Sinosure’s Country Blacklist

The Hidden Trade Barrier: Sinosure’s Export Credit Insurance Blacklist

China’s Sinosure, a major (virtually the only) provider of export credit insurance to China’s factories, plays an instrumental role in facilitating trade between Chinese suppliers and international buyers. However, there’s an under-discussed aspect of their operations that is detrimental for certain countries: the so-called “country blacklist”. This article delves into the implications of this list, and potential strategies companies might employ to navigate around it.

Sinosure’s Country and Company Blacklists

Sinosure has a well-documented history of denying (via its infamous blacklist) export credit insurance to companies with outstanding payments to Chinese suppliers. See Fighting Back Against Fake (and Real) Sinosure Claims: A Primer.

However, I have increasingly been hearing about an even more covert blacklist: one that outrightly refuses insurance for buyers hailing from certain countries.

Though it’s tricky to pinpoint the exact countries on this list, via discussions with industry stakeholders, past Sinosure employees, and clients I have compiled the below list of probable countries allegedly sidelined by Sinosure:

El Salvador
Guinea Bissau
Ivory Coast
Sierra Leone
South Sudan
The Vatican

This list is speculative. I have compiled it based on credible sources, but it’s not etched in stone, especially since none of those people have full confidence in what they’ve revealed. Furthermore, it’s entirely plausible that well-established companies from these countries aren’t uniformly blacklisted – they might be exceptions to the rule. I truly welcome Sinosure reaching out to me to clarify its position regarding anything written in this post and I assure it that I will pass on to readers whatever Sinosure tells me. Based on my long history of dealings with Sinosure, I do not expect to get any clarifications from them, but like I said, my door is open.

Again, the accuracy of this list is dubious. It is not based on any official Sinosure documentation or communications. However, the persistent rumors surrounding this list should not be ignored.

Why Certain Nations Face the Blacklist

The criteria behind this exclusion also remain ambiguous. However, some potential reasons could include:

  1. Perceived Commercial Risk: Countries grappling with unstable economies or nascent legal systems could be labeled as high-risk propositions.
  2. Diplomatic Stalemates: Political rifts with China might earn nations a spot on the list.
  3. Sparse Trade Interactions: Limited trade relations might deter Sinosure due to potential profitability concerns.
  4. Bureaucratic Quagmires: Complexities like language barriers and paperwork intricacies could be a factor.
  5. Bias Allegations: Some opine that prejudiced views against certain nations (based perhaps on politics, race, or religion) play a part in these decisions. Haiti likely makes this list based on its politics — Haiti has diplomatic relations with Taiwan and not with China. And also, based on its predominant race the overwhelming majority of the people in Haiti are Black. That Haiti is also the poorest country in the Americas, probbly helps cement Haiti’s place on this list.

There are some patterns to the above list. Predominantly, the countries seem to have either an underdeveloped legal framework, minimal trade interactions with China, or strained diplomatic relations with China. I’m guessing Guatemala, Paraguay, and The Vatican are on this list because they have diplomatic relations with Taiwan. Not sure why Panama would be on this list. Might it be residual anger at how the Panama papers exposed Chinese government officials? Who knows?

Regardless of the reasons, the result is the same: companies from these countries very likely face difficulties importing from China on credit terms, likely including many companies that are not high risks themselves.

How to Circumvent the Sinosure Blacklist

Over the years, my law firm has formed a ton of entities in the United States for foreign companies that — for a ton of different reasons — want to look (and/or be American). Circumventing Sinosure is a reason I’ve heard multiple times for wanting to form a United States company. I state with pride that our law firm has formed a number of companies to help companies that have been harmed by Sinosure. Along with these entity formations, we also provide advice on how to stay out from under Sinosure’s radar going forward.

Sinosure is opaque regarding what it requires from companies to qualify to buy their product on credit from China. But based on nearly one hundred conversations with companies over the years, it is pretty clear that American companies get Sinosure credit approval for smaller orders without need for a credit application or even a credit check. I say this because I’ve seen countless startup American companies order $50,000 to $750,000+ on credit from China.

If a Paraguayan or Zambian company forms a U.S. entity and then starts buying product from China, it is likely it will be able to receive credit, just like any other American company. Certainly, this would be the case if the product is shipped to the United States, but it is not clear how well this would work if that company always ships its product to Paraguay or Zambia.

The Larger Implications

Which gets us to how unfair it is if Sinosure blacklists entire countries. At minimum this makes trading for companies in the blacklisted countries more expensive (if only by the cost of having to form and operate a United States entity) and complicated. Some of the companies that form U.S. entities to avoid being blacklisted by Sinosure perhaps have their products shipped from China to the United States and then onward to Paraguay, and this too would add costs.

Sinosure’s blacklist, though possibly aimed at risk mitigation, inadvertently acts as a significant trade barrier. The lack of transparency and clear criteria for inclusion on or removal from this list hinders economic development for impacted nations and their companies. Then again, China has a long and less than storied history of blacklisting businesses with entire countries based solely on the politics of the country. This violates various international trade laws, but this has never stopped China previously. See

See Your China Supply Chain is a Bet Against the House, where I noted how China “has a long history of using symbolism (and government induced rioting) to make statements and prove points” and then linked to Canada, Japan, Norway, France, and South Korea as some of the instances in which China has done this. I then warned of how “Beijing might decide to make an example of your country, your industry, your company, or your personnel next.”

If your country or company has been impacted by Sinosure’s blacklist, I would love to hear from you, both because I crave more information about if and how this is happening, and because I would love to help. I would particularly like to hear from companies based in any of the countries listed above.

Among other things, someone, somewhere needs to stick it to Sinosure/China via a massive lawsuit for how they abuse international trade law. There, I said it.