What You Need to Import Goods from China to the EU:

Planning to import goods from China to maximize your profits? This strategic move can be a significant advantage for your business, but it comes with a host of legal and commercial risks that can easily turn a successful deal into a financial loss. This article provides a practical, clear guide on how to navigate the entire process safely—from vetting suppliers and creating ironclad contracts to ensuring smooth customs clearance in the EU.

Need advice on this topic? Contact the ARROWS law firm by email office@arws.cz or phone +420 245 007 740. Your question will be answered by "Mgr. Vojtěch Sucharda", an expert on the subject.

Before You Start: Strategic Preparation and Vetting Your Chinese Partner

The success or failure of your entire transaction is often decided before a single contract is signed. Thorough due diligence of your potential partner is an absolutely critical, non-negotiable step. Relying on a "Gold Supplier" status on online platforms like Alibaba is insufficient and can lead to major problems, including fraud.

Step 1: Verify the Business License

The foundation of any due diligence is requesting and verifying the potential partner's business license. This is the primary legal document proving the existence and legal status of a Chinese company. The license must be checked in the official online registry to ensure you are not dealing with a fictitious entity.

Step 2: Decode the "Business Scope"

A key piece of information on the license is the "Business Scope" (经营范围), which legally defines the activities the company is authorized to perform. If a company offers to manufacture complex electronics, but its "Business Scope" only includes "trading" or "consulting," this is a clear red flag. You are not dealing with a manufacturer, but an intermediary, which increases costs and the risk of quality issues.

Analyzing the "Business Scope" is a direct tool for managing supply chain risk. A trading company might switch factories without your knowledge to increase its profit margin, causing you to lose all control over the production process and quality. At ARROWS, our international network, ARROWS International, provides professional due diligence services, including the legal interpretation of these key documents.

Other Red Flags to Watch For

• Bank Account: Is the account in the company's name and in the same province where it is based? Payments to a private account or an account in another province are extremely risky.
• Communication: Is the partner willing to provide samples and a copy of their license? Any reluctance is suspicious.
• Price: Are the offered prices unrealistically low compared to the market? This could be an attempt to lure you into a scam.
• Chop: Does the company use an official, round, red chop (seal)? Other forms of chops may be invalid and reduce the enforceability of documents.

Risks and Penalties	How ARROWS Helps
Partnering with a fake company ("scam") – Loss of the entire deposit, no goods, and no existing partner to resolve a dispute with.	Comprehensive due diligence report – We verify the company's existence, its license, and legal status in Chinese registries. Want to verify a partner? Write to us at office@arws.cz.
Dealing with a trader instead of a manufacturer – Higher prices, no quality control, risk of "quality fade," and communication problems.	Legal analysis of the business license and "Business Scope" – We ensure you are dealing directly with a manufacturer authorized to produce your goods. Need a legal analysis? Contact us at office@arws.cz.
Payment fraud – The supplier changes the account number in an email, and the payment goes to a fraudster.	Drafting of contractual clauses – We contractually establish the bank details and define the process for any changes. For immediate assistance with your situation, write to us at office@arws.cz.

The Contract as Your Foundation of Security: How to Protect Yourself Legally

Many companies mistakenly believe that a purchase order and a proforma invoice are sufficient for trading with China. This approach is a gamble. These simple documents lack key protective mechanisms, such as dispute resolution clauses, quality specifications, or penalties for delays, and are almost legally worthless if a problem arises.

Essentials of an Enforceable Contract

• Bilingualism: The contract must be in both English and Chinese. However, only the Chinese version is relevant in a dispute before a Chinese court. It is therefore crucial to specify in the contract which language version is decisive in case of a conflict.
• Choice of Law and Forum: For a contract to be enforceable in China, it must be governed by Chinese law, and the venue for dispute resolution must be a Chinese court or, even better, international arbitration.
• Official Chop: In China, the official company chop (round, red) has the same, if not greater, legal weight as the signature of a director. Ensure the contract is stamped with it.

Countering "Quality Fade" in the Contract

One of the most serious risks is the phenomenon of "quality fade"—the intentional and gradual reduction in the quality of materials and workmanship after the initial samples have been approved. The only effective defense is to include extremely detailed technical specifications directly in the contract or as an appendix. It must contain drawings, precise dimensions, types of materials, component certifications, and color codes.

