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HSBC keeps returning incoming payments - on the verge of ruin. What can I do?

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  1. #41

    Join Date
    Apr 2020
    This is extremely helpful!

    I’ve only previously traded in electronic goods for much smaller amounts in the 100’s of thousands of HKD, so self funding the production hasn’t been an issue.

    Had no idea about some of these red flags, and you guessed absolutely correctly that these are medical supplies! Unfortunately no medical supply manufacturers are accepting LCs at the moment.

    It looks like this transaction was doomed to fail without having had more experience in carefully manoeuvring this this sort of thing.

    Quote Originally Posted by LifeInHK:
    Mmm.... have you tried looking at it from the other side of the table ?
    Poster seems to be unaware that he /she has raised a lot more flags.

    1. Short invoice period = high risk goods that are "sensitive" in the market. What goods are you selling ? Anything to do with medical supplies?
    Timing of invoice expiry in less than 10 days (week + 2 days) would raise first flag in the clearing bank

    2. At eve of public holiday = high risk timing, well known favourite time for money laundry.
    Second flag
    Trading companies in HK would NOT accept or send money on eve of big public holiday.... a) they have enough experience with banks and b) if they are big enough then their auditors flag these transactions.

    3. Recipient account = high risk, little movement and no history of big transactions, Third flag

    4. Amount = close to 6 million in HKD , high risk that it is UNLIKELY to be a deposit

    For trading of goods with "Manufacturer" in China, the "normal" Hong Kong middle man would use Letter of Credit , so that details to all parties (banker for buyer, banker for seller, pricing for agent in hong kong (which is your company) forwarder, delivery date, time, method by truck, ship, air ....etc_ are all written down and all risks are minimised. You did not choose this route, instead you went for direct payment. So that tells the bank that you do not know trade finance.

    Fourth flag (big flag)
    Yes, LC costs money... but when your amounts are in the millions.

    5. ...recently reverified all My company docs. ...
    This invoice amount did not match up to the size of your company (whose information was provided by you RECENTLY). The onus is with you to provide good information tothe bank during verification. So would suggest that you go back to check what information did you give to the bank "recently".
    Fifth flag (even bigger flag)

    5. Invoice from China factory = who are supposed to be in the lockdown, and there are NO transport to carry goods to the harbour for "export"
    Is this company part of a long chain of accounts? Very likely

    Sixth flag

    Since you didnot submit the invoice in the first go... the bank had no way of knowing why you are receiving this money.

    Result => cash processing team refer your case to bank's trade finance team , who then refers to anti-money laundry squad who "review" your account... you got screwed.
    Last edited by LonKong; 19-04-2020 at 03:24 PM.

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