A guide to Chinese exports

Chinese exports: a guide to wholesale export paperwork

Before they leave the country, Chinese exports need to pass through regulatory procedures. Find out which wholesale export documents are your trading partner’s responsibility, and which import documents are required to bring goods into the UK.

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China is a manufacturing powerhouse. Marketplace sellers in the UK frequently partner with factories in China because – even with shipping factored into the bargain – they offer unbeatable value for money. The paperwork associated with Chinese exports can be complex for first-time importers: which documents do you need to arrange, and which are your trading partner’s responsibility?

For the sake of clarity – this guide will outline the documents you need to import non-hazardous items from China to the UK. The list of documents below isn’t exhaustive, so do seek professional advice before proceeding with your wholesale export and import strategy,

1. Chinese exports: setting the stage

Your supplier can’t export anything – and you can’t import anything – without a few basics in place. You probably won’t need an import licence, but you will need an EORI number; meanwhile, your trading partner will need to obtain an export licence.

What is an export licence?

Export licences are essential documents: without them, shipments won’t clear Chinese customs. General and specialist export licences are issued by the Chinese government, and they give exporters permission to ship items out of the country. Some smaller companies use freight forwarding services to ship goods rather than obtaining their own export licences.

Who has to get an export licence?

Suppliers – Chinese factories or trading companies – are responsible for getting export licences. Company representatives have to fill out a People’s Republic of China export licence forms and include business licences, order details, shipping destinations, invoice amounts and other details with their applications.

What is an EORI number?

In a nutshell, an Economic Operators Registration and Identification (EORI) number is a registration number for companies who want to move goods between the UK and any other country. Both businesses and individuals can get EORI numbers.

Who has to get an EORI number?

You’re responsible for getting an EORI number – preferably before your goods reach the UK border. If you don’t have an EORI number when your shipment arrives, customs will hold your cargo until you obtain one. It's free to apply for an EORI number.

What is a proforma invoice?

Essentially, a proforma invoice is a preliminary invoice for your order – it’s a good faith agreement between you and the supplier. You’ll receive a proforma invoice after negotiating with your trading partner. Proforma invoices aren’t legally binding: they’re estimates to help you decide whether or not to proceed with your order.

Who creates the proforma invoice?

Your supplier is responsible for creating a proforma invoice for your approval. Scrutinise the invoice carefully, and make sure that the international commercial terms (incoterms) your supplier has used are correct.

What is an export letter of credit?

In basic terms, an export letter of credit (LC) is a conditional payment guarantee. Wholesale exports from China sometimes need to ship before payments are actually made; under the terms of an LC, payments are made as soon as companies provide documentary evidence of shipment.

Who needs to get an export letter of credit?

As the importer – and the buyer – it’s up to you to pay for the products you order. Export letters of credit are a sensible solution even if you have the money to purchase orders without borrowing money because they give you leverage over product shipment.

2. Preparing for shipment

With fundamental import and export paperwork taken care of and proforma invoices approved, it’s time to prepare for shipment. Let’s review some of the documents you’ll need to move your order out of China.

What is a certificate of inspection?

Certificates of inspection prove that products have been examined to make sure that they meet contractual terms – and the terms on the export letter of credit. Only certain products, like industrial equipment, meat, and perishable items, need certificates of inspection.

Who issues a certificate of inspection?

Pre-shipment inspections, or PSICS, can’t legally be done in house. Instead, they’re conducted by independent inspection agencies, who issue certificates of inspection if products meet predefined standards.

What is a commercial invoice?

Also called customs invoices, commercial invoices provide proof of the sale. They’re sent after the terms of the sale are finalised and the products are made, but before payment (or a letter of credit) goes out. You’ll need a commercial invoice to secure an export letter of credit, and to get your goods through – and pay VAT and import duty at – UK customs.

Who creates the commercial invoice?

Your supplier has to create a commercial invoice before shipping your order. Once again, make sure that your trading partner uses the right Incoterms.

What is a bill of exchange?

A bill of exchange is a formal request for payment. It often goes out at the same time as a commercial invoice. Your supplier is known as the drawer, while you are referred to as the drawee. Your supplier is usually also the payee – unless they’ve requested that payment go to a third party.

Who creates the bill of exchange?

Your supplier will create the bill of exchange. Bills of exchange aren’t contracts, but they can be used to define payment terms and to fulfil part of the drawee’s contractual obligations.

What is an export packing list?

An export packing list is a detailed list of all the goods in an order. Packing lists are itemised formal documents; they’re also reference points for customs agencies. Export packing lists have to include absolutely everything in every box in your order. If customs agents find extra items in your shipment, your imported products could be impounded.

Who creates an export packing list?

Your supplier is responsible for creating an accurate export packing list. You’ll need the list to submit your import declaration.

3. Leaving port

We’re going to assume you plan to ship your products by sea. Air freight is an option – and it’s faster – but it’s vastly more expensive than freight shipping. All goods entering the UK from China must clear customs and are subject to a customs check.

If you don’t have the right paperwork in place before your container arrives in the UK, your products could be stuck in a customs warehouse for weeks – and that could cost you a lot of money.

What is a cargo insurance certificate?

A cargo insurance certificate indicates insurance coverage for your shipment. It’s proof of insurance – and you’ll need it to claim compensation if your products are damaged while in transit, or if your shipping container falls overboard.

Where do you get a cargo insurance certificate?

Your agreement with the supplier might include shipping insurance – or it might not. If your contract doesn’t include shipping insurance, you can arrange protection via a third-party firm. Most companies let you insure products up to their final retail value.

What is a bill of lading?

Simply put, a bill of lading is a receipt for your goods from the shipping company. A bill of lading outlines details of the products being shipped, proves shipment, and provides proof of ownership. Your supplier can use a copy of the bill of lading to fulfil proof-of-shipment requirements for an export letter of credit.

Who produces the bill of lading?

The shipping company or freight forwarder will generate a bill of lading for your Chinese supplier. Your supplier will then forward a copy of the bill of lading to you.

What is a certificate of origin?

A certificate of origin is a document that shows where the goods in a shipment were manufactured or where they were obtained from. You’ll need to indicate origin when you fill out your customs declaration, and your certificate of origin will serve as proof if customs agents do inspect your shipment.

Who issues a certificate of origin?

Certificates of origin for goods manufactured in China are issued by the China Council for the Promotion of International Trade. The supplier you work with will obtain a certificate of origin before shipping your order.

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Chinese exports are big business. If you plan to import products from China, you’ll need to move money across country borders and pay your suppliers. With more than 10 years’ experience in China-UK transfers, WorldFirst is a reliable choice for fast cross-border payments.

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