Distribution Chain Structure
→
📦
NIA
National Import Agent
→
🤝
Distributor(s)
Regional Partners
→
🏥
End Customers
Hospitals / Clinics
Key Review Items
📜 Import licenses
🌐 ICP license
🔒 IP protection
⚖️ Liability allocation
💰 Margin & transfer pricing
🚪 Termination rights
🔀 Sub-distribution
📊 Data flow (PIPL)
NIA & Distributor Key Review Areas
📦 NIA Agreement
- Import license — valid & correct product scope
- ICP license — required for digital services
- Revenue flow — fee structure & payment terms
- IP protection — ownership stays with HQ
- Liability caps & indemnification
- Termination rights — clean exit provisions
🤝 Distributor Agreement
- Exclusive vs. non-exclusive territory
- Customer ownership — who owns the relationship?
- Data flow — PIPL compliance required
- Sub-distribution restrictions & oversight
- Reporting visibility — sales & customer data
- Performance targets & minimum commitments
Salesforce + PIPL Compliance
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🇨🇳
PIPL = China's GDPR — fines up to ¥50M or 5% of annual revenue
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❓
Key issue: Where is Salesforce data hosted? — must determine before any customer data is entered
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🌐
Cross-border transfer requires: Standard Contract + CAC filing or Security assessment or Certification
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📝
Separate informed consent in Chinese required for cross-border data transfers
🇨🇳 China SF Instance
Salesforce on Alibaba Cloud. Cleanest PIPL compliance. Higher cost & operational complexity.
🌐 Global SF + Standard Contract
Use existing global instance. Requires Standard Contract + CAC filing. Moderate risk.
📁 Local CRM + Anonymized Sync
Local CRM for PII, sync anonymized data globally. Complex but compliant option.
Critical Compliance — Don't Forget These
🇺🇸
US Export Controls (EAR/BIS) — AI technology exported to China may require a Commerce Department export license. Assess before any product transfer.
💸
FCPA / Anti-Bribery — Hospital sales through intermediaries is a textbook FCPA risk. Due diligence on all agents/distributors is mandatory.
📍
Data Localization — Personal health data may be subject to strict localization requirements. Cannot assume offshore storage is permitted.
🔏
IP Registration — China is first-to-file. Register trademarks, patents, and copyrights in China immediately — before any public disclosure.
🚫
Content Censorship Review — Clinical AI outputs must be screened against restricted topics and content guidelines enforced in China.
Phase 1 — Legal & Regulatory Foundation
Establish Joint Legal Review Board with defined decision rights
Corp + China Legal
Initiate PIPL Data Protection Impact Assessment (DPIA)
Corp Legal + IT
Request & review NIA and distributor agreement drafts
China Legal + PM
Confirm NMPA device classification with China regulatory counsel
China Legal
Run US export control analysis (EAR/BIS) with corporate legal
Corp Legal
File China trademark / IP registrations
Corp Legal
Conduct FCPA due diligence on all proposed intermediaries
Corp Legal
Phase 2 — Commercial Setup
Execute reviewed & approved NIA agreement
Corp + China Legal
Execute reviewed & approved distributor agreement(s)
Corp + China Legal
Finalize transfer pricing & margin structure
Finance + Corp Legal
Draft trial agreement template for hospital/clinic customers
China Legal + PM
Define pilot site selection criteria and KOL targets
Sales + Product
Establish reporting & visibility requirements with distributors
PM + Sales
Set up shared review tracker and bi-weekly legal sync cadence
PM
Phase 3 — Product & Technical
Implement data localization solution (China SF / local CRM / anonymized sync)
IT + Product
Localize product UI, documentation, and consent flows in Simplified Chinese
Product
Register algorithm with CAC and complete transparency disclosures
China Legal + Product
Validate AI outputs for content compliance with Chinese regulations
Product + China Legal
Complete hospital EHR integration scoping and technical assessment
IT + Product
Develop training materials and onboarding program for trial sites
Product + Sales
Complete cybersecurity review (CAC) for health data processing
IT + China Legal
12-Week Execution Timeline
Phase 1: Legal & Regulatory
Legal Foundation · Wks 1–4
Phase 2: Commercial Setup
Phase 3: Product & Technical
🔵 Overlap between phases is intentional — work streams run in parallel
⚡ Critical path: Legal Foundation must complete before commercial agreements execute