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Compliance is a big part of our business, and we often write about directives and standards in the United States, Europe, Australia and other countries. Using a third party testing and certification company is the only way to be sure that your items are compliant. In this article, we explain why testing is critical when importing from China, when the time is right to test your product and how you should manage a failed test.
Different types of product testing
The purpose of product testing is to verify whether a product is compliant with one or more directives, acts or safety standards. As there are different types of product regulations, there are also different types of testing, including:
Substances testing (e.g. Bisphenol A, California Proposition 65 and REACH compliance testing)
Electrical safety testing (e.g. CE LVD compliance testing and FCC EMC compliance testing)
Mechanical and physical testing (e.g. strength testing and ASTM compliance testing)
Before you, or your representative in China, submit a sample to a product testing and certification company, you need to determine which product standards apply to your product.
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Why is product testing necessary when buying from China?
Most Chinese suppliers are not able to comply with American, European, Australian and other foreign product standards. However, even if you buy from a supplier that can prove extensive previous compliance, that is not a 100% guarantee that your batch of items is compliant. Manufacturing is not a science, and things simply go wrong from time to time, as I will explain further down in this article.
Thus, product testing is the only way to verify that your items are compliant with the applicable product safety standards in your country. Many importers think that ensuring compliance should be the supplier’s responsibility, and not theirs. While I may agree that it would be ideal if all Chinese manufacturers could ensure compliance, that is not the case.
In the end, the importer is responsible to ensure compliance – not the supplier. Noncompliant items are subject to forced recalling and may be seized by the customs authorities upon arrival. If anyone is injured, you will also be forced to pay damages. Some regulations, such as CPSIA in the United States, also requires the buyer to issue a Certificate of Compliance, that is based on batch testing reports. Thus, testing is not only a way to show compliance, but mandatory for certain products. We look into the legal requirements later in this article.
How do I know if my product requires testing?
First of all, you need to determine which standards apply to your product, in your country or market. Keep in mind that one product may be regulated by more than one standard. Let’s take a Bluetooth activity tracker as an example. An importer based in California must ensure compliance with the following regulations:
California Proposition 65: Applicable to the silicon bracelet
UL: Applicable to electrical components
Bluetooth transmitter: FCC Part 15
Therefore, the Bluetooth activity tracker requires 3 certification procedures (albeit UL is not legally required) – none of which are free of charge. If you’re on a low budget, limit yourself to components, materials or items that are already certified.
Some directives, including California Proposition 65 and REACH (EU), regulate groups of substances, rather than individual substances. That makes it a bit easier for importers to ensure compliance, as you only need to refer to a uniform standard or directive. The testing and certification company will then do the rest, as they already know which substances to check. The same thing applies to non-substance related directives, such as CE and ASTM – as multiple aspects of a product is covered.
However, certain regulations apply to individual substances rather than groups of substances. In these cases, the import must draft a list of potential substances before submitting samples, rather than referring to an “all in one” directive.
Is third party product testing required by law?
Yes, in some cases you must show a test report or certificate of compliance (that may be based on product test reports) to the customs authorities. We have received reports of cargo being refused entry by customs authorities in both the US and EU – because the importers failed to provide the required documents.
That said, as of today, third party test reports are not required when importing most products. But that is not saying that compliance is optional. You are still legally required to ensure compliance, even if the test report is not part of the standard importing documentation.
Authorities in most countries, including the CPSC in the United States, may request third party documentation proving compliance weeks or even months after the cargo date of arrival.
In the European Union, companies are legally required to prove REACH compliance within 45 days, if requested by a government authority – or even a customer! When that day comes, you better be sure that your imported items are compliant, or you may be forced to withdraw the items from the market with immediate effect. That’s why obtaining a third party test report is critical, even if the document itself is not required by law.
Finding an accredited laboratory
Don’t expect that your local authorities will accept test reports or product certificates issued by any company. There are plenty of unscrupulous testing companies in China, and other Asian countries, selling bogus compliance documents. There are also plenty of suppliers faking test reports and product certificates on their own.
However, an accredited lab is not necessarily a lab located in your own country. All big testing companies, including SGS, Bureau Veritas and TÜV, have facilities in Shanghai, Hong Kong, Shenzhen and Guangzhou.
With few exceptions, Chinese manufacturers always require the importer to pay the compliance testing bill. Buying from China is essentially like flying with a budget airline: no extras included. This is not only valid for compliance testing, but also tooling, product development and quality inspections.
A single product test can range from US$10, for individual electrical components, to tens of thousands of dollars – for more complicated testing programs. However, testing costs primarily depend on three factors:
The number of SKUs
The number of applicable standards, per SKU
The number of components, colors and materials, per SKU
Thus, testing products made of a homogenous material (e.g. PP plastic rope) is less costly, compared products made using multiple materials (e.g. jewelry).
