How to prevent and deal with international trade fraud

How to prevent and deal with international trade fraud

What are the common types of international trade fraud? What are the methods to prevent and deal with international trade fraud? The common types of international trade fraud include letter of credit trade fraud, t / T fraud, processing trade fraud and branch fraud in China.

Prevention and response methods:

First of all, it is necessary to understand the partners. It is necessary to clearly recognize that some countries are market economy countries based on private ownership, and there are some basic national conditions such as bad credit problems. At the same time, considering that most of the trading objects are small and medium-sized enterprises, it is necessary to entrust professional credit investigation companies to conduct credit investigation on them.

Secondly, the risk should be fully evaluated and avoidance measures should be taken. If you can apply for export credit insurance, or adopt a more secure payment method such as letter of credit, require the other party to provide a guarantee or bank guarantee to reduce the risk, include the above-mentioned risk expenses in the cost, measure whether the income and expenditure is cost-effective, prefer to make less profit, rather than sign a contract blindly.

Third, in the process of trade, we must pay attention to the retention of written documents. In addition to signing formal and detailed contracts, a series of small requirements, such as modifying specifications, changing the delivery date, changing the bonded warehouse after landing, etc., must also be confirmed in writing by the person in charge of the other party. It is suggested to add arbitration clause in the contract (since there is no judicial agreement between the two countries, the arbitration result is better executed in the two countries than the court’s judgment).

Fourth, once the other party’s payment is delayed, the cooperation shall be stopped immediately, and the next business shall be done after the other party’s payment is required. Never get away with luck or worry about the other party’s cancellation of the order.

Fifthly, in case of any trade dispute, it is necessary to collect various evidences as soon as possible, request the other party to confirm the repayment responsibility in writing and make a repayment plan. And further pay close attention to the other party’s operation and credit situation. If the situation deteriorates, our company shall immediately notify the export insurance company to settle the claim or carry out property preservation through the local lawyer.

According to the credit investigation results, our company should choose the most efficient recovery methods, such as criminal litigation (suing the other party for fraud and forcing its repayment), civil litigation, debt collection company for recovery, etc. If the company’s assets have not been transferred and are not mortgaged, it is easier to implement, in the form of on-site recovery or direct litigation. In some countries, if a company is a legal person, it is mostly a limited liability company. Generally, it is not allowed to pursue the unlimited economic responsibility of itself and its spouse. If the foreign company maliciously swindles or delays the payment, it will go bankrupt (cancel the company) after the transfer of relevant assets in advance, so it is necessary to strengthen the strong pressure to achieve the purpose of recourse, such as criminal proceedings.

However, due to the increasingly strict filing conditions of criminal proceedings, it is necessary for judicial organs such as the Procuratorate (instructing the police department) to confirm the fact of asset transfer and whether it is suspected of malicious bankruptcy and fraud purpose through financial inspection, so as to determine whether it is criminal detention. The procedures are complicated, the time is long, and the probability of success is small. Since civil litigation does not affect the freedom of action of the foreign parties, and can appeal, the time is more lasting. It takes about one to one and a half years from prosecution to execution.

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