International Trade Scams (11)
2023-03-01 21:20:52

Chinese scammers replaced goods inspected for shipment


A very small number of unscrupulous Chinese foreign trade companies devised various scams to defraud foreign customers, which seriously damaged the good reputation of Chinese exporters and even damaged the overall image of China. They should be fully exposed and held accountable for their legal responsibilities.

In recent years, I have been retained by more than 10 foreign importers to investigate the legal liabilities of Chinese international trade scammers. These Chinese scammers used the common mature fraud tactics to defraud foreign companies:

1. Used bought, lost or even stolen ID cards to register companies and open bank accounts in coastal cities in China;

2. promoted scrap metals or chemical products etc. at ultra-low prices on the Internet to attract foreign customers.

3. Set up warehouses in northern provinces of China to show foreign buyers cheap scrap metals or chemical products etc.

4. First lured foreign customers into signing contracts with ultra-low prices. The sales price was much lower than the normal market price, while foreign customers were required to down pay the full price.

5. After the foreign purchasers personally or entrusted an inspection company to inspect and supervise the goods to be shipped, the Chinese scammers removed the seal lock, unloaded the inspected goods and replaced them with bricks or rubbish on the way from the warehouse to a port in the northern China.

6. After the goods arrived at the destination port, foreign customers often pulled the container directly from the customs-supervised warehouse. After opening the containers, they found that the ordered goods turned into bricks or various garbage.

After foreign customers discovered that they had been deceived, whereas these Chinese scammers had the lowest registered capital and no assets at all, even if they filed a civil lawsuit and won the case, it was difficult to enforce the judgment successfully. If foreign importers reported the scam cases to the local public police, the local police were often unwilling to commence criminal investigation. Criminal investigations of these international fraud cases were usually very professional, complicated, time-consuming and laborious. These cases were not very large, usually tens of thousands of dollars, and the cost of criminal investigation may exceed the defrauded amount. In addition, these Chinese scammers often used nominal shareholders, directors, or general managers. Even if the case occurred, the registered shareholders or directors did not even know the Chinese foreign trade company, let alone the illegal and criminal acts of defrauding foreign customers. In case foreign victims entrusted Chinese lawyers to report the cases, Local police often required foreign companies to notarize and authenticate the power of attorney and evidence originated abroad, or put forward other harsh requirements. Many foreign victims can only retreat when they were in trouble.

Lessons and enlightenment:

1. Before signing a contract, a foreign importer needs to conduct necessary due diligence on a Chinese supplier to understand the basic credit status of the Chinese company.

2. Foreign importers must be very careful about products whose prices are significantly lower than market prices. Don't be greedy for cheap; there is no free lunch.


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