Importing Machinery and Equipment from Taiwan: How to Mitigate Risks under FOB Terms and Full T/T Payment

Importing machinery and equipment from Taiwan is a common yet challenging process. Many importers feel a hint of unease when faced with requirements such as FOB (Free On Board) Taiwan and full payment via TT (Telegraphic Transfer). This unease often stems from concerns over logistics control and payment security. Fortunately, with a bit of preparation, these challenges are not insurmountable. This article will guide you through understanding these risks and share practical strategies to make the import process smoother.

FOB Taiwan: Understand the Rules, Take Control of the Situation

FOB Taiwan means that the seller is responsible for delivering the goods to the designated port in Taiwan and loading them onto the ship, after which all subsequent responsibilities are transferred to the buyer. This implies that the importer needs to handle the transportation and customs clearance from the Taiwanese port to the destination themselves. If you have any...International LogisticsNot very familiar, which might make one feel a bit at a loss.

However, don't worry, there's a way to handle it:

• Try the EXW terms.: Compared to FOB, EXW (Ex Works) allows the buyer to take over the goods directly from the seller's factory or warehouse, with full control over the entire logistics process. This can reduce uncertainties in intermediate steps.
• Find a reliable freight forwarder: If FOB terms are still necessary, consider hiring a freight forwarder experienced in Taiwan. They can handle shipping, customs clearance, and other details to ensure the goods arrive safely at the port.

Full payment TT: Risk is controllable, credit comes first.

Full payment via TT is quite common in international trade, especially when dealing with new suppliers. However, it also means that the payment must be made in full before shipment, which inevitably makes people feel uneasy.

How can we minimize the risks? Here are a few suggestions:

• Get to know the supplier inside out.: Before collaborating, take some time to research the supplier's background, such as their industry reputation and past transaction records. If they are a well-known manufacturer in the industry, they are usually much more reliable.
• Discuss payment methods：If you're not entirely comfortable with a full TT payment, you can try negotiating with the other party, such as paying a portion upfront and using...L/CSettlement. This not only facilitates the transaction but also adds an extra layer of security.

Place of Origin Labeling: Small Details, Big Issues

When importing goods from Taiwan, there is an easily overlooked but crucial point: the origin marking must be labeled as "Made in Taiwan China," not just "Made in Taiwan." This is a requirement by customs.Policy red lineIf a mistake is made and the goods are directly seized, the trouble will be significant. For example, the origin on the equipment nameplate shown below would definitely be stopped by customs.

Therefore, the importer must ensure that the supplier correctly marks the nameplate, labels, packaging, and shipping marks. It's best to clearly stipulate this requirement in the contract to avoid future disputes.

Other tips:

• Used equipment: Must provide depreciation assessment reportEquipment Imports: If it's second-hand machinery, pre-shipment inspection and quarantine (CCIC) may be required. Clarify the relevant regulations in advance to ensure the supplier prepares all necessary documents.
• Use your own freight forwarder: If you have a trustworthy freight forwarding company in Taiwan, the risks under FOB terms will be much lower. They can help you monitor the logistics process to ensure everything goes smoothly.

Summary

Importing machinery and equipment from Taiwan under FOB terms and full T/T payment does carry some risks, but these are not insurmountable challenges. By selecting the right trade terms, finding reliable partners, verifying supplier credibility, and paying attention to details like origin labeling, the import process can proceed smoothly. I hope these suggestions help make your transaction more worry-free and successful!