By Yan Yiran
Recently, Ningbo Handian Trading Company successfully navigated a potentially costly fraud attempt by an overseas buyer, managing to resell a shipment of air conditioners initially intended for Iraq.
According to the staff's recollection, the overseas buyer had shown keen interest in the company's products at a trade fair many years ago, but had never engaged. Last year, the buyer suddenly placed a large, urgent order worth about 20 million yuan. It was to be shipped within two months using a specific freight forwarder chosen by the buyer.
The air conditioners were scheduled for timely delivery. However, red flags were raised when the advance payment failed to materialize, and further investigation uncovered a falsified payment voucher.
The company faced a dilemma: continuing the shipment risked uncollectible receivables, while terminating the transaction could lead to difficulties in reselling. Thus, they sought help from China Credit Insurance Ningbo Branch.
Investigations revealed a broader fraudulent operation. The same freight forwarder and local consignee in Iraq were simultaneously linked to orders from various countries, involving multiple home appliance manufacturers across Jiangsu, Zhejiang, and Guangdong. More than half of the Chinese manufacturers caught up in the scheme are in Ningbo.
The scam exploited the sellers' urgency for shipment, employing tactics like issuing small advance payments coupled with the use of counterfeit payment vouchers.
Four other companies in Ningbo had collaborations with the fraudulent buyer. The total value of orders placed exceeded $9 million. China Credit Insurance Ningbo Branch promptly took action, alerting the companies to halt shipment and avoid further losses.
This incident highlights the critical importance for export companies to bolster risk prevention measures and leverage policy-based financial instruments such as export credit insurance to secure receivables in international trade and investment.
Chief Adviser: Zhao Qingchuan
Proofreader: Yan Yiran