The EU SME Centre frequently receives emails from European SMEs encountering significant issues with purchases from China; these range from commercial disputes to pure fraud. 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, unfortunately the chances to obtain a refund or a new batch of products are minimal. The only possibility is to collect as much evidence as possible and engage with a law firm based in China to file a lawsuit. 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. The key is prevention: most scams are basic and easily identifiable, thus can be easily avoided.
EU SMEs are advised to contact their national representations in China which might be able to assist. The China Council for the Promotion of International Trade (CCPIT) also offer legal assistance services (not for free), their offices in many European countries could potentially assist.