by Mike Bellamy
When selecting a supplier or business partner in China, it’s a wise move to do some due diligence and determine if they have been involved in any lawsuits. The last thing you want to do is end up sending money to a company or person that has a history of cheating their business partners.
In a recent article I explain how to conduct affordable due diligence. Now let me give you a new tool that is free!
In 2013, the government in China decided to finally allow the courts to make public the names of companies and individuals who have defaulted on court ordered payments. You really want to avoid doing business with this group. Not only were they found guilty of doing something nasty, but they can’t or don’t pay for the damage done!
The master list covers all of China and is available online at http://shixin.court.gov.cn/. Unfortunately, it’s only in Chinese, but the list is massive and very comprehensive. You can search for an individual or company by name or ID number.
The court system, in cooperation with the banks, are now going after people on this list. Assets and bank accounts will be frozen. Imagine if you send a payment to a supplier who happens to have his bank account frozen the next day…good luck getting your money back!
This article explains how to conduct affordable due diligence and confirm if the seller has the ability to produce your product at the desired level of quality. You may also want to watch the following short tutorials: Video 1: Finding Suppliers & Video 2: Evaluating Suppliers
The scams in China are constantly evolving. Do a keyword search for “scam” at CSIC to read about the latest scams and how to avoid them. Check out www.SupplierBlackList.com. You may also want to watch the following short video: Avoiding Scams
I think I am the victim of a scam. What can I do?
The answer depends on two things: the amount of money involved and the type of scam. If you have been tricked by a scam artist operating under a false identity, there is very little you can do. Local police & embassy staff are overwhelmed and you will get little support unless the scam was very large (over 100,000 USD for example). CSIC can introduce an investigator, but the minimum fees are a few 1000 USD.
If you have been manipulated by a company in China, the chances of recovering your losses are much better assuming you have supporting evidence such as signed contracts and proof of payment. Contact CSIC if you would like to be introduced to lawyers and negotiators who can provide dispute resolution services. You may also want to read the blog post Resolving a dispute: Demand letters and legal options and watch this short video: Resolving a Dispute