Product testing in 4 steps
Now that you know a few things about why product testing is necessary when importing from China, it’s time to look into the practical aspects. Nothing is certain in international trade. Instead, it’s all about risk management, as described in the following four step process.
Step 1: Confirm applicable product standards and regulated substances (Critical)
Before you place the order, you must confirm the applicable standard or directive. As we’ve already explained, different standards apply to different products. Of course, different countries and markets also have their own standards. Therefore, US standards don’t apply in the European Union, and vice versa.
You should also verify that your supplier can show previous compliance, as most Chinese manufacturers are unable to comply with foreign product standards and directives. Not sure how to find compliant suppliers in China? Click here for more information.
Step 2: Product sample testing (High importance)
Even if your supplier can show previous compliance, test reports only apply to that specific batch of items. Previous compliance is not a guarantee for future compliance. Therefore, verifying that your prototype or product sample is compliant with the applicable standard before money is paid for the mass production is often essential.
However, that’s only valid under the presumption that the mass produced product is made using the same materials and components, as the product sample. If not, you may still end up with a noncompliant item, even if your pre-production sample passed testing.
Step 3: Raw materials testing (Low importance)
Most Chinese manufacturers purchase materials and components only after receiving the buyer’s deposit payment. Verifying that the incoming materials and components are compliant is a good way to prevent contamination, and replace noncompliant materials, before it’s too late.
However, this does put a hold on the production for 10 to 14 days, as assembly cannot start until the results are in. Adding a 3rd test is also often too costly for most small businesses buying from China. You should also note that testing at this stage is not applicable to certain directives and certification standards, including CE and FCC, as they apply only to the final products, rather than substances.
Step 4: Batch sample testing (Critical)
After final assembly, it’s time to verify that your items are compliant. However, I advise you to not let your supplier submit samples to a testing company on their own. There’s always the risk that they may in fact submit samples that don’t represent the actual products (e.g. submitting compliant samples, while the actual items are noncompliant). The best way to solve this issue is by instructing a Quality inspector to collect and submit samples.
Sample testing usually takes one or two weeks. What’s very important at this stage is that you withhold the final balance payment, until you receive the test result. If the items prove to be compliant, you may go ahead and transfer the remaining funds owed to the supplier.
What if I receive a failed test result?
Test reports are not always positive, unless issued by one of those certificate mills I mentioned previously in this article. From time to time, suppliers fail to ensure compliance and turn out a batch of virtually worthless items. For most small businesses, that’s a disaster.
In September 2012, I dealt with such a situation for the first time. A long term client of ours, buying PVC fabrics, for usage of children’s products, from a manufacturer in Zhejiang province, waited a little bit too long before placing an order for the autumn season. As a result, they were in a rush and demanded the cargo to be shipped even before the test result was returned.
I had just arrived in Hong Kong, after a brief summer holiday in Europe, when I got a phone call from my partner. He’d just received the test result, and the PVC fabrics turned out to be non compliant.
Above is a screen print from the actual test report. Out of more than 200 substances checked by the testing company, one substance exceeded the limits by the applicable directive. However, an item is either compliant – or noncompliant – there’s nothing in between.
What made the situation slightly more complicated was the fact that the cargo was shipped only hours before we received the test report. As a result, requesting a remake was not an option. However, we managed to turn the situation around the very same day. As the Sales Agreement clearly specified compliance as a key requirement, the supplier decided to offer the buyer a 50% discount. That turned out to be a very good deal for our buyer, as the PVC fabrics could still be legally used for industrial applications. Thus, they didn’t need to worry about their stock going to waste.
That said, this would never have happened if the buyer had paid the supplier before the results got back. Chinese suppliers are highly pragmatic and rarely consider refunds or discounts only for the sake of “good business”. In this case, the supplier knew they would make an even bigger loss if they didn’t offer a discount. Pay them too early, and you remove their incentive to work out a solution.
As said, the client could still make use of this shipment, as compliance was not mandatory for industrial applications. But that was an exception. If you’re importing toys, electronics, machinery, or textiles – noncompliance renders the products worthless, as importing and selling such items is illegal.
Counting on the supplier to refund the deposit payment is not realistic. In most cases, the only solution is to request a partial, or complete, remake from the supplier. However, a partial remake is only an option if the items can become compliant through minor corrections. This is indeed possible if a correction involves replacing certain electrical components or mechanical parts.
But, if the items contain excessive amounts of regulated substances, such as lead and cadmium, minor corrections will not make the items compliant. In this case, what you need is a complete remake.
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Co-founder of Asiaimportal (HK) Limited and based in Hong Kong. He has been quoted in and contributed to Bloomberg, SCMP, Alibaba Insights, Globalsources.com, China Chief Executive, Quartz Magazine and more.
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