International Trade Operations Essay Example | Topics and Well Written Essays - 3000 words

International Trade Operations - Essay ExampleThis unwrap has been chosen as the central objective of this report and therefore, assessing various payment perils underlying the operations of the go with concerned in international markets, this report highlights the crucial steps that need to be taken by ABC Ltd to reduce these assays to the extent that can enable the familiarity to minimize the hazard of incurring freeing in the course of international trade.As the report declares the company confronts with two kinds of pretends undermining the payment in essence of international trade. These risks could be in two forms either in the form of non-payment by the importer or in the form of late-payment due to a number of reasons. There are many factors that bring about the risk underlying payment in the international trade. As the line of credit operations are carried out on the cross-border level, several international as well as domestic events taking place within twain the merchandiseing and importing countries may have their impact on the extent of risk associated with payment. This is the greatest risk underlying the export trade, which may cause substantial business loss to the exporter. ABC Ltd is providing electronic goods to both the developed as well as developing countries therefore, it comes across many cases in which it fails to receive export payments form the importers due to lack of credit worthiness, no or little information about importer, organization policies and protection, lack of legal action and due to insecure payment modes.RISK OF LATE PAYMENTThis is another(prenominal) risk underlying export payments, which may also cause irreparable loss to the company. The manufacture of electronic goods requires continued flow of capital that is ensured by secured payment from the emptors of the products. Late payments may entail innumerable problems for the business in terms of re-scheduling its manufacturing process. Information about buyers and their countries can play an important role in pre-determining the probability of late payments and potential problems that may arise due to it.ASSESSMENT OF PAYMENT RISKSFollowing are the nearly common risks that are involved in receiving the payment of goods exported to other countriesCommercial risksThe commercial risks that are associated with the export payment are intimately related to the importers credit worthiness. These risks may turn into business loss if the buyer becomes bankrupt or insolvent rendering the exporter unable to receive the payment for goods exported. The commercial risks also implicate the non-acceptance of goods on the part of importer, showing his unwillingness to pay (Trade Facilitation and Electronic Commerce, accessed 02.01.2006).ABC Ltd also confronts the risk of neglectfulness on payment by a buyer or importer at the end of the credit period. The company risks the payment against goods exported when the buyer is less credit-worthy.Risk s Associated With Different Payment MethodsThe following are the common modes of payment utilize by ABC Ltd. in export trade. Some of them are highly insecure and involve risk potential. The risks associated with t