Many kinds of risks may be met by foreign traders, six major points should pay attention! | Sowoll

Release time: Friday, June 29, 2018
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There are mainly six kinds of risk for export foreign exchange receipts:
1. Due to inconsistent shipment specification, date and contract, it will bring the risk of foreign exchange collection.
The exporter doesn’t deliver goods according to the contract or letter of credit:
First, because of the something wrong of production, it caused late delivery;
Second, it replaces the contracted products with products of similar specifications;
Third, the transaction price is low. It replaces the good product to the defective one.

2. Documents with bad quality causes the risk of foreign exchangeAlthough the letter of credit of foreign exchange settlement has played an important role in protection, if it shipped, payment are not consistent with the documents and the documents are not in compliance, even if the buyer agrees to pay, it will incur expensive fees of international communication and inconsistent problems. the time for collecting foreign exchange is greatly delayed, In particular, for a smaller amount of contracts, there will be losses.

3. Risks caused by the pitfalls stipulated in the credit.
Some regulation of letters of credit is that the certificate of inspection is one of the main documents for negotiation. The buyer will focus on the eager of shipment, showing picky on purpose. At the same time, they provide various payment possibilities to induce companies to ship. Once the goods have been released to the buyer, the buyer may possibly give reasons of inconsistency with the inspection, payment delay to reject paying. What is worse, maybe it will lose money and goods together.



4. There is no integral business management system
Export involves all aspects, which is easy to make some trouble. If the company does not have a complete business management approach, once a lawsuit arises, it will create a situation that although you are reasonable, you cannot win the case, especially for those companies that only focus on telephone contact.

5. Risks associated with the converse operation of agent system
For the business of export, the proper way of the agency system is that the agent does not advance funds to the commissioning party, the profit and loss are borne by the commissioning party, and the agent only charges a certain agency fee. However, in the real case, because agency maybe short of customers sources, poor foreign exchange collecting ability, and it is necessary to strive to complete the indicators, agency just can do something converse operation to gain more.

6. Risks of the usage of D/P, D/A forward payment or consignment
The deferred payment method is a type of long-term commercial payment. If the exporter accepts this method, it is equivalent to the importer financing. Although the issuer voluntarily pays the extended interest, ostensibly, it is only necessary for the exporter to make advance payments and loans, customers is waiting for the goods to arrive to check the account essentially.
If it faces the problem of market changes, importers can apply for bank refusal.
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