Showing posts with label Foreign Trade Operator Record. Show all posts
Showing posts with label Foreign Trade Operator Record. Show all posts

Monday, October 1, 2018

Come to China and sign the contract scam

The invitation to China to sign a lucrative sales contract is a fraud scheme that has been going on for many years and a ripoff that companies sadly enough still fall victim for.

The whole idea of the scam is to convince a foreign company to pay administration fees and gifts in order to land a very attractive sales contract with a Chinese buyer.

At first glance, it can be difficult to assess the risk of selling to a first-time customer from China. It should be imperative to screen the credibility of the Chinese buyer by requesting a business license copy for verification, check the foreign trade rights and conduct a litigation check. (read how to conduct your own free business license verification, foreign trade right check, and litigation check). Companies that are selling commodities such as meat or crops to a Chinese company should, in particular, do a comprehensive background check of the buyer and make sure that the buyer is capable of financing the final payment in a situation where commodity prices drop during the shipment to China.

If the due diligence does not raise any flags but the invitation to China to sign the contract or a request to pay a contract notary fee lands in your inbox then it is very likely a scam and you should walk away immediately.

How the scam works
There are two versions of the build-up to the scam but pattern and outcome are the same.

Version 1
A Chinese company sends out unsolicited emails to mostly small and medium-size companies to inquire about product/service and the price. After having received a quotation, the Chinese company will express interesting in placing a substantial order and very often without any attempt to negotiate the price. The Chinese company will then send a purchase agreement that confirms the order size, products/services and payment terms (normally from 30% up to 50% prepayment). Everything looks great until the foreign company is invited to China to sign the purchase contract face to face with nobody else than the CEO. The Chinese company asks for a passport number, name, travel dates etc to issue a formal invitation letter as documentation for visa application.

Version 2
In the second version the Chinese company contacts a foreign company and asks them to host a travel or business event for 100 to 300 people. The Chinese company asks for a quotation that covers expenses for accommodation, meal, travel and other services. The offer is accepted with no hesitations and the Chinese company replies with an agreement that must be signed in China.

How the ripoff works
The foreign company does not want to miss the fantastic deal and sends somebody to China to sign the contract. In China, the foreign company representative meets the CEO and other high-level management and is asked to pay for dinner expenses and buy a gift to the CEO who takes the final decision on the deal (often an expensive gift made of gold). The foreign company representative is also asked to pay a fee for notarization of the purchase contract and other "mandatory" administration fees to for example China Customs. The set-up is a fraud. After having returned home from China, the foreign company NEVER receives a prepayment or hears from the Chinese company again.

The notary public fee
Companies that rejects the invitation to China will still be met with the demand of paying a notary public fee. The expense can be a fixed fee of anything from 1000USD up to 10,000USD or a fee that is 0.3% of the contract value. Some companies will try to deduct the fee by lowering the sales price but the Chinese company will insist on the fee and suggest that the fee is split 50/50 to give the impression of flexibility and fairness. When that is said, it is important to emphasize that notarizing a purchase contract in China is complete nonsense and not required by law at all.

thumb Example of a fake receipt for a notary public fee. A formal receipt or Chinese "fapiao" from a notarization office would normally carry much more details such as a tax identification code and would not be handwritten.

 Who are the companies behind the scam?
Companies behind the "come to China and sign a contract scam" have a relatively short lifetime of 1 to 2 years. Companies that were active in this fraud scheme 2 to 4 years ago are now dissolved, inactive or had the business license revoked. However, new companies with exactly the same intentions are registered again and again.

Here is a list of companies that are currently active in 2017/2018.

