Frauds In Import Export Business - Time To Exercise More Caution

Ironically, this is the time to exercise more caution as fraudsters may exploit present desperation in market to target more exporters with seemingly lucrative deals.

Exporters should be very cautious about certain geographical regions which have become a favorite destination for fraudsters and con artists.

Some may find it sweeping generalization or even unfair treatment - but the fact remains that there is no sign of a decline in scam proposals even after wide publication of Nigerian and other scams.

Worse, the fraudster populations seem to be growing everyday with newer and more daring con games. Victims have nowhere to go as there is no law court or policing authority against these fraudsters.

Exporters and importers should be careful of various seemingly lucrative proposals coming from certain regions and countries such as Nigeria, Benin, Togo, Cote' D Ivory etc. and exercise enough caution.

We document here a few scams. Some of these are specific to certain geographic regions - others more universal.

Nigerian Money Offer (419 scam)

This is by far the most popular one - where Nigerian businessman, Bank Manager, Govt Bureaucrat or just about anybody offers huge sums for small help in siphoning money out of their country. We have written many articles on this scam (also called Nigerian 419 scam). One may get an exhaustive list of scams and gain more information on suspect regions at this b2b portal for Indian exporters.

Nigerian Oil Fraud (Bony Crude)

Bonny Light oil is a grade of crude oil produced in the Bonny region of Nigeria. Fraudsters present lucrative and legitimate looking offer for this oil. These self-declared oil traders offer to sell as much as 1,000,000 barrels of Bonny Light oil at below market rates. In many cases, they are able to present legitimate trade and shipping documents, acknowledging the seller's oil allocation rights. Buyers who accept these trades are persuaded to provide significant cash fees up front.

The charges are normally in the region of $50,000. Fraudsters claim the charges are for anything from agency fees to reassignment charges.

ICC's International Maritime Bureau (IMB) has found that a variety of false supporting documents are being used, all of which allegedly feature the corporate logos of legitimate international companies, such as the Nigerian National Petroleum Corporation.

In the majority of cases seen by the IMB, this forged paperwork includes the following documents:

- Joint Venture Contract Agreement for the Sale and Purchase of Nigerian Crude Oil;
- Charter Party; MOU between Nigerian sellers and named buyer;
- Master's Receipt of Documents;
- Certificate of Authenticity;
- Joint Venture Bill of Lading;
- Master's Receipt for Samples;
- Cargo Manifest;
- NNPC Bonny Terminal Certificate of Quantity;
- Certificate of Quality.

Often these meticulously forged documents name vessels that actually loaded oil cargoes at Bonny. The vessel's stamp and master's name - though not the signature - are often also correct. The genuine cargo, however, is consigned to a completely different party.

Illegal Immigrants Disguised as Buyers or Agents

Fraudsters run illegal immigration racket in the disguise of export Import Company. They offer to send buyers or agents for negotiation, inspection of manufacturing facility etc. and request official invitation letter from exporter/ manufacturer. Visa, obtained by producing these genuine papers, is then used to send illegal job-seekers.

When in doubt, please check the age and position of the visitor. Very young or low ranking buyers should arouse suspicion. If you receive request for groups of buyers - please check the credibility of the company thoroughly.

Un-Collectable Payment

If you receive Letter of Credit (L/c) from an unknown local bank, be sure to check the bank's credibility. If there are any doubts about its financial condition, it is advisable to request confirmation of the L/C from a reliable bank.

Refusing payment for Remaining Shipment

This is a common trick where the fraudster gains trust of exporter in first part of a deal by making immediate payment by T/T. However, he refuses to pay for second part of the shipment. When working on a T/T basis, there is very little an exporter can do if importer refuses to pay. It pays to remain alert - one successful deal should not change all equations.

Avoid Payment through Changed Identity

Some importers deliberately shut down their existing companies and set up new ones in order to avoid payment, leaving exporters unable to collect money. If your partner suddenly changes his or her company's name and places a big order on credit, it is wise to check the company's legal status on the export contract and shipping documents.