A Study on the Risk Management of Trade Payment in International Trade

2019 ◽  
Vol 83 ◽  
pp. 139-157
Author(s):  
Jae-Hwan CHUNG ◽  
Bong-Soo LEE
Keyword(s):  
Risk Management ◽  
International Trade

Customs Risk Management System in the Context of Clearance of Customs Procedures

2020 ◽  
Vol 22 (1) ◽  
pp. 59-63
Author(s):  
Ihor Nestoryshen ◽  
◽  
Ivan Berezhnyuk ◽  
Alina Brendak ◽  
◽  
...  
Keyword(s):  
Risk Management ◽  
International Trade ◽  
Economic Activity ◽  
Management System ◽  
Control Measures ◽  
International Treaties ◽  
External Threats ◽  
Risk Management System ◽  
Operational Activities ◽  
International Conventions

Introduction. The article emphasizes that the current features of the implementation of foreign economic activity require consideration of two factors that are contradictory to each other. In particular, on the one hand, the growth of external threats is forcing the governments of many countries to tighten control measures when crossing the state border of goods and commercial vehicles. On the other hand, according to international conventions and agreements (Kyoto Convention, WMO Framework Standards for Security, WTO Facilitation Agreement), measures to reduce the interference of regulatory authorities in the operational activities of economic operators are envisaged. In this context, the use of risk-oriented customs control tools, which allow simplifying business without reducing the level of national security, is becoming especially important. Purpose. The purpose of the article is to generalize and systematize foreign and domestic approaches to simplification of customs procedures through the use of risk-oriented instruments of customs control, as well as to develop their own proposals for simplification of foreign trade entities in the domestic regulatory field by using subject-oriented criteria. Results. The authors analyzed the provisions of the International Convention on the Simplification and Harmonization of Customs Procedures, the Framework Standards for Security and Facilitation of International Trade, the WTO Agreement on Trade Facilitation, which are provided for significant simplification of international trade procedures by reducing the share of customs inspections and controls. Сustoms security, customs clearance of goods and vehicles on the territory of the subjects of foreign economic activity or in another place permitted by the customs, without the direct participation of customs officials. These measures are based on the widespread use of risk-oriented instruments of customs control. It is noted that some of the provisions of international conventions and agreements on the use of risk-oriented instruments of customs control and simplification of economic operators have been implemented in domestic customs legislation, namely Art. 320 of the Customs Code of Ukraine introduced selective customs control, it is determined that the forms and scope of control sufficient to ensure compliance with legislation on state customs and international treaties of Ukraine in customs clearance are selected by customs (customs posts) based on the results of risk management. Conclusion. The study analyzes the peculiarities of the customs risk management system application in customs control in Ukraine, and offers proposals for the use of subject-oriented criteria of customs control as a simplification for honest economic operators to reduce the selectivity of risk profiles ASUR.

Risk management of international trade: emergency preparedness

2002 ◽  
Vol 21 (3) ◽  
pp. 493-498 ◽  
Author(s):  
A. TORRES ◽  
M.J. DAVID ◽  
Q.P. BOWMAN
Keyword(s):  
Risk Management ◽  
International Trade ◽  
Emergency Preparedness

scholarly journals The Evaluation of Trade Credit Insurance in Lithuanian Business Market as a Credit Risk Management Tool

2017 ◽  
Vol 14 (1) ◽  
pp. 5-20 ◽  
Author(s):  
Aleksandra Lezgovko ◽  
Andrej Jakovlev
Keyword(s):  
Risk Management ◽  
International Trade ◽  
Credit Risk ◽  
Trade Credit ◽  
Alternative Methods ◽  
Management Tool ◽  
Credit Risk Management ◽  
Management Tools ◽  
Credit Insurance ◽  
Business Market

