Common risk issues in export business

In international business ,import and export involves some issues such as taxation, and there are bound to be risks. In recent years, the risk problem has become more and more serious, and even bad debts have continued to increase. Some professionals estimate that with the passage of time, the risk coefficient will increase accordingly, which will give foreign trade a chance. The sustainable development of the enterprise has a serious impact. In order to enable readers to recognize the seriousness of the risk, this article makes a superficial analysis of the risk problems that may arise in the business.

Under normal circumstances, the risk of export receipts in global business mainly includes the following six situations:

(1) The risk of foreign exchange collection is caused by the inconsistency of the delivery specifications and dates with the contract.The exporter fails to deliver according to the contract or the letter of credit. One is that the production plant is delayed, resulting in late delivery; the other is to replace the products stipulated in the contract with products of similar specifications; the third is that the transaction price is low, and it is shoddy.

(2) Risks caused by trap clauses stipulated in the letter of credit.Some letters of credit stipulate that the customer inspection certificate is one of the main documents for negotiation. The buyer will seize the seller’s eagerness to ship, deliberately picky, but at the same time propose various payment possibilities to induce the company to ship. Once the goods are released to the buyer, the buyer is very likely to deliberately inspect the goods for discrepancies, delay payment, or even empty both money and goods. The letter of credit stipulates that the shipping documents will expire abroad within 7 working days after the issuance of the shipping documents, etc. Neither the negotiating bank nor the beneficiary can guarantee such terms, and they must be carefully verified. Once a trap clause appears, it should be notified to modify it in a timely manner.

(3) The risk of foreign exchange collection is caused by the poor quality of the documents.Although it is stipulated that the foreign exchange should be settled by letter of credit and shipped on time with high quality, but after the shipment, the documents submitted to the negotiating bank did not match the documents and documents, so that the letter of credit promoted the due protection. At this time, even if the buyer agrees to pay, it pays the expensive international communication fees and the deduction for discrepancies in vain, and the time for collection of foreign exchange is greatly delayed.

(4) Risks caused by operations contrary to the agency system.For the export business, the real practice of the agency system is that the agent does not advance funds to the client, the profit and loss are borne by the client, and the agent only charges a certain agency fee. In actual business operations now, this is not the case. One of the reasons is that he has few customers and his ability to collect foreign exchange is poor, and he has to strive to complete the target;

(5) There is no complete set of business management system.The export work involves all aspects, and the two ends are outside, which is prone to problems. If the enterprise does not have a complete business management method, once a lawsuit occurs, it will cause a rational and unwinnable situation, especially for those enterprises that only focus on telephone contact. Secondly, because the company’s customer base is expanding every year, in order for the company to have a target in the trade, it is necessary to establish a business file for each customer, including credit, trade volume, etc., and screen them year by year to reduce business risks.


Post time: Apr-20-2022