Home >

Six Tips For Avoiding Trade Risks

2010/10/30 9:46:00 55

Case 1: a cotton spinning group shipped 71.5 tons of yarn, amounting to nearly US $one hundred thousand, price terms FOB.

contract

Payment: prepaid 30%TT+70%DP.

When the goods arrive at the port for two months, the price of the goods plummet, and the consignee does not pay for the goods, and does not agree to return or pfer. During this period, a high port cost has been incurred, and my Chinese company has suffered considerable losses.

Analysis: the government of India stipulates:

Exit

The goods to India must have the certificate issued by the original consignee to modify the consignee and resell NOC or phipment.

Once the market is volatile before the arrival of the goods, buyers often use this provision to cheat foreign customers maliciously, so as to make profits from the difference, and try their best to break the contract, forcing Chinese companies to reduce their prices.

At this time, the goods have been shipped to India, and because of the customs regulations of India, if the goods are not collected at the port within three months, they can be auctioned by the customs.

In this regard, my company has no choice but to "recognize planting", and ultimately accept the price reduction conditions.

Case 2: my company and India company made a value of about $70 thousand for the export of hemp products.

The shipment letter of credit is issued by a Hongkong company from Hongkong.

At the same time, according to the requirements of the letter of credit, the shipper of the bill of lading is made into the Hongkong company, but the original bill of lading, customs declaration form and verification form are retained.

After the shipment, the India customers refused to pay the goods on the basis of discrepancy of the documents, and then forced the Chinese side to make a substantial reduction in terms of the quality of the products.

According to my investigation, the Hongkong company is a India company in Hongkong, and the Hongkong company resolutely disagrees with the return.

My business was in a passive position and finally reluctantly agreed to reduce the price.

Analysis:

Letter of credit

It can be issued by third parties, but it must be guaranteed that the consignor must be Chinese enterprise.

Due to the lack of experience in international trade, our enterprises have not only made basic mistakes in trade, but also failed in the trial of documents, which has been passively and economically damaged in this trade activity.

Case 3: a representative office of a Chinese funded company in India signed a foreign trade contract with India buyers in violation of the provisions of India government.

India buyers, in order to achieve the purpose of reducing tariffs, require two contracts to be signed. The amount of a contract is less than the actual paction amount and is used for customs declaration. The other contract shows the amount of the real paction.

Because the contract price for customs declaration is much lower than the market price, it has attracted the attention of relevant departments in India, so as to conduct investigations. India companies and Chinese enterprises are involved in the case.

Analysis: the India government clearly stipulates that the foreign representative office in India can only engage in non-profit activities such as market research and customer contact.

The representative office violated the regulations without authorization.

In addition, my Chinese company agrees to sign a double contract, and the actual contract amount is not recognized by the law. Exporters are often very passive. If the buyers of India are malicious in arrears, the Chinese side can only take the loss and swallow the bitter fruit.

The international trade line is broad and has many intermediate links.

Because of the wide application of new trade methods such as e-commerce, enterprises rely heavily on commercial credit clearing methods to export goods. Therefore, they are being cheated, and suffer serious economic losses.

Therefore, we suggest that foreign trade enterprises should pay attention to "six concerns" in doing international trade business, so as to avoid and prevent trade risks as far as possible.

First, we should pay close attention to the credit status of buyers. We can investigate and assess the buyers' credit status through China Export and Credit Insurance Corp and India law firms.

Through buyer's credit investigation, get as many buyers' information as possible, so as to prevent trade risks from the source.

The two is to pay attention to the terms of the trade contract. The payment method insists on the irrevocable letter of credit issued by the other party and is confirmed by a third country in Europe and the United States. Next, it can ask the other party to pay part of the advance payment by telegraphic pfer, pay the full amount of the goods by telegraphic pfer before delivery, or TT the total amount of payment by telegraphic pfer, otherwise, it will not deliver the goods.

The three is to pay attention to the relationship between the two sides in the trade. We must keep the evidence documents of the two sides.

In the event of a trade dispute, all written documents, mail and facsimile retained can be used as evidence.

In particular, it is important to keep in touch with each other by fax, because the company name, telephone number, fax and so on are usually left on the fax, which are very strong evidence once the other party denies the relevant contacts and refute the other side.

Four, we should pay close attention to the supplementary insurance measures, and suggest that the exporters with the ability to export can insure export credit insurance.

China Export and Credit Insurance Corp is the only policy export credit insurance company in China.

The main enterprises of their export credit insurance businesses give financial compensation when they lose their export trade, and share the risks of foreign trade of export enterprises. Moreover, their international business account collection and overseas acquisition business rely on the global catch up network, which also helps exporters to effectively pursue overseas acquisitions to reduce the risk of foreign exchange earnings.

Five, we should pay attention to safeguarding our legitimate rights and interests through lawful legal channels.

Since international trade is involved in various trade disputes, Chinese enterprises often compromise with the conditions of the trade parties in India, so that the Indian side has benefited repeatedly and their legitimate rights and interests are damaged.

At present, there are many foreign law firms in China that can handle foreign-related lawsuits, or prepare all the materials, directly entrust the relevant law firms in India, and settle trade disputes through legal means such as prosecution.

The six is to pay attention to the legitimacy of trade.

For Chinese companies that have already set up representative offices and other branches in India, they must ensure that their actions are in line with the laws of the India. If trade opportunities are considerable, they can consider setting up companies and branches in India to ensure lawful business activities and further expand the market.