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Is the PPE vendor reliable? Due diligence tips for buyers.

2020-05-26

摘要：

以下文章旨在为有意向中国供应商购买PPE（Personal Protective Equipment，系指任何个人为防备危害健康或安全的危险而穿着或使用的装置或器具）的外国买家提供指导。文中列出了可用于对供应商进行快速尽职调查的参考链接，这些链接包括国家企业信用信息公示系统、中国裁判文书网、国家药品监督管理局等网站。

How credible is the PPE vendor? In this time of worldwide scramble for PPE, buyers are looking to complete orders quickly and are hard pressed to assess the answer in a short time. The following resources in Chinese are provided as suggestions for conducting a quick due diligence on a Chinese PPE vendor.

TOP 4 Searches

The section lists the key public searches for conducting a basic due diligence (DD) on the vendor. Third party apps like Tianyancha can also be used to pull most basic information, saving the trouble of running a search on each government agency website. The apps aggregate information and display results in a more intuitive and responsive way. The sources of information are nonetheless also provided as results from third party apps may not be up to date.

Link: http://www.tianyancha.com/ 

1.Basic company info

The National Enterprise Credit Information Publicity System (NECIPS) is the general starting point. The website provides the incorporation date, province of incorporation, shareholders, and registered capital. The names of corporate shareholders of the vendor can be further searched through the NECIPS.

A basic indicator of reliability is the duration of the company since establishment. A high amount of registered capital may suggest the vendor is well-resourced and legitimate. However, depending on provincial rules, there may not be any requirement for the shareholders to pay the registered capital at the time of incorporation. And even if the registered capital has been paid up, there is no obligation to maintain the amount as a minimum balance available to the vendor. The paid-in capital by shareholders for a company incorporated on and before February 28, 2014 is published; for companies incorporated after March 1, 2014 the information is published depending on the company's choice.

Link: http://www.gsxt.gov.cn 

2.Disputes

China Judgements Online reports on judgments from the courts of all PRC provinces and provincial level cities. The website is fairly comprehensive with regards to judgments in effect. But the judgments by first instance courts are not in effect and don’t show up until after the expiration of a 10 or 15 day appeal period.

The search field allows for searches by court name, parties, counsels or other key words.  The database yields case details including the name of the opposing party, nature of the complaint, amount in controversy, amount in judgment, etc.

Link: http://wenshu.court.gov.cn/

3.Search engines

The most popular search engine in the Chinese market is Baidu. A search of the vendor, names of shareholders, and key personnel should be conducted on Baidu.

Link:http://www.baidu.com

4.Certificate for distributing medical equipment

The National Medical Products Administration (NMPA) is responsible for safety supervision, registration and quality management of drugs, medical devices and cosmetics. For this purpose, NMPA issues certificates and license for manufacturers and distributors.

Not all manufacturers of medical equipment will hold certificates. A lack of a certificate for a manufacturer does not necessarily mean the manufacturer is not capable of manufacturing equipment in accordance with standards.

Link: http://www.nmpa.gov.cn/WS04/CL2588/ 

Other searches

For a more in-depth investigation, we recommend running searches using the additional resources listed below.

Pledges

The Credit Reference Center is a database for searching pledges on accounts receivables. The database also provides the registration information of the accounts receivable pledge including the name of the pledgee, the amount and date of the pledge and expiry date of the registration. The pieces of information obtained from this search could be of use in assessing the financial condition of the vendor.

Link: http://www.zhongdengwang.org.cn 

Intellectual property searches

Searches of IP held by a target company can yield insights into whether the enterprise is invested in the long term reputation of its business. Quandashi is a third-party intellectual property search platform for trademarks, invention patents and copyrights.

Links:

http://www.quandashi.com   – Quandashi

http://www.ccopyright.com.cn/   -- Copyright

http://sbj.cnipa.gov.cn   -- Trademark

http://cpquery.sipo.gov.cn/   -- Patents

Domain name searches of the .cn extension

A search of the registrar for registrant information for domain names with the .cn extension (.cn, .com.cn, .net.cn, and .org.cn) can provide clues based on registration dates of the duration of the existence of the business.

Link: http://www.whois.sc 

Local tax compliance

As part of the DD exercise, we recommend asking the vendor to provide a tax compliance certificate. On local taxation websites where the vendor is registered, a search can be run on any tax penalties and major tax penalties against the vendor.

For instance, the website of the Shanghai Municipal Bureau of Local Taxation is available at 

http://shanghai.chinatax.gov.cn/

Credit record

Credit China provides information about a company's credit record including major tax violations, irregular operations, and blacklisting in government procurement.

Credit China also has an inquiry function for personal credit information. It can reveal whether a person is listed as having conducted illegal fund-raising or other serious illegal financial actions, responsible for dishonest listed companies, etc.

Link: http://www.creditchina.gov.cn/ 

Outstanding judgments

The Information System of Person Subject to Enforcement helps look up outstanding judgments against an enterprise or person with records dating back to January 1, 2007. The platform is run by the Supreme People's Court. Based on the name, ID number or organization code, the status of outstanding judgments can be looked up.

Link:http://zxgk.court.gov.cn/zhixing/

For entities who have not satisfied outstanding judgements, the Supreme People's Court publishes details on the Information System of Discreditable Person Subject to Enforcement. There is some overlap with this search and Credit China , but common practice is to search both.

Link:http://zxgk.court.gov.cn/shixin/

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