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Doing Business in Asia? Minimize Your Fraud Risk

Doing Business in Asia?  Minimize Your Fraud Risk

As Asia continues to play a leader in the global economy, the business risks like fraud and bribery are still things that need to be watched carefully. Companies are working hard to develop programs that can meet global best practices and help tackle local challenges related to complex fraud and scams.

Doing business in Asia poses the highest risk of being a victim of fraud — higher than anywhere else worldwide with 68 percent of companies hit by fraud.  This isn’t to say that you should never do business in Asia, especially if your company requires it for success. There are just some specific safeguards you should put in place.  In short, getting some expert due diligence can go a long way.

If you are doing business in Asia, here are some ways to help minimize your fraud risk:

Educate employees about fraud.

Encourage and empower your employees to share tips about suspicious behaviors they encounter as they converse with your business partners in Asia.  Internal employees are one of the most common ways fraud is detected within companies.  Take the time to educate your employees on the basics on fraud schemes and emphasize the ways fraud occurs in the industry – and empower every member of the team to step forward when they observe unethical behavior.  Identify and report red flags.

Do your research.

Statistics show that business fraud cases continue to climb in numbers, so it is more essential than ever for U.S. businesses to perform company verifications as a tool to fight fraud.  While you may think you are working with a legit company, you could be giving out information and money to a scammer.  Local government authorities can help you confirm any suspicions about where the company operates.

Consider hiring a law firm.

U.S. businesses need to do some homework prior to working with Asian businesses. Consider hiring a lawyer and trained private investigator to help avoid becoming a victim of fraud. International firms tend to be familiar with corporate law and can be key in helping you not become a victim.

Work with businesses that have invested in the best resources and tools.

Weak systems and controls expose companies in Asia to risks as internal controls and compliance programs are not implemented as thoroughly as they should be. Internet fraud remains high in the global recession, so it’s worth it to make sure you do business with a company who has invested in the needed resources and tools to keep your information safe.  Take proactive measures to help you avoid fraud.

Look out for unusual requests.

As you do business with companies in Asia, keep an eye out for suspicious behavior and requests. Too-low prices or requesting payment be made in advance or via bank wire or Western Union are signs something may not be right.  Don’t send money this way — once you do it is nearly impossible to recover.

Implementing processes like these can dramatically reduce your exposure to fraud when doing business in Asia.  These steps towards securing your assets are simple to implement and can help reduce fraudulent behavior.  When in doubt, get a background check investigation!

C. Wright
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