Factsheets

Our factsheets provide information on tax regulations in Hong Kong and Mainland China as well as tips on fraud prevention measures that may help protect your business.

Money Transfers to China

For quite some time, German businesses have been approaching the AHK offices in China with enquiries about potentially false account information from suppliers. Evidently, fraud attempts and hacker attacks are not a rare phenomenon. In some cases, hackers may intercept e-mails from suppliers about payment requirements and forward altered/fake account information to the buyer.

For instance, one German company made an order with a southern Chinese jewellery supplier based in Hong Kong, but received account information of a completely different owner in a different location. This was only noticed long after the transaction had already been made, when the supplier in Hong Kong eventually enquired about the missing payment.

The following steps should therefore always be considered prior to making a transfer:

Is the payment claim sent from the same contact e-mail address that has been used previously?
If so, is the contact e-mail SSL encrypted? This may not be the case with free e-mail providers (e.g., "Yahoo", "Hotmail", "163.com").
Is the name of the account holder and location of the bank account identical to the originally transmitted contact and account information of the supplier? Under no circumstances should money be transferred to a private account.
Is the writing style of the e-mail consistent with previous e-mails?
Does the (pro forma) invoice contain the correct contact details and corporate font/style?
If in doubt, the receipt of invoice and details of the bill should be re-confirmed with the supplier by phone.

Once a payment has been made to the wrong account, companies should immediately contact their bank. Provided that the transfer was not yet posted on the opposite side, it may be possible to cancel the transaction. Unfortunately, the receiving bank in China or Hong Kong is usually unable to help in such cases. If the transaction cannot be cancelled anymore, the only remaining option may be the filing of a criminal complaint with the local authorities.