Trade Compliance Policies

Effective date: 2026-09-15 Owner: Sales & Legal · SHENHE ZHONGKE Review cycle: Annual or upon regulatory change Applies to: All B2B export contracts, RFQs, and product shipments worldwide

This document is the source of truth for all trade-compliance disclosures on the SHENHE ZHONGKE website (shenhezhongke.com), in `llms.txt` and `ai.txt`, and in the i18n JSON files. Any change here must propagate to all consumer-facing surfaces.

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1.1 Display currency

• Default display currency: USD (United States Dollar)
• Tiered unit pricing shown on all product pages (per bottle / sachet / vial)
• Single-tier "from" price may appear in marketing copy; final price depends on volume, packaging, and Incoterm

1.2 Settlement currencies

• Accepted: USD, EUR, RMB (CNY)
• Default invoice currency is USD unless buyer requests EUR or RMB at quote time
• Bank wire fees on buyer's side; receiving-bank fees on supplier's side

1.3 FX / currency-risk policy

• Orders ≥ USD 30,000: FX rate locked at invoice date (invoice date = date of Proforma Invoice issuance). The rate applied is the one stated on the Proforma Invoice
• Orders < USD 30,000: FX rate fixed at deposit-receipt date (date buyer's T/T arrives at our bank)
• Risk allocation: Buyer bears FX risk from invoice date to deposit-receipt date. Supplier bears FX risk from deposit date onward
• Currency conversion fees: All conversion fees are on the initiating party (buyer pays for USD→EUR conversion when paying in EUR)

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2.1 Pricing basis

• All published prices are EX-Works VAT-exclusive, GST-exclusive, and import-duty-exclusive
• Buyers (importers of record) are responsible for all destination-country taxes and import duties

2.2 EU / EEA buyers

• EU buyers with valid VAT registration: self-account VAT via their VAT number on the import declaration (reverse charge mechanism per EU VAT Directive Article 196)
• EU buyers without VAT registration: import via IOSS (Import One-Stop Shop) or standard customs clearance; we provide commercial invoice with HS code and country of origin for the declaration
• We do NOT charge EU VAT on B2B invoices

2.3 UK buyers (post-Brexit)

• Same VAT treatment as EU buyers but with GB EORI number required on import documentation

2.4 Other regions

• USA: buyer pays import duty and any FDA user fees at port of entry
• Canada, Australia, Japan: same — buyer self-declares at customs
• We provide: commercial invoice, packing list, certificate of origin (Form A or RCEP if applicable), HS code, country of origin = China

2.5 Tax documents provided per shipment

• Commercial invoice (signed, stamped)
• Packing list
• Certificate of Origin (issued by CCPIT)
• HS code (printed on commercial invoice)
• Fumigation certificate (if ISPM-15 pallet used)
• Insurance certificate (if CIF/CIP term used)

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3.1 Default term

• FOB Guangzhou / Shenzhen (Free On Board, named port of loading = Guangzhou or Shenzhen, China)
• Risk transfers when goods cross the ship's rail at the named port of loading
• Supplier arranges export clearance; buyer arranges import clearance, ocean freight, insurance from FOB point onward

3.2 Other available terms (on request)

• EXW (Ex Works) — buyer collects at our Heyuan factory
• FCA (Free Carrier) — buyer nominates carrier at named place
• CIF (Cost, Insurance & Freight) — supplier pays ocean freight + 110% insurance to named port
• CFR (Cost and Freight) — same as CIF but buyer insures
• DAP (Delivered At Place) — supplier delivers to buyer's named address, duties unpaid
• DDP (Delivered Duty Paid) — supplier pays all duties and delivers to buyer's door
• DPU (Delivered at Place Unloaded) — supplier delivers and unloads at named place

All terms per ICC Publication 723E — Incoterms® 2020. Quote must specify which term applies.

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6.1 Pre-shipment quality control

• 6-step in-house QC: IQC → batching → IPQC → filling → OQC → 3rd-party claim verification
• COA (Certificate of Analysis) per batch attached to shipment
• MSDS available for all 20 SKUs

6.2 Acceptance criteria

• Product must match Proforma Invoice specifications (formula, packaging, dimensions, labeling)
• Active-ingredient content within ±5% of declared value
• pH within ±0.5 of declared value
• Microbial load within EU/ISO 17516 cosmetic limits
• Appearance, colour, fragrance must match approved reference sample

6.3 Acceptance window

• 7 days from arrival at destination port for visible / packaging defects
• 30 days for active-ingredient / efficacy claims requiring lab verification
• Force majeure events toll the acceptance window

6.4 Non-conforming goods procedure

Buyer files claim with photo + lab report within window (buyer-side lab report is acceptable; supplier may request counter-sample)

Supplier reviews within 5 business days

If confirmed: replacement shipped at supplier cost within 15 days, OR refund proportional to defective quantity

If disputed: parties agree on third-party lab (SGS / Intertek / Bureau Veritas at buyer's nominated destination)

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7.1 Current coverage

• Product Liability Insurance (PII): Available on request
• Coverage limit: USD 1,000,000 per occurrence / USD 5,000,000 aggregate (underwritten by PICC Property and Casualty Company Limited)
• Policy number: on file — contact sales for certificate copy
• Geographic coverage: Worldwide (with USA / Canada / EU primary)

7.2 EU importers

• For EU-market buyers, we can add buyer as additional insured for orders ≥ USD 30,000 (one-time administrative fee USD 200)
• All EU importers should also maintain their own product liability coverage per EU Product Liability Directive 85/374/EEC

