In order to actively respond to the pressure and challenges brought by the epidemic to foreign trade, help foreign trade enterprises prevent and control risks, mitigate the adverse impact of the epidemic on business operations, and reduce export losses, risks are presented to enterprises and countermeasures are put forward as follows:
I. Risks and suggestions for orders in hand
Due to factors such as delayed rework of workers, capacity recovery, transportation and logistics, some export enterprises may fail to fulfill orders as scheduled, and buyers may cancel orders due to the epidemic situation. Recommended export enterprises:
A. For the orders that may need to be delayed, timely communicate with the buyer, explain the relevant situation, and try to extend the delivery time with the buyer in written form (email, supplementary agreement, re-signing contract, etc.).
B. due to the production conditions, or by the importer to make a law to restrict imports, the influence of epidemic and is unable to continue the performance of the orders, timely will outbreak caused them unable to continue the performance, inform the buyer and the buyer consultations, and attach proof of force majeure, such as documents, utmost safeguard their own rights and interests.
C. It is recommended that the buyer provide evidence to support the buyer’s claim for cancellation of the order due to the epidemic situation, including: Official decrees or documents issued by the buyer’s country prohibiting the receipt of goods exported from China, evidence that the buyer’s sales target or the consumers of the buyer’s country have expressly refused to accept goods from China or have a tendency to refuse to purchase goods from China, and that the buyer’s continued receipt of goods will cause losses to the buyer. If the buyer claims that the goods exported by the company are infected with epidemic virus and may cause the buyer and its customers to be infected, the buyer shall be required to provide an appraisal report issued by an authoritative medical institution.
II. Supply chain risks and recommendations
Export enterprises should keep close contact with upstream suppliers to assess their exposure to the epidemic, confirm the latest situation of raw material supply, and take alternative measures such as increasing stock volume, changing suppliers and negotiating liquidated damages in advance if necessary to ensure a stable supply of raw materials and minimize the risk of supply chain impact.
III. Risks and suggestions of export delivery of goods
Export enterprises should pay attention to the operation of domestic ports, airports and other important delivery points, track whether logistics and warehousing are affected by the epidemic, and pay attention to avoid risks caused by the epidemic. Pay close attention to the latest shipment date stipulated in the L/C to avoid discrepancies between documents. After the export of the goods, the export enterprise shall closely follow the circulation of the goods. If the buyer rejects the goods, the export enterprise shall deal with it as soon as possible and contact CiITC for help in time.
IV. Accounts receivable risk and advice
A. The export cargo may be forcibly disinfected at the port of arrival, which increases the cost of crew and ship quarantine and may cause claims in the future.
B. Some buyers refuse to accept the goods or pay for the goods due to the epidemic situation, return and refund will occur.
It is suggested that export enterprises communicate closely with buyers, truthfully inform them of the current situation and latest progress of the epidemic, and dispel buyers’ doubts. If the buyer refuses to accept the goods or defaults on payment for goods due to the epidemic situation, the exporter should clearly point out to the buyer that the provisional advice issued by WHO does not contain trade measures that may restrict exports, and argue vigorously and properly preserve relevant evidence. In case of risk of default or rejection by the buyer, please seek help from CISURE in time to safeguard your legitimate rights and interests.
V. Risks and suggestions of receiving orders
Due to the risk of old buyers cancelling orders or delaying orders, and the epidemic period affects export enterprises’ market development. Enterprises in the rush to meet in the process of the single and looking for a single, may face a lot of buyer’s credit risk, suggest the enterprise use sinosure credit services, including buyers survey credit, overseas target enterprises import procurement analysis, overseas target countries designated products (HS code) import purchasing analysis report, overseas buyers/suppliers list report, etc., fully to understand the market and customers. In case of any inquiry from potential customers, it is suggested to contact CiITC timely to know the buyer’s credit standing, investigate the background of the buyer, and master the real strength of the buyer. For the payment terms proposed by the buyer, make good use of the buyer’s credit resources approved by China Credit Insurance, flexibly adjust and control risks.
VI. Business risks and suggestions
Return to work after the export enterprises may face factory rent, labor costs, inventory backlog of funds, improve process management of import and export products, plant quarantine, buyers delay of payment, such as pressure of funds, suggest that export enterprises with good faith to protect the trade finance policy under (specific conditions can contact sinosure quanzhou office), We will facilitate trade financing, reduce financing costs, speed up capital turnover, and solve the problem of capital shortage after export.
Article source：AnYi business
Fujian Quanzhiu Zhongtai IMP. AND EXP. CO., LTD. » Risk tips and countermeasures for foreign trade enterprises