AbstractIn today’s trade, the vast majority of commercial transactions in both domestic and international trade are concluded by applying trade credit terms. The aim of this article is to analyse the trade credit insurance and, according to the methodology, to evaluate it as a credit risk management tool in the context of Lithuanian business market. The authors have proposed a methodology that combines theoretical and practical research methods. First of all, with assistance of qualitative analysis, the alternative external credit risk management tools were examined. Such analysis allows not only to identify the advantages, disadvantages and benefits of researched risk management tools but also to assess the efficiency and rationality of trade credit insurance in the context of alternative methods. In order to carry out an assessment in the practical aspect, considering the lack of statistical data, it was decided additionally to perform an expert evaluation. After performing an assessment of trade credit insurance, it was concluded that in international trade, with a large buyer portfolio and high sales volume, the trade credit insurance becomes the most effective and rational way to manage credit risk, which eliminates the losses because of the debtor’s insolvency or bankruptcy, manages countries and sector’s risks and helps to discipline the debtor, what determines the decline in overdue accounts frequencies, amounts and volumes.

scholarly journals Risk Analysis in Documentary Letter of Credit Operation

2017 ◽  
Vol 0 (0) ◽  
Author(s):  
Hamed Alavi
Keyword(s):  
Risk Management ◽  
International Trade ◽  
Risk Analysis ◽  
Current Paper ◽  
Management Theory ◽  
Letter Of Credit ◽  
Legal Principles ◽  
Strict Compliance ◽  
Letters Of Credit

Abstract Documentary Letters of Credit are among most popular methods of payment used in international trade. They function as an irrevocable promise of issuing a bank to pay instead of an applicant buyer to a beneficiary seller under the condition that the beneficiary presents complying documents with terms and conditions of the credit to the bank. One of the reasons for the popularity of the LCs in international trade is shifting the payment risk from an individual buyer to a bank with a much stronger financial standing. However, LC operation in international trade is not free of risk. Despite the fact that two main principles of the Documentary Letter of Credit’s Operation (Principle of independence and principle of strict compliance) facilitate the process of international trade significantly, but still all parties involved in LC operation are supposed to be cautious about the existing risks relevant to their role in LC operation. Current paper tries to use legal principles of documentary credits and risk management theory in order to define existing risks to each party (beneficiary, applicant and bank) in international LC transaction and find an answer to the question of what are exposing risks for involved parties? For this purpose, the paper starts with an explanation of the two main principles of LC operation and moves forward with using the risk management theory to explain existing risks for each party in detail.

scholarly journals The impact of pest risk management measures on trade: the case of apples from France and Chile

2021 ◽  
Vol 9 (1) ◽  
Author(s):  
DeMaria Federica ◽  
Drogue Sophie ◽  
Lubello Pasquale
Keyword(s):  
Risk Management ◽  
International Trade ◽  
Trade Flows ◽  
Local Conditions ◽  
Export Strategy ◽  
Management Measures ◽  
Market Shares ◽  
Trading Partners ◽  
The Impact ◽  
Pest Risk

AbstractIn this article, we investigate how pest risk management protocols may affect trade flows of fresh apples. We apply our analysis to two major players in the international trade of fresh apples: France and Chile. These two countries have been chosen because they are among the world’s leading apple exporters and although they have similar market shares, they differ in terms of destination markets, seasonality, local conditions and export strategy. In order to assess the impact of pest risk management protocols on international trade of apples from France and Chile, we introduce in a gravity equation beside the traditional variables, a score able to measure their complexity. The results are interesting in the sense that even if the score for France and Chile by main trading partners are rather close, we found that French apples exporters would be more impacted by pest risk management protocols than their Chilean counterparts.

scholarly journals Research on the Application of Blockchain Technology in International Trade Risk Management

2020 ◽  
Vol 4 (3) ◽  
pp. p36
Author(s):  
Sun Haosong ◽  
Yang Jayi ◽  
Xu Xinpeng
Keyword(s):  
Risk Management ◽  
International Trade ◽  
Legal System ◽  
Internet Technology ◽  
Trade Facilitation ◽  
Blockchain Technology ◽  
Application Mode ◽  
And Control

In International Trade, due to the Heterogeneity of language, culture, legal system, etc., the trade payment and settlement process is complicated, and there are many risks. With the wide application of Internet technology in the field of international trade, especially the emergence of blockchain technology, it provides a new way to solve the above-mentioned complicated risk management. Based on the concept and characteristics of blockchain technology, this paper probes into its value and application mode in risk management and control in international trade, in order to promote international trade facilitation and scientific risk management and control.

