You paid your Chinese supplier and nothing shipped, or you paid a fake account

The case, in five lines

What is brought

Against the supplier that took the money and does not ship: a formal demand with an additional period and suspension of the rest of the payment (arts. 47 and 71 of the Vienna Convention), avoidance and restitution of the advance with interest from the date of payment (arts. 49, 81(2) and 84(1)), and damages if there is no exemption. If the payment went to a fake account: an urgent request to the bank to try to recover the funds (art. 59 of Royal Decree-law 19/2018) and, if verification of payee failed, a claim against the bank.

Before which court

Whichever the contract designates. With an arbitration agreement, the arbitral tribunal of the agreed institution, such as CIETAC (China International Economic and Trade Arbitration Commission); in China the agreement must name it. With submission to the Spanish courts (art. 25 of the Brussels I bis Regulation), or without a clause if delivery was due in Spain (art. 22 quinquies(a) of the Organic Law of the Judiciary), the sección civil del Tribunal de Instancia (the civil section of the court of first instance). A judgment obtained is enforced in China before the Intermediate People's Court (1992 Treaty) or, for an award made outside China, under the New York Convention. Against the bank, its customer service department and, failing agreement, the civil section of the Tribunal de Instancia.

Deadline

With the bank, hours: the sooner recovery is requested, the better the chance that the money is still in the account. You set the additional period (art. 47). To sue or arbitrate: four years if Chinese law applies (art. 594 of its Civil Code), which is the applicable law before a Spanish court absent a choice (art. 4(1)(a) of the Rome I Regulation), or five if Spanish law applies (art. 1964(2) of the Civil Code). Under Spanish law, the request for prior negotiation interrupts limitation (art. 7(1) of Organic Law 1/2025); under Chinese law, that law decides (art. 12(1)(d) of the Rome I Regulation). Without agreement, the claim must be filed within a year (art. 7(3)). With a preventive attachment before the claim, twenty days to file it (art. 730(2) of the Civil Procedure Act), suspended while the prior negotiation runs (art. 7(3) of Organic Law 1/2025).

Who can bring it

The buying company that paid is the claimant, against the seller named in the contract or pro forma invoice: if you bought from a Hong Kong trading company, against that company, not the factory. Against the bank, the claimant is the payer of the transfer, as its customer. If the holder of the fake account is identified, the claim can also be directed against it; any police report is filed by the company itself.

Financial risk

Winning is not collecting: a supplier with no assets outside China forces enforcement there, at a cost in time and money, and a fraudster empties the account within hours. A Spanish judgment given with the supplier served by registered letter or by email will not be recognised in China if it did not appear (art. 22(4) of the 1992 Treaty). And avoiding or stopping payment without notice makes you the party in breach. Nobody can promise you that you will recover the money.

Breach or fraud: first find out who you actually paid

Behind ‘I paid and it does not ship’ there are two different cases, each with its own route. In the first, the real supplier took the advance, usually 30% or 50%, and is not manufacturing or not shipping: that is a breach of contract and the claim lies against the seller. In the second, someone impersonated the supplier's email (or yours), announced a change of bank account and the money reached a third party: the supplier has not been paid, and the urgency lies with the bank. Mixing them up wastes days that cannot be recovered.

The first check is on paper: in whose name the account you paid is held, whether it matches the seller in the contract or the pro forma invoice, which address the change-of-account instruction came from and whether the supplier confirmed it through another channel. Through our partners with offices in China we also check the company: whether it exists and is registered under the name in the contract, whether it has a factory or is a trading company, whether the account is its own and whether it has a record of lawsuits. And our engineer experts in China can visit the factory to see whether your order exists and what state it is in, before you decide anything about the rest of the payment.

What nobody tells you: in the fraud case, the real supplier will say you have not paid it, because the money never reached its account, and will ask for the price again. Who bears the loss between the two of you is argued on what the contract says about the payment account and changes to it, on the applicable law and on the evidence of where the impostor got in: if the compromised mailbox was the supplier's, the argument changes. That is why the emails are preserved in full, with their headers, from the very first minute.

