UK Foreign & Commonwealth Office: Scam alert for UK companies

QUOTE:

Alert for companies on fraud

Companies conducting business abroad must take the usual precautions and obtain all the necessary information before they engage in business. Very few companies doing business in China undergo serious problems and many British companies are already operating successfully in the Chinese market. However, we are aware of a number of British companies that have been attracted by ‘too good to be true’ offers made by Chinese individuals or suspected Chinese companies which have later turned out to be scams.

What can we do to help?

The Embassy and Consulates-General have been made aware of many cases of fraud but we are not able to investigate or carry out due diligence. We strongly advise that proper care is taken with any new customers overseas.

The Embassy and Consulates-General monitor developments in the types of fraud that are taking place, and UK companies that suspect they are a victim of fraud are requested to send a summary, including the Chinese company name and a summary of interactions to us via commercialmailbeijing@fco.gov.uk. However, we are unable to pursue individual cases further and recommend that companies take the legal route to recovering their money. A list of legal advisors can be found here: COMPANIES PROVIDING LEGAL AND PROFESSIONAL SERVICES IN CHINA (Lawyer's List 2008)

• An offer ‘too good to be true’ may be, in fact, just that
• Verify the data of your business partner, take due diligence checks
• Increase your vigilance when making deals via e-commerce
• When purchasing use secure payment instruments. When selling, secure the payment before delivering the products
• Contrary to what a customer says, it is not always necessary to visit China to finalise a contract. Be wary of a customer who insists otherwise. If you so decide, make sure of the reliability and seriousness of your partner. Corrupt practices such as bribery, paying commissions and tax evasion are illegal in China and will be prosecuted. You will also be liable for prosecution in the UK even if the practice occurs in China

Typical scams

• Consumption products offered through the Internet

Some websites offer attractive products at purchasing prices that are unusually low. Once ordered and paid for, the goods are not delivered or the quality does not fulfil the offer. Any subsequent complaint is in vain and the Chinese company often disappears.

• Advance payment scams

Some suspect companies are sending out multiple offers for large contracts to British and other foreign companies. The contracts are usually for the supply of manufactured products from the UK, in large quantities, on very beneficial financial terms that understandably are very attractive to UK suppliers. UK companies should bear in mind that basic manufactured products can usually be sourced much more cheaply in China. Following short negotiations, these scams are generally used to entice UK companies to visit the market and give advance payments, gifts and lavish meals to ‘secure the deal’. Very often the company ends up with a worthless contract and the Chinese individuals disappear.

• Visa invitation scams

Suspect Chinese companies, normally registered as a ‘trade consulting company’ or ‘trade service company’ are sending out offers for large contracts to UK companies. After a brief exchange of correspondence, UK companies are asked to issue invitation letters for the clients of the Chinese companies. After the invitation letter is issued, the Chinese company will then disappear. They will make illegal profit out of the invitation letter by selling it to an individual seeking to enter the UK.

UK companies doing business in China

1. When entering a new overseas market such as China, make contact with the support networks available in the UK, such as UK Trade & Investment regional officers, Chambers of Commerce, Business Links and the China Britain Business Council. In China, contact UK Trade & Investment at the British Embassy in Beijing or Consulates General in Shanghai, Guangzhou and Chongqing, the British Chambers of Commerce , the CBI and China’s CBBC office . They will be able to advise on business norms, useful legal and business services contacts and assist in research. A structured approach will often yield better long-term results and put companies in touch with local networks such as other UK businesses active in China.

2. Don’t get on the plane or incur any major expenses without carrying out due diligence checks. If you get an offer that looks too good to be true, it probably is. The Embassy and Consulates-General in China cannot carry out due diligence checks on your behalf, but they can provide details of legal and business services companies which can help.

3. Use a lawyer you trust to check all legal documents are accurately translated in dual languages before agreeing to sign anything. If you are pressured to sign without this comfort, walk away from the deal.

4. Do not make illegal payments - not only are there laws prohibiting this but it is in the financial interest of UK companies not to try to make illegal payments, as this makes them more prone to scams perpetrated on them by others or their own employees.

IMPORTANT NOTE : UK companies should not engage in any unlawful activity and should be aware that the UK Government is an adherent to the Organisation for Economic Co-operation and Development (OECD) Guidelines for Multi-National Enterprises (MNEs). See OECD Guidelines for Multinational Enterprises - BIS for further details. UK companies may also be prosecuted under UK law for unlawful activity overseas. See Article 109 of the Anti-terrorism, Crime and Security Act 2001.

Source: Scam alert for UK companies (ukinchina.fco.gov.uk)


Contacts and offices

UK Trade & Investment In London
Kingsgate House,
66-74 Victoria Street,
London, SW1E 6SW.
Enquiry Services: +44 (0)20 7215 8000
Official Website: www.uktradeinvest.gov.uk

[forum_admin]

UK Trade and Investment in Beijing
11 Guang Hua Lu, Chaoyang District, Beijing, 100600, PR China
http://ukinchina.fco.gov.uk/en/doing...ntacts-beijing


UK Trade and Investment In Shanghai
Suite 301 Shanghai Centre, 1376 Nanjing Road, Shanghai 200040, PR China
http://ukinchina.fco.gov.uk/en/doing...tacts-shanghai


UK Trade and Investment In Guangzhou
2/F Guangdong Int'l Hotel, 339 Huanshi Dong Lu Guangzhou 510098, China
http://ukinchina.fco.gov.uk/en/doing...acts-guangzhou


UK Trade and Investment in Chongqing
Suite 2801, Metropolitan Tower, 68 Zuorong Road, Yuzhong District, Chongqing 400100, P.R. China
http://ukinchina.fco.gov.uk/en/doing...acts-Chongqing


China-Britain Business Council
Quote: We work closely with CBBC in both the UK and China to deliver a wide range of practical assistance.
http://ukinchina.fco.gov.uk/en/doing...-contacts-CBBC

[xboxessentials]

Hi, this thread was posted by me. Not sure why it's showing up as being listed by an unregistered individual.

Anyway, as long as everyone can read it.

Regards

G