BizChina

A reader sent me a link to a post from the very controversial blog, Atlas Shrugged. The post is entitled, "A Case of Perjury: Mohamed Bary's Vast Web of Lies." The gist of the story is that the Sri Lankan parents of a 17 year old Rifqa Bary are being denied the return of their daughter by a Florida judge because the family has been unable to document that they are in the United States legally. It appears the judge is denying the daughter's return both for immigration reasons and because her parents' credibility has been so damaged by their apparent history of immigration untruths.

The reader asked me if I am aware of anything like this having happened in China or the United States with Chinese businesspeople and whether "something like this" can impact one's business in China.

HECK YES it can.

I am aware of all kinds of instances where one's immigration status has harmed a business.

Many years ago, I was involved in an international litigation matter involving two Russian fishing companies. One of the key witnesses for the Russian company on the other side was a woman who had secured a US visa based on her extensive education and experience in the fishing industry in Russia. She had secured this visa by claiming a college degree from one of Russia's best fishing institutes and by claiming to have spent many years working for one of its largest fishing companies. Somehow or other, my firm's Russian paralegal extraordinaire had acquired a copy of this person's visa application and had noticed that her college degree from a college in Town A had been stamped by someone in Town B. My paralegal told me this was the equivalent of a Harvard degree with an official Yale stamp on it. In other words, it could never happen if the degree were not a fake.

Our next move was to depose this person and depose her we did. At her deposition, we asked her a whole series of questions intended to make clear we knew she had lied to get into the country. Among the questions we asked were the following:

1. Who was your favorite professor? She said she had no favorite. 2. Name one of your professors. She said she could not remember any. 3. Name one professor at the entire college. She said she could not remember any. 4. Who was your best friend at college. She said she was too busy studying to have had any friends. 5. Name one fellow student at your college. She said she could not remember. 6. List the classes you took. She gave some sort of vague answer. 7. Name some of the buildings on the campus. She could not remember any. 8. Describe the campus. She gave some incredibly vague description.

We asked the same sort of questions regarding the fishing company at which she had allegedly worked in Russia and we got the same sort of answers. It was fun.

And guess what, this key witness for the other side never showed up to testify at trial, which greatly strengthened our case and probably helped us prevail. I have no doubt her failure to appear stemmed from her fear of her illegal immigration status being exposed.

A few years later, I was contacted by a Russian-American company that wanted my firm to sue an American company over a debt. I pushed my client about skeletons in his and his company's closet and he admitted he was in the United States on a student visa and so should not have been working at all. We talked about how his bringing this case might expose him to visa issues and how he should think long and hard about bringing the case. He chose not to and I assume this meant he would be walking away from a not insubstantial debt.

We have had to tell a number of foreigners in China the same thing when they have sought our help in collecting on a debt in China or in suing their Chinese partner for having run off with what the foreigner thought was its own business. If you or your business are not legal in China, you have pretty much foreclosed your ability to sue anyone, no matter what they do to you.

A handful of times (usually during periods of stepped-up visa enforcement), my firm has been contacted by foreigners with illegal businesses in China who have either been denied re-entry into China or have been told to leave. These people are desperately seeking our help to get them back into China. They are desperate because their profitable China based businesses cannot function without them. The odds of our being able to help them are slim.

One of the most underrated benefits of having a Wholly Foreign Owned Entity (WFOE) in China is that entity's ability to hire foreigners and those foreigners' ability to secure Chinese work visas (Z visas). These companies are legal and they have standing to sue and since their employees are working in China legally on Z visas, they have nothing to fear by testifying on the company's behalf.

One of my favorite stories is when I went to Papua New Guinea to help a Sakhalin Island client secure the return of two helicopters. When I landed in Port Moresby, I was asked if I was in the country as a tourist or for business. The tourist visa was something around $35 and the business visa was something around $350, but I said "business'' and I paid the much higher fee. I then flew to Goroka where I met the next day with the governor of the Eastern Highlands Province, Malcolm "Kela" Smith. I was told "Kela" means bald man. The first thing Mr. Smith did when I met with him was to check my passport. When it revealed I was there on a business visa, I could sense a change in his view of me. Though he never confirmed this to me, I am convinced that had my passport revealed I was in PNG on a tourist visa, Mr. Smith would either have had me thrown out of the country or he would have refused to meet with me because I was in the country illegally. Kela Smith ended up meeting with me and with my client and within a day or two we had a deal whereby my client would get his helicopters back.

The bottom line is that if you are going to be doing business in a foreign country, particularly China, it pays to do so legally and it pays to have the right visa.