China International Trade Lawyers in Shanghai

China International Trade Lawyers in Shanghai "Representative Office"& Dispute Resolution Services in China Credit Investigation in China
Business is always accompanied by risks.

We help companies and individuals cut down their business risk in China to a minimum. We carry out due diligence of various degree in accordance with the specific requirement of clients, including but not limited to basic information, shareholding structure, company member, directors, legal representative's investment, registered capital, license obtained, company risks, operation information, int

ellectual properties, litigation/arbitration involved, administrative license, administrative sanctions and liquidation information etc. If necessary, we conduct physical visit of Chinese suppliers. As requested, we facilitate the liaison, communication and negotiation between our international clients and Chinese suppliers. In addition, we provide Chinese legal advice for foreign companies and individuals for their business in/with China; and we help draft, review and/or executing the relative legal documents. Furthermore, we help supervise suppliers performing sales/purchase contracts in China, such as examining the production and inspecting the goods prior to delivery etc. Debt Recovery in China
We help both domestic and foreign clients recover and collect debts in China. Based on the specific facts of cases, we may take various measures to realize the legitimate rights of our clients, such as negotiation, conciliation, mediation, arbitration or even litigation.

10/04/2025

Liability for Breach of Contract and Defenses Due to Sino-US Tariff War
Charles comments on How to deal with the Sino-US trade war
Overall, when a sales contract cannot be performed due to the Sino-US tariff war, the liability for breach of contract of the seller and the buyer depends on the contract terms, the governing law, and the specific facts. Defenses such as force majeure, change of circumstances, commercial impracticability, and frustration of purpose provide possibilities for exemption for both parties. However, whether the US tariff hikes constitute force majeure or change of circumstances is highly controversial in judicial practice, and different courts may have different determination criteria, which makes the defenses of both parties face great uncertainties.
Video transcript:https://www.legis.com.cn/view.php?id=113
Mr. Linchang "Charles" Shen, Senior partner of Shanghai Puruo Law Offices.Charles received law degrees from Peking Uni. and London Uni.. Before admitted to the bar, he had been a judge with an appeal court and served on cases involving economic crimes, IP and int'l trade through 1996 to 2009. In 2005, he was selected by the Supreme Court of P. R. China and awarded a scholarship by the Lord Chancellor of the British Government to join the Sino-British Judiciary Exchange Program. From August 2005 to August 2006, he pursued a master degree in SOAS, London University on a stipend from the British Government.
Charles practices in the fields of int'l trade , transnational investment, dispute resolution and criminal defense etc.
Contact Info:
Charles Shen, Managing Partner
Shanghai Puruo Law Offices
Mobile/WhatsApp/WeChat: +86 177 0160 2717
Email: [email protected]
https://www.legis.com.cn/

09/08/2023

Linchang "Charles" Shen talks about how to recover & collect debt in China.
Charles，Attorney at Law & Managing Partner of Shanghai Puruo Law Offices.Before admitted to the bar, he had been a judge with an appeal court and served on cases involving economic crimes,IPR and foreign-related disputes through 1996 to 2009 in China.
Contact:

Charles Shen, Managing Partner
Shanghai Puruo Law Offices
Mobile: 177 0160 2717
(WhatsApp/WeChat)
https://www.legis.com.cn/

09/08/2023

Charles Shen talks about International Trade Scams (11): Chinese scammers replaced goods inspected for shipment
Linchang "Charles" Shen，Attorney at Law & Partner of Shanghai Puruo Law Offices.Before admitted to the bar, he had been a judge with an appeal court and served on cases involving economic crimes,IPR and foreign-related disputes through 1996 to 2009 in China.
Video Caption:
A very small number of unscrupulous Chinese foreign trade companies devised various scams to defraud foreign customers, which seriously damaged the good reputation of Chinese exporters and even damaged the overall image of China. They should be fully exposed and held accountable for their legal responsibilities.

In recent years, I have been retained by more than 10 foreign importers to investigate the legal liabilities of Chinese international trade scammers. These Chinese scammers used the common mature fraud tactics to defraud foreign companies:

1. Used bought, lost or even stolen ID cards to register companies and open bank accounts in coastal cities in China;

2. promoted scrap metals or chemical products etc. at ultra-low prices on the Internet to attract foreign customers.

3. Set up warehouses in northern provinces of China to show foreign buyers cheap scrap metals or chemical products etc.

4. First lured foreign customers into signing contracts with ultra-low prices. The sales price was much lower than the normal market price, while foreign customers were required to down pay the full price.

5. After the foreign purchasers personally or entrusted an inspection company to inspect and supervise the goods to be shipped, the Chinese scammers removed the seal lock, unloaded the inspected goods and replaced them with bricks or rubbish on the way from the warehouse to a port in the northern China.

