All foreign trade companies:
Since the outbreak of the new coronavirus epidemic, affected by the WHO’s classification of the epidemic as a “public health emergency of international concern” and the continuous strengthening of domestic epidemic prevention and control measures, the risk of contract performance and foreign exchange collection risks faced by export companies may further increase Big.
In terms of contract performance, affected by factors such as the extension of the Spring Festival holiday and delays in the resumption of work by companies, most foreign trade companies and domestic suppliers are generally in a state of not resuming work. Related supply logistics have not fully recovered due to the impact of epidemic prevention and control, and some trade contracts may not be on time When the contract was fulfilled, there were problems such as shipment and delivery delays. Regarding the risk of foreign exchange collection, some countries (regions) may take measures to prohibit or restrict the import of goods from China on the grounds of the epidemic, and the buyer may also refuse to accept the goods or refuse to pay for the goods on the grounds of the epidemic.
As a policy financial institution and a professional export credit insurance institution, Sinosure will give full play to the “counter-cyclical” regulatory role of export credit insurance during the epidemic, increase investment in policy financial resources, strengthen export credit insurance services, and fully support enterprises in responding to the epidemic. Adverse effects. At the same time, Sinosure calls on foreign trade companies in the city to act as soon as possible, strengthen risk management of foreign trade business, strengthen communication with supply chain companies and logistics companies, and increase the protection of their own rights and interests. Based on the recent feedback from companies on related issues that have been affected by the epidemic prevention and control, Sinosure has reminded export companies about the related trade risks that this epidemic may cause and their response measures as follows:
1. Fully investigate the performance risk of orders in hand
Taking into account the escalating situation of epidemic prevention and control, the production and operation of enterprises may be affected to varying degrees. It is recommended that companies conduct a comprehensive review of the orders in hand, and check whether the relevant trade contracts can be fulfilled as scheduled, whether there are late shipments, and whether the relevant trade contracts can be performed according to their own production and operation capabilities, resumption of work, the degree of cooperation between upstream and downstream partners, and the specific agreements of the signed trade contracts Performance risks such as late delivery, so that relevant response measures can be taken in a timely manner.
2. Timely sort out the performance of upstream supply channels
For companies involved in upstream procurement in the production process, upstream suppliers defaulted due to the impact of epidemic prevention and control, and the company will also affect its own performance due to insufficient raw materials or supply. It is recommended that companies actively communicate with suppliers, assess their degree of impact by the epidemic, confirm their performance time and production and delivery plans, etc., and if necessary, take alternative measures such as increasing stocks, replacing suppliers, and negotiating liquidated damages in advance to minimize The degree of self-impact.
3. Planning an alternative plan when logistics is blocked
If logistics and warehousing are blocked due to domestic epidemic prevention and control, it is recommended that export companies continue to pay attention to the operation of important delivery locations such as domestic ports and airports, and change transportation methods and storage locations in a timely manner to avoid late shipments. If it involves changes in the customs policies of the destination country (region) or the third country (region) through which the goods flow, it is recommended that the exporting company communicate and negotiate with the buyer in a timely manner, and adopt methods such as changing the delivery location, direct supply terminal, delayed performance, and third-party sales. Minimize losses.
4. Inform the buyer of performance issues in time
At present, 31 provinces, autonomous regions, and municipalities in mainland my country have initiated first-level responses to public health emergencies, and the China Council for the Promotion of International Trade has announced that it can provide relevant companies with proof of force majeure in response to the epidemic. According to relevant laws and regulations, the timely fulfillment of the notification obligation and the provision of proof of force majeure by the party affected by force majeure is one of the requirements for exemption based on force majeure. In order to better protect the rights and interests of enterprises, if all or part of the obligations of the contract cannot be fulfilled due to the impact of the epidemic, it is recommended to issue a written notice of termination or postponement of the performance of the contract to domestic and foreign buyers, and it is recommended to strengthen international trade promotion with China The committee communicated to better protect its own rights and interests by issuing force majeure factual evidence to the buyer.
5. Pay close attention to the trade policy of the export destination country (region)
The World Health Organization declared the new crown epidemic a “public health emergency of international concern” and said it did not advocate restrictions on trade and tourism. Although the WHO advocates not restricting international trade, the label of “public health emergency of international concern” may still cause panic in some countries (regions), thereby restricting trade. It is recommended that companies pay close attention to the trade policies of the main export destination countries (regions) and respond in advance.
6. Pay close attention to the risk of buyer rejection
Before the goods are exported, if the buyer has shown a tendency to reject the goods, it is recommended that the company and the buyer renegotiate whether the goods will continue to be shipped, the time of shipment and the payment terms, and sign a written agreement. After the goods are exported, it is recommended that the company closely track the flow of goods in transit. If the buyer rejects the goods, they should actively deal with the goods in consideration of whether the buyer’s rejection reason is reasonable, whether the buyer is still willing to receive the goods, and the status of the goods. , Resale, return shipping and other methods to reduce losses, and submit the cargo handling plan to our company.
7. the buyer urges the buyer to perform payment obligations after receiving the goods
After the buyer receives the goods, it is recommended that the company promptly urge the buyer to fulfill the payment obligation in accordance with the billing period agreed in the trade contract. If the buyer refuses to pay for the goods due to the epidemic or other reasons, the buyer should strive to provide evidence to support its claim. For example, if the buyer claims that the goods exported by the company have an epidemic virus and may cause the buyer and the buyer’s customers to be infected, the buyer should be required to provide an identification report from an authoritative medical institution.
8. Keep necessary documentary evidence
If affected by the prevention and control of the epidemic, both parties to the trade have negotiated changes to contract items such as shipping time, logistics methods, payment terms, etc., it is recommended that companies keep faxes, emails and other written evidence of the changes to effectively protect their legitimate rights and interests.
9. Strengthen communication with credit insurance
For companies that have insured with Credit Insurance, if the buyer defaults on the payment or refuses to accept the goods during the epidemic prevention and control period, such risks as stipulated in the insurance policy, please notify Credit Insurance in a timely manner in accordance with the time limit stipulated in the insurance contract. For companies that have not yet insured export credit insurance, Sinosure will provide free risk management consulting services during the epidemic. For any questions about foreign trade risk management and control, Sinosure can contact Sinosure at any time. Companies that need credit insurance can contact us.
Fujian Quanzhiu Zhongtai IMP. AND EXP. CO., LTD. » An open letter to foreign trade companies regarding foreign exchange collection risks during the epidemic