All parties sin a commercial transaction should be very conscious when it comes to fraud and how to prevent it using global due diligence In most cases the parties involved in any international business negotiate with may not even understand the liability they pose.

What is fraud?

In the business world, this is deceiving another party intentionally-this criminal offense under common law as well as a civil violation under civil law.

Most international company claim of transparency in their dealing, on the surface, may seem safe, but failing to fully analyses and global due diligence investigations the party you are entering into a contract with can itself be an invitation for fraud.

It has been started that that commercial fraud often has an international character, and the activity poses a global obstacle trade, which hurts the stability of national economies.

Being vigilant in your due diligence in global business contracts

This is thorough investigation plus audit regarding all matters and person relevant to financial records to a business agreement for both parties involved.  Due diligence international before and during the firm negotiations is the best what to limit and prevent any financial lose, civil tort, company reputation diminishment, litigation and in severe cases bankruptcy resulting from fraud.

In most cases the uncovered risk is so substantial to be the deal breaker; business negotiation is the best way to work through the issues toward a successive international contract.

Remedies to Fraud in International Contracts

New business scam emerges each day, in most cases due diligence you can guard your company or investment for fraudulent international contracts by:

 Acquire expertise

In most cases, you have to hire consultants or lawyers experienced or specialized in both the global trade contracts and market you are trading in. It’s also advisable to invest in accounting and marketing expertise during the Global due diligence investigations bottom lines plus full market potential.

Use letters of credit and secure payments methods

All guideline on payments terms and methods are relatively to a business relationship, with each party still need to take all the precaution to create and secure clearly stated terms.

The letters of credit have banks guarantee owners payments or even partial payments on behalf of buyers according to rigidly defined terms.

If any party doesn’t eliminate the risk of fraud, and a fraudster capitalizes on the opportunity then a false sense of security to inexperienced traders, letters of credit can be used with supporting advice very helpful in mitigating the risk of fraud.

Place requirements clause in contract

All the negotiating element into contract such say product samples or even analysis, the currency, certification and compliance, regulatory documentation, insurance must be indicated to make sure you are dealing with legitimate business parties.

Be aware of currency trends

Using organization such as National Anti-Fraud Network and the US federal bureau of investigation you and check the latest fraud schemes and safeguard precautions.

Lastly, it’s the limiting if technical and physical security access. You need to limit both physical and virtual access to contracting parties to sensitive areas.

International due diligence is the best way to uncover any potential risk ply saving costly and time consuminglitigation process in an international incident.

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