Monday, August 22, 2011

Korea Due Diligence: Not So Different From China

Steve Dickson wrote a great article entitled China Due Diligence. Not Optional - that I will steal and copy at length. His article appears on the China Law Blog. The blog is a must read for all doing business in China.
Most companies are not aware that due diligence is required whenever you do any kind of business with a Chinese company. If you do not already know the Chinese company with which you will be conducting business, you must confirm that the company really does exit and that you are dealing with the actual  company and not an impostor.
Substitute Chinese with Korean and we have a good article for this blog.

I had a client contact me asking for advice on how to collect a debt of USD 150,000. I first asked the client for the name of the debtor and he gave me the name JH Park. I asked if he had any other information and he said he had an email address. How the heck can you send someone USD 150,000 without any information on the person?

He noted that he saw the website and I noted that the website has only an email address and the name JH Park. I felt really bad for this guy and agreed to try to dupe the "JH Park" into revealing more information, but of course the man was too smart to fall for our fishing exercise. Thus, we are left with a fake gmail account and a name that is more common than Joseph Smith in Utah.

Steve seems to experience the same issues I experience working in Korea.

It is easy in China to fake company seals, business cards, bank accounts and even a website. The unsuspecting foreigner makes a deal with the impostor and sends funds to the bank account. Product never arrives. The foreigner contacts the well established Chinese company and that company truthfully responds by saying "we have never heard of you." It turns out the foreigner had been dealing with a fake, virtual company the entire time. This happens all the the time in China. Trust me when I tell you we see instances of this at least once a month. 
Please, my friends at the China Law Blog and I have said numerous times, please do your due diligence. Read the below articles and one can get a better sense of what due diligence actually means.
I love Steve Dickson (in a Philadelphia way), since he is the smartest guy on the other side of the Yangtze and one of the most interesting and creative thinkers in law. I know, enough of the brown nosing. Hope he invites me one day to meet him in China. His blog may be found at: www.chinalawblog.com and the article may be found HERE.

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SeanHayes@ipglegal.com

Thursday, August 4, 2011

Enter the Korean Market - Then Enter China and Japan

Secretary General Jean – Jacques Grauhar made many interesting comments in the EU Chamber’s August 2011 issue of Infomag. He is the most Texas looking Frechman I have ever met.

On another side note, I hope the American Chamber of Commerce in Korea catches up to the EU Chamber in Korea. The EUCCK is producing much better magazine content and much better programs for members.

I am not sure if the EUCCK has more resources than AMCHAM, but when I speak to members of both chambers, many mention the stark differences and are disappointed in AMCHAM.

Competition, hopefully, will produce an even better AMCHAM - it is actually quite decent now.

The Secretary General mentioned something that I think all global businesses should recognize.

He notes that:
While the world focuses on the Chinese market, company executives should also try to include Korea in their itinerary whenever they visit this part of the world, because a presence in South Korea is indispensable for truly global brands and could in fact constitute an excellent launching pad to reach the Chinese and Japanese markets.
In most cases, Korea is a great test market before entry into China and Japan. Many of my clients have successfully succeed and also "successfully" failed in Korea and choose to enter or forgo the Chinese and Japanese markets based on these Korean experiences.

Korea is simply a much cheaper place to do business than Japan and is a much geographically small market than China, thus, lowering the cost of doing business.

Korea, however, for many of my clients, is their largest market in Asia.

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SeanHayes@ipglegal.com