6. After the goods arrived at the destination port, foreign customers often pulled the container directly from the customs-supervised warehouse. After opening the containers, they found that the ordered goods turned into bricks or various garbage.

After foreign customers discovered that they had been deceived, whereas these Chinese scammers had the lowest registered capital and no assets at all, even if they filed a civil lawsuit and won the case, it was difficult to enforce the judgment successfully. If foreign importers reported the scam cases to the local public police, the local police were often unwilling to commence criminal investigation. Criminal investigations of these international fraud cases were usually very professional, complicated, time-consuming and laborious. These cases were not very large, usually tens of thousands of dollars, and the cost of criminal investigation may exceed the defrauded amount. In addition, these Chinese scammers often used nominal shareholders, directors, or general managers. Even if the case occurred, the registered shareholders or directors did not even know the Chinese foreign trade company, let alone the illegal and criminal acts of defrauding foreign customers. In case foreign victims entrusted Chinese lawyers to report the cases, Local police often required foreign companies to notarize and authenticate the power of attorney and evidence originated abroad, or put forward other harsh requirements. Many foreign victims can only retreat when they were in trouble.

Lessons and enlightenment:

1. Before signing a contract, a foreign importer needs to conduct necessary due diligence on a Chinese supplier to understand the basic credit status of the Chinese company.

2. Foreign importers must be very careful about products whose prices are significantly lower than market prices. Don't be greedy for cheap; there is no free lunch.

09/08/2023

Charles Shen talks about International Trade Scams (10): A Turkish importer not to take delivery of goods
Linchang "Charles" Shen，Attorney at Law & Partner of Shanghai Puruo Law Offices.Before admitted to the bar, he had been a judge with an appeal court and served on cases involving economic crimes,IPR and foreign-related disputes through 1996 to 2009 in China.
Video Caption:
From 2008 to 2009, we handled several cases in which Turkish importers defrauded Chinese suppliers of goods.

Unscrupulous Turkish importers took advantages of special provisions of Turkish customs regulations to commit fraud. The common and mature method of scams was that after getting in touch with Chinese companies through the Internet or trade fairs etc., they proposed to purchase goods and required payment in the form of bank collection (D/P at sight). After the goods arrived in Turkey, Turkish importers used various excuses to delay payment. As the Turkish Customs stipulates that the goods should not stay in the port for more than 45 days, otherwise they will be confiscated and auctioned, and the Turkish importers of the goods have the right of first refusal at the time of auction.

Lessons and enlightenment:

Turkish customers played with the law and took advantage of legal loopholes making export companies hard to guard against. However, it is unrealistic to require foreign trade companies to understand the laws of each country, and to be familiar with the legal loopholes and legal gray areas of each country. But for foreign customers, especially for customers in countries and regions with poor business reputation, foreign trade companies must always maintain a sense of risk prevention and understand common trade scams in some countries and regions. We should believe that the vast majority of Turkish companies are good, but we must stay away from this scam that uses local customs regulations to defraud foreign exporters. Before the relevant customs regulations of Turkey are modified, when doing business with Turkish customers, foreign trade companies should avoid the payment term of D/P.

09/08/2023

Charles Shen talks about International Trade Scams (9): a California importer “ cast a long line to catch a big fish”
Linchang "Charles" Shen，Attorney at Law & Partner of Shanghai Puruo Law Offices.Before admitted to the bar, he had been a judge with an appeal court and served on cases involving economic crimes,IPR and foreign-related disputes through 1996 to 2009 in China.
Video Caption:
A friend’s brother, whose company produced high-end snow boots, used to be a successful entrepreneur. He met the owner of a California company (“California Importer”) at the Canton Fair, which distributed luxury snow boots in the United States.

Since the beginning of 2008, the company of my friend's brother (“Chinese Exporter”) had exported snow boots to the California Importer. The California Importer firstly placed an order of 20,000 US dollars, which was fulfilled perfectly, and the two parties had no dispute and the Chinese Exporter received the payment in time. Later, The California Importer successively placed several orders, ranging from thousands to tens of thousands of dollars, which were all performed very smoothly. After going back and forth, the two sides became very familiar and the relationship was very harmonious. The owner of the California Importer was also very business-minded and very good at marketing. He gave high-end snow boots to Hollywood stars for free. After Hollywood stars wore snow boots, snow boots became popular in California and other places, and sales were in good condition. The Chinese exporter was then full of confidence in opening up the US market.

Later, the California Importer placed a large order of US$1.7 million. The California Importer down paid 30% of the purchase price, and the balance should be paid within 60 days after receipt of the goods. At that time, the Chinese Exporter were not alert. After the California Importer paid 30% of the purchase price, the Chinese Exporter actively arranged production and delivered on time. After the payment was due, the Chinese Exporter kept asking for the payment from the California Importer, but the California Importer refused to pay for various reasons. Later on, the California Importer even disappeared.

