Taiwan, China social enterprise Friendly Land Organic Alliance nearly fell victim to an atypical scam involving over ten million yuan
Cross-strait exchanges are frequent, and news reports of brokers helping to sell Taiwan's high-quality agricultural products to China are often seen in the papers. Many Taiwanese agricultural operators frequently encounter middlemen who claim to have good relations with Chinese officials or state-owned enterprises, saying that as long as they pay a "mediation fee," they can act as a go-between and sell agricultural products to China. Usually, once the "mediation fee" is paid, there is no further word, and the worst part is that once the cargo owner ships the goods to China as agreed, the payment is never received either, suffering a double loss.
This typical agricultural trade scam of "fake comprador, real swindle" is often heard of, but in recent years a kind of "atypical scam" has appeared, in which a middleman sets up a company in a country outside the cross-strait three places, claims to purchase Taiwan's high-quality agricultural products for sale to China, and uses Taiwanese agricultural experts to vouch for it, solemnly drawing up a procurement contract to gain the trust of Taiwanese agricultural operators.
As a result, the Taiwanese side prepares the goods as agreed, but the other party repeatedly fails to fulfill the contract and deliver payment, and even uses reasons such as obstruction by Chinese customs quarantine or commodity inspection to demand that the Taiwanese operator pay further mediation fees to solve the problem. Not only does the Taiwanese operator fail to receive the expected income, but the advance funds for stocking the goods become bad debts, resulting in losses.
Different from traditional typical agricultural trade scams, the characteristic of this atypical agricultural trade scam is that these middlemen not only look no different from normal traders, but even their company identity and the standard contracts they sign can pass credit checks, and with the backing of well-known agricultural experts or face-to-face discussions with representatives, it is very easy for ordinary farmers or agribusinesses to believe it to be true.
The "Earth Friend Organic Alliance" of Guantian, Tainan, which is renowned in domestic organic agriculture and social enterprise circles, has recently been troubled by this "atypical agricultural trade scam" tactic. The fraudster used the Earth Friend Organic Alliance as the counterpart and purchased multiple Taiwanese agricultural processed products, with an amount as high as USD 405,000, equivalent to more than NTD 12 million. However, when the "Earth Friend Organic Alliance" had prepared the goods to sell to China, it waited in vain for the other party to open a letter of credit for payment. As a result, this batch of agricultural products has been in stock since before last year's Mid-Autumn Festival, waiting bitterly for the other party to fulfill the contract, but the payment date promised by the other party has been delayed again and again, and has still not been delivered to date.
Seeing that the suitable tasting period for these agricultural products was getting closer and closer, but the other party had no sincerity or intention to fulfill the contract, Yang Tsung-kuei, Chief Operating Officer of Earth Friend Organic Alliance, only then realized that this was a carefully planned scam, and even suspected that the other party used cooperation with Taiwan's agriculture as a pretext to help Chinese officials launder money overseas.
Taiwanese agricultural products ordered by Australian company BQL from Earth Friend Organic Alliance
Yang Tsung-kuei said that up to now, the fulfillment payment dates promised by BQL through Ko Nan-ching have repeatedly bounced, and the plan announced to establish a BQL branch in Taipei by the end of last year has also come to nothing. For this transaction, Earth Friend advanced as much as NTD 2 million in funds, which is a huge financial pressure for Earth Friend, a social enterprise with small capital.
After being reminded by a friend, Yang Tsung-kuei only then realized that this might be a scam, and suspected whether behind the scenes there were Chinese senior officials using the transaction contract between BQL and Earth Friend to launder money.
A Taiwan official familiar with cross-strait agricultural exchanges pointed out that BQL's procurement requirements for Earth Friend had many unusual aspects, including the other party's request to ship the goods via the mini three links rather than direct shipping to Tianjin. The Taiwan official said that if doing business with the real COFCO, COFCO would require the products to be shipped directly from Taiwan to Tianjin, and would not remit money through a foreign bank.
In addition, whether the people Earth Friend met in Tianjin were really Chinese officials is doubtful, because even Chinese officials privately admit that there are very many fake officials in the mainland.
In this "atypical scam" case under the name of agricultural cooperation, apart from the Earth Friend Organic Alliance having already concretely suffered harm, it is understood that BQL, through the matchmaking of certain agricultural experts, is also actively discussing cooperation with domestic official agricultural research institutions, academia, and incorporated foundations under the name of sponsoring funds or technical exchanges. Yang Tsung-kuei calls on others, based on his own experience, to be especially careful if they are units or enterprises that have negotiated cooperation under the name of BQL.
As of now, BQL has not fulfilled the contract payment with Earth Friend. When a NewsMarket reporter called to ask Ko Nan-ching for his view, Ko Nan-ching first did not directly respond to the reporter's questions, only saying that he hoped to help the farmers of the Earth Friend Organic Alliance improve their cultivation techniques. After the reporter pressed further, he only then answered that being caught between BQL and Earth Friend was very troublesome, but he had great confidence in BQL head Huang Ping, believed that there must be a misunderstanding between Earth Friend and BQL, and that he believed Huang Ping would certainly fulfill the contract payment, and asked for another two weeks to handle it, believing that the whole matter would have a good result.
Yang Tsung-kuei said that the entire cooperation case had been under negotiation since March of last year and had now reached a full year, and that Earth Friend had advanced NTD 2 million in funds to prepare the goods, along with USD 22,000 in commodity inspection handling fees. For a large enterprise this might be a drop in the bucket, but for Earth Friend, which is engaged in social enterprise, it is a heavy financial burden, especially as agricultural products have a suitable tasting period, and he is very worried that the result of BQL's breach will cause these high-quality Taiwanese agricultural products to expire and go to waste.
Yang Tsung-kuei said that, given that white rice has a relatively short tasting period, Earth Friend will donate it to social welfare groups in need before the tasting period expires, while the organic tea, organic soy sauce, fruit wine, fruit enzymes, and other products originally intended for sale to Tianjin, China, have been decided to be opened for subscription by Taiwanese consumers. He also used this personal experience as an example, calling on other farmers or operators to be especially careful when conducting cross-border transactions.
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