Criminal gangs based in China that operate over the Internet are increasingly defrauding companies in Poland and other Eastern European countries, according to reports.
Employees at the Trade and Investment Promotion Section [WPHI] of the Polish Consulate in Shanghai claim that the gangs employ a variety of scam techniques. “Unfortunately, the criminals are targeting Eastern Europe, including Poland,” Andrzej Pieczonka, chief counselor at the WPHI, told the Polish Press Agency (PAP).
Since 2013, the WPHI has received at least one complaint each week from Polish companies that have been targeted by China-based scammers and up to 95% of the swindles occur exclusively through Internet contacts between the two sides. Adam Ryszkowski, deputy counsellor at the WPHI, divides the swindles into the categories of fraud, extortion, hacker attacks, and so-called ‘Xi’an scams’.
According to the WPHI’s classification, fraud entails the failure to ship goods that have been ordered and paid for, or shipping goods of inferior quality so that the importer is unable to sell them. The second category involves the extortion of fees from importers who wish to order goods from China; these payments include items as notary fees or even fees that do not actually exist. In some cases Polish companies pay without querying as they are not familiar with the legal system in the People’s Republic of China.
In the case of hacker attacks, cybercriminals intercept business correspondence and send false information to a customer regarding a change in the exporter’s bank account number before the customer has paid an invoice. Less skilled hackers make use of email addresses that are very similar to company addresses, while the more sophisticated are able to gain control of a company’s email account and sending such emails from an authentic address. If the importer is fooled then the money most likely ends up in bank accounts in Hong Kong tied to international criminal groups.
A further category of swindle perpetrated against companies from Eastern Europe has been used since the 1990s, but its victims initially were mainly US companies. This particular extortion is referred to by WPHI staff as the Xi’an scam as those employing it are based in the ancient city, famous for Emperor Qin Shi Huang’s Terracotta Army. The swindle is so popular that over 40% of companies on the WPHI’s blacklist are based in Xi’an.
The Xi’an scam involves having the Chinese contacting a company over the Internet and order a large amount of its products. The value of the order is typically from €400,000 to €1m. The Chinese only ask that the entrepreneur cover half the cost of validating the contract at a Chinese notary. The fee amounts to a small fraction of the contract’s total value.
A different version of the Xi’an scam entails inviting a Polish company to China for the purpose of formally signing a contract that benefits the Polish business. In this case, ‘notary fees’ are extorted on the spot in cash. A scenario that involves “an exchange of gifts” may also occurs. The Chinese give Poles souvenirs marked with hefty price tags and suggest that the Polish side reciprocate with gifts of a similar value. The Chinese also point out specific stores where such gifts can be bought.
The US money market fund reforms came into effect in 2016 and are already dramatically shaping US fund industry with investors flooding out of prime funds and into government securities. While the reforms are similar, they are not the same. GTNews interviews Yeng Bulter, global head of the cash business at State Street Global Advisors on the differences.
Far and away, the largest financial market on the planet is the foreign exchange currencies market, where on average individuals and organisations trade more than $5 trillion daily. In the FX world, the ability to master the market isn't considered a luxury for treasury officers–it's a necessity.
Using data for predictive analytics is the future of banking success, argued Jean-Laurent Bonnafé, CEO of BNP Paribas, in his session on how the bank is reinventing its approach to innovate with and for corporates.
The top five sectors Asian fintech investors are interested in are data analytics, blockchain, lending, payments and regtech, according to Gary Hwa, EY regional managing partner.