After being retained, we entrusted a California local lawyer to investigate the American company. The results of the investigation were surprising. The California Importer had no office and no property under its name. Obviously, this was a deliberate fraud case, and it was of no help to file a civil lawsuit. The Chinese exporter could do nothing but report to the police both in China and the United States. In this fraud case, the Chinese Exporter lost more than one million U.S. dollars, and the boss almost went bankrupt.

Lessons and enlightenment:

1. Be vigilant even for old customers.

2. Credit investigation is very important. Before a transaction, a credit investigation must be conducted on the counterparty. The Internet has been very developed now, and it is very convenient to do some preliminary due diligence through the Internet. For large transaction, foreign trade companies should entrust lawyers or other professionals to investigate counterparties to control foreign trade risks.

3. The safety of payment collection is very important. Maintain control of the goods or title of the goods until all payments are collected. Don't accommodate the other party unprincipledly in terms of payment terms in order to take a big order. In case the goods are completely handed over to the foreign importer before the full payment has been received, whether the payment can be made in accordance with the contract is up to the conscience of the buyer. Generally speaking, when the temptation is great enough, don't test human nature. Undoubtedly, the Chinese Exporter suffered heavy losses in this case, however they themselves were very responsible too.

09/08/2023

Charles Shen talks about International Trade Scams (8): Nonexistent U.K. supplier
Linchang "Charles" Shen，Attorney at Law & Partner of Shanghai Puruo Law Offices.Before admitted to the bar, he had been a judge with an appeal court and served on cases involving economic crimes,IPR and foreign-related disputes through 1996 to 2009 in China.
Video Caption:
A company in Zhangjiagang City, Jiangsu Province (“Chinese Importer”) entered into a scrap steel sales contract with a British company through the Internet. The "British company" showed the photos and videos of the scrap steel storage yard to the Chinese Importer and offered very favorable price. The payment term is 30% in advance and 70% upon the presentation of the bill of lading. After the Chinese Importer down paid more than US$170,000, the “British company” refused to ship the goods by various reasons, and even asked the Chinese Importer to down pay another 30% before the goods were shipped.

After we accepted the entrustment, after preliminary investigation, the "British company" did not exist at all. The company's registration information could not be found, and the business address provided did not have an office. The only true information provided by the "British Company" is the bank account that received the remittance. Obviously this is a very deliberate case of international trade fraud.



Lessons and enlightenment:



1. Before the transaction, a credit investigation must be conducted on the counterparty. Now that the Internet is very developed, it is very convenient to do some preliminary due diligence through the Internet. For large transactions, foreign trade companies should entrust lawyers or other professionals to investigate counterparties to control foreign trade risks.

2. Don't be greedy for cheap; There is no free lunch. foreign trade companies must be very careful about products whose prices are significantly lower than market prices to avoid falling into the trap of fraud.

09/08/2023

Charles Shen talks about International Trade Scams (7): a Malaysian scammer set up his own freight forwarder to deliver goods
Linchang "Charles" Shen，Attorney at Law & Partner of Shanghai Puruo Law Offices.Before admitted to the bar, he had been a judge with an appeal court and served on cases involving economic crimes,IPR and foreign-related disputes through 1996 to 2009 in China.
Video Caption:
A Malaysian scammer registered two companies in Hong Kong. The two companies cooperated with each other: One trading company was responsible for purchasing from Chinese exporters; the other freight forwarding company was responsible for delivering goods without B/L. The Chinese exporter suffered economic losses of more than US$ 600,000.

At the beginning of 2008, a foreign trade company in Fujian Province (“Fujian Exporter”) reached a sales agreement with a Hong Kong company. The Hong Kong company (“Hong Kong Buyer”) ordered slippers, jeans and other goods from the Fujian Exporter with a value of more than US$ 600,000. The payment term was bank collection. The Hong Kong Buyer appointed a Fujian local freight forwarder for the Fujian Exporter. The Fujian Exporter delivered the ordered goods in Fuzhou as agreed. Actually, before the shipment, the Hong Kong Buyer commissioned a Hong Kong notary firm to inspect and supervise the goods and shipment. The Hong Kong Buyer’s boss even went to the factory in Fuzhou to check the shipment status. After the goods arrived at the port of destination in Hong Kong, the Hong Kong local freight forwarding company issued a delivery guarantee to the Chinese domestic freight forwarder, and the Chinese domestic forwarder notified the ship owner to telex release the goods to the local freight forwarder in Hong Kong .

After the local freight forwarder in Hong Kong took all the goods from the shipping company, the Hong Kong Buyer and the Hong Kong forwarder immediately disappeared. The Fujian Exporter was not able to recover the payment for the goods, nor could it recover the goods. The Fujian Exporter suffered such a heavy loss and owed a huge debt to the factory, which caused the factory to be on the verge of bankruptcy.