ARROWS lawyers specialize in drafting and reviewing international purchase agreements with Chinese partners. We will ensure your contract includes all protective elements and reflects the specifics of the Chinese legal environment. Do not hesitate to contact our firm – office@arws.cz.

FAQ – Legal tips on purchase agreements

• Does the contract really have to be in Chinese?
  Yes, it is essential for enforceability in a Chinese court. The English version is for your reference, but the Chinese text is decisive. Our lawyers will ensure the preparation of a precise bilingual contract. Get in touch with us at office@arws.cz.
• What if the supplier refuses to sign a detailed contract?
  This is a significant red flag. A serious manufacturer sees a detailed contract as a sign of your professionalism, not mistrust. It may mean they want to leave room for reducing quality. We can help you negotiate terms that will protect you. Write to us at office@arws.cz.

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New Regulatory Risks: China's Export Licenses and Their Impact on Importers

In 2025, China significantly tightened its export regime, a move that directly affects EU importers. China has introduced new licensing requirements for the export of key materials, complicating supply chains and increasing the risk that your goods may never leave the Chinese port.

China's Ministry of Commerce (MOFCOM) has implemented export licenses for a wide range of strategic raw materials, particularly rare earth metals (such as samarium, gadolinium, and terbium) and related products like permanent magnets. The restrictions also apply to superconducting materials, rare earth processing equipment, and materials for lithium batteries.

The most significant change is the application of extraterritorial jurisdiction. This means that Chinese regulations can now apply to companies outside of China, including those in the EU. If your product manufactured in the EU contains more than 0.1% of its value from Chinese-origin rare earths, its subsequent re-export to a third country may require a license directly from the Chinese ministry.

These new rules are already causing supply chain disruptions in Europe, particularly in the automotive industry. Analyzing your supply chain and contractual relationships is now crucial to minimize these risks. At ARROWS, we can help you assess the impact of these regulations on your business. For a legal consultation, contact us at office@arws.cz.

Risks and Penalties	How ARROWS Helps
Unintentional violation of Chinese law when re-exporting goods containing Chinese raw materials due to extraterritorial jurisdiction.	Legal analysis of the supply chain: We identify risks associated with the new Chinese regulations. Want to know your legal options? Write to us at office@arws.cz.
Production stoppage due to the inability to obtain a Chinese export license for a key component from your supplier.	Legal advice on supply chain restructuring and negotiating with new suppliers. Need a contract prepared? Contact us at office@arws.cz.
Contractual disputes with partners over responsibility for obtaining Chinese licenses and any resulting damages.	Contract review and preparation: We ensure your contracts reflect new regulatory risks and clearly define responsibility. Our lawyers are ready to help you – write to us at office@arws.cz.
Inclusion on a Chinese sanctions list for trading with an entity that is more than 50% owned by a sanctioned Chinese entity.	In-depth partner due diligence: We will check the ownership structures of your partners to uncover hidden risks. For an immediate solution to your situation, write to us at office@arws.cz.

Protecting Your Know-How and Brand: Don't Underestimate Intellectual Property

Protecting your intellectual property (IP) in China is not a step to be dealt with later, but an absolute prerequisite for starting any business negotiations. Sharing information about your product or design without prior legal protection is an invitation for misuse.

Risk #1: "Trademark Squatting"

China operates on a strict "first-to-file" principle. Whoever registers a trademark first gets the rights to it, regardless of who actually created or used it elsewhere in the world. If you do not register your brand (including its phonetic transcription into Chinese characters) before entering the market, your Chinese partner will likely do so and then block the import of your own products or demand a high ransom.

Risk #2: The Inadequacy of a Standard NDA

A Western Non-Disclosure Agreement (NDA) is practically ineffective in China. It only protects you from your partner disclosing your information to a third party. It does not prevent them from using your know-how themselves (Non-Use) to produce a competing product or from bypassing you to sell directly to your customers (Non-Circumvention).

