Working with foreign suppliers is daily practice for many Dutch companies. At Musch Legal, we provide legal guidance on the legal aspects of Chinese production, German parts suppliers, and Indian IT services. A structured supplier contract with clear quality specifications, sanctions screening, and ESG clauses prevents the vast majority of disputes. Since CSDDD, due diligence on suppliers has become of increasing importance.
What is the legal issue? (What risks do importers face?)
Importers bear many risks: quality defects, long delivery times, product liability in Europe, IP, and compliance with EU regulations. A contract with a foreign supplier must contractually transfer these risks. In the event of defects, the importer must be able to quickly file a claim, replace the contract, or terminate it. Without targeted clauses, you bear risks that actually belong to the supplier.
What does the law say? (Which rules apply to purchasing?)
Under EU law, the importer is equivalent to the producer in terms of product liability (Directive (EU) 2024/2853 and Article 6:187 of the Dutch Civil Code). For CE marking, REACH (Regulation 1907/2006) and the Cyber Resilience Act (Regulation 2024/2847), the importer bears compliance responsibility. CSDDD (Directive 2024/1760) requires due diligence in the supply chain. For sanctions, Regulation 833/2014 applies. For B2B purchases between Contracting States, CISG applies automatically.
Under Dutch law, Article 7:17 BW (conformity) and Article 6:185 BW (product liability) govern this.
Subject matter
Purchaser responsibility
Main obligation
Product liability
Equated with producer (Art. 6:187 BW)
Insurance + supplier indemnification
CE marking
Importer bears responsibility
Compliance audit at intake
CSDDD
Due diligence in chain
Supplier Code of Conduct
Sanctions
Supplier UBO screening
Refinance of Worldcheck
IP
Indemnification against IP claims
Indemnity in contract
Subject matter
Purchaser responsibility
Primary obligation
Product liability
Equated with producer (Art. 6:187 Dutch Civil Code)
Insurance + supplier indemnification
CE marking
Importer bears responsibility
Compliance audit at intake
CSDDD
Due diligence in the supply chain
Supplier Code of Conduct
Sanctions
Supplier UBO screening
Refinition of Worldcheck
IP
Indemnification against IP claims
Indemnity in contract
What risks do companies face? (What goes wrong with suppliers?)
Importers can be held liable under Article 6:187 of the Dutch Civil Code for defects from a Chinese manufacturer without a specific indemnification. Delayed delivery causes loss of customers. Unknown IP claims render imports unsaleable. Non-compliance with CE or REACH leads to recalls and fines. CSDDD violations in the supply chain can cost up to 5 percent of turnover. Without a clear contractual basis, importers bear the risk of errors elsewhere in the chain.
Practical example from our practice (How do we save an electronics importer?)
Musch Legal represented a Dutch importer of electrical appliances from China without product liability indemnification, no IP indemnification, and no quality control clause. A European client claimed damages due to a defect; simultaneously, a third party sued for patent infringement. The client bore both claims, totaling 920,000 euros. Upon renegotiation, we incorporated: HKIAC arbitration in Hong Kong, NNN under Chinese law, pre-shipment inspection by SGS, and IP and product liability indemnification with escrow. The following incidents have been successfully recovered.
What can you do? (What do you arrange with every supplier?)
Construct a standard supplier contract with choice of law (Rome I), quality specifications and pre-shipment inspection, payment terms with L/C for high risk, IP indemnification, product liability indemnification under Section 6:187 of the Dutch Civil Code, sanctions screening, Supplier Code of Conduct under CSDDD. For Chinese suppliers: NNN + HKIAC. Engage Musch Legal for a supplier package.
Working with foreign distributors