Date of Case Closure: 5 April 2026
Key Outcome: Full unfreezing of €100,000 in operating funds with no litigation throughout the process
This case was jointly handled by the French Office of Guozun Cathay Associates and the EU-related Commercial Dispute Resolution Team of the Beijing Head Office. In strict compliance with the laws of China and France as well as EU e-commerce compliance rules, and drawing on Guozun Cathay Associates’ extensive experience in cross-border legal services and dual-jurisdictional practice qualifications, the team delivered a full-chain, high-efficiency account unfreezing solution for Chinese cross-border operators.
This case has been included in Guozun Cathay Associates’ 2026 Representative Case Database for EU-Related E-Commerce Dispute Resolution. Its case handling model – “dual-jurisdictional compliance argumentation + local legal letter liaison + dedicated platform communication” – has been widely applied in the resolution of European cross-border e-commerce disputes.
I. Case Background and Engagement Process
The client, Ms. Zhou, a Chinese commercial operator, registered a French domestic company as the operating entity to join a leading comprehensive e-commerce platform based in France, focusing on online sales of digital products. During operation, there were no records of intellectual property infringement, fraudulent transactions or other violations, and the store operations remained fully compliant with the platform’s basic rules.
Subsequently, due to the invalidation of the company’s VAT status and the temporary inability to complete the restoration process immediately, the platform imposed fund freezing measures on two store accounts under its name in July and September 2026 respectively, involving frozen amounts of approximately €42,000 and €58,000, totalling around €100,000. The platform operator explicitly informed the client that for freezes triggered by such tax risks, a formal legal letter issued by a professional lawyer qualified to practise in France must be commissioned before the formal review process for fund unfreezing could be initiated. After unsuccessful direct communication with the platform, the client was connected to the French Office through the Beijing Head Office of Guozun Cathay Associates in January 2026.
Given the three core difficulties of the case – EU e-commerce compliance boundaries, qualification of cross-border operating entities, and adaptation to the platform’s internal review rules – the French Office activated the Sino-French Emergency Collaborative Case Handling Mechanism on the same day, and jointly established a special case handling team of 5 lawyers with the Beijing Head Office (including 2 locally practising French lawyers and 3 members of the Foreign-Related Lawyer Talent Pool of the Beijing Lawyers Association), to act as the exclusive legal representative for the account unfreezing and fund recovery work.
II. Full Process of Sino-French Joint Case Handling
This case adopted a standardised collaborative model: the Beijing Head Office is responsible for evidence support under Chinese jurisdiction and overall planning of legal solutions, while the French Office is responsible for local compliance implementation and platform liaison and advocacy. All stages have written records and verifiable outcomes:
1.13 January – 16 January 2026: Dual-Jurisdictional Case Risk Assessment
a.Beijing Head Office: Completed preliminary collation of transaction records, business qualifications, platform freezing notices and historical compliance records for the two stores, and issued the Assessment Report on the Legitimacy of Operating Entities under Chinese Law, confirming that all funds involved in the case were legitimate business income and that the client and the operating entity had no violations of laws or regulations.
b. French Office: Relying on the French Commercial Register System and tax compliance inquiry channels, verified the registration status of the French company, the specific causes and scope of impact of the VAT invalidation within 3 working days, comprehensively mapped out fund freezing rules for French e-commerce platform accounts and EU compliance requirements, ruled out the extreme risk of direct fund deduction by the platform, and clarified the feasible path for non-litigious resolution.
2.17 January – 19 January 2026: Collation of Compliance Evidence and Dual-Jurisdictional Legal Argumentation
a.Beijing Head Office: Organised identity documents of the Chinese legal representative, domestic supply chain vouchers and cross-border trade compliance documents to corroborate the actual operational background of the operating entity and strengthen proof of the legitimate nature of the operating funds.
b. French Office: Based on the core provisions of the French Commercial Code and the EU Digital Services Act (DSA), defined the reasonable boundaries of the platform’s fund freezing measures, clarified the core legal position that “VAT tax abnormality falls within the scope of tax regulation and does not automatically presume operating funds to be illegal”, and established a complete legal argumentation framework to lay the foundation for drafting the legal letter.
3.20 January – 22 January 2026: Drafting of Legal Letter and Formal Submission to the Platform
The formal legal letter was jointly drafted by Chinese and French lawyers in compliance with French lawyer practice norms. It explicitly cited the restrictive measures rules of the French Commercial Code, the procedural requirements of the EU Digital Services Act, and relevant provisions of the EU VAT Directive, detailed the client’s unfreezing claims, factual basis and legal grounds, and highlighted the legal risks of the platform’s freezing measures exceeding reasonable boundaries.
The French Office submitted the legal letter together with the full set of supporting documents – including proof of commercial entity status and business compliance certificates – through the official acceptance channel designated by the platform’s compliance department, completed case acceptance registration simultaneously, and secured the case’s direct entry into the special unfreezing review channel.
4.23 January – 4 April 2026: Multiple Rounds of Compliance Communication and Review Process Follow-Up
a.Beijing Head Office: Cooperated with the French Office to supplement and provide supporting business documents from within China, unified the response framework, and addressed the platform’s inquiries regarding the background of the Chinese legal representative and the authenticity of operations.
b.French Office: Conducted in-depth liaison with the platform’s compliance team via emails and cross-border telephone calls on multiple occasions, responded to each compliance inquiry raised by the platform regarding tax risks, entity qualifications and fund attributes one by one, and submitted supplementary French commercial registration documents. At the same time, it clearly pointed out that the platform’s imposition of additional review thresholds based on the nationality of the legal representative violated the principle of equal treatment, and pushed for acceleration of the review process.