The Solution: The NNN Agreement

The only functional tool is a contract created specifically for the Chinese environment: the NNN agreement (Non-Disclosure, Non-Use, Non-Circumvention). To be enforceable, it must be in Chinese, governed by Chinese law, and include predefined contractual penalties (liquidated damages), which simplify the enforcement of damages.

ARROWS handles the timely registration of trademarks in China for clients and prepares enforceable NNN agreements that truly protect their trade secrets. Need to protect your know-how? Write to us at office@arws.cz.

Securing Payment and Quality Control: Two Pillars of a Successful Transaction

Secure payment and verified quality are the cornerstones of any successful import. These two elements must be strategically linked to protect your money until you are certain that the goods meet your requirements.

Payments: High Risk of T/T vs. Security of L/C

The commonly offered T/T (Telegraphic Transfer) payment—a deposit and the balance paid against a copy of shipping documents—is extremely risky for the importer. Once you pay the balance, you lose all leverage over the supplier if the goods arrive damaged or of poor quality.

A much safer method is a documentary letter of credit (L/C). In this case, your bank releases the payment to the manufacturer only after they present a set of predefined documents proving they have met their contractual obligations. Crucially, one of these documents must be a certificate of a successful pre-shipment inspection (PSI) from an independent third party.

Pre-Shipment Inspection (PSI)

A PSI is a physical inspection of the goods conducted directly at the Chinese factory when 80–100% of the order is manufactured and packed. Inspectors verify the quantity, visual quality, functionality, dimensions, packaging, and labeling against your technical specifications. The output is a detailed report that determines whether the goods are acceptable and can be shipped—and whether your payment can be released.

ARROWS helps clients structure secure payment terms and incorporate clauses for mandatory and successful PSI into purchase agreements and L/C conditions. To get a tailored legal solution, write to us at office@arws.cz.

Risks and Penalties	How ARROWS Helps
Manufacturer demands 100% payment upfront and delivers nothing – Complete loss of investment, no goods.	Structuring payment via a documentary letter of credit (L/C) – The bank will not release payment until the manufacturer proves shipment of the goods. Need legal help with payments? Contact us at office@arws.cz.
Delivery of defective goods ("quality fade") – Unsellable goods, disposal costs, damage to brand reputation.	Drafting a clause on pre-shipment inspection (PSI) – We condition payment on the issuance of a quality certificate from an independent inspector. Need a watertight contract? Contact us at office@arws.cz.
Supplier rejects a claim – Loss of money on defective items, repair costs, dissatisfied customers.	Preparation of a contract with clear claim conditions and penalties – Defines the process and deadlines for claims and compensation for damages. Our lawyers are ready to help you – write to us at office@arws.cz.

The Journey of Goods to the EU: Customs Procedures, VAT, and Regulatory Duties

After successful production and inspection of the goods, the next key phase follows: their transport and customs clearance in the European Union. Here too, a number of administrative and regulatory duties await, the neglect of which can lead to significant penalties and delays.

Key Steps for Importing into the EU

• EORI Registration: Every company importing goods into the EU must have an EORI (Economic Operators Registration and Identification) number. This is a unique identifier for customs purposes.
• Tariff Classification (TARIC): Before importing, the goods must be correctly classified using the TARIC system. This code determines the amount of customs duty, VAT, and any other restrictions or requirements for import (e.g., licenses).
• Customs Declaration and Payments: For every shipment from a non-EU country, it is mandatory to file an electronic customs declaration. As of October 1, 2021, VAT is payable on shipments of any value; customs duty is levied on shipments with a value over 150 EUR. The basis for calculation is always the sum of the price of the goods and the transport costs.
• Product Compliance: As the importer, you bear full responsibility for ensuring that the imported goods comply with all relevant EU standards and regulations. For categories such as electronics, toys, or protective equipment, the CE marking is key. You must be able to prove that the manufacturer has carried out a conformity assessment and that you have the technical documentation and the EU declaration of conformity.

ARROWS provides comprehensive legal advice on customs law and regulatory compliance. We will help you navigate the TARIC requirements, ensure the preparation of the necessary documentation, and protect you from penalties from customs authorities and supervisory bodies. For legal consultations, contact us at office@arws.cz.

