Keep copies of invoices and supplier documentation for every shipment; avoid purchasing goods priced significantly below market rates: if an employee buys counterfeit products, the employer can still be held legally responsible.

Selling counterfeit merchandise can lead to criminal penalties. If the illicit profits exceed 30,000 RMB or if total sales reach 50,000 RMB, the offender faces up to three years in prison. Even unsold inventory in storage counts toward these thresholds. Merely claiming “I didn’t know it was fake” is not a valid defense: if purchase prices are markedly lower than market rates without a reasonable explanation, guilt is presumed. Maintaining proper purchase contracts, invoices, payment records, and supplier details provides a crucial legal safeguard.

Zero upfront expense. For each batch of goods, retain essential paperwork: purchase contracts, invoices, payment records, the supplier’s business license, and any authorization documents. Implement a company policy requiring all buyers to sign off on purchases; under no circumstances should items priced far below market value be accepted. The real challenge lies in resisting the temptation to purchase seemingly profitable low-cost goods.

Intentional sale of goods bearing counterfeit trademarks incurs serious legal consequences. When illicit earnings surpass 30,000 RMB or total sales reach 50,000 RMB, imprisonment for up to three years and monetary fines are likely. In cases where these figures are ten times higher, sentences range from three to ten years alongside substantial penalties. Un sold stock also contributes to this calculation; if its value triples the sales threshold, criminal liability applies automatically. The burden of proof lies with defendants to demonstrate genuine ignorance, but judicial interpretations issued in 2025 outline five circumstances where intent is deemed evident regardless of personal admission. These include visible tampering with trademarks, possession of forged authorization papers, prior convictions for similar offenses, purchasing goods at inexplicably low prices, and attempting to conceal evidence after detection. Corporate entities face dual penalties: financial fines imposed on the company itself and individual executives held accountable under identical statutes. Consequently, even when employees execute unauthorized purchases, senior management ultimately bears legal responsibility. Conversely, trademark law offers a defense mechanism: if sellers can prove they lawfully acquired products and identify their source, they avoid compensation obligations. Essential documentation—specifically invoices and supplier records—forms the backbone of this protection; lacking them nullifies any claim of innocence (applicable nationwide; judicial interpretation effective April 26, 2025).

Cosmetics, alcoholic beverages, baby products, electronics, and apparel frequently involve such legal disputes due to substantial price variations among identical items. Marketing terms like “exclusive channel stock,” “end-of-line clearance,” or “duty-free imports” cannot substitute for proper documentation. Beyond criminal penalties, administrative sanctions apply: convicted parties forfeit infringing merchandise and tools, while fines up to five times the illegal revenue may be imposed for operations exceeding 50,000 RMB in value. Upon discovering questionable purchases, immediately cease sales, secure the inventory, and contact brand representatives or regulatory authorities—destroying records or merchandise directly triggers the fifth presumption of intent mentioned earlier. For trademark-related matters, refer to Section 21 regarding permissible usage of third-party designs. A common scam involves strangers offering free merchandise in exchange for retail distribution; later, they claim infringement based on missing paperwork and abnormally low purchase prices, effectively negating all defenses. Legitimate consignment arrangements mandate written contracts, copies of supplier identification and business licenses, and explicit clauses defining ownership and liability boundaries.

全国人大常委会 (2020). 刑法修正案（十一）（第十七、二十四项，即刑法第二百一十四、二百二十条）. https://www.spp.gov.cn/zdgz/202012/t20201227_503682.shtml；最高人民法院、最高人民检察院 (2025). 关于办理侵犯知识产权刑事案件适用法律若干问题的解释（法释〔2025〕5 号，2025 年 4 月 26 日起施行）. https://www.spp.gov.cn/xwfbh/wsfbt/202504/t20250424_693977.shtml；全国人大常委会 (2019). 商标法（2019 年修正，第五十七、六十四条；2026 年 6 月 26 日修订后为第七十二、七十八条，自 2027 年 1 月 1 日起施行）. https://www.cnipa.gov.cn/art/2019/7/30/art_95_28179.html、https://www.cnipa.gov.cn/art/2026/6/26/art_95_206942.html