How to Freeze a Chinese Supplier's Bank Account — Asset Preservation Orders Explained

What Is an Asset Preservation Order?

An asset preservation order (财产保全, cáichǎn bǎoquán) is a court order issued by a Chinese court that freezes a respondent's assets — bank accounts, real property, equipment, inventory — before or during legal proceedings. It is China's equivalent of a Mareva injunction or asset freeze order in common law jurisdictions.

The critical feature is timing: asset preservation can be granted before the main lawsuit or arbitration is resolved — or even before it formally begins. This is the weapon against fraudulent suppliers who plan to move money offshore while a lengthy legal process unfolds.

When Should You Pursue Asset Preservation?

Asset preservation is not always necessary — but in these situations, it should be your first legal action:

• Suspected fraud or deliberate non-delivery — when the supplier's behavior suggests intentional wrongdoing rather than a commercial dispute
• Supplier has gone silent or disappeared — unresponsiveness after payment is a strong signal that assets may be moved
• Large sums involved ($30,000+) — the cost of preservation is proportionately justified
• Supplier is newly registered or has thin asset profile — risk of asset dissipation is higher
• Evidence of prior fraud complaints from other buyers — pattern behavior indicates professional fraud operation

For straightforward commercial disputes where the supplier is responsive and has an established business relationship, a formal demand letter is usually the better first step — faster and cheaper. Asset preservation is the escalation tool when trust has completely broken down.

How to Apply for Asset Preservation

Here is the step-by-step process for obtaining an asset preservation order in China:

1. 1
   Day 1–2

   Case Assessment & Asset Investigation

   Your attorney identifies the target's bank accounts, registered assets, and corporate structure. The more specific the application (naming specific bank branches and account numbers), the faster and more effective the freeze. We use official corporate registries, banking system queries, and court-assisted discovery.

2. 2
   Day 2–3

   Prepare and File the Application

   Your attorney prepares the application, supported by: evidence of the underlying claim (contract, payment records, breach evidence), a statement of urgency explaining why delay would cause irreparable harm, and identification of the assets to be preserved. The application is filed with the competent Chinese court — typically the Intermediate People's Court in the supplier's location or where their main assets are held.

3. 3
   Day 3–5 (Court Decision)

   Provide Security Bond

   The court typically requires the applicant to provide a security bond (担保) before granting the order — this protects the respondent against wrongful preservation. The bond is usually 20–30% of the preserved amount and can be in the form of cash, property, or a bank guarantee. Your attorney advises on the most efficient bond structure for your situation.

4. 4
   Within 48 Hours of Filing

   Court Issues the Preservation Order

   Under China's Civil Procedure Law, the court must rule on the application within 48 hours of receiving it (immediately for emergency applications). If granted, the order is immediately sent to the relevant bank branch or property registration authority, which is legally required to comply. The bank freezes the account; the property registry marks the asset as encumbered.

5. 5
   Within 30 Days

   File the Main Case

   In pre-litigation preservation cases, you must file the main case (court litigation or CIETAC arbitration) within 30 days of the preservation order being granted. Failure to do so results in the preservation being lifted. Your attorney files the main case simultaneously or immediately after the preservation order is obtained.

What Assets Can Be Preserved?

Chinese law allows preservation of virtually any asset that can satisfy a monetary judgment:

Costs and the Security Bond

Asset preservation involves two main costs:

Court Application Fee

The court charges a modest application fee — typically RMB 500 to RMB 5,000 depending on the claim size. This is a one-time filing fee.

Security Bond (担保)

The security bond is typically 20–30% of the preserved amount, held by the court until the main case concludes. If you win, the bond is returned in full. If you lose and the court finds the preservation was wrongful, the bond compensates the respondent for any damages caused by the freeze.

Attorney Fees

Emergency asset preservation preparation typically costs USD 2,000–6,000 in attorney fees, depending on the complexity of the asset investigation and the speed required. This fee is separate from fees for the main case (arbitration or litigation).

What Happens After the Order Is Granted

Once asset preservation is in place, several things happen in parallel:

1. The supplier is notified — they learn their accounts are frozen. In many cases, this alone triggers a negotiation for settlement. A frozen bank account is existential for an operating business.
2. The main case proceeds — CIETAC arbitration or court litigation continues on its normal timeline, but you are now protected from asset dissipation during the process.
3. Enforcement becomes straightforward — when you win the main case, the preserved assets are immediately available for enforcement. No need to hunt for assets after the judgment.

Ready to act? Contact us now for an emergency case assessment. If asset preservation is warranted, we can have the application ready within 48 hours of receiving your case materials. Also see: Chinese Supplier Disappeared — Emergency Action Plan | CIETAC Arbitration Guide