International Due Diligence Recommended for Business in China

Cyber crime is becoming a top priority for police and law enforcement agencies around the world. We have seen the recent gathering at the Interpol headquarters where Timothy A. Williams, Director of the agency in Washington stressed the need for more security and more efficient ways to prosecute internet criminals. In the U.S. it seems that the Maine State Police Computer Crime Unit has been recognized to have one of the best units in the country for computer forensics work, but so far the technology is only being used to track digital information for investigations regarding local suspects for murder investigations and sexual predators. Law enforcement in the U.S. and Europe is making strides to enhancing technology to catch conventional criminals, but cyber crime remains ahead of the law enforcement curve. Much work is to be done in this area. In fact, as the China economy is booming, so has the number of serious business fraud cases in China, impacting European and U.S. citizens. So far, going after these criminals is major challenge.

New technology and law enforcement tools have been introduced in the field of cyber forensics, but the criminals are developing their techniques as well. In fact, recently a U.S. spy satellite was hijacked by a hacker that was traced back to China. If the United States can’t protect or control it’s own satellites, consumers and businesses should take note that their information may not be so secure. Businesses investing or conducting business in China should be aware of the high risk for fraud and scams. Even when criminals are identified and located, prosecution is an entirely different matter. Ever been to a criminal trial in China, in Chinese, in a communist court? You get the idea. Once the money is lost in most cases, it’s nearly impossible to get back.

China private investigators are adding some serious value in their efforts of fraud and scam prevention. Through comprehensive due diligence and background check services, individual investigators and corporate clients can minimize their risk, and many are using such services as a prudent form of insurance. It pays to be safe when working with a Chinese company.

China is a land with little regulation, and even less transparency. Verifying management, operations, representatives, legal filings, and reputation is key. If you’re buying a significant amount of shares of a Chinese company, getting a new supplier from China, or working out a new deal with a Chinese firm, be safe and be aware of the risks. Contact a professional private investigation firm with agents on the ground, who speak the language, know the culture, and have the necessary contacts to verify you are in fact dealing with a real and reputable company in China.

So far the most affected countries from crimes committed online are the U.S., the U.K, Canada and Australia. Victims can suffer from extortion, theft, identity theft, advance fee fraud, financial loss or even legal charges if they indeed become involved with an illegal business.

Investing in China? Consider a professional international due diligence service to verify unknown parties and companies. Ignoring the risk can be a costly learning experience.

All the best,

S. Birch
© 2011 S. Birch