Risk assessment and risk management The cost of service: 3,5% of the customs value of goods

Types of risks in an international trade project:

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• Marketing risks

• Foreign exchange risks

• Production / commercial risks

• Credit risks, including the risk of non-payment

• International political risks

• International legal risks

• Force majeure

   What is the reason for the risks?

1. Goods: inability to produce the goods on time, their damage or loss;

2. Price: currency fluctuations, unforeseen expenses on the terms of payment;

3. Foreign partner: insolvency (de jure or de facto bankruptcy), as well as the risk of damaged business reputation of the partner (fraud);

4. Documents: lack of certain permits for export / import or inaccuracies of the contract, which do not allow timely acceptance of goods and transfer of ownership;

5. Country of supply: political risks and non-observance of creditors’ rights of, as well as force majeure circumstances (natural and man-made disasters);

     Realization of risk can lead to:

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• Direct damage

• Indirect losses

(!) However, indirect losses can be much more than direct damage.

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When entering into negotiations with a foreign buyer and agreeing on the main terms of the export contract, the exporter is strongly recommended to:

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• Carry out risk analysis and assessment;

• Calculate potential damage;

• Determine what level of damage your company is willing to accept in case of risk.