Is a Chinese Export licence needed ?
Post 1 of 10
I am currently negotiating with a factory in China but have discovered they do not posess an export license !! Does this mean they cannot export and they are obligated to go thru a company that can ? Is this common situation ?
23 Jul 2006 21:10
Post 2 of 10
Replying to [tonypili]:Yes, companies in China and Taiwan need an export licence. That is one reason trading companies are prolific in Asia. I had a company in Taiwan for 9 years exporting from Taiwan. Over half the factories I dealt with did not do any of their own exports. Everything went through a trading company like my own.
23 Jul 2006 22:36
Post 3 of 10
Replying to [Binsk]:Thanks Binsk, does this also mean that my legal and financial obligations are to the holder of the export licence ! Does it also mean I need to negotiate price with them instead of the factory ?
23 Jul 2006 22:59
Post 4 of 10
Replying to [tonypili]:
Dear Tonypili,
Your questions may involve two issues:
1.Whether the Chinese factory is legally capable of exporting goods on their own?
2.Whether an export license is needed to export the merchandise?
As to the first question, you may talk to the Chinese supplier to see if they have filed a record with relevent government authority of foreign trade allowing them to export goods. Such a filing is necessary for any Chinese company to export goods, without which no exports by themselves will be allowed by the customs. But it is just a matter of course and most Chinese companies can very easily obtain such a filing.
The second question is important as a limited number of merchandise, which are restriced from exportation by law or subject to a quota-based export restriction, need export licenses or export quota licenses for exportation. You need to talk to the Chinese supplier whether the merchandise in question falls under the annual catalogue of goods subject to export license promulgated by ministry of commerce of China.
The Chinese supplier's answers to the above two questions will tell you whether you can enter into a bargain with them directly or have to do through a trading corp.
If the latter is neceesary, you can, and should, hold the trading corp. liable under your contractual terms.
Dear Tonypili,
Your questions may involve two issues:
1.Whether the Chinese factory is legally capable of exporting goods on their own?
2.Whether an export license is needed to export the merchandise?
As to the first question, you may talk to the Chinese supplier to see if they have filed a record with relevent government authority of foreign trade allowing them to export goods. Such a filing is necessary for any Chinese company to export goods, without which no exports by themselves will be allowed by the customs. But it is just a matter of course and most Chinese companies can very easily obtain such a filing.
The second question is important as a limited number of merchandise, which are restriced from exportation by law or subject to a quota-based export restriction, need export licenses or export quota licenses for exportation. You need to talk to the Chinese supplier whether the merchandise in question falls under the annual catalogue of goods subject to export license promulgated by ministry of commerce of China.
The Chinese supplier's answers to the above two questions will tell you whether you can enter into a bargain with them directly or have to do through a trading corp.
If the latter is neceesary, you can, and should, hold the trading corp. liable under your contractual terms.
24 Jul 2006 00:23
Post 5 of 10
Replying to [lawyer_He]:
Many thanks Mr Lawyer_He. I will definitely ask the questions. I have infact asked my Chinese Bank to investigate.
On another matter, they have asked for a deposit prior to manufacturing (instead of a LC) . They also stated that this was a necessary precaution given at the start of any new relationship. . Although I have no reason to doubt them, is it sensible to get a Chinese lawyer to draft a contract for the supply of goods in order to protect the deposit ? Can I also incorporate quality concerns and shipment delaysas terms of the contract the contract ? Can you suggest anyone ?
Many thanks Mr Lawyer_He. I will definitely ask the questions. I have infact asked my Chinese Bank to investigate.
On another matter, they have asked for a deposit prior to manufacturing (instead of a LC) . They also stated that this was a necessary precaution given at the start of any new relationship. . Although I have no reason to doubt them, is it sensible to get a Chinese lawyer to draft a contract for the supply of goods in order to protect the deposit ? Can I also incorporate quality concerns and shipment delaysas terms of the contract the contract ? Can you suggest anyone ?
25 Jul 2006 18:10
Post 6 of 10
Quoting from [tonypili]:
Replying to [lawyer_He]:
Many thanks Mr Lawyer_He. I will definitely ask the questions. I have infact asked my Chinese Bank to investigate.
On another matter, they have asked for a deposit prior to manufacturing (instead of a LC) . They also stated that this was a necessary precaution given at the start of any new relationship. . Although I have no reason to doubt them, is it sensible to get a Chinese lawyer to draft a contract for the supply of goods in order to protect the deposit ? Can I also incorporate quality concerns and shipment delaysas terms of the contract the contract ? Can you suggest anyone ?
Dear tonypili,
The reason for some Chinese manufacturers asking for a deposit may relate to two possibilities:
i)They need the money to finance the manufacturing; and/or
ii)They are afraid of suffering losses if and when the foreigner buyer refuses to take the goods they have manufactured because, for example, the market price has dropped dramatically.
Of course you can have a Chinese lawyer to draft a contract which may include provisions about the deposit you paid to better secure your interest. It is wise and sensible to do so. By the way, a buyer paying a deposit(rather than as advance fee) to the supplier as security may demand double refund of the deposit if the supplier defaults under Chinese law.
You also can incorporte quality specifications and terms on delays in shipment in the contract if you so wish and the opposite agrees. If you'd like it, I may, as a PRC registered lawyer practising business law, draft/review such contracts for you and assist you in relevant legal matters.You may contact me either by leaving me a message or via the email address of hesheng2008@gmail.com.
Best regards,
26 Jul 2006 10:24
Post 7 of 10
Replying to [lawyer_He]:I would be very interested in drafting a contract. Will send you an email.
27 Jul 2006 03:47
Post 8 of 10
Replying to [tonypili]:Can any body please give me weblink to the concerned export authority,which isuues licence for cross verification of the export licence given by supplier. Where to check for factory licence verification?
27 Nov 2007 06:08
Post 9 of 10
It is really difficult to get information on the Chinese export licences. Most of our suppliers have an export licence. I know manufacturers do not all have export licences, but is that licence required for all goods?
Quoting from [Ashutosh]:
Replying to [tonypili]:Can any body please give me weblink to the concerned export authority,which isuues licence for cross verification of the export licence given by supplier. Where to check for factory licence verification?
At the moment I try to do business with a manufacturer, but all I get contact with is some sort of a middleman with a Yahoo email address.
First that middleman stated he has no export licence and an export licence is only needed for restricted goods. What I want to buy is not restricted. The goods can be exported without any licence, he writes.
Now he states he has a licence and gives me some registration numbers.
But I have no way to check the license numbers.
Also he states the licence is not needed for export from the free trade zone Taiwan.
What is true?
How can I check this?
I know that when in doubt it is best to deal not at all, but maybe Iam asking for papers that really are not needed for the goods I want to order?
23 Apr 2008 12:48
Post 10 of 10
Quoting from [tonypili]:
I am currently negotiating with a factory in China but have discovered they do not posess an export license !! Does this mean they cannot export and they are obligated to go thru a company that can ? Is this common situation ?
NO, JUST ASK YOUR CHINA SHIPPING AGENT TO ORGANISE EXPORT LICENSE, IT CAN BE BOUGHT FOR AROUND $100, CAN ONLY BE USED ONCE, SO FOR EVERYTIME YOU SHIP OUT JUST ADD $100 FOR EXPORTATION LICENSE.
20 Jun 2008 03:44
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