General

In international trade, trade risks are ubiquitous, such as common trade disputes, fraud, breach of contract, and so on. Especially in recent years, the frequency of international trade risks has been increasing due to factors such as global epidemics, international conflicts, inflation, and trade frictions. Below, we will introduce to you the risks of international trade.

1、 Legal risks of foreign exchange collection

From an economic perspective, the biggest risk that foreign trade enterprises face in their export business is the risk of foreign exchange collection. The occurrence of this risk is mainly due to the unfavorable provisions of the contract or improper operation during the performance of the relevant export contract, which leads to the inability to recover the expected payment after the export of the goods according to the predetermined assumption or agreement.

2、 Criminal and administrative legal risks in export trade

The main criminal risks that foreign trade enterprises should guard against in their export business are the crime of smuggling ordinary goods, the crime of fraudulently obtaining export tax refunds, and the crime of selling counterfeit registered trademarks. For the risk of administrative penalties, it mainly involves export tax refunds, especially the risks arising from the "four self three blind business" and legal risks caused by infringement of others' intellectual property rights.

International trade risk prevention measures:

1、 Legal risk prevention for foreign exchange collection

Export enterprises should establish a complete set of systems to prevent recovery risks and operate flexibly during the business process, in order to control risks to the minimum extent. The establishment of corresponding systems can be considered from the following aspects:

1. Establish and flexibly apply a risk prevention system for foreign exchange collection

The main content of this system should include:

(1) Risk prevention during the contracting and negotiation stages

The main goal of risk prevention during the contracting and negotiation stages is to strive to adopt the most favorable contract terms and settlement methods for our party, to minimize risks, and to use different prevention measures in the future contract performance process according to the provisions of different settlement methods.

(2) Precautions during contract performance

Due to the fact that the most commonly used method for exporting in China is the L/C method, this article mainly introduces the risk prevention of the L/C method during the contract performance process.

A. By adopting the L/C settlement method, export enterprises must require importers to open an L/C and reserve sufficient time to respond to necessary modifications.

B. After receiving the L/C, it is necessary to review the authenticity of the letter of credit in accordance with the system regulations, and prevent the provision of unilateral termination of payment responsibility at any time in the case of unfair importer details in the letter of credit. At the same time, it is also necessary to prevent the existence of impossible "trap clauses" in the letter of credit. If any of the above situations are found, the other party shall be immediately required to make modifications in accordance with the contract requirements.

C. In international trade, the principle of "consistency of documents, consistency of documents" should be based on the principles, and corresponding risk prevention systems should be improved and implemented.

2. Establish and flexibly use the Background check system of customers and related enterprises

The best and most complete contract cannot prevent completely untrustworthy criminals. In international trade, regardless of the settlement method chosen by export enterprises, they should attach importance to investigating the background and credit of importers, even if it is only the most basic investigation.

3. Flexible application of the recovery security guarantee system

In export collection, the main security measures include bank guarantees, standby letters of credit, international factoring, credit insurance, etc. For large or high-risk international trade, it should usually be considered.

2、 Prevention of Criminal and Administrative Legal Risks in Export Trade

1. For export enterprises that mainly engage in the export of goods as agents, they should prevent "intermediary risk". When conducting export business, especially agency export business, export enterprises should strictly comply with relevant laws and regulations, and control risks through reasonable control measures.

2. We should have an understanding of the intellectual property rights of goods sold for export. When exporting, it is necessary to inquire through the intellectual property registration system of the Chinese Customs, in order to avoid the possibility of manufacturing or selling counterfeit registered trademark goods due to trademark infringement.

3. The contracts signed, especially OEM and contracts signed with agents in export business, should include intellectual property authorization clauses and exemption clauses. Through this type of clause agreement, the counterparty to the contract can largely bear the legal risk responsibility for intellectual property infringement.

4. Provide effective and targeted training on criminal law knowledge for specific personnel handling export business and company management personnel. This type of training can improve the criminal legal risk prevention and control capabilities of relevant personnel, and to a large extent, can prevent some personnel from violating regulations, which may bring destructive damage to the entire company.

3、 Prevention of Legal Risks in Civil Compensation

Fundamentally speaking, export enterprises can almost completely prevent civil risks in their export business through reasonable operating methods, systems, and well-designed contract terms.

1. In international trade, the protection of intellectual property rights is increasingly strengthened. It is suggested that export enterprises with long-term Going concern goals should establish the concept of intellectual property rights through system and contract design, strengthen the awareness of intellectual property protection, and protect their own and others' intellectual property rights, which is to prevent their own legal risks.

2. Entrust professional institutions to conduct necessary intellectual property investigations, mainly focusing on trademark inquiries. If it is found that there is a possibility of infringement, necessary modifications should be made to the trademark use, appearance design, and process of self-produced products in a timely manner to avoid being accused of infringement.

3. The contract drafting process should include reasonable and legal exemption clauses, such as intellectual property exemption clauses.

4. For OEM orders and export agency business that may infringe on the copyright, patent, or trademark rights of others, the other party should be required to provide proof of intellectual property authorization, and attention should be paid to whether the scope of intellectual property protection includes the importing country.

5. When someone files a complaint or sends a Demand letter claiming that the export enterprise has infringed on the sales of products, it should immediately contact the legal department or lawyers, and professionals should conduct corresponding risk assessment and propose solutions.

The above is an introduction to international trade risks and preventive measures, hoping to be helpful to everyone.