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AIB Trade Finance Assessing Risk For the Importer
Q. What are the
risks facing importers?
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A. Assessing risk
for an importer.
Importing can be a risky
business.
Importers encounter risk
in some key areas and may need to consider the following questions:
Supplier:
- Are they bona fide? Can they supply what is needed when it’s
needed?
- Have they the financial resources to deliver the order?
Supplier’s
Country:
- Is the country where the supplier is located economically sound and
politically stable? Could something happen in the supplier’s country that
might disrupt the supply of goods?
Quality of
goods:
- Is it possible to ensure that the quality of the goods meets the
required standards?
Damage to goods in
transit:
- What happens if the goods are damaged in transit and which party will
be responsible?
Credit:
- Will the supplier grant credit? Can the supplier be encouraged to
grant credit? How can the importer improve his credit standing with the
supplier?
Payment:
- How and when will payment be made? How can the importer ensure that
payment is only made for goods ordered and shipped/received?
Finance:
- How can the importer finance the purchase, particularly if payment is
to be made at the time of shipment or receipt, before the goods can be resold
or used to create finished goods for sale?
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