7.3 Indemnification

• Supplier indemnifies buyer against third-party product liability claims arising from manufacturing defects, formulation errors, or labeling non-compliance, up to PII coverage limit
• Buyer indemnifies supplier against claims arising from buyer's modifications, relabeling, or downstream marketing claims

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8.1 China

• GB National Standard compliance for all pet care products
• CSAR (Cosmetic Supervision and Administration Regulation) for applicable products
• CQC mark on selected consumer SKUs

8.2 USA

• FDA Facility Registration: registration on file — number issued on request
• 21 CFR (Code of Federal Regulations) for cosmetic / drug claims
• Fair Packaging and Labeling Act (FPLA) compliance
• Prop 65 (California) compliance — statement available on request

8.3 EU

• Regulation (EC) 1223/2009 (Cosmetics Regulation) for applicable leave-on / rinse-off pet care products
• REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) — SVHC declarations available on request
• CLP (Classification, Labelling and Packaging) — Safety Data Sheets (SDS) per Annex II
• CPSR (Cosmetic Product Safety Report) — available for applicable SKUs on request (lead time: 14-21 days, fee quoted on request)
• BPR (Biocidal Products Regulation 528/2012) — applicable to disinfectant SKUs

8.4 Other markets

• UK post-Brexit: UKCA marking where applicable
• Canada: Health Canada NNHPD notification where applicable
• Australia: TGA (Therapeutic Goods Administration) exemption for pet care cosmetics
• Japan: Quasi-drug registration where applicable

8.5 Documentation package per market (on request)

• CPSR (EU)
• SDS / MSDS (16-language)
• Ingredient disclosure (INCI)
• Allergen declaration
• Animal-testing statement (Cruelty-Free, Leaping Bunny pending certification 2027)
• Vegan / plant-based statement where applicable
• Certificate of Free Sale (CFSE)

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9.1 Confidentiality

• All RFQ-stage exchanges covered by mutual NDA (Non-Disclosure Agreement)
• Standard NDA provided within 24 hours of enquiry
• Custom NDA accepted (buyer-drafted) with mutual review
• Survival: 5 years post-last-shipment

9.2 IP ownership

• ODM (our 20 SKUs + your label): product formula IP owned by supplier; buyer owns label / brand IP; perpetual royalty-free use of formula for buyer
• OEM (your formula): full IP transfer to buyer upon full payment; supplier retains manufacturing process IP and right to use for other clients
• OBM (turnkey): joint IP shared; specific terms in SOW

9.3 Patents

• Supplier holds 8+ patents (bio-enzyme + probiotic complex, chlorine dioxide system, plant-based insect repellent blend, trigger-lock spray gun)
• Full patent register provided under NDA on request

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10.1 Current certifications

• ISO 22716 (Cosmetic GMP)
• Cruelty-free formulations (no animal testing on finished products; ingredients not tested on animals since 2020)
• Plant-based ingredient portfolio across the range

10.2 In progress (2026-2027 roadmap)

• ISO 14001 (Environmental Management) — Q2 2027 target
• ISO 45001 (Occupational Health) — Q4 2026 target
• Leaping Bunny certification — 2027 target
• Sedex / SMETA 4-Pillar audit — Q4 2026 target
• Carbon footprint disclosure (Scope 1 + 2) — 2027 target

10.3 Social compliance

• Living wage floor for all direct employees (220+)
• 5-day work week; overtime capped at 36h/month per Chinese Labor Law
• Free on-site dormitory, cafeteria, clinic for all staff
• Joint laboratories with South China University of Technology and Guangdong University of Technology (formulation chemistry, microbiology)

10.4 Environmental

• Class-D cleanroom waste water treated on-site to GB 8978-1996 standards before discharge
• Solar panel installation on warehouse roof — Q4 2026 target (1.2 MW capacity, 30% of facility demand)
• Plastic packaging: PCR (Post-Consumer Recycled) option available at +5% unit cost

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11.1 Governing law

• All contracts governed by the laws of the People's Republic of China (excluding Hong Kong, Macau, Taiwan)
• Mandatory PRC law applies where Chinese parties are involved (per PRC Contract Law Article 7)

11.2 Dispute resolution mechanism

• Default: arbitration administered by China International Economic and Trade Arbitration Commission (CIETAC) in Shanghai
• Language: English
• Procedural rules: CIETAC Arbitration Rules (current edition)
• Number of arbitrators: 3 (one appointed by each party, one by CIETAC acting as presiding arbitrator)
• Seat of arbitration: Shanghai, China
• Award: final and binding on both parties; enforceable in 170+ jurisdictions under New York Convention 1958

11.3 Alternative mechanisms (on request for orders ≥ USD 100,000)

• ICC International Court of Arbitration (Paris) — preferred for EU / US buyers
• Hong Kong International Arbitration Centre (HKIAC) — preferred for Asia-Pacific buyers
• Litigation — only in PRC courts of competent jurisdiction (buyer's local courts not accepted unless mutually agreed)

11.4 Pre-arbitration dispute escalation

Good-faith negotiation (30 days from written notice)

Mediation via CCPIT (China Council for the Promotion of International Trade)

Arbitration (if mediation fails)

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• Version: 1.0 (2026-09-15)
• Author: Mavis (audit) + SHENHE ZHONGKE sales team
• Review: annual or upon regulatory change
• Distribution: public website, llms.txt, ai.txt, customer-facing sales materials

--- End of TRADE-COMPLIANCE.md. Source of truth for all 12 audit items.