U.S. companies importing goods from Southeast Asia must beware of transshipment schemes by Chinese suppliers. Not only do these schemes mean dealing with China problems after a supposed China departure, they also give rise to serious liabilities if importing into the United States. Over the past few years, companies have had plenty of reasons to
“Where does an 800-pound gorilla sit?” “Anywhere it wants to.” In many, many companies’ supply chains, China is the 800-pound gorilla. And many companies established manufacturing and sourcing operations in and with China back when the gorilla weighed only 250 pounds, or 400. Things are different now. Recapping China Risk Factors, Which Have Been A
Sourcing product from China just got even riskier. Theses risks have never been higher and they just keep increasing. The Russian war and COVID in China are the key causes for this increased risk and both are nearly certain to get far worse.
A few weeks ago, we did a webinar on moving manufacturing from China to Mexico. To watch the webinar, go here. To see the Powerpoints from the webinar, go here. During the webinar we promised to post answers answers to questions we were asked but were unable to answer during the webinar. The below are an initial set of questions and answers. We will follow up with a part 2, with more questions and answers, in a few days. These questions are in no particular order. We received a number of questions that were very particular to a company or an industry and we will not be answering those questions on here, but if you email us, we will do so to the extent possible.
This post explains how to protect your product from China when having your product made in China. One of the first things our international manufacturing lawyers do when working with a company having products made in China is to figure out the contracts and IP registrations that will ensure our client's intellectual property and other rights will be protected against its Chinese manufacturer and the rest of the world.
International Manufacturing Turmoil Increases International Manufacturing Risks With the increasing risks of manufacturing in China, our international manufacturing lawyers are being contacted by many companies seeking legal help after all has been lost. These are mostly companies that moved their manufacturing to “bad” Chinese manufacturers or to other countries in an effort to reduce their
As I noted in my previous post on China NNN agreements, for enforcement purposes you must make sure your China NNN agreement has teeth. To understand how enforcement works under Chinese law, we need to do a little work. The first point to realize is that the standard approach for enforcing an IP contract under the common law (this is the law in the United States and the UK and most of the British world) has no application under Chinese law. In the common law system, lawyers are mostly concerned with two issues. First, the rule that disfavors liquidated damage provisions. Second, the law/equity distinction that allows only for injunctive relief when a law (damages) remedy is not available.
A new client the other day asked me what it should be doing to protect its IP in China and I asked whether they wanted the ten minute version or the ten day version. Fortunately for the both of us (and not surprisingly), they chose the ten minute version and the below is basically that.
As we continue to document in our customs and trade blog posts, import compliance and enforcement risk is higher than ever. And as recent experience suggests, this trend is not going to change anytime soon. By taking the preemptive supply chain verification and substantiation measures noted above, U.S. importers can manage and reduce these risk factors – and, in so doing, avoid becoming another CBP enforcement statistic.
China NNN Agreements up close. Our China lawyers often receive last minute emails sseeking a China NNN Agreement fast.
