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Understanding and managing 
the risks of international trade 
With Sean Haywood
Additional resources 
Free eBook: 
Mitigating the risks of 
trading abroad 
+ 
Presentation slides
Background 
● International Key Account Manager for 
Graydon UK 
● Over 27 years’ experience working for some 
of the country’s leading credit reference 
agencies 
● A member of the Federation of Business 
Information Services (FEBIS) and FCIB 
Association (Finance, Credit and 
International Business)
About Graydon 
● One of the UK and Europe’s leading 
Business Intelligence providers 
● We are driven to help businesses minimise 
risk when dealing with customers and 
suppliers across the globe 
● We provide valuable insight into 220 million 
companies internationally
Expectations in 2010 for 2014 
The 2008 Financial Crisis led 
struggling Western companies 
into thinking: 
● The European economy 
would be recovering 
● ‘Emerging’ BRIC and MINT 
economies were the answer 
to their exporting woes 
● Asia would be a major 
agent for economic growth
But what is the reality? 
● The European economy was 
more stagnant than expected
0.02%
But what is the reality…Cont’d 
● Growth has slowed or stalled in most 
of the BRIC(S) and MINTs 
● Asia appears to be more dependent 
on a strong West than was first 
realised
Any good news? 
● The IMF identified the UK as a 
top performer among the 
world’s leading economies in 
2014 
● The UK government is 
committed to increasing 
annual exports to £1 trillion by 
2020 
● The UK Export Fund (UKEF) 
has put aside £3 billion to 
assist UK exporters
So you want to trade abroad? 
Trading in an unfamiliar market with a different 
language, currency and business culture can 
be risky business.
Know the prospect country’s 
business culture 
Don’t underestimate the scale of difference 
between business cultures.
Study their politics and economy 
Monitor for currency issues or civil unrest 
For example: 
● Venezuela banned currency trading in 2013 
● Political unrest in Turkey adds to the threat 
of ending 10 years of economic success 
● 'Ukraine’s economy choking under Russian 
pressure' (Washington Post)
Verify the prospect company 
● Beware of the 'information 
challenge' 
● Check that the company and 
contacts really exist 
● Don't be fooled into extending 
credit without a full 
background check
Ensure they are compliant 
● Check to see if the prospect company 
appears on any ‘Watch Lists’ such as 
the Office of Foreign Assets Control 
(OFAC) 
● OFAC or HMRC Financial Sanctions) 
● Know your own country’s anti-corruption 
legislation 
● Research the same legislation for the 
prospect country
Assess their payment history 
● Research the payment culture of the 
country you’re selling into 
● Acquiring Trade References can help
Protect your interests 
Consider tools like: 
● Trade Credit Insurance: This protects your 
business against customer default or 
insolvency (including political risk 
insurance). 
● A Letter of Credit: An agreement between 
exporter and recipient banks.
Is your contract watertight? 
● Specify your payment terms 
● Consider including late 
payment penalty 
● Ensure an arbitration goes 
through your home country's 
legal system
How can a credit reference agency 
help? 
● By confirming the existence of the subject 
company / authorised personnel 
● Giving an independent 3rd party 
recommendation on credit to be extended 
(plus their payment experience) 
● By providing an insight into the importer’s 
payment history (where available)
International debt collection 
If there's no chance of the company paying 
their debts, use a reputable debt collection 
agency with a global presence or partnering 
network.
It’s all about forward planning 
● Culture / politics 
● Early verification 
● Compliance 
● Credit report 
● Contract 
● Additional tools
Questions? 
Stand W286

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Managing the risks of international trade

  • 1.
  • 2. Understanding and managing the risks of international trade With Sean Haywood
  • 3. Additional resources Free eBook: Mitigating the risks of trading abroad + Presentation slides
  • 4. Background ● International Key Account Manager for Graydon UK ● Over 27 years’ experience working for some of the country’s leading credit reference agencies ● A member of the Federation of Business Information Services (FEBIS) and FCIB Association (Finance, Credit and International Business)
  • 5. About Graydon ● One of the UK and Europe’s leading Business Intelligence providers ● We are driven to help businesses minimise risk when dealing with customers and suppliers across the globe ● We provide valuable insight into 220 million companies internationally
  • 6. Expectations in 2010 for 2014 The 2008 Financial Crisis led struggling Western companies into thinking: ● The European economy would be recovering ● ‘Emerging’ BRIC and MINT economies were the answer to their exporting woes ● Asia would be a major agent for economic growth
  • 7. But what is the reality? ● The European economy was more stagnant than expected
  • 9. But what is the reality…Cont’d ● Growth has slowed or stalled in most of the BRIC(S) and MINTs ● Asia appears to be more dependent on a strong West than was first realised
  • 10. Any good news? ● The IMF identified the UK as a top performer among the world’s leading economies in 2014 ● The UK government is committed to increasing annual exports to £1 trillion by 2020 ● The UK Export Fund (UKEF) has put aside £3 billion to assist UK exporters
  • 11. So you want to trade abroad? Trading in an unfamiliar market with a different language, currency and business culture can be risky business.
  • 12. Know the prospect country’s business culture Don’t underestimate the scale of difference between business cultures.
  • 13. Study their politics and economy Monitor for currency issues or civil unrest For example: ● Venezuela banned currency trading in 2013 ● Political unrest in Turkey adds to the threat of ending 10 years of economic success ● 'Ukraine’s economy choking under Russian pressure' (Washington Post)
  • 14. Verify the prospect company ● Beware of the 'information challenge' ● Check that the company and contacts really exist ● Don't be fooled into extending credit without a full background check
  • 15. Ensure they are compliant ● Check to see if the prospect company appears on any ‘Watch Lists’ such as the Office of Foreign Assets Control (OFAC) ● OFAC or HMRC Financial Sanctions) ● Know your own country’s anti-corruption legislation ● Research the same legislation for the prospect country
  • 16. Assess their payment history ● Research the payment culture of the country you’re selling into ● Acquiring Trade References can help
  • 17. Protect your interests Consider tools like: ● Trade Credit Insurance: This protects your business against customer default or insolvency (including political risk insurance). ● A Letter of Credit: An agreement between exporter and recipient banks.
  • 18. Is your contract watertight? ● Specify your payment terms ● Consider including late payment penalty ● Ensure an arbitration goes through your home country's legal system
  • 19. How can a credit reference agency help? ● By confirming the existence of the subject company / authorised personnel ● Giving an independent 3rd party recommendation on credit to be extended (plus their payment experience) ● By providing an insight into the importer’s payment history (where available)
  • 20. International debt collection If there's no chance of the company paying their debts, use a reputable debt collection agency with a global presence or partnering network.
  • 21. It’s all about forward planning ● Culture / politics ● Early verification ● Compliance ● Credit report ● Contract ● Additional tools

Editor's Notes

  1. China, Thailand, Japan, Latin America…
  2. Russia, Lebanon, Thailand…
  3. Due diligence early…
  4. OFAC – Office of Foreign Assets Control…
  5. Example: Italy
  6. Remember to do your due diligence at the start of the process.