to Prevent Foreign Trade Risks

In general, there are six main risks of export collection:

1. shipping specifications and dates with contract provisions

the exporter fails to deliver the goods in accordance with the contract or letter of credit, first, the production plant is delayed, resulting in late delivery.

2. documents causes the risk of foreign exchange collection.

After shipment, the documents of the negotiating bank did not match the documents. At this time, even if the buyer agreed to pay, but in vain paid expensive international communications costs and non-conformity deductions, and the time of receipt of foreign exchange is greatly delayed, especially for smaller contracts, seven deductions and 20% off the loss.

risks arising from the trap clauses stipulated in the 3. letter of credit.

some letters of credit stipulate that the customer inspection certificate is one of the main documents negotiated. The buyer will seize the seller's eagerness to ship, deliberately picky, but at the same time put forward all kinds of payment possibilities, forcing the enterprise to ship. Once the goods are released to the buyer, the buyer is likely to deliberately inspect the discrepancy, delay payment, or even empty money and goods. The letter of credit stipulates that the transport document is due abroad within 7 working days after the issuance of the transport document, etc. Neither the negotiating bank nor the beneficiary of such terms can be guaranteed to be done and must be carefully reviewed. In the event of a trap clause, it should be promptly notified of the amendment, and must not be greedy for a while to save trouble and bury hidden risks in the future.

4. does not have a complete business management system

export work involves all aspects, and both ends are outside, which is prone to problems. If the enterprise does not have a complete business management method, once there is a lawsuit, it will lead to a reasonable situation, especially for those enterprises that only pay attention to telephone contact. Secondly, as the source of customers of enterprises is expanding every year, in order for enterprises to have a target in trade, it is necessary to establish business files for each customer, including creditworthiness, trade volume, etc., to screen year by year to reduce business risks.

5. contrary to the agency system

For export business, the real practice of the agency system is that the agent does not advance funds to the principal, the profit and loss is borne by the principal, and the agent only charges a certain agency fee. This is not the case in actual business operations. The first reason is that they have few customers and poor foreign exchange collection ability, and they have to strive to complete the target. The second is to want to make more profits and think the agency fee is less. One is the purchase and sale type, the factory obtains the safe collection of foreign exchange. In the event of a buyer's problem, pre-borrowing is bound to be in vain. The other is the "sell order" business. If the agent does not follow up the factory seriously, there will also be collusion with customers to ship and deceive the "selling order" person.

6. use of D/P, D/A forward payment methods or consignment methods

deferred payment method is a forward commercial payment method, if the exporter accepts this method is equivalent to giving the importer financing concessions, although the issuer voluntarily pays the deferred interest, on the surface only need the exporter to advance, lending, in essence, the customer waiting for the goods to arrive at the port to check the quantity of arrival. If the market changes and the market is not smooth, the importer may apply for bank refusal to pay. Some companies release goods to students and friends doing business abroad. I think it is a relationship customer, and there is no problem of not being able to collect foreign exchange. In the event of poor market sales or customer problems, not only the money will not be collected, but the goods may not be collected.

In the import business, the common risks are:

1. the risk of default by foreign parties.

that the specifications and quality of the products provided by the seller do not conform to the contract. The only way for the buyer to resist the risk caused by this breach is to immediately file a claim against the seller based on the report submitted by the Chinese commodity inspection authority after inspection.

Risks Caused by Irregular Operation of 2. Foreign Trade Agency

The formal foreign trade agency practice in the import business should be that foreign trade companies provide users with thoughtful and high-quality services, for which a certain percentage of agency fees are charged. And now the actual practice is that foreign trade companies in order to collect orders, especially self-raised foreign exchange, under the pressure of competition in the same industry, generally only require users to provide a deposit, the balance of the deposit by the agent company on behalf of the advance, etc., the payment will be paid when the payment. In the event of market changes or sluggish corporate efficiency, payments will be delayed under various pretexts, or underpayment or even refusal to pay, resulting in arrears or even loss of money. Sometimes, even if the user is paying in full, the letter of credit is issued by the foreign trade company, once the seller defaults, the user (principal) often requires the foreign trade company (the principal) to bear the responsibility, forming a small risk situation.

3. the risk caused by the seller's delay in delivery or lack of goods.

delay in delivery: first, the seller delayed the delivery date. The second is the improper arrangement of the voyage. This delay and lack of availability will cause losses to domestic users, and users will claim compensation. At this time, the agent should adopt different hedging methods for different situations.

4. sellers collude with users to cheat agents.

country, more people went abroad to do business, and scandals of collusion between inside and outside to defraud state-owned foreign trade enterprises occurred from time to time. The reason for this is that foreign trade enterprises trust each other. The second is that the other party has no virtue or trust. Some Chinese often have a smooth first or two business, which makes you believe that he keeps his word. Once you believe him, you will take the opportunity to cheat you and then run away.