Although some of the fraudulent methods are quite sophisticated, there will always be some flaws, and it is unlikely that they can be perfect. As long as importers are vigilant and master the methods of identifying traps, they can completely avoid being deceived.
The following summarizes several identification and prevention methods for reference.
(I) Review the authenticity of the business
Reviewing the authenticity of the business is the most important identification method in import and export business. The “authenticity” review is to exclude the “four self-sees and three no-sees” business and to exclude the false business trap. How to review the authenticity of the business?
(1) It should have “five things”. In the import business, there are sellers, buyers, products, transporters, and end users; under the agency import, there is an original agency import agreement. In the export business, there are sellers, buyers, corresponding products, factories that produce products, and transporters.
(2) In the business operation, there are generally standardized operating procedures and rules, and banks are involved. This type of business is mostly self-operated business.
(3) Not the same person (even in agency business, the buyer, seller and transporter cannot be the same person).
(II) Perfecting the contract terms
In the import business, if it is difficult to identify the authenticity, the other party colludes with each other, cooperates with each other, and repeatedly emphasizes the authenticity, and the importer wants to try, you can adopt a strict contract to identify and prevent, such as setting quality clauses, certification clauses, price clauses, inspection clauses, claims clauses, payment clauses, required documents clauses, transportation clauses, and setting detailed specifications and requirements in the contract, and requiring the other party to have the signature of the legal representative (the other party’s passport must be provided) or the signature and seal of the power of attorney. Special emphasis is placed on the signing place in the region.
In the import contract, there should be a strict arbitration clause, stipulating that the importing country is the place of arbitration for resolving disputes. In the import contract, emphasis is placed on proving the quality standards, evaluation clauses, protective clauses, inspection clauses, transportation requirements, etc. of the imported goods. Note that a written contract must be signed in import and export, because a written contract has certainty, warning and publicity, and serves as evidence. Some frauds will definitely reveal flaws in written contracts, and foreign trade companies can identify and prevent them in time when signing contracts.
(III) Do a good job of credit investigation
When doing import and export trade, it is very important to choose the trading partner. You must carefully examine the authenticity of the other party’s identity and find out the other party’s credit status. For example, look at the original and duplicate business licenses, and verify the authenticity of the original and duplicate copies at the same time, and understand and verify its business activities and whether it is still legally conducting business activities through legal channels. At the same time, understand its goods, registered capital, legal address, etc. It is also necessary to examine the authenticity of the other party’s registered credit and its ability to perform the contract, and understand its basic accounts and business activities. The credit status of the parties is related to whether they have the ability to assume debt liability and whether they have the sincerity to perform the contract. When identifying credit investigations, it is necessary to clearly identify the subject’s qualifications. For example, the other party appears as a natural person, or as a legal person or non-legal person economic organization, or as a legal representative, or as an agent.
Investigation methods also include bank inquiries, overseas agency inquiries, industry inquiries, import and export chamber of commerce inquiries, and relevant agency inquiries.
Terms commonly used by banks for credit rating: Excellent; Good; Ordinary; Bad.