Fraud in International Trade (case 1)

Let’s see a common case happened in international trade. Then analyze it and learn how to avoid the frauds in international trade.

A company exported chair to the ABC company, USA in 1997. The payment term is at sight L / C; However, the customer required to send 1/3 original B / L for early delivery sales, and has repeatedly claimed that this is the current popular practice in Brazilian business. Due to the first transaction, the party from China insisted on not sending, but the customer sticked to claim that we did not get a deal with you if no sending. Signed a letter of guarantee to ensure even if they did not receive 1/3 of the bill of lading, but also should pay money based on the L / C requirements, finally, signed contract of the 1X20 ‘cabinets, FOB DALIANUSD10, and 500. The first co-operation is very smooth, the minute we delivered the B / L, customers pay us through bank L / C . The second contract amount increased to USD31, 500, customers still insisted with 1/3 of the original B / L. Considering the fact of the customer who is trustworthy and promised timely payment in the first transaction, we agree with their requirements . Once the goods were delivered, we handled the the original B / L sent quickly to the bank for negotiation. After ten days, we ask ed whether the customer has a payment, customers gave the answer: being processed. 21 days later, when we found the money yet not to arrive and asked customers whether payment, the customer gave the answer: because of funding constraints, a few days later for payment. The fact is that the client had already taken away original of B / L goods .30 days later we asked customer payments, customers started to delay. Later no news. The obvious discrepancies ultra permit shipment due to cross-bank documents, so the banks have no way to help, the company had lost more than 20 million yuan.

Case Analysis:

Many common lessons can be learned from the above case, the following main points;

1, Both new and old customers, regardless of the volume of goods, preferably use L / C payment terms to sign the contract. the terms of payment under L / C stipulation. If there is soft terms in L/C, such as Send 1/3 original B / L, tedious inspection reports, limit third-country negotiation prior implementation is able to do ,otherwise must do not accept. Should carefully examine the other terms, if they can not do it, promptly notify the customer to modify and carefully check the examination of the documents, just in line with documents , so that unscrupulous traders do not give any opportunity.

2, Signing T-/ T, D / A, D / P is purely commercial reputation of the contract , you also need to have a very complete understanding of credit investigation, if necessary, check out client’s reputation and capital by the relevant institutions abroad . Don’t hastily accept T / T, D / P payment situation before you have not known fully. We found that the company is run by unscrupulous businessmen ,who are from the Arab Middle East, in the United States. They did not have business ethics, financial security.

3, We must strive to see through the profiteers who are usual fraudulent and possible disruptions. The case is the first single customer to keep their promises to make timely payments, without any delay, and delay, while the second single fraud. This is everything liar usual tricks, give you some sweetness, luring you hooked, and then began to defraud.

4, We must strengthen the management of contracts and letters of credit. With the development of market economy and the expansion of exports, many of our first-line salesman has the right to decide the payment method, but never relax the management and supervision of the business. If there is no special reason, we can not use non-L / C payment; Moreover, stop using long-term credit terms. For the D / A, D / P, M / T transactions, should be required under the scope of authority, one can not have the final say. No matter using which payment method must be timely investigated to prevent customers delay pay. no payment is received under T / T under, you can not send the B / L.

5, Strengthen communication with the bank, and consciously accept the guidance of the bank. Although the bank was not directly involved with the above case, whether it is L / C or D / P, D / A operations, foreign trade companies must maintain close cooperation with the bank to accept the bank guidance and business training continuously to improve the company settlement level


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