Risks of Exporting

Author: Youth 2 Youth.

There are many risks for exporters. If you don't carefully monitor your planning and operations you can find yourself in some hot water. This article examines the different kinds of risks you may face, to make you aware of what to monitor.

Political Risk

Some countries, particularly developing nations, may experience major political instability. This can often result in defaults on payments, currency fluctuations, etc. The Department of Foreign Affairs and Trade, Austrade and the Export Finance and Insurance Corporation (EFIC) continually monitor the effects of political changes on Australian businesses. Contact them if you have any concerns.

Financial Risk

Protect yourself by using secure and reliable payment methods. Your bank or financial institution can advise you on suitable methods, which may depend on the location of your market. You can also have background checks done on your potential clients through The Export Finance and Insurance Corporation (EFIC). Get comprehensive insurance.

Legal Risk

The law is never the same everywhere, so be aware of the law in your markets. Law can impact on import procedures, taxation, employment practices, currency dealings, property rights, the protection of intellectual property and agency/distributorship arrangements. Speak with you lawyer or Austrade about your requirements overseas.

Government Contacts:

Australian Trade Commission (Austrade) www.austrade.gov.au

Australian Capital Territory Chief Ministers Department - www.business.act.gov.au

New South Wales Department of State and Regional Development - www.business.nsw.gov.au

Northern Territory - www.nt.gov.au

Queensland Department of State Development - www.sd.qld.gov.au

South Australian Department of Industry and Trade - www.dit.sa.gov.au

Tasmania Department of State Development - www.dsd.tas.gov.au

Victoria State and Regional Development - www.dsrd.vic.gov.au

Western Australia Department of Commerce and Trade - www.dct.wa.gov.au

Useful Contacts:

Australian Export Online (searchable database of businesses) www.export61.com/psearch.asp

'Copyright 2003 Youth 2 Youth'

Disclaimer: This article is for your information, but it may not apply to or be suitable for your situation, so seek professional advice. Youth 2 Youth cannot be held liable for anything resulting from how you use the information provided in this article.