scholarly journals Risk factors in the internationalization process of SMEs

2013 ◽  
Vol 61 (7) ◽  
pp. 2385-2392 ◽  
Author(s):  
Lea Kubíčková ◽  
Martina Toulová
Keyword(s):  
Risk Factors ◽  
Risk Management ◽  
International Trade ◽  
Internationalization Process ◽  
Foreign Markets ◽  
Specific Knowledge ◽  
Common Causes ◽  
Elementary Methods ◽  
Process Risk ◽  
Potential Risks

At the present time characterized by globalizing market, increasing competition, accelerating change and the occurrence of many risks it is necessary for businesses, which want to remain competitive, to be able to respond flexibly to the changes in a timely manner and to identify and manage risks. Companies try to diversify business risks, such as the loss of market share in the domestic market, by entering the foreign markets and participating in international trade. Involvement in the internationalization process cannot be understood only as an opportunity to achieve greater profits and a competitive advantage, it is necessary to consider potential risks accompanying this process, because engaging in the internationalization process may bring the companies many different specific risks. It would be useful for companies to identify the factors of failure resulting from internationalization. Identifying the barriers to internationalization, the main risk factors associated with it and designing their possible prevention or elimination could provide SMEs an impetus to enter foreign markets. Although the risk is a frequently discussed issue in the international discussion, only few studies were strictly focused on risk management in the internationalization process. Risk management is a broad discipline that requires a specific knowledge in practice. However, particularly small and medium-sized enterprises are often unable to identify the potential risks of the internationalization process and therefore are not able to manage the risks. This is due to the fact that SMEs usually do not have managers with a deep knowledge of risk management and, moreover, these managers also often lack experience with foreign markets. Unfortunately, the surveys of SMEs conclude that the poorly predicted risks of entering foreign markets are one of the most common causes of failure of SMEs internationalization process.The main objective of this paper is to identify the risks of the internationalization process of Czech small and medium-sized enterprises. To achieve the main aim, it was necessary to make a survey of current situation in Czech small and medium-sized enterprises with focus on the participation in international trade, compared to the situation of these enterprises in recent years. It was also important to define the risk factors faced by Czech small and medium-sized enterprises in connection with the entry and activities on foreign markets and to identify key risk factors SMEs in the internationalization process are exposed to. It was also necessary to find out the obstacles to the internationalization process affecting the decision of Czech SMEs to penetrate foreign markets. And the last but not least task was to suggest some elementary methods that could be used by Czech small and medium-sized enterprises to eliminate risks in their internationalization process.

scholarly journals MANAGEMENT OF FINANCIAL RISKS IN INTERNATIONAL TRADE FINANCING

2016 ◽  
Vol 11 (1) ◽  
Author(s):  
Nada Petrusheva
Keyword(s):  
Risk Management ◽  
International Trade ◽  
Financial Risk ◽  
Foreign Currency ◽  
Global Market ◽  
Time Interval ◽  
Business World ◽  
For Profit ◽  
Goods And Services ◽  
The Moment

Sale of products with delayed payment, i.e. credit supported sale is a major force in international trade and an imperative in today’s business world. In the contemporary international commerce market positions and negotiation power have changed mainly in favor of buyers, who on the other hand, regularly request credit – based purchasing. Faced with competition on the global market, sellers intending to sell their goods and services on the market are enforced to offer favorable conditions, which is in fact sale with delayed payment. Presence on the global market offers possibilities for profit-making, but at the same time export-oriented businesses are surrounded by potential risks. The major problem in fact is the re-payment of the receivables, which is a result of the time interval from the moment when the foreign buyer will receive the delivered goods to the moment when he will pay the agreed amount. Risk management and exposure management or hedging exposure, are applied frequently by financial managers, managing the funds of a company, in order to enable exposure cover and reduce the potential instability for the company. The exposure management in case of foreign currency or exchange exposure represents an integral part of the financial function of the company, which acts globally, primarily multinational companies.International trade transactions are administered in far more complex conditions than those on the local/national market. Therefore, the stress should be on the crucial importance of the economic and financial risk management in the domain of international trade finance.

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