Payment to a fake account: what to do in the first hours

The order was given by your company, even though it was deceived, so it is not an unauthorised transaction: the refund by the end of the following business day and the 50-euro cap in arts. 45 and 46 of Real Decreto-ley 19/2018 (Royal Decree-law 19/2018 on payment services) are not your route. An order executed in accordance with the account identifier is deemed correctly executed, and the bank is not liable for defective execution (art. 59(1) and (2)). That does not mean there is nothing to be done.

The same art. 59(2) requires your bank to make reasonable efforts to recover the funds, and the payee's bank to cooperate by passing on the relevant information. If it cannot recover them, it must give you, on written request, all the information it has that is relevant for you to bring a claim. So, as soon as you find out: call and write to your bank asking for the transfer to be recalled or the funds recovered, with the amount, date, destination account and reference; ask it to notify the receiving bank; and keep a written record of the time. If the transfer went out in dollars or yuan to China or Hong Kong, recovery depends on a bank outside the Union, and speed matters even more.

At the same time the evidence is preserved: the emails in their original format, with full headers, the change-of-account one and the real supplier's earlier ones, and the transfer order with the verification-of-payee result your online banking showed you. Reporting the fraud to the police is the company's decision and the company files the report; this firm does not handle criminal matters, but the chronology we put together for the bank and the supplier serves that purpose too. When the bank is liable and how it is sued is explained in the case "CEO fraud or invoice fraud: when the bank is liable in Spain"; here we focus on what is specific to China.

Verification of payee: when it protects you and when it does not

Since 9 October 2025, banks in the euro area must check, before you authorise a transfer, whether the IBAN matches the payee name you entered and warn you if it does not; if it almost matches, they must show you the real name (art. 5c of Regulation 260/2012, inserted by Regulation 2024/886). Banks in Member States outside the euro have until 9 July 2027. A company may waive the check only for bulk payment orders, and may ask for it again at any time.

The consequence cuts both ways. If your bank carried out the verification and warned you that the name did not match, and you authorised anyway, the bank is not liable for the transfer to that unintended payee. If it did not carry it out, or did it wrongly, and that caused the defective transaction, it must refund you without delay. That is why the bank is asked, in writing, for the record of the verification for that order: which name was checked and what warning you were shown.

What nobody tells you is that verification only covers euro transfers within the European Union. Many payments to Chinese suppliers go out in dollars or yuan to China or Hong Kong, and there is no name check there: if the fraudster gave you an account in Hong Kong, verification did not protect you. To claim against the bank, its customer service department has fifteen business days to answer, extendable to one month in exceptional cases (art. 69 of Royal Decree-law 19/2018), and if the claim is that verification failed, the thirteen-month period in art. 43 applies, unless the company agreed another period with the bank (art. 34(1)). Before suing the bank, the company must try an appropriate dispute resolution method: the shortcut of a complaint to customer service only counts for consumers (seventh additional provision of Ley Orgánica 1/2025, Organic Law 1/2025 on the efficiency of the justice service).

If it took the advance and is not manufacturing or shipping

Between a company in Spain and one in China, the sale is governed by the 1980 Vienna Convention on Contracts for the International Sale of Goods (CISG) unless the contract excludes it (arts. 1(1)(a) and 6). Faced with non-delivery, the safe route is to fix, in writing, an additional period of reasonable length (art. 47): while it runs you may not resort to other remedies, though you keep damages for the delay. If it expires without delivery, or the supplier declares that it will not deliver, you may avoid the contract without further debate (art. 49(1)(b)); likewise if the delay already amounts to a fundamental breach (art. 49(1)(a)). Set a specific date, not ‘as soon as possible’.

Do not pay the balance to ‘unblock’ production. Art. 71 allows you to suspend your own performance when, after the contract is concluded, it becomes apparent that the supplier will not perform a substantial part of its obligations, owing to a serious deficiency in its ability to perform or to its conduct in preparing to perform; you must give notice immediately and pay if the supplier provides adequate assurance (art. 71(3)). And if, before the delivery date, it is already clear that it will commit a fundamental breach, art. 72 allows you to avoid in advance, giving reasonable notice, if time allows, so that it can provide that assurance, unless it has declared that it will not perform.

