There recently has been a case for exporting a large volume of electric car toys to the UK. The buyer had found a supplier and negotiated a price, so most things had been settled already. Before making the final order, he wanted some basic due diligence to be done on the products he was going to buy. Just to be sure about their compliance with all the regulations for importing electric car toys into the UK:
1. CE label
2. RoHS
3. EMC testing
4. BS1363-1 certified power-plugs
5. MSDS document
6. Safety tests for toys
On paper, everything looked great. The supplier (a trading company) had been active for 10 years and had significant experience with exporting goods to the UK. Therefore, the visit was expected to be just a routine review of the product’s quality and details.
The review
After arriving at the supplier’s location, which was just outside of Shenzhen center, the sales staff first kindly offered some coffee prior to the review. While the beginning of the review went well, some problems arose when I asked them to list all available certifications…..
It appeared that there was no CE label, but I was told it could be added on request (a common practice in China). Moreover, RoHS was not available on all models, and the sales staff mentioned wrongly that this is not needed in the UK. Furthermore, EMC testing, which is mandatory for a CE certification, was missing on most types of the electric car toys. Additionally, the products did not have BS1363-1 certified power plugs, required for all electric products to be sold in the UK, and there was no MSDS document for the batteries, which is required for transport by plane and by boat. Finally, the toy safety tests all dated from 2014 and did not include the latest 2015 regulation update.
It was obvious that there were many holes in the importing documents, but the situation got even worse when the initially friendly attitude of the sales staff started to become more aggressive. The supplier suddenly started to claim our requests unreasonable. They said they could guaranty the importing and customs clearance would be fine, but refused signing any kind of contract.
What are the risks for both parties in this situation?
In fact, only the buyer is exposed to several risks:
- The shipment could be stopped at UK customs and refused for importation.
- The products could be confiscated and the buyer fined for reselling illegal products
- Long time storage of the goods in China without alternative, as the goods might could not even leave China due to the missing MSDS document.
- Increased logistic costs at UK customs
What actions are possible?
In this case, the lack of documents is alarming. But the attitude of the sales team is a clear sign for the buyer not to cooperate with this supplier. With so many misleading comments, more risks not yet discovered are likely to happen. For example, we found out they previously used to export without declaring batteries, leading to additional uncontrolled risks.
How to act in such a situation? There are several options to be considered by the buyer:
1. Set up a contract that transfers the liabilities to the seller
2. Run complementary tests to cover the minimum requirements
3. Search for a new supplier
The advice we have given to this buyer was to move away from this supplier. The products did not comply with the UK regulations and the attitude of the seller was likely to bring more problems on the way. Although the buyer didn’t expect to receive such a message, he was happy he had let us checked due diligence, before getting into serious trouble.
This case illustrates the importance of always having your products compliance checked. More information on this topic can be found here.
