Be on the Watch for Business Scams

Several Wisconsin firms have recently received e-mails from China claiming to be interested in purchasing millions of dollars worth of products. In the case of enquiries from Xi'an Tonya Import Export, these may be part of a scam to get money or gifts out of the supplier without any real sale taking place. The Wisconsin Department of Commerce's China Office contacted the Shaanxi Province Department of Commerce during a background check of the Chinese firm and was told that Xi'an Tonya Import Export has never filed/registered for its import and export business rights with the Shaanxi Province Department of Commerce or the Xi'an City Foreign Economic and Trade Cooperation Bureau. Since the company has never properly filed/registered with these government agencies, it is not eligible for import or export business.

There are many legitimate business opportunities in China and sales by Wisconsin firms to Chinese customers are growing. As with sales to any customer from any part of the world, a little homework at the start can reduce the chances of losses in the future.

Issues that should raise a cautionary red flag include:

• the buyer has contacted you via the internet
• the buyer wants a large quantity with little or no negotiation on price
• the buyer invites a senior executive to travel to it's location to sign some type of agreement
• the buyer requests money prior to the trip to pay for a reception in your honor, and/or money or goods to "grease the wheels" with local officials
• the buyer can provide no verifiable references

If your firm receives orders from this "firm" or has questions about the legitimacy of other orders from China, contact the Wisconsin Department of Commerce's Asia Specialist, Ms. Beng Yeap, beng.yeap@wisconsin.gov, ph: (608) 266-1480.

-- Stanley Pfrang