Attorney Jeremy Provides Due Diligence for Swedish Client's Anhui Procurement

The Swedish buyer plans to purchase second-hand excavators from China. To avoid falling victim to trade fraud, the Swedish buyer contacted the legal team of Attorney Larry Zhou at Landing (Shenzhen) Law Office.

Our legal team informed the Swedish buyer that, based on our experience handling hundreds of similar cases, such purchases can easily lead to risks if not handled with care. For example, suppliers may tamper with equipment serial numbers, conceal the actual years of equipment use, or hide issues related to equipment refurbishment. If quality issues are discovered only after the goods are received, the buyer will be in an extremely disadvantageous position, with extremely high costs for upholding rights.

To mitigate the transaction risks, the Swedish buyer entrusted our lawyers, with Attorney Jeremy Hu specifically assigned to provide due diligence services for their procurement transaction.

After accepting the commission, our lawyers immediately launched a comprehensive due diligence process. On one hand, Attorney Jeremy conducted a thorough investigation of the Anhui-based supplier, examining the company's background, its shareholders, related enterprises, legal disputes, administrative penalties, import and export data, and historical performance records. This was done to identify any potential legal issues such as litigation or false customs declarations, to pinpoint credit risk points, and to assess the supplier's ability to fulfill contracts and its business reputation.

In addition, our lawyers proactively contacted the person in charge of the supplier to conduct in-depth interviews. This was to further verify the supplier's basic situation, ability to fulfill contracts, and creditworthiness, and to discuss basic transaction terms, including equipment specifications (model, serial number, original factory certification), warranty period settings, and return and exchange conditions. This step was crucial to confirm whether the supplier has the genuine intention and capability to deliver the goods and fulfill the contract.

After completing both online and offline due diligence, our lawyers provided the client with a written due diligence report. The report specifically highlighted the potential risks of the transaction and analyzed the supplier's situation, offering advice on whether the client should proceed with the transaction.

The Swedish client highly appreciated the report provided by our lawyers, gained a deeper understanding of the risks involved, and made an informed decision accordingly.

Finally, our lawyers also advised companies engaged in cross-border procurement to conduct thorough background checks. It is essential to verify the counterparty's ability to fulfill contracts and creditworthiness before entering into a formal transaction, to understand potential risks and prepare contingency plans, in order to minimize the occurrence of risks.