manufacturer in China. Our international dispute resolution lawyers usually send out something like the following in response to these:

Thank you for contacting us. I am sorry this happened to you.

It is often difficult to sue Chinese companies that have engaged in the sort of conduct you described. Most Chinese companies that do this sort of thing are not actually manufacturers, but rather brokers. Therefore, even if we could sue and win, it would not be clear the Chinese defendant would have any assets from which to pay the judgment or which we could seize to collect on the judgment. Also, unless you have a clearly written and signed (preferably in Chinese and preferably sealed) contract that calls for disputes to be resolved in China, we will likely face problems prevailing.

We do not take these sorts of cases on a contingency fee basis and so we should together figure out whether the value of your case and the value of pursuing it in China warrants you paying for attorneys.

The other day, in CE marking when importing from China – Don’t forget this! [link no longer exists]. This article talks about the need to make sure your product being sent to Europe has the relevant and real (as opposed to fake) CE marking. It nicely highlights how product buyers often fail to conduct their due diligence and end up getting burned.

The post starts out by talking about the importance of confirming the CE logo is the one Europe requires and not a symbol for China Export. It then discusses how it is also crucial for the European buyer to make sure the CE marking is for the relevant directive:

One of our main products recently have been GPS trackers for motorbikes and cars. The relevant directive for this type of device is the R&TTE 1999/5/EC directive. This is a directive for radio and telecommunication equipment’s. This directive also include the essentials from other directives such as the 2006/95/EC Low Voltage directive and the 2004/108/EC Electromagnetic Compatibility directive, we therefore don’t need to follow any other directives than the R&TTE 1999/5/EC directive for reselling this unit on the European markets. We have almost only gotten CE certificates for the 2004/108/EC directive when sourcing GPS units, which is completely irrelevant for our product.

Lastly, the post talks about the need for making sure that the CE logo has been earned and is not just a fake:

Sometimes suppliers provide outright fake documents. These can be quite hard to spot. If the seller claims to be the manufacturer of the product, then the most obvious red-flag would be if the name of the company is not the same as the applicant for the certificate. You also need to verify the certification-number with the website of the third party who issued the DoC. These websites are usually in Chinese by default, so look out for the small “English” button. One extra step to take is to verify that the third party who made the certificate is a legit company.

None of this is easy, which probably explains all of the after the fact problems.

What do you think?

2 responses to “Importing Your China Product: Its Own Special Mess”

  1. Not only do many Chinese supplier fake certificates of compliance to a certain standard, but even more often (I would guess) they provide a real certificate that has nothing to do with the products being purchased. The product itself might be different (often because of different components), or the standard it was tested against was irrelevant.
    Bottom line is, don’t trust anything. Especially with children products, electrical products, food/health products, and other sensitive categories.

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