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(Last updated: 05 Feb 2008)
Australian companies need to be careful of international scammers that tempt people around the world with promises of lucrative rewards. Their offers are typically considered 'too good to be true' and involve attempts to solicit illegal payments or gain other benefits. Some examples of scams from China are described below.
Advance payment scams
Some companies in China send attractive offers to Australian companies involving large contracts on beneficial terms. The contracts are usually for the supply of basic manufactured products from Australia. These scams generally entice businesspeople to visit the market and give advance payments, gifts, and lavish meals for 'securing the deal'. However after visiting the market, Australian companies discover that they are out of pocket but that there is no deal and the company has disappeared.
Internet domain registration scams
Australian companies are sometimes contacted by individuals from China posing as the representatives of domain name administration companies. These individuals contact an Australian company, and advise that a domain application has been made by a Chinese company incorporating the Australian company's name or trademark. The ‘representatives’ of the registrars attempt to convince the Australian company to take steps to protect its intellectual property rights, and register a Chinese domain name to prevent it from being registered by a third party. In reality, they take money, but provide no such service. A list of Accredited Registrars for Chinese domain names is maintained by the China Internet Network Information Center which also provides guidance on domain name dispute resolution at its CNNIC Rules page.
Visa invitation scams
Some Chinese companies, registered as a 'trade consulting company' or a 'trade service company' send offers for large contracts to Australian companies. After a brief exchange of correspondence, the Australian companies are asked to issue invitation letters to the clients of the Chinese companies, who claim that they need to check the quality of the products and the company in Australia. The Chinese company then profits from the invitation letter by selling it to an individual seeking to enter Australia who travels to Australia but has no further contact with the Australian company concerned.
Austrade's role
Austrade has no legal power to assist in the types of scams listed above. The recovery of loss of funds is a private commercial matter and the onus is on individual companies to investigate.
However, Austrade may be able to assist Australian companies by providing initial checks on Chinese companies prior to engaging in further communication, and/or by providing names of legal advisers who may be able to assist you. In addition, certain companies in China can provide professional due diligence services and company checks on a fee for service basis.
If you receive an inquiry from a Chinese company that seems too good to be true or that you think might be a potential scam, you are advised to treat the request with caution, and contact Austrade at info@austrade.gov.au for advice on the assistance Austrade can provide.
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