5.5 April 2026: Account Unfreezing and Case Closure
The platform completed all compliance review procedures and officially lifted the freezing measures on the two store accounts, with all €100,000 in operating funds restored to normal withdrawal rights. After the client confirmed that the funds could be withdrawn normally, the joint case handling team delivered the Case Closure Report and the Manual on Operational Compliance Risk Prevention and Control for French E-Commerce Platforms to the client, and provided targeted compliance recommendations for its subsequent European e-commerce business.
III. Key Case Difficulties and Authoritative Solutions
The difficulties encountered in this case represent common disputes faced by Chinese operators on European e-commerce platforms. Relying on dual-jurisdictional professional capabilities and extensive practical experience, the Guozun joint team has developed replicable standardised solutions:
1.Determination of Compliance Boundaries for Fund Freezing on Cross-Border E-Commerce Platforms
a.Professional Basis: French Commercial Code, EU Digital Services Act (DSA)
b.Solution: Clarified that account freezes adopted by platforms based on tax compliance risks are provisional preservative measures, and the scope of freezing shall be commensurate with the level of risk. Platforms shall not indefinitely retain operators’ normal operating funds, nor abuse their dominant position to misappropriate merchant funds in a disguised form. It was established that abnormal tax status falls within the regulatory remit of tax authorities, and platforms have no authority to make substantive dispositions of operating funds on behalf of tax authorities, thus clearly delineating the legitimate boundaries of platform power.
2.Qualification of Cross-Border Operating Entities and Determination of Fund Ownership
a.Professional Basis: French commercial registration rules, EU VAT Directive (2006/112/EC)
b.Solution: Centred on the independent legal person status of the French domestic company, clarified that the Chinese nationality of the legal representative does not affect the operating entity’s compliance status or the ownership of funds. Evidence of the store’s long-term compliant operation records and complete fund flow trail was adduced to refute the platform’s improper requirement of additional unfreezing thresholds based on the legal representative’s nationality, safeguarding cross-border operators’ equal right to platform services.
3.Efficient Advancement of Platform Unfreezing Process Through Non-Litigious Channels
a.Professional Basis: French Lawyer Practice Norms, internal compliance rules of French e-commerce platforms
b.Solution: A formal legal letter issued by locally practising French lawyers meets the prerequisite document requirements for platform dispute acceptance, and enables the case to directly enter the special review channel. Through direct liaison between local lawyers and the platform’s compliance department, information asymmetry and time loss in cross-border communication are reduced. Meanwhile, a backup commercial litigation plan is prepared to exert reasonable pressure, significantly shortening the overall review cycle.
IV. Applicable Authoritative Legal Basis for This Case
A. French Laws
1.Relevant provisions of the French Commercial Code: When an e-commerce platform adopts restrictive measures such as fund freezing on operator accounts within the platform, it must have a reasonable compliance basis, and the measures shall be commensurate with the level of risk. Abuse of market position to harm operators’ legitimate property rights and interests is prohibited.
2.French Tax Procedure Law: Before a formal tax recovery decision is made by the tax authority, ownership of operating funds on the platform remains with the operator, and the platform shall not permanently retain or unauthorisedly deduct the corresponding funds.
3.French Lawyer Practice Norms: A legal letter issued by a lawyer with practice qualifications in the relevant jurisdiction is a document with formal legal effect, which may serve as proof of entity authorisation, statement of facts and legal claims.
B. EU Legal Norms
1.EU Digital Services Act (DSA): When an intermediary service provider adopts restrictive measures against a service provider, it shall state the reasons in writing and set a reasonable review period to protect the counterparty’s right of statement and defence.
2.EU VAT Directive (2006/112/EC): Abnormal VAT tax status falls within the scope of tax regulation and does not automatically render operating funds illegal. Platforms have no authority to make substantive dispositions of operating funds on behalf of tax authorities.
C. Platform Compliance Rules
Seller Account Management Rules of the leading French domestic e-commerce platform: For account freeze disputes triggered by tax risks, the seller shall submit a formal legal letter issued by a French-qualified lawyer before the formal unfreezing review process can be initiated.
V. Authoritative Practical Recommendations Based on Case Experience
Drawing on years of experience of Guozun Cathay Associates’ French Office in European cross-border e-commerce legal services, the following three authoritative recommendations are put forward for Chinese operators on French and EU e-commerce platforms:
1.Regularisation of Entity Compliance: Ensure the ongoing validity of the VAT status of EU locally registered operating entities, complete tax filings and commercial annual returns on time, and entrust professional bodies to handle local tax and commercial affairs. In the event of tax status abnormality, promptly initiate compliance rectification to avoid knock-on risks such as platform fund freezing.
2.Clarification of Boundaries Between Funds and Entities: Clarify the independent legal person status of local operating entities, retain complete full-chain vouchers for procurement, sales, logistics and tax payment, and clearly demonstrate the legitimate source and ownership of operating funds. Avoid confusion of entity qualification arising from the nationality of the legal representative, and prepare compliance document reserves in advance.
3.Professionalisation of Rights Protection: After encountering platform fund freezing, avoid information deviation and process delays caused by unguided direct communication. A legal team with dual Sino-French jurisdictional service capabilities should be instructed to intervene within one month, initiate the platform’s special review process through a formal legal letter, prioritise non-litigious methods to efficiently resolve disputes, and control rights protection costs.