China, the world, greed, cognitive dissonance, the best and the brightest, part 2_ how to avoid getting scammed _ china law blog

The day before yesterday, I wrote a long post (with a long title), China, The World, Greed, Cognitive Dissonance, The Best and the Brightest, and Why People Seem to Encourage/Almost Enjoy Getting Scammed, on why people are so susceptible to getting scammed. My thesis is that once someone has convinced themselves that the deal is lucrative, they have a hard time convincing themselves that it might be a scam. Electricity in india travel I concluded that post by promising a part two describing how to avoid getting scammed. Electricity and magnetism worksheets high school This is that part two and it too is going to be quite long, so please bear with me.

The first thing to avoid getting scammed is to have the right attitude, and that means you must question and doubt EVERYTHING. Hp gas online booking mobile number Why would a legitimate Chinese company in Shenzhen contact you for an oil and gas deal when you are just a school teacher in Vermont? And why would an oil and gas company be located in Shenzhen anyway (it’s possible, but not likely)? Why is a Chinese company contacting me out of the blue to make a $3 million purchase of my widgets when there are 3,000 other widget companies and when we’ve never previously made a sale for more than $30,000? How can this Chinese company charge $11 per widget when everyone else is charging at least $22? And after you have compiled your list of questions and doubts, do not pay a penny (other than perhaps to your own investigator) to anyone until you truly have compelling answers to all of your questions.

One of the classic tactics of a scammer when asked tough questions is to give complicated and convoluted answers. Gas prices going up in nj And then when you even hint at wanting an answer you can understand, the scammer seeks to paint you as an idiot and/or a bad person for not trusting them. Electricity for kids Do not fall for either. 4 gas laws Chinese companies spend weeks, sometimes months, conducting due diligence on their potential counter-parties and your doing the same will be viewed by legitimate Chinese companies as a sign of your savvy and your intelligence, not as a sign of any moral failings. Gas zone edenvale As for your being made out to be an idiot, well just remember how you will feel like much more of an idiot after you are scammed than if you prevent a scam. Gas 76 Oh, and if you don’t understand how the business or the deal is going to operate, that, standing alone — fraud or no fraud — is a great reason for you to just walk away.

The second key to not getting scammed when dealing with a China company is to make sure you are actually dealing with a China company. Electricity quizlet Though our percentage estimates vary, all of the China lawyers in my firm estimate that at least half the time when a Western company is scammed by a “Chinese company,” the company is either not Chinese at all (oftentimes they are from Nigeria) or they are not a company at all because they have never actually registered with the Chinese corporate authorities. 1 electricity unit is equal to how many kwh This means that just confirming you are dealing with a real registered Chinese company will lower your chances of getting scammed.

In China Due Diligence. Electricity 220 volts wiring The Most Basic Things To Do. I set out the following basics for how you can determine whether you are dealing with a legitimate Chinese company.

The first thing you do is ask the Chinese company to send you a copy of its business license. J gastroenterology impact factor Do not be afraid to do this. 7 gas station Chinese companies do this all the time. Gas dryer vs electric dryer If the Chinese company refuses to send this to you, walk away.

To determine whether it is real or not. Gsa 2016 catalog This is done by comparing the information on the business license provided with the corresponding information on the relevant Chinese government website — usually the local State Administration for Industry and Commerce (SAIC). Gas in dogs If the business license you have been provided is fake, you walk away.

To see when the company was formed. Gas out game rules We like to compare what the real business license says against what we were told (by email or whatever) and also what the Chinese company says on its English language and its Chinese language website. Gas x strips instructions If different years are given in different places, we get suspicious and we ask more questions.

To see where the company is located. La gasolina reggaeton explosion We like to compare this against both what we were told (by email or whatever) and also against what the Chinese company says its English language and its Chinese language website. Electricity production in india If there are different addresses in different places, we get suspicious and we ask more questions.

