Whether an enterprise standard shall be filed?

In a product quality dispute case, the contract involved in the case stipulated that the quality standard of the subject matter should adopt the enterprise standard of the seller. However, the seller did not provide its enterprise standard or the corresponding instruction manual to the buyer. Moreover, the nameplate of the equipment did not match the actual equipment, so the quality standard indicated on the nameplate could not be used as the evaluation standard for the quality of the equipment either. In the end, the court held that the seller could not prove that the equipment complied with the enterprise standard. (for details, see Case No. (2020) Zhe 01 Min Zhong 2569)

The quality standard is a common clause in sales contracts. Usually, the parties would choose the national standard, industry standard, local standard, and enterprise standard, or choose more than one of the aforementioned standards. Among them, the enterprise standard is independently formulated by each enterprise (commonly known as the “ex-factory standard”). The prerequisite for the enterprise standard to be used as a quality evaluation standard is that the seller must prove that the buyer is aware of the content of the enterprise standard. How can the seller prove that the buyer is aware of it? Whether the seller could directly disclose its standard to the buyer, or the seller should file its standard?

For special industries such as food and medicine, due to the implementation of mandatory supervision, the enterprise standard is included in the scope of mandatory supervision. For other industries, it is necessary to investigate whether there is any mandatory requirement regarding the enterprise standards, and what are the requirements, if any.

The enterprise standard filing system originated from the “Measures for the Administration of Enterprise Standardization” in 1990. However, the vast majority of enterprises have not gone through the filing procedures. There are roughly two reasons. Firstly, the filing procedures are cumbersome. Secondly, filing means that the technical parameters, indicators, raw materials, etc. in the enterprise standard will be made public, which may disclose trade secrets. In addition, in line with the transformation of market supervision from ex-ante to ex-post, in 2015, the State Council proposed a reform plan to gradually cancel the enterprise standard filing system. In 2019, the “Standardization Law” abolished the filing system and replaced it with the “Self-declaration Publicity and Supervision System”.

Then, how should enterprises implement the “Self-declaration Publicity and Supervision System”?

Article 14 of the “Measures for the Promotion of Enterprise Standardization” stipulates that “The State shall implement a system of self-declaration, publicity and supervision of enterprise standards. Enterprises shall make public the serial numbers and names of the mandatory standards, recommended standards, group standards or enterprise standards they implement in connection with the provision of products or services. Where enterprises formulate standards by themselves or jointly formulate standards, they shall disclose to the public functional indexes of products and services, performance indexes of products and corresponding experiment methods, inspection methods or evaluation methods. …… Where the functional indexes and performance indexes disclosed by enterprises are lower or lower than recommended standards, enterprises shall explicitly indicate so in the disclosure of self-declaration…….” Article 16 stipulates that, enterprises are encouraged to make self-declaration public through the national unified public service platform for enterprise standards information, enterprises making self-declaration public through other channels shall explicitly indicate such channels on the national unified public service platform for enterprise standards information.

In addition, Article 30 stipulates that if an enterprise fails to publicize its enterprise standard, the standardization administrative department of the people’s government at or above the county level shall order it to make corrections within a time limit; if it fails to make corrections within the time limit, it shall be publicly announced on the enterprise standard information public service platform.

In conclusion:

The self-declaration publicity is a mandatory obligation, and those who violate it are at risk of being ordered to make corrections within a time limit.

The current regulations on the self-declaration publicity requirements for enterprise standards define the scope of publicity and do not limit the means of publicizing, taking into account the need for the protection of trade secrets.

Therefore, enterprises can choose to publicize their enterprise standards through the public service platform or through other means. In other words, both from the perspective of fulfilling mandatory obligations and from the perspective of avoiding the inability to provide evidence in case of quality disputes, the seller should provide its enterprise standard to the buyer.