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    China Uncovers Over $10Bln in Fraudulent Trade Deals in 2014

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    Chinese officials have unveiled more than $10 billion in fraudulent trade this year after a nationwide inspection, The Wall Street Journal reported Thursday.

    MOSCOW, September 25 (RIA Novosti) - Chinese officials have unveiled more than $10 billion in fraudulent trade this year after a nationwide inspection, The Wall Street Journal reported Thursday.

    "Trade-financing fraud is very harmful not only to trade but also to the overall economy … It increases the pressure of hot money inflows and has even become the channel through which funds of some criminal activities flow in and out of China," Wu Ruilin, deputy director of the inspection department at China's State Administration of Foreign Exchange, was quoted by the newspaper as saying to reporters.

    The campaign started in April 2013 in 13 Chinese provinces and cities. This year, the investigation into falsified transactions was expanded to 24 provinces. At least 15 cases of fraudulent activities have been handed over to police.

    Several companies have been creating artificial trade invoices not backed by an actual exchange of goods and services in order to sneak money in or out of one of the world's biggest economies.

    During the investigation, some Chinese banks were found to have failed checking the authenticity of deals.

    This summer, China attracted international attention with a large-scale fraud case. A private company, Decheng Mining, and its related companies were found to have been using fake warehouse receipts at a port in Qingdao to obtain multiple loans secured against a single cargo of metal.

    The exposure of banks and trading firms totaled more than $1.2 billion, with global trading houses filing a series of lawsuits over the incident.

    Tags:
    banks, fraud, China's State Administration of Foreign Exchange, Wu Ruilin
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