What turns a suspicion into evidence is what can be seen at the factory. Our engineer experts in China can check whether production exists, how many units there are, whether they match your specification and what shipping date is credible, with dated photos and records. That tells you whether to grant a period and carry on, or avoid now; and that material, together with whatever our engineer experts in Spain gather on arrival if the shipment does eventually leave, is the basis of the report that, in a trial in Spain, is signed by an expert holding an official qualification (arts. 335, 336 and 340 of the Ley de Enjuiciamiento Civil, Spain's Civil Procedure Act). If the supplier's excuse is that MOFCOM (China's Ministry of Commerce) will not give it the export licence, read "Your Chinese supplier fails to deliver, saying it cannot get the export licence"; if it ships, but off specification, "Your Chinese supplier delivers magnets or parts that are not as agreed".

Recovering the advance: restitution, interest and time limits

Once the contract is avoided, you may claim restitution of what you paid (art. 81(2)) and the supplier must also pay interest from the date you paid (art. 84(1)). The Convention does not set the interest rate (art. 78): the applicable law does and, if it is Spanish law, failing agreement, the statutory interest rate (art. 1108 of the Spanish Civil Code). If the supplier cannot rely on an exemption, it is also liable for the damages foreseeable at the time of contracting (art. 74), such as the extra cost of buying elsewhere. And avoidance does not deprive the arbitration or jurisdiction clause of effect: it survives (art. 81(1)).

Limitation is not in the Convention. Before a Spanish court, and without a choice of law, what the Convention does not govern is governed by the seller's law (art. 4(1)(a) of the Rome I Regulation), that is, Chinese law, which allows four years to sue or request arbitration over an international sale of goods (art. 594 of the Chinese Civil Code); an arbitrator or a Chinese court will apply its own conflict rules. If Spanish law applies, it is five years (art. 1964(2) of the Civil Code), which can be interrupted by an out-of-court claim (art. 1973). To sue in Spain you must first try an appropriate dispute resolution method, also against a Chinese company (arts. 3(1) and 5(1) of Organic Law 1/2025): negotiation between lawyers on a clearly defined subject matter is sufficient. Under Spanish law, that request interrupts limitation from the date the attempt to communicate it is recorded; if there is no written answer within thirty calendar days, time starts running again, and without agreement the claim must be filed within one year (art. 7).

What nobody tells you is that the decisive step is often securing the money before winning. If the supplier has assets or receivables in Spain, such as goods in a warehouse or payments owed to it by other Spanish customers, a preventive attachment can be sought before the claim, without prior negotiation (arts. 727 and 730(2) of the Civil Procedure Act; art. 5(3) of Organic Law 1/2025), showing a good arguable case and a risk in delay and providing security; once granted, the claim must be filed within the following twenty days, a period that is suspended while the prior negotiation required by Organic Law 1/2025 runs (art. 7(3)). If the diverted money sits in an account in another Member State and its holder is known, the European Account Preservation Order (Regulation 655/2014) requires proceedings on the merits to be brought within thirty days of the application or, if later, fourteen days of the order. With arbitration in China, Chinese law allows preservation of assets and of evidence, even before the arbitration if there is urgency (arts. 39 and 58 of its Arbitration Law, in force since 1 March 2026).

Where to claim, how to collect in China and which clause would have prevented it

The forum is set by the contract. With an arbitration agreement, the dispute goes to the agreed institution; in China, an agreement that does not name one is void unless supplemented (arts. 27 and 29 of the Chinese Arbitration Law). With a clause submitting to the Spanish courts, it is valid regardless of the supplier's domicile (art. 25 of the Brussels I bis Regulation) and the claim is brought before the sección civil del Tribunal de Instancia (the civil section of the court of first instance). Without a clause, the Spanish courts have jurisdiction if the obligation on which the claim is based, delivery, was or should have been performed in Spain (art. 22 quinquies(a) of the Ley Orgánica del Poder Judicial, the Organic Law of the Judiciary): with delivery at destination, yes; with delivery at the factory or on board at a Chinese port, unlikely. And if the contract submits to the Chinese courts, the Spanish judge stays the proceedings (art. 22 ter(4)). When each route makes sense is set out in the case "You want to sue your Chinese supplier: arbitration or the courts?".

