Symptom of Import fraud & recover of money

“Red Flags”

A red flag is an indicator of potential problems or issues with your supplier. There is no universal standard for identifying red flags. The method used to detect problems depends on your due diligence and research methodology at the time of selecting supplier. Below are a few red flags that can be indication for possibility of fraud.

• Supplier is not familiar with your product’s application, grades, size, chemical composition etc.
• Limited details or unwillingness to provide information related to their company.
• Incomplete information of Supplier Company in the sale contract.
• Supplier’s Inability to specifically explain the export regulations applicable to your product.
• Supplier’s Location of office space is in residential areas.
• Less than one year of operation history with very young leadership
• Unusually large product supply capacity or urgency to supply
• Insistence that the contract is only legitimate if signed in exporting country

Recovery of loss due to fraud

Dealing with the right supplier and loading inspection by trustworthy agency reduce the risks of poor quality goods or delivery problems. Even so, suppliers can fail to meet their obligations. Enforcing your contractual rights can be difficult, time consuming, expensive or even impossible. If you are victim of any import fraud, you have following options to recover your money or goods but nothing is guaranteed.

1. The Best and cost saving method is negotiation & mediation with supplier. However most of the time this method is not workable when Supplier Company is not a legal entity or has no physical business presence.
2. Submit complaint along with summary of case and copy of all documents to the Consul of Indian Embassy located in country of your supplier. In most cases if Supplier Company is legal registered company this method brings the positive result.
3. Submit complaint to Council for promotion of International Trade located in country of your supplier. This method mostly works in parallel with method no. 2 and brings positive result.
4. You can appoint an Arbitrator in consultation with your supplier as per contract clause and arbitration court will decide the case by issuing judgment in form of Arbitration Award and its legally binding to both the parties. However in some countries arbitration judgment awarded in a country different from a country of supplier is not enforceable in country of your supplier due to different laws. g Arbitration award passed by Singapore International Arbitration Centre is not enforceable in China.
5. Last & final option available to importer is to file a civil case against the supplier in a court of supplier’s country. This method is most expensive, tedious and time consuming. However if the value of transaction involved is much higher than total cost including advocate fee and related expenses and no other method is workable then this is the option where importer can recover his money.