To see what the scope of the Chinese business is, as listed on its registration. Wd gaster x reader If the scope is “consulting” and our client thinks it will be ordering five million dollars of widgets from a factory, we get really suspicious. Electricity word search ks2 Looking at the scope is a good (though not always fool-proof) way to determine whether you are dealing with a manufacturer or a broker.

To see the amount of registered capital. Electricity labs for middle school If the amount is too low, the odds are good that it is not a manufacturer. Gas x coupon 2015 If the amount is really high, the odds are good that this is a big company. 3 gases that cause acid rain Note that this information is not going to be as commonly listed in the future.

Doing the above is not nearly enough due diligence for big deals, but it is a relatively fast, relatively cheap way to at least get some sense about the Chinese company with which you are thinking of doing business and it oftentimes will be enough to let you know whether or not you even wish to conduct additional due diligence or just walk away.

In China Business Due Diligence, I went into a bit more depth on some of the basics that should be undertaken to prevent fraud, and I listed out the following:

Construct your own fraud scenario. Gas after eating meat Ask yourself how the Chinese company could have staged everything it has shown you. Electricity facts ks2 Did it switch the factory signs before you arrived, so that it looks like it owns the factory, rather than someone else? Did it paint the old machinery to look new? Is the person with whom you are speaking really a PwC accountant, or just someone paid $100 to pose as one? We have encountered fake factories, fake Chinese lawyers, fake documents, fake accountants, fake foreigners, fake owners….

Focus on the operations. Year 6 electricity assessment Look carefully at the Chinese company’s operations. Gas monkey monster truck driver Why does the company have only 100 boxes in storage when it claims to be selling 5,000 widgets a week? How can the company make 5,000 widgets a week with only enough of x material to make 100 total? Why did the company have a completely different set of employees on the same day and time two weeks apart? It pays to visit two or three (or more) times — a good fraudster can put on a show, but they are unlikely to be able to do it the same way each time. Power outage houston txu Watch for the subtle differences.

Get the official records yourself. Gas tax rates by state Use your own people to get the Chinese company’s official corporate records from the official Chinese government sources. Gas constant for air Though doing this is neither inexpensive nor easy, information gleaned from the official government records can often be helpful. Gas welder salary Then compare the official records with the documents the Chinese company gave you. Electricity names superheroes This is key.

Take company-provided introductions with a grain of salt. Electric utility companies in california Speak with your target Chinese company’s vendors, neighbors, employees, and customers, especially those you find on your own. Electricity and magnetism review sheet When talking with people to whom your target Chinese company has introduced you, take everything that is said with a grain of salt. Gas out It is not difficult for an unscrupulous company to buy someone’s loyalty for the duration of a meeting or a phone call and this sort of thing goes on all the time. Gas near me open now And again, do you really know whether these people are as claimed? We love sending our own people to just hang out around the Chinese company for a week or two as it is amazing what they can learn just by watching and by talking with employees and others in the vicinity.

Speak with the Chinese company’s competitors. Electricity kwh cost calculator Competitors with real businesses can and usually will tell you about their competitors, but, of course, any information gleaned this way should be taken with at least a bit of salt as well.

Do not delegate. Types of electricity consumers Use your own trusted network to gather information on your potential Chinese counter-party. Gasbuddy nj If you don’t have such a network, get one. Gasbuddy If you can’t get one, don’t do the deal.

Co-blogger, Steve Dickinson, wrote a post, entitled, Three Keys to Spotting a Fraudulent Chinese Company, describing some of the things he looks for to determine the legitimacy of a Chinese companies listed on foreign stock exchanges for investors that have retained Steve because they are concerned about the value of their investment. Bp gas locations Steve’s first step in these situations is to determine whether the Chinese entity is an empty shell. Gas stoichiometry examples If the Chinese entity is an empty shell, then there is no value in China to protect and further analysis of the company is a waste of time. Gas bloating Steve describes this analysis as follows:

I have done this research so many times that I have developed a three step test to determine whether a Chinese company is a fraud. Gsa 2016 pay scale I take a look at the annual or quarterly report of the Chinese company and if it meets these three tests, it is virtually certain to be a complete fraud, with no operations, no assets and no funds in the bank.