Company Name (EN) Shaanxi FengQin Trade Co., Ltd
Company Name (CN) 陕西风沁商贸公司
Business license 91610133MA6URX8E8L
Establishment Date 29th of March 2018
Legal Representative Yang Li Jun (杨立军)
Address Address No.369 North of Taihua Road Weiyang District Xian City China . Pc .710016
Office Phone 86-29-68568356
Mobile Phone 86-17039092007 86-18229097364
Emails sxfqsm@yeah.net
Contact person Betsy, Betty or Helen
Website http://www.sxfqsm.com
Company Name (EN) Yunnan Zhouyun Import & Export Co., Ltd
Company Name (CN) 云南周韵进出口贸易有限公司
Business license 91530100MA6KCWYC37
Establishment Date 7th of March 2017
Legal Representative 郑国芹
Address 云南省昆明经济技术开发区云大西路39号新兴产业孵化区A幢7楼7319号"
Office Phone 86-871-63852259
Mobile Phone 86-18313890965, 86-15198853509, 86-15687892921
Emails chinaynzy13@188.com, chenhzgs2@vip.163.com, ynkmwqw11@vip.163.com
Contact person Zhu Yonfu, Haidong Chen, Yu Mo, Zhu Changshun
Website N/A
Company Name (EN) Henan Changxu Import & Export Trading Co., Ltd
Company Name (CN) 河南长旭进出口贸易有限公司
Business license 91410100MA44ETBC14
Establishment Date 27th of September 2017
Legal Representative 黄哲锋
Address 22 Dongfeng Road Jinshui District Zhengzhou City China.
Status Abnormal Business Operation
Office Phone 86-371-56051299 or 86-371-56051299
Mobile Phone
Emails Info@chinahncx.com
Contact person
Website www.chinahecxjck.com (not working)
Company Name (EN) Xi'an Yaoke Import & Export Trading Co., Ltd
Company Name (CN) 西安耀科进出口贸易有限公司
Business license 91610132351711250L
Establishment Date 19th of August 2015
Legal Representative 许朝光
Address NO.25, Dianzi ZhengJie Dong Sanxiang, Xi'an, China 
Status Abnormal
Office Phone 0086-29-63625416, 0086-29-63625418
Mobile Phone 0086-18292677278, 0086-15929907719
Emails
Contact person Honglin Fan  Xu Chao Guang (许朝光)
Website
Company Name (EN) Shaanxi Suofu Trade Co., Ltd
Company Name (CN) 陕西索富贸易
Business license 91610104MA6TX56C4R
Establishment Date 11th of November 2015
Legal Representative Hu Zong Ying (胡宗营)
Address  ROOM 20733-7 FLOOR,2 UNIT NO.1 LONGHU MOCO INTERNATIONAL, NO.20# XINGHUO ROAD, LIANHU DISTRICT,XI'AN
Status In operation, abnormal business operation
Office Phone 86-022-60771556
Mobile Phone
Emails sales@sfmetal.cn
Contact person Jack Wang
Website
Company Name (EN) Yunnan Gaosai Import and Export Trading Co., Ltd
Company Name (CN) 云南高赛进出口贸易有限公司 
Business license 91530103MA6K4UBP40
Establishment Date 11th of March 2016
Legal Representative Yi Zhong (易钟)
Address No.17,Jinshi Residential Quarter, Panlong District, Kunming City, China
Status Business license revoked
Office Phone 0086-0871-65127808
Mobile Phone 0086-18687527169
Emails ynkmww4@163.com, liuyifang17@vip.163.com, liuyifang11@vip.163.com
Contact person Ming Yu, Liu Yifang
Website http://www.ynkmpgs.com
Company Name (EN) Shaanxi Tengyu Imp & Exp. Co., Ltd. 
Company Name (CN) 陕西腾宇进出口有限公司 
Business license 91610112MA6TXKRG18
Establishment Date 24th of February 2016
Legal Representative Zheng Bao Guo (郑保国)
Address 陕西省西安市未央区明光路龙府北郡腾龙阁19幢2单元501
Status Business license revoked
Office Phone
Mobile Phone 0086-13571997872
Emails
Contact person Meng Xiang Li
Website
Company Name (EN) Xi`An Blessing Wide Trading Co., Ltd
Company Name (CN) 西安福阔商贸有限公司 
Business license 91610131MA6U18MN0F
Establishment Date 13th of January 2017
Legal Representative An YIng Chun (安迎春)
Address Jinqiao International Plaza, Building 1, Room 31009, NO.50 Keji Rd,Gaoxin District,Xi´an,Shaanxi,China 
Status Business license revoked
Office Phone 86-29-63336915
Mobile Phone 0086-13571997872
Emails fktradingg@163.com,cmtradingb@163.com, zgtradingf@188.com
Contact person Frank, Luo Ming (罗鸣) Yin Ren Ling (殷任灵)
Website
Company Name (EN) Xi`An Bei Ao Trading Co., Ltd. 
Company Name (CN)  西安北奥商贸有限公司 
Business license 91610131MA6TYGTR9J
Establishment Date 28th of July 2016
Legal Representative Zhu Xiao Li 朱小莉
Address Shaanxi, Xi´an Gaoxin District, Tangyan Nan Road, 3rd Block, No 1, 18th Floor 
Status Abnormal operation
Office Phone -
Mobile Phone -
Emails -
Contact person Mu Huan Huan ( 穆欢欢)
Website -
Company Name (EN) Shaanxi Guangda Electrical Equipment Engineering Co., Ltd.
Company Name (CN) 陕西广达电力设备工程有限公司
Business license 91610133MA6U61238R
Establishment Date 27th of June
Legal Representative Li Ping Zhang (李平章)
Address No.2 Fu Rong South Road, Qu Jiang New District, Xi´an City 
Status Active
Office Phone 0086-29-88453511
Mobile Phone 0086-15829629823, 0086-13619296713
Emails shaanxiguangda@yeah.net, sun.jinfa@shaanxiguangda.com, sxgdelectric@vip.163.com, shaanxiguangda@126.com info@shaanxiguangda.com, sxguangda01@163.com"
Contact person Mr. Zhang Liang, Mr Sun Jinfa, Liu Jia Mei ( 刘加美)
Website www.shaanxiguangda.com

