The EU SME centre frequently receives emails from EU SMEs which encounter significant issues with purchases from China, ranging from pure fraud to miscommunications leading to commercial disputes that could have been avoided. The most frequent cases relate to:
- Payment done to the Chinese supplier, but shipment not received and supplier suddenly disappeared.
- Payment done to the Chinese supplier, goods were received but with lower quality.
In most cases, scammers are extremely experienced in doing so and therefore have set very complex and opaque structures to avoid being traced back, often involving changing names and key people.
If an EU SME has already paid in advance the Chinese supplier, the only possibility they have is to collect as much evidence as possible and engage with a law firm based in China to file a lawsuit in China. Going to the police in the EU SME’s home country, or engaging with a law firm there, will be completely useless as they will have significant barriers in accessing details on the scammer; even if they manage to do so, the decisions of foreign courts will not be automatically enforced in China.
EU SMEs are advised to contact their national representations in China which might be able to assist. The EU SME Centre has also established a database of reliable service providers which include law firms operating in China: https://www.eusmecentre.org.cn/service-providers.
Finally, it must be kept firmly in mind that, the risk of fraud and of quality issues when purchasing from Chinese suppliers can be reduced by taking very simple steps to conduct due diligence on the company (see specific FAQ in this section).