Winning is not collecting. A supplier in mainland China is not served by registered letter, courier or email: China objects to the channels in art. 10 of the 1965 Hague Service Convention, and formal service, through its Ministry of Justice, takes around six months; under the 1992 Spain-China Treaty the request may be translated into English or French and is free of charge (arts. 6(2) and 9), and after six months without a certificate the Spanish judge may proceed (art. 15(2) of the Convention). A final Spanish judgment is recognised and enforced in China under that Treaty, before the Intermediate People's Courts, at the direct request of the party concerned and without review of the merits (arts. 17, 18, 19 and 23(2)), provided the Spanish court had jurisdiction under its art. 21 (for example, written submission or a contract signed or performed in Spain) and the defendant was duly summoned (art. 22(4)). An arbitral award made outside China is enforced under the New York Convention before the Intermediate People's Court for the debtor's domicile or assets. Before the Chinese courts, the case is handled by a lawyer qualified in China, whom we coordinate from Spain with our partners there.

No single clause would have prevented it; it takes several. A payment schedule with a moderate advance and the balance against the pre-shipment inspection report and the shipping documents; the payment account written into the contract in the seller's name, and a change-of-account procedure requiring a signed letter and confirmation by a telephone number stated in the contract; a long-stop delivery date with the right to avoid and recover the advance within a fixed period; and a useful forum: arbitration with a named institution and seat, or written submission to the Spanish courts, which also fits art. 21 of the Treaty. We draft them for you, and with our partners and engineers in China the inspection before the balance is paid stops being merely the supplier's promise.

How we run the case, step by step

1. 1

   Alert the bank and record the time

   As soon as you detect the diverted payment, a written request to your bank to try to recover the funds and to notify the receiving bank (art. 59(2) of Royal Decree-law 19/2018), with amount, date, destination account and reference, and a request for the verification-of-payee record. Your company, as account holder, places the request; we prepare the letter and the chronology.

2. 2

   Check the supplier and the factory in China

   Our partners with offices in China verify whether the company exists under the name in the contract, whether the account is its own and whether it has lawsuits; our engineer experts visit the factory and document whether your order exists and what state it is in, with dated photos and records that later serve as the basis for the expert report.

3. 3

   Formal demand with an additional period

   A letter to the supplier with a fixed delivery date (art. 47 of the Vienna Convention), immediate notice that you are suspending the rest of the payment (art. 71) and a request to negotiate with a clearly defined subject matter, which meets the requirement of Organic Law 1/2025 and, under Spanish law, interrupts limitation (art. 7(1)). Sent to the email address used in the relationship and by courier with acknowledgement of receipt.

4. 4

   Avoid the contract and claim back the advance

   Once the period expires without delivery, or upon refusal, a declaration of avoidance (art. 49(1)(b)) claiming what was paid and interest from the date of payment (arts. 81(2) and 84(1)) and, if there is no exemption, the foreseeable damages (art. 74).

5. 5

   Secure recovery

   If the supplier has assets or receivables in Spain, a preventive attachment before the claim (arts. 727 and 730(2) of the Civil Procedure Act), without prior negotiation; with arbitration, interim measures from a Spanish court in support of it (art. 11(3) of Arbitration Act 60/2003) or, if the arbitration is in China, the preservation of assets that Chinese law allows.

6. 6

   Claim or arbitration, and enforcement in China

   Without agreement, a claim before the civil section of the Tribunal de Instancia with service in China through the Hague Convention and the 1992 Treaty, or a request for arbitration as the contract provides. Once won, recognition and enforcement in China, where a lawyer qualified there handles the case, coordinated by us with our partners. Against the bank, if verification of payee failed, a complaint and, failing agreement, a claim.