Company Name (EN) Xi’an Qing Xian Lv Trading Co., Ltd (related to Nuolang, see this report)
Company Name (CN) -
Business license -
Establishment Date -
Legal Representative -
Address NO. 216 TAI BAI SOUTH ROAD, YAN TA DISTRICT, XI’AN
Status -
Office Phone 0086-29-62329368, 0086-29-61857812
Mobile Phone -
Emails officeqxl@163.com, officexaqxl@163.com, officesxqxl@163.com officecezyqxl@163.com, officexfqxl@163.com, officezjqxl@163.com
Contact person Judy, Betty
Website http://www.qingxuanlv.com/
Company Name (EN) Xi'an Nuolang Trading Co., Ltd (read a comprehensive investigation)
Company Name (CN) 西安诺朗贸易有限公司
Business license 91610133MA6UQ9X955
Establishment Date 22nd of January 2018
Legal Representative Yang Shao Rong (杨少荣)
Address No. 10 Rong Xin Road, Gao Xin District, Xi’an City
Status Active
Office Phone +86-2963035040,+86-2963035041,+86-2963035043, +86-2963641393
Mobile Phone -
Emails officesxnl@163.com, officexanl@163.com, officennl@163.com, officenll@163.com, officexfnl@163.com, officezynl@163.com, officerynl@163.com, officejnl@163.com
Contact person Judy, Betty, Wang Hai Ping (王海平)
Website www.nuolangshangmao.com
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Friday, September 21, 2018

Verification of China Custom Registration and Foreign Trade Operator Record

Here I will show you how to verify that a Chinese company is registered with China Customs and Ministry of Commerce (MOFCOM) and why that is important.
Companies that are either exporting or importing from China should always make sure the Chinese buyer or seller has the necessary registrations for international trade. Why is this important? If you are an importer then you want to make sure that Chinese company who is is consignee on the shipping papers actually has permission to export before you wire a down payment. If you are exporting to a Chinese company you want to make sure the Chinese buyer has the necessary permits to receive and clear the goods in China before you ship off your goods against a 30% down payment. (if you request 100% payment before shipping then no need to worry)

Chinese companies that are involved in export/import activities must acquire two important certificates. The first certificate is the China Customs Registration Certificate (中华人民共和国海关报关单位注册登记证书) issued by China Customs and the second certificate is Foreign Trade Operator Record (对外贸易经营者备案登记表) issued by Ministry of Commerce (MOFCOM).  Beside these two certificates, a Chinese import/export company also need to acquire an import/export permit that depends on the goods that must be declared.  However, a Chinese company need to have the China Customs and Foreign Trade Operator certificates before they can apply for an import/export license.  

Earlier this year I worked on a case where a client wanted to check Youlian Industry and Trading Company, a supplier of ethonal fireplaces on Alibaba. (www.yl-life.com or https://yjyl.en.alibaba.com). The agreement said that the client would purchase products from Youlian Industry and Trading Company but the consignor would be the trading company EOS Home Décor Co., Ltd.    The client decided to conduct a background investigation of both companies before taking a final decision. Verifying registration with China Customs and MOFCOM was one of the cornerstones. Here is how I did it.  

