In recent years, the risk and even bad debts in the import and export business have been increasing, which not only causes interest loss, but also increases the risk factor with the passage of time, which has a serious impact on the sustainable development of foreign trade enterprises. Therefore, the issue of risk has increasingly become a topic of concern. Under normal circumstances, the risk of export receipts mainly includes the following six situations:
1 Risk of receiving foreign exchange due to the inconsistency of the delivery specifications and dates with the contract
The exporter did not deliver as stipulated in the contract or letter of credit.
First, the production plant missed work, resulting in late delivery;
The second is to replace the products specified in the contract with products of similar specifications;
Third, the transaction price is low, and it is shoddy.
2 Risk of foreign exchange collection due to poor quality of 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 fee and the deduction for discrepancies in vain, and the time for collection of foreign exchange is greatly delayed, especially for the contract with a small amount, the 20% discount will lead to a loss.
3 Risks arising from trap clauses in letters 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 and deliberately be 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 must be carefully verified. Once a trap clause appears, it should be notified to modify it in a timely manner.
4 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, as the company’s customer base is expanding every year, in order for the company to have a target in trade, it is necessary to establish a business file for each customer, including creditworthiness, trade volume, etc., and screen them year by year to reduce business risks.
5 Risks caused by operations 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 client, the profit and loss is 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;
6 Risks arising from the use of D/P, D/A forward payment methods or consignment methods
The deferred payment method is a forward commercial payment method, and if the exporter accepts this method, it is equivalent to financing the importer.
Although the issuer voluntarily pays the deferred interest, on the surface it only needs the exporter to make advances and loans, but in essence, the customer waits for the arrival of the goods and checks the quantity of the goods. If the market changes and the sales are not smooth, the importer can apply for the bank to refuse to pay.
Some companies release goods to classmates and friends who do business abroad. I thought it was a relationship customer, and there was no problem of not being able to receive foreign exchange. In the event of poor market sales or customer problems, not only the money cannot be recovered, but the goods may not be recovered.
Post time: Aug-18-2022