Dear Dr Tekle,

Are there any fraud methods out there that relate to manipulating the actual documents of trade like customs documents or L/C? I guess what im asking is ? is there one completely safe method of negotiating all of the steps of trade?

Thank you and best wishes

The safest way to protect yourself is having a good relationship with the buyer or seller. All methods of payments have risk including the letter of credit. I suggest that you focus on establishing a solid relationship then the rest will take care of itself. Fraudsters have ways of manipulate documents and including negotiations. If you have any doubt, don't take any chance just walk away from the deal.

Dear Tekle,
Are there any websites out there which have the jurisdiction to investigate and prosecute fraudsters. If so, which ones?
Thankyou

Thank you for asking the first question. This question came before and I attempted to find resources with no luck. I still think it will be hard to find a single jurisdiction that you can investigate and prosecute the reason might be because national laws are different and each country prosecutes according to its laws. I suggest for you to identify a legal expert where the fraudulent activities took place and prosecute. Remember to consider the cost that will be associated when you take legal action in another country

Hello,

I am a buyer in the US and I think these boards are helpful.
I find that doing due diligence on all potential trading partners is highly valuable. Which services or methods would say are the best to achieve some peace of mind when making a decision who to source from?

Thankyou sir

As a buyer you have several options. In addition to Alibaba and other platforms I think it will be good to contact the commercial services usually located in the Consulate or Embassy of the country that you want to import from. Their job is to help find buyers from their country. For example if you want to import from Brazil you contact the commercial services of Brazil and so forth. Trade associations, chamber of commerces located in the importers country are also good sourcing resources. A good resource that can help you find a list of platforms is www.fita.org.

How do I distinguish a real supplier from a fraudulent one- are there any initial clues I should look for when viewing a website or an email from them?

Take time to know the company! Use common sense and frankly don't be greedy. Other than that it will be difficult. You have to realize that fraudsters are very good on what they do, they are smart enough not to give you any clue. Be patient and avoid taking unnecessary risk.

Why are some countries more likely to produce fraudulent traders than others? Certainly the governments in these countries would be looking to maintain/RESTORE THEIR COUNTRIES REPUTATION IN THE WORLD ECIONOMY? is there a record of which countries i should be wary of?

Thankyou

I agree with you it gives the country a bad name. It is hard to guess as to why many of the fraudulent activities are limited to some countries. Now though, because of technology, global reach and anonymity you have fraudsters all over the world. I don't know of any list as who to avoid and not to. Irrespective of the origin of the scam try to use a good judgment and educate yourself on the different scams.

If I have been defrauded by a company in say China, surely I have some international recourse ?ICC or international courts? what exactly is the role of the ICC?

thankyou very much

I suspect you are referring to International Chamber of Commerce ICC. The ICC publishes Incoterms and other publication such as UCP 500 that governs letter of credit. Other than that I don't have any knowledge that it has authority to prosecute fraudsters, you will take action in the country where the crime is perpetrated.

Replying to kenple1:

ok i see thanks very much.

Ken

Dr Sebhatu,

Do you know of any place I can go to learn about trade. Not really a course but a primer document or website which covers major areas? I guess like a dummies course or a 5 step type document?

Thank you!

There are several good resources that you can use to educate yourself about trade. One websites that I think could be very helpful is www.fita.org this site have good educational resources including list of trade lead platform providers and short articles like on how to use the services of an Export Management Company. International Chamber of Commerce's site at http://www.iccwbo.org/ is also a very good site to help you understand Incoterms. Basic guide to exporting at www.ita.doc.gov is another good export resource. Additionally, I would also visit the websites particularly trade associations and chamber of commerces of the country that you want to import or export from. Try to identify two or three sites and use them as your core for resources where you will visit them often to learn more about specific trade related issues.

Is there a way, or is it even important, as a supplier, to ensure that my potential buyers can check to that I am trustworthy? Do I need to get due diligence done on myself by a company like D&B ?is it worth the expense? Am I overreacting ?maybe but I see the problems buyers are having distinguishing fraudulent sellers from legitimate companies like mine

Thank

I don't think you are overreacting; in fact, it is good business. By providing the information you are increasing your marketability and that I think could be a good competitive advantage. That will certainly separate you from others that don't provide that kind of information. I suggest that you provide that information to those with greater potential that you think will do business with your company. Be carefull who you give it though.

Replying to Admin:

What is the most common trade related fraud out there? What specifically shoul;d i be wary of

Thanks

Several of them, 419 scam also known as Nigerian or West African, escrow scam, counterfeit international money order or cashiers check scam, letter of credit scam and phishing. All these and more are scams that you should watch for. Scammers use different methods to obtain information from you to commit crimes, educating yourself on the above scams and others is the best way to avoid them.