The law that applies

• Arts. 47, 49 y 72 de la Convención de Viena de 1980. The buyer may fix a reasonable additional period, during which it resorts to no other remedy though it keeps damages for delay. It may avoid the contract if the breach is fundamental or if, in the case of non-delivery, the seller fails to deliver within that period or declares that it will not. If before the date for performance it is clear that there will be a fundamental breach, it may avoid in advance, giving reasonable notice if time allows, unless the other party has declared that it will not perform. BOE-A-1991-2552
• Arts. 71, 81 y 84 de la Convención de Viena de 1980. Either party may suspend its performance if, after the contract is concluded, it becomes apparent that the other will not perform a substantial part of its obligations, giving immediate notice and performing if it receives adequate assurance. Avoidance releases both parties, save for damages and the dispute resolution clauses, and allows what was paid to be claimed back; a seller that refunds the price pays interest from the date of payment. BOE-A-1991-2552
• Arts. 45, 46 y 59 del Real Decreto-ley 19/2018, de servicios de pago. Unauthorised transactions are refunded by the end of the following business day at the latest, and the payer bears at most 50 euros for a lost or stolen payment instrument, save for fraud or gross negligence. An order executed in accordance with the unique identifier is deemed correctly executed and the bank is not liable if the identifier was incorrect, but it must make reasonable efforts to recover the funds, with the cooperation of the payee's bank, and, if it cannot, give the payer, on written request, the information needed to bring a claim. BOE-A-2018-16036
• Art. 1 del Reglamento (UE) 2024/886 (art. 5 quater del Reglamento 260/2012). It requires the payer's bank to offer, before the payer authorises a euro transfer, verification that the account identifier matches the payee name given, and to warn if they do not match or show the name if they almost match. It is mandatory since 9 October 2025 in the euro area and, for Member States outside the euro, from 9 July 2027 at the latest. A bank that complied is not liable for a transfer to an unintended payee; one that failed to comply and caused the defective transaction refunds without delay. 32024R0886
• Arts. 2, 5 y 7 de la Ley Orgánica 1/2025. Before suing in civil matters, an appropriate dispute resolution method must be tried, including direct negotiation or negotiation between lawyers, with the same subject matter as the lawsuit; it is not needed for an enforcement claim, interim measures before the claim or preliminary inquiries. The request interrupts limitation or suspends time bars; without a written answer within thirty calendar days time starts running again, and without agreement the claim must be filed within one year. BOE-A-2025-76
• Arts. 727 y 730 de la Ley de Enjuiciamiento Civil. Interim measures include the preventive attachment of assets to secure a judgment for payment of money. They are requested with the claim or, if reasons of urgency or necessity are shown, beforehand; in that case they lapse if the claim is not filed before the same court within twenty days of their adoption, a period that does not apply in institutional arbitration if the arbitral proceedings are set in motion. BOE-A-2000-323
• Arts. 22 ter y 22 quinquies de la Ley Orgánica del Poder Judicial. Without submission, the Spanish courts have jurisdiction in contractual matters when the obligation on which the claim is based has been or must be performed in Spain, even if the defendant is not domiciled there. A choice-of-court agreement in favour of a foreign court excludes that jurisdiction: the Spanish court stays the proceedings and only hears the case if the foreign court declines jurisdiction. BOE-A-1985-12666
• Arts. 6, 9, 17 a 23 y 26 del Tratado entre España y China sobre asistencia judicial en materia civil y mercantil (Pekín, 1992). Requests for service may be translated into the language of the requested State, French or English, and are free of charge. Civil and commercial judgments are recognised and enforced at the direct request of the party concerned, in China before the Intermediate People's Courts, without review of the merits and without legalisation, if the court of origin had jurisdiction under art. 21; they are refused, among other cases, if the defendant was not duly summoned and did not appear. BOE-A-1994-2077

Each article checked against the consolidated text published in the BOE (the Spanish official gazette).

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