In short, selling goods that you know carry a counterfeit registered trademark is a crime in China: up to three years’ imprisonment in ordinary cases, and three to ten years plus fines when the illegal gains are huge or circumstances are especially serious (Criminal Law, Article 214).

Article 214 and the related offences

Article 214 of the Criminal Law — in the version revised by the Criminal Law Amendment XI, effective 1 March 2021 — punishes sellers who know the trademark is fake. Where illegal gains are relatively large or other serious circumstances exist, the penalty is up to three years’ imprisonment, with a fine; where gains are huge or circumstances are especially serious, the penalty is three to ten years’ imprisonment plus a fine. The 2021 amendment raised the previous seven-year ceiling to ten years. Making the counterfeit goods yourself (Article 213) and producing or selling counterfeit trademark labels (Article 215) carry the same penalty scale.

What this means in practice

If the goods are not just mislabelled but actually substandard or unsafe — for example fake cosmetics or electrical products — prosecutors can instead apply Article 140 on producing or selling fake or substandard products, which allows life imprisonment in the most serious cases with very large sales volumes. Selling online or through cross-border e-commerce is treated the same as selling from a shop.

The word “know” is the key defence point: a seller who genuinely did not know the trademark was fake — for example a retailer with normal invoices from an established supplier — has a real defence. But turning a blind eye is dangerous, because courts infer knowledge from price, sourcing and the way the goods were sold. Below the criminal threshold, market regulators can still confiscate stock and fine the business, and brand owners routinely add civil damages claims on top of a criminal case. Foreign-owned trading companies face the same exposure as local firms.

Hypothetical example: an e-commerce seller moves several thousand pairs of sports shoes bearing a famous logo, bought at a fraction of the authentic wholesale price. Regulators and courts would treat that price gap as strong evidence of knowledge; if the illegal gains exceed the prosecution threshold, the seller faces a criminal case under Article 214, not a simple administrative fine.

If you or your company are under a trademark or product-quality investigation in China, get legal advice early — the line between an administrative penalty and a prison sentence is drawn by facts you can still influence at the start.

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Wang Guan | Co-founder, Beijing Haolue Law Firm | +86 17813108512