Avoid foreign trade scams, read before you take orders!

2023-03-10|56 views|Development skills

In addition to negotiations in trade transactions, trade scams are also something we need to guard against. Because your trust may be used by fraudsters to cheat you. Today I summarized some typical cases of foreign trade scams, I hope it can help you.

Case I:
Domestic foreign trade factory A, through a foreign trade intermediary B got an order from a well-known African company C for 30w USD worth of garments. After many rounds of negotiation and signed a contract with the value of goods, and agreed to pay for OA30 days.
When the goods arrived at the target port, A repeatedly urged the B to pay, but B find various reasons to put off, and then it is directly contactless. After that, 23 of the 32 containers were lifted to Uganda one after another, and 9 containers were stranded in the target port without being raised.
Later, through the customs data, social media and other tools to obtain the contact information of company C for verification, it said that it has never opened a factory in Uganda, and the company does not have the above-mentioned name of staff!
Case 2:
Domestic factory A signed a contract with Kenyan company B for the sale of agrochemical products. For the sake of insurance, they appointed CITIC guarantee. Factory A sent three batches of goods to the port designated by company B, and submitted the first full set of original documents of goods to the bank designated by company B by way of bank collection.
However, when the payment was due, Company B did not pay for the goods and did not lift them. Company A then requested the other bank to return the full set of documents through the delivery bank, but the other bank returned the bill of lading is a color printout, rather than the original bill of lading. When company A contacted company B through the way provided by CITIC Insurance, they found Company B is a counterfeit. Since CITIC Insurance covers business credit risk, not business fraud risk, thus this single loss cannot be paid.
How do we crack the scam in the face of the case?
When you don't know the buyer's credit status, you should apply for a buyer credit check in advance. Check whether the survey result is consistent with the buyer's description. If there is any discrepancy, you should check with the buyer first, and ask the buyer to present a written explanation if allowed.

If the buyer clearly indicates that he/she is an intermediary or agent, he/she must be requested to show the relevant purchase authorization. If the exporter does not get the contract text directly from the final buyer, he/she needs to ask the intermediary or agent for proof of the original way he/she got the contract, and the original email must be sent through the buyer's official email address.
Of course, in addition to these precautions, when we sign the contract, we also need to check whether the signatory is in the list of management personnel in the credit report. Also pay attention to the form of contract to see the fax number, sending address and postmark. If it is sent by email, see whether the sending email is a corporate email.
For the first time cooperation customers, you can also use the way of advance payment to reduce the risk. Of course, we can't rule out the case that the customer will not hesitate to pay the advance payment in order to cheat you of greater value goods. For this kind, we can explicitly ask the other party to make foreign exchange payment with the buyer's own bank account in the payment path. Thus, protect the legitimate rights and interests.
If you are really cheated, do not panic. Timely take appropriate legal measures to protect the rights and interests, and appoint personnel to the location of the goods for return or transit, as far as to minimize losses.

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