Common Legal Risks and Countermeasures to Import and Export Trade

Import and export trade is complicated with great risks since it is foreign-related, affected by policies and covers a wide range. The following are some common legal risks and their corresponding countermeasures.

Contract Party Risk

The main cases are the insufficient performance of the contract and impersonation fraud. Details as below.

1.?Send fake account information with a similar mailbox address. For example, change English letter O to number 0, and change English letter L to number 1;

2.?Matrix scam, directly stole the mailbox to send fraud emails;

3.?Pretend to be large companies, business personnel, middlemen, etc.?

Risk Countermeasures

1.Examine the registered capital, property, assets and liabilities, business style, business reputation, business scope, business ability, etc. For branches, the situation of their head office also needs to be reviewed. Examine the authorized documents.

2.Develop credit standards to determine whether to give customers credit sales. And at the same time, they can be analyzed and managed related with the payment method and time.

3.For customers with low reputation, the guarantee clause can be added to the contract. For example, ask the customer to provide bank guarantees, using bank credit to guarantee, and avoid the risk of fraud and breach of contract.

Contract Content Risk

It mainly shows as below:

1.The product description is inaccurate, and the name of the product is inaccurate;

2.The risk of transaction with the sample;

3.The risk of wrong place of origin.

Risk Countermeasures

1. Make sure the name of the product to be accurate. Use the international general name and the product name should reflect the characteristics of the goods; ensure that the product name in the contract is completely consistent with the product name in the letter of credit to prevent the credit certificate from being refused.

2.Carefully agree on the quality clauses, formulate clear and detailed inspection clauses, and separate inspection and objection claims. At the same time, according to the samples provided by customers, we need to make compliance samples to confirm the quality to customers and keep some samples ourselves.

3.The place of origin should be correct, and treat each small detail carefully in case it is difficult to apportion blame at the legal level.

Cargo Transportation Risk

The risk of cargo transportation is mainly as follows

1.Error selection of trade terms and errors in the process of performance;

2.Use the named bill of lading;

Risk Countermeasures

1.Avoid delivery of products without billing, try to choose CFR/CIF as much as possible; remember that FOB, CFR, and CIF all involved the notification of ship loading of exporters. If the customer fails to buy insurance in time for not receiving the notification and the goods is lost, the exporter will bear all responsibilities.

Avoid using the named bill of lading and it is recommended to use the order bill of lading; the bill of lading should indicate that "Delivery the goods with the original bill of lading."; pay attention to the unloading port policy.

In addition, two points are supplemented for risk prevention and control. One is that everyone is better to communicate in writing, pay attention to preservation evidence The other is to treat information change cautiously. If foreign customers intend to modify key terms such as contract prices and change delivery date, they must be confirmed in writing with customers.