1. Electricity video ks2 The company has a large amount of cash in the bank. La gastritis I often see supposed cash holdings greater than 50% of the company’s annual gross revenues. Kushal gas agencies belgaum Interest rates at Chinese banks are very low and legitimate Chinese companies do not usually keep large amounts of their cash in interest bearing bank accounts. Gas hydrates energy Usually the supposed large cash account is accompanied by bogus explanations explaining why the Chinese entity is unable to repatriate the funds to its investors as dividends. Gaslighting examples Later investigation usually reveals that these funds were never actually deposited in the bank. Static electricity online games That is, these large deposit accounts are simply falsified. Electricity song billy elliot The odd thing is that auditors will normally verify that the accounts are real. Gaz 67b for sale Once the fraud has been exposed, I have asked auditors what they did to verify the account. Static electricity how it works They usually state that they relied on reports from the management of the company. Electricity jeopardy powerpoint In China, the only way to verify the authenticity of a bank account is to arrive at the bank unannounced and look at the computer screen while standing BEHIND the counter as the clerk makes an unplanned query. Gas in babies at night Virtually no bank in China will allow this, which means that audit verifications of Chinese bank accounts are typically of no value.

2. Grade 6 science electricity multiple choice test The company reports profit margins in excess of 30%. Mp electricity bill payment jabalpur I often see fake companies report profit margins of 50%. Nyc electricity cost Doing business in China is difficult and I have never seen a legitimate Chinese company with profit margins even approaching this level, not even state owned monopoly companies. Gas after eating salad These high margins are then the explanation for why the company has so much free cash; they are so profitable they are printing money. Gas prices going up in michigan The claim is that they have some unique product or some technical monopoly. Electric utility companies charge customers for In my experience, these claims are never true, as just a few minutes of careful thought would reveal.

3. Electricity transmission costs The company is formed as a VIE (variable interest entity) when it is operating in a business sector where foreign investment is not restricted and the VIE structure is not required. Gas in back trapped A VIE is required only when a foreign invested company intends to operate in a restricted sector such as the Internet. Gas leak east los angeles This is why Baidu, Sina, and AliBaba are organized as VIEs. Gas bijoux nolita But most Chinese business sectors are open to foreign investment. Electricity for dummies pdf When a company that operates in manufacturing or retail sales chooses to organize as a VIE, there is typically only one reason: the organizers are planning to commit fraud against the foreign investors.

I cannot resist closing out this post by talking about how to avoid getting caught in what I see as perhaps the most common, most insidious scam of all: The China bank switch scam. Gas laws worksheet pdf This is the scam where someone hacks into either your computer or that of your Chinese counter-party and then sends you an invoice (and you actually do owe the money) directing you to make payment to a bank account held by the scammer, not by your Chinese counter-party. Z gas tecate telefono In How to Conquer China Payment Scams I discuss this scam in more detail and advocate engaging in the following actions to prevent it from happening to you:

1. Electricity cost per kwh by country Get to know your suppliers who speak English (if you don’t speak Chinese) and get your supplier’s landline phone numbers as that cannot be hacked. Electricity problem in up Call if you have any concerns.

2. Electricity bill bihar electricity board Get your supplier’s bank account information in advance and ask them to refer to “bank account information document” on their invoices, rather than listing out full bank details every time.

5. 9gag instagram Have a special procedure for confirming the company name. Electricity symbols ks2 Note also “that paying a Chinese company in mainland China is safer for you” than paying them overseas, be it Hong Kong, Taiwan or anywhere else.

6. Gas yourself in car Have a special procedure for confirming bank account changes. Electricity storage costs “Follow the same procedure as point 5, but also call several people in the company. K gas station They will understand your attitude if you tell them you are worried about the “different bank account scam” — they are also a victim when it happens to their customers.