When Things Go Wrong: Why International Arbitration is the Only Way

Even with the best preparation, a dispute can arise. In such a case, it is crucial to have a mechanism in the contract that ensures the real and effective enforceability of your rights. Relying on Czech courts in this case is a strategic mistake.

The Problem: Unenforceability of a Czech Judgment in China

There is no bilateral treaty between the Czech Republic and the People's Republic of China on the recognition and enforcement of court decisions. A final judgment issued by a Czech court is therefore practically unenforceable in China and is just a worthless piece of paper to your Chinese partner. Legal proceedings in the Czech Republic are thus a waste of time and money.

The Solution: International Arbitration

The only effective way is international arbitration. China is a signatory to the New York Convention, which guarantees that an arbitral award issued in one contracting state will be recognized and enforced in more than 160 countries worldwide, including China. Renowned institutions such as CIETAC in Beijing or HKIAC in Hong Kong provide a neutral and professional platform for resolving disputes.

Choosing arbitration at HKIAC also offers a unique tactical advantage. Thanks to a special agreement with mainland China, you can ask a Chinese court to freeze the assets of your Chinese partner even before the arbitration is concluded, thereby ensuring that if you win, there will be something to satisfy your claim from.

ARROWS lawyers have deep experience with international arbitration and representing clients in disputes with an international element. Thanks to our ARROWS International network, we handle these cases on a daily basis. We will help you correctly set up the arbitration clause and guide you through the entire process.

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Conclusion: ARROWS as Your Partner for Safe Trade with China

Importing goods from China is a complex process fraught with risks—from fraudulent suppliers, through unenforceable contracts and intellectual property theft, to disputes with no real resolution. Success requires not only business acumen but, above all, precise legal handling of every step.

At ARROWS, an international law firm operating from Prague, European Union, we provide our clients with comprehensive legal services covering the entire import cycle. Our experience from long-term cooperation with over 150 joint-stock companies and 250 limited liability companies is a guarantee of quality and speed. Thanks to our ARROWS International network, we are able to act effectively directly in Asia.

Planning to import from China? Don't take risks. Contact us at office@arws.cz and provide your business with a solid legal foundation. We are also happy to listen to your business ideas and connect you with other interesting clients from our portfolio.

FAQ – Most common legal questions about importing goods from China

1. How long does it take to vet a Chinese supplier?
A basic online license check takes a few working days, while preparing a comprehensive due diligence report usually takes 1–2 weeks. A timely check is a minimal investment compared to the risk of losing an entire order. If you are selecting a partner, contact us at office@arws.cz.

2. Is it really worth paying for a documentary letter of credit (L/C)?
Absolutely. The bank fees for an L/C are a fraction of the potential loss from non-delivery or delivery of defective goods. For orders in the tens and hundreds of thousands of euros, it is a standard and necessary risk management tool. For help with setting up secure payments, contact office@arws.cz.

3. What should I do if I have already sent designs to a manufacturer without an NNN agreement?
You must act immediately. File a trademark and industrial design application in China without delay and try to conclude an NNN agreement with the manufacturer retroactively. Time is a critical factor in this case. For immediate help with protecting your IP, write to us at office@arws.cz.

4. Can I handle the customs declaration myself?
Theoretically, yes, but the process is administratively demanding and requires knowledge of customs regulations and the TARIC system. An error can lead to delays and penalties. Most companies therefore use the services of professional customs declarants. Need advice on customs regulations? Contact us at office@arws.cz.

5. What is the approximate cost of international arbitration?
The costs vary depending on the complexity of the dispute and the amount of the claim, but they are comparable to a more complex court proceeding in the Czech Republic. The key difference is that an arbitral award is enforceable in China, while a Czech judgment is not. It is an investment in a real outcome. For an estimate of costs and dispute resolution strategies, contact office@arws.cz.

6. How do I know if a CE certificate from a supplier is genuine?
The authenticity of the certificate must be verified. It should contain the identification number of the notified body that performed the testing, whose database can be looked up. Unfortunately, certificate forgery is common, and the importer bears full responsibility. We also provide legal verification of the validity of certificates. Write to us at office@arws.cz.

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