First step was to look at the business registration information which is necessary to have in order to apply for Customs Registration Certificate and Foreign Trade Operator Record. See more information about how to check a business license here


  1. Business license: 91440106304640568F (Unified Social Credit Number)
  2. Company Name: (CN) 广州伊欧斯精品家居有限公司 aka EOS Home Décor Co., Ltd
  3. Legal Form: Limited Liability Company (Sole proprietorship)
  4. Legal Representative: Guan Rui Ye (关锐烨)
  5. Registered Capital: CNY 500,000
  6. Establishment: 8th of October 2014
  7. Operation Term: N/A
  8. Validity: From 8th of October 2014
  9. Registrar: Administration of Industry and Commerce Guangzhou, Tianhe District
  10. Last Inspection: 17th of May 2016
  11. Status: Active
  12. Registered Address: Yueken Road, No 94, 2nd Floor, Tianhe District Guangzhou
  13. Business scope:
    Wholesale of home decoration items, lamps, interior decoration items, ceramics, glassware, daily utensils, groceries, resin and resin products, household appliances, metal hardware, kitchen equipment and kitchenware, hardware products, furniture.  Import and Export (Except for franchised control products). Retail sales of lamps, ceramics, glassware, glassware, kitchenware, groceries, resin and resin products, hardware and furniture.
2nd step was to confirm if the company is registered with China Customs. Companies that are registered with China Customs can be found on the platform Credit Publicity Platform of Import and Export Business of Customs of the People's Republic of China. http://credit.customs.gov.cn


Any user can search on a company by entering the company name (in Chinese), the organization code or the unified social credit number (on the business license). The platform also host a database for 3 categories of companies:
  1. List of companies with a good reputation
  2. List of discredited companies
  3. List of companies with abnormal behavior
The search on the platform successful identified EOS Home Décor Co., Ltd. Here is the information that was retrieved:


  1. Business license: 91440106304640568F (Unified Social Credit Number)
  2. China Customs Code: 4401963DYE
  3. Registration date: 22nd of September 2015
  4. Organization Code: 304640568
  5. Company name: 广州伊欧斯精品家居有限公司
  6. Registrar: Guangzhou Customs
  7. Address: Yueken Road, No 94, 2nd Floor, Tianhe District Guangzhou
  8. Administration District: Guangzhou Tianhe District
  9. Type of Economic Zone: Normal
  10. Business: Consignor and consignee of export and import goods
  11. Special Trade Zone: No
  12. Industry classification: Wholesale
  13. Expiry: 31st of July 2068
  14. Cross Border Ecommerce: N/A
  15. Status: Normal
  16. Annual Report: Done
  17. Abnormal credit records: None
Information from China Customs did not trigger any questions. The information corresponds to business registration information and there are no negative remarks about the company.
Next step was to confirm that the company is registered as foreign trade operator with MOFCOM on the website http://iecms.mofcom.gov.cn


There are 3 search options which are:
  1. Foreign Trade Operator Record Code (13 digits)
  2. Chinese company name
  3. Unified Social Credit Code (from business license)
The search shows that EOS Home Décor Co., Ltd is registered as a Foreign Trade Operator and here is the registration data from the database:


  1. Import Export Enterprise Code: 4401304640568
  2. Unified Social Credit Number: 91440106304640568F Number)
  3. Chinese Name: 广州伊欧斯精品家居有限公司
  4. English Name: Guangzhou Eos Home Decor CO.,Ltd
  5. Registration Place: Guangzhou
  6. Legal form: Privately Owned Limited Liability
  7. Legal Representative: Guan Rui Ye (关锐烨)
  8. Registered Capital: CNY 500,000
  9. Last filing date: 2017-03-03
  10. First filing date: 2015-09-21
  • EOS has a valid registration with China Customs and MOFCOM
  • Registration information is consistent with registry information from NECIPS.
  • Registration since 2015 and No abnormal records.
Of course, a Chinese company can choose to import or export through an appointed import/export agent with the necessary qualifications and permits. This is often an option for smaller companies that don't have resources to handle all the paper works related to export/import. In that case it is highly recommendable to figure out more about the trading company and make sure that consignee/consignor information is consistent with information on the invoice and the necessary shipping papers/documentation for custom clearance.
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