After investigation, both the Hong Kong Buyer and the local freight forwarder in Hong Kong were registered and established by a Malaysian Chinese. The Fujian Exporter was convinced that it had encountered international fraud and could do nothing but report to the police in many places.



Lessons and enlightenment:

1. When the payment method is D/P, it is not absolutely safe for the exporter to hold the original bill of lading, so beware of bad importers releasing the goods without the bill of lading, especially if the carrier or domestic forwarder is designated by the importer .

2. It has been repeatedly emphasized that foreign trade companies must have a sense of risk prevention and keep a clear mind when facing large orders. It is necessary to develop the habit of conducting necessary credit investigations on foreign importers. The larger the order amount, the more necessary and comprehensive credit investigations are required. If necessary, lawyers or professional institutions should be entrusted to conduct due diligence on the other party.

09/08/2023

Charles Shen talks about International Trade Scams (6): a Nigerian scammer colluded with bank staff to illegally obtain B/L
Linchang "Charles" Shen，Attorney at Law & Partner of Shanghai Puruo Law Offices.Before admitted to the bar, he had been a judge with an appeal court and served on cases involving economic crimes,IPR and foreign-related disputes through 1996 to 2009 in China.
Video Caption:

In 2008, a textile company in Zhejiang ,China(“Zhejiang Exporter”) , exported a batch of goods to a Nigerian company(“Nigerian Importer”) with a value of more than 70,000 US dollars. The payment term was D/P at sight. Although the Zhejiang Exporter sent the original bill of lading and other documents to the local collection bank, First Bank of Nigeria via bank express, the Nigerian Importer failed to make the payment to redeem the documents. The Zhejiang Exporter contacted Chinese domestic freight forwarder, and the domestic freight forwarder informed that the Nigerian Importer had taken the goods away upon the original bill of lading.

After accepting the entrustment, through investigation we found out that the Nigerian Importer obtained the original bill of lading without payment through the collusion with the internal staff of the collection bank. We sent a lawyer's letter to the collection bank First Bank Of Nigeria, which confirmed that the collection documents mailed to the bank's address has been intercepted by others.



Lessons and enlightenment:

1. International trade fraud can occur in any step. Under the payment term of bank collection and document against payment, holding the original bill of lading cannot guarantee the absolute security of the collection. foreign trade companies must well evaluate the risks of bank collections, especially where foreign importers appoint carriers.

2. For importers from countries and regions with poor reputation, exporters should try to use a letter of credit or partial payment in advance + full payment when the bill of lading is presented.

09/08/2023

Charles Shen talks about International Trade Scams (5): A California Importer defaulted through bankruptcy
Linchang "Charles" Shen，Attorney at Law & Partner of Shanghai Puruo Law Offices.Before admitted to the bar, he had been a judge with an appeal court and served on cases involving economic crimes,IPR and foreign-related disputes through 1996 to 2009 in China.
Video Caption:
A hosiery company in Zhejiang, China (“Zhejiang Company” ) signed a sales contract with a California company (“California Importer”) through the Canton Fair to export more than US$300,000 of socks. After the Zhejiang Company delivered the goods, the California Importer did not make the payment as agreed in the contract, and the Zhejiang Company kept demanding the payment but failed. A few months later, the Zhejiang Company received a lawyer's letter from the California Importer stating that the California company was preparing to apply for bankruptcy to the court due to poor management and drastic changes in market conditions. The California Importer would pay US$2,000 if the exporter can sign a confirmation letter.

After accepting the entrustment, we contacted the California Importer, and the California Importer had filed for bankruptcy in the US court. After investigation, the California Importer’s shareholder is a Middle Eastern American, who also registered another company in California. The owner used the other company to continue to do business with Chinese suppliers and purchase large quantities of clothing, hats, footwear and other products, and he was still active in the Canton Fair.

Lessons and enlightenment:

1. When exporting goods, foreign trade enterprises should pay attention to the security of recovering the payment, and require the counterparties to adopt payment methods such as letter of credit or bank collection, and try to ensure the control of the goods or the title of the goods before receiving the full payment. In case the goods have been delivered to the buyers before fully receiving the payment, the recovery of the payment can only rely on the conscience of the other party. Generally speaking, when the benefits are large enough, human nature should not be easily tested.

2. foreign trade companies must pay attention to the counterparty's credit investigation, and master the counterparty's credit information as much as possible. In the case of large transaction , foreign trade companies should entrust lawyers to conduct necessary investigation, carefully evaluate transaction risks and resolutely abandon orders with high and uncontrollable risks.

Address

Shanghai
200120

Telephone

+8617701602717

Website

http://www.fdi-law.com/

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